Sharp v Union Trustee Company of Australia Limited [1944] HCA 35

_ of A provided : " As to the assets and investments both in realty and personalty SYDNEY,

which are held by me in conjunction with" J and T "I declare that" Jand Dec. 4.

_ T "should they both be living at the time of my decease or the survivor of iLinesonxs

_ them if one be deceased and notwithstanding that" T "shall have joined in Mich, Starke,

_ the application for probate to my will and shall have accepted the trusts Williams JJ. thereof shall for a period of two years from the date of my decease have an

• option or right of purchasing or taking over my share and interest and the

share and interest of my estate in the said assets and investments or any

'specific one or more of them at" values to be ascertained as prescribed, " And

in the event of " J and T "or either of them deciding to exercise such right

or option (and if desired by them or either of them) payment therefor shall be

accepted by my trustees on terms" stipulated. T died after, but within the

Held, by Latham C.5., Starke and McTiernan JJ. (Rich and Williams JJ. dissenting), that in the events which happened the option lapsed on the death

of T because, on the proper construction of the will, it was conferred only on 'J and T jointly and as a personal right.

Decision of the Supreme Court of Victoria (O'Bryan J.) affirmed.

Appear from the Supreme Court of Victoria. Australias Sharp (hereinafter called "the testator") carried it business, until the time of his death, in partnership with his brother John Brown Sharp, and John Edmond Taylor. The testator died on 21st September 1943 leaving a will, dated 4th June 1929, probate of which was granted by the Supreme Court of Victoria on 17th July 1944, to The Union Trustee Co. of Australia Ltd. and Leonard Roberts Stillman, the executors and trustees named in the will (hereinafter called " the trustees"). The will contained the follow- ing provisions : - " As to the assets and investments both in realty and personalty which are held by me in conjunction with my brother John Brown Sharp and John Edmond Taylor I declare that the said John Brown Sharp and John Edmond Taylor should they both be living at the time of my decease or the survivor of them if one be deceased and notwithstanding that the said John Edmond Taylor - shall have joined in the application for probate to my will 'and shall have accepted the trusts thereof shall for a period of two years - from the date of my decease have an option or right of purchasing or taking over my share and interest and the share and interest of my estate in the said assets and investments or any specific one or more of them at the values respectively which at my death are shewn in the books relating to such assets and investments as the value thereof respectively And in the event of the said John Brown Sharp - and John Edmond Taylor or either of them deciding to exercise such - right or option (and if desired by them or either of them) payment therefor shall be accepted by my trustees on terms extending over a period of five years from the date of my death and by instalments or otherwise as the said The Union Trustee Company of Australia - Limited in its full discretion shall consider fair and reasonable I _ declare that up to the date of exercise of such option or right my estate's share of the income arising on such assets and investments - shall be income of my estate but on the intimation of the exercise of such option or right my estate's right to such income shall cease - and thenceforward the said John Brown Sharp and John Edmond Taylor or the one of them exercising such right shall be charged with interest on the balance of the purchase money from time to time remaining unpaid at the rate of four pounds per centum per - annum." Taylor died on 17th December 1943. Subsequently J. B. Sharp - gave the trustees a notice, dated 5th May 1944, whereby he purported, for himself alone, to exercise the option in respect of certain of the property covered by the clause in the will. The trustees took out an originating summons in the Supreme Court of Victoria, joining

as defendants J. B. Sharp, the executors of Taylor and Winifred

Austen Vial (personally and as representing herself and all other the

ons beneficially interested in the residuary estate of the testator).

o far as is here material the questions raised by the summons were :

(A) (1) Is the option given by the will of the testator to the

lant John Brown Sharp and John Edmond Taylor deceased

ase or take over the share and interest of the testator and

'his estate in the assets and investments held by him in conjunction

with the said John Brown Sharp and John Edmond Taylor or any

ecific one or more of them at the values respectively shown in the ks relating to such assets and investments at the death of the as the value thereof,

(a) exercisable in the events which have happened by the said John Brown Sharp and the executors of the said John Edmond Taylor deceased jointly ?

(b) exercisable in the events which have happened by the said John Brown Sharp and the executors of the said John Edmond Taylor deceased severally ?

(c) exercisable only by the said John Brown Sharp or only by the executors of the said John Edmond Taylor deceased ?

O'Bryan J. ordered that question (A) (1) " be and the same is hereby d by declaring that the option given by the will of the above- itioned Australias Sharp deceased to the defendant John Brown. arp and the above-named John Edmond Taylor deceased to pur- or take over the share and interest of the said Australias Sharp and of his estate in the assets and investments held by him ith the said John Brown Sharp and John Edmond Taylor deceased or any specific one or more of them at the values respectively shown in the books relating to such assets and investments at the death of the said Australias Sharp deceased as the value thereof lapsed on the death of the said John Edmond Taylor deceased on the 17th day of December 1943 and was not thereafter and is not now capable of being exercised by any person."

From this decision J. B. Sharp appealed to the High Court.

