Ritchie v Magree

High Court of Australia|1964-07-01|Before: Kitto JJ

High Court of Australia Dixon C.J. McTiernan and Kitto JJ. Ritchie v Magree [1964] HCA 10

ORDER Appeal allowed. Cross appeal dismissed. Vary the order of the Supreme Court by omitting the declarations made as to the true construction of the will and declare in lieu thereof that upon the true construction of the will and the events which have happened the assets of the residuary estate of the testator devolved upon his death upon his widow Mildred Maria Wilson absolutely. Costs of all parties as between solicitor and client of the appeal and cross appeal to be paid out of the estate.

This appeal concerns the interpretation of the will of Leo Aubrey Wilson who died on 26th June 1951. The will was made on 20th September of the previous year. He left him surviving his widow, Mildred Maria Wilson, whom he appointed his executrix, and his daughter, Helen Kathleen. He was a news-agent carrying on business at Dulwich Hill. He owned the house they lived in, namely, 81 Harris Street, Harris Park, and a house at Marrickville and another at Harris Park. The goodwill of his news-agency was of course valuable. It was in fact sold in February 1956 for £5,967, including stock. At his death the stock was valued at £326 and there appear to have been some debts due to him of £1,578. The widow died on 24th December 1959, leaving a will in which the appellants were appointed executors. Her daughter, whose married name is Magree, is the respondent to the appeal. The will of her late father is a short but inartificially drawn document. It begins well enough; perhaps he used a will form. After the revocation of prior wills, the appointment of his executrix and a direction to pay debts, funeral and testamentary expenses, he gives and bequeaths and directs that within one month of his death the sum of £500 be given to his daughter, Helen Kathleen Wilson. Why he thought fit to make this provision does not appear.

Next comes this provision: "I also direct that my wife, Mildred Maria Wilson is to have full use of my property situate at 81 Harris Street, Harris Park and that upon her death the property 81 Harris Street, Harris Park is to become the property of my daughter, Helen Kathleen Wilson." So far there is no difficulty. His wife is to take the home for life and after her death it becomes the daughter's. Then follow three sentences that have led to this litigation. They are as follows: "The remainder of my real and personal possessions is to become the property of my wife Mildred Maria Wilson. I also direct that my wife Mildred Maria Wilson is at liberty to dispose of any portion of my estate if she thinks it is advisable with the exception of course the property known as 81 Harris Street, Harris Park. I also direct that upon the death of my wife Mildred Maria Wilson all of that portion of my possessions remaining is to become the property of my daughter Helen Kathleen Wilson."

It is claimed by the executors of the will of the late Mildred Maria Wilson that all property which devolved on her under her husband's will which existed, or the proceeds of which existed, at her death passed under her will. On the other hand, it is claimed by Mrs. Magree that it passed to her under the provision of her father's will just quoted, in particular under the sentence "I also direct that upon the death of my wife Mildred Maria Wilson all of that portion of my possessions remaining is to become the property of my daughter Helen Kathleen Wilson". A great deal of discussion has taken place in this Court as to what is the true intention of the testator as disclosed by the passage I have quoted. For the appellant it is said that it is a layman's statement of an intention that the residuary property should become his wife's on his death and that she could do with it what she liked; but if she failed to dispose of any part of it he wished that property to become his daughter's on his widow's death. An opposite view is that the first sentence of what has been quoted merely gives the widow a life interest in residue and the following sentences give her power of disposition during her lifetime for her own benefit; subject to that the daughter is to take on her death. This may be put in different ways and indeed the same result may be produced without necessarily construing the residuary gift to the widow as a gift of a life interest only. The view taken by the learned judge from whom the appeal comes (McLelland C.J. in Eq.) is summarized in the following passage in his judgment: "I am of opinion that the testator's intention as disclosed by his will was that the widow was to have the benefit of the income of the residue during her life, that she was to have a power to dispose of any part of it for her own purposes in the sense I have mentioned during her life, and that such of the residue as was not disposed of in exercise of this power was to go to the daughter."

