SUCCESSION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS
– WHAT INTEREST PASSES – ABSOLUTE GIFTS GENERALLY
AND WHEN CUT DOWN
– ABSOLUTE GIFTS GENERALLY – where a testator left a detailed Will
Source
Original judgment source is linked above.
Catchwords
SUCCESSION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS– WHAT INTEREST PASSES – ABSOLUTE GIFTS GENERALLYAND WHEN CUT DOWN– ABSOLUTE GIFTS GENERALLY – where a testator left a detailed Willwith two codicils – wherecl. 16 of the Will defines the entire residuaryestate as constituting 100 equal parts and directs the trustees “topay”portions of the residuary estate to certain institutions in theproportions and for the purposes identified in the sub-clauses –where cl.16(ii) of the Will allots a portion of the residuary estate to the applicant“for the purpose of establishing withinthe Diocese a home for AgedPersons to be described as ‘The Edwin Marsden Tooth MemorialHome’” – where theapplicant seeks a declaration regarding theproper construction cl. 16(ii) of the Will – where the applicant submitsthat thegift was an absolute gift – where the Attorney-General does not
oppose the application but submits that the gift was for a
charitable purpose
and that a trust was imposed on the gift – whether the applicant is
beneficially entitled to the gift as
an absolute gift or whether the gift is
subject to a trust
SUCCESSION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS
– CONSTRUCTION GENERALLY – PRINCIPLES OR RULES
OF CONSTRUCTION
– WORDS HAVING TECHNICAL OR LEGAL MEANING – where a testator left a
will that does not indicate, on its
face, that it was prepared by a lawyer
– where the will uses formal language – where the will precisely
identifies beneficiaries
and the purposes of gifts – where the will
contains detailed instructions – where one of the witnesses of the will
was
described as a solicitor – whether the will was prepared by a
lawyer
McClymont v Hooper [1973] HCA 2
(1973) 128 CLR 147, cited
National
Trustees, Executors and Agency Co of Australasia Ltd v O’Connor [1919] HCA 59
(1919)
27 CLR 60, applied
Re McIlrath (dec’d) [1959] VR 720,
cited
Re O’Mullane (dec’d) [1954] VicLawRp 80
[1955] VLR 217, cited
Re
Frigo
Ex parte Missionaries of Sacred Heart [2017] QSC 81, applied
Judgment (56 paragraphs)
[1]
GR Cooper, Crown Solicitor for the Attorney-General intervening
[2]
[1] Sir Edwin Marsden Tooth died on 27 May 1957. He had been a very successful entrepreneur and, towards the end of his life, a generous philanthropist. His estate was worth over £700,000. He left a detailed will with two codicils. The question for determination concerns the true nature of one of the gifts in that will - was it absolute or was it subject to a trust?
[2] The Corporation of the Synod of the Diocese of Brisbane (the Corporation) submits that the relevant clause of the Will provides for an absolute gift to it. The Attorney-General, who has exercised her right to intervene in the matter, submits that the gift was for a charitable purpose and that a trust was created.
[3]
[3] The terms of the Will are extensive and detailed. It provides for numerous gifts of real property. In various parts of the Will, Sir Edwin expressed a wish without imposing a legal obligation. For example, he left some freehold property to his niece, Lorna Cook, but expressed the wish that she permit his brother, Sidney Tooth, to reside there so long as he might wish.
[4] There were also legacies to relatives and numerous specific gifts of money to the applicant for it to apply to various colleges, schools and institutions.
[5] Sir Edwin left his residuary estate to his trustees to hold on a trust created under the Will. He empowered his trustees to retain investments held by him in any companies at the date of his death and to invest moneys in other identified investments with particular powers to deal with them.
[4]
[6] One of the matters which is able to be taken into account when construing a will is whether or not the will was drawn by a lawyer. A lawyer is presumed to know the technical meaning of words of legal import.[1] This is relevant when construing the meaning of terms which are used in one place and not in another. It can be assumed that there was an informed decision made to use or not to use a particular form of words where that form has been accepted to have a particular meaning.
