Warton v Yeo

Supreme Court of NSW|2014-04-22|Before: Hallen J, Powell J

The Claim 1HIS HONOUR: These are proceedings in which the sole issue is the construction of one clause of the Will made 25 August 1994 ("the Will") of Justin Huntley Augustine Callaghan ("the deceased"). 2Without intending to convey undue familiarity, with no disrespect intended, and for convenience, I shall refer, hereafter, to the parties and other family members, after introduction, by his, or her, given name. 3The Plaintiffs named in the Summons are Veronica Ann Warton, who was born in October 1957, and her brother, Gregory Charles Lamond, who was born in August 1954. Each is a child of James Patrick Lamond and Valerie Gladys Veronica Lamond (nee Foley). There are two other children of James and Valerie, being Mark Alexander Lamond, who was born in February 1953, and Vincent James Lamond who was born in March 1956. 4Valerie died on 26 June 1960. 5The first Defendant named in the Summons is the deceased's solicitor, Richard Edmonds Yeo, who is also the executor named in the Will. He drafted the Will. (I shall refer to him, in these reasons, as Mr Yeo, since he is not a family member.) 6David John Lamond is the second Defendant named in the Summons. He is the only child of James and Ailsa Josephine Lamond (nee Callaghan). He was born in January 1965. 7Ailsa was the deceased's sister. She married James in February 1963. 8David filed a submitting Appearance on 14 April 2014. He has not participated, thereafter, in the proceedings. (Although there was a suggestion that he intended to give instructions to distribute the part of the residue referred to in Clause 6(b) equally amongst himself and the step-children of Ailsa, there is evidence that the suggestion was incorrect and that it did not reflect David's current intentions (Ex. 1D2)). 9At the hearing, the Plaintiffs sought, and without objection, were granted, leave to file an amended Summons (the amendments being identified) in which the following relief was sought: "1. A declaration that, upon the proper construction of the last will and testament of the late Justin Huntley Augustine Callaghan (Deceased) dated 25 August 1994 (Will) upon which probate was granted to the First Defendant on 22 May 2012 (Estate), each of the Plaintiffs, Mark Alexander Lamond, Vincent James Lamond and the Second Defendant are "such one of" the "children" of the sister of the Deceased, Ailsa Josephine Lamond, within the meaning of paragraph 6(b) of the Will. 2. A declaration that each of the Plaintiffs, Mark Alexander Lamond, Vincent James Lamond and the Second Defendant is entitled to an equal share of the 25% share of the residue of the Estate to which the said Ailsa Josephine Lamond would otherwise have been entitled under paragraph 6(b) of the Will but for the fact that the said Ailsa Josephine Lamond died before the Deceased. 3. An order that the First Defendant as trustee and executor of the Estate account to each of the plaintiffs for a 9.76% equal share of the residue of the Estate. 4. An order that the costs of the Plaintiffs be paid by the First Defendant as trustee and executor of the Estate on a common fund basis. 5. Such further or other declaration or order as the Court thinks fit so as to give effect to the Will." 10At the hearing, two affidavits sworn by Veronica and one by Mr Yeo were read and an exhibit to Mr Yeo's affidavit that was tendered (Ex. 1D1). Neither of the deponents was cross-examined. 11Also, at the hearing, at the request of the parties, I made an order, pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), rules 7.6 (1)(c) and 7.6(2)(c), as the proceedings concerned the construction of a document, that the Plaintiffs represent the class of persons who are the step-children of Ailsa, for the purpose of determining the proper construction of Clause 6(b) of the Will dated 25 August 1994 of the deceased. 12Commendably, the legal representatives of the parties prepared, and provided to me, an agreed Statement of Facts, which I shall incorporate, with minor amendments, in these reasons. In addition, each provided detailed written Submissions, which I have found very helpful. The hearing of the proceedings took less than one hour. 13I am most grateful for the way in which the case was presented. No doubt, the parties have benefited in that proceedings, commenced by Summons filed on 21 February 2014, have been completed in about two months. 14Following the conclusion of the hearing, and without opposition from the parties' legal representatives, I indicated the declarations and orders to be made and stated that I would publish my reasons subsequently. These are those reasons.

