IN THE ESTATE OF LONCAR (DECEASED)

[2023] SASC 37

SUPREME COURT OF SOUTH AUSTRALIA

(Testamentary Causes Jurisdiction)

IN THE ESTATE OF LONCAR (DECEASED)

[2023] SASC 37

Judgment of the Honourable Justice Bampton  

21 March 2023

SUCCESSION - INTESTACY AND DISTRIBUTION ON INTESTACY

The deceased, who died a widower never having fathered children, left a will dated 19 November 1965 (“the will”) – the will gifts the deceased’s estate to his wife or, if she predeceased him and without leaving children, to his brother – as both beneficiaries under the will predeceased the estate, the estate is to be distributed on an intestacy under Part 3A of the Administration and Probate Act 1919 (SA) (“the Act”) – the applicant is the surviving executor under the will – where deceased is not survived by any spouse, children, parents, or siblings but is survived by issue of his deceased siblings – where deceased is survived by eight nieces and nephews and predeceased by one niece and one nephew – where the deceased niece is survived by a son and daughter – where deceased nephew is survived by two sons – where applicant seeks judicial advice regarding the proper construction of the words “issue of such a relative” in s 72J(b)(iv) of the Act and directions regarding distribution of the intestate estate in accordance with judicial advice.

Held: On an ordinary meaning construction, the words “issue of such a relative” in s 72J(b)(iv) of the Act on their proper construction mean “children, grandchildren and more remote lineal descendants of such a relative”; and in the case of grandchildren and more remote lineal descendants, such relatives take their respective deceased parent’s share of the estate per stirpes.   It is appropriate and proper to distribute the deceased’s intestate estate in accordance with the judicial advice. 

Administration and Probate Act 1919 (SA) Pt 3, ss 69, 72J; Probate Rules 2015 (SA) r 80(1); Administration and Probate Act Amendment Act (No 2) 1975 (SA); Succession Act 2006 (NSW) s 129; Administration and Probate Act 1958 (Vic) s 70ZI; Administration and Probate Act 1929 (ACT) s 49C; Administration and Probate Act 1929 (NT) s 69; Succession Act 1981 (Qld) s 37; Intestacy Act 2010 (Tas) s 30; Administration Act 1903 (WA) s 14, referred to.
Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355; Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (The Engineers’ Case) (1920) 28 CLR 129; R v A2 (2019) 269 CLR 507; Sibley v Perry (1802) 7 Ves Jr 522; 32 ER 211; Matthews v Williams (1941) 65 CLR 639; In Re Wardle (Deceased) (1979) 23 SASR 214; In the Estate of Hughes (1985) 38 SASR 5, considered.

IN THE ESTATE OF LONCAR (DECEASED)
[2023] SASC 37

Testamentary Causes Jurisdiction

1      BAMPTON J:  Cedomir Loncar (“Cedomir”) who was last seen alive on 22 August 2019 and whose dead body was found at Croydon Park on 5 September 2019, died aged 89 leaving a will dated 19 November 1965 (“the will”).  Cedomir died a widower, never having fathered children.  The will appoints Executor Trustee and Agency Company of South Australia and Cedomir’s wife, Snezana Loncar (“Snezana”), executors.  Australian Executor Trustees (“AET”) is the successor in law to Executor Trustee Australia Limited (formerly Executor Trustee and Agency Company of South Australia Limited).

2               The will gifts the entirety of the Cedomir’s estate to Snezana or, if she predeceased him and without him leaving children, to his brother Svetozar Loncar (“Svetozar”). 

3 As both Snezana and Svetozar predeceased Cedomir, Cedomir’s estate stands to be distributed on an intestacy under Part 3A of the Administration and Probate Act 1919 (SA) (“the Act”). AET is the surviving executor under the Will.

4 As Cedomir is not survived by any spouse, children, parents (relatives of the first degree) or any of his siblings (relatives of the second degree) but is survived by the issue of his deceased siblings, s 72J(b)(iv) of the Act is enlivened.

5                Cedomir had seven nieces and three nephews.  He is survived by two nieces living in South Australia and six other nieces and nephews living in Serbia.  One niece and one nephew predeceased Cedomir.  His deceased niece, Dragana Repija, is survived by a son and daughter and his deceased nephew, Mile Gnjatic, is also survived by two sons.  A family tree annexed to these reasons may assist in understanding Cedomir’s familial relationships.

