Blockley v Challis
[2017] VSC 15
•1 February 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S CI 2016 02471
| MITCHELL BLAIR BLOCKLEY (as executor of the Will of Nigel Francis Blockley, deceased) | Plaintiff |
| v | |
| PHILIP CHALLIS (in his capacity as the executor of the Will of Helen Blockley, deceased) | First Defendant |
| JANE HALL (representing herself and Nicholas Roger Thompson) | Second Defendant |
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JUDGE: | Ierodiaconou AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 8 November 2016 |
DATE OF JUDGMENT: | 1 February 2017 |
CASE MAY BE CITED AS: | Blockley v Challis and anor |
MEDIUM NEUTRAL CITATION: | [2017] VSC 15 |
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WILLS – Construction – Testator granted right to B to reside in a property for ‘as long as she wishes’ – Property to be sold and proceeds distributed when B ‘ceases to use or reside permanently’ in the property – B died while living in the property – Whether ‘cease to use or reside’ includes cesser by way of death – Whether voluntary or involuntary cesser required
WILLS – Construction – Pecuniary legacies of specified amount to be paid from one-third of the proceeds of sale of the property – Specified amounts different in value from value of one-third of the sale proceeds – How legatees are to be paid – Whether pro rata division of sale proceeds is appropriate – Specified amounts ordered to be paid, with remainder falling as residue
WILLS – Evidence – Armchair principle – Extrinsic evidence – Whether uncertainty from surrounding circumstances or on the face of the will – Evidence of testator’s intention unhelpful – Wills Act 1997 (Vic) s 36
WORDS AND PHRASES – ‘Cease to use or reside permanently’ – ‘Cease’
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Boaden | TSA Lawyers |
| For the First Defendant | Mr S McNab | Gisborne Legal |
| For the Second Defendant | Mr P Pascoe | John Benninson |
HER HONOUR:
The issue for determination in this proceeding is how the will of Nigel Francis Blockley (‘the deceased’) should be construed. There is a dispute between the executor of the deceased’s will (a stepson), the estate of his widow, and other stepchildren. The amount in dispute is approximately $92,000.
Background
The deceased’s first wife was Anne. Anne had five children with her former de facto partner, Roger Thompson.[1] Anne, along with three of her five children (Mitchell, Samantha and Nicholas) and family friends, assisted the deceased to build a family home at 35 Henderson’s Road, Wandin North (‘the property’).[2] The property had been purchased in 1982 and was the primary asset of the deceased.
[1]Affidavit of Jane Hall sworn 28 September 2016 (‘the Hall affidavit’) [6].
[2]The Hall affidavit [11]; the affidavit of Samantha Louise Blockley sworn on 28 September 2016 (‘Samantha’s affidavit’) [5]; Thompson affidavit [8].
Anne died in 1992. The deceased married Helen Blockley in 1996, with whom he had no children.[3] Helen moved into the property after their marriage, to reside with the deceased. Helen lived in the property until her own death in 2014, twelve years after Nigel Blockley’s death.
[3]The certificate of marriage is dated 10 March 1996 and forms ‘Exhibit ‘PC-4’ to the affidavit of Philip Challis affirmed 31 September 2016 and dated 31 August 2016 (‘the Challis affidavit’). The date of affirmation appears to be a typographical error, as there is no such date. The affidavit is dated 31 August 2016 on the first page and was filed on 1 September 2016.
On 16 September 2002, the deceased made a will (‘the will’).[4] The will was witnessed by solicitors Ray Maxwell Sheedy and Jason Anthony Ashton.
[4]The will forms exhibit ‘MBB-1’ to the affidavit of Mitchell Blair Blockley sworn on 16 June 2016 (‘the Mitchell affidavit’).
The deceased died on 14 October 2002 and was survived by Helen Blockley, five step-children (those born to Anne) and also step-grandchildren. Probate was granted to Mitchell Blockley on 4 December 2007.
