"Testator nominates and appoints as his universal heir in

full and absolute ownership of all his property, present and future, his

daughter Catherine-Jane Saliba, provided that on reaching the age of

eighteen years, the said heiress will be entitled to receive the sum of

fifteen thousand Australian Dollars in one lump sum and an income

of fifty Dollars per week from reaching the age of eighteen years: on

reaching the age of twenty-one (21) years, she will be entitled to

receive the sum of thirty thousand Australian Dollars in one lump sum

together with an increase of income of another fifty Dollars a week, thus

bringing the total weekly income to one hundred dollars a week: on

reaching the age of twenty-five years, the sum of fifty thousand

Australian dollars together with the said income of 100 dollars a week

and on reaching the age of forty years she will be able to dispose of

The summons seeks determination as to whether, on the true construction of article 3 of the will, Catherine Saliba may require the trustees to transfer the residual assets of the estate to her upon completion of administration, or whether she can only do that on attaining 40 years of age.

The defendant is the other daughter of the late Romeo Saliba. She was served with the summons and affidavits in this matter, but did not appear.

The only counsel who appeared in the case was Mr Julian Sexton for the plaintiffs Catherine and the trustees. Apart from Mr Sexton's submissions, I was also assisted by written opinions of Mr Sexton of 7 March 1996, Mr D P F Officer QC of 2 April 1996 and 31 January 1997, and by Mr Brian Green of the English bar of 18 July 1989.

It is not easy for a judge to determine a case on construction without being able to put to the various disputants the problems as he or she sees them. In the instant case, one matter that arose was how far, if at all, the Trusts (Hague Convention) Act 1991 of the Commonwealth (No 50 of 1991) was applicable. This matter was not dealt with in any of the written opinions and as Mr Sexton took the view (contrary to my preliminary view) that the Act did not apply, I had no assistance on that matter.

The basic question is whether Catherine takes the whole of the estate notwithstanding that the will says that she is only to have limited enjoyment up until she is 40, or whether there is a partial intestacy so that her sister, the defendant, will share at least in the income until Catherine attains 40.

The problem falls into two branches. The first branch concerns the application of the rules in Lassence v Tierney [1849] EngR 1185; (1849) 1 Mac & G 551; 41 ER 1379 and the rule in Saunders v Vautier [1841] EngR 629; (1841) 4 Beav 115; 49 ER 282: the second branch concerns the rules of accumulation that apply differently in England and Australia. The second branch of the question involves analysing the testator's domicile and the proper law of the trusts set out in article 3 of the will.

So far as the first branch of the matter is concerned, counsel in their opinions come to different conclusions. Mr Green takes the view that article 3 does not amount to an out and out gift which is then cut down by other words, but rather a gift that does not cover the whole of the income that will accrue to the capital up until the time Catherine attains 40.

The only justification for this view is some enigmatic words in para 27 of Mr Green's advice that "The residuary gift is not, however, in a form which would attract the application of the rule in Lassence v Tierney if English law were applicable to it." There is then a reference in a footnote to the decision of Astbury, J in Re Payne [1927] 2 Ch 1. However, that case was decided on the text of the will in question. As far as I can see it has not ever been applied in Australia or perhaps in England though see In re Marshall [1928] Ch 661. Jarman on Wills 8th ed (Sweet & Maxwell London 1951) p 1170 gives it as an illustration of a situation where the directions in the will show that they cut down the substance of the gift itself rather than a being mere modification of the estate first given.

With respect, I consider that Mr Officer QC's comment more accords with the reality of what the testator did. Mr Officer QC says in his advice of 2 April 1996 that the testator appointed Catherine his universal heir in full and absolute ownership of all his property present and future and "it is difficult to envisage an absolute gift in clearer words."

This view is reinforced by the decision of the High Court of Australia in Smidmore v Makinson [1908] HCA 20; (1908) 6 CLR 243, 249. In that case, a testator gave his property by will on trust for his children in equal shares "but so that up to the age of twenty five years it shall be employed as far as necessary for their maintenance, and after that age to pay it to them for life." The High Court held that the testator must have intended that either the children would receive the accumulations of income at 25 or he had made no disposition on that subject so that there would be a partial intestacy. The court lent against intestacy, the testator obviously did not intend that there be inequality between the children thus the children were entitled to the whole of the income.