I think that to ascertain with any certainty the precise intention of the testator from the language he has used is not really possible. I do not think there is any doubt that by the initial sentence of the provisions I have set out he meant to give the property in the remainder of his assets to his widow and intended that the gift should be of the full duration, let us say, of an estate in fee simple. That is what a layman means by "property" and that is what the words would naturally convey in the context. I do not think the word "also" in the next sentence is any indication to the contrary. That word occurs in the will three times before the word "direct".

I think the case should be decided by an application of the venerable but simple rule that "where a legacy is given absolutely, and a gift over is superadded in the event of the legatee dying without having disposed of his legacy, the gift over is void, and the legacy is absolute". (The language of Wigram V.C. in Green v. Harvey [1] ). Although Dr. Glanville Williams may find no logic in this rule (see (1943) 59 L.Q.R. 343) he does not impugn its binding authority and at least as a rule positivi juris it removes a difficulty created by the inability of a testator in his unrestricted testamentary capacity so to express his intention as lawfully to govern the devolution of his property.

(1842) 1 Hare 428, at pp. 431, 432 [66 E.R. 1100, at p. 1101].

I think the appeal should be allowed and the cross appeal should be dismissed. In answer to the questions in the originating summons I would say simply that the assets of the residuary estate of the testator devolved on his death upon his widow, Mildred Maria Wilson, absolutely.

This appeal and the cross appeal involve the question of the construction of the will of Leo Aubrey Wilson deceased in so far as it disposes of the testator's residuary estate. The testator's daughter, the present respondent - she married since the date of the will - was plaintiff in the Supreme Court. The executors of the testator's widow, Mildred Maria Wilson, the present appellants, were the defendants. The will is a short inexpertly drawn document. After the appointment of the executrix, who was Mildred Maria Wilson, the will proceeds to direct that the debts funeral and testamentary expenses of the testator be paid and that a sum of £500 be paid to Helen Kathleen within a month of the testator's death. The will directs that the testator's widow "is to have full use of" the testator's house at Harris Park and that upon her death it "is to become the property" of Helen Kathleen. Doubtless the testator means by these words that his widow is to enjoy the house for life and at her death the absolute interest in the property is to go to Helen Kathleen. The meaning of that disposition is not a question for decision. The meaning of the rest of the will is the matter in issue. The clauses making up the rest of the will are these: "The remainder of my real and personal possessions is to become the property of my wife Mildred Maria Wilson. I also direct that my wife Mildred Maria Wilson is at liberty to dispose of any portion of my estate if she thinks it is advisable with the exception of course the property known as 81 Harris Street, Harris Park. I also direct that upon the death of my wife Mildred Maria Wilson all of that portion of my possessions remaining is to become the property of my daughter Helen Kathleen Wilson." These clauses run consecutively in the will. In the first the testator refers to his residuary estate. This would consist of what was left after payment of debts and the legacy but the house at Harris Park does not form part of it. It is apparent that the testator desired his widow and daughter to be beneficiaries in succession of his residuary estate. The wording of the gift to the widow, however, has lead to the question whether he made in the first place an absolute gift of it to his widow. If that is the right construction of the disposition of the residuary estate the gift to the daughter is inoperative. The informal expression "is to become the property of" are the words used by the testator to make the gift to his widow and the gift to his daughter. The words are capable of meaning an absolute gift but it would not be repugnant to or contradictory of them to imply a limitation for life if the context so requires. The expression is not inflexible and it is a question of construction in each case whether it means an absolute gift or that only an interest for life is given. The first gift to the widow should not be considered in isolation. The disposition of the residuary estate should be construed as a whole. It consists not only of a gift to the wife, without words of limitation, but also of a gift upon her death of what then remains of the residuary estate to the daughter. In my opinion the right construction of the disposition is that the gift to the widow is cut down or restricted to an interest for life by the words of the gift to the daughter, this being a gift of portion of the estate given to the first taker and being expressed to take effect at her death: Jarman, 8th ed. (1951), vol. 1, p. 577; Theobald, 10th ed. (1947), p. 362.

