Plaintiff v Defendants

1 Vera Helen Foord died on 12 January 2018. Probate of her will dated 28 October 2009 was granted to the plaintiff on 6 April 2018. The deceased was survived by her three sons, William Foord, David Robert Foord and Michael Frederick Foord. The latter two sons are the defendants in the proceeding.

I GIVE to my son WILLIAM FOORD all my personal chattels (as those words are defined by the Administration and Probate Act 1958.)

SUBJECT TO the payment of all expenses associated with my death and the administration of my estate including all debt taxes and duties of any kind payable on or by my estate or in respect to property deemed to form part of my estate I GIVE all my real estate and the residue of my personal estate (in this Will called "my residuary estate") to my Trustees UPON TRUST to divide the same into four (4) equal parts and to dispose of the same as follows:

(a) TO pay or transfer two (2) of such parts to my son WILLIAM FOORD absolutely;

(b) TO pay or transfer one (1) of such parts to my son DAVID ROBERT FOORD absolutely;

(c) TO pay or transfer the remaining one (1) of such parts to my son MICHAEL FREDERICK FOORD absolutely.

3 At the date of execution of her will, the deceased's principal asset was her home in Williamstown. Pursuant to a power of attorney, William Foord sold the Williamstown property on 26 August 2010 for $560,000. Most of the sale proceeds were used for an accommodation bond of approximately $410,000 for the deceased. The balance of the sale proceeds of approximately $146,459 was used by William Foord, on behalf of the deceased, to buy gold bullion and silver coins. The bullion and coins were purchased between 27 May 2011 and 5 January 2018. The deceased was informed of these purchases and Centrelink was informed that the bullion and coins belonged to the deceased. None of the gold and silver was traded by the deceased or on her behalf and it was kept in the Guardian Vaults on her behalf.

4 The deceased's net estate at the date of her death amounted to approximately $565,060. Of this amount, the gold bullion component was valued at $146,371.80 and the silver coins at $87.44.

5 By originating motion filed 17 August 2018, the plaintiff seeks the determination of the following questions:

(a) Are the gold bullion and silver coins personal chattels or are they excluded as securities for money pursuant to s 5 of the Administration and Probate Act 1958?

(b) Alternatively, are the gold bullion and silver coins excluded as:

(i) chattels that were not personal to the deceased; or

(ii) effects used for business purposes; or

(iii) money?

6 In their written submissions, the defendants raise a preliminary issue of whether the sale proceeds of the Williamstown property can be traced to the gold bullion and silver coins and whether an exception to the principle of ademption should apply in those circumstances - that is, whether the interests in the Williamstown property are preserved in the sale proceeds and, subsequently, the value of the gold bullion and silver coins. The defendants submit that if the preliminary issue is resolved it may be unnecessary for the questions in the originating motion to be determined at all.

Do the principles of ademption apply to the sale of the Williamstown property?

7 The defendants submit that the plaintiff ought to consider s 83A of the Powers of Attorney Act 2014 as part of his duties, notwithstanding that the sale of the Williamstown property occurred in 2010. Section 83A contains an exception to ademption for property dealt with by an attorney, and the defendants submit that the legislative intent in the section is directed to remedying the unfairness referred to in Simpson v Cunning.[1]

8 The defendants submit that the deceased 'specifically gifted her "real estate" for division' and that s 83A 'allocates the "same interest in any money or property" if no sale [of] the subject of the property was made'. As such, the defendants seek the following order:

The Executor is directed that section 83A of the Powers of Attorneys Act 2014 applies such that the interests in any money or property arising from the sale of the deceased property are the same as if no sale had been made.

9 In support of their submissions, the defendants referred to the explanatory memorandum outlining the purpose of the enactment of s 83A as follows:

New section 83A provides an exception to ademption for property dealt with by an attorney in the same terms as the exception provided for property dealt with by an administrator under section 53 of the Guardianship and Administration Act 1986.[2]

10 The defendants also referred to the following statement by Hargrave J (as his Honour then was) in Simpson v Cunning, which was decided prior to the enactment of s 83A:

People are living longer than in the past and their physical health is outlasting their mental capacity. It is commonplace for properties owned by incapacitated persons to be sold under the authority of enduring powers of attorney, to fund accommodation bonds and other necessities and comforts for an aging population. Further, as noted, there is no good reason why the position should be different if, in the absence of an applicable enduring power of attorney, it is necessary to appoint an administrator under the Guardianship and Administration Act to sell property of an incapacitated person for such purposes.

