Alexopoulos v Krasovec
[2022] VSC 749
•12 December 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2022 01463
IN THE MATTER of the will and estate of FRANK KRASOVEC, deceased
- and -
IN THE MATTER of an application pursuant to order 54 of the Supreme Court (General Civil Procedure) Rules 2015
BETWEEN:
| PAULA ALEXOPOULOS (in her capacity as executor and trustee of the estate of FRANK KRASOVEC, deceased) | Plaintiff |
| v | |
| MICHAEL KRASOVEC | First Defendant |
| FRANK GEOFFREY KRASOVEC | Second Defendant |
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JUDGE: | Barrett AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 October 2022 |
DATE OF JUDGMENT: | 12 December 2022 |
CASE MAY BE CITED AS: | Alexopoulos v Krasovec |
MEDIUM NEUTRAL CITATION: | [2022] VSC 749 |
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WILLS – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 54.02 – Construction of a will – Conditions of a clause of a will – No express gift over clause in the event conditions are not satisfied – Whether extrinsic evidence of a testator’s intention is admissible – Whether the conditions have been satisfied – Whether the executor can sell property of the deceased’s estate to satisfy debts of the estate – Held that extrinsic evidence is admissible where the uncertainty or ambiguity is on the face of the will – Wills Act 1997 (Vic) s 36 – Held that the executor can sell property of the estate to satisfy the debts of the estate – Administration and Probate Act 1958 (Vic) s 37 – Held that the conditions of a clause of a will were not satisfied – Held that it was the testator’s intention for the specified time limit to be of the essence – Re Goodwin [1924] 2 Ch 26.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Acutt | GPZ Legal |
| The First Defendant in person | ||
| For the Second Defendant | Mr J McCoy | Hicks Oakley Chessell Williams Pty Ltd |
TABLE OF CONTENTS
Background......................................................................................................................................... 1
Evidence and submissions............................................................................................................... 4
Applicable principles........................................................................................................................ 7
Consideration...................................................................................................................................... 9
Conclusion......................................................................................................................................... 14
HIS HONOUR:
This is an application by the executrix of the will and estate of the late Frank Krasovec seeking advice pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’), as to the proper construction of the will.
Background
Mr Frank Krasovec (‘the deceased’) died on 28 February 2021, aged 90, leaving a will dated 14 July 2018 (‘the will’). He was survived by his two sons: Michael Krasovec, who is the first defendant, and Frank Geoffrey Krasovec, who is the second defendant.
On 1 July 2021, probate was granted to Paula Alexopoulos (‘plaintiff’). According to an account of the deceased’s estate (‘estate’) prepared by the plaintiff as at August 2022, the assets of the estate include a property (being the property at 21 Edith Street, Glen Waverley) (‘property’) valued at $1,925,000, an Omega watch valued at $1,500, a Mercedes-Benz vehicle valued at $16,500, and $27,692.36 in cash. That account records that $22,510.96 has been paid out of the plaintiff’s solicitor’s trust account in respect of estate expenses, that $11,723.90 in expenses were then outstanding, and that anticipated expenses were approximately $89,000. The first defendant takes issue with some aspects of the account as discussed further below, although that is not a matter that calls for resolution in this proceeding.
There was no dispute that the deceased’s intention, as expressed in the will, was that his estate should be shared equally between his two sons. The will appointed the plaintiff as executrix and trustee, and relevantly provides (emphasis in original):
4.SUBJECT to the payment of my debts, funeral and testamentary expenses and all probate and estate and other duties payable in respect of my estate to any State or Federal Authority in consequence of my death I GIVE DEVISE AND BEQUEATH my estate as follows:
(a)the property at No. 21, Edith Street, Glen Waverley 3150 to my elder son MICHAEL KRASOVEC on the basis that once my Will is proved and grant of Probate being issued to my Executor and within six months of the date of the grant of Probate, the property should be valued and half the value of the property to be paid to my younger son FRANK GEOFFREY KRASOVEC, only after paying the half the value of the property MICHAEL KRASOVEC can take possession of the property. Till such time, the property needs to be vacant.
(b)MICHAEL KRASOVEC to be entitled for my car and MICHAEL KRASOVEC needs to pay the value of the car at the time of my death to FRANK GEOFFREY KRASOVEC out of the funds from my bank account.
(c)MICHAEL KRASOVEC to become entitled to all my tools.