Background Facts 15The deceased died on 30 December 2011. 16This court granted Probate in common form of the Will, which was duly executed, to Mr Yeo, on 22 May 2012. 17Relevantly, the Will provided: "5. I GIVE the following legacies:- (a) as to the sum of Three Thousand Dollars ($3,000.00) to my niece, JANE FRANCES CALLAGHAN; (b) as to the sum of Three Thousand Dollars ($3,000.00) to my nephew, DAVID LAMOND; (c) as to the sum of Three Thousand Dollars ($3,000.00) to my nephew, MARK ANTHONY CALLGHAN; (d) as to the sum of Two Thousand Dollars ($2,000.00) to my nephew, PETER DOMINIC CALLAGHAN; (e) as to the sum of Two Thousand Dollars ($2,000.00) to my nephew, DAMIAN CALLAGHAN; (f) as to the sum of Two Thousand Dollars ($2,000.00) to my step-nephew, MARK LAMOND; (g) as to the sum of Two Thousand Dollars ($2,000.00) to my step-nephew, GREGORY LAMOND; (h) as to the sum of Two Thousand Dollars ($2,000.00) to my step-nephew, VINCENT LAMOND; (i) as to the sum of Two Thousand Dollars ($2,000.00) to my step-niece, VERONICA WARTON; (j) as to the sum of Three Thousand Dollars ($3,000.00) to my cousin, PATRICK ALOYSIUS CARNEY; (k) as to the sum of Two Thousand Dollars ($2,000.00) to my friend, LINDSAY E. JOHNSON of Lane Cove; (m) as to the sum of Two Thousand Dollars ($2,000.00) to my friend, ANNE SWAIN of Lalor Park; (n) as to the sum of Two Thousand Dollars ($2,000.00) to the RIGHT TO LIFE ASSOCIATION (N.S.W.) INC.; (o) as to the sum of Two Thousand Dollars ($2,000.00) to ST. BENEDICT'S PARISH, Roman Catholic Church, Broadway, New South Wales for maintenance of the Church building; (p) as to the sum of Two Thousand Dollars ($2,000.00) to CHARITABLE WORKS FUND of the Sydney Archdiocese of the Roman Catholic Church; (q) as to the sum of Two Thousand Dollars ($2,000.00) to SECULAR FRANCISCAN ORDER of the Roman Catholic Church, Australia; (r) as to the sum of Two Thousand Dollars ($2,000.00) to the Administrator of ST. MARY'S ROMAN CATHOLIC CATHEDRAL, Sydney for maintenance of St. Mary's Cathedral. 6. AS TO THE REST and residue of my real and personal estate of whatsoever nature and kind and wheresoever situate TO MY TRUSTEE to sell, call in and convert into money any such part of my estate as shall not consist of money with power to postpone such sale, calling in and conversion as he shall think fit and to pay thereout all my just debts, funeral and testamentary expenses, and to distribute the balance in the following shares:- (a) as to thirty-three-and-one-third percent (33-1/3%) to my sister, PATRICIA MARY CALLAGHAN; (b) as to twenty-five percent (25%) to my sister, AILSA JOSEPHINE LAMOND, but if she should die before me then to such one of her children as shall survive me and if more than one in equal shares; (c) as to ten percent (10%) to my sister-in-law, MAUREEN CALLAGHAN, but if she should die before me then to such one of her children as shall survive me and if more than one in equal shares; (d) as to five percent (5%) to SOCIETY OF ST. VINCENT de PAUL; (e) as to five percent (5%) to ORDER OF THE FRANCISCAN FATHERS of the Roman Catholic Church; (f) as to five percent (5%) to MISSIONARY SOCIETY OF MARY of the Roman Catholic Church; (g) as to five percent (5%) to LEGION OF MARY OF THE ARCHDIOCESE OF SYDNEY of the Roman Catholic Church; (h) as to three percent (3%) to PONTIFICAL MISSIONS SOCIETIES of the Roman Catholic Church; (i) as to two percent (2%) to MISSIONARY SISTERS OF THE SOCIETY OF MARY of the Roman Catholic Church; (j) as to two percent (2%) to RELIGIOIUS ORDER OF ST. CLARE, Campbelltown, New South Wales; (k) as to two percent (2%) to LITTLE COMPANY OF MARY ORDER of the Roman Catholic Church; (l) as to one-and-two-thirds percent (1-2/3%) to JESUIT REFUGEE SERVICE of the Roman Catholic Church; (m) as to one percent (1%) to FRANCISCAN MISSIONARIES OF MARY of the Roman Catholic Church; (n) IF THE TRUSTS of any share or interest to my sisters or sister-in-law fail, then that share or interest shall be added to the other shares or interest to my sisters and sister-in-law in the proportion which those shares or interests bear to each other." 18The Inventory of Property disclosed to the court under s 81A of the Probate and Administration Act 1898 (NSW), a copy of which Inventory was attached to the Probate document, stated that the property owned solely by the deceased at the date of his death, had an estimated (or known) gross value of $620,576. The deceased's actual estate was said to consist of real estate in a unit in the Bougainvillea Retirement Village Sydney ($275,000), money in current accounts ($35,632) money in banks or financial institutions on deposit ($52,913, $12,642 and $1,224), shares in various public companies ($21,898), managed investment units ($90,857) payments made under any medical benefits or hospital contribution fund ($407) and an interest in the estate of Patricia Mary Callaghan ($130,000). (I have omitted any reference to cents and shall continue to do so. This may appear to result in a minor mathematical error in the figures.) 19In an affidavit sworn on 7 April 2014, Mr Yeo deposed that the legacies payable under Clause 5 of the Will were distributed in 2012. Of the sum of $300,000, being residue, $125,010 was distributed under Clause 6, with the amount of $174,990 (together with any interest accrued thereon) retained, and invested, pending the determination of these proceedings. 20The deceased never married. So far as is known, he had no children. 21The deceased had two sisters, Patricia Mary Callaghan and Ailsa, and one sister in law, Maureen Callaghan, the wife of his brother, Leo, who predeceased the deceased, each of whom was living at the date of the Will. 22Patricia did not marry, had no children and predeceased the deceased, having died on 1 November 2010. 23Ailsa was born in May 1924 and died on 13 May 2010. As at the date of her marriage to James, Veronica was aged 5 years, Gregory was aged 8 years, Vincent was aged 6 years, and Mark was aged 10 years. Ailsa brought each of them up as her own children. Each is named as a beneficiary in Clause 5 of the Will and identified as a "step-nephew" or a "step-niece", respectively, of the deceased. 24James died on 30 June 2007. 25As stated, the only biological child of Ailsa and James was David. He was named as a beneficiary in Clause 5 of the Will and was identified as a "nephew" of the deceased. 26Each of David, Mark, Gregory, Vincent and Veronica, lived in the family home of James and Ailsa until beyond his, or her, 18th birthday. Ailsa's last will left her estate on trust to "such of my five children as survive me and attain the age of twenty one years". (I mention this because the Plaintiffs rely upon Ailsa's Will as being, somehow, relevant to the determination of the question of construction of the Will, a submission that I do not accept.) 27Maureen survived the deceased. She and Leo had four children, namely Jane Callaghan (now Jane Rose), Mark Callaghan, Peter Callaghan and Damien Callaghan. Each is named as a beneficiary in Clause 5 of the Will and identified as a "niece" or "nephew", respectively, of the deceased. 28The deceased and Ailsa, as brother and sister, had a close relationship. He was also in contact with Mark, Gregory, Vincent, Veronica and David. Each of them survived the deceased. 29In the 1970s and 1980s, the deceased shared dinner with James, Ailsa, Mark, Gregory, Vincent, Veronica and David on Sunday evenings and they met as an extended family on Christmas day. He also attended important family events, such as the weddings of Mark, Gregory, David and Veronica and the Christening of his, and her, children, including Gregory's son, and daughters, and Veronica's two sons and daughter. 30As at the date of the Will, Ailsa was 71 years of age and there was no prospect that she would have any more children. 31As a result of Patricia having predeceased the deceased, the gift of 33.33 per cent of residue that would have passed to her under Clause 6(a) of the Will lapses. However, by operation of Clause 6(n), the gifts of 25 per cent and 10 per cent of residue under Clauses 6(b) and 6(c) respectively, are increased by 23.81 per cent and 9.52 per cent, respectively, with the result that the person, or persons, entitled under Clause 6(b) of the Will is, or are, entitled to the whole of, or to share equally, 48.81 per cent of residue. 32As will have been observed, the Clause to be construed is Clause 6(b) of the Will. If the meaning of "children" in Clause 6(b) of the Will is limited to the natural, or biological, child, or children, of Ailsa, the result will be that David will receive 48.81 per cent of residue. If, however, "children", includes "step-children", Veronica, Gregory, Mark, Vincent, and David will each receive 9.76 per cent of the 48.81 per cent of residue. That is the question to be decided in this case. 33Maureen, in any event, is entitled, under Clause 6(c) to 19.52 per cent of residue.

