Tatham v Huxtable

Tatham v Huxtable - [1950] HCA 56 - HCA 1950 case summary — Zoe

[5]

This is an appeal from an order of the Supreme Court of Western Australia (Wolff J.) whereby the will of the late Joseph Tatham was interpreted. By his last will the testator gave eleven legacies to such beneficiaries as the Children's Hospital, Masonic Lodges, a children's home and other benevolent institutions, a bowling club and two individual persons. The will contained the following provision in par. (11): - "I hereby authorise and empower in law my executor the said Edgar Ernest Huxtable, to distribute any balance of my real and personal estate which may at the time of my decease be possessed wholly or in part by me, to the beneficiaries in this my Will and Testament, in addition to amounts already specified, or to others not otherwise provided for who, in my opinion have rendered service meriting consideration by the testator". It was held by Wolff J. that the latter part of this provision, relating to "others not otherwise provided for who, in my opinion have rendered service meriting consideration by the testator", was so uncertain that it was void, but that the invalidity of this part of the clause did not affect the other part of the clause, which was held to be valid. Accordingly, his Honour made an order that par. (11) of the will was effective in so far as it conferred benefits on the named beneficiaries under the will of the testator but was void for uncertainty in so far as it empowered the executor to distribute any moneys among any persons or institutions not named in the will of the testator. His Honour reserved for further argument the question of the manner in which the residuary estate of the testator was to be distributed amongst the beneficiaries named in the will. An appeal is brought to this Court by the representatives of the next-of-kin of the deceased, who contend that the whole of par. (11) is invalid and that there is an intestacy as to the residuary estate of the testator. The Attorney-General was made a party to the proceedings in order to cover the possibility of a contention that par. (11) was, or at least contained, a charitable gift. In this Court the Attorney-General through his counsel quite properly intimated that he was of opinion that this contention was unarguable.

[11]

The argument for the invalidity of the second part of par. (11) is founded upon such cases as Houston v. Burns [2] , where Lord Haldane said that a testator cannot leave it to another person to make a disposition of the beneficial interest of his estate unless he has passed the beneficial interest to that person to dispose of as his own: - "He may, indeed, provide that a special class of persons, or of institutions invested by law with the capacity of persons to hold property, are to take in such shares as a third person may determine, but that is only because he has disposed of the beneficial interest in favour of that class as his beneficiaries. There is, however, an apparent exception to the principle. The testator may indicate his intention that his estate is to go for charitable purposes" [3] . Lord Haldane repeated this opinion in Attorney-General v. National Provincial and Union Bank of England [4] , where he used the following words [5] : - A testator "cannot leave it to some one else to make a will for him, nor can he leave it to his trustees to give it for purposes which are to be completely in their discretion, unless these purposes are so indicated as in some sense to confer on a class of beneficiary an interest". These words recognized that it is possible for a testator by his will to create a special power of appointment in a person who may or may not be given a beneficial interest in the estate. But a testator may also create a general power of appointment authorizing a disposition in favour of any person and not only of members of a specified class: see Jarman on Wills, 7th ed. (1930), vol. 1., p. 458, where, after a reference to Attorney-General v. National Provincial and Union Bank of England [4] , the learned authors say: - "But a general power of appointment may be given, for that is equivalent to property, and a power of distribution among charities may be given". Thus what was said in Houston v. Burns [1] and in the last-mentioned case should not be understood as denying the well-established law with respect to powers of appointment: see Re Hughes; Hughes v. Footner [2] , where an estate was given to an executor "upon trust for all my children and their issue in such shares and in such manner as I shall by codicil direct or appoint, or, failing any such direction or appointment by me, then in such shares as [the said executor] shall in his discretion think fit and proper". The testator did not make a codicil and it was held that the children and their issue living at the death of the testator were entitled to the estate subject to the power of selection given to the executor. Sargant J. said [3] : - "The general law on the subject is well settled, and is that the power of testamentary disposition is essentially a personal one and cannot be exercised by a will merely purporting to delegate to another the distribution of the testator's estate and the ascertainment of the objects of his bounty. But there are some real or apparent exceptions to or qualifications of this general rule. One is that of the creation of a general power which the donee may exercise for his own benefit, for such a power is equivalent to property. Another is that of the creation of a power of distribution amongst charities. A third is that of the creation of a power of selection amongst individuals or a class of individuals who are pointed out as the beneficiaries: see Houston v. Burns [4] ".