The issue requires urgent legislative intervention to resolve any doubt.[3]

11 The defendants also referred to the recommendations of the Victorian Law Reform Commission's 2013 report on Succession Laws ('VLRC Succession Laws Report').[4]

12 The plaintiff submits that the principles of ademption and s 83A do not apply as only specific gifts can be adeemed and the Williamstown property is not a specific gift. Reliance is placed upon Robertson v Broadbent,[5] in which Lord Blackburn said that a specific legacy is 'something which a testator, identifying it by a sufficient description, and manifesting an intention that it should be enjoyed in the state and condition indicated by that description, separates in favour of a particular legatee, from the general mass of his personal estate'.[6]

13 The plaintiff also relied upon the Dixon CJ's definition of a 'specific bequest' in McBride v Hudson.[7]

14 When interpreting a will, the task of the court is to give effect to the testator's intention through examination of the words used, having regard to the will as a whole, aided as necessary by any admissible extrinsic evidence.[8] Prima facie, the words of a will must be given their ordinary meaning.[9]

15 Unless a will expresses a contrary intention, all property not already disposed of after the payment of debts, liabilities and other devises or legacies comprises the residuary estate.[10] As stated by Bryson AJ in Armstrong v The Childrens Hospital at Westmead:

A reference in a will to 'the rest and residue of my estate' indicates in its ordinary and natural meaning that other dispositions in the will are to be satisfied before the rest and residue of the estate is to be ascertained.[11]

16 The word 'ademption' derives 'from the Latin noun ademptio, meaning "a taking away"'.[12] While ademption can arise in a number of circumstances,[13] of relevance here is its application to specific gifts of property by will where at the time of the testator's death the property is no longer her or his to dispose.[14] Subject to certain exceptions, the specific gift fails as there is no property that meets the description of the subject matter of the gift amongst the testator's property at the time of her or his death.[15] An obvious case of ademption is where the testator divests her or himself of the property in her or his lifetime.[16]

17 The principle only applies to 'specific gifts'.[17] A gift is specific where:

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.[18]

18 In contrast, a demonstrative gift is an 'unconditional gift of a specified amount accompanied by reference to a particular fund or source for payment thereof'.[19] Gifts that are neither specific nor demonstrative, are described as 'general' - that is, a gift that:

Has no reference to the actual state of the testator's property, and it is not a gift of a particular thing or interest identified and set apart from the rest of the testator's property. It is a gift to be satisfied by the executor out of the general assets of the estate without regard to any particular fund, thing or things, and consequently does not require the delivery of any particular thing forming part of the testator's estate or the transfer or any legal or equitable interest of which the testator was possessed to the legatee.[20]

19 In Re Plowright, Newton J referred to the 'well-established presumption that a legacy should, where possible, be construed as general rather than specific'.[21]

20 In unusual circumstances, such as occurred in Armstrong v The Childrens Hospital at Westmead, Bryson AJ identified a specific devise within the following residuary clause:

34. SUBJECT TO the payment thereout of all my just debts, funeral and testamentary expenses and all probate estate and other duties payable in respect of my estate or as a consequence of my death I GIVE DEVISE AND BEQUEATH the rest and residue of my estate both real and personal of whatsoever kind and nature and wheresoever situate, including but without limiting the generality of the foregoing, my home at 25 Wallace Street, Concord in the State of New South Wales or such other home as I reside in at the date of my death and all the furniture, furnishings, crockery, cutlery, glassware, plate, plated goods and all other items of a household or domestic nature, together with all my jewellery and porcelain ornaments UNTO such of my niece MURIEL THELMA CAMPBELL and her husband JOSEPH OWEN CAMPBELL as shall survive me, if more than one in equal shares as tenants-in-common.[22]

It was relevant to his Honour's conclusion that the gift was specifically disposed of in the 'plainest way' and 'no less so' because the disposition was 'subject to liabilities'.[23]

21 In Re Blake, J Forrest J determined that whether the principle of ademption applies involves two questions: first, what is it that has been bequeathed by the specific gift; and second, whether the subject matter of the bequest exists as at the death of the testator.[24] In that case, the will provided a gift of the proceeds of sale of the deceased's interest in her unit or any other accommodation facility occupied by her as her residence at her death.[25] In fact, the deceased did not own any 'accommodation facility' at the time her will was made, or at her death. J Forrest J held that the clear intention of the deceased was that any money standing to the deceased's credit in relation to her accommodation, including the return of a bond under an agreement with a retirement village, would fall within the terms of the gift.[26] His Honour said that her use of a general reference to her place of occupation at her death 'was to ensure that the gift did not fail in the event of her moving to another facility'.[27]

22 Re Viertel[28] was a case in which, acting pursuant to powers of attorney and at a time the testatrix lacked testamentary capacity, beneficiaries of a will sold the testatrix's house. At the time of sale, the beneficiaries were unaware that the house was devised to them. In such circumstances, Thomas J recognised an exception to the principles of ademption, appearing to follow the approach in Jenkins v Jones.[29] Re Viertel was then followed in a number of cases, including Simpson v Cunning.[30] There, the testatrix devised her house to her son. However prior to her death, her solicitor sold the house, acting under an enduring power of attorney, in order to fund the testatrix's accommodation in residential care. After reviewing the relevant authorities and submissions based upon policy, Hargraves J determined that the exception to ademption as recognised in Re Viertel should apply:

