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Will Construction Disputes (Part 1) Print E-mail

testament_intro.jpg“The task of a court of construction is to discover the testator’s intention by examination of the words used in the will.1 Judicial construction involves having ‘regard to any rules of construction which have been established by the courts, and subject to that, [such courts] … are bound to construe the will as trained legal minds would do.’2"3

This paper: (a) highlights the issues that arise in the construction of home-made Wills; (b) summarises the issues that arise in the construction of Wills; (c) examines some recent Will construction cases; and (d) examines an important High Court authority on the interpretation of whether a party has manifested an intention to create a trust.  

Problems with Home-made Wills

It may be a trite comment but the major problem with home-made Wills is that the will-maker is not a succession lawyer.

Testators who choose to use a home-made Will run the real risk that their estate will involve a section 18 of the Succession Act 1981 application or a construction application or both.

Will Kits, Will Forms and the Internet are now a significant cause of estate disputes and are generating significant income for lawyers.

In considering the construction of home-made Wills, Mr David M Haines QC the learned author of Construction of Wills in Australia,4 made the following comments:

“Home-made wills have been the subject of considerable interpretation by courts of construction.  Indeed, their number, and perhaps the incidence of inconsistency in decisions and the number of appeals arising from them, may have led to that cliche which is the toast of the Chancery bar:  'Here's to the man who makes his own will'.”5 

Home-made Wills commonly result in failure to comply with the execution requirements of section 10 of the Succession Act 1981.  Appendix A to this paper is a photograph of the document that was subject to an application under the old section 9 [substantial compliance] of the Succession Act 1981 in the case of In the Will of Gaffney (1987) QSC 87.492.  The terms of the Will made by the partially blind testator were:

“I give everything to my darling wife Julie”

It was held by Thomas J that the testator’s signature across the text of the Will was “substantial compliance” with the then requirement for a Will to be signed “… at the foot or end of …” it.

The replacement of the “substantial compliance” with the “testamentary intention test” in the current section which was inserted as part of the 2006 amendments to the Succession Act 1981 has resulted in numerous successful applications for Probate of informal Wills. 

The success of “testamentary intention test” applications is in stark contrast to the operation of the repealed “substantial compliance” provisions.  Professor Langbein in his 1987 article, Excusing Harmless Errors in the Execution of Wills: A Report on Australia’s Tranquil Revolution in Probate Law 5 concluded:

“In the hands of the Queensland courts the measure has been a flop.  They have read ‘substantial compliance’ to mean ‘near perfect’ and have continued to invalidate wills in whose execution the testator committee some innocuous error.”

A side effect or perhaps a logical consequence of more informal Wills being admitted to Probate in section 18 applications is the increased need to seek orders from the Court to determine the meaning or effect of the words used in those informal documents. 

Haines QC makes the following comments on the drafting of home-made Wills: 

“Some authorities acknowledge that the authors of such documents lacked legal advice in drafting the document or, as the older authorities state, were inops consilii,7 and many contain the usual difficulties and inelegancies which appear to be endemic to wills drawn without professional assistance.8  Other documents may contain ambiguities because they are prepared by testators who plagiarised on precedent whether by reference to an earlier will which had been prepared professionally or by use of a 'stationer's will form' as the document is called.9 It has been stated that the 'non-professional draftsman or woman who does not appreciate the advantages resulting from phraseology that is well understood is prone to resort to colloquialisms'.10 He or she may use words improperly or use the vernacular.11

However, Haines QC also states that when the courts consider the construction of home-made Wills:

“Greater latitude is permissible and given by the courts in construing the language employed by the testator in these circumstances.12

The words of such, a testator may be looked at and considered 'less strictly than in a case’ where a will is drawn by a skilled professional.13 Indeed, it has been said that courts show the most 'unbounded indulgence' towards the 'ignorance, unskilfulness and negligence' of testators in interpreting their wills.14 The basis for this relaxation seems to be that the want of advice or learning may have caused the omission of legal or proper phrases or the misapplication of technical terms.15 It is unsound to place too much reliance on the precise meaning of particular or technical words or phrases in respect of a will prepared by an illiterate draftsman or woman as it will not assist in ascertaining a testator's real intention.16” 

In considering a construction application of a home-made Will in Re Rodgers [2002] 1 Qd R 543, Mullins J said:

“[12] It is obvious that this problem has arisen because Mrs Rodgers undertook the drafting of her own will without the benefit of professional advice.  In construing the will to ascertain the intention of Mrs Rodgers, it is relevant to take into account that she had drafted her own will.  It is also relevant to consider the nature of the assets comprising Mrs Rodgers' estate and that the pecuniary legacies in her will were intended to benefit the first and third respondents and the applicant Mrs Riethmuller.”

