Carrington v Wallace

[2019] NSWSC 1301

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Carrington v Wallace [2019] NSWSC 1301
Hearing dates:	2 August 2019
Decision date:	27 September 2019
Jurisdiction:	Equity
Before:	Robb J
Decision:	(1) The Court proposes making the orders as set out in par [115] of these reasons for judgment.  (2) The parties should serve on the other parties and deliver to the Associate to Robb J any comments on the form of the orders that should be made within 14 days of the publication of these reasons for judgment.
Catchwords:	SUCCESSION — Wills, probate and administration — Proper construction and effect of testamentary dispositions SUCCESSION — Wills, probate and administration — Construction and effect of testamentary dispositions — Admissibility of extrinsic evidence — Ambiguity at common law — Ambiguity under s 32 of the Succession Act — Ambiguity vs equivocation — No relevant ambiguity found
Legislation Cited:	Administration of Justice Act 1982, (UK) Succession Act 2006 (NSW) Wills Act 1968 (ACT) Wills Act 1997 (Vic) Wills Act 2008 (Tas)
Cases Cited:	Allgood v Blake (1873) LR 8 Ex 160 Dore v Billinghurst [2006] QCA 494 Fell v Fell (1922) 31 CLR 268; [1922] HCA 55 Hobhouse v Macarthur-Onslow [2016] NSWSC 1831 James v Douglas [2016] NSWCA 178 Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60; [1925] HCA 18 Lockrey v Ferris [2011] NSWSC 179 Lubke v Claridge [2016] TASSC 44 Marley v Rawlings [2015] AC 129; [2014] UKSC 2 Re Williams (deceased); Wiles v Madgin [1985] 1 All ER 964 The Estate of William John Gilbert [2017] NSWSC 1138
Texts Cited:	GE Dal Pont and KF Mackie, Law of Succession (2nd ed, 2018, LexisNexis Butterworths) National Committee for Uniform Succession Laws Report (December 1997) Sir K Lewison and D Hughes, The Interpretation of Contracts in Australia (2012, Thomson Reuters (Professional) Australia Limited)
Category:	Principal judgment
Parties:	Mischa Grace Carrington (first plaintiff/first cross-defendant) Dean Edward Carrington (second plaintiff/second cross-defendant) Matthew Gary Wallace (first defendant/first cross-claimant) Ashley Joseph Carrington (second defendant/second cross-claimant)
Representation:	Counsel: S Bell (plaintiffs/cross-defendants) J D Cook (defendants/cross-claimants)   Solicitors: SR Law (plaintiffs/cross-defendants) Minter Ellison (defendants/cross-claimants)
File Number(s):	2018/238530

Judgment

1. This case raises a question of the proper construction of the will dated 18 April 2015 of the late Edward Joseph Carrington, who died on 19 December 2015.

The parties

2. The plaintiffs are two of the children of the deceased, Mischa Grace Carrington (formerly known as Michelle Anne Wallace) and Dean Edward Carrington.

3. The defendants are the executors and trustees of the will of the deceased, under a grant of probate made by this Court on 27 May 2016.

4. The first defendant, Matthew Gary Wallace, was formerly married to the first plaintiff before their divorce in about 2011. The second defendant, Ashley Joseph Carrington, is the third child of the deceased.

The claims

5. The plaintiffs commenced these proceedings by summons filed on 3 August 2018. By that summons, the plaintiffs seek the following relief:

1. A declaration that each of the Plaintiffs is each entitled to one third of the Estate of Edward Joseph Carrington remaining after payment of the gifts specified in clauses 4.1 and 4.2 of the will of Edward Joseph Carrington dated 18 April 2015.

2. An order that the Defendants pay to each of the plaintiffs one third of the Estate of Edward Joseph Carrington remaining after payment of the gifts specified in clauses 4.1 and 4.2 of the will of Edward Joseph Carrington dated 18 April 2015.

3. In the alternative:

a. An order that the Defendants be removed as executors and trustees of the estate of Edward Joseph Carrington; and

b. An order that the Plaintiffs, or any other suitable person or persons as determined by the Court, be appointed as administrators and trustees of the estate of Edward Joseph Carrington.

4. An order that the Defendants personally pay the Plaintiffs' costs on an indemnity basis.

6. The defendants filed a cross-summons in which they sought the following relief:

1. That the Court provide opinion, advice or direction to the cross-claimants in relation to the following questions at paragraphs 2 to 6 below, pursuant to rule 54.3 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), in relation to the Will of Edward Joseph Carrington (the deceased) dated 18 April 2015 (the Will).

2. Whether on a true construction of the Will, Ashley Joseph Carrington, Mischa Grace Carrington and Dean Edward Carrington:

(a) are entitled to one-third of the residue of the deceased's estate (the Estate) respectively; and

(b) if they are, whether that interest is an absolute, vested and indefeasible interest.

3. Whether the cross-claimants are justified in distributing to the cross-defendants their entitlement to the deceased's estate in accordance with the 'Saunders v Vautier' principle.

4. If the answer to 3 above is yes, which property of the Estate is required to be transferred to the cross-defendants.

5. If the answer to 2(a) and/or (b) is no, whether the cross-claimants are justified in defending the proceedings commenced by the plaintiffs/cross-defendants.

6. If the answer to 2(a) and/or (b) is no, a declaration that the cross-claimants as executors of the Estate be at liberty to distribute the Estate in accordance with the determination of the Court in paragraph 2 above.

The will

7. It is appropriate to begin by considering the relevant provisions of the will of the deceased. The will was prepared by Page Seager Lawyers of Hobart and Melbourne.

8. By clause 2.1, the deceased appointed the defendants to be his executors, and by clause 2.2, the deceased appointed his executors as the trustees of each trust under the will.

9. Clause 3.1 required the executors to hold the deceased's estate on trust, subject to the powers set out in the will, and, after selling, calling in or converting into money any part of the estate, and paying all of the deceased's debts and testamentary expenses, to deal with the balance of the estate as provided in the following clauses of the will.

10. By clause 4.1, the deceased left a legacy of $50,000 to his partner. That legacy has been paid, and need not be considered further.

11. Clause 4.2 of the will provided as follows:

In respect to my grandchildren, I would like to give each of my 8 grandchildren a small amount, maybe $2,000, but leave the determination of this to the beneficiaries noted in clause 5.2 in their absolute discretion.

12. The provisions of the will that are most relevant to the determination of this dispute are as follows:

5. DIVISION AND DISTRIBUTION OF BALANCE OF ESTATE

5.1. My Executors must divide the balance of my Estate not already dealt with under the preceding clauses of this Will into one or more equal parts or sections and hold those parts or sections on trust in accordance with Part B of this Will, and dispose of those parts or sections as I have directed in this clause.

5.2. Each of my children, Ashley, Michelle Anne Wallace (Michelle) and Dean Edward Carrington (Dean) who survive me are to receive one equal part of the balance of my Estate, subject to clause 6.

5.3. If any of Ashley, Michelle or Dean do not survive to attain a vested interest in my Estate then the remaining children are to receive one equal part of the balance of my estate.

