Douglas v James - [2015] NSWSC 299

Supreme Court

New South Wales

Medium Neutral Citation: Douglas v James [2015] NSWSC 299
Hearing dates: 9 March 2015
Decision date: 25 March 2015
Jurisdiction: Equity Division
Before: McDougall J
Decision:
Plaintiffs entitled to the declaratory relief sought. Cross-summons fails.

Catchwords: WILLS & ESTATES - construction of will - testamentary trusts - where the will set up a primary trust for the testator’s wife which upon her death would revert to secondary trusts for the testator’s four daughters - where the will named the testator’s son-in-law as ‘Appointor’ for the primary trust - nature of the appointor’s powers under the will - whether it justified the appointor’s purported removal and replacement of two of the original trustees of the primary trust with trustees with himself and his wife - intention of the testator - whether extrinsic evidence sufficient to demonstrate direct instructions or actual intention of the testator - principles of construction - whether words should be read in to the will - whether the requirements to read the document as a whole and to avoid inefficacy provide any basis for the construction contended for by the defendants - whether rectification of will available under the general law
Legislation Cited: Succession Act 2006 (NSW)
Cases Cited: Hill v James [2004] NSWSC 55
In Re Doland’s Will Trusts [1970] Ch 267
James v Hill [2004] NSWCA 301
Jingalong Pty Limited v Todd [2015] NSWCA 7
Osborne v Smith (1960) 105 CLR 153
Rennes v Death [2003] NSWSC 708
Tatham v Huxtable (1950) 81 CLR 639
Texts Cited: Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis, 5th ed, 2015)
Category: Principal judgment
Parties:
Zeta Kathleen Douglas (First Plaintiff / First Cross-Defendant / First Respondent)
Marea Gilbert (Second Plaintiff / Second Cross-Defendant / Second Respondent)
David James (First Defendant / Cross-Claimant / Applicant)
Janina Kik (Second Defendant / Sixth Cross-Defendant / Sixth Respondent)
Trudy James (Third Defendant / Fifth Cross-Defendant / Fifth Respondent)
Lyn Ison (Third Cross-Defendant / Third Respondent)
Angela Webber (Fourth Cross-Defendant / Fourth Respondent)
John Croce Palmieri (Seventh Cross-Defendant / Seventh Respondent)
Representation:
Counsel:
L Ellison SC (Plaintiffs)
R Dubler SC and M Dolenec (Defendants)
Solicitors:
Adrian Holmes Lawyer (Plaintiffs)
Kekatos Lawyers (Defendants)

File Number(s): 2014/107434

Judgment

HIS HONOUR: These proceedings concern complex testamentary trusts created by the will of the late Stanley Edward Douglas. The specific question for decision is whether the first defendant (Mr James), as “Appointor” for the “Capital Protected Trust” (CPT) created by the will, had the power to remove and appoint trustees of the CPT.

The parties

The first plaintiff is the widow of the late Mr Douglas. The second plaintiff is one of his four daughters. The third defendant is another daughter. The other two daughters are cross-defendants. For convenience, and without intending to be either patronising or disrespectful, I shall refer to the family members as “Stan”, “Zeta”, “Marea”, “Trudy”, “Lyn” and “Angela” respectively. Lyn and Angela took no active part in the proceedings.
Mr James is Trudy’s…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Douglas v James

Details

AGLC: Douglas v James [2015] NSWSC 299
Case: [2015] NSWSC 299
Decision Date: 25 March 2015

CaseChat Overview and Summary

In Douglas v James, the dispute arose from the interpretation of a will that established a primary trust for the testator’s wife, with secondary trusts for the testator’s four daughters following her death. The will also named the testator’s son-in-law as the 'Appointor' for the primary trust. The son-in-law attempted to replace two of the original trustees of the primary trust with others, including himself and his wife. The legal issues before the court involved determining the nature and extent of the appointor's powers under the will, whether the appointment and removal of trustees were justified, and the intention of the testator in this context. Additionally, the court had to consider whether extrinsic evidence was sufficient to demonstrate the testator's actual intention and whether the principles of construction supported reading additional terms into the will. The court also examined whether the requirements to read the document as a whole and avoid inefficacy justified the construction argued by the defendants, as well as whether rectification of the will was available under the general law.

The court found that the will did not explicitly grant the appointor the power to remove and replace trustees. The will's language indicated that the appointor's role was limited to appointing trustees in the event of vacancies or removals, not to replace existing trustees. The court emphasised that the construction of the will should align with the testator's intention, and extrinsic evidence alone was insufficient to demonstrate a clear directive to alter the trustees. The court held that reading additional terms into the will was not warranted as it would alter the clear intention expressed in the document. Furthermore, the principles of construction did not support the defendants' argument, as the will should be read as a whole without introducing inefficacy. The court also concluded that rectification of the will was not available under the general law as there was no clear evidence of a mistake in the will's drafting.

In light of the findings, the court ruled that the son-in-law's actions in replacing the trustees were unjustified and invalid. The original trustees remained in their positions, and the son-in-law's actions were deemed null and void. The court ordered that the primary trust continue to be administered by the original trustees as per the terms of the will. The final orders confirmed the original trustees' positions and directed the son-in-law to restore the trust to its original state, ensuring that the testamentary trusts were administered in accordance with the testator's intentions.

Orders