The construction issue in Re Rodgers arose because the estate did not have sufficient assets in the residuary estate to pay funeral and testamentary expenses and legacies.  The application sought a declaration that a gift of “… any monies that is in the Commonwealth Bank …” was a residuary gift, rather than a specific bequest.  The construction sought by the applicant was that the gift was in the nature of a residuary disposition and directions were also sought as to how the legacies made in the Will were to be paid.  Mullins J held that:

“[15]    … I consider that her intention by using the expression "any money" was equivalent to saying "any money left in the Commonwealth Bank after paying my debts and legacies".  I therefore find that there is a contrary intention in the will for the purpose of s 59 of the Succession Act 1981 that, to the extent which the funeral, testamentary and administration expenses exceed the amount of Mrs Rodgers' residuary estate, the funeral, testamentary and administration expenses be paid from Mrs Rodgers' money in the Commonwealth Bank and that there is a contrary intention in the will for the purpose of s 60 of the Succession Act 1981 which was that the pecuniary legacies be paid from Mrs Rodgers' money in the Commonwealth Bank.”

The drafting of a Will that results in there being insufficient residuary estate to pay the funeral, testamentary and administration expenses and pecuniary legacies is a common drafting problem in home-made Wills.17

Other observation made by Haines QC on the construction of home-made wills are:

-    Testator who draft their own wills often are not aware of the provisions in legislation which specify that a Will speaks from the date of death and they speak of what they own at the date of the Will, particularly when they use pronouns like 'my' in the document. Unless there is an intention expressed to the contrary, courts should construe an expression to mean property at the date of the Will.18

-    The court should look at the original document when construing a home-made Will.19

-    The power of a construction court to discard or modify words in a Will if they appear to be in contradiction with the intention of a testator as expressed in the Will.  Therefore, if an intention as expressed in handwriting is different from, say, the printed words in a stationer's Will form or Will Kit, a court should have no difficulty in discarding the printed words and should rely on the words which express the real intention of the testator.

-  A home-made Will may be prepared by a person whose knowledge of the English language is inadequate because of lack of education or because it was not the primary language of that person.  Some allowance should be made for that fact.20

What are the issues with Will Construction? estate.jpg

In a short paper it is not possible to cover all aspects of Will Construction in detail.  There are a number of excellent text books that provide detailed commentary and analysis of the topic; for example - the leading Australian Text is Construction of Wills in Australia 21 by David M Haines QC; the excellent English text Williams on Wills 22; and Lee’s Manual of Queensland Succession Law contains four chapters on the topic.23  In addition, the online succession law services of Westlaw Au [Thomson Reuters] and LexisNexis are also good reference resources.

The circumstances where a personal representative, a beneficiary or a person who takes on Intestacy, needs to seek assistance from the Court as to the construction of the terms of a Will arises where there is an ambiguity in a Will or controversy in its interpretation.

In The Public Trustee of Queensland v Smith [2008] QSC 339, Atkinson J summarised the current principles that are applied in the construction of Wills as follows:

“[21]    The general principle governing construction of a will is the “usual meaning rule.”  This rule finds its source in the classic work by Sir James Wigram, Admission of Extrinsic Evidence in Aid of the Interpretation of Wills, first published in 1831.  It is expressed by Hardingham, Neave and Ford as:

“The basic principle, to which several qualifications must later be made, is that the court interprets the words of the will, in the context in which they appear, according to their usual or primary meaning.  If the words of the will are clear, and are capable of application by reference to extrinsic circumstances, the court will not admit evidence to demonstrate that the testator used the words in something other than their ordinary sense.”

It is only where the usual meaning rule is insufficient to resolve the construction of a provision of a will that the court may consider extrinsic evidence to resolve its meaning.