It is argued for the respondents that as the testator's widow is executrix, the power to dispose of the estate merely enables her to sell or otherwise dispose of it in the course of her executorial duties and that it is not a beneficial gift. If this is correct the disposition of the residuary estate is simply a gift for life to the widow with remainder to the daughter. A point is made of the different verbiage describing the estate in respect of which the power is expressed to be given. But it is clear from the words describing the subject of the gift over to the daughter, that the testator contemplated that her mother would use up portion of the residuary estate for her own purposes. In my opinion the right construction is that the power to dispose of the estate is a beneficial one added to the interest in the residuary estate, given to the testator's wife and therefore the gift over to the testator's daughter at her mother's death is only of so much of the residuary estate as answers to the description "all of that portion of my possessions remaining".

It is sufficient to refer to Jarman, 8th ed. (1951), vol. 1, pp. 482, 483 to feel justified in holding that this type of disposition is one which, according to the weight of modern authority, is valid. See also Theobald, 10th ed. (1947), p. 363. The best analogy would seem to be In re Thomson's Estate; Herring v. Barrow [1] . It is obvious that in the context the power to dispose of the estate conferred upon the widow does not extend to making a disposition of it by will. Subject to that exception, any mode of disposing of property is included.

A question as to what is the scope of the subject of the gift over to the daughter arises. The description is "all of that portion of my possessions remaining". I think this means remaining at the widow's death. It would seem that any assets of the residuary estate not converted by the widow are included: and the equity in any assets mortgaged or charged by her is also such a possession. In my opinion the expression should include equitably any assets in the widow's hands at her death which represent the proceeds of the conversion of any part of the testators' residuary estate if this is ascertainable. I would delete the words "which had not been used for her own purposes" from the decretal order as being superfluous. Subject to this variation I think that the decretal order as made by the learned primary judge is right. The appeal and cross appeal should in my opinion be dismissed.

This is an appeal and cross appeal against a decretal order made in the Supreme Court of New South Wales by McLelland C.J. in Eq. on an originating summons raising a question as to the true construction of the will of one Leo Aubrey Wilson deceased.

The will was made in September 1950, and the testator died in June of the following year. He was survived by his wife, Mildred Maria Wilson, and by a daughter, Helen Kathleen Wilson. He was occupying at the date of the will and still retained at his death a house property known as 81 Harris Street, Harris Park. He also owned at his death two other items of real estate. His only other assets worth mentioning were some debts of a total amount of about £1,578 and a newsagency business of which the stock was valued at £326 and the goodwill at £3,571.

The will is in formal shape, but its dispositive provisions are inartificially and even ungrammatically expressed. It begins with a revocation of prior wills, an appointment of the testator's wife as executrix, and a direction that all the just debts and funeral and testamentary expenses should be paid as soon as conveniently might be. Then come the dispositions without any preliminary gift to a trustee. First there is a direction - "I give and bequeath and direct" are the words used - that within one month of the testator's death the sum of Five hundred pounds (£500) shall be given to his daughter. The rest of the will consists of four sentences which need to be read together: "I also direct that my wife, Mildred Maria Wilson is to have full use of my property situate at 81 Harris Street, Harris Park and that upon her death the property 81 Harris Street, Harris Park is to become the property of my daughter, Helen Kathleen Wilson. The remainder of my real and personal possessions is to become the property of my wife Mildred Maria Wilson. I also direct that my wife Mildred Maria Wilson is at liberty to dispose of any portion of my estate if she thinks it advisable with the exception of course the property known as 81 Harris Street, Harris Park. I also direct that upon the death of my wife Mildred Maria Wilson all of that portion of my possessions remaining is to become the property of my daughter Helen Kathleen Wilson."

