Plaintiff v Defendant

1 This is an application under Order 54 of the Supreme Court (General Civil Procedure) Rules 2015 for judicial advice in relation to the proper construction of clause 4(a) of the last Will of Florida Troy made on 22 November 2006 (the Will).

2 Florida died on 5 May 2019 at 91 years of age. [1] She was predeceased by her husband, Thomas Frederick James Troy, who passed away on 1 April 2015. Florida was survived by two adult children, Rodney John Troy and Deborah Maree Troy, who are the parties to this proceeding

3 The Will was prepared by a solicitor and is in simple terms. A mirror will was executed by Thomas on the same day Florida signed the Will. [2]

4 By the Will, Florida appointed Thomas as the executor and trustee of her estate and bequeathed the entirety of her estate to him. In the event that Thomas predeceased her, as in fact occurred, she appointed Rodney and Deborah as the executors and trustees of her estate and made the following gifts to them pursuant to clause 4:

(a) AS TO my interest in any land situated in Matthews Road Kerang and described in Certificate of Title Volume 8967 Folio 201 for my son, RODNEY JOHN TROY absolutely

(b) AS TO the rest, residue and remainder of my estate I DIRECT my Trustee after payments of all debts testamentary expenses duties and funeral expenses, to stand possessed of the same UPON TRUST for my said daughter DEBORAH MAREE BOWE.

5 The remaining clause of the Will, clause 5, provides as follows:

I have made no further provision for my son RODNEY JOHN TROY as I believe that my husband and I have made adequate provision for him during our lifetime.

6 Probate of the Will was granted to Rodney and Deborah on 16 April 2020. The inventory of assets and liabilities filed in support of the application for probate valued Florida's estate at $1,870,988.70. This included two real properties, one located at 7 Andrew Street, Kerang (Andrew Street) and the other being the land the subject of the devise in clause 4(a) of the Will (Florida's land) which was valued at $120,000. Florida's estate also included various items of personal property, relevantly including two water shares issued under the Water Act 1989 (the Water Act) by the Goulburn Murray Water Corporation which had a combined value of $508,675 (the water shares).[3]

7 The question for determination in this proceeding is whether, properly construed, the reference in clause 4(a) of the Will to 'my interest in any land situated in Matthews Road, Kerang and described in Certificate of Title Volume 8967 Folio 201' includes the water shares. If answered in the affirmative, the water shares will pass to Rodney; if answered in the negative, they are part of the residue of the estate and will pass to Deborah.

8 For the reasons which follow, the question must be answered in the affirmative.

9 This proceeding arises in a broadly similar factual context to that which arose in Greenham v Greenham[4] in which I summarised the legal principles which apply to the construction of wills as follows:[5]

The 'fundamental rule' in construing a will 'is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case - which are the "expressed intentions" of the testator'.[6] The task is to 'find the deceased's intention as expressed in her words in the will'; [7] 'not what she meant to say, but what she actually said'. [8]

Unless indicated otherwise, the words used by a testator will be given their usual or ordinary meaning. However, as stated by Isaacs J in Fell v Fell, although a will:[9]

... must receive a construction according to the plain meaning of the words and sentences therein contained... you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it.

The following two other principles formed part of what Isaacs J referred to in Fell v Fell as ten 'incontestable' principles relevant to the construction of wills:[10]

An inference cannot be made "that did not necessarily result from all the will taken together"...A necessary inference is one the probability of which is so strong that a contrary intention cannot reasonably be supposed.

"We cannot give effect to any intention which is not expressed or plainly implied in the language of" the "will"... "You have no right to fancy or to imply, unless there be something within the four corners of the will which is not only consistent with the implication you make, but which could hardly stand, if at all, in the will, without that implication being made. That is what is called necessary implication, and legitimate implication, in contradistinction to gratuitous, groundless, fanciful implication".

A will is not, however, to be construed in a vacuum.[11] In Perrin v Morgan, Lord Romer referred to the:[12]

... cardinal rule of construction that a will should be so construed as to give effect to the intention of the testator, such intention being gathered from the language of the will read in the light of the circumstances in which the will was made. To understand the language employed by the court is entitled, to use a familiar expression, to sit in the testator's armchair. When seated there, however, the court is not entitled to make a fresh will for the testator merely because it strongly suspects that the testator did not mean what he has plainly said.

By placing itself in the 'testator's armchair' in order to determine the testator's intention, the Court is able to 'consider the circumstances by which [the testator] was surrounded when he made his will'.[13] The surrounding circumstances may include evidence of the testator's family, property, friends and acquaintances.[14]

Consideration of this type of extrinsic evidence is not limited to or conditional upon the existence of ambiguity in the terms of a will. Under the armchair rule, evidence of the factual matrix in which a testator made their will 'is always admissible to explain what the testator has written, and to show the meaning of his words, and this evidence is totally distinct from evidence sought to be applied to prove the testator's intention as an independent fact'.[15] As the High Court stated in King v Perpetual Trustees Company Ltd, 'it is from the words of the will that the intention of the testator must be ascertained, aided only by such facts as existed and were known to the testator at the date of the will which it is permissible to take into account in interpreting that language.'[16] This reflects the fact that 'the meaning of words varies according to the circumstances of and concerning which they are used'.[17]

This is consistent with the contemporary approach to the interpretation of contracts. In Marley v Rawlings, Neuberger LJ succinctly formulated that approach in the following terms:[18]

When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions.

When it comes to interpreting wills, it seems to me that the approach should be the same. Whether the document in question is a commercial contract or a will, the aim is to identify the intention of the party or parties to the document by interpreting the words used in their documentary, factual and commercial context.

