Plaintiff v Defendant

2 On 16 May 2018, pursuant to s 9 of the Wills Act 1997 ('the Wills Act'), probate of the informal will of the deceased dated 25 August 2006 ('the 2006 will') was granted to the plaintiff as the named substitute executor.[1] The Court determined that the deceased's partner, Mr Michael O'Neill, had by his murder of the deceased forfeited his interest under the 2006 will.[2]

3 The remaining issue for determination is how the 2006 will takes effect in light of the forfeiture of Mr O'Neill's interest, specifically, whether effect should be given to the gift over provision in clause 5 of the 2006 will. For the reasons that follow, the Court has concluded that clause 5 should not be given effect and the estate falls to be distributed on an intestacy.

4 On 10 November 2017, the Court appointed two independent contradictors, counsel and a solicitor, to provide joint written submissions on the construction of the informal will and the legacies to each beneficiary. By 2 February 2018, the Court had received written submissions from both the plaintiff and the independent contradictors. On 16 March 2018, solicitors for Mr Chester Halstead, a beneficiary under the gift over provision in the 2006 will, informed the Court that Mr Halstead would likely make submissions regarding the operation of the 2006 will. On 10 August 2018, Mr Halstead was joined as a defendant to the proceeding and written submissions have since been filed on his behalf.

5 A detailed factual background is outlined in the earlier decision of Re Rattle and are not repeated here, save for a brief outline of the facts relevant to the issue remaining before the Court and the circumstances surrounding the creation of the 2006 will.

6 Mr O'Neill deposes that in 2006 the deceased's company, Rattle Group Pty Ltd, was restructured. Up until 30 June 2006, the deceased's parents were 50 per cent shareholders and, alongside the deceased, directors of the company. After a financial settlement with his parents, the deceased became sole director and shareholder of Rattle Group Ltd. Mr O'Neill describes the change of company ownership as 'acrimonious'. The 1996 will gave the deceased's interest in the company to his parents and the residuary estate to his nieces and nephews. Mr O'Neill states that the deceased wanted to change his will 'to ensure that his parents did not receive his shares in the company, due to the events which had occurred in relation to the dissolution'. The shares in Rattle Group Pty Ltd are listed in the inventory of assets and liabilities valued at $552,638.

If my partner the said MICHAEL ANTHONY O'NEILL does not survive me by 30 days THEN I DIRECT my Trustees to stand possessed of my residuary estate UPON TRUST for such of my sisters KATRINA BRAMMER and DIANNE MARY NEWLANDS, my partner the said MICHAEL ANTHONY O'NEILL's sister NORA O'NEILL and my godsons MATTHEW PALTOGLOU and CHESTER HALSTEAD who survive me and attain the age of 21 years and if more than one in equal shares absolutely.

8 In the event that the clause is not given effect, the deceased's estate falls upon intestacy and will be distributed equally between the deceased's mother and the estate of the deceased's father.[3]

9 The plaintiff submitted that as the precise terms of the gift over have not been met, the gift over fails, unless the terms of the 2006 will can be construed as encompassing the event that has occurred. The plaintiff submitted that while the question arises as to whether the rule in Jones v Westcomb[4] preserves the gift over, 'neither the wording of the 2006 will, or its structure indicate any intention to deal with a situation other than Mr O'Neill predeceasing' the deceased. In support of this conclusion, the plaintiff also submitted that 'there are no further residuary dispositions or directions to the trustee as to how the estate should be distributed'.

10 The submissions of the independent contradictors concluded that the gift over in clause 5 cannot be saved by the application of the rule in Jones v Westcomb. The contradictors submitted that nothing in the 2006 will nor the admissible evidence suggests, let alone necessarily implies, that the gift over should be effective. Accordingly, such a finding would be mere speculation. The contradictors relied on the decision of Re Edwards; State Trustees Ltd v Edwards,[5] as the most recent Victorian authority, where it was held that the rule in Jones v Westcomb applies only where the gift over was intended to take effect in the circumstances that occurred. The rule does not apply in 'any circumstance merely to avoid an intestacy', and only applies where 'the contingency actually contemplated raised the ineluctable inference that the testator must a fortiori have intended the gift over to take effect upon the contingency that actually occurred'.[6] The contradictors submitted that the deceased's intention is derived from the ordinary principles of will construction and that the application of the rule in Jones v Westcomb needs to be determined on a case-by-case basis. The contradictors submitted that, similar to the circumstances in Re Edwards, the fact that Mr O'Neill's sister is provided for in the gift over strengthens the argument against the application of the rule.[7]