The respondents to the appeal were the trustees and Winifred

Austen Vial. Taylor's executors were not joined as respondents,

but on the hearing of the appeal the High Court heard argument on

Pullagar K.C. (with him Gowans), for the appellant. It is not contended that the option was not "personal" in the sense that neither J. B. Sharp nor Taylor could have assigned his rights to a 'stranger. Further, it is not contended that, if both J. B. Sharp

'on Taylor's death. The right conferred was a proprietary right

and Taylor had lived to exercise the option, it would have be exercisable otherwise than by them jointly. What the appellant claims is that, the option having been granted to him and Taylor jointly, the right conferred passed to the appellant by survivorship:

and the ordinary rule as to survivorship between joint tenants shoi be applied : See Farquhar v. Hadden (1) ; Colquhoun v. Brooks (2) ; Buffar v. Bradford (3); Jarman on Wills, 7th ed. (1930), vol. m p. 1777. [He also referred to In re Pethybridge ; Reid v. Pethybridg (4).] Even if that result is not correct as a matter of general princip there is sufficient evidence in the words of the will that that was th result intended by the testator. That this was the intention appears - from the words " or the survivor of them if one be deceased " and the ensuing words " And in the event of " J. B. Sharp or Taylor "or either of them deciding to exercise" the option. Although, - prima facie, the will speaks as at the date of the testator's death, - this rule must give way to another intention expressed in the will, and in the present context the words " survivor of them if one be deceased " are apt to relate to the time of the exercise of the option rather than to the time of the testator's death.

Coppel (by leave), for Taylor's executors. The words "if one be - deceased " necessarily relate to the time of the testator's death, - There is nothing in the will to displace the presumption that that is the meaning of the words. Accordingly, at the testator's death J. B. Sharp and Taylor together acquired the right conferred by the option clause. The right was not a proprietary right, so that the rule of survivorship as between joint tenants would apply. It was personal as distinct from proprietary, but that is not incon- - sistent with transmissibility. It was not personal in the sense that - it was meant by the will to go to J. B. Sharp alone in the events | which have happened ; the intention expressed in the will is that both J. B. Sharp and Taylor should have the opportunity to benefit, by the option if both survived the testator, and the proper conelu- sion from the words of the will and the circumstances of the ease is that the option is now exercisable jointly by J. B. Sharp and

Ham K.C. (with him Spicer), for Winifred Austen Vial. The question is entirely one of the intention to be found in the will (Abbott v. Union Trustee Oo. of Australia Ltd. (5) ) - See also In re (3) (1741) 2 Atk. 220 [26 E.R. 537.

(1) (1871) 7 Ch. App. 1, at p. (2) (1887) 19 Q.B.D. 400, 406 (1888) 21 Q.B.D. 52, at p. 65.

kes ; Younghouse v. Sykes (1). The natural meaning of the words f the present will is that J. B. Sharp and Taylor were to, have the to exercise the option jointly if both survived the testator, but that, if only one of them survived the testator, he should have

eight alone. In the events which have happened, O'Bryan J. shtly held that the option had lapsed. The words of the will, one be deceased ", are not linked with the words relating to the iod of two years; they must mean deceased at the death of the itor. Otherwise, these words would be unnecessary; "the ivor of them" would be sufficient to convey the meaning for which the appellant contends.

'Laruam C.J. This is an appeal from an order of the Supreme of Victoria (O'Bryan J.) made upon an originating summons vhich raises questions as to the interpretation of the provisions of

The testator carried on business in partnership with his brother ohn Brown Sharp and John Edmond Taylor, referred to as his d in his will. There is no evidence of any formal partnership ement, but the books and records of the partnership show that capital contributions of the partners to the partnership have ys been unequal (the testator usually having contributed more than either of the other partners), and the amounts of the capital contributions have varied from time to time. All profits and all losses of the partnership have been shared and borne equally by the partners. Thus the share in the profits of each partner would be ne-third, but the share of each partner in the assets would depend also upon the relative amount of his capital contribution.

The will contained a provision giving an option of purchase over he testator's share in the partnership assets. J. E. Taylor died on 17th December 1943, that is, after the death of the testator, and J. B. Sharp (the appellant) now claims that he alone is entitled to se the option. On 5th May 1944 he gave notice of the exercise

(1) (1941) 1. Ch. 1. (3) (1912) S.A. 2) (1892) 13 L.R. (N.S.W.) Eq. 62. (4) (1932) 8.

of the option in respect of testator's interest in 94,846 shares held by the partnership in John Sharp & Sons Pty. Ltd. These share were valued in the balance-sheet of the partnership as at 21st Sep-

in respect of two named racehorses, which, it is agreed, are included within a number of fifty-one horses which are valued in the bala sheet at six pounds per head. The two horses in question are in fact worth more than six pounds per head.

The executors of J. E. Taylor (upon whose behalf argument allowed to be heard in the appeal) contend that the option is still exercisable, but only jointly by J. B. Sharp and themselves. residuary legatees, on the other hand, contend that the option ¥ given only to J. B. Sharp and J. E. Taylor jointly if, as actually happened, they both survived the testator, and that, as they di d not exercise the option, the option. has lapsed and cannot now be exercised by any person. O'Bryan J. agreed with the last-stated - contention.