Evidence of Mr Yeo 34The deceased made an earlier will on 14 March 1977 ("the 1977 Will"). The author of that will was Brian Forbes, a former partner in Mr Yeo's firm. 35Relevantly, in the 1977 Will, Patricia received 30 per cent of residue and Ailsa received 25 per cent of residue. Leo also received 25 per cent of residue. The balance was divided between certain identified charities. In the event that any of the residuary beneficiaries predeceased the deceased, "the share or shares to which they would have been entitled should fall into residue and be equally divided between those surviving of my aforesaid brother and sisters". 36On 17 August 1994, the deceased consulted Mr Yeo for the purpose of making a new will. He provided Mr Yeo with a document, in his handwriting, headed "Amendments/additions to the last will J H A Callaghan". A copy of this handwritten document, with additional amendments made by Mr Yeo (identified in red), and other notations, also seemingly made by Mr Yeo, forms part of Ex 1D1. 37In the handwritten document, the deceased identified David as "my nephew"; Mark Callaghan, Peter, and Damian were similarly identified; whilst Mark Lamond, Gregory and Vincent were identified as "step-nephews", and Veronica was identified as "my step-niece". 38The only amendments to the residue clause of the 1977 Will was in relation to the 25 per cent share passing to Leo. Of that share, 10 per cent was given to Maureen, who was identified as "my sister-in-law", whilst the balance thereof was shared between various charities in different percentages. The second amendment was that a share of the residue (5 per cent) passing to the Lewisham Hospital was divided between two other identified charities. 39Mr Yeo notes that there is "no mention in the 1977 Will of a gift over for children but [that] there is in clauses 6(b) and 6(c) of the 1994 Will". He states that he has "no note or independent recollection of receiving instructions to insert a gift over for the children of Ailsa Josephine Lamond", but that "[i]t was and is my practice to only include gifts over for children if specifically instructed by the testator". He also states that he believes he followed his "usual practice in the preparation of the 1994 Will and inserted a gift over for Ailsa's children in accordance with the deceased's instructions". 40Mr Yeo also states that he did not know that Mark, Gregory, Vincent and Veronica was each the step-child of Ailsa, although he did know they were the step-nephews, and a step-niece, respectively, of the deceased. It was Veronica who informed Mr Yeo of their, and her, relationship with Ailsa following the death of the deceased. (Although the paragraph of his affidavit stating these facts was objected to, I allowed it to be read.) 41In October 2006, the deceased consulted Mr Yeo once again, about his sister, Patricia. However, the deceased provided no instructions to amend the Will. Subsequently, in March 2007, the deceased consulted Mr Yeo again, but no final instructions to amend the Will were received from the deceased. Finally, in February 2009, the deceased consulted Mr Yeo, but, once again, no final instructions were received from the deceased to amend the Will. 42Following the death of the deceased, Mr Yeo provided a brief to Dr C J Birch SC for advice. A copy of the Memorandum of Advice, dated 30 May 2013, from Dr Birch is part of Ex. 1D1. Neither of the parties in this case suggests that the advice provided is wrong. However, as is proper in giving advice to an executor, Dr Birch sets out the arguments on one side or the other in determining the question that must be decided.