6. REQUEST PROVISION

I request that my Executors distribute the residue of my Estate to my beneficiaries by paying to each of my beneficiaries distributions (to be determined by the Executors in their absolute discretion) up to a maximum total amount of $50,000.00 per annum until there are no funds remaining.

Preliminary matters

13. Before I describe the issue as to the proper construction of the will of the deceased that has arisen, and the positions taken by the parties as to how the construction issue should be determined, it will be convenient to refer to a number of preliminary issues that have arisen in relation to the proper administration of the deceased's estate, and how those issues have been dealt with during the course of these proceedings.

The effect of clause 4.2

14. First, there is an issue as to the effect of clause 4.2 of the will of the deceased.

15. Apparently, the grandchildren of the deceased who are also the children of the plaintiffs have been paid $2,000 each by the defendants. The four children of Ashley Carrington have not been paid the same amount, although an amount of $100 each has been allowed for them in the estate summary. Relevantly, the beneficiaries noted in clause 5.2 of the will, being the three children of the deceased, have not met to exercise their absolute discretion as to whether or not to pay any particular amounts to the grandchildren of the deceased under clause 4.2 of his will.

16. The position adopted by the plaintiffs is that they are content to resolve with Ashley Carrington for $2,000 to be paid to each of his children, so that in practical terms it is a matter for Ashley as to whether those payments should be made.

17. The real concern of the plaintiffs is that, until the three beneficiaries have exercised their power in clause 4.2 one way or another, the "balance" of the deceased's estate for the purposes of clauses 5 and 6 of the will cannot be determined. Technically, the result would be that the final administration of the will would be impeded by the failure of the beneficiaries to exhaust their power in clause 4.2 in relation to the grant of small legacies to the deceased's grandchildren.

18. It will be appropriate to preface my description of the defendants' response to this issue by noting that, during the hearing, the Court raised the need for the parties to address the resolution of the outstanding problems in the administration of the estate in a manner that allowed the estate to be administered as efficiently and inexpensively as possible. The possibility that additional costs would be incurred if the defendants were replaced by an independent executor was of particular significance to that issue. It is sufficient to note, as will be explained more fully below, that the parties all adjusted their positions to facilitate the completion of the administration of the estate. In response, the Court offered to make an order granting leave to the parties to apply in relation to any further issues that required the consideration of the Court for the purpose of the proper completion of the administration. In short, the parties will attempt to resolve the outstanding practical problems cooperatively, but, if they cannot, they will have leave to apply to the Court. That approach may lead to all problems being resolved in the most cost efficient manner possible, once the Court has determined the primary construction issue that is in contention.

19. Returning to the effect of clause 4.2 of the will, counsel for the defendants stated during the hearing that the defendants would not take the stance that the failure of clause 4.2 to be fully implemented prevented the ascertainment of the residue for the purpose of the administration of clauses 5 and 6 of the will. Counsel did not elaborate what the practical effect of the position announced by the defendants would be.

20. Strictly, the amount of the residue cannot be ascertained until the beneficiaries under clause 5.2 have exhausted their power in clause 4.2 to determine the amount of the gifts that should be made to the grandchildren. The practical effect of the stance announced by the defendants is that Ashley Carrington will have to cooperate with the plaintiffs within a short time to agree, one way or another, whether an appropriate amount should also be paid to his children. I will make an appropriate order to that effect at the end of these reasons for judgment.

21. If the issue is approached sensibly, the real question is whether, in fairness, the children of Ashley Carrington should be paid the same amount of $2,000 as has been paid to each of the children of the plaintiffs. The plaintiffs will agree to a determination to that effect being made. As the power vested in the beneficiaries is a joint one, it must be exercised unanimously. Consequently, as a practical matter, the only question is whether Ashley Carrington wants his children to get the same gifts as the plaintiffs' children. If he does, the plaintiffs will join him in making that resolution. If he does not, that will be the end of the matter. There is no reason why this outstanding question cannot be dealt with promptly, within, say, seven days, by communication between the parties' respective solicitors, after Ashley Carrington has determined his position.

Issues concerning the value of the residue

22. The next set of preliminary issues arises in relation to the determination of the value of the residue of the deceased's estate, and the getting in of the assets. Although probate of the will was granted on 27 May 2016, the defendants have not yet gotten in all of the assets and converted them into money. Consequently, the defendants are not in a position to divide the balance of the estate as required by clause 5.1 of the will, or to pay it to the plaintiffs and the second defendant in accordance with clauses 5.2 and 6.

23. The plaintiffs initially claimed that a subsidiary consequence of the way that the defendants have administered the deceased's estate to date is that it has given rise to actual and potential conflicts of interest in the defendants that justify the Court making appropriate orders that lead to their replacement as executors and trustees of the estate.

(a) Debt owed by first defendant

24. The first issue that arises is in respect of an item in the inventory of property being a loan of $50,342.72 described as being owed by the first plaintiff and the first defendant to the deceased at the time of his death. The plaintiffs contended that the first defendant had accepted that he alone was responsible for the repayment of the debt, and that the first plaintiff had no liability in respect of it. The defendants did not contest that assertion.

25. However, there was some evidence that suggested that the defendants believed that there was evidence that justified a conclusion that the deceased had forgiven the debt owed to him by the first defendant before his death, in a manner that had the effect that the debt was no longer payable.

26. The plaintiffs submitted that, if the defendants raised an issue as to whether or not the debt remained payable to the estate by one of them, then a conflict of interest necessarily arose that required the Court to make appropriate orders that the defendants be replaced as executors and trustees of the estate.

27. The defendants responded to this claim by acknowledging in open court that the debt was payable by the first defendant and indicating that it would be repaid forthwith.

28. That being the case, the Court will make an order in due course noting that outcome. As a practical matter, this issue will therefore cease to be a basis of any contention that the defendants should be replaced as executors and trustees.

29. There may remain a question as to whether the first defendant should have acknowledged that he was obliged to repay that debt earlier in the proceedings. That is an issue that may be relevant to the costs orders that should be made. It need not be considered further, as the Court indicated during the course of the hearing that it would make provision for the parties to make submissions concerning the appropriate costs orders to be made, after the Court had published its judgment on the principle question of construction.

(b) The opal collection

30. The next issue concerning the realisation of the deceased's estate concerns the deceased's opal collection, which was valued in the inventory of property at $18,790. The opal collection has not yet been sold. In the Summary of Position prepared on behalf of the estate the opals have been valued at $9,000 as at 30 November 2018, 31 May 2019 and 26 July 2019. The plaintiffs complain that there has been no explanation for the apparent reduction in the value of the opals and, furthermore, that there is no reason why the opals should not have been sold by now.

31. At the hearing, in response to this complaint, counsel for the defendants informed the Court that the defendants would realise the value of the opals by an appropriate sale process as soon as possible. If a proper sale process is adopted, then it is likely that the sale price will resolve any doubt concerning the true value of the opals. This is a matter that will be dealt with in the orders that are made by the Court.

(c) Sale of real property

32. The third issue concerning the value of the deceased's estate concerns the money realised from the sale of the principal asset of the estate, being the deceased's real property known as 14 The Wheelhouse, Manyana in this State. The property was given an estimated value of $480,000 in the Inventory of Property.