The provisions in the will which have to be interpreted are as follows : -

"As to the assets and investments both in realty and personalty - which are held by me in conjunction with my brother John Brown Sharp and John Edmond Taylor I declare that the said John Brown Sharp and John Edmond Taylor should they both be living at the time of my decease or the survivor of them if one be deceased and notwithstanding that the said John Edmond 'Taylor shall have joined in the application for probate to my will and shall have accepted the trusts thereof shall for a period of two years from the date of my decease have an option or right of purchasing - or taking over my share and interest and the share and interest of my estate in the said assets and investments or any specific one or more of them at the values respectively which at my death are shewn in the books relating to such assets and investments as the value thereof respectively And in the event of the said John Brown Sharp and John Edmond Taylor or either of them deciding to exercise such right or option (and if desired by them or either of them) payment therefor shall be accepted by my trustees on terms extend- ing over a period of five years from the date of my death and by instalments or otherwise as the said The Union Trustee Company of Australia Limited in its full discretion shall consider fair and reasonable I declare that up to the date of exercise of such option - or right my estate's share of the income arising on such assets and investments shall be income of my estate but on the intimation

of the exercise of such option or right my estate's right to such income cease and thenceforward the said John Brown Sharp and John Edmond Taylor or the one of them exercising such right shall be

time to time remaining unpaid at the rate of four pounds per centum er annum subject as aforesaid." 'The contention for the appellant is that the option given by the ll was in the nature of property, that it was given to J. B. Sharp nd J. E. Taylor jointly, that J. E. Taylor, one of the joint owners, died after they had become joint owners, and that the other joint owner, J. B. Sharp, simply takes the option as survivor of one of two joint owners. Alternatively, the appellant contends that the

ords of the will expressly give the option to the survivor of the wo partners, and that J. B. Sharp is the survivor of the two partners, as J. E. Taylor has died and J. B. Sharp is still alive.

The argument for the executors of J. E. Taylor is that the option s given to both J. B. Sharp and J. E. Taylor, but that it did not stitute property held in joint ownership so as to accrue to the urvivor. The option, it is argued, was an offer which could be ited by either of the persons to whom it was given during their or by the executors of either or both of them after the optionees had died, provided that it was exercised within the two-year period prescribed by the will. 'The argument for the residuary legatees is that the option was personal to J. B. Sharp and J. E. Taylor, and that, in the event ich happened, namely, that both of them were living at the time of the decease of the testator, the option was given to them jointly nd to no other person, that it can be exercised by them jointly, and not otherwise, and that, as it has not been so exercised, the option has lapsed. The provisions in the will relating to the option of purchase should e construed independently of any prima facie presumption, either that an option to purchase is personal only to the person to whom it is given, or that it is prima facie a form of property which is assign- ble by him and transmissible to his executors (Skelton v. Young- ouse (1)). Accordingly, before considering whether an option of

ase is assignable property, the nature of the option itself

st be ascertained. This can be done only by reading the words the will in their natural grammatical meaning. When the words

itaves, can be examined. 'hy, however, it is held that, upon (1) (1942) A.C. 571.

ged with interest on the balance of the purchase money from _

• the true construction of the will, it was the intention of the testator

that only a named person or persons should exercise the option, question as to assignability or transmissibility can arise : See Abbo v. Union Trustee Co. of Australia Ltd. (1). The relevant clause of the will begins by defining the person o1 persons who are to be entitled to exercise the option and pro to define the nature of the right which that person or those persons: are to have. The right which is given is an immediate right. It is not postponed for the purpose of letting in any prior interest. Iti a right which can be exercised at any time (and possibly from time to time in respect of different assets) during a period of two ye from the date of the testator's decease. It is clear that it was intended that if both J. B. Sharp and J. E. Taylor were living at the time of the testator's decease they sho be entitled jointly to exercise the option. All parties are agreed up _ to this point. The controversy arises as to the meaning of the word 1 "or the survivor of them if one be deceased." It is argued for the - appellant that the words " survivor of them " are satisfied by J. B Sharp, who is the survivor of himself and J. E. Taylor. Upon this" view the words " if one be deceased " are surplusage. There can be no survivor of two persons unless one of them is deceased. The contrary view attaches a meaning to the words "if one be deceased " by reading the words as referring to death in the lifetime of the testator. The clause deals with two events. If both the other partners are living at the time of the testator's decease the _ option is given to both of them. If, on the other hand, at that time one is deceased, so that only one is living, then the option is given - to the survivor. a In my opinion the latter construction is that which is to be pre- ferred. The words " or the survivor of them" plainly refer to the - survivor of the two other partners. But they do not in themselves - indicate the point of time at which survivorship is to be ascertained - or determined. The words might refer to the person who was the - survivor of the two partners either at the time of the death of the - testator, or at some later time. It is urged for the appellant that - if one partner becomes the survivor of the other at any time during _ two years after the death of the testator, the partner so surviving is _ entitled to exercise the option. But, as already stated, this con- struction gives no effect to the words " if one be deceased." The words are placed in connection and juxtaposition with the words - referring to the death of the testator. They are not associated - with the words referring to the period of two years. In cases where, - (1) (1928) 41 C.L.R. 375, at p. 381.

