Egan v O'Brien - [2006] NSWSC 1398

CITATION: Egan v O'Brien [2006] NSWSC 1398

HEARING DATE(S): 6/12/06

JURISDICTION: Equity Division

JUDGMENT OF: Young CJ in Eq

EX TEMPORE JUDGMENT DATE: 12/06/2006

DECISION: The property in the will passes to the first defendant who holds it on trust for the deceased's next of kin, the third defendant. Costs of the plaintiff on the trustee basis and costs of the submitting defendants to be paid out of the residue.

CATCHWORDS: WILLS [201]- Construction- Forfeiture under public policy rule- Gift over- Testator left estate to friend or, if he predeceased him, to a charity- Friend convicted of manslaughter of testator- Jones v Westcomb rule- Evidence of intention- Not clear whether testator intended "predecease" to cover other eventualities- Gift passes to friend who holds on constructive trust for deceased's next of kin.

CASES CITED: Davis v Worthington [1978] WAR 144
Ekert v Mereider (1993) 32 NSWLR 729
Jones v Westcomb (1711) Prec Ch 316; 24 ER 149
Public Trustee v Hayles (1993) 33 NSWLR 154
Re Callaway [1956] Ch 559
Re DWS Deceased [2001] Ch 568
Re Fox [1937] 4 All ER 664
Re Lentjes [1990] 3 NZLR 193
Re Nicholson [2004] QSC 480
Re Robertson (1963) 107 Sol Jo 318
Re Rowney (Cooper J, 19.3.1992, unreported)
Re Stone [1989] 1 Qd R 351
Union Trustee Co of Australia Ltd v Church of England Property Trust Diocese of Sydney (1946) 46 SR (NSW) 298
Verrell v Jackson [2006] QSC 309

PARTIES: Jeffrey Francis Egan (P)
Shane Alan O'Brien (D1)
Salvation Army (NSW) Property Trust (D2)
Frank Englart (D3)

FILE NUMBER(S): SC 3703/06

COUNSEL: J E Armfield (P)
D2 and D3 submitting appearances

SOLICITORS: Egan Simpson (P)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Wednesday 6 December 2006

3703/06 – EGAN v O'BRIEN

JUDGMENT

1 HIS HONOUR: This is a summons to construe the last will of Robert Englart who died on 13 February 2003. Before he died Mr Englart made his last will on 12 July 2002 probate of which was granted to the plaintiff by this Court on 30 September 2003.

2 The problem arises with the gift of residue where the testator provided that it was to pass:

SHANE ALAN O'BRIEN

I GIVE DEVISE AND BEQUEATH

SALVATION ARMY (NEW SOUTH WALES) PROPERTY TRUST

3 Mr Englart died leaving an estate with residue of approximately $253,000. He was killed in circumstances where the beneficiary, Shane O'Brien was convicted of his manslaughter.

4 Under the law, if a beneficiary under a will is convicted of murder or manslaughter of the testator that person cannot take any benefaction under the will. Accordingly, the gift to Mr O'Brien does not operate or alternatively operates so that, at law, he would be entitled to be paid the money by the plaintiff, but, in equity, he would hold it on trust for the person…

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 Egan v O'Brien

Details

AGLC: Egan v O'Brien [2006] NSWSC 1398
Case: [2006] NSWSC 1398
Decision Date: 06/12/2006

CaseChat Overview and Summary

In the case of Egan v O'Brien, the dispute involved the interpretation of a will which left the estate to a friend or, if the friend predeceased the testator, to a charity. The testator was murdered by the friend, who was subsequently convicted of manslaughter. The court was tasked with determining whether the friend could benefit from the will under the circumstances. The legal issues centred on the construction of the will, particularly the clause regarding forfeiture under public policy and the application of the Jones v Westcomb rule. The court had to decide whether the testator intended the friend to benefit from the estate despite the friend's criminal act, and whether the friend's conviction under public policy should result in a forfeiture of the gift.

The court examined the language of the will and the surrounding circumstances to ascertain the testator's intention. It noted that the will did not explicitly cover all potential eventualities, such as criminal conduct by the friend. The court applied the principle from Jones v Westcomb, which holds that a testator's gift to a beneficiary may be saved from forfeiture if it is clear that the testator did not intend to include that eventuality. In this case, the court found that the testator's intention was not sufficiently clear to cover the friend's criminal act, and thus the gift over to the charity did not apply. Instead, the court held that the friend held the estate on a constructive trust for the testator's next of kin.

The reasoning of the court was grounded in the principle of ascertaining the testator's true intention, while also considering public policy and the equitable doctrine of constructive trusts. The court concluded that the friend could not benefit from the will due to the forfeiture rule, and that the estate should instead pass to the testator's next of kin. This decision was based on the equitable principle that a person should not be allowed to benefit from their own wrongdoing, particularly in a context where public policy would be offended by such a result.

The court's final orders were that the estate of the deceased should be held by the friend on a constructive trust for the deceased's next of kin. The friend was not entitled to any benefit from the estate under the will, and the gift over to the charity did not apply. This decision highlights the importance of clear testamentary intentions and the equitable principle that prevents beneficiaries from profiting from their own wrongdoing.

Orders