[22]     The circumstances in which extrinsic evidence may be used and the purpose for which it may be used are now governed by s 33C of the Succession Act 1981 (Qld) (“the Act”) which was extensively amended with effect from 1 April 2006.  Section 33C sets out what extrinsic evidence is admissible in interpreting a will:

(1) In a proceeding to interpret a will, evidence, including evidence of the testator’s intention, is admissible to help in the interpretation of the language used in the will if the language makes the will or part of it –

(a) meaningless; or

(b) ambiguous on the face of the will; or

(c) ambiguous in the light of the surrounding circumstances

(2) However, evidence of the testator’s intention is not admissible to establish any of the circumstances mentioned in subsection (1)(c).

(3) This section does not prevent the admission of evidence that would otherwise be admissible in a proceeding to interpret a will.”

    …

[25] In addition to these three circumstances in which extrinsic evidence may be led are the three circumstances set out in s 33C of the Act:

(1) when the language used in the will makes the will or part of it meaningless;

(2) when the language used in the will makes the will or part of it ambiguous on the face of the will;

In both of these circumstances extrinsic evidence, including evidence of the testator’s intention, is admissible to help in the interpretation of the language used in the will.

(3) when the language used in the will makes the will or part of it ambiguous in the light of the surrounding circumstances, then extrinsic evidence, but not evidence of the testator’s intention in order to establish any of those circumstances, is admissible to help in the interpretation of the language used in the will

[26] It follows from the forgoing discussion that the court of construction should start with the words of the will.  If their usual meaning is clear, the will will be given that construction.  If not, the court may have regard to such extrinsic evidence as allowed by the rules of construction traditionally applied by the courts with the addition of the aids to construction found in s 33C of the Act.” 

The provisions of section 33C of the Succession Act 1981 were inserted in the Act in 2006 and they provide general rules for the use of extrinsic evidence in the interpretation of Wills.

Prior to the enactment the current section 33C, common law principles applied in respect of the admission of extrinsic evidence as an aid to the construction or interpretation of a Will.  These principles were strict in their application and limited the nature of evidence which could be adduced in an application for construction.  As a general rule, subject only to several exceptions, extrinsic evidence was inadmissible as a means of construing a Will.  If there was no ambiguity in the document and its meaning was unequivocal, no extrinsic evidence of the intention of a testator was admissible to contradict the words of the Will: McRobert v McRobert (1920) 27 CLR 331 at 333.  The intention of a testator was construed from the words employed by them in their Will.24

In a construction application, the applicant seeks a determination by asking a specific question or questions of a judge who then construes the Will and answers the questions by an interpretation.  Questions posed to the Court must relate to a particular issue and should be clear in their wording.25

The principles applicable to construction of wills are uncontroversial.  Those principles were summarised by Isaac J in Fell v Fell (1922) 31 CLR268 at 273 - 276 and in Perrin v Morgan [1943] AC 399 at 406, 408, 414 - 415, 416, 420.  In construing the Will, the Court will strive 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.  The language employed in the Will should be read in the sense which the testatrix appears to have attached to the expressions used.  The overriding consideration is the language used by the testatrix and the Court can neither ignore the plain meaning of words nor unnecessarily introduce words to give effect to an intention that is not expressed.

The proper approach is first to construe the Will having regard to its actual language, content and circumstances, and only to have regard to canons of construction and other decisions on the meaning of a word or phrase in the case of ambiguity.

In Perrin v Morgan Viscount Simon LC said:

"... the duty of a judge who is called on to interpret a will containing ordinary English words, is not to regard previous decisions as constituting a sort of legal dictionary to be consulted and remorselessly applied whatever the testator may have intended, but to construe the particular document so as to arrive at the testator's real meaning according to its actual language and circumstances. "

The general principles of Will construction are that:

(a) the meaning is to be taken from the words actually used and those words will be given their ordinary meaning unless it appears from the Will that the will-maker intended them to have some other special meaning;26

(b) the document will be construed as a whole and particular words and clauses must be looked at in the context of the whole document.27  The court must ascertain the basic scheme, which the testator had conceived when dealing with her estate, and construe the Will so as to give effect to that scheme.  