two persons, the tendency, after some variation, has been to hold that survivorship should be determined at the time when the prior iterest falls in, that is, at the period of distribution : See the cases cited in Jarman, 7th ed. (1930), vol. m1., pp. 2055 et seq., especially p. 2063, and in Laws of England, 2nd ed., vol. 34, pp. 279, 280. In my opinion different considerations apply to a case such as the nt where no prior interest during the two years is given to any her person, and where the expiry of the period of two years is not . point of time at which an interest of a survivor may arise. In the case of a gift to a survivor after a life or other interest the persons who are survivors then take their interests in possession. But in the present case it is impossible to carry out the intention of the tor by postponing the ascertainment of the survivor until the v of the two-year period, because after that period has expired

e is no analogy between the present case and other cases which true words relating to survivorship in connection with interests after a prior estate. " Survivor" means the one of J. B. sharp and J. E. Taylor who lives the longer. To that survivor the 'option is given, but only in a certain event, namely, "if one be leceased." Instead of regarding these words as superfluous, I e them as meaning that the time at which survivorship is be determined is the time of the death of the testator. It was pointed out in argument that the phrase "if one be eased" is more apt for the purpose of referring to an event h has happened in the past than for referring to an event which ay happen in the future. In other words, "if one be deceased " isa phrase which should not be read as equivalent to "if one shall die." This argument supports what I regard as the natural con- struction of the clause in question, namely, that if both of the ator's partners are living at the time of his decease they are to we the option jointly ; but that if one only is living at the time his decease, then that one only is to have the option' Upon 8 view in the events which have happened J. B. Sharp and J. E. 'Taylor could exercise the option jointly, but there is no provision in the will giving the option to J. B. Sharp alone as " survivor " in the event (which has happened) of J. E. Taylor dying after the testator, but before J. B. Sharp. It is contended for the appellant, however, that, even if, in the events which have happened, the option was given only to the two artners who survived the testator, yet the option was in the nature

iter a life or other interest, an interest is given to the survivor of #. ©. or A.

other. This question has to be answered, not by applying any ruk of law, but by ascertaining the intention of the testator. Tl question is: " Does the will show that the testator intended, in th events which have happened, that the option should be exercised only by both partners personally ? " In the present case the option is given to the testator's broth J. B. Sharp and his friend J. E. Taylor. The provision that J. Taylor may exercise the option, although he may have joined in. the application for probate to the will, suggests that it was contem- plated that J. E. Taylor himself, and not some stranger-assign would be exercising the option. There is express reference to the event of the said J. B. Sharp and J. E. Taylor or either of them: "deciding to exercise such right or option " and it is provided th "if desired by them or either of them" terms shall be given for payment of the purchase money. These words suggest personal decision and personal desire. a The option includes a right to select assets and investments. applies not only to "the said assets and investments ", but also to "any specific one or more of them." A right in a donee to select

objects of gift is an element which supports the construction of thi gift as personal to the donee (In re Madge ; Pridie v. Bellamy (1) Criticism was directed against the opinion expressed by O'Bryan J. that the " object of granting the option was to enable the surviving or continuing partners, if they were so minded, to continue the partnership business together after the death or retirement of the - other partner instead of completely winding up the business." It was pointed out that the will of the testator conferred no powe upon his executors to carry on the partnership business, so that dissolution would be necessary (Partnership Act 1928 (Vict.), 8. 37), and that in any event the partnership could not be continued between the surviving partners unless they agreed to continue it. Therefore, it was said, the provision in the testator's will would not make it pos- sible to carry on the partnership. But I agree with the learned - judge that the effect of the clause would be to give the partner or partners who survive the testator an opportunity, if he or they should so desire, to carry on in partnership or alone with such assets as might be selected from the assets of the firm. I agree with the learned judge that this points rather to a personal right than to 4 right intended to be transmissible to personal representatives. In my opinion the option given by the will could, in the events - which have happened, be exercised only by J. B. Sharp and J. E. Taylor jointly. This conclusion makes it unnecessary to consider A (1) (1928) 44 T.LLR. 372.

value of the testator's share in particular assets should be letermined and various associated questions. In my opinion the appeal should be dismissed.

rcs J. The facts material to the present appeal are as follow : e testator, together with his brother J. B. Sharp and his friend E. Taylor, carried on in partnership a business which included the ness of investors and pastoralists. There was no written ership agreement, but the profits and losses were shared and equally, and the records of the partnership show that the pital was unequally contributed, the testator's total contributions g usually larger than those of either of the others. By his will nade on 4th June 1929 he appointed as his executors and trustees , trustee company and his partner J. E. Taylor, and gave his residuary ite to his trustees upon trust for conversion "' but as to the assets investments held by me in conjunction with my brother John Sharp and my friend the said John Edmond Taylor or either them subject to the directions and dispositions hereinafter contained respecting the same." The option which has given rise to the present appeal is in the following terms. " As to the assets and investments both in realty and personalty which are held by in conjunction with my brother John Brown Sharp and John dmond Taylor I declare that the said John Brown Sharp and John nond Taylor should they both be living at the time of my decease the survivor of them if one be deceased and notwithstanding that said John Edmond Taylor shall have joined in the application or probate to my will and shall have accepted the trusts thereof for a period of two years from the date of my decease have an on or right of purchasing or taking over my share and interest nd the share and interest of my estate in the said assets and invest- ments or any specific one or more of them at the values respectively h at my death are shewn in the books relating to such assets and investments as the value thereof respectively And in the event of the said John Brown Sharp and John Edmond Taylor or either of them deciding to exercise such right or option (and if desired by em or either of them) payment therefor shall be accepted by my s on terms extending over a period of five years from the date

e Company of Australia Limited in its full discretion shall fair and reasonable I declare that up to the date of e of such option or right my estate's share of the income 'on such assets and investments shall be income of my estate

other questions raised in argument as to the method by which the ¥. © or A.