Evidence which bears upon the factual context in which a will is made is therefore relevant to the task of construction. Lord Neuberger's observations in Marley v Rawlings have been applied on numerous occasions by Australian courts in relation to the construction of wills.[20]

In addition to the position at common law, s 36 of the Wills Act 1997 (the Wills Act) also addresses the admissibility of evidence in proceedings to construe a will. Section 36 states:

36 When is evidence admissible to clarify a will?

(1) In any proceedings to construe a will, if the language used in a will renders the will or any part of the will -

(a) meaningless; or

(b) uncertain or ambiguous on the face of the will; or

(c) uncertain or ambiguous in the light of surrounding circumstances -

evidence may be admitted to assist in the interpretation of that language.

(2) Evidence which may be admitted under subsection (1)(c) does not include evidence of the testator's intention.

(3) Nothing in this section prevents the admission of evidence which would otherwise be admissible at law in any proceedings to construe a will.

As recently stated by Hallen J in Serwin v Dolso, language used in a will:[21]

... is ambiguous if it can reasonably be interpreted in more than one way, or the words used can reasonably be given more than one meaning. The ambiguity may be apparent on the face of the will itself or when construed in the light of the surrounding circumstances.

Although cast in wide terms, two limits on the operation of s 36 of the Wills Act should be noted. First, assuming one or other of the conditions in sub-s (1) are engaged, it is not licence to admit any evidence; evidence may be admitted 'to assist in the interpretation' of the language used in will. Evidence which does not bear upon the proper construction of the testator's language used in a will should not be admitted. Secondly, the operation of sub-s (2) is not to be overlooked; where uncertainty or ambiguity arises in the light of the surrounding circumstances, evidence of the testator's intention may not be admitted.

Circumstances surrounding the making of the Will

10 The principal relevant undisputed facts of which Florida may be taken to have been aware when she made the Will are set out below. My consideration of other disputed matters extrinsic to the making of the Will, and my findings in respect of those matters, are dealt with later in these reasons.

11 For most of the approximately 50 years that they were married until August 2006, Florida and Thomas lived and farmed land near Murrabit, Victoria. The farm was spread over three adjacent titles. Two of these, which I will collectively refer to as 'the home block',[22] are about 487 acres in total. The third title (of about 60 acres) is what I have referred to as 'Florida's land'; it is separated by a road from the home block. Over the years, all three blocks were operated as a single farming enterprise.

12 Rodney worked on the farm with his parents from when he left school in about 1980 at 16 years of age. Rodney worked on the farm seven days a week for 10 months of the year, working 12-14 hour days. In return, Rodney would be entitled to 12.5% of the profits from the farming enterprise.

13 Water from the Murray River, which is only a short distance from the farm, is the primary source of water used on the farm. The water reaches the farm through an irrigation channel which runs through, or next to, the home block and Florida's land. All of the land comprising the farm, including Florida's land, accessed water from the irrigation channel. Although the home block and Florida's land had separate rights to access water, over the years, water was used for the farm and integrated into the single farming enterprise regardless of whether it was obtained from the home block or Florida's land. Aside from rainwater, water from the irrigation channel was the only source of water used on the farm.

14 It would appear that, every year, Thomas also purchased extra water for use on the farm. There is evidence of one such purchase: in about August 2004 he purchased 134 megalitres of water from the owner of a neighbouring property (the 2004 water purchase). The evidence does not provide any further insight about the purchase, such as the price, except that it was funded by a loan (of an amount unknown), and Rodney's evidence that this water was allocated to the home block.

15 Florida and Thomas retired in about July - August 2006, moving off the farm and into the nearby town of Kerang. They had intended to move into a house in Victoria Street in Kerang owned by Rodney (Victoria Street). For reasons which are disputed and considered later in these reasons, this did not occur and, in about July 2006, Florida and Thomas instead purchased and moved into Andrew Street in Kerang where they lived until it was badly damaged by fire in mid-2008. They then moved back to the farm and lived with Rodney for a period.

16 After Florida and Thomas retired to Kerang, Rodney took over the day-to-day management of the farm. Importantly, in about August 2006, Thomas and Florida transferred the title in the home block to Rodney. Notably, Florida's land was not transferred. As part of the transfer of title of the home block, Rodney also received the rights to access water from the Murray River which were associated with that land. He also received machinery used on the farm, and a dairy herd of about 300 cows. He did not make any payments to his parents in return for these transfers.

17 After Florida and Thomas retired, the water entitlement associated with Florida's land was not used on that land or the farm more generally. Instead, that entitlement was sold to fund Thomas and Florida's retirement. The evidence does not otherwise disclose when or how this occurred, or the precise nature of the water entitlement.

18 At common law, the rights of an owner of land in respect of the water of a river which flows past the land are known as the owner's 'riparian rights'. These rights are of a special character which the owner has 'by virtue of his ownership of land abutting on a river'.[23] As explained by Windeyer J in Gartner v Kidman:[24]

By the common law the proprietor of land upon the banks of a natural stream of running water, is entitled to have, and is obliged to accept, the flow of water past his land. ... . These rights and obligations do not depend on prescription or grant. They are proprietary in character, natural incidents of the ownership or lawful possession of the land abutting on the stream: ... They do not depend upon the ownership of the bed of the stream, but of its banks: ... They are thus called riparian rights. ...

19 The water shares owned by Florida embody a fundamental departure from these common law rights which was effected by amendments to the Water Act which commenced on 1 July 2007.[25] These amendments gave effect to what is colloquially known as the 'unbundling' of property rights to water from the ownership of land. I summarised this change in Greenham: [26]

It was common ground that, in Victoria until 1 July 2007, water flowing in a watercourse was not property capable of being owned and transferred separately to land. The rights at common law to use water flowing in a water course were derived from a person's ownership or occupation of land abutting the watercourse.[27] As Bryson J explained in Elders Rural Finance Ltd v Westpac Banking Corporation:[28]

At common law a land owner's right to the use and flow of water was enforceable by litigation, the cause of action being nuisance against persons who interrupted the flow or made excessive use of their own water rights. Flowing water is not itself an [sic] subject of property at common law, but an owner of land (and it is convenient to speak of freehold land) past or under which water flows in a defined stream or percolated could take it and use it. ... Sir Robert Megarry and Professor Wade in The Law of Real Property, 5th ed, at p 65 state riparian rights thus when dealing with the land owner's right to everything on or over his land and the qualifications on that general rule.

