Corporation of the Synod of the Diocese of Brisbane v Perpetual Trustees Queensland Ltd

[1995] QCA 15

IN THE COURT OF APPEAL	[1995] QCA 015
SUPREME COURT OF QUEENSLAND

Appeal No. 83 of 1994

Brisbane
[Synod of Diocese of Brisbane v. Perpetual Trustees & Anor.]

BETWEEN:

THE CORPORATION OF THE SYNOD
OF THE DIOCESE OF BRISBANE

Appellant

AND:

PERPETUAL TRUSTEES QUEENSLAND LIMITED

First Respondent

AND:

PATRICIA LEE NEVIN

Second Respondent

McPherson J.A.
Davies J.A.

Pincus J.A.

Judgment delivered 20/02/95

Joint reasons for judgment of McPherson and Davies JJ.A.

Concurring separate reasons by Pincus J.A.

APPEAL DISMISSED; APPELLANT TO PAY THE RESPONDENTS' TAXED

COSTS OF THE APPEAL.

CATCHWORDS:	SUCCESSION - INTESTACY - whether construction of codicil and intention of testator; whether intestacy in respect of residuary estate in remainder upon the determination of life interests; whether the residuary estate in remainder is to be held on trust; whether Will to be construed to speak and take effect as if executed immediately before the death of testator - s.28(a) Succession Act 1981.
Counsel:	Mr. C. Brandis for the appellant Mr. A. M. Wilson for the first respondent Mr. G. J. Gibson Q.C. with him Mr. R. Derrington for the second respondent
Solicitors:	Flower and Hart for the appellant McCullough Robertson for the first respondent de Groot & Co. for the second respondent

Hearing Date: 11 October 1994.
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 83 of 1994

Brisbane

Before McPherson J.A.
Davies J.A.
Pincus J.A.

[Synod of Diocese of Brisbane v. Perpetual Trustee & Anor.]

BETWEEN:

THE CORPORATION OF THE SYNOD
OF THE DIOCESE OF BRISBANE

Appellant

AND:

PERPETUAL TRUSTEES QUEENSLAND LIMITED

First Respondent

AND:

PATRICIA LEE NEVIN

Second Respondent

JOINT REASONS FOR JUDGMENT - McPHERSON AND DAVIES JJ.A.

Judgment delivered the 20th day of February 1995

The sole question in this appeal involves the construction of cl.5 of the first codicil ("the codicil") to the will of Edward Brackett Nevin ("the deceased") who died on 29 April 1975 in Manhattan, New York City, where he was domiciled.

In particular the question is whether, in the events which occurred, as the learned primary judge held, the deceased died intestate in respect of his residency estate in remainder, located in Australia, upon the determination of the life interests provided for in cl.5. By a will dated 16 May 1955, and two codicils thereto, respectively dated 2 August 1955 and 29 November 1955, the deceased established trusts with respect to his Australian estate. Probate of the will and codicils was granted by the Supreme Court of Queensland to his trustee and executor, the second respondent, on 17 December 1975. The second codicil is irrelevant to this appeal.

The testator, who died a widower, is survived by his only child, Patricia Nevin, the first respondent. The appellant, the Corporation of the Diocese of the Synod of Brisbane, was named as the legatee of a contingent legacy to the testator's residuary estate situated in Australia. His Honour held that the gift to the appellant provided by cl.5(f) of the codicil failed. It is common ground that the principles of interpretation to be applied to the construction of the codicil are those of the law of Queensland, in accordance with cl.2 of the will.

