Executor Trustee Australia Ltd v De Meyrick

[2005] SASC 388

SUPREME COURT OF SOUTH AUSTRALIA

(Testamentary Causes Jurisdiction)

In the Estate of ANNIE ISABELLA CUDMORE DECEASED

EXECUTOR TRUSTEE AUSTRALIA LTD v DE MEYRICK & ORS

Judgment of The Honourable Justice Debelle

5 October 2005

WILLS, PROBATE AND LETTERS OF ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS

Will - construction – life interest in income – gift over to children of life tenant who attain 21 years – two children – one child predeceases life tenant – whether both children entitled to the interest of the life tenant – held, both children take under the will.

Married Women's Property Act 1883 - 1884  ; Law of Property Act 1936 s 93, s 110, referred to.
Hickling v Fair [1899] AC 15, discussed.
Fell v Fell (1922) 31 CLR 268; In re Sutcliffe; Alison v Alison [1934] Ch 219; Kenna v Conolly (1938) 60 CLR 583; Adams v Perpetual Trustee Co Ltd (1964) 114 CLR 527; Re Skinner (decd) [1965] VR 660; Ritchie v Magree (1965) 114 CLR 173; Re Whittle (decd) [1970] SASR 546, considered.

In the Estate of ANNIE ISABELLA CUDMORE DECEASED
EXECUTOR TRUSTEE AUSTRALIA LTD v DE MEYRICK & ORS
[2005] SASC 388

Civil:

1. DEBELLE J:        This is an action seeking determination without administration of questions arising in the administration of an estate.

2. Annie Isabella Cudmore (“the testatrix”) died on 11 December 1939.  She was survived by her three children.  They were her son Daniel Murray Cudmore and her two daughters Colleen May Parsons and Margaret Earle Rymill.  The questions for determination concern the provisions by which the testatrix disposed of the residue of her estate.

3. By clause 7 of her will the testatrix divided the residue of her estate equally between her three children.  Clause 7 was in these terms:

   7.     UPON TRUST as to all the rest residue and remainder (hereinafter referred to as “my estate”) UPON TRUST for my three children DANIEL MURRAY CUDMORE COLLEEN MARY PARSONS and MARGARET EARLE RYMILL equally between them.

   However, because the testatrix believed each of her two daughters was in comfortable circumstances, she made further directions in clause 9 of her will as to the disposition of the interests of the two daughters.  Clause 9 was in these terms:

   9.     IN view of the fact that each of my daughters has upon attaining the age of twentyone years become entitled to a sum of approximately THREE THOUSAND POUNDS (₤3000) from the estate of her paternal Grandfather Daniel Henry Cudmore which sum is not subject to any trust or restraint and in view also of the fact that the husband of each of them is in comfortable circumstances I DECLARE AND DIRECT that the portion of my estate hereinbefore bequeathed to each of my said respective daughters shall not be paid to her but shall be held by my Trustees upon trust to invest the same and to pay to her the interest and income to arise therefrom for and during the term of her natural life for her separate use free from the separate debts control and intermeddling of her husband and without power of anticipation and on her death UPON TRUST to stand possessed of her said portion both as to capital and income for her child or if more than one her children equally between them upon their respectively attaining the age of twentyone years or being females marrying under that age and in the event of any such daughter dying without leaving issue her surviving or in the event of none of such surviving issue having attained or living to attain the age of twentyone years or being females marrying under that age the portion of such deceased daughter shall go in accretion to the portions of her surviving brother and sister equally between them and as if the same were part of the respective portions originally appropriated PROVIDED THAT the child or children of a deceased brother or sister shall take per stirpes the share which his her or their deceased father or mother would have taken had she been living at the death of such daughter dying without issue.

   There was a codicil to the will but it does not affect the operation of clauses 7 and 9.  The questions to be determined stem from clause 9.

4. Those questions concern the interest in the will of Margaret Earle Rymill (“Margaret Rymill”).  Margaret Rymill had two daughters.  They were her only children.  They were Rosemary de Meyrick who was born on 7 June 1936 and Annabel Caffrey who was born on 19 June 1942.

5. Margaret Rymill died on 27 May 2004.  Her daughter Rosemary de Meyrick survived her.  However, her daughter Annabel Caffrey had predeceased her, dying on 13 January 1995.  Annabel Caffrey died without issue.

6. There is a dispute as to the true construction of the will of the testatrix in relation to the trust concerning the interest of Margaret Rymill.  Rosemary de Meyrick contends that the whole of that interest should be distributed to her as the only surviving daughter.  The executors of the estate of Annabel Caffrey contend that the interest of Margaret Rymill should be divided equally between Rosemary de Meyrick and the estate of Annabel Caffrey.

7. It will have been noticed that clause 9 contains a restraint on anticipation.  The will was executed in 1935.  At that time, a restraint imposed on a woman to prevent her from alienating or anticipating the income was valid notwithstanding the enactment of the Married Women’s Property Act 1883‑1884.  The validity of a restraint upon anticipation was preserved by s 93 of the Law of Property Act 1936 but it became invalid when s 93 and s 110 of the Law of Property Act 1936 were amended on 18 May 1972 by s 11 of the Statutes Amendment (Law of Property and Wrongs) Act 1972.  Thus, the restraint in clause 9 was valid.  The restraint does not affect the issues in this action.

8. Shortly stated, the effect of the will is to make a gift to Margaret Rymill for life of the income of her one‑third share of her mother’s estate with a gift over to the children of Margaret Rymill contingent on those children attaining the age of 21 years or, if female, marrying before that age.  The only contingency expressed in the will in respect of the gift in favour of Margaret Rymill’s children is that they attain the age of 21 years or, if female, marry before that age.  The will contains no provision that the children of Margaret Rymill who satisfy the conditions prescribed in clause 9 of the will must also be living at the death of Margaret Rymill if they are to take under the will.

