Public Trustee v Bennett & Anor

Supreme Court of NSW|2004-10-15|Before: Gzell J, Mr J

Introduction 1 The executrix of the will of the late George Brian Campbell having renounced probate, the Public Trustee was appointed administrator of his estate. He brought a summons for the construction of the will of the deceased. 2 By his will, the deceased made a gift of the residue of his estate to his grandchildren. The defendants, Cheridyn Lee Bennett and Sharni Jade Bennett were the only living grandchildren of the deceased. They were represented in the proceedings by their parents as tutors.

Representation of unborn grandchildren 3 Because of the relative smallness of the estate, I did not require the appointment of a person to represent the interests of unborn grandchildren under the Supreme Court Rules 1970, Pt 8 r 14(1). Submissions on behalf of unborn grandchildren were made by the Public Trustee.

Paragraph 5 appointed the deceased's solicitor as executor and trustee in the event that his sister did not survive him. The will continued: "6 I DIRECT THAT no minor Beneficiary shall take under this Will until they have reached the age of thirty-two (32) years. 7 I DECLARE that my Trustee may in his/her absolute discretion apply either the whole or any part or parts of the income and/or capital of the vested contingent or presumptive share of any infant under this my Will for or towards his or her maintenance, education, benefit or advancement in life." 5 Paragraph 8 of the will provided for payment of commission if the executor practised a profession and paragraph 9 expressed the wish that the deceased's solicitors be employed by the executor in connection with the execution of the provisions of the will.

Delay in Vesting in Interest 6 The first thing that can be said about the will is that paragraph 3 provided that no beneficiary should take in interest unless the 30 day period of survival was achieved. It seems clear that the deceased did not intend that beneficiaries should take in interest but not in possession until the expiration of the 30 day period.

Did the rule in Lassence v Tierney apply? 7 Paragraph 4 of the will was couched in terms of an absolute gift. Paragraph 6 appears to cut down the earlier absolute gift. The rule in Lassence v Tierney (1849) 1 Mac & G 551 (41 ER 1379) is that if the subsequent provision fails for some reason, the absolute gift takes effect. In Hancock v Watson [1902] AC 14 at 22 Lord Davey explained the rule thus: "…if you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary legatee or next of kin as the case may be." 8 It was submitted on behalf of the existing grandchildren that paragraph 6 was void for ambiguity and, in consequence, the gift in paragraph 4 took effect according to its tenor. 9 There are infelicities in the drafting of paragraph 6. If the gift of the residue of the estate was to take effect, either in interest or in possession, when a grandchild reached 32 years of age, there was no point in speaking of a minor beneficiary taking under the will. Furthermore, the subject of paragraph 6 was a beneficiary in the singular, whereas the concluding part of the paragraph refers to beneficiaries in the plural. 10 The will appears to have been drawn by a solicitor but it is badly drawn and should, in my view, be treated similarly to a will drawn by a lay person. 11 Viewed in that fashion, the infelicities can be accommodated. The word "minor" plays no part in the operation of paragraph 6 and can be deleted. If it is deleted, the paragraph has meaning notwithstanding the change from the singular to the plural. In my view, paragraph 6 is not so uncertain as to be void. 12 The second basis upon which paragraph 6 might fail, is its possible infringement of the rule against the perpetuities. The Perpetuities Act 1984, s 3(1) defined the rule to mean the common law rule that invalidated a trust for a purpose that was not charitable, where the duration of the trust would or might exceed the perpetuity period. Section 7(1) provided that for the purpose of that rule, the perpetuity period applicable to an interest created by a settlement was 80 years from the date on which the settlement took effect. 13 If paragraph 6 of the will had the effect that the gift to grandchildren might not vest until a yet unborn grandchild reaches 32, the rule against perpetuity would be infringed, because that might not happen within 80 years of the death of the deceased. 14 However, wait and see rules were prescribed by the legislation that prevented such an infringement. The Perpetuities Act 1984, s 8(1) provided that where a provision of a settlement that created an interest would infringe the rule against perpetuities, the interest should be treated, until such time (if any) as it became certain that it must vest, if at all, after the end of perpetuity period, as if the provision did not infringe that rule and its becoming so certain did not affect the validity of any thing previously done in relation to the interest. Section 9(1) provided that where a provision of a settlement created an interest and the vesting of the interest depended on the attainment by any person of a specified age and it became apparent that the provision would infringe the rule against perpetuities, but that it would not infringe that rule if the specified age had been a lesser age, the interest should, for all purposes, be treated as if, instead of its vesting depending on the attainment by the person of the specified age, its vesting depended on the attainment by the person of the greatest age that, if put in place of the specified age, would save the provision from infringing the rule. 15 It follows that, pursuant to the wait and see rules, paragraph 6 of the will did not, in my opinion, fail and the rule in Lassence v Tierney did not apply.