(d)MICHAEL KRASOVEC to become entitled to my Omega watch and FRANK GEOFFREY KRASOVEC to become entitled to the sound system in my property.
(e)The rest and residue of my estate to be divided equally between my sons MICHAEL KRASOVEC and FRANK GEOFFREY KRASOVEC.
More than six months has expired since probate was granted. Valuations were obtained in relation to the property on 11 March 2021 by the first defendant, and 12 October 2021 by the plaintiff, but the first defendant did not pay half the value of the property to the second defendant, or any amount as half of the value of the property, within six months of probate being granted, and he asserts that the will does not require him to do so.
The first and second defendants are in dispute as to the meaning of cl 4(a). The plaintiff and second defendant are broadly in agreement, but the first defendant sees the matter otherwise.
On 28 April 2022, the plaintiff filed an Originating Motion seeking advice as to the proper construction of cl 4(a) of the will, and generally whether or not she is required to transfer the property to the first defendant, and what obligations flow from the answer to that question. The plaintiff also seeks advice as to whether cl 4(a) is void for uncertainty such that the gift falls into residue, and what other steps are necessary or appropriate in the administration of the estate. The relief sought is as follows:
1.Pursuant to order 54.02 of the Supreme Court (General Civil Procedure) Rules 2015, given the events that have transpired since the death of the deceased, what is the proper construction of clause 4(a) of the will of the deceased, and specifically:
a)Is the plaintiff obliged to transfer the property from the estate to the first defendant immediately, notwithstanding the first defendant has not paid the second defendant half the value of the property and the estate has outstanding debts and liabilities, and if so:
i.what is the nature of the interest the first defendant receives as a result of this transfer, given the wording of the will?
ii.if this transfer is effected, is the first defendant obliged to pay the second defendant 50% of the value of the property, pursuant to the valuation obtained by the plaintiff, prior to him being able to take physical possession of the property?
iii.what are the plaintiff’s obligations in relation to the administration of the estate in the event the property is transferred, and the first defendant fails to make any payment to the second defendant of the plaintiff’s evaluation; and
iv.is the plaintiff obliged to prevent the first defendant from taking possession of the property in such circumstances?
b)If the plaintiff is not required to transfer the property to the first defendant immediately;
i.is she only required to do so upon the payment by the first defendant, to the second defendant of half the value of the property pursuant to the valuation or on some other basis (e.g. upon payment of the estate’s debts and liabilities)?
ii.if so, is she required to wait for the first defendant to make such a payment, and for how long does this option to purchase last for the first defendant; or
iii.given 6 months has expired since the date of probate, and the first defendant’s disagreement with the valuation the plaintiff has obtained and his failure to pay the second defendant, is she at liberty to put the property on the open market for sale, presumably with the proceeds to be shared between the first defendant and second defendant once the debts and liabilities of the estate are accounted for?
c)Whether clause 4(a) is void for uncertainty and the gift falls into the residue of the estate?
d)What other steps does the Court consider necessary and appropriate to complete the administration of the estate of the deceased.
Evidence and submissions
The plaintiff relies on affidavits sworn by her on 11 April 2022 and 26 August 2022, and on written submissions filed on 29 August 2022.
The plaintiff is not named as a beneficiary under the will, and has not sought executor’s commission or any other benefit, and states that her ‘intention is to do what’s best and discharge [her] duties as executor’. Her affidavit sworn 11 April 2022 sets out in some detail the correspondence she has had with each of the beneficiaries, being the defendants, ‘in an effort to seek agreement on the outstanding issues’ and notes that ‘dispute remains and regrettably, the administration of the estate has reached an impasse’ where advice must be sought from the court.
The plaintiff describes her correspondence with the defendants in relation to issues surrounding the administration of the estate, including questions concerning: access to the property; ownership and disposal of furniture in the property; control of the car and liability for the costs of its storage; allegations by the first defendant that the second defendant had misappropriated funds from the estate; and questions as to the proper interpretation of cl 4(a) of the will. Many of the issues that are covered in the correspondence do not need to be resolved or considered here. The question for resolution concerns the interpretation of cl 4(a). The plaintiff makes submissions as to the proper construction of cl 4(a) to assist the court, and not with any intention of taking an adversarial role in the proceeding.