33. The property has been sold by the defendants to Ashley Carrington. As Ashley is one of the executors and trustees, ordinarily a question would arise as to the propriety of the sale. However, clause 11.1(q) of the will provides:

11.1. My Executors and the Trustees of any trusts established by the terms of my Will, have the following specific powers:

…

(q) To purchase all or any part of an Asset of my Estate at a value determined by a qualified valuer and on terms that would be granted to an arm's length purchase from my Estate…

34. The evidence before the Court in respect of this issue was not comprehensive. That may be because the question of whether the property had been sold to Ashley in contravention of the will was not strictly an issue in the proceedings. The plaintiffs only relied upon the evidence concerning the issue to support their claim for an order replacing the defendants as executors and trustees under the will. This claim was supported by the argument that there was sufficient evidence to prove that there was an issue about whether the property had been sold to Ashley in contravention of the will and at an undervalue, and, to the extent that that was so, the defendants had a conflict of interest and could not be relied upon to make a proper judgment as to whether to institute proceedings against Ashley or, if proceedings were instituted, to pursue those proceedings objectively and diligently.

35. The plaintiffs' claim was based upon the suggestion that an independent valuation of the property, as required by clause 11.1(q) of the will, had been obtained in January 2016, which valued the property at $480,000. It was said that the property was sold to Ashley in February 2017 for $465,000. The plaintiffs suggested that the provision in the will had not been complied with because the price was less than that determined by the qualified valuer, and, further, that, for the valuation to be effective, it had to be prepared as at the date of sale, not some 13 months earlier. The plaintiffs submitted that the value of the property may have increased over those 13 months.

36. It may be noted that the issue of the sale of the property is dealt with in various places in the communications between the parties that were in evidence.

37. There is a suggestion in letters from the plaintiffs' solicitors to the defendants dated 14 September 2016 and 21 October 2016 that the plaintiffs would consent to the property being sold to Ashley for a price of $465,000, but only on condition that the net proceeds of sale were distributed between the three beneficiaries on settlement. Apparently, the defendants did not accept the condition. An email from the first defendant to the plaintiffs' solicitor on 4 November 2016 suggests that the price of $465,000, including contents, was the correct price because clause 11.1(q) of the will required that the terms of the contract be the "terms that would be granted to an arm's length purchase". The suggestion was made that the price paid by Ashley was consistent with the price that would be paid by an arm's length purchaser because a sale to such a purchaser would have subjected the estate to additional costs that would not be incurred for a sale to Ashley.

34. The Court has not been required to decide whether or not the circumstances in which the property was sold to Ashley constituted a contravention of the defendants' duties as executors and trustees under the deceased's will, or, if so, what the appropriate remedy would be. In that circumstance it would not be appropriate for the Court to make any observation concerning that issue.

35. It appears that there may be a live issue as to whether the circumstances in which the defendants sold the property to Ashley involved a breach of duty by them. However, it does not necessarily follow that an order should be made by the Court replacing the defendants as executors or trustees under the will. Particularly if all other issues in the administration of the estate can be resolved by the judgment in these proceedings, or by the terms of the will being otherwise administered, it may not be warranted for the estate to incur the costs of the appointment of any independent executor and trustee. It does not seem to be appropriate, given the contest between the beneficiaries, for either of the plaintiffs to be appointed in substitution for the defendants.

36. If, following judgment in these proceedings, the plaintiffs make a positive decision to institute a claim for breach of duty by the defendants, it should be possible for the Court to make appropriate case management orders that would enable that issue to be determined in these proceedings between the plaintiffs, on the one hand, and the defendants on the other, who are the natural claimants and contradictors. Provided in the first instance that the defendants are not permitted to fund the litigation out of the assets of the estate, the identity of the executors and trustees should be immaterial to the resolution of the claim.

37. This issue will be dealt with in the orders made at the end of these reasons for judgment.

(d) Consequences of need for equal distribution of residue

42. The final major issue concerning the circumstances of the estate is that the evidence has established that the defendants have made three payments of $50,000 out of the estate to Ashley in the purported exercise of their discretion under clause 6 of the will. The last of these payments was made after the commencement of the proceedings. The total amount paid is therefore $150,000.

43. The plaintiffs say that, if they succeed in their claim as to the proper construction of the relevant terms of the will, they will each also be entitled to be paid $150,000. In theory, the defendants should be able to make that payment out of the $347,822.28 disclosed in the estate's Summary of Position as being the estimated remaining balance in the estate available for distribution to the three beneficiaries, who are the children of the deceased.

44. However, as the plaintiffs pointed out during the hearing, it may be necessary for the Court to make orders for the payment of the legal costs of the parties, or some of them, out of the estate. After such costs are paid, there may be an insufficient balance in the estate to enable the defendants to pay $150,000 to each of the plaintiffs.

45. This provided the final basis for the plaintiffs' argument that the Court should make an order replacing the defendants as executors and trustees under the will. The plaintiffs submitted that the defendants could not be relied upon to require Ashley to repay any part of the residue distributed to him that may be necessary to ensure that all three beneficiaries share equally in the residue, and that they would have a conflict of interest.

46. The defendants responded to this argument by their counsel advising the Court, during the hearing, that the defendants would act to ensure that Ashley repaid into the estate any amount necessary to ensure that the residue could be distributed equally to the three beneficiaries, if the finding by the Court on the construction issue made that step necessary.

47. Counsel for the plaintiffs then took instructions and informed the Court that the plaintiffs would withdraw their claim in prayer 3 of their summons for an order replacing the defendants as executors and trustees under the will, provided that, in consequence of the leave to be granted by the Court, the plaintiffs would remain able to seek any necessary further orders in these proceedings to implement the terms of the will, including, if necessary, to renew their claim for an order replacing the defendants. The defendants agreed to those terms. Accordingly, an appropriate order will be made at the end of these reasons.

Deferral of application for replacement of executors

48. It will therefore not be necessary in this judgment to consider further the question of the replacement of the defendants. That question will, in practical terms, be deferred, as it may not be necessary to subject the estate to the costs that will follow the replacement of the defendants. It will also not be necessary for the Court to determine whether, as submitted by the defendants, the only course available to the Court would be to revoke the grant of probate to the defendants and make a new grant of letters of administration to some other person; or whether, as submitted by the plaintiffs, it is appropriate to treat the defendants as trustees and to make an order replacing them as such.

Residual issues

49. I should record that there were a number of other issues concerning the administration of the deceased's estate that received peripheral mention. One was that the inventory of property states that the estate consisted of household chattels worth $3,535, which were apparently transferred to Ashley with the sale of the property. There may also be a dispute concerning the entitlement to some personal effects of the deceased, including watches. The position in relation to these potential disputes is not clear. The orders for the further case management of the proceedings should make provision for the parties to declare their position in relation to all remaining issues. It may be hoped that, once the principal construction issue is resolved, the parties may be able to reach agreement in relation to outstanding minor issues that would not normally warrant the cost of judicial resolution.

Dispute as to proper construction

50. It is now necessary to deal with the construction issue that requires the determination of the Court. I will first set out the contending positions adopted by the parties.