That then leads on to the next apparent problem that the testator has not dealt with the intermediate income. Apart from provision that Catherine is to receive certain amounts at certain ages, there is no express disposition. Mr Green says that this means that the income goes as per intestacy between the defendant and Catherine. This would be a strange result in view of the words the testator used and it seems to me, with respect, that Mr Green has been overborne by the fact that the expression used by the Maltese drafter "universal heir" has no equivalent in English law. The words, however, must be construed in a non-technical sense as not only giving the property to Catherine, but also the income as well as an accessory to the principal gift.

I have considered whether s 36B of the Conveyancing Act 1919 (the NSW equivalent of s 175 of the Law of Property Act 1925 of the United Kingdom) applies in this case, or alternatively, the well-known rule in Countess of Bective v Hodgson [1864] EngR 292; (1864) 10 HLC 656, 665; [1864] EngR 292; 11 ER 1181, 1185. I do not consider that any assistance is given in this area because the will itself, by indicating that income is to be paid at a certain time, seems to take the case outside the rule; see for instance Re Geering [1964] Ch 136.

However, Mr Green also says that if English law applies, the rule against accumulations means that the income cannot be accumulated for more than 21 years after the testator's death. As Catherine was 16 at the time when the testator died, this means that between the time Catherine is 37 and she is 40, the excessive accumulation must be distributed equally between Catherine and the defendant; see eg Perpetual Trustee Co Ltd v Public Trustee [1922] NSWStRp 60; (1923) 23 SR (NSW) 1.

This result follows because the Thellusson Act still applies in England; see ss 164 to 165 of the Law of Property Act 1925, though the law has been slightly amended by the Perpetuities and Accumulations Act 1964, s 13. In New South Wales, on the other hand, the Thellusson Act has been repealed by the Perpetuities Act 1984, s 7, so that no special period is set for accumulations and they are governed by the general 80 year perpetuity period.

It follows that if the trusts in article 3 of the will are governed by English law then there will be a three year period where it is arguable that the income will not pass to Catherine because it has always been clear that rules of construction like Countess of Bective v Hodgson are subject to the law with respect to accumulations: Re Taylor [1901] 2 Ch 134, 136.

There is a good case for saying that English law does apply flowing from the general rule that succession to movables is governed by the law of the testator's domicile.

The contrary argument is put by Mr Green in para 31 of his advice which I quote, "The trusts of Article 3 of Mr Saliba's will are written in favour of an Australian beneficiary, expressed in terms of Australian dollars, and fall to be administered by the testamentary executors appointed by Mr Saliba in the following article of his will, who are Australians. In the circumstances, it seems strongly arguable that Mr Saliba intended Australian law to govern the trusts of Article 3 - an issue quite distinct from the question of the proper law governing the administration of Mr Saliba's estate pending the ascertainment and transfer of the net residue of that estate to Mr and Mrs Rodgers as trustees." In a footnote he says that what he means by Australian law is probably New South Wales law being the law where Mr and Mrs Rodgers live, and presumably where Catherine also lives. I am not completely sure that that last statement is correct, but it does not really matter.

Mr Officer QC does not deal with this question in the part of the advice which has been put in evidence. Mr Sexton, however, in his oral and written submissions, put that the view in para 31 of Mr Green's opinion should be adopted. He puts that the only fair construction of article 3 is that the trusts were to be dealt with under New South Wales law. He says that this conclusion is consistent with the decision of Johnston, J in Public Trustee v Vodjdani (1988) 49 SASR 236, 243, though cf Re Cunnington [1924] 1 Ch 68, 71-2.

As Mr Green points out, the law in this area is not completely settled. P E Nygh in his Conflict of Laws in Australia 6th ed (Butterworths Sydney 1995) p 569 says, "The applicable law is the law which the testator intended to apply, which in the absence of any indication to the contrary is presumed to be the law of the domicile." See also Sykes and Pryles Australian Private International Law 3rd ed (LBC Sydney 1991) pp 757-758.