The plaintiff relies on the account of August 2022 which shows the existing and anticipated debts of the estate exceeding the liquid funds available to satisfy them. In that regard the plaintiff submits that the property must be sold, and that as a consequence the gift of the property in cl 4(a) fails. It was submitted that that is, for all intents and purposes, the end of the matter, and that there is no need to consider the proper construction of the other conditions of the gift, and whether they have been satisfied, or what rights may have been granted in the face of those conditions, because the first and primary condition is that the property can only be gifted in specie if there are sufficient liquid funds in the estate to discharge the debts and liabilities of the estate, which there are not. The result will be that the balance of the proceeds of sale after payment of debts will fall into residue to be divided equally between the defendants.
In the event it is necessary, the plaintiff makes submissions as to the proper construction of the other conditions in cl 4(a). The plaintiff submits that the use of the phrase ‘on the basis that’ were used to create conditions to the gift, although perhaps not as clearly as words such as ‘on the condition that’ or ‘on the proviso that’. The plaintiff submits that the conditions created were that a valuation was to be obtained within six months of probate and that the first defendant pay half that value to the second defendant within six months of probate. It was submitted that this interpretation accords with the natural meaning of the words used in their context which ties the payment (of half the value of the property to the second defendant within six months of probate) to the first defendant’s possessory right.
The plaintiff further submits that the alternative interpretation that the clause gives the first defendant a right to a transfer of the property immediately without requiring payment within six months, would lead to ‘unworkable and untenable’ consequences. For example, questions would arise as to what rights the first defendant has to the property prior to payment; would he have a right to ownership but not possession? Further, if transfer of the property could be made with payment being deferred to a later time, beyond six months, then there would be questions as to when and how payment was required, how it could be compelled, and whether any use could be made of the property in the event the first defendant was unable to pay half the value and so was not entitled to possession.
The second defendant relies on an affidavit sworn by him on 11 July 2022 and his written submissions filed on 30 September 2022.
The second defendant’s submissions were in accord with the plaintiff’s in relation to the need to sell the property to pay the debts of the estate. The second defendant further submits that, properly construed, the terms of cl 4(a) of the will create a conditional gift of the property to the first defendant which required a valuation of the property and payment of half of that value from the first defendant to the second defendant within six months of the grant of probate of the will. It was submitted that the gift only vests once those conditions are satisfied.
The second defendant also submits that there is an ambiguity on the face of cl 4(a) arising out of the failure of the will to specify what should happen if the conditions are not satisfied. The second defendant submits that because there is such an ambiguity, it is appropriate to consider direct evidence of the deceased’s intention. To that end the second defendant relies on evidence of what the deceased said prior to his death in relation to how he wished his property to be disposed of.
The second defendant submits that this extrinsic evidence makes it plain that the deceased intended that the gift in cl 4(a) of the property would fail if the conditions were not satisfied within six months of the grant of probate. The second defendant submits that in order to resolve this ambiguity it is necessary for the court to read cl 4(a) with the insertion of a sentence at the end of that clause in the following terms:
If MICHAEL KRASOVEC does not make payment of half the value of the property to FRANK GEOFFREY KRASOVEC within six months of the date of the grant of Probate, the property is to be sold and the proceeds of sale will form part of the residue of my estate.
The first defendant relies on affidavits sworn by him on 26 May 2022, 4 July 2022 and 6 September 2022, and written submissions which were exhibited to his affidavit of 6 September 2022. The first defendant represented himself at trial. It is apparent from the affidavits and submissions of the first defendant that he held many concerns about the treatment of the deceased in his final years in his nursing home. He also expressed concerns about the conduct of the second defendant. The second defendant rejects the allegations raised by the first defendant. Similarly, the first defendant raises a number of questions about the plaintiff’s conduct as executrix, and questions the assets and liabilities recorded in the accounts of the estate. It is not necessary for me to make any determination in relation to these matters. This case only concerns the proper construction of cl 4(a).
The first defendant submits that the terms of the will entitle him to the immediate transfer of the property, but that possession depends upon payment of half of the value of the property. In his affidavit sworn on 4 July 2022, the first defendant states as follows:
In my view, 21 Edith [Street] Property comes to me with title certificate in my name. Therefore, ownership is taken by me, [first] defendant. The property remains vacant, until full payment is provided to the [second] defendant, the [first] defendant then takes possession.
In his oral submissions the first defendant submitted that the use of the word ‘bequeath’ in cl 4(a) means that the title is given to him and that there is no condition to that gift. But the first defendant also conceded that he is not entitled to possession of the property until he has paid half the value of that property to the second defendant.