In my opinion, the statements in Jenkins v Jones were not intended to create a new exception to the ademption principle. Rather, as held in Banks v National Westminster Bank, Jenkins v Jones was an application of the existing exception for unauthorised dispositions of the relevant asset without the knowledge or consent of the testator. However, I am nevertheless of the view that a further exception to the ademption principle, to the effect expressed in Re Viertel, constitutes a justified extension of the common law to reflect current circumstances.[31]

23 The exception to ademption identified in Re Viertel was considered by the Court of Appeal of New South Wales in RL v NSW Trustee and Guardian.[32] That case involved the administration of property of a woman who had advanced Alzheimer's disease. Specifically at issue was the application of s 83 of the NSW Trustee and Guardianship Act 2009 (NSW), a statutory exception to ademption. Campbell JA found that it was unnecessary to determine whether Re Viertel applied in New South Wales given the statutory exceptions afforded in s 83 of that Act and s 22 of the Powers of Attorney Act 2003 (NSW).[33] However, after an extensive review of the authorities, his Honour concluded that were it not for the statutory exception the devise in question would have adeemed,[34] and that in his Honour's view Re Viertel had 'come to an incorrect view of the law'.[35] In relation to Simpson v Cunning, Campbell JA stated:

Hargrave J noted this in Simpson v Cunning, and at [42] said that 'there is no sound reason why a sale by an administrator, appointed to fill the gap where there is no enduring power of attorney, should lead to a different result than a sale by an attorney in like circumstances'. As a matter of social policy, I agree. However, if one is considering what the law actually is, it seems to me that it is of critical importance that the only reason why a sale by an administrator does not adeem the subject matter of the specific gift totally is because there is a statute that permits any surplus proceeds arising from a sale by an administrator to be notionally treated as being themselves the subject matter of the specific gift. The reason why the statutory provision was enacted was precisely because, absent the statutory provision, ademption occurs as a result of such a sale. When there is no analogous Victorian statutory provision concerning sales effected under power of attorney, proper application of principle must require that the ademption occur.[36]

24 Ultimately, his Honour viewed the relevant inquiry as whether, at her death, the property of which the testatrix has made a specific gift in her will still belonged to her.[38]

25 Sections 83A and 83B of the Powers of Attorney Act 2014 (Vic) commenced on 1 November 2017.[39] They form a statutory exception to ademption in Victoria that applies regardless of testamentary capacity. As submitted by the defendants, ss 83A and 83B implemented recommendations from the VLRC Succession Laws Report, and were enacted following Hargrave J's call for 'urgent legislative intervention' in Simpson v Cunning.[40] When the amendments were introduced into the Powers of Attorney Act 2014 (Vic), there were no transitional provisions included in that Act giving them retrospective effect.

26 Amendments to the Guardian and Administration Act 1986 (Vic) and the Administration and Probate Act 1958 (Vic) ('the APA') regarding ademption also commenced on 1 November 2017.[41] The changes to the APA provide, inter alia, that a beneficiary may apply to the court if a beneficiary under a will gains an unjust advantage or suffers an unjust disadvantage by the application of s 83A of the Powers of Attorney Act 2014 (Vic) or s 53 of the Guardianship and Administration Act 1986 (Vic).[42] Further, a beneficiary under a will to whom either of those sections applies is entitled to any traceable income from the sale of adeemed assets.[43] Pursuant to s 106, the amendments to the APA apply in respect of the estate of any person who died on or after 1 November 2017.[44]

27 Although the defendants submit that the plaintiff be directed that s 83A of the Powers of Attorney Act 2014 (Vic) applies in this case, their submissions do not address how the provision applies to a sale that occurred in 2010 and prior to the amendments to the APA that commenced on 1 November 2017. In any event, even if s 83A does apply, the difficulty in the defendants' submissions is that the principles of ademption apply to specific gifts. Section 83B refers to s 83A as an '[e]xception to ademption'. Ademption is a word conventionally used to express a common law principle. The VLRC Succession Laws Report, upon which the amendments were based, sets out the rule of ademption as relating to specific gifts, and expressly concluded that while an additional exception was necessary, no change to the common law rule was required.[45] As such, the requirement for the gift to be specific remains, even in the context of s 83A.

28 The phrase 'all my real estate' used by the deceased in her will is general. This is not a gift of a particular thing set apart from the rest of the deceased's property. Rather, it expressly forms part of the deceased's residuary estate, alongside 'the residue of [the deceased's] personal estate'. While the decision in Armstrong v The Childrens Hospital at Westmead demonstrates that a gift may be specifically disposed of in a residuary clause, the will in that case referred to the testatrix's home by its address and 'such other home as I reside in at the date of death'.[46] In that circumstance, the language indicates an intention of the testatrix to specifically distinguish her home from the rest of her estate. The same conclusion cannot be drawn in the deceased's will. Further, the words or structure of the will do not indicate that the deceased intended the proceeds of the sale of the Williamstown property to be specifically gifted to the named beneficiaries; in this regard, the language is distinct from that used in Re Blake.[47] Finally, if there was any doubt as to whether the gift was general or specific, such doubt would be resolved in favour of the former.

29 Accordingly, the gift of 'all my real estate' in the deceased's will is general and the principles of ademption do not apply.