6 By an amended originating application, AET seeks judicial advice pursuant to s 69 of the Act and r 80(1) of the Probate Rules 2015 (SA) in respect of the proper construction of s 72J(b)(iv) of the Act, in the context of the action commenced by AET[1] seeking probate of the will in solemn form (“the probate action”).

[1]     Australian Executor Trustees Ltd v Loncar & Ors CIV-21-003039.

7 The respondents and interested parties to the probate action have reached an in‑principle settlement of that action which has been submitted to AET for endorsement. Whilst AET does not oppose the in-principle settlement, it is in difficulty as to who are the proper beneficiaries pursuant to s 72J(b)(iv) of the Act, and the in-principle settlement cannot be given effect to until the following questions are determined:

1.On their proper construction, do the words “issue of such a relative” in s 72J(b)(iv) of the Act mean:

(a)    “children of such a relative” of the deceased: or

(b)    “children, grandchildren and more remote lineal descendants of such a relative” of the deceased?

2.lf the answer to question 1 is (b) “children, grandchildren and more remote lineal descendants of such a relative” of the deceased, then, in the case of grandchildren and more remote lineal descendants, do such beneficiaries:

(a)    take their respective deceased parent’s share of the estate per stirpes: or

(b)    take a share of the estate per capita?

8               AET also seeks directions regarding distribution of Cedomir’s estate in accordance with the answers given by way of judicial advice to the questions 1 and 2 above.

The intestacy provisions of the Act

9 Section 72J of the Act provides:

72J—Distribution amongst relatives

The following rules govern distribution of an intestate estate amongst relatives, or issue of relatives, of the intestate:

(a)where the intestate is survived by a single relative of the first degree, that relative is entitled to the whole of the intestate estate, and where the intestate is survived by two relatives of the first degree, those relatives are entitled to the whole of the intestate estate in equal shares;

(b)where the intestate is not survived by a relative of the first degree but is survived by a relative of the second degree or issue of any such relative, then—

(i)    if the intestate is survived by one relative of the second degree, and by no issue of any such relative who predeceased him, the surviving relative is entitled to the whole of the intestate estate;

(ii)     if the intestate is survived by relatives of the second degree, and by no issue of any such relative who predeceased him, those relatives are entitled to the whole of the intestate estate in equal shares;

(iii)    if the intestate is survived by a relative of the second degree, and by issue of any such relative who predeceased him, the intestate estate shall be divided into portions equal in number to the number of relatives of the second degree of the intestate who either survived the intestate or left issue who survived him and—

(A)any relative of the second degree who survived the intestate is entitled to one of those portions; and

(B)where a relative of the second degree died before the intestate leaving issue that survived the intestate, the issue is entitled per stirpem (through all degrees) to one of those portions (and if the issue comprises two or more persons, they share equally);

(iv)    if the intestate is not survived by a relative of the second degree, but is survived by issue of such a relative, the intestate estate shall devolve upon that issue as if the issue were issue of the intestate;

(c)where the intestate is not survived by any relative of the first or second degree, or by issue of a relative of the second degree, but is survived by a relative or relatives of the third degree, then—

(i)    if the intestate is survived by only one such relative, that relative is entitled to the whole of the intestate estate; or

(ii)     if the intestate is survived by more than one such relative, those relatives are entitled to the whole of the intestate estate in equal shares;

(d)where the intestate is not survived by a relative of the first, second or third degree, or by issue of a relative of the second degree, but is survived by a relative of the fourth degree, or by issue of such a relative, then—

(i)    if the intestate is survived by one relative of the fourth degree, and by no issue of any such relative who predeceased him, the surviving relative is entitled to the whole of the intestate estate;

(ii)     if the intestate is survived by relatives of the fourth degree, and by no issue of any such relative who predeceased him, those relatives are entitled to the whole of the intestate estate in equal shares;

(iii)    if the intestate is survived by a relative of the fourth degree, and by issue of any such relative who predeceased him, the intestate estate shall be divided in the portions equal in number to the number of relatives of the fourth degree of the intestate who either survived the intestate or left issue who survived him and—

(A)any relative of the fourth degree who survived the intestate is entitled to one of those portions; and

(B)where a relative of the fourth degree died before the intestate leaving issue that survived the intestate, the issue is entitled per stirpem (through all degrees) to one of those portions (and if the issue comprises two or more persons, they share equally);

(iv)    where the intestate is not survived by a relative of the fourth degree, but is survived by issue of such a relative, the intestate estate shall devolve upon that issue, as if the issue were issue of the intestate. 