The deceased made provision for four stepchildren: Mitchell Blockley, Samantha Blockley, Jane Hall and Nicholas Thompson. There was no provision made for one stepchild, Melanie Phillips, and she did not take part in these proceedings. The deceased also made provision for nine step‑grandchildren in his will.
Relevantly, clauses 2 and 4 of the will provide as follows:
2.I DEVISE my property at 35 Henderson’s Road, Wandin North (‘the Property’) to my Trustees subject to the following trusts:-
2.1Subject to paragraph 2.3 hereof to permit my wife HELEN BLOCKLEY to reside therein for as long as she wishes and subject to her paying all rates and taxes levied upon the Property and all of the premiums on any insurance policies taken out by my Trustees in respect of the Property;
2.2Until the said HELEN BLOCKLEY has, in the reasonable opinion of my Trustees, ceased to use or reside in the Property permanently or to comply with the conditions of her right of occupation, it shall not be sold without her consent;
2.3If the said HELEN BLOCKLEY ceases to use or reside permanently in the Property, the Property shall be sold and the net proceeds of such sale shall be distributed as to two thirds to the said HELEN BLOCKLEY if she survives me for 30 days and the balance shall be divided between the following beneficiaries who survive me and attain the age of 18 years:
(a)to NICHOLAS ROGER THOMPSON I give the sum of FIFTEEN THOUSAND DOLLARS ($15,000.00);
(b)to MITCHELL BLAIR BLOCKLEY I give the sum of FIFTEEN THOUSAND DOLLARS ($15,000.00);
(c)to SAMANTHA BLOCKLEY I give the sum of FIFTEEN THOUSAND DOLLARS ($15,000.00);
(d)to JANE HALL I give the sum of FIFTEEN THOUSAND DOLLARS ($15,000.00);
(e)To RHETT ETHEREDGE I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(f)to ZOE TAYLOR I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(g)to NOVA TAYLOR I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(h)to FABIAN CULCIAN I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(i)to AVERY GARDNER I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(j)to YAEL GARDNER I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(k)to BIANCA PHILLIPS I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(l)to ERICA PHILLIPS I give the sum of FIVE THOUSAND DOLLARS ($5,000.00);
(m)to REBECCA BLOCKLEY-JACKSON I give the sum of FIVE THOUSAND DOLLARS ($5,000.00).
2.4If the said HELEN BLOCKLEY so wishes she may at any time offer to pay the amount payable to any of the beneficiaries named in the preceding paragraph and if the beneficiaries (or any of them) accept the offer such payment shall discharge their entitlement to any further payment under this Will. I FURTHER DIRECT that any offer to an infant beneficiary must be accepted by such infant beneficiary’s guardian and if accepted must be held in trust for such beneficiary until he or she attains the age of eighteen years.
2.5If the said HELEN BLOCKLEY fails to survive me for thirty days the two thirds of the Property or of the proceeds of sale she would have received under this Clause shall be distributed in accordance with this [sic] Clause providing for the distribution of my residuary estate.
…
4.AFTER payment of my debts, funeral and testamentary expenses, I GIVE the remainder of my property of whatever nature and wherever situated (my residuary estate) to my Trustees UPON TRUST for the said HELEN BLOCKLEY provided she survives me for thirty days and if not my residuary estate shall be divided between the said MITCHELL BLAIR BLOCKLEY, SAMANTHA BLOCKLEY, NICHOLAS ROGER THOMPSON and JANE HALL, or such of them that shall survive me and if more than one in equal shares.
Some of the legatees named in clause 2.3 were later approached by Helen, who offered to pay out the pecuniary legacies to which they were entitled. Mitchell Blockley accepted such an offer, and was paid $15,000. This was paid to his trustee in bankruptcy.[5] Helen later left Mitchell a $15,000 pecuniary legacy in her own will.[6]
[5]The Mitchell affidavit [9]. There is no evidence of the date of payment.
[6]Helen’s will forms Exhibit ‘PC-2’ to the Challis affidavit. See clause 2.9 of Helen’s will.