[7] The Will does not have, on its face, any formal indication that it was prepared by solicitors but, given:
[5]
(b) the precision of the identification of the beneficiaries and the purposes of gifts,
[6]
(c) the structure of the Will and the detailed instructions,
[7]
(d) that there is little likelihood that a commercially sophisticated person would rely on a will drawn by an unqualified person, and
[8]
(e) that one of the witnesses was described as "Desmond E. Booker, Solicitor, 33 Queen Street, Brisbane",
[9]
I am satisfied that it was prepared by a solicitor or solicitors.
[10]
[8] The relevant gift is contained in cl. 16 of the Will. That clause is lengthy, but for the purposes of construing the relevant part, it is necessary that it be set out:
[11]
"16. SUBJECT to the appropriations hereinbefore referred to I DIRECT my trustees to stand possessed of my own ready monies arising from the sale and calling in and conversion both capital and income (hereinafter referred to as 'my residuary trust fund') and to divide the same into One Hundred equal parts and to hold the same UPON TRUST to pay the same to the following institutions in the proportions and for the purposes herein mentioned viz:-
[12]
(i) To THE CORPORATION OF THE SYNOD OF THE DIOCESE OF BRISBANE (CHURCH OF ENGLAND) for the purpose of the St. John's Cathedral Completion Fund TEN of such parts.
[13]
(ii) To the said Corporation for the purpose of establishing within the Diocese a home for Aged Persons to be described as 'The Edwin Marsden Tooth Memorial Home' TEN of such parts.
[14]
(iii) To the said Corporation for the purposes of aiding and assisting all or any Schools Hospitals and educational or other charitable institutions conducted or controlled by the said Corporation within the said Diocese TWENTY of such parts.
[15]
(iv) To the said Corporation for the purpose of initiating or augmenting a fund to establish a Grammar School for Boys within the said Diocese on the Northern side of the City of Brisbane TEN of such parts.
[16]
(v) To THE UNIVERSITY OF QUEENSLAND for the purpose of founding within the said University an Institute for Agricultural Research to be known as 'The Edwin Marsden Tooth Institute for Agricultural Research' TWELVE of such parts upon the following conditions or provisions viz:-
[17]
(a) That the Institute shall be administered by the Senate of the University of Queensland.
[18]
(b) That the Institute shall function as part of the Department of Agriculture of the University under the general control of the Faculty of Agriculture or until otherwise determined by the Senate.
[19]
(c) That subject to the supreme control of the Senate the functions of the Institute shall include:
[20]
In a general way co-operation as far as possible in promoting the extension development and improvement of agriculture with special reference to agricultural science and research;
[21]
Promoting the study of soils, cultural practices, crops, pastures and otherwise; to collate such studies with teaching work; to arrange that practical and useful results derived therefrom be promulgated for public information;
[22]
Conducting such research work appertaining to agricultural science and cognate sciences as the Senate may approve;
[23]
Assisting in the preparation and training of persons to engage in research work appertaining to the foregoing purposes;
[24]
Co-operating and collaborating with such other Institutions and Organisations engaged in the foregoing activities, and in activities akin thereto, as the Senate may determine;
[25]
Perform such other functions as the Senate may from time to time determine.
[26]
(d) It shall be open to the Senate to accept monies from other sources for the purposes of the Institute and such moneys shall be applied by the Senate solely for such purposes.
[27]
(e) Insofar as they are applicable the provisions of Section 16 of 'The University of Queensland Act 1909-1941' or any amendment thereto shall apply to the management, carrying on and control of the aforesaid Institute of Agricultural Research.
[28]
(vi) To the University of Queensland TEN of such parts to be applied for the maintenance and upkeep of the Medical School within the said University and without derogating from the generality of the foregoing words for the following purposes:
[29]
(a) In particular for the endowment for medical research work and the granting of Scholarships within the said school.
[30]
(b) The purchase of equipment for the use of such Medical School.
[31]
(c) The maintenance of Chairs of Medicine and Surgery.
[32]
AND I DECLARE that such endowments and Scholarships shall be available to any Graduate or Undergraduate of the said University or to such other persons as the Senate of the said University and my trustees shall think fit.
[33]
PROVIDED HOWEVER that should I during my lifetime bequeath to the said University of Queensland the sum of approximately THIRTY THOUSAND POUNDS (£30,000) for the purposes aforesaid then this bequest shall lapse and be dealt with in accordance with the last proviso of this clause of this my Will.
