Backhouse v Lloyd - [1933] HCA 49

49 CLR 559

BACKHOUSE AND ANOTHER

APPELLANTS; DEFENDANTS,

LLOYD AND ANOTHER

RESPONDENTS.

PLAINTIFF AND DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF

SOUTH AUSTRALIA.

W ill-ConstructionDistinction between residuary gift and gift of distinct fund-

Effect of enumeration of particular things in a residuary gift.

The testatrix made the following provisions with regard to the residue of her estate :- 7. I direct my trustees to set aside the sum of £10,000 upon trust to pay the income thereof to my husband

during his life and from and after the death of my husband I direct that my trustees shall hold the said sum of £10,000 or until the said sum of £10,000 shall be

49 CLR 560

set aside as hereinbefore provided the annual payment of £500 representing the same upon the trusts hereinafter declared by clause nine of my will as altered by this codicil

8. Subject as hereinafter provided I direct my trustees out of the residue of the trust fund to set aside a sum of £8,000 upon trust to pay the income thereof to "G" during her life. And I further said sum of £8,000

my trustees shall out of the residue of the income of the trust fund pay to the said " G " the sum of £400 a year. 9. Subject to the trusts hereinbefore declared I direct that the said two funds of £10,000 and £8,000 or the annual payments representing the same respectively and the residue of the trust fund and the income thereof shall be held by my trustees upon trust to pay the income thereof to my two sisters equal shares during their lives." The husband of the testatrix died in 1932 and the income from the whole estate was only sufficient to pay to the husband of the testatrix the sum of £500 a year from November 1930 to the date of his death, and thenceforth was insufficient to pay the sums of £500 and £400 a year respectively.

An originating summons having been taken out to determine whether G. was entitled to be paid in priority to the two sisters of the testatrix or whether the annual sums of £500 and £400 should abate,

Held, that clause 9 constituted a residuary gift to the sisters of the testatrix, whose claims were postponed to those of G.

Decision of the Supreme Court of South Australia (Napier J.), affirmed.

APPEAL from the Supreme Court of South Australia.

By her will as altered by a codicil the testatrix, after giving certain legacies, devised and bequeathed all the residue of her real and personal estate to her trustees upon trust to sell and convert into money. The will as altered by the codicil continued :-

" 7. I direct that my trustees shall out of the proceeds of such sale calling in and conversion and out of my ready money pay my debts and funeral and testamentary expenses and the legacies bequeathed by this my will or any codicil thereto out…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Backhouse v Lloyd

Details

AGLC: Backhouse v Lloyd [1933] HCA 49
Case: [1933] HCA 49
Decision Date: 6 November 1933

CaseChat Overview and Summary

The appellants, Katherine Backhouse and Ellen Constance Campbell, appealed to the High Court from a decision of the Supreme Court of South Australia. The dispute concerned the distribution of income from the testatrix's estate, which was insufficient to meet all the intended payments. The core of the disagreement was whether the annual sums payable to the respondent, Moira Kathleen Gordon, should abate in favour of the appellants, or vice versa.

The legal issues before the High Court were: firstly, whether the respondent, Mrs. Gordon, was entitled to be paid her annual sum in priority to the appellants; and secondly, whether the annual sums should abate given the insufficiency of the estate's income. The central question revolved around the construction of clause 9 of the will, specifically whether it constituted a residuary gift to the sisters or a gift of a distinct fund.

The High Court, affirming the decision of the Supreme Court, held that clause 9 constituted a residuary gift to the appellants. The reasoning applied was that a residuary legatee is generally not entitled to receive anything until particular legacies are fully satisfied. The court found that the provisions in clause 9, which dealt with the income from the £10,000 and £8,000 funds and the residue of the trust fund, were intended to capture whatever remained after prior trusts were fulfilled. Therefore, the appellants' claims were postponed to those of Mrs. Gordon, who was considered to have a prior claim as a legatee of a specific annual sum. The appeal was dismissed.

Orders