Jane Hall deposed that she received a letter from Helen’s lawyers in March 2012, stating that Helen wished to pay out each of the pecuniary legacies. Jane Hall spoke with all of the other named beneficiaries aside from Nicholas Thompson, Mitchell Blockley and Rebecca Blockley-Jackson, and each of them declined Helen’s offer.[7] Jane Hall also declined an offer from Helen.[8] Nicholas Thompson confirmed by way of affidavit that he never received an offer from or on behalf of Helen.[9]
[7]The Hall affidavit [23].
[8]The Hall affidavit [23].
[9]Affidavit of Nicholas Rodger Oliver Thompson sworn 30 September 2016 (‘the Thompson affidavit’) [15].
Helen died on 16 January 2014. Probate of her will was granted to the first defendant, Philip Challis, on 16 June 2014.[10] Philip Challis is Helen’s brother and the brother‑in‑law of the deceased.
[10]The grant of probate forms Exhibit ‘PC-3’ to the Challis affidavit.
The property was then sold on 1 August 2014 with net proceeds of $551,716. The amount remaining after costs were deducted was $545,161. This is the only remaining asset of the deceased’s estate relevant to these proceedings.
By originating motion filed 24 June 2016, and summons filed 28 June 2016, the executor (Mitchell Blockley) seeks an order declaring for whom the plaintiff holds the residue of the estate, upon proper construction of the will and in the events that have happened.
Though explored more fully below, a brief statement of the issue between the parties can be stated here. The plaintiff and first defendant say that the will is, more or less, clear. The property is to be sold and the proceeds divided in paying the pecuniary legacies, with the remainder to fall to Helen.
Conversely, the second defendant says that the legacies were to be paid only if Helen ‘ceased to use or reside’ in the property while alive, and that the legacies can only be paid in such an event. That event never occurred: Helen died while residing in the property. As a result, the defendant says that the money which otherwise would have been used to pay the pecuniary legacies must be dealt with by way of a clause implied into the will (and set out below).
There is a related question as to how, exactly, the one-third share to which the beneficiaries are entitled is to be divided amongst the legatees. One-third of the proceeds of sale equates to around $182,000 while the pecuniary legacies total only $105,000 (of which $15,000 has already been paid to Mitchell). What happens to the difference between these two values? Does it fall to Helen as residue, or is it to be divided pro rata between the legatees?
Applicable principles
Section 36 of the Wills Act 1997 (Vic) provides as follows:
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.
The applicable principles concerning construction of a will were summarised by McMillan J in Jepson v Bowman at [6]–[13] and that summary is adopted here:[11]
[11][2014] VSC 590 (all emphases in original).
[6] At common law, the task of a court of construction is to discover the testator’s intention by examination of the words used in the will, having regard to the will construed as a whole in light of any admissible extrinsic evidence[.] In the opening words of Lord Romer’s judgment in Perrin v Morgan:
My Lords, I take it to be a cardinal rule of construction that a will should be so construed as 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.[12]
[12][1943] AC 399, 420. In that decision, in which the House of Lords overturned a ‘rule of construction’ that money must refer necessarily to cash, Lord Atkin famously celebrated ‘with satisfaction that henceforth the group of ghosts of dissatisfied testators who, according to a late Chancery judge, wait on the other bank of the Styx to receive the judicial personages who have misconstrued their wills, may be considerably diminished’: 415. See also Re Edwards [1981] VR 794.
[7] A detailed and succinct summary of the 10 principles relating to the construction of wills is set out by Isaacs J in Fell v Fell, principles that his Honour described as ‘incontestable’.[13] Prima facie, the written words in the will must be given their ordinary meaning, with the Court making a determination of the issue by reference to the words used by the testator in the will, having regard to any established rules of construction and construing a ‘will as trained legal minds would do’.[14] As articulated in the second principle of Issacs J in Fell v Fell:
[13](1922) 31 CLR 268, 273–6.
[14]Ibid quoting Ralph v Carrick (1879) 11 Ch D 873, 878 (Cotton LJ).