In relation to payment of half the value of the property, the first defendant says that the will provides no time schedule for that payment to be made. The first defendant explained that he needed ‘up to 30 months, but it can be done within 15 or 16 months’. The first defendant also explained that he needed time to build a home on the property, and sell his property, which would take a minimum of 15 months, after which payment could be made. In his written submissions, the first defendant also states that the second defendant ‘will get the money when he provides certain private and personal items of the estate to [the first defendant]’.
Applicable principles
Rule 54.02 of the Rules provides that an executor may seek judicial advice in respect of a broad range of issues including the proper construction of a will and as to the administration of the estate. There was no issue as to the appropriateness of the plaintiff bringing the proceeding in the circumstances. Where advice is sought in relation to a proposed course of conduct, the function of the court is to determine whether the executor has power to do what is proposed, and if so, whether it would be improper to exercise the power in that manner.[1]
[1]Morris v Smoel [2013] VSCA 11, [25].
The principles of construction of a will are uncontroversial. They have been summarised recently in Re Niall[2] as follows:
In construing a will, the task of a court is to give effect to the testator’s intention through examination of the words used in the will, having regard to the will as a whole, aided as necessary by any admissible extrinsic evidence. Prima facie, the words of a will must be given their ordinary meaning.[3]
[2](2019) 60 VR 1, 9 [36]–[38]. See also Craven v Bradley (2021) 63 VR 567, 586–7 [74]–[75] (Derham AsJ).
[3]Re Niall (2019) 60 VR 1, 9 [36] (citations omitted).
If words can be given their ordinary meaning having regard to the will as a whole, it is generally unnecessary, and inappropriate, to look beyond those words to determine their meaning. But if the words used are meaningless, uncertain, ambiguous or would lead to a capricious result, extrinsic evidence may be relied on to assist in the interpretation of that language.[4] That principle finds expression in s 36 of the Wills Act 1997 (Vic) which provides:
[4]Wills Act 1997 (Vic) s 36; Brown v Hunt [2021] VSC 683, [21] (Incerti J); Re Lapalme; Daley v Leeton (2019) 60 VR 71, 85 [66] (McMillan J); Re Allsop [1968] Ch 39, 47 (Lord Denning MR).
When is evidence admissible to clarify a will?
(1)In any proceedings to construe a will, if the language used in a will renders the will or any part of the will—
(a) meaningless; or
(b) uncertain or ambiguous on the face of the will; or
(c)uncertain or ambiguous in the light of surrounding circumstances—
evidence may be admitted to assist in the interpretation of that language.
(2)Evidence which may be admitted under subsection (1)(c) does not include evidence of the testator’s intention.
(3)Nothing in this section prevents the admission of evidence which would otherwise be admissible at law in any proceedings to construe a will.
It is notable that s 36(2) only precludes evidence of a testator‘s intention where the uncertainty or ambiguity arises in light of the surrounding circumstances, but it does not preclude evidence of the testator’s intention where the uncertainty or ambiguity is on the face of the will.[5]
[5]Brown v Hunt [2021] VSC 683, [21] (Incerti J); Re Lapalme; Daley v Leeton (2019) 60 VR 71, 78 [31] (McMillan J).
As a general principle, a court should not too readily find that a gift should fail for uncertainty. In Re Niall,[6] McMillan J held:
For … such a disposition to fail for uncertainty, it must be incapable of any clear meaning. If a court can arrive at the meaning with a reasonable degree of certainty, the disposition will not fail. In essence, for a gift to fail for uncertainty, it must be utterly impossible to put a meaning upon it.[7]
[6](2019) 60 VR 1.
[7]Ibid 9 [38] (citations omitted).
The court may, in construing a will, ‘insert missing words which are clearly necessary to give effect to the testator’s intention’.[8]
[8]Chan v Valmorbida [2019] VSC 336, [51], citing Fell v Fell (1922) 31 CLR 268, 274; Butlin v Butlin (1966) 113 CLR 353, 357.
If the meaninglessness, uncertainty or ambiguity of a disposition in a will cannot be resolved, then the result is that the gift will fail and the subject of the gift will pass under any residuary clause.[9]
[9]Re Niall (2019) 60 VR 1, 9 [37].