Are the gold bullion and silver coins 'personal chattels'?

30 The remaining issues are whether the gold bullion and silver coins fall within the phrase 'my personal chattels' as that phrase is used in the will or whether they fall to the residuary estate.

31 The defendants submit that the gold bullion and silver coins are not 'personal chattels' as the phrase is defined in s 5 of the APA.

32 According to the defendants, s 5 of the APA derives from s 55(1)(x) of the Administration of Estates Act 1925 (UK). That section is asserted to have formed a mechanism allowing an intestate's surviving spouse to take the personal chattels absolutely, subject to statutory trusts for the intestate's residuary estate. Decisions from the United Kingdom have described s 55(1)(x) as the 'enumeration of specific articles ... [that] is neither happy nor clear',[48] and as a 'curious collocation of terms'.[49] However, the defendants submit that, '[n]evertheless, the items may be seen as terms ejusdem generis of a class of items with a personal or domestic connection to the deceased'.

33 In this respect, it is asserted that the 'Courts have interpreted the various items by reference to their connection to the [deceased]', and that each item 'may be assessed by reference to the proviso that the item has a personal connection to the deceased'. A number of authorities from the United Kingdom are relied upon.[50]

34 The defendants contrast '[t]he need for a personal connection' with 'the exclusion of specific items used for business purposes, any chattels used at the death of the intestate for business purposes, money and securities for money'. On this point, reliance is placed upon Re Ogilby, in which the deceased's farm was held to be a business, as there was no personal connection.[51]

35 Finally, the defendants assert that the 'statutory purpose in preserving chattels for a deceased's spouse or issue and whether those chattels form part of the deceased's residuary estate' is another consideration.

36 The plaintiff submits that the silver coins, 'given their description', are probably money. Reference is made to the Currency Act 1965 (Cth), and the definitions of 'monetary unit' in s 8, 'legal tender' in s 16, and 'payments to be made in currency' in s 11. It is submitted that the Currency Act 1965 (Cth) 'does not describe or define money', but that it 'makes it clear that Australian currency is the currency of Australia in dollars and cents', in addition to 'provid[ing] how payments are to be made'.

37 In contrast, the plaintiff's position on the gold bullion is that it is 'not money, nor is it a security for money within the meaning of [s 5 of the APA]'. The plaintiff refers to a number of dictionary sources,[52] which define 'bullion' as: 'a quantity of solid gold or silver'; the 'bulk form of precious metal such as gold or silver'; as 'gold or silver in mass'; as being 'valued by weight'; or as a means of transportation prior to further processing. Bullion is also referred to as a standard that reflects an amount of gold bullion reserve maintained as a currency support, and as being traded and borrowed/lent to the extent that it may constitute offshore banking activity, pursuant to s 121D(4)(f) of the Income Tax Assessment Act 1936 (Cth).

38 Having defined 'bullion' as such, the plaintiff submits that '[t]he difficulty with the definition of the words used in this proceeding is that the words bullion, chattels and money have specific meanings for specific purposes defined by statute'. The plaintiff submits that as the APA 'does not further define bullion chattels or money', the words 'must be given their ordinary meaning'.[53] This is a similar approach, it is noted, to the one applied when construing wills.

39 The plaintiff's submissions on what constitutes a 'chattel' include reference to the dictionary definition of 'chattel' with, for example, the Macquarie Encyclopaedic Dictionary, defining chattels as 'moveable articles of property'. The plaintiff also refers to the definition provided by the Australian Law Dictionary, which states:

A thing that is capable of being owned as a form of personal property. A chattel real is intangible personal property consisting of a right to the use of real property (land): e.g. a lease of commercial or residential property. The right is the chattel (not the lease or a piece of paper creating evidence in the right).

A chattel personal is any other kind of property that may be owned (i.e. apart from land). Chattels personal may be corporeal, moveable and tangible (a physically embodied and touchable chose in possession: e.g. livestock, or a chair, which is in someone's possession) or incorporeal and intangible (a right of some kind, like shares, or a right of action, called a chose in action: e.g. copyright, a debt, shares in a company).

Goods, as physical items, are personal chattels traded in the market.[54]

40 According to the plaintiff, 'the meaning of chattels may be limited to specific tangible or physical things if the context requires pursuant to the statute'. On this point, the plaintiff cites Commissioner of State Revenue v Uniqema Pty Ltd[55] and Robinson v Jenkins.[56] In the former case, context required 'chattels' as used in the Stamp Act 1958 (Vic) to be read restrictively as 'tangible or physical things' rather than extended to 'personal property' more broadly.[57] In the latter case, Fry LJ described 'chattels' as 'one of the widest words known to the law in its relation to personal property'.[58]

41 The plaintiff asserts that here the will is 'clear on its face' and it defines 'personal chattels' as those words are defined in the APA. As such, the question should be determined in accordance with the meaning in the APA, 'and not any general intention that may be thought to have been discovered in the will'. Further, it is submitted that '[o]n its plain meaning ... the words "chattels" includes the gold bullion and the silver coins. There is simply no evidence that it was intended to trade the gold bullion, and it is an agreed fact ... that it was not traded on the Deceased's behalf'.