but on the intimation of the exercise of such option or right m estate's right to such income shall cease and thenceforward th said John Brown Sharp and John Edmond Taylor or the one o them exercising such right shall be charged with interest on the balance of the purchase money from time to time remaining unp at the rate of four pounds per centum per annum." The testato confirmed his will by codicil on 23rd October 1935, and died 21st September 1943. J. E. Taylor died on 17th October 1943, On 5th May 1944 J. B. Sharp, the testator's brother, purported t exercise the option to purchase created by the will. 7

The question is whether, upon the proper construction of the ¥ the option was one exercisable, if both partners should survive, only by both of them acting jointly, and whether an option w available to a single partner only if he should be the only partner to survive the testator. It was held by this Court in Abbott v. Union Trustee Co. of Australia Ltd. (1) and subsequently by the House of - Lords in Skelton v. Younghouse (2), in relation to the question of the availability of an option created by will to the personal repre sentatives or assignees of an optionee who survived the testato but subsequently died or purported to assign the option, that th depends upon the intention of the testator gathered from the language of his will read with reference to the nature of the subject property and the relationship between himself and the optionee. I am of opinion that the availability of the option in the present case depends upon similar considerations, due effect being given to the natu legal consequences of the language used.

The testator was a member of a partnership of three, and 'iit q persons mentioned as optionees are the other two partners. The option is conferred upon J. B. Sharp and J. E. Taylor " should they both be living at the time of my decease or the survivor of them - if one be deceased." The subject matter of the option is "my share and interest and the share and interest of my estate in the said assets and investments or any specific one or more of them at the - values respectively which at my death are shewn in the books relating to such assets and investments as the value thereof respectively." The assets and investments in question are the partnership assets, - and what the testator is purporting to do is to give an option to purchase not his interest in the partnership business but his interest, - at book values as at death, in either the whole of the partnership - assets or in any one or more of the assets at the choice of the optionees - or optionee.

Business partners own between them the whole of the partnership and each partner has a proprietary interest in each and every it But his interest is not a fixed proportion of each item, nor is it an immediately ascertainable quantity of the item. It is an ndefinite and fluctuating interest, which at any given moment is in oportion to his share in the ultimate surplus coming to him if at moment the partnership were wound up and its accounts taken worth v. Munn (1); Marshall v. Maclure (2); Manley v. Sartori

id. v. Federal Commissioner of Taxation (5) ). No doubt, as between and his partners, his interest in individual items is subject to ir right to have all the assets of the partnership for the time being lt with in accordance with the partnership agreement, but his erest in them is none the less real for that (In re Holland ; Brethel . Holland (6); In re Fuller's Contract (4)). The partnership in question was one which would become, and did become, olved upon the death of any partner; and upon the testator's th the right to wind up the partnership business, including the ght to carry it on so far as necessary for this purpose, and to realize e partnership assets, both real and personal, would then become, nd did then become, exclusively vested in the surviving partners. The testator had no power to interfere by his will with the rights of

e survivors. But the optionees would not be likely to exercise option except to the extent to which they thought that they ld benefit more by doing so than by winding up the partnership n the ordinary way, that is, except in relation to partnership assets h at the death of the testator stood in the books of the partner- hip at less than their real value. The exercise of the option with respect to an item would have the result that on a taking of partner- accounts they would get everything referable to the item,

ilst the estate would get nothing in respect of it out of the partner- ship, but would have instead the price which the optionees had paid in respect of the testator's share in it.

The will envisages the possibility that only one partner might survive the testator. Since the death of any of the three would olve the partnership which existed when the will was made, the itor must here be contemplating the possibility of one of the two dying and of himself and the survivor arranging to acquire e business and form a new partnership of two for the purpose of ying it on. If this had happened, the general position would

(1) (1880) 15 Ch. D. 363, at pp. 369, (4) (1933) Ch. 652, at p. 656. i 370. (5) Ante, at p. 285. (2) (1885) 10 App. Cas. 325, (6) (1907) 2 Ch. 88, at p. 91.

be the same as if, the partnership being still of three, two had su vived the testator. It is true that in the clause creating the option the phrase used is "as to the assets. . . which are held by in conjunction with my brother John Brown Sharp and John Edmon Taylor", but it is evident that the words " or either of them" m here be understood. This is clear from the fact that these wo appear in the earlier reference to this provision, and from the lang of the declaration which immediately follows.

What in fact happened was that at the testator's death the pa ship which existed when the will was made was still being on; but J. E. Taylor, one of the two survivirtg partners, died wi a month of the testator without having joined with the other survi in exercising the option. This did not, of course, dissolve the part- - nership. It was already dissolved. It meant that only one pa : was now left to wind up the partnership affairs.