The instrument … must receive a construction according to the plain meaning of the words and sentences therein contained. But … you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it.[15]
[15]Ibid 273–4 (emphasis in original).
[8] If, in the context of the will read as a whole, and of the surrounding circumstances, the ordinary meaning of the words in the will does not make sense, extrinsic evidence is admissible in a court of construction under the ‘armchair principle’.[16] This principle allows the court to place itself in the position of the testator at the time of executing the will and take into account all of the circumstances actually known to the testator when the will was made.[17] Referring again to the opening of Lord Romer in Perrin v Morgan:
[16]Boyes v Cook (1880) 14 Ch D 53, 56 (James LJ).
[17]The other instance at common law that allows the admission of extrinsic evidence in a court of construction (which is not relevant in this proceeding) is in the case of equivocations where direct evidence of a testator’s actual testamentary intentions: see John G Ross Martyn et al, Theobald on Wills (17th ed, Sweet & Maxwell, 2010) 281–3.
To understand the language employed the Court is entitled, to use the familiar expression, to sit in the testator’s armchair.[18]
[18][1943] AC 399, 420.
[9] This approach was also succinctly stated by Fullagar J in ANZ Executors & Trustee Co Ltd v McNab:
The search for testamentary intention must be a search for intention disclosed by the words used, and in this search words must prima facie be given their ordinary meanings and, if the law has consistently given a particular meaning to some word or phrase, that is the meaning which the word or phrase must prima facie be given. Nevertheless, the intention is to be gathered from a study of the will as a whole, and in the light of any relevant and admissible evidence of surrounding circumstances.[19]
[10] At common law, the general rule is that a testator’s declarations as to his or her intentions and the meanings of words used in the testamentary document are inadmissible as direct evidence of testamentary intentions. This means that in most circumstances evidence of instructions of a testator to his or her solicitor would be inadmissible in construing the meaning of a will.
[11] The circumstances in which extrinsic evidence may be used and the purposes for which it may be used in interpreting a will are also governed by statute. In Victoria, pursuant to s 36 of the Wills Act 1997, where a will is made on or after 20 July 1998, evidence of the testator’s intention is admissible in certain circumstances.[20] The legislation does not oust the armchair principle but supplements it.
[12] Where there are cases of uncertainty or ambiguity, evidence may be admitted to assist in the interpretation of the language of the will, both where the uncertainty or ambiguity arises on the face of the will or in light of surrounding circumstances, although in the latter situation, evidence of the testator’s intention may not be given.
[13] As concluded by Atkinson J in The Public Trustee of Queensland v Smith, after setting out the principles applicable to the construction of wills, including s 33C of the Succession Act 1981 (Qld) (the Queensland provision equivalent to s 36 of the Wills Act 1997):
It follows from the foregoing discussion that the court of construction should start with the words of the will. If their usual meaning is clear, the[y] 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.[21]
[19](1999) 3 VR 666, 667.
[20]See Morgan v Moore [2000] VSC 94 (23 March 2000), where a detailed discussion of the legislative history of s 36 of the Wills Act 1997 and its precursor, s 22A of the Wills Act 1958, is set out.
[21][2008] QSC 339 (19 December 2008) [26] (Atkinson J).
Evidence
Affidavits from the following individuals were provided as evidence in this proceeding:
(a) Mitchell Blair Blockley, executor of the will and stepson of the deceased, sworn 16 June 2016 (Exhibit A);
(b) Philip Challis, Helen’s brother and the executor of her will, dated 31 August 2016 (Exhibit B);
(c) Samantha Louise Blockley, stepdaughter of the deceased, sworn 28 September 2016 (Exhibit C);
(d) Jane Hall, stepdaughter of the deceased, sworn 28 September 2016 (Exhibit D);
(e) Nicholas Rodger Oliver Thompson, stepson of the deceased, sworn 30 September 2016 (Exhibit E).
(f) There were some objections to some of the affidavit material. Where necessary, these objections are dealt with below.
Submissions
The central submissions of each party are as follows.