42 The plaintiff also refers to s 101 of the Succession Act 2006 (NSW), which contains a definition for 'personal effects', and excludes property such as 'gold bullion'. Section 101 provides:

"personal effects" of an intestate means the intestate's tangible personal property except the following:

(a) property used exclusively for business purposes,

(b) banknotes or coins (unless forming a collection made in pursuit of a hobby or for some other non-commercial purpose),

(c) property held as a pledge or other form of security,

(d) property (such as gold bullion or uncut diamonds):

(i) in which the intestate has invested as a hedge against inflation or adverse currency movements, and

(ii) which is not an object of household, or personal, use, decoration or adornment,

(e) an interest in land (whether freehold or leasehold).

43 The plaintiff submits that the absence of such legislation in Victoria 'confirms that the definition of chattels as opposed to personal effects, includes bullion'. Moreover, close analysis of the legislation suggests 'property such as gold bullion is only excluded if it is a hedge against inflation and not an object of household or personal use, decoration or adornment', and that 'it cannot be said to be a hedge against inflation or adverse currency movements', which therefore results in the second component falling away.

44 The deceased's will adopts the phrase 'personal chattels' as those words 'are defined by the Administration and Probate Act 1958'. Section 5(1) of the APA defines 'personal chattels' to mean:

carriages horses stable furniture and effects (not used for business purposes) motor cars and accessories (not used for business purposes) garden effects domestic animals plate plated articles linen china glass books pictures prints furniture jewellery articles of household or personal use or ornament musical and scientific instruments and apparatus wines liquors and consumable stores but does not include any chattels used at the death of the intestate for business purposes nor money or securities for money.[59]

45 Statutory construction begins with consideration of the text in question, and ascertaining the meaning of the text may require consideration of context, including the general purpose and policy of the provision.[60] In the APA, the phrase 'personal chattels' is used with reference to property distribution in the context of intestacy. Specifically, the personal representative is afforded the power to postpone the sale of the intestate's estate, such that, unless there is a want of other assets, personal chattels must not be sold except for special reason,[61] and personal chattels are property to which the intestate's partner or partners are entitled.[62] As such, an intention of parliament in using 'personal chattels' appears to have been distinguishing such property from the phrases 'chattels real' and 'personal estate' in a manner that affords that type of property certain protections from sale and directs it toward the intestate's partner or partners. Of some note, the drafters of the definition of 'personal chattels' employed the words 'means' to commence the definition, before concluding that the definition 'does not include' specified items.

46 As the defendants submit, a number of cases in the United Kingdom have considered the application of an analogous former definition of 'personal chattels' in s 55(1)(x) of the Administration of Estates Act 1925 (UK).[63]

47 In Re Chaplin, a motor yacht was determined to fall within the phrase 'articles of household or personal use'.[64] A stamp collection was considered an 'article of personal use' in Re Reynolds' Will Trusts.[65] Re Ogilby was a case in which livestock on a farm fell within the phrase 'business purposes', such that they were not 'personal chattels'.[66] Simonds J viewed the question as one of interpretation of the words in s 55(1)(x).

48 Re Grimwood was a case in which it was determined that 'plate' referred to utensils for table and domestic use, ornaments, etc, originally made of silver and gold, but also extending to plate ware and to other kinds of metal.[67] In this regard, of significance was the ordinary meaning of the word.

49 In Re Crispin's Will Trusts, the Court of Appeal considered whether a number of clocks and watches fell within the statutory definition of 'personal chattels'.[68] In concluding that the clocks and watches were personal chattels, Russel LJ (Stamp and James LJJ agreeing) determined that the proportionate value of the items in question, relative to the estate, was irrelevant. His Lordship went on to reason:

Apart from the question of use for business purposes, and 'articles of household or personal use or ornament', we apprehend that the only question is whether an article comes within the ordinary meaning of the word used: for example, jewellery, In re Whitby [1944] Ch 210; horses, In re Hutchinson, decd. [1955] Ch 255; and, we apprehend, furniture. When considering whether an article is a an article of household use or ornament, or of personal use or ornament, an examination of the circumstances of the particular article may be required in addition to its actual physical character.[69]

50 The clocks in question were determined to fall within the meaning of 'furniture', while the watches were considered to be 'an article of personal use' due to their nature, and also because in the circumstances, they were cherished by eye and hand and worn from time to time.

51 The cases considering the former s 55(1)(x) indicate that regarding the specifically named items, such as 'furniture' or 'books', the test is simply whether the item in question falls within the ordinary meaning of the word. On the other hand, when considering the phrase 'articles of household or personal use', of relevance is the character of the item and the way in which it was used by the testatrix or testator.

