Antill-Pockley v Perpetual Trustee Co Ltd

[1974] HCA 52

HIGH COURT OF AUSTRALIA

McTiernan A.C.J., Gibbs and Stephen JJ.

ANTILL-POCKLEY v. PERPETUAL TRUSTEE CO. LTD.

(1974) 132 CLR 140

29 November 1974

Settlement

Settlement—Construction—Power of appointment amongst settlor's wife (if any) children (if any) grandchildren (if any) and next of kin—Testamentary appointment made to nephew—Settlor's sister alive at material times—Next of kin—Whether nearest blood relation or relations generally—Whether nephew within class.

Decisions

November 29.
The following written judgments were delivered:-
McTIERNAN A.C.J. The first respondent (the Perpetual Trustee Company Limited) issued a summons out of the Supreme Court of New South Wales seeking "A determination of the question whether on the true construction of an Indenture of Settlement bearing date 31st July, 1924 and made between the late Frederick Edmund Sargood, of the one part and the plaintiff and the late George Washington Waddell of the other part and in the events which have happened, the corpus of the property subject to the said Indenture of Settlement: (a) is now vested beneficially in the defendant, Brian Edmund Antill-Pockley, or (b) is now, pursuant to provisions of cl. (b)(2) of the said Settlement, held on charitable trusts". The first respondent was the trustee of the settlement mentioned above and the appellant and the second respondent (the Attorney-General for New South Wales) were defendants to the summons. (at p142)

2. The material clauses of the deed of settlement are as follows:

"1. THE Settlor hereby irrevocably directs and declares that as from the twenty-first day of July One thousand nine hundred and twenty four the Trustees shall stand possessed of the Trust Fund and the income therefrom upon the following trusts namely:

(b) After the death of the Settlor the Trustees shall stand possessed of the Trust Fund: (1) Upon trust for the Settlor's wife (if any) children (if

any) grandchildren (if any) and next of kin or such one or more of the foregoing to the exclusion of the other or others and in such shares and proportions as the Settlor shall by Will appoint or at his option partly for all or any of the foregoing persons and partly for such charities or wholly for such charities and in such shares and proportions as he shall so appoint; and (2) In default of any such appointment or in so far as the same shall not extend then upon trust for such charities and in such shares and proportions as the Trustees may in their absolute discretion determine PROVIDED ALWAYS that neither the Roman Catholic Church nor any charitable institution directly or indirectly connected therewith shall benefit under the provisions of this Settlement." (at p142)

3. In his will dated the 12th day of March 1970 the settlor made inter alia the following provision:

"7. (a) WHEREAS under and by virtue of a Deed of Settlement made by me as Settlor on the Thirty first day of July One

thousand nine hundred and twenty four the Trustees thereof shall stand possessed after my death of the Trust Fund therein mentioned Upon Trust for my wife (if any) my children (if any) my grandchildren (if any) and my next of kin or such one or more of the foregoing to the exclusion of the other or others and in such shares and proportions as I shall by Will appoint or at my option partly for all or any of the foregoing persons and partly for such charities or wholly for such charities and in such shares and proportions as I shall so appoint And whereas I have never married and am desirous of making the appointment hereinafter mentioned NOW in exercise of the power for this purpose given me by the said Deed of Settlement and of all other powers if any enabling me in this behalf I HEREBY DIRECT AND APPOINT that the Trustees or Trustee for the time being of the Deed of Settlement shall from and after my death stand possessed of the said Trust Fund as to the capital and future income thereof Upon Trust for my said nephew Brian Edmund Antill-Pockley the son of my sister Nancy Julia Watson absolutely or if he shall have predeceased me then for such of the children of the said Brian Edmund Antill-Pockley and his wife Jeanette Mary Hamilton as shall be living at the date of my death and attain the age of twenty one years and if more than one in equal shares as tenants in common."

The settlor died on 28th December 1970 and had remained a bachelor throughout his life. At the time of the settlement, his father was alive but not his mother, and he had two sisters, one of whom had a son, who is the appellant. At the time of his death he was survived by his sister (the appellant's mother), the appellant, two other nephews and a niece. These last three persons were the children of the settlor's sister (the appellant's mother) by her second marriage. (at p143)

4. The summons was heard by Mahoney J. who made the following declaration answering the questions asked in the summons:

"Upon the true construction of the Indenture of Settlement bearing date 31st July, 1924 and made between the late Frederick Edmund Sargood of the one part and the plaintiff and the late George Washington Waddell of the other part and in the events which have happened the corpus of the property subject to the said Indenture of Settlement: (a) is not now vested in the defendant Brian Edmund Antill-Pockley. (b) is now, pursuant to the provisions of cl. (b)(2) of the said Indenture of Settlement, held on charitable trusts."