Even if there is no dispute as to the terms of the gift or bequest in a will, an executor is obliged to pay the debts of the deceased in due course of administration,[10] and may have resort to the ‘real and personal estate, whether legal or equitable, of a deceased person’ to pay such debts.[11] No disposition in a will can stand in the way of payment of creditors.[12]
[10]Administration and Probate Act 1958 (Vic) s 36.
[11]Ibid s 37; Morris v Smoel [2013] VSCA 11, [8].
[12]Morris v Smoel [2013] VSCA 11, [8].
Consideration
The gift of the property expressed in cl 4(a) of the will is conditional in a number of respects: first, it is subject to payment of:
my [the deceased’s] debts, funeral and testamentary expenses and all probate and estate and other duties payable in respect of my estate to any State or Federal Authority in consequence of my death …
The condition attaching to the gift in cl 4(a) is consistent with the obligations of an executor to pay the debts of the deceased and his estate, and also consistent with an executor’s right to sell the real and personal estate of the deceased in order to satisfy those debts.[13]
[13]Administration and Probate Act 1958 (Vic) ss 36, 37; ibid.
In this case, the account of the estate of August 2022 discloses that the assets of the estate totalled $1,970,692.36, of which the value of the property is $1,925,000. The liabilities of the estate include:
(a) expenses incurred in the administration of the estate to that date and already paid — $22,510.96;
(b) outstanding expenses — $11,723.90; and
(c) anticipated expenses totalling approximately $89,000, which includes costs in relation to this proceeding.
Apart from the property, the only assets to which recourse may be had to satisfy estate debts are: an Omega watch valued at $1,500.00, a Mercedes-Benz vehicle valued at $16,500.00 and $27,692.36 in cash. In those circumstances, counsel for the plaintiff indicated that the plaintiff needs to, and intends to, sell the property in order to pay the debts and liabilities of the estate, in which event the gift of the property cannot be effected.
The first defendant submitted that the property does not need to be sold to pay estate debts. He referred to a Westpac term deposit statement for the amount of $90,000.00 which he said belonged to the deceased. The first defendant further asserted that the money was taken by the second defendant and that it is money that should form part of the estate and be available to pay any liabilities of the estate. The first defendant did not provide any evidence to substantiate his assertion that his brother had taken those funds, nor was there any documentary evidence indicating where the funds may have gone after that term deposit matured. I note that the maturity date of the term deposit was 12 January 2020, which is more than a year prior to the deceased’s death.
I am satisfied that the assets and liabilities of the estate generally remain as set out in the plaintiff’s account of August 2022, and that the liabilities of the estate cannot be met from the estate other than by the sale of the property. That being the case, it is not improper for the plaintiff to sell the property in order to discharge her obligation to pay the debts of the estate. The consequence is that, irrespective of the proper construction of the gift of the property in cl 4(a), the gift cannot take effect in specie because the property will not remain in the estate in specie. What will remain in the estate will be the net proceeds of sale after the payment of debts which will fall into residue to be distributed equally between the first and second defendants in accordance with the residue clause.
In those circumstances it is unnecessary to consider the question of the proper construction of the remainder of cl 4(a), but as the parties addressed detailed submissions to that question, I will deal with them below.
The question of the payment of the debts of the estate aside, the parties all agreed that the gift in cl 4(a) was, at least in some respects, conditional. That is sufficiently clear from the use of the words ‘on the basis that’. The real dispute between the parties concerns how the conditions operate. The first defendant submits that the gift of the property to him is immediate and unconditional, but that his right to possession of the property is conditional upon him paying half the value of the property to the second defendant within an unspecified time frame. In that regard the first defendant suggests a payment timeframe of 30 months would be appropriate but in any case suggests not less than 15 months. The plaintiff and second defendant each submit that the appropriate construction is that the gift is conditional upon both the valuation of the property, and the payment of half that value by the first defendant to the second defendant, taking place within six months of the grant of probate. I consider that the latter construction is the proper construction for the following reasons.
The structure of cl 4(a) requires two things to occur within six months of probate for the gift to take effect. Those two things are that: the property should be valued and half the value of the property must be paid by the first defendant to the second defendant. The use of the conjunction ‘and’ appearing between each of those conditions, and those conditions appearing after the words ‘within six months of the date of the grant of Probate’ compel the conclusion that the gift is conditional on those two things occurring within the identified six-month period. This interpretation of the conjunction ‘and’ is fortified by the absence of any punctuation in the phrase ‘the property should be valued and half the value of the property to be paid to my younger son [the second defendant]’. There is no indication in the text that the first of these conditions was to occur within the six-month period but the second of these conditions could occur at any time, including after the six-month period. For those reasons I consider that the proper construction of cl 4(a) requires, as conditions of the gift, that both the valuation and the payment be made within six months of probate.
