Duncan v Equity Trustees Executors & Agency Co Ltd - [1958] HCA 36

EQUITY TRUSTEES EXECUTORS AND

AGENCY COMPANY LIMITED AND

RESPONDENTS. OTHERS

PLAINTIFF AND DEFENDANTS,

ON APPEAL FROM THE SUPREME COURT OF VICTORIA. Will-Construction-Gift of absolute interest to each beneficiary in his share in estate

with trusts engrafted on interest-Failure of engrafted trusts-Accruer clause making specific provision on such failure-Whether rule in Lassence v. Tierney excluded-Nature of rule.

The rule in Lassence v. Tierney (1849) 1 Mac. &G. 551 [41 E.R. 1379] or Hancock v. Watson (1902) A.C. 14 is no more than a rule of construction, the application of which may always be excluded by the terms of the will or deed in question. There can be no occasion for the application of the rule unless trusts are engrafted upon an antecedent gift absolute in the first instance and there is a failure of these trusts. Where, however, the will or deed provides in terms for what is to happen in the event of a failure of the engrafted trusts the operation of the rule is excluded. Thus the rule cannot prevent an accruer clause from taking effect according to its tenor.

Decision of the Supreme Court of Victoria (Lowe J.), reversed.

APPEAL from the Supreme Court of Victoria.

Alison May Duncan appealed to the High Court of Australia from a decision given by Lowe J. on 6th March 1958 answering questions raised by an originating summons wherein the Equity Trustees Executors and Agency Company Limited (as the surviving executor of the will of William James Woodmason, dec'd. and as administrator of the estate of Phyllis Ada Bell Woodmason, dec'd.) was plaintiff and Edna Elizabeth Bell Barrow, Winifred Jemima Bell Taylor and the appellant (as representing herself and all the

99 CLR 514

children of William James Woodmason, dec'd., other than the other named defendants, and all the grandchildren and remoter issue of the deceased who were or might become entitled to any interest in his residuary estate) were defendants. EQUITY

The facts and the material provisions of the will in question appear in the judgment below.

F. Maxwell Bradshaw, for the appellant. L. Voumard Q.C. and S. Hulme, for the respondent, the Equity Trustees Executors and Agency Co. Ltd.

C. I. Menhennitt Q.C. and H. R. Newton, for the respondents Barrow and Taylor.

Cur. adv. vult.

THE COURT delivered the following written judgment :- This is an appeal from an order made by Lowe J. in chambers on an originating summons relating to the construction of the will of William James Woodmason deceased. The will was made on 13th July 1937, and the testator died on 5th July 1940. The testa- tor devised and bequeathed his residuary estate to his trustees upon trust, subject to certain trusts for the maintenance and education of three grandchildren, to pay the income arising therefrom to his wife for life. The question which has arisen relates to those pro- visions of the will which are to take effect after the death of the wife, who died on 4th April 1957. Three…

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.

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Details

Case: [1958] HCA 36
Decision Date: 14 August 1958

CaseChat Overview and Summary

This case concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria regarding the construction of the will of William James Woodmason. The dispute arose following the death of the testator's daughter, Phyllis Ada Bell Woodmason, who died unmarried and intestate. The plaintiff, Equity Trustees Executors and Agency Company Limited, sought to determine whether Phyllis's share of the residuary estate devolved as part of her own estate or whether it accrued to the shares of other beneficiaries under an accruer clause in the testator's will. The appellant, Alison May Duncan, representing certain grandchildren, argued that the accruer clause should operate.

The central legal issue before the High Court was whether the rule in *Lassence v. Tierney* (or *Hancock v. Watson*), which presumes an absolute gift takes effect where engrafted trusts fail, was excluded by the specific terms of the testator's will. The Supreme Court had held that the rule applied, meaning Phyllis's share devolved as part of her intestacy, and that the accruer clause did not operate. This decision was based on the finding that the trusts engrafted on Phyllis's initial absolute interest had failed, and that the accruer clause did not encompass such a failure.

The High Court determined that the rule in *Lassence v. Tierney* is merely a rule of construction that can be displaced by the clear terms of a will. It reasoned that the rule only applies when an absolute gift is made and subsequent trusts fail, and there is no provision for what should happen in that event. In this instance, clause 18 of the will expressly provided for the failure or determination of any trusts, directing that such shares should accrue to the other shares in the estate. The Court found that the failure of the trusts for Phyllis's children constituted precisely the event contemplated by clause 18, thereby excluding the operation of the *Lassence v. Tierney* rule and giving effect to the accruer clause.

Consequently, the High Court allowed the appeal, discharged the order of the Supreme Court, and declared that Phyllis Ada Bell Woodmason's share did not devolve as part of her intestacy. Instead, the Court ordered that her share was to be held upon trust and distributed according to the accruer provisions in clause 18 of the will, specifying the proportions in which it would accrue to the shares of the surviving daughters and grandchildren. The costs of the appeal were ordered to be paid out of the testator's estate.

Orders