The question is whether J. E. Taylor's death prevented the exercise by J. B. Sharp of the option which had been conferred upon them both. In my opinion, it did not. The will creates two option in the alternative, one in favour of both Sharp and Taylor should both survive the testator, the other in favour of whichever of them - should survive the testator if only one should do so. The option were clearly intended to confer benefits. The option given to both - confers a joint benefit upon both, and, prima facie, on the death of one joint beneficiary, a joint benefit survives to the other. I see nothing in the language of the will, the subject matter of the option, or the relationship of the parties to the deceased to suggest that survivorship was not intended. The evident object of the testator was to confer personal benefits on his surviving partners with respect to his interest in the partnership assets. As regards the phrase "and in the event of the said John Brown Sharp and John Edmond Taylor or either of them deciding to exercise such right or option (and if desired by them or either of them) payment therefor shall be accepted by my trustees on terms", I think that the expres sion "such right or option" indicates that the testator is here referring to the right or option expressed to be vested in both if both should survive him or in either if that one only should survive _ him. To sum up, I think that, upon the true construction of the will and in the events which happened, no original several option ever became vested in J. B. Sharp, but an original joint option became vested in J. B. Sharp and J. E. Taylor, and on the death of the latter the right to exercise it became vested in J. B. Sharp by survivorship, because it was a joint option. :

itted to the primary judge. Costs of all parties except the ervener as between solicitor and client out of the estate. The itervener to bear his own costs.

'Starke J. The substantial question on this appeal is whether an ption to purchase given by the will of Australias Sharp was exercis- by the donees jointly and is incapable of exercise by one of them

Tt depends upon the terms of the testator's will construed in the ght of the relevant surrounding circumstances (Skelton v. Young- house (1) ). _ The option is given by the testator to his brother J. B. Sharp nd J. E. Taylor "should they both be living at the time of my or the survivor of them if one be deceased . . . fora od of two years from the date of my decease . . . of pur- or taking over my share and interest and the share and est of my estate in the . . . assets and investments" "both in realty and personalty " held by the testator in conjunction. with J. B. Sharp and Taylor " or any specific one or more of them the values respectively which at " his death were " shewn in the oks relating to such assets and investments as the value thereof spectively." The testator, who died in September 1943, his itéten J. B. Sharp and J. E. Taylor had carried on business in partnership as Sharp ¢ Taylor. There was no deed of partnership, but the partners to have been interested in the partnership each in an equal share though their capital had been contributed unequally. The ness comprised various activities, and the assets thereof, which are of considerable value, consist of freehold properties, government stock, shares, debentures, live stock, plant and equipment.

ui B. Sharp and Taylor survived the testator, but Taylor died in ber 1943 without the option given by the will having been

nd by no-one else. The option is given to them jointly and enables them to choose and decide whether they take over the share and est of the testator or some specific one or more of the assets of e partnership, a choice, as it seems to me, which it is unlikely the testator would confide in anyone but the donees themselves. it was said, on the authority of London and South Western Railway Co. v. Gomm (2), that the option gave the donees severally some

For these reasons the appeal should be allowed and the matter H. ©. or A.

sort of interest in the assets and investments of the partne' which passed to the personal representative of the deceased don The argument appears to me without any foundation: the oj did not give to the donees or either of them any right or intere executory or otherwise in any property: it conferred a perso right to be exercised or not to be exercised as the donees joint] decided.

Then it was suggested that the will itself conferred upon J. B. Sharp the right to exercise the option now that Taylor was dea The words relied upon were "or the survivor of them if one be deceased." But deceased when? Clearly, I should think, in the - context in which the words appear, at the time of the death of the testator.

A suggestion was heard that the option given by the will was uncertain and void. On the part of those interested in the residuary - estate it was said to be practically impossible to give effect to the - option ; by the appellant that it involved quite a simple caleula- tion for a court of equity and well within the capacity of accountants: and trustees; by the trustees that it involved fractions of astron- - omical proportions. But it is unnecessary for me in the view I take of the nature of the option to enter upon these interesting problems, which are far removed from anything the testator had in - mind or intended and arise because of the nature of the partners' interests and responsibilities in connection with the partnershij assets and liabilities.

McTiernan J. In my opinion the appeal should be dismissed. I agree with the conclusions and in substance with the reasons of the Chief Justice.

Wiuiams J. Australias Sharp, hereinafter called the testator, - died on 21st September 1943 having duly made his last will on 4th _ June 1929 and a codicil thereto on 23rd October 1935, by which, subject to certain alterations and modifications, he confirmed his will.

At the date of his will, codicil and death the testator was carrying on in partnership with his brother John Brown Sharp and John Edmond Taylor under the style of Sharp & Taylor the business of investors in real and personal property, pastoralists and other business. There was no partnership agreement in writing, but it appears from the books and records of the partnership that the _ capital contributions of the partners were always unequal (the

rtners), that the amounts of the capital contributions varied from ime to time, but that the profits and losses of the partnership were hared and borne equally by the partners.

John Edmond Taylor died on 17th December 1943 without g joined with John Brown Sharp in the exercise of the option fter referred to.