[34]
(vii) The balance of such One Hundred Parts to such Charitable Institutions (including religious institutions of the Church of England) or educational institutions in the State of Queensland as are exempt from the payment of Probate and Succession and any other duties payable under 'The Succession and Probate Duties Act 1892-1955' or any amendment thereof in such amounts and proportions and for such ends intents and purposes of a charitable nature only including any of the purposes specified in Sub-Clause (vi) hereof as my Trustees may in their sole discretion from time to time nominate or determine.
[35]
PROVIDED HOWEVER AND I HEREBY DECLARE that if any of the bequests contained in this paragraph of this my Will shall lapse or fail for any purpose whatsoever then the amount of the bequest so lapsing or failing shall fall into and form part of the balance of such parts bequeathed in Sub-Clause (vii) hereof and be distributed in accordance with the terms of such sub-clause."
[36]
[9] The broad effect of the clause is to define the entire residuary estate as constituting 100% and then to allot lesser percentages in various ways. The trust impressed on the trustees was to hold of the residuary estate so that the identified portions could be paid to the named institutions.
[10] Another clause which assists in understanding the intent of the deceased is cl. 18. It provides:
[37]
"18. It is also my desire that my trustees should when the occasion in their opinion arises from time to time consult the Chancellor or Vice-Chancellor for the time being of the said University and the Archbishop of the Diocese of Brisbane for the time being respectively concerning the respective shares or interest of the said University and the Corporation of the Synod of the Diocese of Brisbane in my estate without violating the intentions expressed by this my Will as far as possible to carry into effect the wishes of the said Senate and The Corporation of the Synod of the Diocese of Brisbane respectively."
[38]
[11] The clause in question may be more comprehensibly expressed in the following way:
[39]
"... I direct my trustees to stand possessed of my [residuary estate] upon trust to pay the same to the following institutions in the proportions and for the purposes herein mentioned viz:-
[40]
(ii) To the said Corporation for the purpose of establishing within the Diocese a home for Aged Persons to be described as 'The Edwin Marsden Tooth Memorial Home' ten of such parts."
[41]
[12] The Corporation advanced a number of arguments in favour of an absolute gift rather than a gift on trust.
[13] It was uncontentious that the money received pursuant to cl. 16(ii) was used for the purpose of establishing within the Diocese a home for the aged persons and it was named "The Edwin Marsden Tooth Memorial Home" (the Home). It was also uncontentious that the money was insufficient to fund, by itself, the establishment of the Home. The Home was built and later, extended, through the use of government grants, other legacies and other gifts.
[14] First, the manner in which cl. 16 is expressed does not clearly establish a charitable trust. A number of gifts are provided for in that clause and they may generally be described as philanthropic. None of them, though, use words usually associated with the creation of a charitable trust such as providing that a sum of money is to be given "to the (beneficiary) upon trust for ...".
[15] It is relevant to note that a declaration of trust is made elsewhere in the Will. In cl. 13 the usual trust is established by which the trustees are to "sell call in and convert into money" the remainder of the deceased's real and personal estate.
[16] Clause 16 creates a trust in the hands of the trustees, but there is no expression similar to that which would apply to the Corporation or the University of Queensland with respect to the gifts to them.
[17] Secondly, cl. 16 directs the trustees to pay identified proportions of the residuary estate to the Corporation or University of Queensland. A direction to pay without condition is not consistent with the creation of a trust in the hands of the beneficiary. The instruction "to pay" is similar to the instruction "to transfer" in Re Frigo; Ex parte Missionaries of Sacred Heart (Re Frigo).[2] In that case, as in this, the executor was a bare trustee whose only obligation was to transfer the property to the beneficiary.
[18] Thirdly, the words "upon trust" as they appear in cl. 16 refer to the trustees rather than the beneficiaries. No words of similar meaning are used for the way in which the Corporation must hold the money. Had the same words been used with respect to the gift to the Corporation then there would be little doubt about the deceased's intention. But, they were not, and the difference in the expression that is used suggest that the deceased had different intentions with respect to the relevant part of his residuary estate.
[42]
What is the effect of the words "for the purpose of establishing within the Diocese a home for Aged Persons"?