Plaintiff’s Submissions
First, the plaintiff says that clause 2.3 is valid and operates here. The words ‘ceases to use or reside permanently in the property’ include cessation of use or residence because of death.
The plaintiff then submits that, on the proper construction of the will read as a whole, it provides a direction to:
(a) pay two-thirds of the fund to the estate of Helen Blockley;
(b) apply the remaining one-third of the fund in payment of the remaining pecuniary legacies set out in paragraph 2.3, amounting to $105,000; and
(c) to pay the balance of that one-third part of the fund to the estate of Helen Blockley as part of the residual estate.
The plaintiff says that the named beneficiaries are entitled to receive only the pecuniary legacy nominated for him or her.
The plaintiff submits that the terms of the will should be read as they appear on their face, with one exception. The exception relates to clause 2.3, in which the plaintiff says that the words ‘divided between’ should be struck out and replaced by the words ‘applied in making payments to’, so that the clause reads as follows:
If the said HELEN BLOCKLEY ceases to use or reside permanently in the Property, the Property shall be sold and the net proceeds of such sale shall be distributed as to two thirds to the said HELEN BLOCKLEY if she survives me for 30 days and the balance shall be
divided betweenapplied in making payments to the following beneficiaries who survive me and attain the age of 18 years:(a) …
The plaintiff says that his construction of the will derives from clause 2.4, which provides that Helen could offer to pay the pecuniary legacy to any of the beneficiaries at any time, and this would discharge their entitlement under the will. Indeed, as noted above, Helen did that with respect to Mitchell in paying his bankruptcy in trustee $15,000.
The plaintiff says that s 36 of the Wills Act is not applicable. Direct evidence of a testator’s intention is admissible at common law only in the case of genuine equivocation, not to resolve a mere ambiguity. This remains the only basis for admission of such direct evidence under the legislation. Alternatively, if s 36 is applicable, s 36(1)(c) and 36(2) are applicable, not s 36(1)(b): there is no ambiguity or uncertainty on the face of the will. Further, even if the evidence contained in the second defendant’s affidavits is admissible, it does nothing to resolve the matter. That evidence does not shed light on what would happen to the one-third share of the payment proceeds after payment of the legacies.
First Defendant’s Submissions
The first defendant supports the contentions of the plaintiff. The first defendant says further that the individual words in clause 2 of the will should be considered by reference to their general meaning in the context and overall scheme of the will to ascertain the intention of the deceased. That intention is manifested in the words of the will.
The first defendant says that Helen’s death is a permanent cessation of her use of, or residence in, the property. The whole of clause 2.3, including the pecuniary legacy sub-clauses, will not apply if ‘cease’ does not include death. Clause 4 then applies and the remainder of the estate should go to the residuary estate; that is, to Helen’s estate.
The first defendant says that even if the second defendant’s extrinsic evidence of the testator’s intention is admitted, it does nothing to advance her case. The first defendant also states that, while the deceased was under heavy medication when he signed his will, there has never been any challenge to the validity of the will.
The first defendant notes that even if the estate passed to Helen by way of intestacy, she would get the first $100,000 from the sale of the property and one third of the statutory residue together with interest upon the statutory legacy paid.
Second Defendant’s Submissions
The second defendant submits that the will is uncertain on its face and s 36(1)(b) of the Wills Act applies. The second defendant says this uncertainty arises for two reasons. First, no express words in the will govern what would happen if Helen enjoyed the use of the property for the whole of her life. Second, if the property was sold after Helen’s death, the second defendant questions what would happen to the proceeds of sale.
