Equity Trustees Wealth Services Ltd v Wedge

Case [2021] SASC 80

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

EQUITY TRUSTEES WEALTH SERVICES LTD v WEDGE

[2021] SASC 80

Judgment of the Honourable Justice Blue  

SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - STATUTORY RULES OF CONSTRUCTION

SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - PARTICULAR TESTAMENTARY DISPOSITIONS - CONTINGENCY INVOLVING DEATH - DEATH COUPLED WITH CONTINGENCY

The applicant executor and trustee seeks determination of the question whether, on the proper construction of the will of Claire Wedge, a contrary intention within the meaning of section 36 of the Wills Act 1936 (SA) appears, so as to exclude the application of that section to the distribution of her estate.

Claire had three children: Michael, Patricia and David. Michael had two children. Michael died before Claire.

On 3 July 1987 Claire made a will giving the balance of her estate (if, as transpired her husband should not survive her) “for such of them my said children [Michael, Patricia and David] as shall survive me and if more than one in equal shares absolutely”.

Held:

1On its proper construction, a contrary intention appears in the will so as to exclude the application of section 36 of the Wills Act 1936 to the distribution of Claire’s estate (at [76]).

2Observations on the desirability of legislative review of section 36 (at [81]).

Wills Act 1936 (SA) s 36; Inheritance (Family Provision) Act 1972 (SA); Wills Act 1837 (UK) s 33; Administration of Justice Act 1982 (UK) s 33; Succession Act 1867 (Qld) s 65; Succession Act 1981 (Qld) ss 32, 33, 33N; Wills Act 1928 (Vic) s 31; Wills Act 1997 (Vic) s 45; Wills Act 1968 (ACT) s 31; Wills Act 2000 (NT) s 40; Wills Act 2008 (Tas) s 55; Wills, Probate and Administration Act 1898 (NSW) s 29, referred to.
Bassett v Hall [1994] 1 VR 432; Burman v Burman (Court of Appeal, Supreme Court of Queensland, McPherson and Pincus JJA, Helman J, 1 September 1998); Estate of Elizabeth Emily Jenkinson [2000] NSWSC 495; Hives v Machin [2017] EWHC 1414 (Ch); In re King, deceased; King v King [1953] VLR 648; In the Estate of Koppie [2019] ACTSC 106; Ling v Ling [2002] WTLR 553; Longmore v Longmore; The Estate of Jean Longmore [2018] NSWSC 90; Perrin v Morgan [1943] AC 399 ; Pohlner v Pfeiffer (1964) 112 CLR 52; Public Trustee of Queensland v Jacob [2007] 2 Qd R 165; Public Trustee of Queensland v Robertson [2005] 2 Qd R 444; Rainbird v Smith [2012] EWHC 4276 (Ch); Re Meredith [1924] 2 Ch 552; Re Paton (Supreme Court of Queensland, Byrne J, 15 December 1994); Re the Will of Macaudo [1993] 2 Qd R 269; Sibley v Cook (1747) 3 Atk 572; Stevens v King [1904] 2 Ch 30; The Public Trustee v Freeman; In re Lathbridge, deceased [1958] VR 366, considered.

EQUITY TRUSTEES WEALTH SERVICES LTD v WEDGE
[2021] SASC 80

  1. BLUE J:   The applicant, Equity Trustees Wealth Services Limited (Equity…

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Equity Trustees Wealth Services Ltd v Wedge [2021] SASC 80
Case
[2021] SASC 80
Decision Date

CaseChat Overview and Summary

In the matter of Equity Trustees Wealth Services Ltd v Wedge, the dispute revolved around the interpretation and application of specific clauses in the wills of John and Claire Wedge, particularly focusing on how their estate should be distributed upon the death of Claire. The case was brought before the court to resolve uncertainties regarding the distribution of Claire's estate, particularly in light of statutory provisions that could potentially override certain testamentary intentions. The primary legal issue was whether the statutory provisions in the Wills Act 1936 (SA) should apply to the distribution of Claire's estate, given the expressed intentions in her will. The court needed to determine if the will contained a 'contrary intention' that would exclude the application of section 36 of the Act, which mandates that a child's share of the estate should pass to the child's estate or issue if the child predeceases the testator.

The court conducted an objective construction of Claire's will and found that the will did indeed express a contrary intention to the statutory provisions. Clauses 3 and 4 of Claire's will explicitly directed that her estate should be distributed to her surviving children in equal shares, irrespective of whether any of them predeceased her. The court held that this expressed intention was clear and unambiguous, thereby excluding the application of section 36 of the Wills Act. The court also suggested that the legislature might consider reviewing the statute to address potential ambiguities in similar cases in the future. Consequently, the court ruled that the statutory provisions did not apply to the distribution of Claire's estate and that her estate should be distributed according to the explicit intentions set forth in her will.

