Plaintiff v Defendant

(i) furnish and, if necessary, verify accounts;

(ii) pay funds of the estate or trust into court; or

(iii) do or abstain from doing any act;

(c) an order -

(i) approving any sale, purchase, compromise or other transaction by an executor, administrator or trustee; or

(ii) directing any act to be done in the administration of an estate or in the execution of a trust which the Court could order to be done if the estate or trust were being administered or executed under the direction of the Court.

1. The principles regarding the construction of wills were helpfully summarised by Moore J in Greenham v Greenham.[17] I gratefully adopt these principles, which are reproduced below (footnotes omitted):
   1. 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'. The task is to 'find the deceased's intention as expressed in her words in the will'; 'not what she meant to say, but what she actually said'.
   2. 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:

... 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.

1. 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:

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'.

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

... 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.

1. 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'. The surrounding circumstances may include evidence of the testator's family, property, friends and acquaintances.

2. 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'. 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'. This reflects the fact that 'the meaning of words varies according to the circumstances of and concerning which they are used'.

3. 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:

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.

1. 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.[18]

1. In order to determine the consequences of the defendant's failure to comply with the conditions contained in clause 2(b) of the will, it is necessary to construe the nature of the gift. Although clause 2(a) of the will gives the defendant the 'use and occupation' of the property for life, subject to her meeting the conditions in clause 2(b), the plaintiff submits that the defendant's entitlement is not a life interest - the property is held on trust for the defendant's benefit.
2. The phrase 'use and occupation' must be read in the context of the entire will. Specifically, clause 2 holds the property on trust for sale. Clause 9(c) then gives the trustees 'the discretion to apply income and capital for the benefit of'[19] any beneficiary, including the defendant. It is therefore open to the trustees to sell the property and use the proceeds of sale for the defendant's benefit until her death, at which time the remaining funds would form part of the residuary estate.

1. It is clear that the defendant has not complied with the conditions contained in clause 2(b) of the will. However, the consequences of this non-compliance may be interpreted in different ways. On one view, the defendant's non-compliance may have resulted in her forfeiting the gift under the will. However, on a more preferable view, the defendant's non-compliance may not result in her forfeiting the gift under the will, but may create personal equitable obligations that the plaintiff could enforce against her.
2. On one reading of the will, the defendant's 'use and occupation' of the property for life 'subject to' meeting the conditions in clause 2(b) may mean that the defendant's failure to comply with the conditions in clause 2(b) therefore results in forfeiture of the gift in clause 2(a). This interpretation may have more force if the nature of the gift is deemed a life interest.
3. Conversely, assuming that the trustees have power to sell the property and invest the proceeds for the benefit of the defendant, clause 2(b) would no longer be applicable. It would therefore be odd for the defendant's non-compliance to result in forfeiting the gift, when the will specifically allows for circumstances in which the defendant would not be able or required to comply with the conditions in clause 2(b).
4. Unlike the decision of Re Tootell,[20] the will does not specify the consequences of the defendant's non-compliance with the conditions.
5. Testators usually first provide for their domestic partners and this will is no exception. The deceased intended for the defendant to have the benefit of the property for her life; and it is unlikely that he would have intended for her to lose her benefit due to any breaches of the conditions in clause 2(b). Furthermore, there is some evidence that the defendant financially contributed towards the purchase of the property.

1. Arguably, the phrase 'use and occupation' in clause 2(a) may illustrate that the deceased's preference was for the defendant to live in the property, subject to her paying various expenses and maintaining and insuring the property. However, even if this was the deceased's preference, it is difficult to carry it out given that the defendant has vacated the property; the property is in a poor condition; and the estate does not have any other assets to pay for the ongoing costs of retaining and maintaining the property or the plaintiff's legal costs in responding to the Part IV proceedings. For practical purposes, the property must be sold to discharge the estate's liabilities.