(Emphasis added)

10             I have been assisted in providing this advice by written submissions prepared by AET’s solicitors and counsel (“the written submissions”).

11             I note at this juncture I was informed by AET’s counsel that the respondents and interested parties to the probate action were notified of the date and time of the hearing of this application for advice or direction and provided with a copy of the written submissions.  The matter was called outside court before the hearing and there was no appearance for any party, although the solicitor for the second to seventh respondents in the probate action was present in court.  I was informed that counsel for the second to seventh respondents in the probate action had, upon receipt of the written submissions, notified AET’s counsel that he was not instructed to make further submissions.

12 The written submissions detail the legislative history of s 72J of the Act and principles of statutory construction which I paraphrase as follows.

13 Section 72J was inserted into the Act by the Administration and Probate Act Amendment Act (No 2) 1975 (SA).  During the Second Reading speech for the Amending Act, the then Attorney-General, the Hon Peter Duncan, stated that:

The present law governing the distribution of an intestate’s estate is a mixture of common law, United Kingdom Statutes enacted prior to 1836, and sections 53, 54, 55 and 55a of the Administration and Probate Act,1919-1972, which to some extent amend the earlier United Kingdom Statutes.

and:

New section 72J deals with distribution amongst relatives. (These provisions are applicable only where the deceased leaves no spouse or issue.) Relatives are entitled to the estate in the following order of priority: (a) parents of the intestate; (b) brothers and sisters of the intestate (and, where a brother or sister has died leaving issue, the issue takes the share of the deceased brother or sister); (c) grandparents of the intestate; and (d) uncles and aunts of the intestate (and where an uncle or aunt has died leaving issue, the issue takes the share of the deceased uncle or aunt). 

(Emphasis added)

14             Counsel also prepared the following overview of the equivalent legislative provisions in other Australian jurisdictions which reveals some variation in how the matter of distribution to siblings (and their issue) of an intestate estate has been approached:

Jurisdiction	Relevant legislation	Summary
New South Wales	Succession Act 2006 (NSW) s 129	If any child of a brother or sister has died, leaving “issue” who survive the intestate, they take their deceased parent’s presumptive share per stirpes (the section contemplates “issue” continuing beyond nieces and nephews, but only if their respective parent predeceased).
Victoria	Administration and Probate Act 1958 (Vic) s 70ZI	Distribution is to siblings and to the children of any siblings who predeceased (per stirpes), 3 AP Act, s 72B 5.  The section uses the word “child” of a sibling rather than “issue.”
Australian Capital Territory	Administration and Probate Act 1929 (ACT) s 49C	Siblings and the “issue” of predeceased siblings take (and if more than one issue, per stirpes).
Northern Territory	Administration and Probate Act 1929 (NT) s 69	Siblings and the “issue” of predeceased siblings take (and if more than one issue, per stirpes).
Queensland	Succession Act 1981 (Qld) s 37	Siblings and the “children” of any predeceased sibling, and the section specifically precludes any issue more remote than “child”.
Tasmania	Intestacy Act 2010 (Tas) s 30	Siblings and the “issue” of predeceased siblings take (and if more than one issue, per stirpes).
Western Australia	Administration Act 1903 (WA) s 14	Distribution is to siblings and to the children of any siblings who predeceased (per stirpes).  Specifically uses “child” of a sibling rather than “issue”.

Principles of construction

15             In interpreting a statute, it is the Court’s function is to construe the intention of the legislature through the words used in the statute.[2]

[2]     Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355.

16             The traditional approach to statutory interpretation is to give words used in the statute their literal meaning, and to only reject that meaning if the results lead to an absurdity or inconsistency.  In the past, the “ordinary” or “literal” meaning approach has been described as the fundamental rule to which others are subordinate.[3]

[3]     Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (The Engineers’ Case) (1920) 28 CLR 129.

17             However, in contrast to the “literal approach”, there has been a shift towards the “modern” or purposive approach, which requires greater emphasis to be given to the context of the words within the statute.  This approach involves consideration of the statute as a whole, the existing state of the law, and the purpose of the statute.