A land owner has no property in water which either percolates through his land or flows through it in a defined channel. In the case of percolating water, at common law the land owner could draw any or all of it off without regard to the claims of neighbouring owners; ... In the case of water flowing through a defined channel, even at common law the riparian owner (the owner of the land through which the water flows) could not always take all the water; but he has certain valuable rights.

This situation was fundamentally changed on 1 July 2007 following amendments to the Water Act 1989. These amendments introduced a regime, referred to colloquially as 'unbundling', that allowed property rights to water to exist separately from ownership of land.[29] The Minister could issue a 'water share' in respect of a 'declared water system'.[30] A water share 'authorises the taking of water under the water allocation for the share during the water season for which the water allocation is allocated'.[31] Ownership of a water share could be transferred independently of a transfer of land and, on the death of the owner, forms part of their estate.[32]

20 Consistent with these observations, the parties in this proceeding accepted that, until 1 July 2007, the right to water ran with the ownership of land, and not separately from land. Although a landholder had certain rights in relation to water in an adjoining watercourse, they had no ownership rights over the water.

21 In the years before the above amendments were made to the Water Act, it was common knowledge in the Kerang community where Florida and Thomas lived that changes were to be introduced to the existing system of water allocation.

22 Before outlining the specific submissions advanced on behalf of Deborah, I note that it was also submitted on her behalf on various grounds which it is unnecessary to rehearse, that the decision in Greenham was limited to its facts and did not predetermine the outcome of this proceeding because of critical differences in the respective testamentary instruments in each case, as well as the facts. I accept this submission. Putting aside matters of general principle to which I have referred above, the fact that there are some obvious similarities in both cases does not mean that the determination of the issue of construction in Greenham somehow prefigures or guides the resolution of the issues of construction in this case.

23 Deborah submitted that the Will was to be construed at the time of Florida's death. This was said to be the consequence of the operation of s 34(1) of the Wills Act which states:

(1) A will takes effect, with respect to the property disposed of by the will, as if it had been executed immediately before the death of the testator.

24 Although the operation of this provision is subject to the existence of a contrary intention 'whether in the will or elsewhere',[33] Deborah submitted that there was no such contrary intention in the circumstances of the case. She contended that the plain meaning of the gift of 'my interest in any land situated at Matthews Road, Kerang' in clause 4(a) would capture any and all real estate owned by Florida at Matthews Road, Kerang upon her death. The clause referred to a 'generic' type of property and did not on its face identify any specific properties owned by Florida when she made the Will. The words of the clause allowed for any changes in real property at Matthews Road, Kerang which Florida may have owned up until her death.

25 Considering Florida's property at the time of her death, because the water shares were personal property created by statute and did not run with the land, they therefore did not pass under the devise in clause 4(a) of the Will. The devise by Florida of her land to Rodney should not be construed to include a reference to the water shares which, after July 2007, were not appurtenant to that land. Clause 4(a) did not expressly extend to separate statutory entitlements to water, being personal and tradeable water rights held by Florida independent of the land.

26 Deborah also submitted that, in construing clause 4 of the Will, it was essential to read the clause in conjunction with clause 5.[34] It was contended that clause 5 informed the limitations inherent in the words of clause 4(a), in particular, the ambit of the expression 'my interest in any land', which indicated Florida's intention to limit the scope of any gifts to Rodney. The effect of clause 5 was therefore to make clear that the gift in clause 4(a) was strictly limited to Florida's land. When read together, these provisions revealed an intention by Florida to separate and divide her estate into real estate and personal estate; no part of her personal property would comprise the gift of 'my interest in any land situated at Matthews Road, Kerang', being the subject of the devise in clause 4(a).

27 Deborah also submitted that various circumstances referred to below did not evince any intention by Florida to bequeath her land together with any water shares that she may have owned at her death.

28 It was submitted that a critical feature which distinguished the proper construction of the Will from the testamentary instrument considered in Greenham was the fact that Florida's land did not require any water allocation in order for it to be productively utilised for farming. In Greenham, the Court concluded that the common law riparian water rights appurtenant to the land formed part of the rights bequeathed under the Will because there was no other source of water for that land. By contrast, Florida's land did not necessarily need access to the water rights owned by Florida; the water shares were not vital or necessary for the enjoyment of the land and that land had been and continued to be irrigated with water shares held by Rodney which came with the land which was transferred to him by his parents in mid-2006.

29 After Thomas and Florida transferred the home block and the farming business in August 2006, they permitted Rodney to use Florida's land as part of the farming enterprise. In doing this, however, Rodney neither needed or used the water allocated to Florida's land; those entitlements instead were used by Florida and Thomas to supplement their retirement. Rodney used the water allocated to the home block to irrigate Florida's land as necessary.

30 Deborah submitted that the common law water rights which had previously run with the land ceased to exist from about 1 July 2007. As at the date of Florida's death, Florida's land did not, as a matter of law, have any rights to water due to the amendments to the Water Act.[35] The water rights were acquired by Florida under the new legislative scheme and were independent from her ownership of land and, as personal property, could be dealt with as she saw fit. Under the new statutory arrangements, a land owner did not have any right to water and could only obtain a right, in the form of an annual licence, that might be granted by the relevant authority. Any such grant of a right to water was at the sole discretion of the relevant water authority which was not obliged to grant a water share to any landowner who formerly had a common law right to draw water for irrigation.