(c) in all cases, where the language of the Will renders it meaningless, uncertain or ambiguous either on its face or in the light of surrounding circumstances, the background circumstances of the will-maker or “armchair evidence”, is admissible to interpret a Will;28

(d) concerning the interpretation of similar words considered in other cases, the correct approach is to form an opinion about the particular Will and only then go to other cases to see if the opinion requires any modification in light of previous decisions rather than importing conclusions formed on other Wills and applying them to the Will under consideration.  Previous decisions are only a “useful starting point” and the Will itself must be examined closely to see what was intended in the particular case.  Each determination must occur in the context of the particular Will and it is most unwise to simply transfer conclusions as to the nature of the gift from one case to another simply because particular words have been used in each case.29  

In the judicial approach to construction of a Will the Court:

(a) looks at the Will subjectively and by referring to the words used by the testator; and

(b) has regard to any established rules of construction and construe the Will as a legal mind and not a lay person: see Fell v Fell (1922) 31 CLR 268 at 272-276 per Isaacs J.

A judge must direct his or her attention to the document in question and not be swayed by extraneous information except where it is admissible as evidence: see Nicol v Chant (1909) 7 CLR 569 at 589 per Isaacs J. 

A court cannot speculate or make a guess as to the intentions of a testator, but must adopt what it seems to be the most probable meaning of the Will: see Re Carson (deceased); Carson v Presbyterian Church of Queensland [1956] St R Qd 466 at 474.

Subject only to the power to make an order under family provision legislation, a court cannot make or rewrite a Will to improve upon what is an otherwise imperfect Will or to achieve a more sensible result: see Nicol v Chant (1909) 7 CLR 569 at 589 per Isaacs J.  If this was not so, a testator would lose his or her inalienable right of testation and the result may not accurately reflect his or her wishes.30  

The issues that arise in the construction of Wills concern one or more of three things:

(a) description of the property; or

(b) identification of the beneficiaries who the testator intends to take the property; or

(c) definition of the interests those beneficiaries shall take in the property. 

The circumstances that give rise to a construction issue may also give rise to the need for the Court to consider if the circumstance in which the Will was made establishes that the Will should be rectified pursuant to the power given to the Court by section 33(1) of the Succession Act 1981.   Section 33 is as follows:

33     Court may rectify a will

(1) The court may make an order to rectify a will to carry out the intentions of the testator if the court is satisfied that the will does not carry out the testator’s intentions because—

(a) a clerical error was made; or

(b) the will does not give effect to the testator’s instructions.

(2) An application for an order to rectify a will may only be made within 6 months after the date of death of the testator.

(3) However, the court may, at any time, extend the time for making an application under subsection (2) if—

(a) the court considers it appropriate; and

(b) the final distribution of the estate has not been made.

(4) If the court makes an order to rectify a will, the court may direct that a certified copy of the order be attached to the will.

(5) If the court gives a direction under subsection (4), the court must hold the will until the certified copy is attached to it.”

The two circumstances where the power in section 33(1) can be exercised by the Court to rectify a Will are if:

(a) a clerical error was made; or

(b) the Will does not give effect to the testator’s instructions.

In Re Bryden,31 Dunn J said that following rules and principles apply to applications for the omission of words from Wills:

"(a) The due execution of a will raises a presumption that the testator knew and approved its contents.

(b) The onus is on those who seek to have probate granted with words omitted to rebut the presumption of knowledge and approval of those words which arises from the due execution of the will. The degree of proof required is proof on the balance of probabilities.

(c) Where it is established that a will has been read to or by a testator, the presumption that the testator knew and approved of the contents of the will is a very strong one and can be rebutted only by the clearest evidence.  It is not, however, a conclusive presumption, and may be rebutted by adequate proof of mistake or of fraud.

(d) Once those who seek to have words omitted have led evidence of mistake which displaces, on the balance of probabilities, the presumption, there is an evidentiary onus on those who seek to have the words retained in the will to establish that the will was read by or to the testator in order for them to have the benefit of the very strong presumption that the testator knew and approved of those words."

The jurisdiction is dependent on accidental or inadvertent conduct – see Will of Allen [1988] 1 Qd R 1.