The Submissions 43I shall set out the submissions of the parties because, in each case, they are detailed and provide all that can be said by each in relation to the construction of the Will. This is not to say that I necessarily accept the entirety of the submissions. 44The Plaintiffs contend that the terms of the Will, with, or without, resort to extrinsic circumstances, make it clear that the deceased intended the gift in Clause 6(b) to be one for all five of his sister's children and stepchildren, should Ailsa predecease him, and they, or any number of them, be living at the date of his death, not only to David. 45They submit that this is not a case in which the court will need to have resort to any presumption, but instead may ascertain, and give effect to, the intention of the deceased in the manner sometimes described as placing itself in "the testator's armchair": Thomson v Down (2012) QSC 171, at [11]; see also Estate of Jack Alexander Warren [2011] NSWSC 104. 46In relation to the construction of the relevant Clause of the Will, the Plaintiffs submit: "25. The language and context of the Will provides strong support for the conclusion that the word 'children' in clause 6(b) was intended to include Mark, Gregory, Vincent, Veronica and David and [not] be confined to David: (a) Ailsa was 71 years of age in 1994 when the Will was made. (b) The Will makes it plain that the Deceased knew that his sister Ailsa had one natural born son and four step-children living at that date because he refers to David as his 'nephew' in 5(b) and to Mark, Gregory, Vincent and Veronica as 'my step-nephew' or 'my step-niece', as the case may be, in clauses 5(f), (g), (h) and (i). (c) Each of David, Mark, Gregory, Vincent and Veronica was named in clause 5. (d) Had the Deceased wished to confine the gift in 6(b) to David and exclude Mark, Gregory, Vincent and Veronica he could and would have named David in that clause or used the singular form 'child' instead of the plural, 'children', in the gift over. (e) The authorities support the proposition that the primary meaning of 'child' or 'children' is consanguinity not affinity but they plainly admit of the possibility that the distinction may not be intended in a particular case. (f) By parity of reasoning, the primary meaning of 'children', in contrast to 'child', is plural, not singular, which points to an intention that more than one person was to benefit by the gift over in 6(b) provided they survived the Deceased and there is nothing in the Will to justify departure from the primary plural meaning and reading the word down to the singular. (g) Quite the opposite, the intention to benefit a plurality is underscored by the phrase in which the word 'children' appears, namely, if 'she should die before me then to such one of her children as shall survive me and if more than one in equal shares' (underlining added). (h) It is inconceivable that the Deceased contemplated the possibility that his 71 year old sister may have had another child at that age and improbable that he contemplated that she might adopt in light of the fact that she had by then brought up five children, who were now adults aged between 30 and 41. (i) When the Deceased made the will dated 14 March 1977, a copy of which appears at page 1 of Exhibit [1D1], he described Mark, Gregory, and Vincent as 'my nephews' and Veronica as 'my niece' as he did David and his other niece and nephews by his sister-in-law, Maureen Callaghan - Jane Rose (nee Callaghan); Mark Callaghan, Peter Callaghan and Damien Callaghan. That use of language makes it plain that the Deceased drew no distinction between consanguinity and affinity in his relationships with his sister's children. (j) Mr Yeo makes it clear in [9] of his affidavit that he 'inserted a gift over for Ailsa's children in accordance with the Deceased's instructions' (although he has no independent recollection of those instructions and, quite permissibly relies upon his usual practice). It is inherently unlikely that Mr Yeo would have included a gift over in the terms he did if his instructions had been to confine the gift over to David and exclude Mark, Gregory, Vincent and Veronica. (k) In [11] of his affidavit, Mr Yeo goes on to say that he, Mr Yeo, did not know that Mark, Gregory, Vincent and Veronica were the step children of Ailsa at the time he drafted the Will - and that all he knew was that they were step nephews and a step niece of the Deceased. That is a curious piece of evidence: The surname of Ailsa and of each of Mark, Gregory and Vincent is 'Lamond'; they are all named 'Lamond' along with Ailsa (but not Veronica, because she had married by then and become Veronica 'Warton'); but who else could Mr Yeo have thought the 'step-nephew(s)' 'MARK LAMOND', 'GREGORY LAMOND' and 'VINCENT LAMOND' referred to in clauses 5(f), (g) and (h) of the Will to have been other than: (1) The children of the person referred to as 'my sister, AILSA JOSEPHINE LAMOND' in clause 6(b) of the Will (who was his sister and bore the same surname 'Lamond'); and (2) the self same persons referred to by the Deceased as 'my nephews... MARK LAMOND, GREGORY LAMOND and VINCENT LAMOND' in clause 5 of the 1977 will (on which Mr Yeo made notes including the addition of the word 'step' over the name 'VERONICA LAMOND')? (l) But the belief of Mr Yeo (including absence of belief and erroneous belief) is irrelevant (and [11] is accordingly objected to). The Deceased certainly knew who Mark, Gregory, Vincent and Veronica were; it is his Will, not the will of Mr Yeo; and Mr Yeo makes it plain in [12] & [13] of his affidavit that he would have given the Will to the Deceased to read and [would have] checked to ensure that he read it before it was executed. (m) Moreover, the evidence that Mark, Gregory, Vincent and Veronica were regarded by Ailsa as her children and treated as such as part of her family (and an extended family, which included the Deceased and his sister Patricia) is unquestionable and it points very strongly to an intention on the part of the Deceased to include them as Ailsa's 'children' no less than David. (n) The terms of Ailsa's will are crystal clear. All five are regarded by Ailsa as 'my children'. It matters not that the will is dated 1997, some three years or so after the Deceased made his Will. Indeed, in the context in which the Deceased made wills in favour of Mark, Gregory, Vincent and Veronica as well as David in 1977 and again in 1994, the will of Ailsa is close if not relevantly contemporaneous and it provides a sound basis to infer Ailsa and her brother each regarded all five as Ailsa's children: it would be odd indeed if Ailsa regarded all five as her children but her brother did not (and there is no evidence to justify such a finding). (o) Ailsa was 39 years old when she married James. When she married, James had four children aged 7, 5, 4 and 2. In effect, she took on an instant family. She then had one child of her own. The evidence is that she brought up Mark, Gregory, Vincent and Veronica, as well as David, as her own children. (p) The first photograph annexed to the affidavit of Veronica Warton was taken on the occasion of Ailsa's 80th birthday. It depicts a big happy family of which Mark, Gregory, Vincent and Veronica were part, just as much as David - and it includes the Deceased and his sister Patricia. By that date, Mark, Gregory, Vincent and Veronica were all mature aged adults but they were part of Ailsa's family. (q) The second photograph annexed to that affidavit shows the Deceased at the home of Gregory, amongst other members of the family, including David, around Christmas 2008. Evidence up to the date of death is admissible: Warren [7]. What is shows is an on-going close relationship with a step-son of Ailsa which continued (by then) for more than 50 years. (r) This is a much stronger case on its facts that Norman's successful claim in Warren - and it bears nothing in common with the hapless George. (s) Significantly, David does not contest this claim. He does not offer any evidence. He does not offer any argument. The Court can be confident that... [their] claim is sound. (t) The email from Mark to Mr Yeo states that 'From the time of the wedding in early 1963 Ailsa at all times insisted that she was our mother and indeed would be very upset at any mention of my birth mother'. That statement supports the plaintiffs' construction, for the reasons earlier given." 