31 Deborah submitted that it was common knowledge in the Kerang farming community in 2006 that a new water share allocation scheme would shortly come into effect. There were public meetings in Kerang and surrounding areas organised by statutory authorities to provide information about the new water share scheme which was to be implemented, and local newspapers carried articles and public notices about the matter. It was submitted to be common knowledge that any person who wanted to use water would need to apply for a water share allocation from the relevant authority and the grant of such water allocation was at the discretion of that authority.

32 It was submitted that the Court should find that, when Florida made the Will in November 2006, she would have been aware that the new statutory scheme would come into effect on 1 July 2007 which unbundled the water rights from the land, with the grant of water shares a matter for the discretion of the relevant authority.

33 Deborah submitted that an important feature of the context in which the Will was made was that, five months earlier in July 2006, Florida and Thomas had transferred to Rodney, for no consideration, the farming business and the home block, being the majority of the farming land. In return, Thomas and Florida requested that Rodney agree for them to live rent free in Victoria Street. It was submitted that Rodney reneged on this agreement, with the consequence that Thomas and Florida were forced to purchase Andrew Street.

34 When Florida and Thomas were preparing to transfer the home block to Rodney in mid-2006, Deborah submitted that Florida and Thomas also offered Rodney the existing water rights associated with the 2004 water purchase on the condition that he pay out the loan used to fund that purchase. It was submitted that Rodney flatly refused the proposal. In the context of that refusal, it was submitted that Florida and Thomas told Deborah that they would keep the water and it was not going to Rodney. Thomas and Florida then retained the water share rights and traded them to supplement their retirement income. Deborah further submitted that this, as a matter of fact, was an 'unbundling' of water rights before November 2006. The conversation between Florida and Deborah demonstrated that Florida well understood that the water rights were independent of the land. This circumstance and the matters referred to in the previous paragraph were said to inform Florida's intention in including clause 5 of the Will so as to limit the scope of the gift of her land to Rodney. The words of clause 4(a), as limited by clause 5, construed in the factual matrix and circumstances when the Will was executed, achieved Florida's intention to limit her gift only to the land and nothing more.

35 It was submitted that, even when the Will was made in November 2006, it was possible to transfer water rights to a person other than the landowner in whom the water rights may have been attached. In support of this proposition Deborah pointed to the 2004 water purchase. Further, that bundle of water rights were transferred to form part of the home block which was ultimately transferred to Rodney. This was said to demonstrate that, before the Will was executed, water rights could be transferred from an allocation attached to a particular property, to an allocation attached to another property. Similarly, Deborah relied upon Rodney's evidence that, in using Florida's land as part of an integrated farming operation, he used water that had been part of the home block. Water rights were not necessarily tied to particular land holdings and could be transferred to other landowners. This was submitted to have informed Florida's intention when she made the Will in November 2006 that the water shares were to be dealt with independently of the land.

36 It was submitted that the Court should find that, in the factual matrix which existed when Florida signed her Will in November 2006, Florida understood that the water rights were a separate right to land and that her bequest to Rodney was only of the land. It was not necessary for Florida in her Will to separate the land from the water rights because of the specific words in clause 4(a) and clause 5; they had the effect that only Florida's land was bequeathed to the plaintiff, and not anything else.

37 It was submitted on behalf of Deborah in the alternative that, if the Court determined that a water share was a necessary part of the gift of land under clause 4(a) of the Will, only the water share certificate WEE008778 (for 58.1 megalitres) should form part of the gift.[36] It was not necessary for the enjoyment of Florida's land that the water entitlement in Certificate WEE008777 form part of the gift.

38 It is convenient to first consider Deborah's submission that, by operation of s 34(1) of the Wills Act, the Will is to be construed at the time of Florida's death.

39 The effect of ss 34(1)-(2) of the Wills Act is that, unless a contrary intention appears, a will is to be construed in relation to the property disposed of by it as if it had been executed immediately before the testator's death. The existence of a specific legacy in a will, by referring to a subject-matter in existence at the date it was made, will import a contrary intention.[37] In Greenham, I discussed the approach to determining whether there existed a contrary intention:[38]

A leading authority on the approach to determining whether there is a contrary intention for the purposes of sub-s 34(2) of the Wills Act is the judgment of Joyce J in Evans v Powell.[39] The question for determination in that case was the effect of a gift expressed as the 'house and effects known as Cross Villa situated in Templeton in the county of Pembroke'. When the testator made the will, he was entitled to half an acre of land with a house upon it known as Cross Villa in which he resided. Some years later, the testator separated part of the land by a hedge and erected two dwellings and moved into one of them; those dwellings ceased to be known as Cross Villa. He later died. The controversy was whether the portion of the land separated by the hedge with two new houses upon it passed as part of the gift described as the 'house and effects known as Cross Villa situated in Templeton'.

Justice Joyce concluded that the devise passed the property with all the buildings erected upon it. His Honour referred to s 24 of the Wills Act 1837 (the equivalent to s 34 of the Wills Act)[40] and the statement by Lindley LJ in In re Portal and Lamb that s 24 'does not say that we are to construe whatever a man says in his will as if it were made on the day of his death'.[41] Instead, Joyce J observed that, in construing a will it is necessary to 'take into consideration the condition of things in reference to which it was made'.[42] He continued:[43]

In applying this approach, Joyce J concluded that the description in the will of the house known as Cross Villa was so particular and precise as to exclude the operation of s 24. It followed that 'any building erected, though subsequently, upon land devised by the will must pass by the devise of the land'.[44]

This analysis was referred to with approval by Dixon CJ in McBride v Hudson[45] in the context of determining what was required for the appearance of a contrary intention for the purposes of s 27 of the Wills Act 1936 (SA) (the equivalent to s 34 of the Wills Act).[46] His Honour stated that, '[i]f the bequest in question is seen to be specific it suffices as an indication of a contrary intention'.[47] Justice Windeyer likewise determined that a gift of specific property is itself an indication of a contrary intention.[48]

40 In McBride v Hudson, Dixon CJ also stated that what marks a bequest as specific is:[49]

... that its subject-matter is designated as something that does at the time of the will, or shall at the time of the death of the testator, form an identifiable part of his property and is, so to speak, distinguished by the intention of the testator as ascertained from his will to separate it in his disposition from the rest of his property for the purpose of bequeathing it as the distinct subject of a testamentary disposition.