It is clear that in the case of the testator's home, 81 Harris Street, Harris Park, the widow took a life estate, the daughter the remainder in fee simple. The provisions concerning the residuary estate offer a marked contrast, and two views are possible as to their meaning. The view which the appellants support is that the intention disclosed is to give the widow an absolute interest but nevertheless to control the destination upon her death of so much of the residuary estate as she may not have disposed of. The other view, which was adopted by the learned primary judge, may be expressed by saying that the widow was intended to take an interest for life only, though with a superadded power of disposition in the nature of a general power of appointment, and that the daughter took a remainder subject to defeasance to the extent of any dispositions under the power. The cross appeal suggests a third view, namely that the residuary estate was to be held simply upon trust for the widow for life with remainder to the daughter; but this may be put aside as not fairly open on the terms of the will.

The proceedings have become necessary because the widow has died leaving a will under which not only the daughter but also the daughter's infant children are the beneficiaries. The daughter, who is the respondent here, claims to be entitled as remainderman under the testator's will to such items of property as can be identified as "that portion of my possessions remaining". On the other hand the widow's executors, who are the appellants, assert that the widow took the residuary estate absolutely, and that the purported gift to the daughter of "that portion of my possessions remaining" failed either for repugnancy or for uncertainty.

If, when the will is considered as a whole, it is found that the intention disclosed is to give the widow complete ownership of the residuary estate, so that the direction that she is at liberty to dispose of any portion of it she thinks "advisable" operates only as an acknowledgement that as a consequence of the gift she has the power of disposition of an absolute owner, the ultimate direction in favour of the daughter must be void. It may be void because the meaning of "dispose of" in the context is so doubtful that the description of what the widow does not "dispose of" as "that portion of my possessions remaining" is too uncertain to be applied; but if not void for uncertainty it must be void for repugnancy - void, as James L.J. would have said, as an attempt to violate the rule that a man cannot create a new course of devolution in a gift once given: In re Stringer's Estate [1] .

It is, of course, essential to read the will as a whole, to interpret every part of it with a due regard to any clue to the meaning of that part which may be provided by any other part. The initial provision as to residue is clearly one which, if it stood alone, would confer an absolute interest. That was the view of the learned primary judge, and no suggestion to the contrary was made in the argument in this Court. There are, it is true, no technical words of limitation, but the words that are used not only are more apt as English words to confer absolute ownership than a limited interest but are the very words the testator himself has used in two other places in the will for the purpose of giving property absolutely. These words, "is to become the property of", are found as his formula for an absolute gift in the case of 81 Harris Street, and again in the concluding direction as to the residuary estate. The problem is to determine what meaning is conveyed by making first the apparently absolute gift of the residuary estate to the widow and then the apparently absolute gift of what remains at her death to her daughter. Is the meaning that the former is to be understood as cut down to a life interest only? If so, it is difficult to explain why in both places the expression appears which the testator seems to regard as the appropriate expression for describing an absolute interest, and particularly difficult in view of the fact that the testator has shown, in dealing with 81 Harris Street, that when he wants to give a life interest with remainder over he knows how to select clear words for the purpose. In short, the contrast provided by the provision as to 81 Harris Street can hardly be only a contrast of words. It seems a contrast advisedly created in furtherance of an intention to deal separately with 81 Harris Street on the one hand and the residue of the estate on the other hand, to separate them for the very purpose of making a difference between them as regards the interests to be taken by the same two beneficiaries. The conclusion seems inevitable that the testator, intending in the case of the home a gift to the widow for life with remainder to the daughter absolutely, intended a completely different kind of gift in the case of the residuary estate.

For some reason he divided his disposition of the residue into three separate directions. It has been urged upon us that if the initial direction had been intended to operate as a gift to the widow of an absolute interest the express power of disposal would have been omitted as unnecessary and superfluous; but that kind of observation has less weight in relation to a will like this than it has where the draftsmanship shows more precision of thought and expression. It is by reading the three sentences together and in close sequence that the meaning is found which leaves the fewest questions unanswered. By that I mean that if the three sentences be read as saying that the residuary estate is given to the widow to be her property to dispose of as she thinks advisable, but that what she does not dispose of shall go on her death to the daughter, there is no departure from any of the words used, the formula "to be the property of" is given the same meaning in all three of the places where it occurs - and its natural meaning at that - and a clear purpose of dealing with the Harris Street property separately from the residue appears. This construction of the language used seems to me sounder than one which treats the last direction as turning back upon the first and forcing upon it a limitation of meaning which the testator or his draftsman, with the habit of expression that he had, could hardly have intended when he penned it.