47The first Defendant, relevantly, submits: "3. Turning to the text of the will itself: a. The natural and primary English meaning of the word 'child' or in its plural form 'children' means natural child, rather than a step-child. As stated in Haines, Unless the contrary appears in the context of a will, or appears in circumstances surrounding the testator at the time of its making, the word 'child' refers to the first generation of progeny of a testator born of his or her blood. b. There is a distinction drawn in the will between the 'children' of Ailsa in clause 6(b) and 'step-nephew' and 'step-niece' of the testator in clauses 5(f) - (I). The question is, what meaning can be discerned from this discrimination in the language. Obviously enough, it demonstrates that the testator knew that Ailsa had one natural child and four step-children, as pointed out in par 25(b) of the plaintiff's submissions. Contrary to that submission, however, this factor is either at best neutral, or indicates that the testator intended to maintain the distinction between Ailsa' step-children and her own child. c. It is not completely true that the Deceased drew no distinction between consanguinity and affinity in relation to his earlier will made 14 March 1977, as submitted in par 25(I) of the plaintiff's submissions. He did, to the extent that his 'nephew' David Lamond was left a legacy of $1,500, when the other 'nephews' and the 'niece' and were left only $750 each. Moreover, there was no gift over in cl 6(c) of the earlier will. When a gift over was inserted in the will made 17 years later on 15 August 1994, attention would have been focussed on the issue of Ailsa, and it is in this will the testator drew the distinction between step-nephews and a step niece he did in cl 5. Indeed, the Deceased preserved the monetary distinction in the later will, to the extent that the niece and the nephews received legacies of $3,000, while the step-niece and the step-nephews received only $2,000. d. The use of the plural 'children', rather than 'child' at first glance seems to be the strongest indicator that the testator intended both Ailsa's own child and Ailsa's step children to take the gift over. Otherwise, as the plaintiff's submissions say at par 25(d) - (g), he would either have identified the natural child by name, or used the singular form 'child', not the plural 'children'. e. On closer examination, however, the use of the plural 'children' may not have the force asserted by the plaintiffs. The emphasis given in the plaintiffs' submissions is on the choice of the plural 'children'. But equal emphasis ought to be given to the 'one' in 'such one of her children'. For the same reason, weight ought to be accorded to the qualifier 'if' in 'if more than one'. It is true that Ailsa was 71 at the time the testator had made her will and already had five children and step children. However, in a fast-changing world, will-makers, and their advisors, deal in possibilities not probabilities. The possibility of adoption, however remote, cannot be dismissed. 4. The armchair evidence is inconclusive. The plaintiff's evidence essentially comprises two elements: a. The facts referred to in paragraphs 15 - 18 of the statement of agreed facts (which is based on Veronica Warton's affidavits), which related to family activities. b. How Ailsa treated her step-children and David in life and in her will. 5. The evidence of family contact down to the date of death known to the testator is admissible, as the plaintiffs submit. However, the evidence does not go any further but to establish that there was a happy extended family. A good step-uncle - step-nephew relationship (or step-uncle - step-niece relationship for that matter) however fortunate, is just that. It does not mean that the Deceased regarded Ailsa's step-children as her children. Unlike the facts in Warren, there is no evidence that the Deceased regarded Ailsa's step-children as her children, or ever described them as such . In any event, Warren was a different case, dealing with the will of the step-father, not the step-uncle. 6. The evidence of how Ailsa treated her step-children as a mother and in her will is not evidence of the testator's knowledge under the armchair principle, and provides no basis for the submission in par 25(n) of the plaintiffs' submissions. In this regard, Ailsa's will was made two and a half years after the Deceased's and was drawn by a different solicitor. There is no evidence of any statement made by the Deceased ..."

The Law 48The object of a will construction suit is to ascertain the intention of the deceased as expressed in his, or her, will, or codicil, when it is read as a whole. The intention of the maker of the testamentary instrument has been referred to as the "pole star" in the construction of wills: Thomson v Thomson [2008] VSC 375. 49Campbell JA, in Byrne v Macquarie Group Services Australia Pty Ltd [2011] NSWCA 68, at [2], wrote, in another context, that construction is a process of coming to understand the meaning of a text, which meaning is disputed. It involves a consideration of the disputed text in itself, both as a whole, and in its constituent parts. 50Recently, in Marley v Rawlings [2014] UKSC 2; [2014] 2 WLR 213, a decision of the Supreme Court of the United Kingdom, which involved the rectification of wills, Lord Neuberger (with whom Lord Clarke, Lord Sumption and Lord Carnwath agreed), wrote at [19] - [25]: "When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions. In this connection, see Prenn at 1384-1386 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989, per Lord Wilberforce, Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251, para 8, per Lord Bingham, and the survey of more recent authorities in Rainy Sky, per Lord Clarke at paras 21-30. When it comes to interpreting wills, it seems to me that the approach should be the same. Whether the document in question is a commercial contract or a will, the aim is to identify the intention of the party or parties to the document by interpreting the words used in their documentary, factual and commercial context. As Lord Hoffmann said in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] 1 All ER 667, para 64, 'No one has ever made an a acontextual statement. There is always some context to any utterance, however meagre.' To the same effect, Sir Thomas Bingham MR said in Arbuthnott v Fagan [1995] CLC 1396, that '[c]ourts will never construe words in a vacuum'. Of course, a contract is agreed between a number of parties, whereas a will is made by a single party. However, that distinction