[19]

With great respect to the learned judges who decided those cases, I would think that the real question was not whether the power which was given was a valid power as such, but whether it amounted to a true testamentary disposition of property, or, in other words, whether it complied with the well-established rule stated by Lord Haldane in Houston v. Burns [3] and by Lord Simonds in the Diplock Case (Chichester Diocesan Fund v. Simpson [4] ). It is to be remembered that the ultimate basis of the rule lies in the Wills Act, which provides that every person may dispose of all his property by will but that no will shall be valid unless it is in writing and executed by the testator in a particular manner. It is inherent in the very nature of the power so given that it cannot be delegated or exercised by an agent for the testator, and it seems to me necessarily to follow that some powers of appointment, which would be perfectly good in any instrument other than a will, are ineffective in a will for the simple reason that they do not amount to a testamentary "disposition" of property, or indeed to any "disposition" of property at all. It seems quite consistent with legal principle to say that the creation by will of a general power of appointment (which has been said to confer the equivalent of ownership) is a testamentary disposition of property. It also seems consistent with legal principle to say the same of the creation of a special power of appointment among a class, where the class is described with certainty and (as in the normal case) there is, unless and until the power is exercised, a trust for the class or for persons who are to take in default of appointment. Where there is, as a matter of construction, no such trust, there does seem to be a departure from principle if we say that the creation by will of a special power to appoint among a class is a testamentary disposition of property, but to say so represents a natural enough "latitude" of view, which is perhaps characteristic of a system which has never regarded strict logic as its sole inspiration. Unless, however, there is a class designated with certainty, to say that the creation of a power to select beneficiaries amounts to a testamentary disposition of property is not merely to relax the principle to meet an exceptional case but to deny the principle absolutely. And this is, I think, what was done both in Re Park [1] and in Re Jones; Public Trustee v. Jones [2] . When it is said in such cases that the power given is a valid power as such, as no doubt it is, the real question - the question whether there is a testamentary disposition of property - seems to me, with great respect, to be simply avoided.

[49]

It remains to add that this case is distinguishable from cases such as In re Clarke; Bracey v. Royal National Lifeboat Institution [1] , by the fact that, if clause (11) were valid, the executor might distribute the whole of the residuary estate to persons as to whom it is impossible to say that they are within a class pointed out by the testator. In the case cited, Romer J. [2] distinguished between three types of cases: (1) the case where the executor in the exercise of a discretion may apply the whole fund to non-charitable indefinite objects; (2) the case where a definite portion of the fund is given to such charitable objects as the executor may select and the rest of the fund is given to such non-charitable indefinite objects as the executor may select; and (3) the case where a part of the property, to be determined by the executor, must be given to charity and only the residue to non-charitable indefinite objects. His Lordship held that the case before him was of the third type, and that, since the power of the executors to decide the proportions to go respectively to the charitable objects and the non-charitable indefinite objects was invalid (because if valid it would be exercisable by virtue of Lord Selborne's Act so as to give the property wholly to the non-charitable indefinite objects), the property was held in trust for the charitable objects and the non-charitable indefinite objects in equal shares, and only the gift of the share of the non-charitable indefinite objects failed for uncertainty. But a similar conclusion is not open in a case such as the present, which falls within the first class mentioned by Romer J. I see no distinction in principle between this case and those in which it has been held, in the absence of statutory provisions such as s. 131 of the Property Law Act 1928 of Victoria and s. 37D of the Conveyancing Acts 1919-1943 of New South Wales, that a power given by will to a trustee to apply property in favour of objects some of which are valid because charitable and some of which are invalid because non-charitable and indefinite, is wholly invalid: Attorney-General (N.S.W.) v. Adams [1] ; Chichester Diocesan Fund v. Simpson [2] .

At a glance

Court

Decision date

Before

Source

Judgment (52 paragraphs)

Parties