In Jewish National Fund Inc v Royal Trust Co (1965) 53 DLR (2d) 577, the Supreme Court of Canada had to deal with a trust of movables set up by a testator who was domiciled in British Columbia but to be administered in New York. The majority concluded that if the trust was bad by the law of British Columbia, then it mattered not that the trust might have been valid in the place where it was to be performed, namely New York. The converse case is Fordyce v Bridges (1848) 2 Ph 497; 41 ER 1035, where a trust was subject to English law and made investments in Scotland which might have been invalid had the proper law of the trusts been English. The only other relevant case is Re Mitchner [1922] St R Qd 39. The relevant trust dealt with in that case was a gift of residue to people in Germany which might contravene the law of perpetuities in Queensland. In the first report of the case the Full Court of Queensland held that gift void for perpetuities. This was reversed in the High Court reported as Public Curator of Queensland v The Union Trustee Co of Australia Ltd (1922) 31 CLR 66 and the matter was referred back to the Queensland Full Court. On reconsideration, the Queensland Full Court in Re Mitchner (No 2) [1922] St R Qd 252, said that as the bequest was valid in accordance with the law of Queensland, all that was necessary was to see whether it could be put into effect in Germany. Thus the present problem did not really arise.

A modern court should pay due regard to the decisions of past ages which are persuasive authority. However, nowadays, courts should not be put off by the novelty of propositions or that such propositions might conflict with what was said in a decision of only persuasive authority 60 years or more ago. In many cases the decision made 60 years ago or so was made for social reasons which were relevant at the time, but which are no longer relevant. In the administration of trusts and private international law things have moved swiftly, especially since the war with the improvements in both air travel and electronic communications. It seems to me that it is now sensible to adopt the rule as set out Nygh's book that prima facie a sub-trust in a will which is to be administered in a particular jurisdiction and which the testator has shown that he chooses it to be administered according to the law of that jurisdiction, is to be administered by the law of that jurisdiction: Nygh op cit pp 569-70. It follows, though this is not relevant to the present case, that the court of the domicile will now recognize this and not lightly declare the trust invalid because it might be so regarded by the law of the domicile unless of course there are some serious public policy considerations involved.

However, whilst I am content to decide the case on that basis, I do not have to go that far.

As I mentioned earlier, the Federal Parliament has passed the Trusts (Hague Convention) Act 1991. Although the present trust is in a will which took effect prior to 1991, Article 22 of the Convention which is adopted by that Act, states that it is to apply regardless of the date on which the trust was created. Thus it does not matter whether one looks at the date of death or the date when the estate is fully administered. Article 6 provides that, "A trust shall be governed by the law chosen by the settlor." The choice does not have to be expressed but may be implied. See in general Dicey & Morris on the Conflict of Laws 12th ed (Sweet & Maxwell London 1993) p 1088 (note also rule 141 on pp 1038 and following which sets out the English common law) and In the Estate of Webb (1992) 57 SASR 193, 204.

In my view the Convention is right in point. Not only that, but the factors which are mentioned earlier show that so far as the trust that is to arise at the time when the estate is fully administered is concerned, the testator has plainly chosen New South Wales law for the reasons given by Mr Green. My only reluctance about this matter is that Mr Sexton seems reluctant to rely on the Act and normally I have found, with respect, his judgment to be sound. The Convention thus removes any doubt there may have been that the law chosen for the trust is the law of New South Wales.

Accordingly, the accumulation problem does not affect the administration of the trust because the accumulation is within the period allowed by New South Wales law.

Accordingly, for the reasons given, Catherine is entitled to the whole of the trust fund after it comes into existence. The precise form of order may need some care as until the estate is fully administered, the fund does not actually exist. Mr Sexton may bring in short minutes of order by arrangement with my Associate.

As I have indicated, the defendant, although served, did not appear. I thought for a while that it would be preferable merely to give judicial advice under s 63 of the Trustee Act so that the defendant could challenge it within the prescribed time after service on her of a copy of the order. However, on reflection it seems to me that the defendant made a conscious choice not to appear and that the same rights will be conferred on her if I extend the time for appeal to eight weeks from the delivery of these reasons and direct that a copy of the reasons be sent to the defendant at her last known address by airmail within seven days of today. I will so order.

The plaintiffs' costs on the indemnity basis should be paid out of the trust fund. I will also reserve liberty to apply generally.