41 With these principles in mind, Deborah's submissions in relation to s 34(1) must be rejected because, properly construed, clause 4(a) of the Will contains a specific gift so as to indicate a contrary intention, thereby displacing the operation of the section.

42 The submission advanced on behalf of Deborah that clause 4(a) captures any and all real estate owned by Florida at Matthews Road, Kerang upon her death proceeds from a partial and incomplete reading of the words of clause 4(a). The devise provided by the clause is not simply 'my interest in any land situated at Matthews Road' as was submitted; it is Florida's 'interest in any land situated in Matthews Road, Kerang and described in Certificate of Title Volume 8967 Folio 201'. Although the reference to 'any' land, together with the use of the word 'and' after the reference to Matthews Road, Kerang, gives rise to some ambiguity in the clause, in the context of the clause as a whole viewed in the circumstances in which it was made, the above italicised words must be understood as operating to delimit and identify with specificity particular land situated in Matthews Road, Kerang. This interpretation is generally consistent with the usual conjunctive meaning of the word 'and', as well as giving purpose to the reference in the clause to a specific certificate of title. That reference would serve no purpose if Florida's intention had been to gift any real estate which she owned in Matthews Road, Kerang. A document, including a will, is to be construed 'on the understanding that words have not been included in it for no reason; and a construction of the document that avoids surplusage is to be preferred over one that creates it'.[50]

43 This construction is also one which accords with the objective factual circumstances in which Florida made the Will. Three or fourth months before she signed the Will, Florida and Thomas retired from the land which they had farmed for 50 years. As part of that profound change in their life, they transferred the home block to Rodney. The only land which had formerly comprised their farm which they retained was Florida's land, being the land the subject of the devise in clause 4(a). Florida's land was the only farming land which Florida could be expected to address when she made the Will. The theoretical possibility that she could have had in mind that she might later acquire other property in Matthews Road, Kerang may readily be disregarded; there is no such suggestion in the evidence and it is at odds with Florida and Thomas' retirement from the land and their move to Kerang.

44 For the above reasons, a contrary intention to that posited by s 34(1) is established. It follows that the Will is to be construed in relation to the property disposed of by it when it was made on 22 November 2006.

45 Before considering the proper construction of the Will, it is necessary identify an important consideration which bears upon an assessment of Deborah's submissions. Deborah's submissions relied heavily on inferences and conclusions about Florida's intentions based on various asserted extrinsic facts and circumstances. Those submissions must be rejected to the extent that they rest on alleged facts and circumstances not in existence when Florida made the Will on 22 November 2006. As I have noted, the Will is to be construed in relation to the property disposed of by it as at the date it was made, not at the date of Florida's death. A recognised qualification[51] on the armchair principle is that, as stated by James LJ in Boyes v Cook,[52] the permission to have regard to surrounding circumstances known to a testator when construing a will, 'only means that the circumstances existing at the time when the testator made his will may be looked at'.[53] In considering Deborah's submissions, I have accordingly disregarded evidence which is probative only of alleged facts and circumstances which post-date the making of the Will on 22 November 2006.

46 In determining the proper construction of clause 4(a) of the Will, an important consideration is that the Will is uncomplicated and conventional in its terms and was prepared by a solicitor. In the absence of a contrary foundation in the evidence, a solicitor who drafts a will is assumed to be competent.[54] Analogously with the principles that apply to the construction of contracts, the 'legal background'[55] forms part of the surrounding circumstances in which Florida's intentions expressed in the Will are to be construed. As stated by Gleeson CJ, Gummow and Hayne JJ in Maggbury Pty Ltd v Hafele Australia Pty Ltd, the:[56]

... background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract ... may include matters of law.

47 In this case, at the time Florida's solicitors prepared the Will, the essential legal position in respect of the legal rights pertaining to the ownership and use of water was clear: any rights and entitlements to access water associated with Florida's land were, in the language of Windeyer J, the 'natural incidents of the ownership' of that land.[57] In devising 'my interest in any land situated in Matthews Road, Kerang and described in Certificate of Title Volume 8967 Folio 201 for my son, RODNEY JOHN TROY absolutely', Florida must accordingly be taken to also have intended to pass to Rodney the riparian rights attached to the specified real property. As Campbell JA stated in Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council:[58]

If the document in question is drawn by a lawyer, is manifestly intended to effect a legal transaction, and uses an expression that is not an expression in common use but that has a meaning in an area of legal discourse that is relevant to the document in question, that in itself provides a basis for the reasonable reader concluding that that expression is used in its special legal sense, unless there are other factors present that show it is not used in that special legal sense. ...

48 Given the nature of the riparian rights which attached to Florida's land when the Will was made, if the submissions advanced on behalf of Deborah were to be accepted, the solicitor who prepared the Will must have been seriously derelict or negligent in failing to ensure those rights were gifted to her. That position is not, however, maintainable because, '[a]lthough solicitors do obviously make mistakes, there needs to be something in the language of the document or its admissible background to justify that inference'.[59] There is no such indication in the material before the Court in this matter.

49 More fundamentally however, an understanding of the legal background in which the Will was made and the plain terms of clause 4(a) highlights the ill-founded basis of Deborah's case: it proceeds from the misconception that, when she made the Will, Florida, having retained a solicitor, determined to separate the riparian rights which attached to her land from the real property per se. Although senior counsel asserted that these rights were divisible as a matter of law, no authority or reasoned basis was advanced to explain how these different rights might be able to be severed in a legally efficacious way. The submission is rejected as being contrary to the then subsisting common law in relation to riparian rights and there was no suggestion that the submission reflected or was based upon any legislative provisions then in existence.