Were precatory words used? 16 The question then is what effect paragraph 6 of the will had on the absolute terms of paragraph 4. 17 If paragraph 6 is regarded as containing precatory words only, it did not impose a trust (Stead v Mellor (1877) 5 Ch D 225). 18 In my view, however, paragraph 6 of the will should not be construed as the expression of a wish on the part of the deceased. The paragraph was meant to cut down the operation of paragraph 4 and, at the least, it was intended to defer the time at which grandchildren took possession of the residue.

Was a vesting in interest deferred? 19 The question is whether the deceased intended that the residue should not vest in interest in a grandchild until he or she attained the age of 32 years, or whether the interest vested in interest upon his death subject to divestiture if a grandchild failed to reach 32, or whether the residue vested in interest in Cheridyn and Sharni Bennett on his death with possession deferred until the specified age. 20 I have already indicated my view that paragraph 3 of the will deferred any vesting in interest for the 30 day period. That intention was achieved by the use of the words "NO BENEFICIARIES SHALL take". Almost identical words are used in paragraph 6 amended by the deletion of the word "minor" - "no Beneficiary shall take". 21 Normally, one would expect the repetition of essentially the same phrase in a will to have the same meaning. If that were the case, paragraph 6 would defer any vesting in interest until a grandchild reached 32. 22 In this case, however, no such intention should be presumed. The will is to be construed as if prepared by a lay person unfamiliar with such niceties. Viewed in that way, I see no reason to suppose that the deceased intended to defer vesting in interest. It is just as likely that he had in mind deferring actual possession of the residue until the grandchildren were of mature age. The provision for advancement in paragraph 7 is also consistent with this approach. 23 There is a general presumption in favour of early vesting (Duffield v Duffield (1829) 3 Bl NS 260 at 331 (4 ER 1334 at 1358)). That presumption reflects the common sense assumption that a testator wishes the objects of his beneficence to benefit as early as possible. In my view, paragraph 6 of the will should not be interpreted as delaying the vesting in interest provided in paragraph 4.

Was there a class gift? 24 In my view, the gift in paragraph 4 of the will should be construed as class gift, the class having closed on the death of the deceased. That interpretation is consistent with a construction of paragraph 6 as not deferring vesting in interest. The attaining of 32 years prescribed in paragraph 6 was a condition subsequent to the vested interest. In my view, paragraph 6 deferred vesting in possession until the grandchildren of the deceased, alive at his death, attained 32 years of age.

The rule in Saunders v Vautier 25 The interpretation I have placed on the will means that there is no interest that future grandchildren might take. It also means that when the existing grandchildren turn 18, they may bring the trust to an end under the rule in Saunders v Vautier (1841) Cr & Ph 240 (41 ER 482)). The Court will not enforce a trust for accumulation in which no person has any interest but the legatee who may give a good discharge upon attaining his or her majority.

Admissibility of extrinsic evidence 26 On the same day as he engrossed his will, the deceased made a statutory declaration to which he annexed a letter addressed to whom it might concern. Objection was taken to the admission of that extrinsic evidence and I reserved my decision. 27 The language of the will is clearly ambiguous. In those circumstances, evidence of surrounding circumstances is admitted in order to avoid attributing to a testator a capricious intention (Belaney v Belaney (1867) LR 2 Ch App 138). In my view the statutory declaration and the attached letter were admissible.

Significance of extrinsic evidence 28 The statutory declaration explained that the deceased had contact with his son on approximately four or five occasions and had not seen his daughter at all since his divorce. His sone was then about five years old and his daughter was about two. The annexed letter was intended to explain his side of the story. The statutory declaration said he had been informed of the Family Provision Act 1982 but despite that he had not included his children in his will. The statutory declaration is innocuous so far as the resolution of ambiguity is concerned. 29 The annexed letter contained a reference to the fact that the deceased's son married and had two children, Cheridyn and Sharni. The deceased was clearly aware that they were his only grandchildren. He said he did not have contact with his son and daughter and would not probably see his little grandchildren again. He said he would miss his grandchildren very much. His letter concluded: "Through the innocence ( sic ) of my grand children & subsequent grand children I make my last Will & Testiment ( sic ) to them knowing that one day they will know that I was their real Grandfather." 30 The letter is also innocuous with respect to the resolution of ambiguity. The reference to future grandchildren could mean grandchildren born before the death of the deceased or grandchildren that might be born after his death. 31 My admission of the extrinsic evidence does not alter the interpretation I have placed on the will. 32 I set out the questions raised by the summons and my answers thereto.