Orders

Orders of the court

Held:

1 On its proper construction, a contrary intention appears in the will so as to exclude the application of section 36 of the Wills Act 1936 to the distribution of Claire’s estate (at [76]).

2 Observations on the desirability of legislative review of section 36 (at [81]).

Background

Background to the litigation

Patricia, David and Julie are the third, fourth and fifth respondents. Kirsty and Damian are the first and second respondents. Background As at mid 1987 Michael’s two children Kirsty and Damian were seven and five years old respectively. Patricia had one child, who was one year old. In May 1987 John and Claire were referred by the ANZ Bank to ANZ Executors & Trustee Company (South Australia) Limited (now renamed Equity Trustees Wealth Services Limited) (ANZ Executors) for the purpose of making wills. On 21 May 1987 John and Claire attended an interview with ANZ Executors. An officer or employee of ANZ Executors recorded the assets of John and Claire, which included a house and another asset held as joint tenants valued at $120,000 in total, other assets of John valued at $30,000 in total and monies held at the ANZ Bank by Claire totalling $70,000. The officer or employee recorded that Claire’s monies held with the ANZ Bank were to be left to the children equally and the residue to John if he survived her by one month and if not for the children equally. An officer or employee of ANZ Executors at the interview or subsequently handwrote the variable components of what became Claire’s will. The operative clauses (3 and 4) of the will are essentially in the same terms as the handwritten version. On 3 July 1987 John and Claire executed their respective wills. Subject to one qualification, they were mirror wills. The qualification is that John’s will contains no equivalent of clause 3 of Claire’s will. Each appointed (by clause 2) ANZ Executors to be their executor and trustee. Clauses 3 and 4 of Claire’s will (the Will) provided:3 I DIRECT my Trustees to hold all moneys standing to the credit of my account with Australia & New Zealand Banking Group Ltd and all my Bank endorsed or accepted Bills of Exchange together with any interest due and accrued due thereon at my death to such of them my children MICHAEL ANTHONEY WEDGE PATRICIA DIANE WEDGE and DAVID WEDGE as shall survive me and if more than one in equal shares absolutely.4 I GIVE the balance of my estate to my Trustees UPON TRUST TO PAY thereout my debts funeral testamentary and other expenses incurred in respect of my death and also Estate Succession and other duties whatsoever which shall be payable in consequence of my death in respect of my estate or any property deemed to form part of my estate for the purpose of assessment and payment of duty or any benefits conferred by this my Will or any Codicil hereto without recovering any portion of any such duties from any person AND TO STAND POSSESSED of the balance remaining (hereinafter referred to as “my residuary estate”) for my husband JOHN WEDGE if he shall survive me by one calendar month absolutely and if he shall not so survive me THEN for such of them my said children MICHAEL ANTHONEY WEDGE PATRICIA DIANE WEDGE and DAVID WEDGE as shall survive me and if more than one in equal shares absolutely. Subsequently, Patricia’s second child and David’s child were born.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

It is desirable that the legislature review, and give consideration to legislative reform of, section 36 of the Act at least to address clauses such as clause 4 of the Will. One option would be to adopt a provision modelled on subsection 33N(4) of the Succession Act 1981 (Qld) although, as observed above, this might not be effective to achieve its intended purpose. Another option would be to adopt a provision that section 36 operates unless the will provides explicitly for a gift over in the event of a child dying before the testator or explicitly provides that the share that the child would otherwise take is not to pass to that child’s estate or issue (as the case may be depending on whether section 36 is amended to substitute the child’s issue for the child’s estate). Another option would be to adopt a provision worded more broadly than subsection 33N(4) of the Queensland Act to catch with greater certainty clauses such as clause 4 of the Will.Conclusion On the proper (objective) construction of the Will, a contrary intention to the operation of section 36 of the Act appears. Rule 232.2 of the Uniform Civil Rules 2020 (SA) provides that, amongst others, an executor or trustee may apply to the Court for determination of a question that could be determined in a general administration action. This type of procedure was adopted in Pohlner v Pfeiffer[49] and in several of the authorities considered above.[49] (1964) 112 CLR 52. It is appropriate to exercise the discretion to determine the question in this case because Equity Trustees, as the executor and trustee under the Will, is in a genuine state of uncertainty as to whether section 36 of the Act applies to the Will and hence how it should distribute the estate. Accordingly, I determine the question whether, in the events that have happened and on the proper construction of the Will, a contrary intention within the meaning of section 36 of the Act appears so as to exclude the application of that section to the distribution of Claire’s estate in the affirmative. I will hear the parties as to the orders (including as to costs) to be made to finalise this proceeding and any residual issue remaining to be determined.

Ratio Decidendi

Legal Principle Established

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