52 In Re Collins' Will Trusts, Brightman J referred to Re Reynolds' Wills Trust and s 55(1)(x) in determining that a coin collection came within the scope of 'personal effects', as that phrase was used in a will.[70]

53 Although not directly applicable, cases that have considered the meaning of 'personal effects' in testamentary documents provide useful analysis regarding the expression 'articles of personal or domestic use or ornament'.[71] In the absence of a controlling context, 'personal effects' has been taken to mean physical chattels having some personal connection with the testator, such as 'articles of personal or domestic use or ornament'.[72] Generally, 'personal effects' does not extend to money or entitlement to money, as those are not 'physical chattels'.[73] In Re McLuckie, Mann CJ determined that the phrase 'personal belongings' included a motor vehicle.[74] In reaching this conclusion his Honour reasoned: 'the phrase "personal belongings", like "personal effects" and similar phrases, has a connotation of a certain domestic and private kind and refers to articles of personal use and enjoyment by the testatrix'.[75] The cases have adopted an approach whereby the breadth of the word 'possessions' or 'effects' is limited by the adjective 'personal'.[76]

54 In Lowe v Lowe, Brereton J determined that the expression 'personal effects' included the deceased's motor vehicle, but not money, shares or notes in public companies. In reaching this conclusion his Honour stated:

I do not think that nowadays a gift of the testator's "personal effects" is readily to be construed as a gift of all personal property. Too many cases emphasise both that the word "personal" in that context stipulates for some personal connection beyond mere ownership - typically, personal use and enjoyment - and that the "effects" are physical chattels, for the broader construction to prevail. Moreover, the context of bequests of household furniture and furnishings, heirlooms, photographs and papers (in which the term is found in the will), and the provision elsewhere of legacies, provides no support for the contention that by "personal effects" the deceased intended to deal with all his other personal property.[77]

55 On the relevance of s 101 of the Succession Act 2006 (NSW) his Honour went on to say:

As the defendants submitted, that definition is not of direct application because this is not an intestate estate. Nonetheless, it substantially accords with the views expressed in the cases to which I have referred; in particular the reference to tangible personal property is consistent with the limitation to physical property, and the exclusion of bank notes and coins is consistent with the exclusion of money.[78]

56 Section 5 of the APA provides an express definition of 'personal chattels'. It appears that the definition and use of the phrase in the APA is intended to give such property certain protection regarding the sale of assets in the context of an intestacy, and to direct such property toward the intestate's partner or partners. The phrase appears to be employed to distinguish such property from 'chattels real' and 'personal estate' more generally.

57 Although it has since been amended, the language of s 55(1)(x) of the Administration of Estates Act 1925 (UK) previously reflected that adopted in s 5 of the APA. As such, the approach in the cases identified by the defendants are persuasive and is consistent with the context and purpose of 'personal chattels' in the APA. That is, the task of the Court is to determine whether the gold bullion and silver coins fall within the scope of the ordinary meaning of the words and phrases of s 5 of the APA, having due regard to their context and purpose. In so determining, of particular relevance may be the phrase 'articles of household or personal use or ornament' as well as the use of the particular article and its actual physical character. As in Re Crispin's Will Trusts,[79] whether the article was used and cherished is a consideration, reflecting the word 'personal' in 'personal chattels' and 'article of ... personal use', and the degree of protection afforded to 'personal chattels' in the APA.

58 The gold bullion does not readily fall within any of the types of chattels expressly named in s 5 of the APA. The question then arises as to whether it comes within the phrase 'articles of household or personal use or ornament'. On the facts, the gold bullion is not an item that was cherished by the deceased or otherwise used personally. While it is accepted that, in a broad sense, it may fall into the ordinary meaning of 'chattel', that word cannot be divorced from the context in which it appears - that is, with the adjective 'personal' and a definition relevantly encompassing an item of 'personal use' - nor the special approach to 'personal chattels' afforded in the APA. In the Court's view, the gold bullion does not fall within the definition of 'personal chattels' specified in s 5 of the APA.

59 While the case law regarding 'personal effects' is not directly applicable, it accords with the Court's approach to s 5 of the APA. As Re Collins' Will Trusts demonstrates,[80] the analysis in such case law overlaps to a degree, and when considering 'articles of personal use', in both contexts a personal connection between the deceased and the chattel beyond mere ownership is identified. The Court is not persuaded that the definition of 'personal effects' in s 101 of the Succession Act 2006 (NSW) confirms that 'personal chattels' as defined in s 5 of the APA should include gold bullion. Rather, as Brereton J noted, the provision broadly reflects the case law regarding the meaning of 'personal effects', which, by virtue of the common inquiry into issues surrounding articles of 'personal use or ornament', is consistent with the approach in the United Kingdom to s 55(1)(x) of the Administration of Estates Act 1925 (UK) as it was previously worded.[81]

60 Insofar as the definition in s 5 of the APA concludes with the words 'but does not include any chattels used at the death of the intestate for business purposes nor money or securities for money', in the Court's view it is unnecessary to determine whether gold bullion falls within 'business purposes', 'money' or 'security for money'. The definition commences with the word 'means', suggesting an exhaustive definition of 'personal chattels'.[82] It then excludes chattels used at death for business purposes, money or securities for money, via the phrase 'but does not include_'_. The Court considers that the express exclusions were adopted to avoid any doubt that those items fell within the meaning of personal chattels, the risk of that perhaps being enhanced by the breadth of the phrase 'articles of household or personal use or ornament', and the inconsistent use of the bracketed phrase 'not used for business purposes' after the specified items giving meaning to 'personal chattels'.[83] Consequently, having found that the gold bullion does not fall into the specified meaning of 'personal chattel', it is unnecessary to determine whether it comes within the scope of the express exclusions.