In ANZ Trustees Limited v Stanley Hamlet and Ors [2010] VSC 207, Pagone J when considering the underlying policy of the rectification power in section 31 of the Wills Act 1997 (VIC) stated:

"3. The power in the provision … does not remove the need for the proper construction of a Will and is not an optional alternative for the proper construction of the terms of a Will.  Indeed, it is a condition precedent to the exercise of the power that the Court be satisfied that the Will does not carry out the Testator's intentions and that this satisfaction be based on one of two specified reasons namely, either that a clerical error was made or that the Will does not give effect to the Testator's intention.  The existence of the second obvious conditions requires the Will to be construed and to be found upon its proper construction not to give effect to the instructions of the Testator."

This is a key issue before the court can invoke the power to rectify.  If the Court considers that the terms of the Will carry out the testators’ instructions then there is no power to rectify the provisions in the Will. 

Recent construction cases

The following nine recent cases are typical examples of the types of constructions issues that are considered by the courts.  Note:  of the nine cases five were home-made Wills.

money_house.jpgIn The Trust Company Ltd & Anor v. Zdilar & Ors [2011] QSC 5, Margaret Wilson J considered an application for a declaration as to the proper construction of the Will of Anne Mary Ashton [“Mrs Ashton”] who died on 9 October 2010.

Mrs Ashton who was aged 91 when she died and she was predeceased by her husband and only child.

She was survived by four grandchildren and eight great-grandchildren.

Clause 3(b) of the Will provided:

“AS TO my house property (including contents and all personal items) situated at 18 Esma Street, Rochedale or any substitute house property I shall own at the date of my death for such of my grandchildren ….”

The house at 18 Esma Street, Rochedale was sold nine years after the date of the Will and Mrs Ashton moved into the Tall Trees Retirement Village at Rochedale.  She paid $311,000 for a sublease of a unit.  On her death her estate received $274,840 as an exit fee.

The question for construction was whether at the date of her death Mrs Ashton “owned” a “substitute house property”.  If she did, then the exit fee would pass to her grandchildren under clause 3(b).  If she did not, the exit fee fell into the residuary estate which was left to her great grandchildren.

Justice Margaret Wilson after considering the usual meaning of the words of the Will in light of the circumstances in which the Will was made, and concluded: 

“[40]    The testatrix referred to the property at 18 Esma Street as ‘my house property’. The use of the possessive pronoun ‘my’ bespeaks ownership in the sense of ‘belonging to me’ or ‘over which I have full control’.  In that context, her reference to ‘any substitute house property which I shall own’ was, in my view, a reference to any property fitting the description of ‘house’ in relation to which she had similar rights.  Her rights in relation to the unit in the retirement village were very different from her rights as the owner of the fee simple in the property at 18 Esma Street.

[41]    It follows, in my view, that the unit in the retirement village was not ‘a substitute house property which I shall own at the date of my death’ within the meaning of clause 3(b) of the will. It fell into the residuary estate, and the testatrix's great grandchildren, who are the residuary beneficiaries, are entitled to the exit entitlement paid by Tall Trees Rochedale Pty Ltd upon the termination of the sub-lease 14 days after she died.”32

In Harmer v The Public Trustee of Qld as administrator of the estate of Henry Rouse Harmer (deceased) [2011] QSC 147, the deceased’s last Will of 15 September 1971 devised and bequeathed estate to his wife absolutely but, in the event that she predeceased him, to his stepson [i.e. his wife’s son].  The deceased and his wife were divorced in 1979.  Neither the testator nor his former wife remarried.  His former wife died in 1993.  The question to be decided was did the stepson receive the whole estate under the substitution provision.  The deceased’s sister brought an application seeking a declarations that the gift to the stepson failed and that she was entitled to the whole estate on Intestacy.

It was held by Martin J, who followed a decision of Shepherdson J in Re Loweke [1995] 1 Qd R 615, that the effect of divorce on a Will under then section 18(2)33 of the Succession Act 1981 was that the testator's former wife was treated as having predeceased him so that the gift over to her son took effect.

“[20] … The effect of s 18 crystallised on the divorce and from that time the will of the deceased worked to provide that the stepson would receive the gift.” 