is an unconvincing reason for adopting a different approach in principle to interpretation of wills: it is merely one of the contextual circumstances which has to be borne in mind when interpreting the document concerned. Thus, the court takes the same approach to interpretation of unilateral notices as it takes to interpretation of contracts - see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, per Lord Steyn at 770C-771D, and Lord Hoffmann at 779H-780F. In my view, at least subject to any statutory provision to the contrary, the approach to the interpretation of contracts as set out in the cases discussed in para 19 above is therefore just as appropriate for wills as it is for other unilateral documents. This may well not be a particularly revolutionary conclusion in the light of the currently understood approach to the interpretation of wills (see eg Theobald on Wills, 17th edition, chapter 15 and the recent supplement supports such an approach as indicated in RSPCA v Shoup [2011] 1 WLR 980 at paras 22 and 31). Indeed, the well known suggestion of James LJ in Boyes v Cook (1880) 14 Ch D 53, 56, that, when interpreting a will, the court should 'place [itself] in [the testator's] arm-chair', is consistent with the approach of interpretation by reference to the factual context. However, there is now a highly relevant statutory provision relating to the interpretation of wills, namely section 21 of the 1982 Act ('section 21'). Section 21 is headed 'Interpretation of wills - general rules as to evidence', and is in the following terms: '(1) This section applies to a will - a) in so far as any part of it is meaningless; b) in so far as the language used in any part of it is ambiguous on the face of it; c) in so far as evidence, other than evidence of the testator's intention, shows that the language used in any part of it is ambiguous in the light of surrounding circumstances. (2) In so far as this section applies to a will extrinsic evidence, including evidence of the testator's intention, may be admitted to assist in its interpretation.' In my view, section 21(1) confirms that a will should be interpreted in the same way as a contract, a notice or a patent, namely as summarised in para 19 above. In particular, section 21(1)(c) shows that 'evidence' is admissible when construing a will, and that that includes the 'surrounding circumstances'. However, section 21(2) goes rather further. It indicates that, if one or more of the three requirements set out in section 21(1) is satisfied, then direct evidence of the testator's intention is admissible, in order to interpret the will in question. Accordingly, as I see it, save where section 21(1) applies, a will is to be interpreted in the same way as any other document, but, in addition, in relation to a will, or a provision in a will, to which section 21(1) applies, it is possible to assist its interpretation by reference to evidence of the testator's actual intention (eg by reference to what he told the drafter of the will, or another person, or by what was in any notes he made or earlier drafts of the will which he may have approved or caused to be prepared)." 51Of course, in New South Wales, in relation to the estate of a person who dies after 1 March 2008, it is necessary to consider the Succession Act 2006 (NSW), which, so far as is relevant, by s 32, provides: "32 Use of extrinsic evidence to construe wills (1) In proceedings to construe a will, evidence (including evidence of the testator's intention) is admissible to assist in the interpretation of the language used in the will if the language makes the will or any part of the will: (a) meaningless, or (b) ambiguous on the face of the will, or (c) ambiguous in the light of the surrounding circumstances. (2) Despite subsection (1), evidence of the testator's intention is not admissible to establish any of the circumstances mentioned in subsection (1) (c). (3) Despite subsection (2), nothing in this section prevents evidence that is otherwise admissible at law from being admissible in proceedings to construe a will." 52What has been described as the ten 'incontestable principles' for the construction of wills described by Isaacs J in Fell v Fell [1922] HCA 55; (1922) 31 CLR 268, 273-275 should be remembered: "1. 'Every will must by law be in writing, and it is a necessary consequence of that law that the meaning must be discovered from the writing itself, aided only by such extrinsic evidence as is necessary in order to enable us to understand the words which the testator has used'... 2. 'The instrument ... must receive a construction according to the plain meaning of the words and sentences therein contained'. But you must look at the whole instrument, and inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it... 3. 'If the will shows that the testator must necessarily have intended an interest to be given which there are no words in the will expressly to devise, the court is to supply the defect by implication, and thus to mould the language of the testator, so as to carry into effect, as far as possible, the intention which it is of opinion that the testator has, on the whole will, sufficiently declared'... 4. An inference cannot be made 'that did not necessarily result from all the will taken together'... A necessary inference is one the probability of which is so strong that a contrary intention cannot reasonably be supposed... 5. The court 'cannot give effect to any intention which is not expressed or plainly implied in the language of' the 'will'... 'You have no right to fancy or to imply, unless there be something within the four corners of the will which is not only consistent with the implication you make, but which could hardly stand, if at all, in the will, without that implication being made. That is what is called necessary implication, and legitimate implication, in contradistinction to gratuitous, groundless, fanciful implication'... 6. 'If the contents of a will show that a word has been undesignedly omitted, or undesignedly inserted, and demonstrate what addition by construction, or what rejection by construction, will fulfil the intention with which the document was written, the addition or rejection will by construction be made'... 7. 'When the will is in itself incapable of bearing any meaning unless some words are supplied, so that the only choice is between an intestacy and supplying some words; but even there, as in every case, the court can only supply words if it sees on the face of the will itself clearly and precisely what are the omitted words, which may then be supplied upon what is called a necessary implication from the terms of the will, and in order to prevent an intestacy'... 8. 'There are two modes of reading an instrument: where the one destroys and the other preserves, it is the rule of law, and of equity following the law in this respect (for it is a rule of common sense...), that you should rather lean towards that construction which preserves, than towards that which destroys'... 9. If on reading the will you can see some mistake must have happened, 'that is a legitimate ground in construing an instrument, because that is a reason derived not dehors the instrument, but one for which you have not to travel from the four corners of the instrument itself'... 10. 