[43]
[21] The gift here is not conditional but it is reasonably clear that it was intended by the deceased to be a gift for a purpose. Similar expressions appear in the balance of cl. 16. The question that arises is whether the words "for the purpose of establishing within the Diocese a home for Aged Persons" serve to attach a condition or trust, or are they merely precatory words demonstrating the deceased's wish or desire in respect of the gift?
[22] I repeat what I said in Re Frigo:
[44]
"[27] A well accepted principle was discussed in National Trustees Executors and Agency Co of Australasia Ltd v O'Connor, where Rich J said:
[45]
"It is a well-known rule of construction that, if there be a clear gift, subsequent words in order to defeat such a gift must be reasonably clear or sufficiently certain (Randfield v Randfield) and it must not be forgotten that the court is "naturally in favour of vesting" (Re Litchfield; Horton v Jones). The question, then, is whether the subsequent clause in this will indicates with reasonable certainty the intention of the testator to cut down the absolute gift already made." (citations omitted)
[46]
[28] To similar effect is the statement by Macrossan CJ (with whom Mansfield SPJ and Sheehy J agreed) in Re Kipping:
[47]
"Now, the law is clear that if there be a clear gift it is not to be cut down by anything subsequent in the will which does not with reasonable certainty indicate the intention of the testator to cut it down. That is a statement of the law by Lord Campbell, in the case of Randfield v Randfield ... which is adopted by Griffith CJ in Peter v Shipway ..." (citations omitted)
[48]
[31] The context of these words should be seen as constituting a request or suggestion or, perhaps, a demand. A demand, like the expression of a wish, desire or request, can be regarded as merely precatory. As Hardie Boys J said in Re Burton, "if words in a will are precatory only, effect cannot be given to them." Further, these words are not reasonably clear enough or sufficiently certain to cut down the absolute gift." (citations omitted)
[49]
[23] A court will generally be reluctant to construe the deceased's words as imposing a condition if a different meaning can be reasonably drawn from those words.
"... It has long been an established rule of construction that where property is bequeathed to a beneficiary and a special purpose of benefiting him in a particular way is assigned for the gift, the disposition should primâ facie be construed as absolute and the purpose merely as the motive of the gift, so that the beneficiary takes the whole of the property and not merely so much as is necessary to effect the purpose ..."[4] (citations omitted)
[51]
[25] I am satisfied that the reference to the purpose of establishing a home for aged persons should be construed as precatory words. That is consistent with the balance of the gifts in cl. 16 and also with the provisions of cl. 18, which appear to contemplate that the words were not directions given the reference to "without violating the intentions expressed by this my Will".
[26] It was submitted on behalf of the Attorney-General that it was open to find that the gift was a gift for a charitable purpose and not an absolute gift to the Corporation. The construction advanced has been dealt with through consideration of the Corporation's arguments above.
[27] It was also argued that the conclusion advanced on behalf of the Attorney-General was supported by the provision in the final subclause of cl. 16 which provided that, if any gift under the balance of the clause failed, then it would form part of the balance of a gift to be made under cl. 16(vii) to "Charitable Institutions ... or educational institutions" for such "ends intents and purposes of a charitable nature" by the executors in their sole discretion.
[28] The "gift over" clause is a clause frequently seen in wills of this type. It applies in a circumstance that has not come to pass and it does not require the conclusion advanced on behalf of the Attorney-General because it does not necessarily follow that a testator would, because the testator makes provision for a failed gift to be applied charitably, intend that the gift be charitable in all circumstances.
[52]
[29] The Corporation seeks declarations as to the proper construction of the Will.
[30] It is declared that, upon the proper construction of the Will of Sir Edwin Marsden Tooth dated 14 October 1957, the Corporation is justified in regarding itself as having been beneficially entitled to the provisions which came to it from the estate of the deceased pursuant to clause 16(ii) of the Will and in respect of which it has all the powers of an absolute owner.
[19] The inference that the deceased had a different intention with respect to the estate when it was in the hands of the trustee's and the portions of the estate when they came into the hands of the beneficiaries can be more easily drawn in circumstances where, as I find, the Will was professionally drafted. The difference in terminology is important and there is nothing to suggest that it was not intentional.
[20] Fourthly, apart from the reference to the purpose of establishing a home for aged persons, there are no identified terms for a trust nor does it provide for any powers of the Corporation if it were to be a trustee of the proportion of the residuary estate it received.