11 The defendant submitted that the rule in Jones v Westcomb should be applied in the current circumstances. Relying on the decision in Re Edwards, the defendant submitted the law in Victoria includes that only 'a fortiori contingencies may be written into the will, viz, contingencies that may be implied by necessary implication'[8] and that it is necessary to consider the application of the rule 'in light of the will and the relevant circumstances the real contingency guarded against'.[9]

12 In addressing the principles of will construction, the defendant emphasised the 'armchair principle' enunciated by Lord Romer Perrin v Morgan,[10] and the distinction between evidence of intention and evidence of the surrounding circumstances. The defendant noted that the distinction, which affects the question of admissibility,[11] has been described in Theobald on Wills as follows:

[t]he court has not only to construe the will as a piece of English, it has also to apply it to the existing facts. It has to ascertain who the objects of the testator's bounty are, and in the case of specific gifts, what the subject matter of these gifts is. For this purpose the important distinction must be borne in mind between evidence of the testator's intention - for instance, declarations by him as to what he meant - and evidence of surrounding circumstances from which his intention may be inferred. The former evidence is hardly ever, the latter is in most cases, admissible.[12]

13 The defendant submitted that Mr O'Neill's evidence as to the deceased wanting to ensure his parents did not receive his shares in the company is admissible as evidence of surrounding circumstances and supports an inference that the deceased intended the gift over to operate in the events that have occurred. The defendant also relied on the removal of the deceased's parents as beneficiaries of the 1996 will, the acrimony between the deceased and his parents, and the financial settlement reached between them as supporting such an inference of the deceased's intention.

14 The defendant submitted that the circumstances in this proceeding, where there is evidence supporting an inference as to the deceased's intention, are distinct from most of the authorities, where there was no supporting evidence of the relevant intention. Had the deceased been asked the question as to whether the gift over should operate in the event that Mr O'Neill killed him, the defendant submitted that the deceased would have said 'a fortiori the gift should take effect', so that his parents would not inherit, and despite Mr O'Neill's sister sharing in the estate. The defendant submitted that the 'real contingency guarded against was an intestacy whereby the deceased's parents would inherit the shares'.

15 The defendant also submitted that cases concerning the rule in Jones v Westcomb are decided on a case-by-case base. The defendant submitted that the circumstances in this proceeding are similar to the circumstances in Re Keid,[13] in which a similar gift over 'that did not evince a broader purpose within which the testator's murder by the primary beneficiary could fall' was given effect by the application of the rule in Jones v Westcomb.

16 The object of the Court when construing a will is to ascertain the intention of the testator as manifested in the will when read as a whole, in light of any admissible extrinsic evidence.[14] Extrinsic evidence may be admitted in accordance with both the 'armchair principle'[15] and s 36 of the Wills Act. Section 36(1) provides that evidence may be admitted to clarify a will if the language used renders part or all of the will meaningless, uncertain or ambiguous on its face, or uncertain or ambiguous in light of surrounding circumstances. Regarding uncertainty or ambiguity arising in light of surrounding circumstances, however, admissible evidence under the Wills Act does not include evidence of the testator's intention.[16] Section 36 does not prevent the admission of evidence that would otherwise be admissible,[17] and at general law, direct evidence of a testator's dispositive intention is admissible for the purposes of resolving an equivocation.[18]

17 The general rule is that a gift over on a contingency will not take effect unless the exact contingency specified occurs.[19] The rule in Jones v Westcomb provides an exception to the general rule. Although the scope of the rule has been uncertain, in Re Edwards it was said to apply where, based on the will read as a whole and in light of any admissible extrinsic evidence, the testator a fortiori intended the gift over to operate in the circumstances that occurred.[20] In this regard, 'a fortiori' means 'from yet firmer ground' and introduces a fact that, if a prior fact is true, must still be more obviously true'.[21] In the application of the rule in Jones v Westcomb, the contingency that occurred is implied by necessary implication to be encompassed by the contingency provided for by the will.