Applying the armchair principle, the following facts need to be taken into account regarding the deceased:
(a) the property was his major asset;
(b) the property had been owned by him and Anne as joint tenants from about October 1982;
(c) Anne had five children who were his stepchildren but whom he always referred to as his children and raised as his own, and the stepchildren regarded him as their father;
(d) Anne was the grandmother of nine grandchildren, and he was a proud grandfather to them;
(e) he had constructed a house on the property substantially by himself but with help from Anne, Mitchell, Nicholas, Samantha and some friends of him and Mitchell;
(f) the property was the family home and remained so until Anne’s death in 1992;
(g) when Anne was alive, both she and Nigel had told Jane and Nicholas that the property was to be left to ‘the kids’;
(h) he had married Helen on 10 March 1996 at the property and they had lived there after that time;
(i) in 1983, Helen had purchased and, as at September 2002, continued to own real property in Newport, in which Helen’s brother Ray Challis lived without paying rent or utilities;
(j) prior to his marriage, he had communicated the fact that Helen owned her own property to Samantha, in words the substance of which was ‘don’t worry she owns her own house in Newport’;
(k) he became unwell in about 2001 and was diagnosed with bladder cancer; and
(l) he was heavily medicated on methadone and struggled to remain awake when Samantha had visited him over the last few months.
The second defendants submits that, applying s 36(1)(c) of the Wills Act, extrinsic evidence of the deceased’s testamentary intention may be admitted. In about August 2002, the deceased told Jane that the property was meant to go to ‘you kids but Helen wants to stay living there’, that he had to make sure Helen would be looked after, and that Helen might not be able to manage the property when she is older and ‘might have to sell it to move somewhere else, she will need some of the money to do that’.[22] In about September 2002, the deceased spoke with Nicholas about his will and said his intention ‘was to make sure that Helen had a right to live at [the property] as long as she wanted without being asked or being forced to move out against [her] wishes’, and that when she ‘moves out or passes away the house is for the children to inherit.’[23]
[22]The Hall affidavit [14].
[23]The Thompson affidavit [12].
Clause 2.1 allows Helen to stay in the property ‘for as long as she wishes’. The words ‘cease to use or reside permanently’ require Helen to form a wish or desire or intention to reside elsewhere and never resume personal residence of the property. The sub-clause does not operate in a situation where Helen died while continuing to reside in the property: Helen could not logically form a wish, desire or intention after death. In essence, the second defendant says that voluntary cesser is required for the clause to operate, and that death (a form of involuntary cesser) is not sufficient.
If clauses 2.3 and 2.4 do not operate, what should happen to the proceeds of sale? The second defendant answers that the following clause should be implied into the will as sub‑clause 2.6:
If upon the death of the said HELEN BLOCKLEY she has not ceased to use or reside permanently in the Property, then, subject to clause 5, I give, devise and bequeath:
(a)the two thirds of the property or the proceeds of sale she would have received under sub-clause 2.3 if she had ceased to use or reside permanently in the property during her lifetime to Mitchell Blair Blockley, Samantha Louise Blockley, Nicholas Roger Thompson and Jane Hall as tenants in common in equal shares, subject, however, to the condition that they repay to Helen’s estate any amount paid by Helen during her lifetime pursuant to sub-clause 2.4 to any beneficiary named in sub-clause 2.3; and
(b)a one third share of the property or the proceeds of sale equally to such of the beneficiaries named in sub-clause 2.3 as had not received a payment from Helen during her lifetime of the amount payable to them, such one third share to be paid to each beneficiary in the proportion that their respective amount payable to each of them bears the total of the amounts payable to the aggregate of them.
Alternatively, the second defendant says that clause 2.2 says no more than that, if the payment of the fixed amount is made during Helen’s lifetime, a fixed sum shall not be paid again upon the sale of the property. It says nothing about the circumstances that have now occurred. It says that clause 2.3 intends to deal with the bequest of the whole of the net sale proceeds of the property. It does not intend that part of it be dealt with by clause 2.3 and a remaining part by the residue estate (clause 4). Further, as a matter of the express language employed, clause 2.3 bequeaths to Helen no more than two-thirds of the net sale proceeds of the property.
As a matter of inference or implication, as at the date of the will, the balance of the property proceeds, that is the remaining one third of the net proceeds of sale, are intended to be dealt with by the gift of pecuniary legacies. The testator must have had in mind that the total of the pecuniary legacies ($105,000) would amount to one-third of the value of the property, though it is conceded there is no evidence of this. In the event, the one-third figure exceeded the total value of the legacies.