50 Moreover and in any event, there is no indication in the terms of the Will that Florida wished to separate the riparian rights which attached to her land from the real property per se. Clause 5 of the Will does not, on its terms, seek to give effect to such a purpose. Contrary to Deborah's submissions, clause 5 does not assist in elucidating the correct construction of clause 4(a). Clause 5 is not dispositive of any assets of Florida's estate; it simply records the reason why Florida made 'no further provision' for Rodney beyond that provided by clause 4(a) of the Will. That reason, and the fact that Florida elected to include that reason in her Will, does not rationally bear upon the ascertainment of what precisely Florida intended to dispose to Rodney in gifting him 'any land situated in Matthews Road, Kerang and described in Certificate of Title Volume 8967 Folio 201'.

51 The preceding analysis is unaffected by the fact of the 2004 water purchase and the fact that Rodney utilised that water in the integrated farming operations he conducted across the home block and Florida's land. These facts are to be considered in circumstances where the evidence pertaining to the 2004 water purchase was scant, and where the Court was not assisted with any submissions or evidence concerning the nature of any regulatory arrangements pertaining to the use of, or access to, water from the Murray River in the period before the 'unbundling' of land and water rights on 1 July 2007 effected by amendments to the Water Act. In the absence of any evidence or submissions about those matters, the 2004 water purchase and Rodney's evidence about other similar purchases merely demonstrates that, when he operated the farm, Thomas had from time to time purchased water from his neighbour. The use of that water in the integrated farming operations conducted across the home block and Florida's land merely confirms the unsurprising conclusion that irrigated water over which a landholder may be assumed to have certain legal authority may be directed to different landholdings controlled by the landholder.

52 The above propositions provide no support for Deborah's submission that there had been 'some unbundling' of rights to water and land before November 2006. Insofar as that submission was intended to convey that there had then been some separation or disentanglement of property rights to water from property rights in land, that submission would, for the reasons I have explained, be contrary to law and contrary to matters agreed by Deborah's legal representatives on which basis the trial was conducted.[60] The nature of any practical or commercial arrangements entered into by Thomas associated with the purchase of water from neighbours and his (and later Rodney's) use of that water across different landholdings, cannot affect the then conjoined nature of the riparian rights with appurtenant land, which basal principles are to be assumed to have underpinned and informed the terms of the dispositions in the Will prepared by Florida's solicitor.

53 This analysis is unaffected by Deborah's submissions in relation to Florida's involvement in trading water. The evidence about that matter was at a high level of generality. I accept that, at unknown times after they retired in July-August 2006, Thomas and Florida sold water entitlements associated with Florida's land to generate income for use in their retirement. However, in order for this to form part of the surrounding circumstances which might inform the proper construction of the Will, it is necessary for this involvement to have occurred in the three or four month period after their retirement before Florida made the Will in November 2006.

54 The evidence does not permit such a finding to be made. Other than the 2004 water purchase, there was no evidence of any specific transactions in which Thomas and Florida sold any water entitlement associated with Florida's land, or the frequency with which they did so. The fact of the 2004 water purchase and Thomas' previous purchases of water do not provide a proper basis to infer that Florida and Thomas would have likely engaged in the trading of water in the three or four months immediately after they retired. The absence of any evidence about the general practice or arrangements associated with the asserted 'trade' in water before unbundling occurred on 1 July 2007, and the apparent discordance between any such trade and the nature of the then subsisting riparian rights, in contrast to the arrangements established after 1 July 2007, also weigh against the likelihood that this involvement in water trading occurred in the relevant period.

55 However even if it is assumed that, in the three months before she made her Will, Florida did engage in a commercial transaction by which she received income from disposing of water entitlements associated with Florida's land to a third party, the fact of such a transaction cannot alter the then conjoined nature of the riparian rights associated with Florida's land.

56 I accept Deborah's submissions that the water shares were not essential for Florida's land to be irrigated. Although this is a distinguishing feature from the facts in Greenham, having regard to the other matters to which I have referred, it is of limited assistance in construing clause 4(a) of the Will.

57 I also accept Deborah's submission that the proposed unbundling of water rights from land was a matter of widespread public interest and awareness in the Kerang community in the period before the relevant amendments to the Water Act were enacted, including in 2006. Having been involved in farming irrigated land for nearly half a century, it is likely that, in the time when she made the Will, Florida would have been generally aware that significant changes in relation to water rights were proposed.

58 However, contrary to Deborah's submissions, the evidence does not permit any more detailed findings as to the extent or nature of Florida's specific awareness and knowledge about the proposed changes, or the likelihood that they would be implemented. Accordingly, this is an unduly tenuous basis to draw any inferences about what Florida intended by the disposition in clause 4(a) of the Will. In any event, the issue diminishes in significance in light of the fact that Florida made the Will with the assistance of a solicitor who, notwithstanding the likelihood that they would also have had some awareness of the proposed changes,[61] is to be taken to have prepared it by reference to the existing legal framework of property rights, as distinct from a framework which might be established in the future.

59 Deborah placed emphasis on two other circumstances said to be in existence when Florida made the Will which she submitted supported her posited construction of clause 4(a). The first concerned Thomas' claimed offer of the 2004 water purchase to Rodney on condition that Rodney be responsible for the loan associated with that purchase. Deborah's evidence was that her parents told her that, as a result of Rodney's refusal of this proposal, they said they would keep the water and that it was not going to go to him. In his evidence, Rodney denied that the question of the loan was ever discussed with him, or that his father ever offered him the 2004 water purchase on the basis that he pay out the balance of the loan.