1 Whether on a true construction of the will and in the events that have happened paragraph 6: (a) contains merely precatory words expressing a wish, hope, desire or entreaty in respect of the gift contained in paragraph 4; or (b) engrafts a trust on the absolute gift contained in paragraph 4.

Paragraph 6 of the will engrafts trust on the absolute gift contained in paragraph 4.

2 If the answer to the question in paragraph 1 hereof is (b), then the opinion, advice and direction of the Court is sought as to whether paragraph 6: (a) imposes a condition precedent on the gift contained in paragraph 4; or (b) imposes a condition subsequent on the gift. Paragraph 6 of the will imposes a condition subsequent so that the gift in paragraph 4 is absolute.

3 If the answer to the question in paragraph 1 hereof is (b), then the opinion, advice and direction of the Court is sought as to whether the gift fails for infringing the rule against the perpetuities defined in the Perpetuities Act 1984, s 3(1). The rule against perpetuities is infringed but that infringement is subject to wait and see provisions.

4 If the answer to the question in paragraph 3 is yes, then the opinion, advice and direction of the Court is sought as to whether: (a) the gift in paragraph 4 takes effect pursuant to the rule in Lassence v Tierney ; or (b) the gift should be treated as if it did not infringe the rule against the perpetuities in the manner prescribed in the Perpetuities Act 1984, s 8(1). Both the wait and see rule in the Perpetuities Act 1984, s 8(1) and in s 9(1) apply such that the gift is treated as if it did not infringe the rule against the perpetuities.

5 Whether on the true construction of the will and in the events that have happened the gift contained in paragraph 4: (a) is a class gift; or (b) is a gift to those of the testator's children alive at the date of the will. The gift is a class gift to those grandchildren of the deceased alive on the date the will took effect on the death of the deceased.

6 Whether on the true construction of the will and in the events that have happened the word "take" in paragraph 6 means "take in interest" or "take in possession". The word "take" in paragraph 6 of the will means take in possession.

7 Whether on the true construction of the will and in the events that have happened the word "minor" in paragraph 6 can be disregarded. Yes.

8 If the answer to the question in paragraph 7 hereof is no, then the opinion, advice and direction of the Court is sought as to the effect of the word "minor" in paragraph 6. This question needs no answer.

9 Whether on the true construction of the will and in the events that have happened the use of the words "until they have reached" in paragraph 6 mean that: (a) no beneficiary takes an interest under the will until all beneficiaries turn 32 years; or (b) each beneficiary takes an interest under the will when he or she turns 32. Each beneficiary takes an interest under the will on the death of the deceased but, subject to the operation of the rule in Saunders v Vautier , possession is deferred until each beneficiary reaches 32 years of age. 33 I will make a declaration that the Public Trustee is entitled to administer the estate and is at liberty to distribute it in accordance with these determinations. 34 I will hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.

Last Modified: 10/21/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Public Trustee v Bennett & Anor (Revised) [2004] NSWSC 955 HEARING DATE(S) : 05/10/04 JUDGMENT DATE : 15 October 2004

CATCHWORDS : SUCCESSION - Wills, Probate and Administration - Construction and effect of testimentary dispositions - Whether a trust engrafted on an absolute gift of residue - Whether the later provision was void for uncertainity or as infringing the rule against perpetuities - Whether the rule in Lassence v Tierney applied - Whether the later provision was a condition precedent or subsequent - Whether the later provision delayed vesting in interest or vesting in possession - Whether the gift of residue was a class gift - Whether the class closed on the death of the testator or at a later time Supreme Court Rules 1970 LEGISLATION CITED : Perpetuities Act 1984 Family Provision Act 1982 Lassence v Tierney (1849) 1 Mac & G 551 (41 ER 1379) Hancock v Watson [1902] AC 14 CASES CITED : Stead v Mellor (1877) 5 Ch D 225 Duffield v Duffield (1829) 3 Bl NS 260 (4 ER 1334 at 1358) Saunders v Vautier (1841) Cr & Ph 240 (41 ER 482) Belaney v Belaney (1867) LR 2 Ch App 138 PARTIES : The Public Trustee - Plaintiff Cheridyn lee Bennett & Sharni Jade Bennett - Defendants FILE NUMBER(S) : SC 3437/04 COUNSEL : Mr J Kildea - for the Plaintiff Mr S Hickey - for the Defendant SOLICITORS : B Maher, Solicitor to the Public Trustee Stewart and Stewart, Solicitors for the Defendants

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