The one-third amount should be applied as follows. First, in payment of any fixed pecuniary legacies payable, but not paid. Second, as to any surplus, in payment to each pecuniary legatee pro rata in accordance with the proportion which his or her unpaid entitlement bears to the aggregate of the legacies.
It is conceded that the validity of the will was not challenged. The evidence as to the heavy medication of the deceased at the time of making the will is one consideration under the armchair principle.
Finally, the second defendant says that the will was drawn by Mr Sheedy, solicitor, and there is no evidence from him. Therefore, an adverse inference should be drawn.
Consideration
Ray Maxwell Sheedy was the solicitor of the deceased and attended upon the deceased for signature of the will.[24] Mr Sheedy presumably drafted the will as he is also a signatory to it. Mr Sheedy was not called to give evidence by the plaintiff. The second defendant argued that an inference be drawn that no evidence of Mr Sheedy would have assisted the plaintiff’s case. In my view, that is unnecessary here: from the reasons which follow, it will be clear that extrinsic evidence is not necessary to resolve the questions in this case in any event.
[24]The Thompson affidavit [13].
Although there was evidence that the deceased was under heavy pain medication at the time he signed his will,[25] the validity of the will has never been challenged. Given that it has been more than 14 years since the death, and more than nine years since probate was granted, there has been much time to bring such a challenge. The second defendant’s submission that medication of the deceased is a relevant consideration by way of the armchair principle is rejected. As discussed above, the armchair principle ‘allows the court to place itself in the position of the testator at the time of executing the will and take into account all of the circumstances actually known to the testator when the will was made’ [emphasis added].[26] The health of the deceased at the time he made the will may go to the question of testamentary capacity, but appears (in this case, at least) to be irrelevant under the armchair principle – it does not go to resolving an ambiguity in the will.
[25]The Thompson affidavit [13]; the Hall affidavit [18]; Samantha’s affidavit [8].
[26]Jepson v Bowman [2014] VSC 590 [8].
The plain words of the will must be read in light of the circumstances of the deceased. The circumstances suggested by the second defendant are not all relevant. Certainly circumstances (a)-(f) and (h) listed above in their contentions are relevant. The others are not and appear directed towards the testator’s intention.
Two questions fall for determination here. First, whether clause 2.3 applies. Second, if it does apply, what that clause requires (operating together with the remainder of the will).
The second defendant argues that clause 2.3 does not apply here, because ‘ceases to use or reside permanently’ in a property requires voluntary cesser of residence, and cesser by death is not voluntary. I reject this submission: clause 2.3 does apply.
Williams on Wills makes the following comment on this situation:[27]
It depends upon the terms of the condition whether a cesser of residence incurs a forfeiture of the gift. If the condition is only against voluntary cesser, a cesser by the act of a third party, as on bankruptcy or execution, will not affect the gift, but, unless some such words are included, such cesser causes a forfeiture.
The editor cites cases which support this proposition. What is, perhaps, less clear from those cases is the situation in which the language of the will can be taken to require a voluntary element.
[27]Francis Barlow (ed.), Williams on Wills (9th ed, 2008), 388 [35.20].
In this respect, there were submissions made about Re Coxen (deceased); MacCallum v Coxen.[28] That case does not assist here. In that case, the right of residence was expressed to come to an end either upon death or upon cesser of residence. The question of whether death may constitute cesser of residence was therefore not one which could possibly have arisen for the Court in that case: the particular will expressly made the two possibilities mutually exclusive.
[28][1948] 2 All ER 492.
In this case, the phrase ‘ceases to use or permanently reside’ includes involuntary cesser; that is, cesser by way of death. There is nothing in the language of the will which requires a voluntary element. The ordinary meaning of the word ‘ceases’ would include the result of death. ‘Cease’ means ‘to stop’, ‘to come to an end’, ‘to die’ or ‘discontinue’.[29] Clause 2.3 does not include any words which require a voluntary cesser, such as ‘wish’. Clause 2.1 does use the word ‘wishes’, but the provision concerning cesser (cl 2.3) is not subject to clause 2.1. Rather, the opposite is true: clause 2.1 is expressed to be subject to clause 2.3.