18             The “modern approach” was summarised by the High Court in R v A2 as follows:[4]

In assigning legal meaning to the words of a provision, the court starts with consideration of the ordinary and grammatical meaning of the words taking into account both context and legislative purpose.  Consideration of context in its widest sense and the purpose of the statute informs the interpretative task throughout.  That consideration, and the consequences of giving a provision its literal, grammatical meaning, may lead the court to adopt a construction that departs from the ordinary meaning of the words.  Purposive construction, however, does not extend to expanding the scope of a provision imposing criminal liability beyond its textual limits. 

(Citations omitted)

[4] (2019) 269 CLR 507 at [124] (Kiefel CJ and Keane J).

Section 72J(b)(iv) – Ordinary meaning interpretation

19             The term “issue” is defined by the Encyclopaedic Australian Legal Dictionary, in the context of succession law, as referring to “children, grandchildren and all other lineal descendants”.

20             In the text Construction of Wills in Australia, the following excerpts discuss the interpretation of the word “issue” in the context of will construction:[5] 

[5]     David M Haines QC, Construction of Wills in Australia (LexisNexis Butterworths, 2007) at [17.2]-[17.3].

Gifts to Issue, Descendants, and Next of Kin

Introduction

17.1   The word ‘issue’ in gifts has been the subject of considerable judicial controversy in terms of the identity of the intended beneficiaries.  It is proposed to consider such gifts in general and specific terms, and then the provisions of the wills legislation in so far as it relates to gifts to the issue of such persons who predecease a testator.  There may be difficulties in understanding expressions in a will that identify classes of descendants who are intended to be its beneficiaries.  The manner in which courts have construed words describing particular classes such as ‘issue’, ‘descendants’, or ‘nephews and nieces’ is such that particular care must be used in employing them lest the will is interpreted as including persons who are beyond the donative intention and contemplation of a testator.  Notwithstanding the fact that children may fall within the definition of some of the classes of persons described in this chapter, the various forms in which children take for the purposes of succession are considered both here but more particularly in a separate chapter.[6]

[6]     See Chapter 15.

Issue

17.2   Gifts to issue invariably are made in substitution of a primary beneficiary who dies before the happening of an event and are ineffectual if the primary beneficiary is alive at that time.[7]  The word ‘issue’ has a clear prima facie meaning, namely, descendants or progeny.[8]  The essence of ‘issue’ primarily means all descendants, in totality rather than succession.[9]  In construing a will, a court should not first consider the meaning of ‘issue’ simpliciter and then see whether it is affected by the context.[10]  ‘Issue’ are descendants in any degree and not merely children or grandchildren.[11]  The general rule is that ‘issue’ means ‘issue to all degrees’ unless that meaning is restrained by the context.[12]  The word ‘issue’ is not restricted to the children of a person unless the context of the will provides otherwise.[13]  It is, nevertheless, a flexible word and its prima facie application may be restricted by any sufficient indications appearing in the will.[14]  The words ‘issue’ and ‘descendants’ mean substantially the same thing and, prima face, are equivalent to ‘heirs of the body’.[15]  The word ‘issue’ in a will means, prima facie, the same as heirs of the body and is to be construed as a word of limitation.[16]  The word ‘issue’ should not be construed in a secondary or restricted sense unless the context of the will otherwise directs.[17]  A construction of the word becomes important as to the limitation which should be put on the word or otherwise within the context of a will.  Thus, the context may restrict those who take the benefit of the estate and that limitation may affect grandchildren of a testator.[18]  An onus is cast on those who contend to the contrary to displace the ordinary meaning of ‘issue’ in a will.[19]

A gift to ‘male issue’ prima facie means males descended from male children and, unless the context of the will provides otherwise, excludes males born through female descendants.[20]

A gift to A for life with remainder ‘to B but if B dies during A’s life leaving issue, then to such issue’ includes a child en ventre sa mère at the date of A’s death.[21]