60 As the party seeking to rely upon this asserted fact, Deborah carries the evidentiary burden to prove its existence on the balance of probabilities. For a number of reasons, I have no actual sense of persuasion of this asserted fact. First, as the only living witness able to give direct evidence about this conversation, where there is no specific reason to doubt his denials on this point, Rodney enjoys a forensic advantage when analysing the relevant evidence. Secondly, Deborah's evidence on this point is inherently of limited weight. Her claim is based on what she recalls she was told by her parents at an unspecified time at least 15 years ago and which was at least approximately two years after the Will was made. Further, her evidence of what was reported to her by her parents was expressed in very general terms and in the context of other significant familial upheavals then occurring in their lives. Thirdly, while there is an explanation for its absence, it remains the case that there is no documentary material before the Court to support Deborah's evidence concerning a loan about which there is scant evidence. In these circumstances, I prefer Rodney's denials in relation to conversations with his parents, as compared to Deborah's general and conclusionary evidence uncorroborated by any documentary material about what she asserts she was told by her parents many years ago in relation to conversations said to have occurred at an even earlier point in time.

61 The other surrounding circumstance of significance upon which Deborah relied was the claim that Rodney reneged on an agreement for his parents to live in his house in Victoria Street in return for the farm being transferred to him. Rodney agreed in evidence that it was always the plan that Thomas and Florida would live at that property in their retirement. However, he disputed that he refused permission for his parents to live at Victoria Street. His evidence was that, although Florida wanted to live at the property, Thomas 'didn't like the house and he wanted another one'. Deborah's evidence to the Court was that her parents told her that Rodney would not allow them to move into Victoria Street because it was rented out and he would not give the tenants notice with the consequence that they decided to withhold a portion of the farm from Rodney (Florida's land) and purchased Andrew Street.

62 I prefer Deborah's evidence on this issue. She gave clear and convincing evidence of her own observations when she visited Kerang which were consistent with Victoria Street then being let to tenants. Her evidence was also more consistent with the inherent probabilities and logic of events. First, having made the very significant decision to retire and leave the land after 50 years with a plan to live at Victoria Street, the proposition that Thomas then decided that he 'didn't like the house' as asserted by Rodney, and to instead expend a presumably not insignificant capital sum to buy another house is inherently unlikely. Secondly, Deborah's evidence that, after Rodney reneged on the agreement, her parents decided to withhold Florida's land from the transfer of the farm to Rodney, provides a logical explanation, which is otherwise lacking in the evidence, for why that land was not transferred to Rodney. It is an oddity in the facts of this case that, having decided to retire from the land and transfer the farm to Rodney, Thomas and Florida decided to retain Florida's land. No explanation otherwise emerges as to why they decided to keep this relatively small parcel of land; Deborah's evidence that this occurred because Rodney reneged on the retirement plan arrangements provides a rational explanation for this occurrence.

63 Although this finding of fact forms part of the background in which the Will was made by Florida, it is of little assistance in determining the proper construction of clause 4(a) of the Will because, having reneged on the arrangement for his parents to move into Victoria Street on their retirement, within two or three months, Florida proceeded to gift her 'interest in any land situated at Matthews Road, Kerang' to Rodney. The fact that Rodney reneged on the agreement is not of any particular assistance in construing whether, in making this gift, Florida intended to convey the water rights or entitlements which attached to the land the subject of the gift in clause 4(a).

64 For all of the foregoing reasons, Deborah's submissions in relation to the construction of clause 4(a) of the Will based upon various extrinsic circumstances are of limited assistance in resolving the issue of construction.

65 Further, there is one surrounding circumstance which materially supports the construction of the Will advanced by Rodney. It is significant that, about three months before Florida made her Will, Thomas and Florida transferred the home block to Rodney. It is uncontroversial that, as part of this transfer, Rodney also received the rights to water associated with the home block. As I have explained, that arrangement is entirely consistent with the then subsisting riparian rights. It is a strong indication that, when she made the Will three months later, Florida assumed or understood that dispositions of particular parcels of land, such as that the subject of clause 4(a), carried with them the disposition of any rights to water associated with the subject land.

66 Given my analysis and conclusions, Deborah's alternative submission referred to in [37] must also be rejected.

67 The Court will accordingly declare that the water shares form part of the gift in clause 4(a) of the Will.

[1] In the interests of clarity and without intending any disrespect, I will generally refer to the members of the Troy family by their first names.

[2] Thomas also executed a codicil on 24 June 2014 by which he appointed State Trustees Ltd as executor and trustee of his estate in lieu of the appointments made by his will.

[3] Certificate number WEE008778, being in respect of 58.1 mega litres classified as 'low' reliability valued in the inventory at $29,050, and certificate number WEE08777, being in respect of 127.9 mega litres classified as 'high' reliability and valued in the inventory at $479,625.

[4] [2020] VSC 749 ('Greenham').

[5] Ibid [13]-[23] (citations in original).

[6] Perrin v Morgan [1943] AC 399, 406 (Viscount Simon LC) ('Perrin v Morgan').

[7] Lutheran Church of Australia South Australia District Incorporated v Farmers' Co-operative Executors and Trustees Ltd [1970] HCA 12; (1970) 121 CLR 628, 638 (Barwick CJ).

[8] Farrelly v Phillips (2017) 128 SASR 502, 510 [32] (Stanley J) ('Farrelly v Phillips').

[9] Fell v Fell (1922) 31 CLR 268, 273-4 (Isaacs J) (emphasis in original).

[10] Ibid 274 (Isaacs J) (emphasis in original).

[11] 'No will can be analysed in vacuo': Perrin v Morgan (n 6) 414 (Lord Atkin).

[13] Boyes v Cook [1880] UKLawRpCh 76; [1880] 14 Ch D 53, 56 ('Boyes v Cook').