61 Although the plaintiff submitted that, given their description, the silver coins 'probably' fall within the word 'money', no basis for this submission was identified. While reference was made to the Currency Act 1965 (Cth), submissions were not made on the meaning of 'money' as it is used in the APA. It is unnecessary to determine whether the particular silver coins purchased fall within the meaning of the word 'money'. As with the gold bullion, the relevant phrase within the meaning of 'personal chattel' appears to be 'article of household or personal use or ornament' and the evidence does not disclose a personal connection between the silver coins and the deceased.

62 The principles of ademption do not apply to the sale of the Williamstown property. As such, any interest that the defendants had in the Williamstown property cannot be traced to the proceeds of sale, accommodation bond or gold bullion and silver coins. The gold bullion and silver coins are not 'personal chattels' within the meaning of s 5 of the APA and, accordingly, they fall to the deceased's residuary estate.

63 The answers to the questions for determination are as follows:

Question (a) - Are the gold bullion and silver coins personal chattels or are they excluded as securities for money pursuant to s 5 of the Administration and Probate Act 1958?

Answer - The gold bullion and silver coins are not personal chattels for the purposes of s 5 of the Administration and Probate Act 1958. It is unnecessary to determine whether they are securities for money.

Question (b) - Alternatively, are the gold bullion and silver coins excluded as:

(i) chattels that were not personal to the deceased; or

(ii) effects used for business purposes; or

(iii) money?

Answer - The gold bullion and silver coins are not personal chattels for the purposes of s 5 of the Administration and Probate Act 1958. It is unnecessary to determine whether they are effects used for business purposes or money.

[1] (2011) 4 Australian Succession and Trusts Law Reports 584.

[2] Explanatory Memorandum, Administration and Probate and Other Acts Amendment (Succession and Related Matters) Bill 2016 (Vic) 10, cl 24.

[3] Simpson v Cunning (n 1) 593-594 [45]-[46].

[4] Victorian Law Reform Commission, Succession Laws (Report, August 2013) xxiv, [4.73]-[4.93] ('VLRC Succession Laws Report').

[5] (1883) 8 App Cas 812.

[7] [1962] HCA 5; (1962) 107 CLR 604, 617.

[8] Fell v Fell [1922] HCA 55; (1922) 31 CLR 268, 273-4 (Isaacs J); Perrin v Morgan [1943] AC 399, 420 (Lord Romer); Wills Act 1997 (Vic) s 36. See also Re De Bruyn [2016] VSC 6, [11]-[13] (McMillan J).

[9] Re De Bruyn (n 8) citing Fell v Fell (n 8) 273 (Isaacs J), which quotes Ralph v Carrick (1879) 11 Ch D 873, 878 (Cotton LJ).

[10] GE Dal Pont and KF Mackie, Law of Succession (LexisNexis Butterworths, 2nd ed, 2017) [7.10]-[7.11]; GL Certoma, 'Particular Residue: True Residue or Specific Legacy?' (1981) 55 Australian Law Journal 193, 194-5.

[11] Armstrong v The Childrens Hospital at Westmead [2008] NSWSC 1315, [16].

[12] Reynolds v Bonnici [2017] NSWSC 828, [38] (Lindsay J).

[13] See, eg, ibid [34]-[39] (Lindsay J).

[14] Brown v Heffer [1967] HCA 40; (1967) 116 CLR 344, 348 (Barwick CJ, McTiernan, Kitto & Owen JJ).

[15] RL v NSW Trustee and Guardian [2012] NSWCA 39; (2012) 84 NSWLR 263, 292-3 (Campbell JA). The exceptions include fraud or tortious acts unknown to the testator because of an unauthorised act of an agent, see Simpson v Cunning (n 1) [22] (Hargrave J), or statutory provisions such as Powers of Attorney Act 2014 (Vic) s 83A.

[16] Brown v Heffer (n 14) 348.

[17] Robertson v Broadbent (n 5) 815 (Lord Blackburn); McBride v Hudson (n 7); RL v NSW Trustee and Guardian (n 15) 292 (Campbell JA).

[18] McBride v Hudson (n 7) 617 (Dixon CJ); see also Roberston v Broadbent (n 5) 815 (Lord Blackburn).

[19] Re Culbertson (1966) 59 DLR (2d) 381, 384 (Disbery J) (QB(Sask)), revd on appeal but not on this point Re Culbertson (1967) 62 DLR (2d) 134 (CA(Sask)), cited in Suthers v Suthers [2015] QSC 285, [17] (Burns J).