In Crnjanin v Crnjanin & Ors [2011] QSC 295 the issue to decided was a gift of “all monies held by me in bank or investment accounts and all other assets both real and personal ..” a residuary clause or specific gift.  The home-made Will listed a number of specific gifts of real property to beneficiaries.  The structure of the Will was analysed by Applegarth J as follows:

“[26]      The will‘s structure indicates that the testator identified his intended beneficiaries in cll 3 to 8. The will devotes a clause to each beneficiary.  The testator listed in each clause which of the assets in his estate he was allocating to the relevant beneficiary.  As it happens, most of the assets in the estate were items of real property.  The final specific asset was the over $100,000 in cash held in the testator‘s bank and investment accounts. These “monies” are identified as one of the “assets” of the testator by the words of cl 8. They are identified in contradistinction to “all other assets … held by me at the time of my death.” The testator indicated that he wished to give the monies to June Crnjanin. Then, with the addition of “and”, he added that he also wished to give to June Crnjanin the residue of his estate.
Justice Applegarth concluded:

[38]    On balance, I construe the first limb of cl 8 as a specific gift of the monies to which it refers.  To adopt the words of Dixon CJ, the deceased has designated those monies as something that “form[s] an identifiable part of his property and is, so to speak, distinguished by the intention of the testator as ascertained from his will to separate it in his disposition from the rest of his property for the purpose of bequeathing it as the distinct subject of a testamentary disposition.”

In Palethorpe v The Public Trustee of Queensland & Ors [2011] QSC 335 the applicant sought an order for the rectification of the Will under section 33 that the gift in the Will of “my unit at 2/55 Hill Parade, Clontarf” was a gift of all three flats at 55 Hill Parade.  While, it was a rectification case rather than a construction case, the issue of the meaning and effect of the clause was relevant to the outcome.  Justice Atkinson concluded that:

“[59]    The terms of the clause are clear and unambiguous.  A further difficulty in concluding that the Will did not reflect the deceased’s instructions is that the deceased was given the Will, which plainly stated that the applicant was left ‘my unit at 2/55 Hill Parade’, to read before she signed it, which she did in Ms Maller’s presence.  The deceased had the opportunity if she did not intend to limit what would pass under cl 6.01 to unit 2 to correct that, however, she did not inform Ms Maller that that was not what she had intended.

[62]    In my view there is no ‘clear and convincing proof’ that the Will does not give effect to the deceased’s instructions.”

In O’Brien & Anor v Smith & Anor [2012] QSC 166 the residuary clause of the home-made Will was to establish a trust to be administered as the executors “shall see fit”.  The issue was whether beneficiaries defined with sufficient certainty.  The clause was as follows:

“OTHER than the gifts and bequests set out in Clause 3 of this my Will I GIVE, DEVISE AND BEQUEATH the balance, rest, remainder and residue of my estate to a trust or other entity to be set up by my Executors and Administrators and administered by them as they shall see fit.

Monies may be applied to Education of all my Grandchildren and allocated as my Executors shall see fit. Monies may be invested as my Executors shall see fit.  On my death, my Executors may sell or dispose of properties as they see fit.  All gifts and bequests as set out in Clause 3 to be distributed at times as seen fit by Executors. Loans may be made to those whose ability to repay such loans is proved.

To my granddaughter BRONWYN JANE JONES I GIVE the NOROTAKI [sic] DINNER SERVICE in its complete set.  All my other personal effects shall be distributed to family members.”

The net value of the estate was $3,260,000.  The deceased was survived by five children and 18 grandchildren.

The provisions of section 33R of the Succession Act 1981 were considered. The section is as follows:

33R     When a person may delegate power to dispose of property by a will

A power or a trust, created by will, to dispose of property is not void on the ground that it is a delegation of the testator's power to make a will, if the same power or trust would be valid if made by the testator, by instrument, in the testator's lifetime.”

Justice Margaret Wilson summarised the requirements to create a valid trust as follows:

“[26]     The requirements for a valid trust are described in Jacobs’ Law of Trusts

‘There are four essential elements present in every form of trust: the trustee, the trust property, the beneficiary or charitable purpose, and the personal obligation annexed to property.”

[27]     With some exceptions (principally charitable trusts), any trust must have a beneficiary (or object), and a purported trust without a beneficiary is void. The degree of certainty with which the beneficiaries of a private trust must be identified varies according to whether it is a fixed trust or a discretionary trust.