[29]Macquarie Dictionary (6th ed, 2013); see also, Shorter Oxford Dictionary (1993).
The second question is: what does clause 2.3 require?
Clause 2.3 must be read with clause 2.4. Clause 2.4 makes it clear that the deceased wished to provide an early payout option. If Helen wished, and a particular beneficiary accepted, there could be an early payout of a pecuniary legacy. That would then discharge all of the beneficiary’s entitlements under the will. Mitchell was the only beneficiary to receive the early payout. Applying clause 2.4, he receives nothing further from the will.
In construing the will, there are two basic options. First, the one-third share can be distributed pro-rata in accordance with the proportion that each individual legacy bears to the total of the legacies. Second, as the plaintiff says, the one third can be applied in making payments in the amount specified in the legacies. The remainder of the one-third share falls to Helen as part of the residual estate.
The plaintiff’s interpretation is to be preferred here. The alternative pro rata distribution raises a number of problems. First, the language of the will is not consistent with a pro rata division of the proceeds. A pro rata division could have easily been delineated, with the proportion to go to each beneficiary spelt out. Instead, a dollar amount has been specified for each individual.
Second, if a pro rata division is accepted, what happens when a legatee is paid out early by Helen, as happened in the case of Mitchell? It is unclear whether the share which would have gone to Mitchell would then fall to Helen, or would increase the pro rata entitlement of the other legatees. In the latter case, a legatee entitled to 5/105 parts of the original pool would then be entitled to 5/90 parts after Mitchell is paid out his $15,000. This represents an increase in the effective entitlement of that legatee. This type of gain would increase each time another legatee accepted an early pay-out.
The pro rata division requires a complex amendment of the will to account for these difficulties. The specification of dollar amounts for each legatee is consistent with the one-third share being applied in making specific payments to each legatee in the named amount. The residue will then fall to Helen as part of the residuary estate.
Clause 2.3 should therefore be amended to read as follows (implied words are double underlined and deleted text struck out):
2.3If the said HELEN BLOCKLEY ceases to use or reside permanently in the Property, the Property shall be sold and the net proceeds of such sale shall be distributed as to two thirds to the said HELEN BLOCKLEY if she survives me for 30 days and the balance shall be
divided betweenapplied in making payments to the following beneficiaries who survive me and attain the age of 18 years:...
Uncertainty
There was argument before the Court as to whether there was an uncertainty in the will. To the extent that there is an uncertainty or ambiguity, such problems are resolved by the construction here, which gives effect to the words of clauses 2.3 and 2.4. No extrinsic evidence was necessary, either of the testator’s intention or otherwise.
The question of uncertainty arose because the second defendant asked the Court to consider evidence of the testator’s intention, which was said to favour a grant of the property to the children after Helen’s death. This is possible only if the uncertainty appears on the face of the will, as opposed to uncertainty which arises from surrounding circumstances.[30] To the extent that there is uncertainty in this case, that uncertainty does arise on the face of the will: that is, the will itself does not state clearly and unambiguously what is to happen to the money on Helen’s death while living in the property.
[30]Wills Act 1997 (Vic) s 36.
However, the evidence of the testator’s intention is unhelpful even if admissible. The suggestion that the testator intended the children to inherit the property is simply inconsistent with the words used in the will, which leave to Helen two-thirds of the estate and allow her to offer an early payment out to discharge other beneficiaries’ entitlements. People change their minds and the testator appears to have done so here. The evidence proffered of the testator’s intention is not useful or necessary for resolution of the questions in this case.
Conclusion
The pecuniary legacies should be paid to each of the named recipients in the amounts specified in the will, unless that legatee accepted an early payment from Helen under clause 2.4. The remainder of the one-third share of the property falls to Helen’s estate as part of the residuary estate of the deceased.
The parties are requested to confer as to the appropriate form of orders.
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