Plaintiffs’ contentions

51. The plaintiffs contend that the effect of clauses 5.1 and 5.2 of the will is that, as the three children survived the deceased (see clause 5.3), the will imposed upon the defendants a trust over the residue that required the defendants to hold one-third of the residue on a present vested trust on behalf of each child of the deceased, and that clause 6 only operated as a request of the deceased that authorised, but not commanded, the defendants to exercise a discretion as to the timing of the payments to each of the beneficiaries of the one-third of the residue to which each was presently entitled.

52. The plaintiffs then submitted that, by application of the rule in Saunders v Vautier (1841) 4 Beav 115, 49 ER 282 (Saunders v Vautier), as considered by the High Court in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98 at 118-121; [2005] HCA 53, the plaintiffs, as beneficiaries each entitled to a present one-third absolute beneficial interest in the residue, were entitled to require the defendants to transfer their entitlements to them immediately, notwithstanding the deceased's request in clause 6 of the will. The plaintiffs relied further on the decision of Bryson J (as his Honour then was) in Robertson v Allen [2003] NSWSC 848, particularly at [15]-[29], where his Honour considered the application of the rule in Saunders v Vautier in circumstances where there was an immediate gift of an absolute beneficial estate to a beneficiary under a will that entitled the executors to delay payment to the beneficiary.

53. It will not, however, be necessary for the Court to consider the application of the rule in Saunders v Vautier in this case, and I will not do so. The defendants, through their counsel, clearly informed the Court that the defendants accepted that, if the plaintiffs succeeded in their argument as to the proper construction of the relevant terms of the will, the terms of clause 6 did not stand in the way of the plaintiffs being entitled to require the payment to them of their individual one-third shares in the residue of the estate in accordance with the rule in Saunders v Vautier. Thus, the only question that the Court must determine is the construction issue.

54. I had thought, at the commencement of the hearing, that, as the defendants had not determined to make any payments to the plaintiffs, but had determined to make three individual payments of $50,000 to Ashley, it would be necessary for the Court to consider the application of the principle in Re Baden's Deed Trusts; McPhail v Doulton [1971] AC 424 (McPhail v Doulton), as to whether the defendants had properly performed their duty to exercise the discretion vested in them by clause 6 of the will. However, once the defendants advised the Court that they accepted that the plaintiffs would each be entitled to be paid immediately one-third of the residue, if their claim for the proper construction of the will succeeded, it became clear that the issue of whether the defendants had properly exercised their discretion would not arise.

Defendants’ contentions

55. The defendants' counter-submission focused on the fact that clause 5.2 of the will, which is the primary source of the plaintiffs' claim to be entitled to each receive one equal part of the residue of the deceased's estate, is expressed to be "subject to clause 6". According to the defendants, the effect of the request in clause 6 is to vest in the defendants, as executors, a power in their absolute discretion to make determinations as to whether or not to distribute the residue of the estate to the beneficiaries by paying to each of them distributions up to a maximum total amount of $50,000 per annum, until there are no funds remaining. The defendants specifically submitted that clause 6 was the dominant provision, and that it gave the defendants an absolute discretion to determine how the balance of the deceased's estate was to be distributed. That, according to the defendants, extended to giving them an absolute discretion to resolve to pay the whole of the residue, in maximum amounts of $50,000 per annum, to Ashley, and to resolve to pay nothing at all to Mischa and Dean.

Principles of construction

56. There was no contest between the parties concerning the principles that the Court is required to apply in determining the proper construction of the terms of the will. It will be appropriate to set out briefly the principles of construction that are of particular relevance to the issue in dispute in this case.

57. As stated in GE Dal Pont and KF Mackie, Law of Succession (2nd ed, 2018, LexisNexis Butterworths) (Law of Succession) at [8.4]:

The fundamental rule in construing the language of a will is to give the words used the meaning that, having regard to the will construed as a whole, the testator intended. The question is not what the testator meant to do when making the will, but what the written words used mean in their context. In other words, the inquiry is not into the ‘subjective’ intention of the testator, but rather his or her intention ‘expressed’ by the terms of the will. Again, in the words of Lord Romer in Perrin v Morgan [1943] AC 399 at 420:

I take it to be a cardinal rule of construction that 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.

…

58. Section 6(1)(a) of the Succession Act 2006 (NSW) (Succession Act) has the effect, relevantly, that a will is not valid unless it is in writing. That requirement would be undermined if the Court searched for and gave effect to the subjective intention of the testator not found in the meaning of the words used.

59. As I have discussed in Hobhouse v Macarthur-Onslow [2016] NSWSC 1831 at [446]-[449], if a testator relies upon another party to express the testator’s intentions in writing, the Court will give effect to the wording of the will on its proper construction, even if by some error or mistake the wording does not have the effect intended by the testator. As McMurdo J observed in Dore v Billinghurst [2006] QCA 494 at [63]: “…The required knowledge and approval [of the testator] is of the contents of the will rather than a knowledge of its legal effect. So there could be cases where the testator knows and approves of the words in his will, thereby making it valid, although it is not what he intended in its effect…” This principle is another manifestation of the requirement that, for a will to be valid, it must generally be in writing. This principle is of some significance in the present case, as the defendants sought to tender evidence of the deceased’s subjective intention in making the will. The tender was rejected, but the evidence, if admitted, would suggest that the solicitor who prepared the deceased’s will did not succeed in giving effect to his subjective intention.

60. There has been common acceptance of 10 principles stated by Isaacs J in Fell v Fell (1922) 31 CLR 268, 273–275; [1922] HCA 55. Of those principles, the following are of particular relevance to the present case (omitting citations):

1.“Every will must by law be in writing, and it is a necessary consequence of that law that the meaning must be discovered from the writing itself, aided only by such extrinsic evidence, as is necessary in order to enable us to understand the words which the testator has used”…

2. “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”…

…

5. “We cannot give effect to any intention which is not expressed or plainly implied in the language of “the “will“…“You have no right to fancy or to imply, unless there be something within the four corners of the will which is not only consistent with the implication you make, but which could hardly stand, if at all, in the will, without that implication being made. That is what is called necessary implication, and legitimate implication, in contradistinction to gratuitous, groundless, fanciful implication”…

…

8. “There are two modes of reading an instrument: where the one destroys and the other preserves, it is the rule of law, and of equity, following the law in this respect (for it is a rule of common sense…), that you should rather lean towards that construction which preserves, than towards that which destroys…”

61. The defendants placed particular emphasis on Isaacs J’s eighth proposition, relying on Lockrey v Ferris [2011] NSWSC 179 and The Estate of William John Gilbert [2017] NSWSC 1138. In the latter case, Emmett AJA said at [17]:

…A testator must be taken to have meant that the words used in the will should have some effect as they stand.

62. It is necessary to construe individual provisions in the will by reference to their context in the entire will: see Isaacs J’s second proposition above.

63. Words and phrases used in the will are to be given their ordinary meaning, unless there are indications that either the testator used them in different senses, or that the ordinary meaning would make no sense in the light of the surrounding circumstances, whereas secondary meanings do make sense: the Law of Succession at [8.6]-[8.13].