The appellant now appeals against this declaration. (at p143)

5. The question in issue is whether the appellant falls within the description "next of kin" as it is used in cl. 1(b)(1) of the deed of settlement. It was argued by the appellant that in the context of the settlement deed it is appropriate to construe "next of kin" as meaning "blood relations" or "family" and not to restrict the term to its ordinary meaning or to the class of persons included in the term "statutory next of kin". (at p143)

6. In my opinion, there is nothing in the context of the deed of settlement which is a reason for construing the term "next of kin" other than in its ordinary sense, that is as meaning "nearest of kin" or "nearest in blood relation". The result is in this case, that the appellant's mother is the only possible object of a valid appointment by the settlor. The cases cited to us do not produce any instance where the term "next of kin" has been given a meaning wider than its ordinary meaning, except where in some circumstances it has been extended to mean "statutory next of kin". In the result, I would dismiss the appeal and conclude that question 1(a) in the first respondent's summons was answered correctly by his Honour Mahoney J. However, I agree that the determination of question 1(b) should not be made in the absence of representation of the appellant's mother, the sole next of kin of the settlor. (at p144)

GIBBS J. This appeal from a judgment of Mahoney J., sitting in the Equity Division of the Supreme Court of New South Wales, raises for decision questions as to the construction of a deed of settlement made on 31st July 1924 by Frederick Edmund Sargood ("the settlor"). By cl. 1 of that deed the settlor directed and declared that as from 21st July 1924 the trustees of the settlement should stand possessed of the trust fund and the income arising therefrom on the following trusts:

"(a) During the life of the Settlor the Trustees shall permit him to receive from time to time so much of the said income as shall accrue during his life or shall receive and stand possessed of the same in trust for him; and (b) After the death of the Settlor the Trustees shall stand possessed of the Trust Fund: (1) Upon trust for the Settlor's wife (if any) children (if

any) grandchildren (if any) and next of kin or such one or more of the foregoing to the exclusion of the other or others and in such shares and proportions as the Settlor shall by Will appoint or at his option partly for all or any of the foregoing persons and partly for such charities or wholly for such charities and in such shares and proportions as he shall so appoint; and (2) In default of any such appointment or insofar as the

same shall not extend then upon trust for such charities and in such shares and proportions as the Trustees may in their absolute discretion determine PROVIDED ALWAYS that neither the Roman Catholic Church nor any charitable institution directly or indirectly connected therewith shall benefit under the provisions of this Settlement."

At the date of the settlement the settlor was a bachelor; his father was living but his mother was dead; he had no brothers but two sisters one of whom, Nancy Julia Antill-Pockley, had a son Brian Edmund Antill-Pockley. (at p144)

2. The settlor died on 28th December 1970 leaving a will by which he purported to make an appointment for the purposes of the settlement. The will, after reciting the relevant provisions of the settlement, provided as follows:

"I HEREBY DIRECT AND APPOINT that the Trustees or Trustee for the time being of the said Deed of Settlement shall from and after my death stand possessed of the said Trust Fund as to the capital and future income thereof Upon Trust for my said nephew Brian Edmund Antill-Pockley the son of my sister Nancy Julia Watson absolutely or if he shall have predeceased me then for such of the children of the said Brian Edmund Antill-Pockley and his wife Jeanette Mary Hamilton as shall be living at the date of my death and attain the age of twenty one years and if more than one in equal shares as tenants in common."

At the date of his death the settlor had remained a bachelor. His father and one of his sisters had died. His sister Nancy Julia Antill-Pockley who had remarried and is now Nancy Julia Watson, was, and is still, alive. She had two children by her second marriage both of whom are alive. Her son Brian Edmund Antill-Pockley is still living; he is the appellant on this appeal. (at p145)

3. The trustee of the settlement commenced the present proceedings for a determination of the questions whether on the true construction of the settlement and in the events that have happened the corpus of the property subject to the settlement - (a) is now vested beneficially in the appellant or (b) is now, pursuant to the provisions of cl. 1(b)(2) of the settlement, held on charitable trusts. The defendants to the suit were the appellant and the Attorney-General for the State of New South Wales. Mrs. Watson was not a party to the suit and was not represented either before the learned trial judge or before us. The learned trial judge answered question (a) in the negative and question (b) in the affirmative. He did not discuss whether, if the fund was not vested beneficially in the appellant, Mrs. Watson might be entitled to it; he assumed that in that event the fund would be held on charitable trusts under cl. 1(b)(2) of the settlement. (at p145)