[14] See, for example, Phillips v McCabe [2016] SASC 27, [14].

[15] In the Will of Loughlin; Acheson v O'Meara [1906] VLR 597, 601 (Hood J), citing James Wigram, Examination of the Rules of Law, respecting the Admission of Extrinsic Evidence in Aid of the Interpretation of Wills (London, Sweet and Maxwell) 10. See also Lang & Ors v Davey & Ors [2020] SASC 160, [39] (Bampton J); The Trust Company Limited Ltd & Anor v Zdilar & Ors (2011) 4 ASTLR 379, 384-385, [21] (M Wilson J); Suthers & Anor v Suthers & Ors [2015] QSC 285, [4] (Burns J); David Malcom Haines, Construction of Wills in Australia (LexisNexis Butterworths, 2007) [5.3].

[16] King v Perpetual Trustee Company Ltd [1955] HCA 70; (1955) 94 CLR 70, 78.

[17] Allgood & Ors v Blake [1873] UKLawRpExch 17; (1873) LR 8 Ex 160, 162 (Blackburn J).

[18] Marley v Rawlings [2014] UKSC 2; [2015] AC 129, 144 [19], 145 [23] (Lord Clarke, Lord Sumption, Lord Carnwath and Lord Hodge JJSC agreeing).

[20] Public Trustee v Cole [2019] QSC 298, [37] (Davis J) (second quotation); Davies v Davies (No 2) [2019] QSC 294, [8] (Bradley J); Roberts v Pollock [2019] QSC 184, [46] (Davis J); Re Lapalme; Daley v Leeton [2019] VSC 534; (2019) 60 VR 71, 76-7 (McMillan J); Chan v Valmorbida [2019] VSC 336, [19] (Daly AsJ); Wright v Stevens [2018] NSWSC 548, [181] (Hallen J); Re Islik [2018] VSC 59, [41] (Riordan J); Farrelly v Phillips (n 8) 502, [29] (Stanley J, Kourakis CJ and Nicholson J agreeing); Trenberth v Trenberth [2016] SASC 150, [94] (Bampton J); Fielder v Burgess [2014] SASC 98, [42] (Kourakis CJ); Re Nies [2014] SASC 93, [14] (Gray J).

[21] [2020] NSWSC 370, [66].

[22] Being the land described in Certificates of Title Volume 8906 Folio 609 and Volume 8470 Folio 477.

[23] Thorpes Ltd v Grant Pastoral Co Pty Ltd [1955] HCA 10; (1955) 92 CLR 317, 329 (Fullagar J).

[24] [1962] HCA 27; (1962) 108 CLR 12, 23-4 (citations omitted, emphasis added) ('Gartner v Kidman').

[25] The amendments to the Water Act were made by the Water (Resource Management) Act 2005. On 19 June 2007, an 'Order declaring water systems in Northern Victoria' was made pursuant to s 6A of the Water Act, as amended. The order took effect from 21 June 2007, being the date of publication in the Government Gazette. The date on which the water system became a declared water system was 1 July 2007.

[26] Greenham (n 4) [7]-[8] (citations in original).

[27] Kate Stoeckel et al., Australian Water Law (Thomson Reuters, 2012), [2.20]; Gartner v Kidman (n 24), 32.

[29] The amendments to the Water Act 1989 were made by the Water (Resource Management) Act 2005. On 19 June 2007, an '[o]rder declaring water systems in Northern Victoria' was made pursuant to s 6A of the Water Act 1989 as amended. The date on which the water system became a declared water system was 1 July 2007.

[30] Water Act 1989 s 33F(1).

[31] Water Act 1989 s 33F(2).

[32] Water Act 1989 ss 33S(1), 33AV(1).

[37] See Gowan J in Re Grieve [1968] VicRp 58; [1968] VR 465 at 466 in relation to s 22 of the Wills Act 1958, being the predecessor provision to s 34 of the Wills Act, referred to with approval by Forrest J in Re Blake [2009] VSC 184; (2009) 25 VR 27, [49] in relation to s 34(1)-(2) of the Wills Act.

[39] [1909] UKLawRpCh 51; (1909) 1 Ch 784 ('Evans v Powell').

[40] Section 24 of the Wills Act 1837, 1 Vict, c 26 provided that: '[e]very will shall be construed, with reference to the real estate and personal estate comprised in it, to speak and take effect as if it had been executed immediately before the death of the testator, unless a contrary intention shall appear by the will'.

[41] (1885) 30 Ch D 55.

[45] [1962] HCA 5; (1962) 107 CLR 604 ('McBride v Hudson').

[46] Section 27 of the Wills Act 1936 (SA) provided that '[e]very will shall be construed with reference to the real estate and personal estate comprised in it to speak and take effect as if it had been executed immediately before the death of the testator unless a contrary intention appears by the will'.

[50] See, for example, Kinloch v Manzione [2022] ACTSC 76, [18].

[51] See for example Farrelly v Phillips (n 8) [28] (Stanley J with whom Kourakis CJ agreed); Loring v Woodland Trust [2015] 1 WLR 3238, 3245 [21] (Lewison LJ) ('Loring v Woodland Trust'); and Re Moran [2022] VSC 776 [30] (McMillan J).

[54] RSPCA v Sharp [2010] EWCA Civ 1474; [2011] 1 WLR 980, 988 [22] (Patten LJ) ('RSPCA v Sharp').

[55] See Loring v Woodland Trust (n 51) [23].

[56] [2001] HCA 70; (2001) 210 CLR 181, 188 [11], citing Hoffman LJ in Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 WLR 896, 912; [1997] UKHL 28; [1998] 1 All ER 98, 114.

[58] [2010] NSWCA 64, [174].

[60] Joint Statement of Agreed facts and Issues dated 20 September 2023, paragraphs 8, 9.

[61] Florida's will was signed and witnessed by solicitors who were located in Kerang.