64. In James v Douglas [2016] NSWCA 178, Meagher JA (with whom Leeming and Simpson JJA agreed) said as follows at [19]:

At common law, evidence of what a testator intended in relation to the operation of a testamentary document was not admissible: Sherratt v Mountford (1873) LR 8 Ch App 928; Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 at 64. However, evidence of facts and circumstances known to the testator at the time the will was created could be taken into account in interpreting its language: King v Perpetual Trustee Co (Ltd) [1955] HCA 70; 94 CLR 70 at 78. That position was modified by s 32 of the Succession Act, and its predecessors in other jurisdictions: see Administration of Justice Act 1982 (UK), s 21; Wills Act 1968 (ACT), s 12B; Morgan v Moore [2000] VSC 94 at [19]–[32].

65. The reference by Meagher JA to the admission of evidence of facts and circumstances known to the testator at the time the will was created concerns what is sometimes called the ‘armchair principle’. Blackburn J, in Allgood v Blake (1873) LR 8 Ex 160, at 162, explained the armchair principle in the following terms:

…The general rule is that, in construing a will, the Court is entitled to put itself in the position of the testator, and to consider all material facts and circumstances known to the testator with reference to which he is to be taken to have used the words in the will, and then to declare what is the intention evidenced by the words used with reference to those facts and circumstances which were (or ought to have been) in the mind of the testator when he used those words…the meaning of words varies according to the circumstances of and concerning which they are used.

66. At common law, direct evidence of a testator’s actual testamentary intention is admissible in the construction of his or her will where an equivocation is found in the will. An equivocation arises where the testamentary language may be applied equally to each of two or more persons or things: see the discussion in the Law of Succession at [8.42]. Equivocation is perhaps a special form of ambiguity, in that the term used in the will applies equally to more than one person or item of property and the wording of the will and the available surrounding circumstances do not permit the Court to determine which of the alternatives was intended by the testator. In that limited case, evidence can be permitted of the testator’s subjective intention to enable the true meaning of the will to be determined.

67. It will be appropriate to consider briefly the effect of s 32 of the Succession Act, as the defendants sought to rely upon extrinsic evidence of the testator’s intention in this case. It will also be appropriate to provide a brief elaboration of the reasons why the Court rejected that evidence during the hearing. I will return to that issue below but, for the present, the section provides as follows:

(1)   In proceedings to construe a will, evidence (including evidence of the testator’s intention) is admissible to assist in the interpretation of the language used in the will if the language makes the will or any part of the will:

(a)    meaningless, or

(b)   ambiguous on the face of the will, or

(c)    ambiguous in the light of the surrounding circumstances.

(2)   Despite subsection (1), evidence of the testator’s intention is not admissible to establish any of the circumstances mentioned in subsection (1)(c).

(3)   Despite subsection (2), nothing in this section prevents evidence that is otherwise admissible at law from being admissible in proceedings to construe a will.

68. In the present case, none of the parties submitted that the deceased’s will contained any relevant ambiguity. The parties each proffered a construction of the relevant provisions based upon their view of the ordinary meaning of the words used by the deceased. However, the defendants each sought to give evidence of statements made to them by the deceased that constituted positive evidence of the deceased’s subjective intention and what the deceased wished to achieve by means of the execution of his will. The defendants urged upon the Court that it should receive the evidence, if only provisionally in the first instance, to prepare for the possibility that the Court might decide for itself in the determination of its judgment that the deceased’s will was in reality ambiguous. The Court rejected that submission.

68. It was clear, however, that, if extrinsic evidence of the deceased’s intention was admissible, that was not on the basis that any provision of the will was meaningless, but it was rather on the basis that the will was ambiguous on its face. The defendants did not suggest that the surrounding circumstances showed that the will was ambiguous.

69. The word “ambiguous” is itself capable of having different meanings. It is defined in the Macquarie Dictionary in the following terms:

adjective 1. open to various interpretations; having a double meaning; equivocal: an ambiguous answer.

2. of doubtful or uncertain nature; difficult to comprehend, distinguish, or classify: a rock of ambiguous character.

3. lacking clearness or definiteness; obscure; indistinct.

71. If this dictionary definition were adopted, ambiguity might exist in cases where the word or phrase used in the will did not have two (or more) primary meanings, each of which may be adopted without distortion of the language. The word or phrase may be ambiguous where its meaning is, for some reason, doubtful. See the discussion of ambiguity in the context of the interpretation of contracts in Sir K Lewison and D Hughes, The Interpretation of Contracts in Australia (2012, Thomson Reuters (Professional) Australia Limited) at Ch 8.

72. As the defendants did not identify any ambiguities in the relevant sense in the will in the present case, and as the parties did not deal with this issue in the submissions, it will not be appropriate for the Court to seek to resolve the meaning of the word “ambiguous” in the context of s 32 of the Succession Act in these reasons. The following observations may, however, be relevant to the resolution of this question.

73. It may be noted as being relevant to the intended meaning of “ambiguous” in s 32 of the Succession Act that the report of the National Committee for Uniform Succession Laws submitted in December 1997 (the Report), which was endorsed by the New South Wales Law Reform Commission in April 1998, said the following about the model provision that appears to have been the source of s 32 of the Succession Act:

6.32   To be ambiguous it must be possible to say of words in the will that they may mean (a) or (b) or perhaps (c), to any of which effect could be given. Extrinsic evidence is admitted to resolve whether the testator intended (a) or (b) or (c).

74. This approach suggests that ambiguity requires that the relevant word or phrase in the will has two (or more) meanings, each of which is capable of applying in the context without any distortion of the language used.

75. In Re Williams (deceased);Wiles v Madgin [1985] 1 All ER 964, Nichols J considered the effect of s 21 of the Administration of Justice Act 1982, (UK) which relevantly permitted extrinsic evidence, including evidence of the testator’s intention, to be admitted to assist in the interpretation of the will “in so far as the language used in any part of it is ambiguous on the face of it”. The testator had relevantly listed 25 persons into three groups, labelled with the numerals 1, 2 and 3 without any clear indication of the purpose of such grouping. His Lordship, at 967 and 968, found that the difficulty in construing the will was one of ambiguity in that “…at least two possible meanings is to be attributed to the use of the numerals 1, 2 and 3 in the context of this unusual will…” (emphasis added). That observation tends to suggest that it is not sufficient if the meaning of the words used in the will is merely doubtful.

76. In Lubke v Claridge [2016] TASSC 44, Brett J was required to determine the effect of a term in a will that purported to appoint “Brian Claridge Accounting” as executor. The evidence was that the testator’s accountant was a Mr Brian Claridge, who practised as a director of a company called Brian Claridge Accounting Pty Ltd. There was no business that traded under the name “Brian Claridge Accounting”. Mr Claridge was not the only accountant who practised in the conduct of the company’s business. Section 46 of the Wills Act 2008 (Tas) was in the same terms as s 32 of the Succession Act. His Honour found at [12] as follows:

…The nature of the ambiguity is that it is unclear, having regard to these circumstances, whether the intention of the testator was to appoint as executor Mr Claridge in his individual capacity, a business entitled “Brian Claridge Accounting”, which does not exist, or the company “Brian Claridge Accounting Pty Ltd”, which is, of course, is [sic] a separate person.