18 The rule in Jones v Westcomb is an application of the principles of will construction as identified in Fell v Fell.[22] It is not applied in order to bring about a result that the Court considers fair.[23] As identified in Re Edwards, in many of the cases in which the rule has been applied:

[t]he contingency that the testator actually provided for in the will encompassed the contingency that was excluded. In each case, the wording of the provision evinced a broader purpose within which the unforeseen contingency fell.[24]

19 In the recent case of Sadleir v Kähler,[25] the Court applied the rule in Jones v Westcomb in a similar manner. In that case, the principal beneficiary of an estate was the testator's brother, with a gift over to the brother's children in the event he was separated or divorced from his wife at the date of the deceased's death. The testator's brother predeceased the testator, but remained married to his wife at the time of his death. Atkinson J determined that the gift to the children should be given effect as, if the testator were asked what was to happen to his estate in the event that his brother separated from his wife not by choice but by death, the testator would have intended a fortiori that the children were to take as beneficiaries.[26]

20 In Re Edwards, the Court determined that it was inappropriate to infer from the mere existence of a gift over that the 'real contingency guarded against' was an intestacy or to imply that the gift over was to operate in any circumstance in which the gift failed.[27] In that case, the forfeiture rule was applied in circumstances where the principal beneficiary of the estate killed the testator in an act of defensive homicide and three gift over provisions were not saved by the rule in Jones v Westcomb. The Court was not satisfied, with respect to two gifts over, that the testator would have intended the mother of his killer to benefit, and considered the circumstances analogous to those in Ekert v Mereider,[28] a case in which the Court rejected the proposition that the testator would have intended to benefit the child of his murderer.[29] With respect to the other gift over, despite the Court stating it 'might have been satisfied', had the testator been asked, that he would have intended one of the gifts to operate, that inference was not supported a fortiori by the contingency actually provided for by the will.[30]

Should the gift over provision in clause 5 of the 2006 will operate?

21 The structure of the 2006 will is simple, bequeathing personal effects by way of a letter, before disposing of the entire estate to Mr O'Neill, with a gift over in the event that Mr O'Neill predeceased the deceased. Nothing in the language or structure of the will requires the drawing of an inference by necessary implication that the deceased would have intended the gift over clause to operate in the current circumstances.

22 In Re Edwards, the Court identified that the testator had deliberately excluded the person who would take on intestacy,[31] and accepted that a clause of the will evinced an intention not to benefit that person.[32] A degree of disharmony also appeared to exist between the testator and the taker on intestacy.[33] While there was little evidence of the surrounding circumstances in Re Edwards, as submitted by the defendant, the Court found that the proper construction of the will was that the gift over provisions could not take effect.[34]

23 In this proceeding, the evidence of the circumstances surrounding the creation of 2006 will, including the change in beneficiaries between the 1996 will and the 2006 will, clearly demonstrate that the deceased did not intend his parents to benefit from his estate, of which the shares in the company comprised a significant proportion. It is more probable than not that the change of ownership of the company in 2006, the financial settlement and the associated acrimony between the deceased and his parents contributed to the deceased's decision to execute a new will. The deceased's relationship with Mr O'Neill, the principal beneficiary of the 2006 will, also may have contributed to this decision. The evidence of Mr O'Neill, insofar as states that the deceased changed his will to 'ensure that his parents did not receive shares in the company', is evidence of a general nature and its admissibility is uncertain in the circumstances where an uncertainty, ambiguity or equivocation in the 2006 will has not been identified. However, in the absence of any objections as to admissibility and proceeding on the basis that Mr O'Neill's evidence is admissible, the proper construction of clause 5, in the circumstances that have occurred, does not support a conclusion that the deceased must have a fortiori intended to give effect to clause 5.