4. It is unfortunate that Mrs. Watson was not made a party to these proceedings. She was, at the death of the settlor, his sole next of kin, if those words are used in their ordinary sense or as meaning the persons entitled under the Statutes of Distribution. Upon one view, the settlement creates a trust in favour of the settlor's wife, children, grandchildren and next of kin, a class which, if the construction contended for by the appellant is incorrect, was comprised only by Mrs. Watson. On this view of the construction of the settlement, a trust is created by the opening words of cl. 1(b)(1), and that trust is not affected by the grant of the power of appointment by the succeeding words (introduced by "or") unless the power is exercised, particularly when, as in fact occurred, there is only one member of the class; similarly the concluding provisions of cl. 1(b)(1) come into effect only if the settlor exercises the option which those provisions give him. On this view, the provisions of cl. 1(b)(2), if read without qualification, would conflict with those of cl. 1(b)(1), but the conflict could be resolved by regarding the former provision as prevailing over the latter. I express no opinion, one way or the other, upon the question whether this construction is correct, but it appears that the settlement does give rise to a doubt which should not be resolved without giving Mrs. Watson an opportunity to be heard if she wishes to advance a claim to the fund. (at p146)

5. Nevertheless it seems convenient to answer the first question raised. The appointment in favour of the appellant cannot be valid unless he is one of the "next of kin" of the settlor within the meaning of cl. 1(b)(1). In the ordinary meaning of the expression, the "next of kin" of a person are those "most closely related" to him. In the strict sense of the words the relationship referred to is that of blood and it has been held again and again that a trust in favour of "next of kin", whether by will or settlement, prima facie is a trust in favour of the "nearest in proximity of blood" or, in other words, the "nearest blood relations": see Withy v. Mangles (1843) 10 CI &F 215, at p 254 (8 ER 724, at p 738) ; Gutheil v. Ballarat Trustees, Executors &Agency Co. Ltd. (1922) 30 CLR 293, at p 299 , and the other cases cited in Halsbury, 3rd ed., vol. 34, p. 615, and vol. 39, pp. 1065-1066. By s. 33 of the Conveyancing Act, 1919 (N.S.W.), as amended, a different effect is given to the words "next of kin" in any instrument to which the section applies; where under the terms of any such instrument any property vests in the next of kin of any person the property shall vest in the persons who on the death of such person intestate would be beneficially entitled to his estate under the relevant statute law of New South Wales, and in the shares indicated in the section. However, if the words of any settlement reveal with sufficient clarity an intention that the words "next of kin" should not have their primary meaning (whether that is their ordinary meaning or the meaning attributed to them by s. 33) effect will be given to that intention and the primary meaning will be displaced. In the present case it is not submitted that s. 33 applies, but it is in any case immaterial to the appellant whether the words "next of kin" in the settlement mean nearest blood relations or the persons entitled to succeed on an intestacy, and it would not assist him even if the words were given the extended meaning which they sometimes bear in colloquial usage of "most closely related whether by blood or marriage". The appellant was not on any possible view the person most closely related to the settlor. His mother, Mrs. Watson, was more closely related than he. The appellant was kin of the settlor but his kinship was comparatively remote. (at p146)

6. It was therefore necessary for Mr. Handley on behalf of the appellant to submit that in the context provided by the settlement the words "next of kin" mean simply "relations of any degree". In support of this submission it was said that it appears from the words of cl. 1(b)(1) that the settlor contemplated that he might have "next of kin" even if he had children and grandchildren who survived him. So far this submission appears to me to be correct, and although the words "if any" showed that the settlor doubted whether he would have a wife, children or grandchildren, the natural meaning of the clause is that next of kin would be included in the class of beneficiaries or objects of the power even if the settlor had children living at his death. It was then said that it was unlikely that at the death of the settlor there would have been persons living who could properly be called "next of kin" if there were also children alive, and that this shows that the words were intended to be used in a loose and extended sense. In fact it was possible that the settlor's father would be living at his death, and in that event he would have been one of the next of kin, in the ordinary sense, even if the settlor had also left children surviving him: Withy v. Mangles (1843) 10 CI &F 215 (8 ER 724) . The fact that the settlor, contemplating that he might leave no wife, children or grandchildren, constituted a class which might possibly include those persons and other next of kin as well provides no support for the contention that the words of the settlement should be given an unnaturally wide meaning. (at p147)