5th May 1944 John Brown Sharp gave the trustees notice in ig of his intention to exercise the option with respect to the in the company known as Sharp Investments Pty. Ltd.

e testator's death. The shares referred to in the notice were valued in the partnership books as at the date of the testator's death at £94,967 19s. 5d. and the horses at six pounds each. The question having arisen whether the option lapsed upon the ath of John Edmond Taylor, the trustees filed an originating ummons in the Supreme Court of Victoria asking for the determina- tion of this and other questions relating to the construction of the rovisions of the will conferring the option. Upon the originating mmons coming on to be heard, O' Bryan J. made an order in which declared that the option had lapsed on the death of John Edmond faylor. It is against this order that the appellant John Brown Sharp s appealed to this Court. The personal representatives of John Edmond Taylor, who were made defendants to the originating summons, were not served with the notice of appeal, but upon the earing they appeared by counsel and contended that the option had not lapsed but was only exercisable by John Brown Sharp and his clients jointly. By his will the testator, after appointing John Edmond Taylor one of his executors and trustees and after making a specific devise, gave, devised and bequeathed his residuary real and personal estate his trustees upon trust to collect realize and convert the same into ey, but provided that "as to the assets and investments held me in conjunction with my brother John Brown Sharp and my d John Edmond Taylor or either of them " the trust was to be bject to the directions and provisions thereinafter contained ecting the same. This exception of the assets held by the tor in conjunction with his brother and Taylor or either of em from the trust for sale would lead to the expectation that the juent portion of the will would contain an option over assets ch the testator held in conjunction with his brother and Taylor

stator having usually contributed more than either of the other 4. ©. or A.

or either of them at the date of his death. But the subsequer option only refers to the assets held by the testator in conjuneti with his brother and Taylor. It is in these terms : - " As to th assets and investments both in realty and personalty which ai held by me in conjunction with my brother John Brown and John Edmond Taylor I declare that the said John Brown Shar and John Edmond Taylor should they both be living at the time o my decease or the survivor of them if one be deceased and noty standing that the said John Edmond Taylor shall have joined it the application for probate to my will and shall have accepted trusts thereof shall for a period of two years from the date of n decease have an option or right of purchasing or taking over share and interest and the share and interest of my estate in the said assets and investments or any specific one or more of them at the values respectively which at my death are shewn in the books relating to such assets and investments as the value thereof respec- tively And in the event of the said John Brown Sharp and Ji Edmond Taylor or either of them deciding to exercise such right 0 option (and if desired by them or either of them) payment th shall be accepted by my trustees on terms extending over a of five years from the date of my death and by instalments or wise as the said The Union Trustee Company of Australia Li

of the income arising on such assets and investments shall be ine of my estate but on the intimation of the exercise of such option or ; right my estate's right to such income shall cease and thenceforward the said John Brown Sharp and John Edmond Taylor or the one of them exercising such right shall be charged with interest on the balance of the purchase money from time to time remaining unpaid at the rate of four pounds per centum per annum." " A will must be construed with reference to the real and personal estate comprised in it to speak and take effect as if it had been executed immediately before the death of the testator unless a contrary intention shall appear by the will. In the present will there is no indication of a contrary intention in the provisions relating to the option. On the contrary they must refer to assets which exist at the testator's death because the price to be paid is determined by their book value at that date. The words in the option " as to the assets and investments both in realty and person- alty which are held by me in conjunction with my brother John Brown Sharp and John Edmond Taylor" contemplate, therefore, that both J. B. Sharp and Taylor would still be alive at the death

ich the option is given is a share calculated on the basis that there e three persons interested in the assets at that date. The testator proceeds to declare that with respect to these assets his brother

or the survivor of them if one be deceased . . . shall for a period of two years from the date of my decease" be entitled to ercise the option. The donees of the option in the first instance

re therefore the testator's brother and Taylor provided they are both alive at his death. But if one of them be deceased, that is, if is dead, the right to exercise the option is given to the survivor. has been said that the word " survivor" is one which ought to e avoided by any person who is not a consummate master of the rt of conveyancing because no word has occasioned more difficulty per Lord Hatherley, then Sir W. P. Wood V.C., in In re Gregson's "rusts (1) See also per Rigby L.J. in In re Pickworth ; Snaith v. 'Rkinson (2). The words " should they both be living at the time my decease " refer to the donees surviving the testator, but the s " or the survivor of them " refer to one of the persons named ig the other, so that " survive " is used in its natural gram- 'matical sense of one person living longer than the other (White v. Baker (3); Re Wood; Hardy v. Hull (4); Knight v. Knight (5) ).

ticular moment of time. Read literally they would appear to refer to one of the partners dying in the lifetime of the testator. But if one of the partners had predeceased the testator the partnership would have been dissolved and there would have been no assets ich could be said strictly speaking to be held by the testator in conjunction with his brother and Taylor at his death, although assets 'still held by the testator in conjunction with the other surviving partner and the personal representatives of the deceased partner might be said in a loose sense to answer the description. But the itor must then be taken to have intended that the gift of the ate option should be conditional upon the partnership still in the course of being wound up at the date of his death.

_ The gift is not a devise or bequest of property but an option to uurchase property, so that the date corresponding to that on which | devise or bequest of property would vest in possession is not the

death of the testator but the date on which the option is exercised,

nd the provisions relating to the payment of the purchase money

(1) (1864) 33 LJ. Ch. 531, at p. 532. (4) (1923) 130 LT. 408. 3 (1899) 1 Ch. 642, at p. 651. (5) (1912) 14 C.L.R. 86.

ind Taylor " should they both be living at the time of my decease se

in the event of the exercise of the option, and of the destination of the income of the assets prior to its exercise, and those which to the actual exercise of the option by J. B. Sharp or Taylor or eit of them contemplate that the option might be exercised at time prior to the expiry of the period of two years by the optione jointly or by either of them separately.