The codicil substituted a new cl.5 which, after providing for the calling in and conversion of so much of the testator's estate not already held in authorised investments and securities, and the discharge of his debts and testamentary expenses, provided that the Australian estate was to be held on the following trusts:

"(a) TO pay one-tenth part of the net income thereof unto my friend WILFRED MANNING HALL presently residing at Laurel Avenue Graceville Brisbane in the State of Queensland during his lifetime and after his death to pay such income to my daughter PATRICIA NEVIN during her lifetime;

(b) TO pay a further one-tenth part of the net income thereof to my friend DR. EDWARD ARNOLD BURKHART and his wife KAY BURKHART presently residing at 27 Exeter Street Forest Hills N.Y. in the United States of America during their joint lives in equal proportions in recompense for their kindness to me and after the death of either of them to pay the same to the survivor during his or her life and upon the death of the survivor to pay such income to my said daughter Patricia Nevin during her lifetime;

(c) TO pay a further five-tenths part of the net
income thereof to my said daughter Patricia Nevin
during her lifetime;
(d) TO accumulate the remaining three-tenths
part of the net income thereof and to invest the
same as an accretion to capital in any of the
securities or investments hereinafter authorised
for a period of twentyone years from the date of
my death or during the lifetime of my said
daughter Patricia Nevin (whichever period is the
shorter) and to pay the resulting income from such
accumulation and investment in the manner and to
the persons and in the proportions hereinbefore
described and at the end of twentyone years from
my death or on the death of my said daughter
Patricia Nevin (whichever period is the shorter)
to pay the remaining three-tenths part of the net
income and the resulting income from any accretion
thereof in the manner and to the persons and in
the proportions hereinbefore described;
(e) Subject as aforesaid as to both capital and
income of my Australian estate UPON TRUST for all
and every the children or the child (if only one)
of my said daughter who being sons or a son shall
attain the age of twentyone years or being
daughters or a daughter shall attain that age or
previously marry and if more than one in equal
shares as tenants in common;
(f) IF my said daughter Patricia Nevin has died
or shall die before me without issue who being
sons or a son shall attain the age of twentyone
years or being daughters or a daughter shall
attain that age or previously marry THEN I DIRECT
my Trustee to stand possessed of my Australian
estate both capital and income upon the following
trusts:-

(i) TO pay four-fifths part of the income thereof for such hospital established in Brisbane in the State of Queensland as my Trustee in its absolute discretion shall determine (not being a hospital under Governmental or Municipal control by means of a Statutory Board or otherwise) which shall from time to time be conducting research work for the prevention relief and treatment of cancer for the benefit of such hospital in carrying out such work AND I FURTHER DIRECT AND DECLARE that if my Trustee in its absolute discretion shall decide that there is no such hospital in Brisbane at the date of my death conducting such work as aforesaid or if at any time thereafter there is no such hospital continuing to conduct such work then UPON TRUST for THE CORPORATION OF THE DIOCESE OF THE SYNOD OF BRISBANE to be applied by it for the aid and care of cancer patients of St. Martins Hospital Ann Street Brisbane aforesaid absolutely;

(ii) TO accumulate the remaining one-fifth part of the net income thereof and invest the same as an accretion to capital in any of the securities or investments hereinafter authorised for a period of twentyone years from the date of my death and to pay the resulting income from such accumulation and investment to the hospital or institution entitled to receive the income directed to be paid under the terms of the preceding sub- paragraph (i) hereof;

(iii) After the expiration of twentyone years as aforesaid to pay the whole of the said one-fifth part of the net income (including any income from such accumulation and investment as shall be then accrued and undistributed) to such hospital or institution as shall be determined by my Trustee in manner aforesaid."

Of those persons upon whom life interests were conferred by cl.5(a) to (d), Patricia Nevin, and Kathryn C. Dow (formerly Kathryn Burkhart) are still alive. Mr. Hall and Dr. Burkhart have since died. Patricia Nevin has had no children and is now incapable of child bearing. She will die without issue. As his Honour indicated in his reasons, this is the explanation for the application which was brought before him. Sub-clause (e) can have no operation.

The estate has been administered in accordance with sub- cll.(a) to (d).

His Honour held that, on its proper construction, cl.5(f) operated only if the first respondent had predeceased the testator without children. As she has survived him, according to that construction, the gift to the appellant pursuant to cl.5(f) will fail upon the determination of the life estates. The critical question is whether, on the true construction of cl.5(f), upon the determination of the remaining life interests the residuary estate in remainder is to be held on trust for the appellant in accordance with the trusts provided by that clause; or whether there is a partial intestacy with respect to it, the gift to the appellant having failed. The material words for consideration are those which provide the contingency upon which the gift to the appellant provided by cl.5(f) is to take effect. Those words are: 'IF my said daughter Patricia Nevin has died or shall die before me without issue ...' .