77. It seems that his Honour considered that the surrounding circumstances demonstrated that the description of the intended executor used by the testator was capable of having one of three different meanings. The learned authors of the Law of Succession suggest, at [8.45], that this decision supports the observation made by the authors that the Report envisaged that provisions in the terms of s 32 “serve to extend admissibility to all forms of ambiguity and not simply cover equivocation”. That seems to be correct, but the decision supports the term “ambiguous” having the meaning that the word or phrase in the will must be capable of having more than one meaning, without it being possible to determine the particular meaning intended by the testator on the basis of the wording in the will alone. Ambiguity in this sense is different from the concept of equivocation, because the latter refers to the case where a particular term refers equally to two or more possible persons or pieces of property: see the Report at [6.30]. In the sense used here, “ambiguous” means that the term has two possible meanings, when the testator could only have intended to adopt one of those meanings.

78. For completeness, it should be noted that s 36 of the Wills Act 1997 (Vic) and s 12B of the Wills Act 1968 (ACT) permit extrinsic evidence, including evidence of the testator’s intention, to be admitted in aid of the interpretation of the will where the language used is “ambiguous or uncertain”, so that the provisions are not limited to circumstances of ambiguity. It is sufficient to note that the Report at [6.33] suggests that uncertainty in this context means strict uncertainty, in the sense that the words are not capable of being given any meaning, so that mere doubt as to the meaning intended by the testator is not sufficient.

79. In the end, however, it is necessary to distinguish between ambiguity and mere difficulty of construction. The terms of a particular will may give rise to intense difficulty in construction because different aspects of the wording tend to direct the mind to different possible meanings. Different lawyers, including judges, may form inconsistent opinions about the true meaning of the words in a particular will. That does not necessarily mean that the will contains an ambiguity. As Isaacs J said in Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 78-79 (Knox CJ at 71 and Starke J at 84 making similar statements – footnotes omitted); [1925] HCA 18:

…As to construction, there is always one and only one true meaning to be given to fully expressed words. Sir Montague Smith, speaking for the Judicial Committee in McConnel v. Murphy, said: - “In questions of difficult interpretation, not only two, but frequently many constructions may be suggested. And, after all, there must be one true construction; and if that true construction can be arrived at with reasonable certainty, although with difficulty, then it cannot properly be said that there are two meanings to the contract.” Once there is established the full mutual expression of the agreement in English words, the construction of the document is, as Lindley L.J. says, a pure matter of law…

80. For the reasons given by Lord Neuberger in Marley v Rawlings [2015] AC 129; [2014] UKSC 2 at [20]-[21], the observations of Isaacs J apply equally in the context of the construction of wills.

81. The point is that a will is not ambiguous by reason only that it is difficult to determine its true construction. It is important that the distinction be carefully maintained because, otherwise, extrinsic evidence, including evidence of the actual subjective intention of the testator, will be too readily admissible to determine the testator’s testamentary intention, in a manner that is inconsistent with the fundamental requirement that the will be in writing, and the cardinal principle of construction that the testator’s intention is to be derived from the meaning of the words used in the will.

The proper construction of the will

82. For the reasons that have been explained above, the question in this case is whether the effect of the relevant provisions of the will is that, from the time the residue of the deceased's estate is determined, each of the children of the deceased becomes absolutely entitled to a one-third share in the residue held on trust for them by the defendants, or whether the real effect of the provisions is that each child does not have any present beneficial title to any part of the residue unless and until the defendants make a determination under clause 6 to pay a portion of the residue up to $50,000 in each year to that beneficiary.

83. If the former construction is the correct one, then each child will become entitled absolutely to a one-third share of the residue, but, subject to the application of the principles in Saunders v Vautier and McPhail v Doulton, each child would only receive distributions of her or his beneficial entitlement in accordance with determinations made by the defendants under clause 6. Unless some principle of law constrained how the defendants could exercise their discretion under clause 6, each beneficiary might only receive distributions of her or his entitlement in small amounts over many years, if ever. However, whatever determinations were made by the defendants concerning the amount of any distributions, the balance of each child's one-third share in the residue would remain that child's property, and would not be available to be distributed by the defendants to any other child.

84. On the construction of the will contended for by the defendants, each child would be entitled to nothing until the determination was made by the defendants under clause 6 in that child's favour, and, at the end of the day, the defendants could make annual determinations that led to the whole of the residue being distributed to one or more of the children in whatever manner the defendants saw fit.

85. The appropriate place to start a consideration of the proper construction of the deceased's will is to consider the effect of clause 5.1, which the deceased himself established as the starting position by reason of its position in the will.

86. Clause 5.1 is an explicit and mandatory instruction to the executors, who "…must divide the balance of my Estate not already dealt with under the preceding clauses of this Will into one or more equal parts or sections…" That is a clear instruction to the defendants to create separate equal parts of the residue, and is inconsistent with the defendants holding the whole of the residue on the basis of some indivisible trust. I understand the reference to “one or more” parts, rather than simply stating “three” parts, to have been made in order to cover the contingency that one or more of the deceased’s children could have predeceased him. Although clause 5.1 does not, by itself, mandate the number of equal parts, it does specifically require the executors to divide the residue into equal parts, and to hold those parts on trust. The balance of clause 5 deals with the disposition of the parts so held on trust. Clause 5.1 creates the beneficial interest in the beneficiaries, depending on who survives the deceased.

87. Clause 5.1 then instructs the defendants as to how they should hold the individual parts of the residue, in terms that they must "…hold those parts or sections on trust in accordance with Part B of this Will…" Part B contains the administrative provisions governing the trust. Although the administrative provisions determine how the defendants may deal with the property that they hold on trust, it was not suggested that any of those provisions is material to the present construction issue.

88. The primary relevance of this aspect of clause 5.1 is the specific instruction that the defendants must hold the individual equal parts of the residue on trust. In my view, the effect of clause 5.1, when read in conjunction with clause 5.2, is that, once the residue is determined, it is required to be held in equal third parts on trust. That is a very strong indication that each child was intended by the deceased to be beneficially entitled to one third of the revenue.

89. Clause 5.1 then obliges the defendants to "…dispose of those parts or sections as I have directed in this clause." This part of the will appears to me to mean that, once the defendants have established the trusts over three equal parts of the residue, what follows is to govern how they are to dispose of the money held on trust.

90. The primary significance of the use of the expression "this clause" is that it directs attention to clauses 5.2 and 5.3.

91. Clause 5.2 clearly provides that each of the deceased's children who survive him "…are to receive one equal part of the balance of my Estate, subject to clause 6."

92. Putting aside the proviso for the moment, clause 5.2 provides that each of the surviving children is to receive one equal part of the residue. When read with clause 5.1, the provision seems to establish that the defendants were required to divide the residue into equal parts, depending on the number of surviving children, to hold those parts on trust, and each child was entitled to receive her or his equal part of the residue.

93. The question, therefore, is whether the proviso, "subject to clause 6", was meant by the deceased to qualify the existence of each child's entitlement to a beneficial interest in the equal part of the residue held on trust for that child, or whether it only qualified the circumstances in which each child's beneficial share would actually be distributed to that child.