Alternatively the description of the assets excepted from the for sale shows that the testator contemplated that assets owned him in conjunction with his two partners might subsequently b held by him in conjunction with either of them, which would taken place if either of his partners had predeceased him and and the surviving partner had bought out the interest of deceased partner and continued to carry on the partnership business. Possibly, therefore, the words "or either of them" should | supplied in the option after the initial reference to the assets held the testator in conjunction with his brother and Taylor. If this is done the words "if one be deceased " would naturally refer to the death of the brother or Taylor in the lifetime of the testator, and the only option conferred by the will would be, in the events that have happened, a joint option to the brother and Taylor. But I agree with my brother Rich that upon this construction of the will there is nothing to prevent the right to exercise the option surviving - to the brother upon Taylor's death. If the option had been con- ferred by a contract the chose in action would clearly have survived (Southcote v. Hoare (1); Fadden v. Deputy Federal Commissioner of - Taxation (2); Halsbury, 2nd ed., vol. 4, p. 470; vol. 7, p. 73), and I can see no distinction in principle where an option is conferred by awill. The authorities cited in Trustees Hxecutors & Agency Co. ltd. v. Federal Commissioner of Taxation (Milne's Case) (3), to which I will add Carter v. Hyde (4), show that an option of purchase creates an equitable interest in the property subject to the option. The extent of that interest depends upon the terms of the contract or of the gift. If upon the true construction of the instrument an intention - appears that the option is only to be exercised by the optionee personally, then the option determines upon his death (Skeltom v. - Younghouse (5); Tawse's Trustees v. Lord Advocate (6); Abbott v. Union Trustee Co. of Australia Ltd. (7) ).

The terms of the present option, and particularly the right to select the assets to be purchased, are such that they do, in my opinion,

(1) (1810) 3 Taunt, 87 [128 E.R. (4) (1923) 33 CLLR. 115, at p. 125. 36]. (5) (1942) A.C, 571,

(2) (1943) 68 C.L.R. 76, at p. 83. (6) (1943) S.C. 124 (Ct, Sess.)

(3) Ante, at pp. 285, 296. (7) (1928) 41 C.L.R. 375.

manifest an intention that the option was to be exercised only by the testator's brother and Taylor personally and by no one else and therefore not by their assignees or personal representatives (In re Madge ; Pridie v. Bellamy (1), a decision of Lord Russell of Killowen (then Russell J.) which Viscount Maugham referred to in Skelton v. Younghouse (2) as " unquestionably correct"; Tawse's Trustees vy. Lord Advocate (3)). But there is no indication of an intention that the proprietary interest created by the joint option should not be subject to its ordinary incident of survivorship, and therefore, on the death of one of the optionees, be capable of being exercised by the other personally. The indications of intention are, I think, entirely to the contrary.

For these reasons I do not feel compelled to choose between the two constructions of the will, because whichever is right I am of opinion that J. B. Sharp was entitled to exercise the option on 5th May 1944.

It remains to consider the rights and obligations which then arose between him and the executors of the will. The property subject to the option is partnership property. The price to be paid under the option is the value of the testator's share in the assets to be _ purchased as shown in the books of the partnership at the date of death. When the books are looked at the shares in Sharp Invest- ments Pty. Ltd. appear at £94,967 17s. 5d. and the racehorses, which, it is agreed, were at Tallarook, at six pounds each. The total assets of the partnership are shown in the books at the value of £377,020 10s. 8d., while on the liabilities side there appear £132,216 13s. 3d. owing to creditors and £244,803 17s. 5d. to the credit of the capital accounts of the partners. Of the amount to the credit of the capital accounts, the testator is credited with £162,305 19s, 2d. or approxi- mately two-thirds. The purchase price payable by J. B. Sharp is therefore approximately two-thirds of £94,979 17s. 5d.

It is the duty of J. B. Sharp as the surviving partner to wind up the partnership by selling the assets, discharging the liabilities, and distributing the balance between the estates of his two partners _ and himself in accordance with the rights of the partners. The 'proceeds of sale of the shares in Sharp Investments Pty. Ltd. and of the two racehorses will be available, like the proceeds of sale of

the other partnership assets, to discharge these liabilities. But out : of the proceeds of sale of the whole of the assets received by the estate of the testator, the executors will be obliged to pay J. B. Sharp a sum equivalent to approximately two-thirds of the proceeds

(1) (1928) 44 T.L.R. 372. (2) (1942) A.C., at p. 577.

' taking into account the liabilities of the partnership, it follo

Will Trusts; Graham v. Armstrong (2) ). As the amount payable for the testator's share in these assets has been ascertained without

that, in determining the liability of the estate to J. B. Sha the only deductions that should be made from the two-th of these proceeds of sale should be two-thirds of any exp such as commission, specifically referable to the sale of the share and the racehorses and two-thirds of the proportion of the general costs, charges and expenses of winding up the partnership attribut- able to the proportion which the proceeds of sale of these as bears to the total proceeds of sale of the partnership assets.

For these reasons I would allow the appeal and I agree with th order proposed by my brother Rich. "

Appeal dismissed. Appellant to pay costs respondent trustees and of Winifred Aus Vial.

Solicitors for the appellant, J. V. McHacharn & Son. Solicitors for the trustees, Abbott, Beckett, Stillman & Gray. Solicitors for Winifred Austen Vial, Blake & Riggall. Solicitors for Taylor's executors, Francis Newell & Son.