24 As in both Re Edwards and Ekert v Merider, a conclusion that the deceased a fortiori would have intended the gift over provision to operate in the circumstances that occurred is more difficult to draw where a relative of the murderer of the deceased is a beneficiary of the provision.[35]

25 Finally, in Re Edwards a detailed review of the relevant authorities was undertaken, including Re Keid. In Re Keid, a testatrix bequeathed her estate to her son upon him attaining the age of forty years, with a gift over to his children should he predecease her or fail to survive to obtain a vested interest, and another gift over to her sisters. The son, who had no children, killed the testatrix and at issue was whether the gift over to the sisters should take effect. Wanstall CJ determined that the clause should be given effect as the contingency guarded against was the failure of the gift to the son and subsequent intestacy.[36]

26 In Re Edwards, the Court determined that in many of the cases in which the rule in Jones v Westcomb is applied, the contingency provided for in the will encompassed the contingency that occurred. Although the possibility was not excluded, the Court noted the difficulty in determining that a gift over operating where the principal beneficiary predeceased the testator, encompassed circumstances where the principal beneficiary killed the testator. The circumstances here do not justify a departure from the approach adopted in Re Edwards. To the extent that that approach differs from Re Keid, the reasoning in Re Edwards is preferable.

27 The precise terms of the gift over provided for in clause 5 of the 2006 will have not been satisfied. On the proper construction of the will, including consideration of the surrounding circumstances, the gift over provisions in clause 5 cannot take effect. Consequently, the deceased's estate falls on an intestacy.

28 The Court orders that the estate of the deceased be distributed equally between the deceased's mother and the estate of the deceased's father.

[1] Re Rattle [2018] VSC 249 (16 May 2018).

[3] The deceased's father survived the deceased, but subsequently died on 22 August 2014.

[4] (1711) Prec Ch 316; 24 ER 149.

[5] [2014] VSC 392 (2 August 2014) ('Re Edwards').

[10] [1943] AC 399, 420.

[11] Re Staughton; Grant v McMillan [2017] VSC 359; Wills Act 1997, s 36.

[12] HS Theobald, SM Cretney and G Dworkin, Theobald on Wills (Stephen & Sons, 13th ed, 1971) [430].

[13] [1980] Qd R 610.

[14] Re De Bruyn [2016] VSC 6 (22 January 2016) [11]; Marley v Rawlings [2014] UKSC 2; [2014] 2 WLR 213, 220.

[15] Boyes v Cook (1880) 14 Ch D 53, 56; Perrin v Morgan [1943] AC 399, 420.

[16] Wills Act 1997, s 36(2).

[17] Ibid s 36(3).

[18] In re Smith [1939] VicLawRp 33; [1939] VLR 213, 216-17; Re Staughton; Grant v McMillan [2017] VSC 359 (22 June 2017) [38]; GE Dal Pont and KF Mackie, Law of Succession (LexisNexis, 2013) also notes that direct evidence of dispositive intent may be admissible to rebut certain equitable presumptions: [8.38].

[19] Re Bailey [1951] Ch 407, 411-12; Re Sinclair [1985] Ch 446, 455; Re Edwards [2014] VSC 392 (2 August 2014) [109], [145].

[20] Re Edwards [2014] VSC 392 (2 August 2014) [174], [177]-[179].

[22] [1922] HCA 55; (1922) 31 CLR 268. See Re Edwards [2014] VSC 392 (2 August 2014) [178].

[23] Ekert v Mereider (1993) 32 NSWLR 729, 732-3.

[24] Re Edwards [2014] VSC 392 (2 August 2014) [177].

[25] [2018] QSC 67 (6 April 2018).

[27] Re Edwards [2014] VSC 392 (2 August 2014) [174].

[28] (1993) 32 NSWLR 729.

[29] Re Edwards [2014] VSC 392 (2 August 2014) [180].

[35] Ibid [180]; Ekert v Mereider (1993) 32 NSWLR 729, 733.

[36] [1980] Qd R 610, 614.