94. The latter of those alternatives is the more apt in accordance with the language of clause 5.2, as the expression "subject to clause 6" in terms qualifies the entitlement of each child "to receive one equal part of the balance" (emphasis added), rather than the entitlement to the equal beneficial interest created by clauses 5.1 and 5.2.

95. The plaintiffs submitted that the wording of clause 5.3 is immaterial, as each of the three children survived the deceased. The defendants submitted, conversely, that the effect in clause 5.3 of the words: "If…do not survive to attain a vested interest in my Estate" is that the provision is significant to the construction issue now being considered. The submission is that the addition of the words "to attain a vested interest in my Estate" means that not only does each child have to survive the deceased, but that survival is not enough. Each child also has to attain a vested interest by reason of determinations being made in favour of that child by the defendants in exercise of their discretion in clause 6.

96. The defendants supported this submission by noting that the deceased’s children would not take under clause 5.2 unless they survived the deceased. Consequently, if any child predeceased the deceased, the automatic effect of clause 5.2 is that the residue of the estate would be divided between the survivors. In that case, the interpretation of the wording in clause 5.3 that is favoured by the plaintiffs is said to be superfluous. The defendants relied upon the principle – considered above – that a construction of a will should be avoided, where possible, that would not give any effect to words used by the testator. The defendants submitted that, consequently, the words “to attain a vested interest” in clause 5.3 should be given emphasis, and have the effect that survival alone is not enough, but rather each child must also attain a vested interest in the deceased’s estate. According to the defendants, the only candidate for the source of the attainment of that vested interest was the making of determinations by the defendants under clause 6 to distribute amounts to each particular child.

97. I do not accept the defendants' submission. The relevant wording in clause 5.3 is perhaps consistent with the defendants' argument, but I consider that the inclusion of the words "to attain a vested interest in my Estate" in clause 5.3 is ultimately neutral to the issue. The words could equally be intended to clarify clause 5.2 by explaining that the vested interest in the Estate would follow from the fact of survival, and thus be consistent with the plaintiffs' contention as to the proper construction of the will. The construction of the will that I prefer does not mean that some provision in the will is meaningless and of no effect. The apparent repetition as between clauses 5.2 and 5.3 on the issue of the need for survival does not necessarily mean that one of those provisions is meaningless or ineffective.

98. The construction of the effect of clause 5.3 that I prefer is to some extent supported by clause 5.3 being included in clause 5, dealing with the "division and distribution of [the] balance of [the] estate", and not the "request provision" in clause 6.

99. It is of significance that clause 6 is described as a "request provision" and begins: "I request that my Executors distribute the residue of my Estate to my beneficiaries by…" (emphasis added). If the deceased had intended that each of his children would only become entitled beneficially to any share in the residue of his estate if the defendants made a determination to pay a share to that child, the conventional and well-understood way for the deceased to explicitly achieve that result would have been to create a discretionary testamentary trust. The deceased could have achieved the result that the defendants submit he intended to achieve by using clear and explicit words of gift that would have that effect. The deceased's will was drafted for him by a solicitor, and it is reasonable to suppose that the solicitor would have advised the deceased of the well-established means of achieving the result, if that were intended by the deceased, that each child's entitlement to a present beneficial share in the residue would be contingent on the making of a determination by the defendants.

100. It is also important that clause 6 is couched in terms of a request, not a direction. The provision is precatory in nature. Subject to the application of any principle of law that governs how the defendants must exercise the discretion given to them by clause 6, the effect of the request is that the defendants are free to act on the request or not. It may be that, provided the defendants exercise their discretion in conformity with the will, their actions could not be attacked as a breach of trust, because the request in clause 6 constitutes an authorisation to them as to how they may distribute the residue of the estate. However, the defendants could ignore the request. In that event, the only residual course available to them would be to distribute to each surviving child the equal part of the residue held by the defendants on the trusts created by clause 5.1.

101. The fact that clause 6 does not require the defendants to exercise a discretion before making distributions of the residue to the deceased's children is inconsistent with a conclusion that the effect of the will is that the children will only become presently beneficially entitled to any share in the residue upon the determination of the defendants, in execution of the discretion that the deceased requested them to exercise in respect of the distribution of the residue.

102. For these reasons, I prefer the submissions made by the plaintiffs, and find that, on the proper construction of the deceased's will, each of the surviving children became absolutely presently entitled beneficially to an equal one-third share of the residue of the estate held on trust for them by the defendants.

Extrinsic evidence of the deceased’s intention

103. As I have recorded above, the defendants sought to tender evidence of the actual subjective intention of the deceased. According to par 11 of the defendants’ written outline of submissions, it was the intention of the deceased that his estate would be distributed to his children on the condition that distributions be required to be applied for wealth creation purposes, such as the purchasing of real estate, and not for day-to-day living expenses. The defendants sought to tender the evidence in pars 8 to 10 of the first defendant’s affidavit and pars 7, 12 and 16 to 18 of the second defendant’s affidavit. The issue was dealt with at T47.34 to 54.6.

104. I wish to make some brief additional observations concerning the rejection of the tender of this evidence.

105. As I have noted above, the defendants did not submit that there was a relevant ambiguity in the will that this extrinsic evidence would resolve. Rather, the submission was that the Court might decide, when considering the proper construction of the will, that there was such an ambiguity, and therefore should receive the evidence provisionally. I rejected that submission as a basis for the receipt of the extrinsic evidence. I should record that, even though I accept that there are some difficulties in the way the will has been worded, so that its proper construction is not straightforward, I have not identified any ambiguities that I would retrospectively consider could have justified the receipt of the extrinsic evidence.

106. I should also note that the tender of the evidence was supported on the basis of s 32 of the Succession Act, and not on the basis of the ‘armchair principle’ at common law.

107. Also, I do not consider that the evidence of the deceased’s intentions that the defendants sought to tender actually support the conclusion that the defendants wished the Court to reach based upon that evidence. Even without the extrinsic evidence, the Court could have concluded that it was the deceased’s intention that the plaintiffs were not to receive their equal shares in the residue except in amounts decided within the discretion of the defendants. The terms of clause 6 of the will make that perfectly clear. If the deceased’s intentions have failed, that is because the will was not drafted in a manner that created a testamentary discretionary trust, but rather created absolute and immediate trusts subject to a request as to how each child’s share would be paid to that child. The defendants agreed that, if that were the case, the effect of the rule in Saunders v Vautier is that each of the plaintiffs are entitled to call for the immediate payment to them of their shares in the residue. That consequence follows from the concession, and is a matter that the Court has not been required to decide.