9. If one were to construe this will unassisted by authority and with regard to the events which have happened, the clear meaning and intent of clause 9 is that Margaret Rymill has a life interest in the income of her one‑third interest and, that on her death, the capital and income of that interest will be divided equally between her two daughters who are the only persons who satisfied the contingency of attaining the age of 21 years.  The fact that Annabel Caffrey pre‑deceased her mother does not defeat her interest under the will.  Her estate is able to take her share when her mother dies.  Reference to well established principle confirms that conclusion.

10. Where there is a gift contingent upon a person attaining a certain age or, if female, marrying under that age and no other contingency is expressed, it is generally taken to be a very clear indication that no other contingency was intended.  In Hickling v Fair [1899] AC 15 at 35 Lord Davey expressed the principle in these terms:

    It is an elementary principle in the construction of wills that a gift to a class after a life interest or life‑rent includes all persons within the description of the class who were alive at the testator’s death, or have come into being during the lifetime of the life tenant or life‑renter.  That principle is common to Scotland and England, and is applicable, I should suppose, wherever the English language is used.  I think it is equally clear that when the gift is made to depend on the happening of a contingency, that contingency is not imported by implication into the description of the class so as to confine the gift to those members of the class who survive the contingency.

    So, the general rule, which Lord Davey described as elementary, is that a gift to a class after a life interest includes all persons within the description of the class who are alive at the testator’s death or who had come into being during the lifetime of the life tenant: Adams v Perpetual Trustee Co Ltd (1964) 114 CLR at 527 per Kitto J at 531.

11. The rule is reinforced by the presumption as to early vesting.  So in Kenna v Conolly (1938) 60 CLR 583 at 595 – 596 Dixon J said:

    The prima facie rule is that a devise or bequest to the children of a named person to take effect absolutely upon the determination of a prior life estate, whether given to that person or some other persons confers an interest upon every such child who is in existence at the death of the testator or comes into existence after his death and before the determination of the life estate.  The quantum of the interest may be diminished as additional members of a class come into existence, but otherwise the interest is vested …

    The presumption is in favour of early vesting; the contingency of survival to the period of distribution or enjoyment is not imported into the description of the class and an interest once vesting is not made the subject of a divesting condition except by express words or clear implication.

    See also In re Sutcliffe; Alison v Alison [1934] Ch 219; Re Skinner (decd) [1965] VR 660 at 665 and Re Whittle (decd) [1970] SASR 546 at 555.

12. Applying these principles, when Rosemary de Meyrick and Annabel Caffrey attained the age of 21 years, the interest which each had in her mother’s share under the will vested in each of them.  The will does not contain any express provision adding a further contingency which divests that interest if either should not survive the mother’s life interest.  Nor is there any necessary implication to that effect.  Thus, the fact that Annabel Caffrey predeceased her mother Margaret Rymill did not defeat the interest of Annabel Caffrey.  Instead, upon the death of Annabel Caffrey her estate became entitled to enjoy a one‑half share of her mother’s interest after her mother had died.

13. Mr Haines QC, who appeared for Mrs de Meyrick, submitted that, when read as a whole, the will demonstrated an intention on the part of the testatrix that gifts were to pass only to persons who survived the donees designated in the will.  He pointed to the clear provisions in clauses 4 and 8 of the will to that effect.  The submission must fail.  Although it is well established that a will must be read and construed as a whole: Fell v Fell (1922) 31 CLR 268 at 273 per Isaacs J at 273 – 274 and Ritchie v Magree (1965) 114 CLR 173 per Kitto J at 181, there is nothing in the will which has the effect for which Mr Haines contends. Clauses 4 and 8 are examples of the concern of the testatrix to ensure that a gift to any of her three children should not fail. By clause 4 the testator gives the contents of her house to be divided equally between her children or such of them as may be living at her death. By clause 8 she directs that if any of her children should die in her lifetime leaving issue surviving them, the issue shall take the share of the deceased parent. By including these clauses, the testatrix demonstrates an intention that a gift to one of her children should not fail. However, in clause 9 of the will the testatrix provides how the gift to each of her daughters is to be applied and makes provision for the children of each of those daughters. The clear intention is that the testatrix’s grandchildren, that is to say, the children of each of her two daughters, should succeed to the interest of their mother when the mother should die. The testatrix makes no further disposition of her estate once the grandchildren have benefited under the will. There is nothing in the will to suggest that the testatrix was concerned to make any further dispositions once there were grandchildren in whom the interest vested. Mr Haines QC also relied on the final gift over as expressed in clause 9. However, that does not assist him. It is clear that the gift over only operates if there is no person who will take the share of either of the daughters of the testatrix. Plainly, the conditions of that gift over are not satisfied. There is nothing, therefore, in either the will when read as a whole or in clause 9 which suggests that the interest of either daughter should be divested if she did not survive Margaret Rymill. Indeed, the terms in which the final gift over is expressed in clause 9 support the conclusion that the testatrix was not concerned with any further disposition once there were grandchildren in whom an interest vested.

14. For these reasons, I order that, upon the true construction of the will of Annie Isabella Cudmore deceased and in the events which have happened, the provisions contained in clauses 7 and 9 of the will operate so that, upon the death of Margaret Rymill, the whole of the interest of Margaret Rymill passes to Rosemary de Meyrick and to the personal representatives of the estate of Annabel Caffrey to be divided equally between them.