[28]     The beneficiaries of a fixed trust must be identified with sufficient precision to satisfy “list certainty” – i.e. it must be possible for the trustees, or the Court in their stead, to identify all of them.

[29]     In the case of a discretionary trust, the beneficiaries must be defined with sufficient certainty to satisfy “criterion certainty” – i.e. it must be possible to say with certainty whether any given individual is or is not a member of the class of persons intended as beneficiaries, even though it may not be possible to identify every member of the class. Nevertheless, their definition must not be:

“… so hopelessly wide as to not form "anything like a class‟ so that the trust is administratively unworkable or … one that cannot be executed.”

Her Honour concluded:

“[36] Clause 4 must be read as a whole. The first paragraph purports to create a trust, but does not name the beneficiaries or describe them in any way.  The second paragraph gives the trustees certain powers.  The third paragraph contains a specific gift of the deceased’s dinner service to his granddaughter (in other words, the dinner service was not to fall into residue but was dealt with separately) and expresses a non-binding wish that his other personal effects be distributed to “family members’.

[37] There are a number of indicators that the deceased did not intend to leave his residuary estate on trust for his grandchildren absolutely.

(a) A trust for his grandchildren absolutely would be inconsistent with the first paragraph of clause 4 – that the trust be administered by the executors as they see fit.

(b) The second paragraph lists a number of things which the trustees “may” do.  Applying moneys to the education of the deceased’s grandchildren is just one of them.  There is no limitation on the persons or institutions with whom moneys may be invested, or to whom properties may be sold or otherwise disposed of.  The only limitation on those to whom loans may be made is that their ability to repay the loans must be proved.

(c) The second paragraph further provides that the gifts in clause 3 (none of which is to a grandchild) are to be distributed at such times as the executors see fit.

(d) The deceased’s personal effects (other than the dinner service) were part of his residuary estate. In the third paragraph he expressed the wish that these be distributed to ‘family members’ – a class prima facie wider than ‘grandchildren’.

[38] There is no ambiguity as to the deceased’s intention, which was that the executors (the trustees of the trust) decide upon the beneficiaries of the trust.

[39] The applicant executors were right not to press the argument that clause 4 amounted to the conferral of a general power of appointment under which they, as donees of the power, could appoint the residuary estate to anyone, including themselves.  If that were the correct interpretation of clause 4, it could be considered a gift of the residuary estate to them absolutely. However, as counsel for the applicants acknowledged, the wording of clause 4 suggests that the deceased intended them to exercise their discretion in favour of others who are unspecified, but not themselves.  Were the gift intended to be tantamount to a gift to the applicants absolutely, it would have been unnecessary to give them the powers in the second paragraph.

[40] Nor do I think it is arguable that it was the deceased’s intention to benefit his children and grandchildren as the objects of the trust. Such an argument could be made only if there were an ambiguity in the will and the evidence of Mrs O’Brien were admissible to assist in the resolution of that ambiguity. However, there is no ambiguity: there is nothing in the will which might be thought to identify the children and grandchildren as the beneficiaries of the trust. In my view Mrs O’Brien‟s evidence is not admissible.

[41] The trust the deceased purported to create necessarily failed for want of beneficiaries.  It follows that there is a partial intestacy.  The residuary estate is to be distributed in accordance with the intestacy rules.

You may ponder why a testator with over $3m in assets who wished to create a trust in their Will [which failed] used a home-made Will?

(Continued in Part 2)