Notwithstanding that the contingency, the death of Ms. Nevin without children, is expressed in both past ('has died') and future ('shall die') tenses, his Honour said that they referred to the same event; the death of the Ms. Nevin without children before the testator's death. The words creating the contingency were therefore directed to two possibilities; first, that Ms. Nevin had died at the date of execution of the codicil ('has died') and second, that she was alive at the date of the execution of the codicil, but predeceased the testator ('shall die').

The appellant submits that the construction given to cl.5 by his Honour failed to give effect to the testator's real intention. It contends that a testamentary instrument should be construed so as to speak, and to take effect, as if made immediately prior to the death of the testator. If, so, according to the construction submitted by the appellant, the expression 'has died' must refer to the period from execution of the codicil to the testator's death and the expression 'shall die' to the period after the death of the testator. It was submitted that, upon the correct construction of the clause, it was the testator's intention to provide for the disposition of his residuary Australian estate in the event that he had no grandchildren. In the appellant's submission, according to this construction, cll.5(e) and (f) intended together to cover the question whether or not there were grandchildren, the former applying if there were, the latter if there were not.

At the outset it must be said that there is some attraction in the construction contended for by the appellant. It is one which accords with the maxim that the court will lean in favour of a construction which avoids an intestacy. It would otherwise follow, as is the result of his Honour's construction, that the testator had omitted to make provision for the logical contingency which has in fact occurred, Ms. Nevin surviving him without issue; and that the residuary estate in remainder would fall to be transmitted on an intestacy on the termination of the limitations.

However the construction contended for by the appellant is one which requires the Court to overlook the words 'before me' so as to read the clause as providing for the contingency that Ms. Nevin '... has died or shall die without issue ...' be it before or after the testator's death. In our view the words 'before me' are critical to the expression of the testator's intention. i.e. that he intended the gifts in cl.5(f) to take effect only upon his daughter predeceasing him without issue. To omit those words would be to alter the apparent intention of the testator and substitute an interpretation which, while avoiding an intestacy, does not accord with that intention.

There is no principle of general application that a will must be construed so as to speak as if written immediately before the death of the testator, in the absence of a contrary intention. The principle is only that, with reference to the property comprised in it, a will is to be construed to speak and take effect as if executed immediately before the death of the testator: the Succession Act 1981 s.28(a). With regard to the objects of a testamentary disposition, the will speaks from the time of its execution; Amyot v. Dwarris & Ors. [1904] A.C. 268 (PC). There is no absurdity in the testator having provided for the eventuality that Ms. Nevin may have died before execution of the codicil. It then follows that the compound expression `or shall die before me' can be given effect according to the ordinary meaning of the words used; so that only if she died before the testator without issue the trusts provided for by cl.5(f) would take effect.

For the reason which we have given we would favour the construction adopted by his Honour. That construction also finds support from the language of cl.5(f) when read as a whole. The trustee, in administration of the trust provided by cl.5(f)(i), must make a determination as to whether there is a hospital which accorded to the testator's direction at the date of his death. It could scarcely have been intended that this determination might be made some time well after the testator's death. The language of sub-cll.(ii) and (iii) of cl.5 also imply that the trust takes effect from the date of the testator's death.

It seems that there was an unforeseen omission in the failure to consider the contingency of Ms. Nevin surviving the testator without issue. But simply because, with hindsight, one may say that a further provision should have been included, does not enable the Court to reconstruct a testamentary instrument so as to cater for such further contingency in the absence of an indication of testamentary intention to support the court filling such omission.

The learned primary judge was, in our view, correct in concluding that the testator died intestate on the determination of the life interests with respect to the residuary Australian estate. As the testator was survived by his daughter the only contingency capable of enlivening the trust provided by cl.5(f) had failed. We would therefore dismiss the appeal. The appellant is to pay the respondents' taxed costs of the appeal.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 83 of 1994.