Rule in Sibley v Perry

17.3   The rule, or more properly called the ‘so-called rule’, in Sibley v Perry[22] has been the subject of considerable judicial debate.  It has, on occasion, been questioned as to ‘its origin, its present authority and even its very existence’.[23]  Indeed, it is difficult to see that a general rule can arise from the original reasons for judgment as the rationale was limited to the words of the will under construction in that particular case.[24]  The so-called rule is considered where there is a gift of $X to A, B and C ‘if they be living at the time of my decease and if all or any of them shall die before [me], then to the lawful issue of every one of them so dying before me shall share and share alike and enjoy that $X which their respective parents if living would have had and enjoyed’.  In short, the so-called rule says that where the word ‘issue’ is used in reference to the parent of that issue, the word ‘issue’ is prima facie restricted to children of that parent.[25]  The High Court has interpreted the effect of the so-called rule in such a manner as to limit it to an acknowledgment that, while ‘issue’ usually refers to descendants to any degree, sometimes it does not, all depending on the context of the will.[26]  Some English authorities have criticised the ‘compartmental approach’ required by Sibley v Perry saying that a different construction may be warranted after a reading of the whole will.[27]

(Footnotes in original)

[7]     Re Heard; McDonald v Edney [1942] VLR 199 at 202 per Mann CJ.

[8]     Matthews v Williams (1941) 65 CLR 639 at 650.

[9]     Matthews v Williams (1941) 65 CLR 639 at 650.

[10]   Re Noad, decd; Noad v Noad [1951] 1 Ch 553 at 556; [1951] 1 All ER 467 per Roxburgh J, there not following Walsh v Johnston [1899] 1 IR 501 at 503-4 per Chatterton VC.

[11]   Re Matthews [1960] VR 3 at 7 per Sholl J.

[12]   Re Noad, decd; Noad v Noad [1951] 1 Ch 553 at 556; [1951] 1 All ER 467 per Roxburgh J

[13]   Buick v Equity Trustees Executors (1957) 97 CLR 599 at 620; 31 ALJ 839 per Kitto J.

[14]   Buick v Equity Trustees Executors (1957) 97 CLR 599 at 620; 31 ALJ 839 per Kitto J. See too Plunkett v Plunkett (1947) 47 SR (NSW) 483 at 486 per Roper J.

[15]   Re Hickey [1927] VLR 555 at 559 per McArthur J.

[16]   Slater v Dangerfiled (1846) 15 M & W 263 at 273; 153 ER 848 per Parke B.

[17]   Re Hickey [1927] CLR 555 at 560.

[18]   Barraclough v Shillito (1884) 53 LJ Ch 841 per Chitty J.

[19]   Re Matthews [1960] VR 3 at 7 per Sholl J.

[20]   Allen v Crane (1953) 89 CLR 152 at 161; 27 ALJ 538 per Dixon CJ and at 165 per Kitto J. The Court of Appeal in Re Drake, decd; Drake v Drake [1971] Ch 179; [1970] 3 All ER 32 declined to follow Allen v Crane and held that the expression ‘male descendants’ means male persons descended in any manner from a common ancestor including those descended through females.

[21]   Permanent Trustee Co of NSW Ltd v Ralfe (1940) 57 WN (NSW) 183 per Williams J.

[22]   Sibley v Perry (1802) 7 Ves 522 at 531; 32 ER 211 per Lord Eldon LC.

[23]   Re Wardle, decd (1979) 23 SASR 214 at 217 per Cox J and see 218 for specific examples of criticism by other judges.

[24]   Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 at 25 per Bryson J. See too Ralph v Carrick (1879) 11 Ch D 873 at 882 per James LJ and 886 per Cotton LJ.

[25]   Re Wardle, decd (1979) 23 SASR 214 at 218 there citing Re Timson; Smiles v Timson [1916] 2 Ch 362 at 365 per Lord Cozens-Hardy Mr; Re Eddington (1921) 17 Tas LR 70 at 72 per Crisp J; Re Dougharty [1935] VLR 333 at 340 per Mann J.

[26]   Matthews v Williams (1941) 65 CLR 639 at 656. See also Re Wardle, decd (1979) 23 SASR 214 at 218.

[27]   Re Hipwell; Hipwell v Hewitt [1945] 2 All ER 476 at 477 per Lord Greene Mr and at 479 per du Parcq LJ and see Re Manly’s Will Trusts; Burton v Williams [1969] 1 WLR 1818; [1969] 3 All ER 1011 per Ungoed-Thomas J for an excellent review of the authorities.