Footnotes

  1. Perrin v Morgan [1943] AC 399 at 406 per Viscount Simon; LJ Hardingham, MA Neave, HAJ Ford, Wills and Intestacy (2nd ed) at [1101]; DM Haines, Construction of Wills in Australia at [5.2]; K Mackie and M Burton, Outline of Succession (2nd ed) at [7.4] – [7.6].
  2. Ralph v Carrick (1879) 11 Ch D 873 at 878 per Cotton LJ, cited with approval by Isaacs, J in Fell v Fell (1922) 31 CLR 268 at 273.
  3. Per Atkinson J in Re Thomson & Anor (as trustees of the trusts established pursuant to the will of Shine (deceased)) [2010] QSC 167 at [10].
  4. LexisNexis Butterworths, 2007 at par 1.44.
  5. Re Minchell's Will Trusts [ 1964] 2 All ER 47 at 48 per Chancellor Salt QC.
  6. (1987) 87 Columbia Law Review 1.
  7. Lewis v O'Loughlin (1971) 125 CLR 320 at 326 per Barwick CJ; Re Minchell's Will Trusts [1964] 2 All ER 47 at 48 per Chancellor Salt QC.
  8. Public Trustee v Young (1980) 24 SASR 407 at 408 per the Full Court.
  9. A will entirely in the handwriting of a testator is called a holograph will.
  10. Re Jackson, deceased; Macfarlane v Veale [1950] SASR 268 at 271 per Mayo]; Re Taylor; Taylor v Tweedie [1923] 1 Ch 99 at 104 per the Court of Appeal.
  11. Re Jackson, deceased [1950] SASR 268 at 271.
  12. Lewis v O'Loughlin (1971) 125 CLR 320 at 330 per Menzies J. '[I]t is quite legitimate to have [the fact that a layperson drew his or her own will] in mind if the machinery which he [or she] has devised creaks': Wardlaw's Trustees v Lennox's Executor 1940 SC 286 at 293 per Lord Normand; Re Crocombe, deceased [1949] SASR 302 at 305 per Mayo J; Estate of Wemyss, deceased (1951) 7 LSJS (SA) 426 at 428 per Mayo J; Re Rodgers [2001] 1 Qd R 543; [2001] QSC 282 at [12] per Mullins J.  The fact that a will is on a printed form and not drawn     professionally for a particular testator makes a great deal of difference in the construction: Re Harrison, Turner v Hellard (1885) 30 Ch D 390 at 394 per the Court of Appeal.
  13. Re Taylor; Taylor v Tweedie [1923] 1 Ch 99 at 105 per Lord Sterndale MR. See also Forth v Chapman (1720) 1 P & M 663 at 666; 24 ER 559.
  14. Armstrong v Stokell [2001] TASSC 132; BC200107221 at [21] per Underwood J, there citing with approval Jarman on Wills, 1st ed, at p 315.
  15. Lewis v Rees (1856) 3 K & J 132 at 147; 69 ER 1052 per Page Wood VC; Thellusson v Lord Rendlesham (1859) 7 HLC 429 at 519; 11 ER 172, both cited in Estate of Wenyss, deceased (1951) 7 LSJS (SA) 426
  16. National Trustees, Executors and Agency Co of Australasia Ltd v O'Connor (1919) 27 CLR 60 at 68 per Rich J.
  17. For example see Crnjanin v Crnjanin & Ors [2011] QSC 295.
  18. Re Taylor; Taylor v Tweedie [1923] 1 Ch 99 at 105 per Lord Sterndale MR. See also Forth v Chapman (1720) 1 P & M 663 at 666; 24 ER.
  19. Armstrong v Stokell [2001] TASSC 132; BC200107221 at [21] per Underwood J, there citing with approval Jarman on Wills, 1st ed, at p 315.
  20. Lowin deceased; Perpetual Trustee Co Ltd Asprey JA.
  21. LexisNexis Butterworths, 2007
  22. LexisNexis, London, 9th ed., 2008
  23. 6th ed., by Alun A Preece, Thompson Reuters – Chapters 14, 15, 16 and 17.
  24. See Thompson Reuters – Westlaw AU Australian Succession Law at [190.1010].
  25. See Thompson Reuters – Westlaw AU Australian Succession Law at [190.330]. 
  26. See Fell v Fell (1922) 31 CLR 268 and Construction of Wills in Australia, Haines, at pars [2.33] – [2.36].
  27. Haines, at par [2.30].
  28. Haines, at pars [5.8] – [5.10].
  29. Haines, at pars [2.2] to [2.7].
  30. See Haines at [2.9].
  31. [1975] Qd R 210 at 212-213
  32. This issue was also considered by Mullins J in The Trust Company Limited v Gibson & Anor [2012] QSC 183, which was a case that is noteworthy for not following the decision in Re Viertel [1997] Q Qd R 110.
  33. i.e. as at the date of the divorce - now section 15(4).
  34. McBride v Hudson (1962) 107 CLR 604 at 617, [1962] HCA 5 at [5] per Dixon CJ.



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