Brisbane

Before McPherson J.A.
Davies J.A.
Pincus J.A.

[Synod of the Diocese of Brisbane v. Perpetual Trustees & Anor.]

BETWEEN:

THE CORPORATION OF THE SYNOD OF

THE DIOCESE OF BRISBANE

Appellant

AND:

PERPETUAL TRUSTEES QUEENSLAND

LIMITED

First Respondent

AND:

PATRICIA LEE NEVIN

Second Respondent

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 20 February 1995

I have read the joint reasons of Davies J.A. and McPherson J.A. in which the

matters for decision are set out.

It will be noted that the interests created by all of subcls. (a) to (d) of cl. 5 cease

on or before the death of Ms Nevin. If one reads subcls. (e) and (f) literally, then the

scheme of the will is that, to put it broadly, if Ms Nevin has any children, they take, and if

not, charities do - except that the gift to the charities does not take effect if Ms Nevin survives the testator. The expression "to put it broadly" is necessary because the trust

for Ms Nevin's children operates in favour only of those children who fulfil the conditions

set out in subcl. (e) and repeated in subcl. (f). But that qualification has no particular

bearing upon the point that on the construction adopted below, the testator must have

intended that if Ms Nevin had no children and lived on past the date of the testator's

death, then the estate should, on her death, be distributed as on an intestacy. As a

practical matter, it may seem unlikely that the testator had any such intention; one can

understand the testator making a gift conditional upon his daughter predeceasing him, if

that was intended as an alternative to a gift to take effect if the daughter survived him;

but the preceding subclauses do not deal exhaustively with the latter eventuality.

The meaning of the will as interpreted below is that if Ms Nevin dies before the

testator, the only effect of subcls. (a) to (d) is to create life interests with respect to one-

fifth of the income, under subcls. (a) and (b); so that the bulk of the estate would go

immediately on the testator's death to the children, if any, and if none, as on intestacy.

The concept of making the gift to the charities dependent upon Ms Nevin not having

enjoyed a life interest may be thought a capricious one. If the (fairly obvious) possibility

of Ms Nevin outliving the testator, but having no children, were intended to produce a

distribution as on intestacy, one would have expected the will to say so.

Mr Brandis for the appellant argued the matter before us on the basis that it is

not enough to infer as a matter of commonsense that the insertion of "before me" was

probably a drafting slip, but that some support for that conclusion must be found in the

context. He sought it in the expression "has died or shall die before me".

It is true that the use of this expression is somewhat odd, because to achieve the

result which has been held to follow from the will, all that it was necessary to say was

"dies before me". But much the same point may be made even if one ignores the

words "before me"; then it would have been enough to say "dies without issue". The

unnecessary verbiage in the expression "has died or shall die" appears to me to be a

tenuous basis on which to adopt the construction for which the appellant contends. Nor,

in my opinion, does the appellant derive much assistance from a comparison of the

codicil in which the clauses whose meaning is in dispute are to be found with the

corresponding clause in the will itself.

In Tatham v. Huxtable, (1950) 81 C.L.R. 639 the will empowered the executor to

distribute property to beneficiaries "who, in my opinion have rendered service meriting

consideration by the Testator". The word "my" was read as meaning "his". Kitto J

remarked (651):

"The only sense in which it is true to say that a court of construction may correct mistakes in a will is that that court may give effect to inferences obtained from the will as a whole (with the assistance of evidence of surrounding circumstances if ambiguity in the will justifies resort to such evidence)...notwithstanding that to do so involves an alteration of the words used.

In this case an inference appears to me plainly to arise from the language of the will itself..."

In contrast, here I can find nothing in the language itself to justify the conclusion

that "before me" is a mistake. It is the structure and effect of the will, read literally, which

gives rise to the inference of mistake, rather than any particular expressions in it which

are incongruous with the literal construction of the immediately relevant part.

But cases of this kind appear on occasion to have attracted a benevolent

construction; an outstanding, although rather complicated, example is Langston v.