'The mind never inclines towards intestacy: that is a dernier resort in the construction of wills'..." (Omitting citations) 53Finally, in Coorey v Coorey (Supreme Court (NSW), Powell J, 22 February 1986, unrep), Powell J said, in a passage approved by Bryson J in Perpetual Trustee Co Ltd v Wright; Re Will of James Paul Gee Cox Junior deceased (1987) 9 NSWLR 18, at 33, and repeated again by Hamilton J in Hatzantonis v Lawrence [2003] NSWSC 914, by Gzell J in Peoples v Simpson [2005] NSWSC 355 and by Campbell JA in Fairbairn v Varvaressos [2010] NSWCA 234, at [19]: "... It seems to me that one's task is, first, if it be possible, to ascertain what was the basic scheme which the deceased had conceived for dealing with his estate and then, so to construe the will as, if it be possible, to give effect of the scheme so revealed." 54In Muir v Winn [2009] NSWSC 857, Bryson AJ added, at [24]: "It is necessary to seek to understand the scheme of a testator's dispositions. Where the terms of the will are perfectly clear search for the scheme may be of little use, but where the language is obscure or the effects of the literal reading and the reasoning impliedly underlying it are startlingly unlikely, as in this case, the scheme of dispositions is very important." 55The Plaintiffs rely on what is described as "the armchair principle". In J R Martyn, M Oldham, A Learmonth & C Ford, Theobald on Wills, (17th ed, 2010, Sweet & Maxwell/ Thomson Reuters), at 278, this is described: "Under the armchair principle, evidence of the circumstances surrounding the testator at the date of his will is admissible as an aid in the construction of the will. 'You may place yourself, so to speak, in (the testator's) arm-chair, and consider the circumstances by which he was surrounded when he made his will to assist you in arriving at his intention.' (per James LJ in Boyes v Cook (1880) 14 ChD 53 at 56). The justification for the armchair principle is that the court infers that the testator had his own surrounding circumstances in mind when he made his will and used the words in his will with reference to those circumstances." 56Blackburn J, in Allgood v Blake (1873) LR 8 Ex 160, at 162, described the armchair principle in this way: "The general rule is that, in construing a will, the Court is entitled to put itself in the position of the testator, and to consider all material facts and circumstances known to the testator with reference to which he is to be taken to have used the words in the will, and then to declare what is the intention evidenced by the words used with reference to those facts and circumstances which were (or ought to have been) in the mind of the testator when he used those words ... the meaning of words varies according to the circumstances of and concerning which they are used." 57There is a qualification to the armchair principle. In relation to "extrinsic evidence", that evidence can never make words in a will bear a meaning which on the face of the will they are incapable of bearing. This has been described, in Theobald on Wills, at 279, as the "incapable meaning rule" or the "plain meaning rule": "... extrinsic evidence can never make words in a will bear a meaning which on the face of the will they are incapable of bearing. As already explained, a testator can make 'black' mean 'white' if he makes the dictionary sufficiently clear in his will, but extrinsic evidence alone can never make 'black' mean 'white'." 58See: Higgins v Dawson [1902] AC 1, per Earl of Halsbury LC, at 4-6. 59Reference should also be made to Lord Romer's statement in Perrin v Morgan [1943] AC 399, at 420: "I take it to be a cardinal rule of construction that a will should be so construed as to give effect to the intention of the testator, such intention being gathered from the language of the will read in the light of the circumstances in which the will was made. To understand the language employed the court is entitled, to use a familiar expression, to sit in the testator's armchair. When seated there, however, the court is not entitled to make a fresh will for the testator merely because it strongly suspects that the testator did not mean what he has plainly said..." 60These authorities were referred to, with approval, in Bagot's Executor and Trustee Co Ltd v Minda Home Inc, Julia Farr Centre Inc, Ruth Loveday Morcom, Doris Lorna Pointon, Bryan Leonard Canty, Executor Trustee Australia Ltd and IOOF Australia Trustees Ltd (1994) 62 SASR 596, per Millhouse J. 61I next turn, briefly, to how the court has usually construed the words "child" or "children". Harris v Ashdown (1985) 3 NSWLR 193 concerned the question whether gifts in a Will to the "children" and "grandchildren" of the testator included a child adopted by a daughter of the testator after his death. Kirby P (as his Honour then was) wrote at 196: "It was conceded, properly I think, that the words 'child' and 'children' can, in ordinary speech, be used, interchangeably, to mean the natural child, the legitimate child, the illegitimate (or ex-nuptial) child or the adopted child. Courts seeking the meaning in a particular context will sometimes derive assistance from other provisions of the document in which the word appears. Sometimes they will be helped by reference to admissible external circumstances from which it can be inferred that only one meaning could have been intended. Sometimes they will resort to prima facie rules of construction which have been adopted in the past - definitions offered by judges construing the same word in different contexts, in earlier times. The last-mentioned approach was urged upon the Court in the present case. It was said to be especially applicable because of the fact that the will here in question was drawn by a lawyer who, it was said, could be taken to have been aware of the settled prima facie construction of the word 'child' where appearing in a will, namely that it means the legitimate child of the testator and hence, by inference in the present case, excludes a person with no genetic relationship to the testator, whose sole link with the class to be benefited was the limited link of legal adoption." 62Earlier, his Honour had introduced his decision, at 194-195, in the following way: "It is clear that the search in which the Court is engaged is for the intention of the testator, as stated in his will. Wills being written in words, and words being imperfect vehicles for meaning, it is often necessary for courts to have regard to facts, extrinsic to the will, which are proved as the background matrix of surrounding circumstances (if that phrase may be adopted) against which a testator may be presumed to have directed his mind in the preparation of the will. Sometimes described as 'armchair facts', these may be established for the elucidation of the language of the will, on the basis that a testator is generally to be presumed to know the circumstances of his family, and relieved from the obligation to spell out in his will the obvious." 63Importantly, the question in Harris v Ashdown involved the testator's own children and grandchildren. It was in that context that his Honour concluded that, as an ordinary English word, the word "child" or children" was likely to be used by a testator in a broader sense. In other words, "child" should be interpreted as being any person formally acknowledged, or held out, by the testator in his, or her, lifetime as his, or her, child. 64I do not think it is necessary to discuss the other authorities, referred to by Dr Birch, since each relates to a testator who was referring to his, or her, own "children", rather than to the case of a testator who was referring to a nephew or niece, being the child or children of his or her sibling.