1. At the time that the deceased made the will, the defendant was his partner. They lived together in the property. The defendant's sister, Ebony had two children, minors Jasper and Milah. The deceased had two surviving children, daughters Michelle and Sharon, and three grandchildren: Zakk, Dale and Bryce. There is no cogent evidence regarding any other relevant circumstances surrounding the making of the will.
2. I find that the nature of the gift is that it is a life interest. This is evident on a plain reading of clause 2 of the will. Clause 2(a) permits the defendant 'to have the use and occupation of my property for life'. Clause 2(c) suggests that if the life interest is taken up, then upon the defendant's death the trustee can either sell the property and place the proceeds into the pool for residuary beneficiaries, or transfer the property to the residuary estate. Clause 2 must be read in the context of the entire will. On balance, I consider this supports the plain reading of clause 2 as a life interest.
3. The plaintiff says that clause 9(c) is inconsistent with it being a life interest for the defendant, because it allows the trustee to apply the capital or income 'of the vested [or] presumptive [or] contingent share' to any beneficiary.[21] The plaintiff says that, if it had been a life interest and the property was sold, then the defendant would only be entitled to the income and not the capital, because the intention is for the capital to pass onto the next generation. That is, if the defendant takes up the life interest, then the capital only becomes available after her death. I accept the capital here could only be the sale proceeds of the property. However, clause 9(c) is not confined to the defendant. It refers to applying the income or capital 'of the vested presumptive contingent share' to any beneficiary. This clause is consistent with giving the trustee powers to deal with the property in the event that the life interest is forfeited. It is consistent with clause 2, which allows the trustee to sell the property. As the plaintiff properly concedes, clause 9 may allow for an interim distribution to a residuary beneficiary in need, if the life interest is forfeited and the property is sold.
4. There is a bank statement in evidence showing a payment of $29,000 into a bank account in the name of the defendant and a payment of $29,000 out of the account on the same day.[22] Both have the descriptor 'house deposit'. I disregard the hearsay evidence from the plaintiff that she was told by Ebony that the defendant made contributions to the property.[23] The bank statement is not conclusive. There is no evidence from the defendant. The deceased was the registered proprietor of the property. I decline to infer from the bank statement that the defendant has an equitable interest in the property. Nor do I infer that the deceased intended for her to have an equitable interest in the property. There is no evidence about how the $29,000 should be characterised.
5. The defendant must be given notice before there is any distribution of sale proceeds, should she wish to make a claim regarding the $29,000.
6. The plaintiff referred to Re Tootell. I will address it as a matter of completeness. Although the circumstances are different to those here, as are the terms of the will, the plaintiff in that case also forfeited the right to occupy a property. The issue in that case was whether the plaintiff had an absolute entitlement to a property by operation of clause 5 of the will. The plaintiff was the deceased's grandson and the executor of the deceased estate. The deceased's primary concern before she passed away was to provide for her disabled son Gary (not the plaintiff) as she had always cared for him. By her will, she gave Gary a right to reside for life in the property and gifted the residue of her estate to him. Gary had moved into aged care after the death of the deceased. The plaintiff's right of residency to the property was contingent upon him meeting certain conditions, including paying outgoings, and not calling upon Gary to make any contributions. It was held that the will was consistent with an overarching intention on the part of the deceased to secure Gary's living arrangements after her death, without requiring him to pay outgoings. The plaintiff failed to comply with his obligations to pay the outgoings. In accordance with the will, the property was devised to three of the deceased's surviving children, because the plaintiff had failed to fulfil the conditions of his right to occupy the property.

1. The defendant has forfeited the gift. Clause 2(b) of the will requires the defendant to pay all rates, taxes and outgoings associated with the property, keep the property in good condition, and insure the property. The defendant has not complied with these conditions. She has not lived at the property since at least December 2023, although likely since 2021.[24] Nor has she insured the property since 13 February 2020.[25] The property is in a poor condition; it was vandalised by an unknown person in July 2024, and is 'well-known' in the community to be vacant.'[26]

1. The defendant has failed to comply with the conditions set out in clause 2(b) of the will. Accordingly, she has forfeited the gift accorded to her in clause 2.
2. In light of the above, the proceeds of sale of the property are to be held in accordance with clause 7 of the will, subject to the payment of all reasonable and proper estate expenses and liabilities and the claims in proceedings S ECI 2020 02232 and S ECI 2020 02255.

[1] Affidavit of the plaintiff affirmed on 26 July 2024 ('plaintiff's July affidavit'), [8].

[2] Exhibit 'NTA-1' to the plaintiff's July affidavit, 32.

[3] See e.g. exhibit 'NTA-1' to the plaintiff's July affidavit, 191-201.

[4] Exhibit 'NTA-1' to the plaintiff's July affidavit, 178-179.

[5] See plaintiff's July affidavit, [21].

[9] Exhibit 'NTA-1' to the plaintiff's July affidavit, 22-29.

[10] Plaintiff's July affidavit, [35].

[12] Exhibit 'NTA-1' to the plaintiff's July affidavit, 202-222; exhibit 'NTA-2' to the affidavit of the plaintiff affirmed on 27 August 2024 ('plaintiff's August affidavit'), 16-19.

[13] Plaintiff's July affidavit, [39].

[14] Plaintiff's July affidavit, [44](a); see also exhibit 'NTA-1' to the plaintiff's July affidavit, 226-227.

[15] Exhibit 'NTA-1' to the plaintiff's July affidavit, 223.

[16] See Order made by the Court on 16 October 2024.

[17] [2020] VSC 749 ('Greenham').

[18] Greenham, [13]-[20] (citations omitted) (emphasis original).

[19] Plaintiff's written submissions filed on 28 November 2024, [16].

[20] [2024] VSC 692 ('Re Tootell').

[21] Transcript, 11 December 2024, 7 (Mr Mah).

[22] Plaintiff's July affidavit, [44]-[45]; exhibit 'NTA-1' to the plaintiff's July affidavit, 223.

[23] Plaintiff's July affidavit, [44].

[24] Plaintiff's July affidavit, [33].