7. An alternative submission was that some significance should be attached to the fact that at the date of the settlement the settlor's father was his sole next of kin, if those words are given their ordinary meaning. However, it was said that the settlement revealed an intention to give the trustees a wide power of selection, and that the words "next of kin" should be construed as meaning "relations" so as to enable this intention to be given effect. It is perfectly clear that it was intended that the next of kin should be ascertained at the settlor's death - that is the prima facie rule of construction (Falkiner v. Commissioner of Stamp Duties (N.S.W.) (1973) AC 565, at pp 578-580; (1972) 46 ALJR 713, at pp 715-717 ), and it obviously applies to cl. 1(b) which was not intended to take effect until the settlor's death. However, the death of the settlor might not have occurred (and did not in fact occur) for many years, and it was possible, if not probable, that during the years that might elapse before the settlor died the class of next of kin, construing those words in their ordinary sense, might have expanded so that it might be desirable for the settlor to have power to choose which of the next of kin should take. (at p147)

8. In the course of argument reference was made to some authorities whose effect is thus stated in Farwell on Powers, 3rd ed. (1916) at p. 568:

"A power of appointment among the 'relations' or the 'family' of the testator or of A, can be well exercised by an appointment to any relations, although not within the degree of next of kin, if the power authorises selection . . . But if the power authorises distribution merely, and not selection, the donee is confined to the next of kin according to the statute."

It was submitted that these authorities show that words such as "next of kin" may be given a wide construction where they appear in a power authorizing selection. It is unnecessary (and, in the absence of any representation of Mrs. Watson, undesirable) to express any opinion on the question whether the settlement here gives a power of selection rather than creates a trust or power of distribution, because the authorities cited do not assist the appellant. The principle established by these cases is that a trust in favour of "relations" or "family" would be void for uncertainty and must therefore be read down as being a trust in favour of a narrower and ascertainable class, namely the statutory next of kin, but a power of selection from the wider group is, by an anomalous rule, nevertheless treated as valid (see In re Griffiths; Griffiths v. Griffiths (1926) VLR 212, at p 217 ; In re Perowne; Perowne v. Moss (1951) Ch 785, at pp 788-789 ; Inland Revenue Commissioners v. Broadway Cottages Trust (1955) Ch 20, at p 33 ). There is nothing in these cases that justifies giving "next of kin" a wider and uncertain meaning even if those words appear in a power of selection. Snow v. Teed (1870) LR 9 Eq 622 , was also cited. In that case a power to a woman to appoint a fund among "her own family or next of kin" was held applicable to any relative, but in the course of argument Sir W. M. James V-C. said (1870) LR 9 Eq, at p 623 (without giving reasons) that "'next of kin' cannot be confined to 'nearest of kin', but must include the statutory 'next of kin'". If this remark is of any general application to selective powers, it does not support the argument that "next of kin" in a selective power includes relations generally. (at p148)

9. Although Mr. Handley has urged everything possible in favour of the appellant, I am unable to find anything in the context of the settlement that would justify placing upon the expression "next of kin" the meaning of "relations" or, in other words, that would justify construing the settlement as though the words "next of" did not appear in it. In my opinion the learned primary judge was right in holding that the words of the settlement do not disclose any intention that the expression "next of kin" should be given any other than its ordinary meaning. As I have said, so construed, the "next of kin" of the settlor do not include the appellant. (at p148)

10. The answer given in the Supreme Court to question (a) was correct, and the appeal should be dismissed. However, since it was not right, without hearing Mrs. Watson, to treat the answer to question (b) as merely consequential on question (a), the declaration made by the learned primary judge should be varied by setting aside the answer given to question (b). The question whether the fund is now held on charitable trusts cannot be answered at this stage and the matter should be remitted so that the question (b) may be considered in the Supreme Court after Mrs. Watson has had an opportunity to be heard. (at p149)

STEPHEN J. I have read and am in agreement with the reasons for judgment of Gibbs J. (at p149)

Orders

Appeal dismissed with costs.

Order of the Supreme Court of New South Wales varied by setting aside the answer given to question (b) of the summons and matter remitted to the Supreme Court of New South Wales for the determination of question (b) in a suit to which Nancy Julia Watson has been added as a party.