21             In In Re Wardle (Deceased),[28] Cox J noted the High Court’s recognition and narrow application of the so-called rule in Sibley v Perry in Matthews v Williams cited at footnote 26 in the except at [20] above:[29]

That, as it seems to me, falls significantly short of a prima facie rule of construction about the meaning of “issue” in any will that contains a reference to the parents of issue.  Rather, it would appear simply to acknowledge that, while “issue” usually refers to descendants to any degree, sometimes it does not.  It all depends on the context. 

[28] (1979) 23 SASR 214.

[29] (1979) 23 SASR 214 at 219.

Discussion

22 Section 72J prescribes rules governing distribution of an intestate estate amongst relatives or issue of relatives of the intestate. As Cedomir is not survived by a relative of the second degree but is survived by issue of such a relative, s 72J(b)(i)(iv) is applicable to the distribution of his intestate estate. This section provides the issue of Cedomir’s deceased relatives of the second degree are taken, for the purposes of distribution of his intestate estate, to be Cedomir’s issue. As this subsection prescribes that his intestate estate shall devolve upon such issue as if they were his issue but does not describe the manner of distribution, regard must be had to s 72I.

23 Section 72I prescribes rules for the distribution of an intestate estate amongst issue of the intestate. It is be noted the only place where the words “child”, “children”, and “grandchildren” appear in the Act is in s 72I and they are used in clear contradistinction to the use of the word “issue”. Section 72I provides:

(a)if the intestate is survived by a child and by no other issue (apart from issue of that child) that child is entitled to the whole, or that part (as the case may be) of the intestate estate; and

(b)if the intestate is survived by children and by no other issue (apart from issue of those children) those children are entitled to the whole, or that part (as the case may be) of the intestate estate, in equal shares; and

(c)if the intestate is survived by a grandchild and by no other issue (apart from issue of that grandchild) that grandchild is entitled to the whole, or that part (as the case may be) of the intestate estate; and

(d)if the intestate is survived by grandchildren and by no other issue (apart from issue of those grandchildren) those grandchildren are entitled to the whole or that part (as the case may be) of the intestate estate in equal shares; and

(e)in any other case, the whole or that part of the intestate estate shall be divided into portions equal in number to the number of children of the intestate who either survived the intestate or left issue who survived him and—

(i)    a child (if any) of the intestate who survived the intestate is entitled to one of the portions;

(ii)     where a child of the intestate died before the intestate leaving issue that survived the intestate, that issue is entitled per stirpem (through all degrees) to one of those portions (and if the issue comprises two or more persons, they share equally). 

(Emphasis added)

24             As Cedomir:

(a)is not survived by child, children, grandchild, or grandchildren s 72I(a) to (d) are not applicable; and

(b)noting his intestate estate pursuant to s 72J(b)(iv) devolves upon the issue of his deceased relatives of the second degree as if they were his issue,

his intestate estate is be distributed in accordance with the rule in s 72I(e).

25 Applying s 72I(e), distribution to the issue of the intestate would start with children. The treating of nieces and nephews as issue of the intestate means that nieces and nephews take per capita pursuant to s 72I(e)(i). In this case, the distribution of Cedomir’s intestate estate would start with his nieces and nephews.

26 Any issue of deceased children take the share of their deceased parent pursuant to s 72I(e)(ii) per stirpes.  This subrule applies to the issue of Cedomir’s deceased niece and nephew, who take the share which their parents would have taken per stirpes.

27 If the word “issue” in s 72J(b)(iv) is to be interpreted as meaning “children”, it would render the rule in s72I(e)(ii) regarding stirptial distribution through all degrees meaningless.

28 It follows the rule in s 72I(e)(ii) that issue is entitled to distribution per stirpem (through all degrees) signals, the word “issue” in s 72J(b)(iv) is to be interpreted as meaning all lineal descendants of a deceased relative of the second degree of the deceased.

29             Support for this construction is found in Buick v Equity Trustees Executors & Agency Co Ltd,[30] where Dixon CJ and Kitto J, Fullagar J dissenting, held that a direction in a will that on the death of any of the testator’s children their gift “shall be divided between the issue of such child per stirpes” meant all lineal descendants and not simply children of the testator’s children.  Chief Justice Dixon said that to interpret “issue” as meaning “children”:[31]

would mean the entire rejection of the words “per stirpes”, as inappropriate and meaningless; and in any case some context is necessary to enable one to read “issue” as “children”.