Determination 65It can be seen from the Will, that the deceased referred to David as "my nephew". He also referred to each of Mark Dominic Callaghan, Peter Dominic Callaghan and Damian Callaghan as "my nephew". However, he referred to each of Mark, Gregory and Vincent as "my step-nephew" and to Veronica as "my step-niece", each being the step-child of Ailsa. 66The Will demonstrates, in my view, that the deceased, clearly, distinguished between the child of his sister, Ailsa, and those persons who were not her children, but who had the relationship with her of "step-children". The same may be said for the designation of the children of his brother, Leo (and Maureen) as "nephews". 67It is also clear that he well knew the difference between the two types of relationship so far as he was concerned. By using the words "step-nephew" and "step-niece" in Clause 5, the deceased used words with an accepted meaning and which could be applied with certainty. 68It cannot be submitted, and nor was it, that the use of the prefix "step" in Clause 5(f), (g), (h) and (i), was accidental or inadvertent. In this regard, it is important to remember that the document that was provided to, and relied upon, by Mr Yeo in drafting the Will, was one in the deceased's own handwriting and it was the deceased who identified each of the beneficiaries in that way. 69The dictionary meaning of "step" is a prefix indicating connection between members of a family by the remarriage of a parent: The Macquarie Dictionary (3rd Ed., 2007). 70I note, in this regard, that there is no definition of "stepchild" in the Succession Act. However, there is a useful definition in s 40A of the Succession Act 1981 (Qld): "(1) A person is a stepchild of a deceased person for this part if - (a) the person is the child of a spouse of the deceased person; and (b) a relationship of stepchild and step-parent between the person and the deceased person did not stop under subsection (2). (2) The relationship of stepchild and step-parent stops on the divorce of the deceased person and the stepchild's parent. (3) To remove any doubt, it is declared that the relationship of stepchild and step-parent does not stop merely because - (a) the stepchild's parent died before the deceased person, if the deceased person's marriage to the parent subsisted when the parent died; or (b) the deceased person remarried after the death of the stepchild's parent, if the deceased person's marriage to the parent subsisted when the parent died." 71The definition, quite naturally, distinguishes between a child of the deceased person and the child of the spouse of the deceased person. 72There, also, was no dispute that the relationships of step-nephews and step-nieces, are different from nephews and nieces. One is permanent because of the genetic, or the blood, link with the parent or the relative, whilst the other, so far as it relates to the step-parent, or step-relative, is one of affinity, which may, or may not, be permanent, because it is created on, and subsists during, the step-parent's marriage to the child's parent. (In the case of adoption, the relationship is permanent but not because of the genetic, or the blood, link but because of the legal status created by the adoption.) 73In my view, despite the reference to "such one of her children" in Clause 6(b) and 6(c), the deceased did not intend the step-children of his sister, Ailsa, to be included within the meaning of the word "children" in Clause 6(b). Had he wanted each to share in the bequest, he would have identified them as "step-children" and included that term after the reference to "child or children". He did not do so. 74In addition, if the deceased were of the view that, to all intents and purposes, each of the step-children was to be treated as a nephew, or niece, he would have identified him, or her, as such in Clause 5 of the Will. Of course, as stated, he did not do so, which suggests that he did differentiate between "children" of each of his siblings (who he described as "nephew" or "niece") and Ailsa's step-children. 75I do not think that the use of the same formulation of words in Clause 6(b) and Clause 6(c) referring to "such one of her children", in circumstances where there was only one "child" of Ailsa, but four children of Leo and Maureen causes me to change my view. Nor do I think that not mentioning David, specifically by name, as a child of Ailsa, causes me to change my view. 76I am unable to conclude that the deceased's intention was to treat "stepchildren" and "children" as meaning the same thing. 77I reject the submission that Ailsa's Will is relevant to this question. That Will might demonstrate her intention to include each of her step-children as her "children", but that does not enable me to conclude that the deceased held the same intention. As previously stated, that he did not view his relationship in the same way with each of Mark, Gregory, Vincent and Veronica, is demonstrated by the reference to each as "step-nephew" or a "step-niece". Had he viewed his relationship with each of them as a child of his sister (i.e. a nephew and a niece) he could have identified them as such in Clause 5. He specifically did not do so. 78In any event, it is noted by counsel for Mr Yeo, and I accept, firstly, that Ailsa's Will was made on 18 February 1997, some 2.5 years after the Will; secondly, that there is no evidence the deceased knew about the terms of Ailsa's Will, or how she had described her step-children therein; and thirdly, her Will was not prepared by Mr Yeo. 79In addition, I do not think that the fact of the continuing relationship between the step-children and Ailsa during the lifetime of Ailsa, is of great significance. It does not matter, in determining whether a "step-relationship" exists, that there is continuing contact between the relevant parties. What matters is the subsistence of the relationship that created the step-relationship. In other words, and by way of example, it would not matter if there had been no continuing contact between the step-children and Ailsa; they would have remained her step-children so long as the relationship between her and James continued, or if he died, so long as their marriage subsisted at the date of his death. 80In all the circumstances of the case, I am not satisfied that the deceased intended his step-nephews, Mark, Gregory and Vincent, and his step-niece, Veronica, to be included in the bequest made in Clause 6(b) of the Will. 81I declare that, upon the proper construction of Clause 6(b) of the Will dated 25 August 1994, of Justin Huntley Augustine Callaghan, the whole of the share of the estate referred to passes to the deceased's nephew, David Lamond, the only child of the deceased's sister, Ailsa Josephine Lamond, absolutely. 82The parties agreed that the costs of each party, calculated on the indemnity basis, should be paid out of the part of the estate that has been retained and I so order. David's costs of entering a submitting appearance should also be paid out of that part of the estate. 83It is not necessary to repeat the orders made at the hearing to which I have referred earlier in these reasons.

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