108. When the extrinsic evidence is considered, it is not in any event consistent with a finding that it was the deceased’s intention that his surviving children would not be entitled to any part of the residue unless and until the defendants made a determination to pay some part of the residue in each year to the particular child (which was the case made by the defendants). The statements attributed to the deceased in the evidence support the conclusion that the deceased did intend that each surviving child would become entitled beneficially to an equal share of the residue, but that the share would not be paid to the child except for a purpose satisfactory to the deceased. A statement attributed to the deceased, in par 10 of the first defendant’s affidavit, is as follows: “Matt under no circumstances are you to give money to the children unless they have complied with my wishes. I understand that this might mean that it might take a long time…” That is consistent with each child having an immediate right, but the deceased understanding that it may take many years for the child to actually receive that child’s share in the estate. Similarly, in par 18 of the second defendant’s affidavit, the deceased is recorded as having said: “…And the catch is that you are only entitled up to a maximum of $50,000 a year each…” That statement is consistent with each surviving child having an entitlement which is limited in respect of the actual amount received annually.

Costs

109. As I agreed during the hearing to give the parties an opportunity to put submissions on the issue of costs, I will do so. However, I would urge the parties to be restrained in their inclination to incur significant further costs in fighting about the costs orders that should be made.

110. I am not in a position to comment on the significance, if any, of the manner in which the defendants have conducted the administration of the deceased’s estate to the issue of the costs orders that are proper in this case. However, I will observe that the primary issue, being the proper construction of the deceased’s will, has arisen out of the terms in which the deceased chose to make his will, and, given the findings of the Court, the fact that he chose to create immediate beneficial interests in his surviving children in conjunction with an explicit request concerning the manner in which his executors were to distribute the shares in his residue to his children. Although I have accepted the construction of the will proposed by the plaintiffs, I do not consider that the alternative proposal made by the defendants was unreasonable. Furthermore, I am satisfied that, if the extrinsic evidence that was rejected at the hearing was admitted at a hearing on the issue of costs, it would likely establish that the defendants have genuinely attempted to comply with the real testamentary intentions of the testator as explained to them personally. In addition, the defendants have only argued the construction point, and accepted the consequence of the rule in Saunders v Vautier as relied upon by the plaintiffs.

111. I appreciate that there were other contentious issues between the parties concerning various aspects of the administration of the deceased’s estate, some of which have not yet been resolved. Nonetheless, I would counsel caution in respect of any enthusiasm on the part of the parties about embarking upon minute battles in respect of every costs issue that theoretically arises. Such battles are likely to be more complex and expensive than may be thought.

Orders

112. Given the number of issues that must be dealt with in these orders, in addition to dealing with the orders that should be made following the Court’s determination of the construction issue (see pars 20, 28-29, 31, 41, and 47-49 above), I will now set out the orders that I propose as being appropriate, but I will give the parties an opportunity to comment on the precise form of the orders, as well as to consider the issue of costs.

113. The parties should serve on the other parties and deliver to the Associate to Robb J any comments on the form of the orders that should be made within 14 days of the publication of these reasons for judgment.

114. It seems to me that, as the Court has decided the construction issue, it should not be necessary for the Court to give the judicial advice sought in the defendants’ cross-summons. That is because the defendants will be justified in administering the deceased’s estate in accordance with the orders made on the plaintiffs’ summons. If the defendants take a different view, they have leave to make further submissions in conjunction with the proposed orders. I should record that it appears to me that it was reasonable for the defendants to file their cross-summons, even though, in the events that have happened, it may not be necessary to make any of the orders that they have sought.

115. The orders that the Court proposes are:

1. Declaration that each of the plaintiffs and the second defendant is entitled to one-third of the residue of the estate of the late Edward Joseph Carrington (the deceased) under his will dated 18 April 2015 (the will).

2. Declaration that each of the plaintiffs and the second defendant is entitled to receive her or his share of the residue as soon as reasonably possible after it has been determined and is available in cash to be paid to that party.

3. Order that the defendants pay to each of the plaintiffs and the second defendant one-third of the residue of the estate of the deceased under his will as soon as reasonably possible after the residue has been determined and converted into money.

4. Order that the defendants may comply with order (3) in stages by making equal one-third payments of the residue of the estate of the deceased under his will out of such cash as is available from time to time, after making all appropriate adjustments to the entitlements of the plaintiffs and the second defendant required by all payments out of the residue already made to the second defendant.

5. Note that the second defendant has agreed and informed the Court that he will repay to the estate of the deceased an appropriate proportion of the residue of the estate that has already been paid to him as may be necessary to ensure that each of the plaintiffs and the second defendant receives an equal one-third payment of the residue of the estate.

6. Note that the defendants have agreed and informed the Court that they will cooperate with the plaintiffs to ensure, for the purpose of allowing the residue of the estate to be determined as soon as reasonably possible, that all determinations necessary for the satisfaction of clause 4.2 of the will are to be made as soon as possible.

7. Note that the plaintiffs have agreed and informed the Court that, if the second defendant wishes payments of $2,000 to be made to the second defendant’s children under clause 4.2 of the will, the plaintiffs will join with the second defendant in determining that those payments be made.

8. Order the second defendant to inform the plaintiffs, within seven days, as to whether he elects for payments of $2,000 to be made to the second defendant’s children under clause 4.2 of the will, and, if so, which children, and order the plaintiffs to comply with clause 4.2 in accordance with the agreement noted in order (7) within a further seven days.

9. Note that the first defendant has agreed and informed the Court that he accepts that he is indebted to the estate of the deceased in respect of the loan of $50,342.72 listed in the inventory of property of the deceased, and that the debt is repayable immediately.

10. Order the first defendant, if he has not already done so, to repay the loan of $50,342.72 referred to in order (9) within 28 days.

11. Order the defendants, if they have not already done so, to sell the deceased’s opal collection, as referred to in the inventory of property of the deceased, by an appropriate means for realising the best price possible for that property with all reasonable expedition.

12. Direct the plaintiffs to inform the defendants, within 14 days, of all alleged breaches of the defendants’ duties as executors of the will of the deceased in respect of the circumstances in which the deceased’s property known as 14 The Wheelhouse, Manyana was sold to the second defendant, and the remedies sought by the plaintiffs in respect of those breaches, that the plaintiffs wish to pursue.

13. Direct the plaintiffs to inform the defendants, within 14 days, of the nature of any dispute that the plaintiffs wish to resolve in respect of the residual issues referred to in par 49 of the reasons for judgment.

14. Direct the parties to inform each other and the Associate to Robb J, within 14 days, of the costs orders that they wish the Court to make in respect of these proceedings to date.

15. Direct the parties, as soon as possible after the expiration of 14 days, to arrange with the Associate to Robb J for the listing of the proceedings for the purpose of the Court making directions for the purpose of determining all outstanding issues as referred to in orders (12), (13) and (14).

16. Note that the plaintiffs did not pursue, at the hearing, their application for an order replacing the defendants as executors and trustees of the will of the deceased (or any alternative order that may be required, such as the revocation of the grant of probate to the defendants and the issue of a new grant as may be appropriate), but that, with the agreement of the defendants, the plaintiffs reserve the right to renew their application in respect of any new circumstances that arise out of the further administration of the estate of the deceased by the defendants.

17. Grant leave to the parties generally to apply to the Court, by arrangement with the Associate to Robb J, to relist these proceedings for the purpose of making any order that may be necessary or appropriate for the implementation of these orders or for the further administration of the estate of the deceased.

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Amendments

16 October 2019 - Representation corrected

Decision last updated: 16 October 2019