Further, Kitto J said:[32]

… If “issue” is here to be translated “children” the result must be, not merely that “per stirpes” becomes otiose … but that the division that is directed is denied the character which the words “per stirpes” stamp upon it.  It must be a division into as many parts as there are stocks, and a distribution of each part among members of one stock must be without regard to the degree of their relationship to the common ancestor of all the stocks.

[30] (1957) 97 CLR 599.

[31] (1957) 97 CLR 599 at 607.

[32] (1957) 97 CLR 599 at 620.

30 If the issue of Cedomir’s deceased siblings are, for the purposes of s 72J(b)(iv), taken to be issue of Cedomir, then, on an ordinary meaning construction, s 72J(b)(iv) and s 72I(e) read together would provide that:

1.Cedomir’s intestate estate should be divided into portions equal to the number of children of a deceased sibling of Cedomir who:

(a)    either survived him; or

(b)    left issue who survived him. 

Cedomir’s nieces and nephews number 10, eight of whom survived him and two predeceased him.  It follows Cedomir’s intestate estate should be divided into 10 equal portions.

2.Any niece or nephew who survived Cedomir is entitled to one of the 10 portions.

3.The surviving issue (grandnieces and grandnephews together with their issue) of any niece or nephew who predeceased Cedomir are entitled to one portion, and if more than one, in equal shares.

In the Estate of Hughes

31              In In the Estate of Hughes (“Hughes”),[33] the intestate died a divorced woman with no issue. She was not survived by parents, siblings, grandparents, or aunts and uncles. She was survived by “issue” of her relatives of the fourth degree, that is, her first cousins and lineal descendants of those cousins. As the intestate was not survived by a relative of the fourth degree but survived by the issue of such a relative, s 72J(d)(iv) of the Act was enlivened. The intestate estate fell to be distributed between her first cousins or where any first cousins predeceased her, the issue of those cousins living at the date of her death took the share the first cousin would have taken if they had survived the intestate.

[33] (1985) 38 SASR 5.

32             Justice Bollen said his task in Hughes was to interpret s 72J(d)(iv) of the Act in determining whether the section means:[34]

… all of the issue of the uncles and aunts of the intestate, who survived the deceased, are to share the estate as if all of the cousins of the intestate who survived the deceased, or who left issue surviving the deceased, are treated as children of the deceased so that in effect the estate is distributed per capita between such cousins, or whether the claims of the issue of each relative of the fourth degree are to be dealt with separately so that in effect the estate is to be distributed per stirpes through the relatives of the fourth degree…

[34]   In the Estate of Hughes (1985) 38 SASR 5 at 6.

33             The focus of the Bollen J’s enquiry was whether the issue of the intestate’s first cousins took per capita or per stirpes and appeared to be based upon an acceptance that the word “issue” in s 72J(d)(iv) meant “all lineal descendants”.

34 Justice Bollen referred to the rules governing distribution amongst issue of an intestate in s 72I of the Act and determined issue of the intestate relatives of the fourth degree take the share their parents would have taken per stirpes:[35]

I think, too, that the phrase in s. 72j(d)(iv) “as if the issue were issue of the intestate” demands an interpretation that the cousins take per capita.  Issue of the intestate would start with children.  They take in equal shares per capita.  Any children of deceased children take between themselves the share of their deceased parent.  The treating of cousins as issue of the intestate means that cousins take per capita.  Children of deceased cousins must take the share which their parents would have taken.

[35] Ibid at 10-11.

35 The wording in s 72J(b)(iv), the subject of the advice in this matter, and s 72J(d)(iv), the subject of the advice in Hughes, are identical other than:

1.section 72J(b)(iv) concerns issue of a deceased relative of the intestate of the second degree; and

2.section 72J(d)(iv) concerns issue of a deceased relative of the intestate of the fourth degree.

The approach taken in Hughes supports my construction of s 72J(b)(iv).

Conclusion

36             On an ordinary meaning construction, the answers to the question posed by AET are:

1.As to question 1, the words “issue of such a relative” in s 72J(b)(iv) of the Act on their proper construction mean “children, grandchildren and more remote lineal descendants of such a relative”; and

2.As to question 2, in the case of grandchildren and more remote lineal descendants, such relatives take their respective deceased parent’s share of the estate per stirpes. 

37             I direct AET that it is appropriate and proper to distribute Cedomir’s intestate estate in accordance with these answers.   

Annexure – family tree