Accordingly, it seems to me that this is a case of the kind not infrequently found in which a testator exhibits concurrently the intention of giving property to a person to deal with as his own and an intention of governing nevertheless the ultimate destination of so much of that property as the donee retains at his death. It is true that if, in such a case, the testator had been told when making his will that the persistence of the first intention prevented effect being given to the second, he might have abandoned the first intention and decided instead to give the primary donee no more than a life interest with a power of disposition. But it is also true that he might have abandoned the second intention, and decided to trust the primary donee to make an acceptable testamentary disposition of his own. A court of construction has no authority to make the choice which it may think the more probable. As Lord Normand observed in Cochrane's Executrix v. Cochrane [1] , to do so on the ground that that is the simplest and surest way of giving effect to the intention is not to construe the will but rather to make a will for the testator. I would add that it is also guesswork. The only question for the Court to consider is whether in truth the intention which prima facie appears from the initial words of gift is the intention of the will as a whole, notwithstanding what is added later. If the answer is Yes, the Court must give effect to the legal rule which is attracted by what the testator has in fact done. As Adam J. said in Re Ferguson [1] , one of the best statements of the rule is that which is found in the judgment of Sir John Romilly in a passage in Henderson v. Cross [2] : " when the original gift is a gift of the absolute interest to the first legatee or devisee and the gift over is in derogation of that estate, that is to say, if it cuts down the interest to a limited interest, then the gift over is perfectly good; but if it does not, in the slightest degree, cut down the previous interest, but leaves the previous interest to remain in the same state as it was before, then the gift over is inconsistent with it, and is one which this Court cannot enforce."

(1947) S.C. 134, at p. 146. 2. [1957] V.R. 635, at p. 639. 3. (1861) 29 Beav. 216, at p. 220 [54 E.R. 610, at p. 611].

In my opinion the operation of the rule in the present case is to invalidate the gift over to the daughter. In the argument presented on her behalf reliance was placed upon the cases In re Sanford [3] and In re Pounder [4] , but in each the decision turned upon the special circumstances of the case, and they are relevant only as illustrating what is not here denied, that where a will gives a life interest with remainder over the gift in remainder is not invalidated by the addition of a power in the life tenant to dispose of corpus so that the remainder will take effect in possession in respect only of what is not disposed of under the power: In re Thomson's Estate [5] . More nearly in point is another case that was relied upon, In re Stringer's Estate [6] , where a gift to a person (no words being added to indicate the quantum of his interest), with full power to sell and dispose of the property, was followed by a gift over of property not disposed of, and it was held in view of a special context that the first donee took only an interest for life with an absolute power of appointment. Properly understood, the judgments tend rather to support than to weaken the conclusion I have stated in the present case; for James L.J. [7] and Baggallay L.J. [8] both make it clear that the decision would have gone the other way if the first gift had been a gift of everything and the second only a purported dealing with that part of the property which the first donee should not have seen fit to dispose of in his lifetime. The cases closest to the present are Perry v. Merritt [9] ; In re Jones [10] ; Wright v. Wright [11] ; Mowsar v. Birrell [12] and Re Ferguson [13] .

[1901] 1 Ch. 939. 2. (1886) 56 L.J. Ch. 113. 3. (1880) 14 Ch.D. 263. 4. (1877) 6 Ch.D. 1. 5. (1877) 6 Ch.D., at p. 16. 6. (1877) 6 Ch.D., at p. 18. 7. (1874) L.R. 18 Eq. 152. 8. [1898] 1 Ch. 438, 9. [1913] V.L.R. 358. 10. (1929) 29 S.R. (N.S.W.) 506. 11. [1957] V.R. 635.

Accordingly I would allow the appeal, set aside the Supreme Court's declarations as to the true construction of the will, and declare instead that the testator's widow took on his death an absolute interest in his residuary estate. The cross appeal should be dismissed.

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Judgment (26 paragraphs)

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