Alan John Hyland (as Executor of the Estate of the late Lily Therese Hyland) v Jacqueline Sheri Woods

[2011] NSWSC 266

Supreme Court

New South Wales

Medium Neutral Citation:

Alan John Hyland (as Executor of the Estate of the late Lily Therese Hyland) v Jacqueline Sheri Woods [2011] NSWSC 266

Hearing dates:

31 March 2011

Decision date:

31 March 2011

Before:

Rein J

Decision:

1. Gift to and trust established for James Stanley Hyland under the will have failed.

2. Declaration that the plaintiff is entitled to pay out 60% of the monies in the Commonwealth Bank of Australia fixed deposit account to the three beneficiaries named immediately in accordance with clause 4 of the will.

3. Plaintiff's costs to be paid out of the estate on an indemnity basis.

4. First and fourth defendants' costs to be paid out of the estate on the usual basis.

Catchwords:

SUCCESSION - construction of will - whether a gift to and trust established for a beneficiary under the will has failed due to the death of the beneficiary prior to the death of the testatrix - whether the executor is entitled to pay out monies immediately to the named beneficiaries pursuant to the will

Cases Cited:

Estate of Elizabeth Emily Jenkinson [2000] NSWSC 495
Re Meynell [1949] WN 273
Saunders v Vautier (1841) 41 ER 482

Texts Cited:

G L Certoma, The Law of Succession in New South Wales, 4th ed (2010), Thomson Reuters (Professional) Australia

Category:

Principal judgment

Parties:

Alan John Hyland (plaintiff)
Jacqueline Sheri Woods (first defendant)
Myra Margaret Davidson (second defendant)
Rosemary Ann Falkenberg (third defendant)
Brandii Mae Woods (fourth defendant)

Representation:

Counsel:
G M McGrath (plaintiff)
D F Rowley (solicitor for the first and fourth defendants)
Solicitors:
Lobban McNally (plaintiff)
Levy Partners (first and fourth defendants)
Teece, Hodgson & Ward (third defendant)

File Number(s):

SC 2010/308606

EX TEMPORE Judgment

1. These proceedings concern the will of the late Lily Terese Hyland (to whom I shall refer to as "Lily" ) who died on 12 January 2009 at the age of 91.

1. Lily was survived by three of her five children, Myra Margaret now known as Mrs Myra Margaret Davidson ( "Myra" ), Alan John Hyland ( "Alan" ) and Rosemary Ann now known as Mrs Rosemary Ann Falkenberg (" Rosemary" ). Mary Hyland, her first-born daughter, died before 2005. James Stanley Hyland ( "James" ), her first-born son, died on 9 August 2009.

1. By her will dated 23 August 2005 ( "the Will" ), Lily appointed Alan as her executor and trustee and:

(1) gave 60% of "all monies in the fixed deposit account with the Commonwealth Bank of Australia" in her name to her trustee to hold upon trust for Alan, Myra and Rosemary;

(2) gave 20% of "all monies in the fixed deposit account with the Commonwealth Bank of Australia" in her name to her trustee to hold upon trust for such of her grandchildren who will survive her and who will attain the age of 18 years; and

(3) gave 20% of "all monies in the fixed deposit account with the Commonwealth Bank of Australia" in her name to Jacqueline Sheri Woods ( "Jacqueline" ), the daughter of Myra, on trust for James "provided that the interest of the said James Stanley Hyland under the terms of the said Trust shall vest in the said James Stanley Hyland immediately prior to his death": see clause 6 of the Will at page 15 of Exhibit A.

1. Lily expressed her wishes as to how the trust was to be administered: see clause 9 of the Will at page 16 of Exhibit A. She also left the residue to pay all debts and expenses and then upon trust for Jacqueline.

1. In 2008, Lily entered Ashburn House, an aged care facility operated by Christadelphian Homes Limited. An accommodation bond was required by the operation of Ashburn House and $300,000 so required was paid out of the Commonwealth Bank of Australia fixed deposit account referred to in the Will ( "CBA Account" ).

1. After Lily's death, the operator of Ashburn House paid $308,405.35 to her estate.

1. Mr G M McGrath of counsel appears for Alan. Mr Rowley, solicitor, appears for Jacqueline and her daughter, Brandii Mae Woods ( "Brandii" ), who is a minor of nine years of age. It was agreed that Jacqueline should be appointed as tutor for Brandii. Myra, the second defendant, was served with the summons but has indicated that she does not wish to attend and Rosemary, the third defendant, has filed a submitting appearance.

1. The principal concern of the summons is for a determination as to whether the gift to and the trust established in respect of James has failed. If the gift to James is a testamentary gift, there can be no doubt that it has failed due to the death of the beneficiary prior to the death of the testatrix: See Estate of Elizabeth Emily Jenkinson [2000] NSWSC 495 per Young CJ in Equity, as his Honour then was, and G L Certoma, The Law of Succession in New South Wales , 4 th ed (2010), Thomson Reuters (Professional) Australia . Mr McGrath has drawn my attention to the possibility that the gift could be seen as one made inter vivos, but he submits that it ought not be seen as such on the basis of the fact that the settlement is one contained in a duly executed will which gives rise to a rebuttable presumption that the trust is testamentary: see Re Meynell [1949] WN 273 per Barnard J which is referred to by Mr McGrath in his submissions.

1. None of the defendants promote the proposition that the gift to James is a gift inter vivos or a settlement inter vivos and I think it is clearly a testamentary gift and therefore it fails.

1. There was an issue raised in the summons concerning the $308,405 to which I have referred in [6] above. However, it is accepted by the plaintiff and the first and fourth defendants that the Will is ambulatory and if the money has been taken out of the CBA Account before Lily's death, then the gift is to be treated as the subject of an ademption (there are exceptions to this principle but none are said to be relevant here). Thus the gift in clause 4 of the Will (and clause 6 had it not failed due to the death of James prior to the death of Lily) is what was in the CBA Account on Lily's death, which was, I am informed, $197,000.

1. The next matter that the summons seeks a determination upon concerns clause 4 of the Will. It is in the following terms:

" I GIVE sixty percent of all monies in the fixed deposit account with the Commonwealth Bank of Australia in my name to my Trustee to hold UPON TRUST as tenants in common in equal shares for such of my children, ALAN JOHN HYLAND, MYRA MARGARET DAVIDSON and ROSEMARY ANN FALKENBERG as shall survive me."

1. In relation to this clause, the executor and trustee seeks a declaration that he is entitled to pay 60% of the monies in the CBA Account to the three beneficiaries named immediately. They are all over the age of 21 years and sui juris and are entitled under the rule in Saunders v Vautier (1841) 41 ER 482 to call for the monies. No one disputes their entitlement to receive the monies. It is appropriate that that declaration be made. By reason of that conclusion, an issue of construction raised in the summons does not need to be considered.

1. Another matter which the summons sought to deal with was the question of the representation of Brandii and the estate of James, but there no longer seems to be any need for that, for having regard to the fact that all persons interested in the question of James' bequest are before the Court, there being evidence that James, left by his will, his estate to the first defendant on trust for the sole benefit of her daughter Brandii.

1. There was also agreement about the costs consequences which follow in relation to summons. That is, that the plaintiff should receive the costs of the proceedings out of the estate on an indemnity basis. There is agreement that costs of the first and fourth defendants should be paid out of the estate but on the usual basis.

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Decision last updated: 07 April 2011