[20] Re Culbertson (n 19) 384 (Disbery J); see also McBride v Hudson (n 7) 617 (Dixon CJ).

[21] Re Plowright [1971] VicRp 13; [1971] VR 128, 132 citing McBride v Hudson (n 7) 617 and Re O'Connor [1948] Ch 628, 632.

[22] Armstrong v The Childrens Hospital at Westmead (n 11) [9].

[24] Re Blake (Deceased) [2009] VSC 184; (2009) 25 VR 27.

[28] [1996] QSC 66; [1997] 1 Qd R 110.

[29] (1866) LR 2 Eq 323.

[30] Simpson v Cunning (n 1).

[33] Ibid 306 (Campbell JA), 307 (Young JA), 307 (Saville AJA).

[36] Ibid 306; Dal Pont and Mackie (n 10) RL v NSW Trustee and Guardian (n 15) as 'emphatically reject[ing] Re Viertel and its progeny'.37

[38] RL v NSW Trustee and Guardian (n 15) 303-4, adopting the statements of Young CJ in Johnston v Maclarn [2002] NSWSC 97, [16].

[39] Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 (Vic) s 2(2), 24.

[40] (n 1) 594 [46].

[41] Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 (Vic) ss 20-3.

[42] Administration and Probate Act 1958 (Vic) s 50.

[43] Ibid s 51.

[44] Ibid s 106.

[45] VLRC Succession Laws Report (n 4) 40.

[46] Armstrong v The Childrens Hospital at Westmead (n 11) [9] (Bryson AJ).

[48] Re Chaplin [1950] Ch 507, 509 (Vaisey J).

[49] Re Reynolds' Will Trust [1966] 1 WLR 19, 22 (Stamp J).

[50] Re Chaplin (n 47); Re Hutchinson [1955] Ch 255; Re Collins' Will Trusts [1971] 1 WLR 37; Re Crispin's Will Trusts [1975] 1 Ch 245.

[51] Re Ogilby [1942] Ch 288.

[52] The plaintiff refers to the Compact Oxford English Dictionary, the Macquarie Encyclopaedic Dictionary, and the Encyclopaedic Australian Legal Dictionary Online.

[53] Citing Fell v Fell (n 8) 274 (Isaacs J).

[54] The Australian Law Dictionary (Oxford University Press, 2nd ed, 2013).

[55] [2004] VSCA 82; (2004) 9 VR 523.

[56] (1890) 24 QBD 275.

[57] Commissioner of State Revenue v Uniqema Pty Ltd (n 54) 542-3 (Ormiston JA).

[58] Robinson v Jenkins (n 55) 279.

[59] Administration and Probate Act 1958 (Vic) s 5(1).

[60] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27, 46-7 (Hayne, Heydon, Crennan and Kiefel JJ).

[61] Administration and Probate Act 1958 (Vic) s 70H(3)(c).

[62] Ibid s 70L, 70ZB.

[63] On 1 October 2014, the Administration of Estates Act 1925 (UK) was amended by the Inheritance and Trustees Powers Act 2014 (UK) s 3 such that 'personal chattels' means tangible movable property, other than any such property which - consists of money or securities for money; or was used at the death of the intestate solely or mainly for business purposes; or was held at the death of the intestate solely as an investment.

[64] Re Chaplin (n 47) 509 (Vaisey J).

[65] Re Reynolds' Will Trusts (n 48).

[66] Re Ogilby (n 50).

[67] Re Grimwood [1946] Ch 54.

[68] Re Crispin's Will Trusts (n 49).

[69] Re Crispin's Will Trusts (n 49) 251.

[70] Re Collins' Will Trusts (n 49).

[71] See Joseph v Phillips [1934] AC 348; Re McLennan, deceased [1963] VicRp 42; [1963] VR 270; Re Leury [1975] VicRp 58; [1975] VR 601; Lowe v Lowe [2015] NSWSC 48.

[72] Re McLennan, deceased (n 70), explaining Joseph v Phillips (n 70).

[73] Lowe v Lowe (n 70) [25] (Brereton J); State Trust Corporation of Victoria v Taylor [1993] VicRp 19; [1993] 1 VR 282, 286 (Tadgell J).

[74] Re McLuckie [1943] VicLawRp 27; [1943] VLR 137.

[76] Lowe v Lowe (n 70) [18] (Brereton J); Re McLennan, deceased (n 70) 272 (Sholl J); Re Leury (n 70) 603 (Starke J).

[77] Lowe v Lowe (n 70) [29].

[79] Re Crispin's Will Trusts (n 49).

[80] Re Collins' Will Trusts (n 49).

[81] Lowe v Lowe (n 70) [30].

[82] DC Pearce and RS Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) [6.60].

[83] Ibid [6.63]; see also Neumann Dredging Co Ltd v Collector of Customs (QLD) (1987) 79 ALR 588, 589 (Burchett J); Corporate Affairs Commission (SA) v Australian Central Credit Union [1985] HCA 64; (1985) 157 CLR 201.