Langston (1834) 2 Cl. & Fin. 194; 6 E.R. 1128. There, remainders went to certain of

the testator's sons, but there was no mention of giving anything to the first son; it was

held that this was an obvious drafting mistake. In reaching this conclusion the court

relied on the circumstance that:

"...the very first person that was likely to take any estate under the will after the only son of the testator in esse of the date of the will, the eldest son, is disposed of by being omitted". (239)

Reasoning of this general character assists the appellant here, for it is perhaps

unlikely that in truth the testator, in a fairly elaborately drawn will, intended to leave a

large gap - an intestacy - consequent upon events which were easily foreseeable.

Some other examples of correction of mistakes should be given. In Smith v.

Crabtree (1877) 6 Ch.D. 591 there was a gift of residue to children "living at the time of

the death or second marriage of my said wife (which shall first happen)". The judge

treated the words referring to the period of the death or second marriage of the wife as

having been "inadvertently thrown in"; the will was construed as if they were not there.

In re Thomas [1925] V.L.R. 488 there was a gift of half of the estate to the testator's wife

and a gift to two daughters of "one quarter each of the remaining half of my estate...",

which read literally meant the daughters got an eighth of the estate each. That

expression was read as if it said "one quarter each out of the remaining half of my

estate" and that was done partly on what has been described as the "golden" rule of

construction, the presumption against intestacy. In re Peacock [1958] N.Z.L.R. 374

there was a gift "Upon the death or remarriage of my said wife and the death thereafter of my said three brothers and sister...". The word "thereafter" was held to have been

inserted "incautiously", so that the gift took effect whenever the three brothers and sister

died. Turner J said in the Court of Appeal:

"It would be capricious in the highest degree, and I have been unable to imagine any possible reason which might have persuaded the testator to provide that the donees should take if, and only if, the brothers and sister all survive the widow of the testator. Secondly, the conclusion for which the appellant contends involves intestacy. In the will now being considered, there is no gift over such as one would expect if the testator were defining a contingency which he thought might or might not actually occur." (385)

In Peacock's case words were used which the court thought to be inconsistent with the

intention which would be expressed by giving effect to the word "thereafter"; it was said

that the words "Upon the death" indicate "the happening of an event which the testator

regarded as certain to occur" (385, 386). In my view this case supports the appellant

here. It seems to have been the capriciousness of the literal construction which

principally produced the result in Peacock, for the implication sought to be derived from

the words "upon the death" was surely not a strong one. Further, it will be noted that in

Peacock's case the alleged mistake was of a similar kind to that which might be thought

to have been made here; in each case an expression defining an order of events was

in issue.

The primary judge relied, in reaching his decision, partly upon the provisions of

paras. (i) and (ii) of subcl. (f). The effect of para. (i) is that prima facie four-fifths of the

income mentioned in subcl. (f) is to go to a hospital of a certain type, but the trustee is

given a discretion to decide that there is "no such hospital in Brisbane at the date of my

death conducting such work as aforesaid...". This points towards the testator having

had in mind that the fate of the charitable gift would be determined at the date of his
death.

Paragraph (ii) requires that the remaining one-fifth of the income be invested "for

a period of twentyone years from the date of my death", and this provision again seems

to assume that the charitable gift will take effect, if at all, at the date of the testator's

death.

Both these paragraphs provide support to the conclusion reached below and

tend to encourage one towards the conclusion that if the insertion of "before me" was a

mistake, then corresponding mistakes were made in other parts of subcl. (f); the terms

of paras. (i) and (ii) are consistent with the insertion of "before me" having been

deliberate rather than accidental. Although this is by no means sufficient to dispel the

impression that there may have been an error, in that the drafter has perhaps failed

properly to translate the testator's instructions into legal language, in my view these

aspects of paras. (i) and (ii) of subcl. (f) suggest that the better view of the construction

of the will is that arrived at below. I have found the case a difficult one, but agree that it

should be disposed of as proposed in the joint reasons of Davies JA and McPherson

JA.