The plaintiff and second defendant each submitted that there is a degree of uncertainty or ambiguity on the face of cl 4(a) that need to be resolved by having regard to extrinsic evidence. Essentially it was submitted that such uncertainty arises out of the failure of the will to express what was to happen if the conditions in cl 4(a) were not satisfied.
While it is clear that the will imposed a time limit upon the exercise of the conditions, the will does not contain a gift over or any express provision as to what is to happen if the time limit is not satisfied. In such circumstances it is for the court to determine what was the intention of the testator in inserting the condition.[14] The language of the will, and evidence from the second defendant as to conversations he had with the deceased at about the time the will was made,[15] support the conclusion that it was the deceased’s intention that the six-month time limit would be of the essence, and that if it was not complied with the property would fall into residue.
[14]Re Goodwin [1924] 2 Ch 26, 30, which was applied in Re Selinger’s Will Trusts [1959] 1 All ER 407, 409–410, and Re Will of Meshakov-Korjakin (decd) [2011] VSC 372, [41] (Mukhtar AsJ). See also Re Bowles (decd) [2003] Ch 422.
[15]Admissible pursuant to s 36(1)(b) of the Wills Act 1997 (Vic).
The second defendant states that he discussed the proposed terms of the will with the deceased a few days before the will was made. He took notes of the conversation which were tendered. Those notes read as follows:
1/House 21 Edith Street [the property] plus cash at bank and shares to be split 50% to Frank jnr [the second defendant] & Michael [the first defendant] within 6 months after the passing of Frank snr [the deceased].
2/occupance [sic] of 21 Edith Street will not be allowed unless settlement in option 1 has been finalised, therefore Michael or Frank jnr and family … are not permitted to occupy 21 Edith Street Glen Waverley [the property] unless the financial settlement has been reached …
3/House and ownership of cash, shares and any other assets of Frank snr to be split …
The second defendant also attended a meeting at the solicitor’s office on 14 July 2018 when the deceased made his last will. The second defendant deposes that, in response to requests from the first defendant, the deceased said:
Michael [the first defendant], no, you will pay your brother Frank [the second defendant] under the terms of six months after probate if you want the house and when this time is up then the Executor will sell the house and divide the estate … six months after probate are the conditions which is plenty of time for you to raise the money …
I note also that significant practical difficulties may flow from an interpretation that required a valuation within six months but did not require payment until some undetermined time in the future. For example, and as submitted by the plaintiff, if the first defendant was entitled to the transfer of the property to him but not to possession of the property until payment was made, the property could potentially lay fallow indefinitely if the first defendant could not raise funds to pay the second defendant half the value of the property. Such a situation could also see the second defendant not receiving the benefit of his entitlement under the will for an indefinite period.
Having regard to the terms of the will, the evidence of conversations recounted by the second defendant and the practical considerations that would flow from delayed performance of the conditions, I am satisfied that the deceased’s intention in inserting the six-month condition into cl 4(a) was to ensure the conditions were met within that six-month period and that if they were not satisfied within that period, the gift was to fail and fall into residue.
Conclusion
In light of those findings I answer the questions posed by the Originating Motion as follows.
Question 1(a): No, the plaintiff is not required to transfer the property to the first defendant immediately.
Question 1(b)(i) and (ii): The gift of the property in cl 4(a) was conditional on both a valuation of the property and payment of half its value by the first defendant to the second defendant within six months of probate being granted. As payment was not made within six months of probate being granted, the gift failed at the expiration of that six-month period, and the property fell into residue. Thereafter the plaintiff is not required to transfer the property to the first defendant upon payment of half the value of the property, or at all.
Question 1(b)(iii): Yes, the plaintiff is at liberty to put the property on the open market for sale, with the proceeds to be shared equally between the first defendant and second defendant once the debts and liabilities of the estate are accounted for.
Question 1(c): Clause 4(a) is not void for uncertainty, but the gift has failed, and the property fallen into residue, because the conditions contained within cl 4(a) were not satisfied within the time limit specified.
The parties are requested to provide orders consistent with these reasons, including proposed orders as to costs.
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