In the Estate of Stewart
[2021] NTSC 47
•25 June 2021
CITATION:In the Estate of Stewart [2021] NTSC 47
PARTIES:IN THE ESTATE OF STEWART
ON REFERENCE from the Registrar of the Supreme Court of the Northern Territory
TITLE OF COURT: SUPREME COURT OF THE
NORTHERN TERRITORY
JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:2020-01972-SC
DELIVERED: 25 June 2021
JUDGMENT OF: Brownhill J
Long v Watkinson (1852) 17 Beav 471; 51 ER 116; Lord Advocate v Bogie [1894] AC 83; Re Bosanquet; Unwin v Petre (1915) 113 LT 152; Re Chester, Deceased (1978) 19 SASR 247; Re Cousen’s Will Trusts; Wright v Killick [1937] Ch 381; Sibley v Cook (1747) 3 Atk 572; 26 ER 1130, referred to.
G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths,
1st ed, 2013).
Administration and Probate Act 1969 (NT) s 17(2)(c)
Wills Act 2000 (NT) ss 6, 34(1)
REPRESENTATION:
Solicitors:
Applicant:Maleys Barristers & Solicitors
Judgment category classification: C
Judgment ID Number: Bro2112
Number of pages: 13
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINIn the Estate of Stewart [2021] NTSC 47
No. 2020-01972-SC
BETWEEN
IN THE ESTATE OF STEWART
ON REFERENCE FROM THE REGISTRAR OF THE SUPREME COURT OF THE NORTHERN TERRITORY
CORAM: BROWNHILL J
REASONS FOR ORDERS
(Delivered 25 June 2021)
Two issues arise in this matter. The first is whether letters of administration should be granted to the applicant in circumstances where the deceased made a will that may make an alternative disposition to circumvent the doctrine of lapse arising by the death of the intended beneficiary. This issue requires construction of the will. The second issue is whether the deceased had testamentary capacity in light of the cause of death described in the death certificate as longstanding dementia. This issue is a question of fact.
The Registrar referred this matter (‘the reference’) under s 17(2)(c) of the Administration and Probate Act 1969 (NT).
The deceased, Lynette Rae Stewart, made a will on 24 July 2008 (‘the Will’). The Will provides that, if her defacto partner, William John Johnston (‘Mr Johnston’), survives her for a period of 30 days, she appoints him as her executor and bequeaths the whole of her estate to him (cl 2).
The deceased was not survived by Mr Johnston. Mr Johnston died on 3 September 2012. The deceased died on 30 May 2019.
The Will also provides that, if Mr Johnston does not survive the deceased for a period of 30 days (cl 3), the deceased appoints Kathleen Alison Buntain and Claud Buntain (‘Ms and Mr Buntain’) as joint executors and trustees of the Will, who are identified thereafter in the Will by the term ‘the Trustee (cl 4), and that she bequeaths the whole of her estate to the Trustee upon trust to sell, and out of the estate to pay her debts, funeral and testamentary expenses, duties and costs incidental to the execution of the trusts of the Will and to hold the remainder upon trust for Mr Johnston (cl 5).
Ms Buntain is the daughter of Mr Johnston and Mr Buntain is her husband.[1]
The estate has a net value of $151,010.92.
The reference expresses the view that, because Mr Johnston died over six years before the deceased, the Will fails to deal with the deceased’s assets, such that the deceased died intestate.
On 3 April 2020, Ms Buntain applied for letters of administration of the deceased’s estate. The application was supported by an affidavit she made on 13 February 2020 (‘Affidavit’). The application is made on the basis that the Will fails to deal with the deceased’s assets such that she died intestate.[2] Ms Buntain seeks to distribute the deceased’s estate to the children of Mr Johnston (who are not children of the deceased), namely herself, Heather McMaster and Nancy Johnston.[3]
If it is correct that the Will fails to deal with the deceased’s assets, such that she died intestate, it will be necessary to determine whether the deceased is survived by issue, parent or next of kin and to whom the estate should be distributed. If it is not correct, those matters need not be determined. I have concluded that it is not correct. I have also concluded that the deceased had testamentary capacity.
The doctrine of lapse
The doctrine of lapse provides that, if a beneficiary of a testator’s gift predeceases the testator, or does not survive the testator for a period of 30 days,[4] the gift ordinarily fails because it ‘lapses’.[5] In this event, the deceased beneficiary’s personal representatives cannot claim the disposition and, in the case of a residuary gift, it falls to be distributed according to the intestacy rules.[6]
The doctrine of lapse is the product of the ambulatory nature of a will, namely that it has no effect until the death of the testator.[7] It follows that, should the beneficiary predecease the testator, the subject matter of the gift cannot vest in the beneficiary, as he or she no longer has the capacity to take it at the date of the testator’s death.[8]
A testator can prevent lapse via an appropriate ‘substitutional’ clause that makes provision for an alternative disposition in the event that the intended beneficiary is no longer alive or in existence at the testator’s death.[9] A will may circumvent the doctrine of lapse via an alternative disposition to the personal representatives of the intended beneficiary, who then hold the disposition in trust for those who take the estate of the intended beneficiary.[10]
In Re Chester, Deceased (1978) 19 SASR 247 at 255, King J summarised the effect of numerous authorities[11] as follows:
A gift by will to the personal representative of another deceased person has the effect that the executor holds the subject matter of the gift upon trust to deal with it as though it formed part of the estate which the executor is administering…
In Sibley v Cook (1747) 3 Atk 572; 26 ER 1130, the will provided that the testator gave certain legacies to be paid to the named persons, provided that if any of the persons should die before the legacies become due and payable, they shall not be deemed lapsed legacies. The will then particularised the legacies, including a gift to a named person ‘and to her executors or administrators’.[12] This was held to be sufficient to prevent lapse arising from the death of that person.
In Re Cousen’s Will Trusts; Wright v Killick [1937] Ch 381, the will provided for the residuary estate to go to certain children and that, if they died in the testator’s lifetime, leaving issue at the testator’s death, the share in the estate which that child would have taken if he or she had survived the testator ‘shall be held in trust for his or her personal representatives as part of his or her personal estate’.[13] Leaving aside the fact that the relevant child had also predeceased the testator, Farwell J held (at 387) that the effect of the will was that the child’s share was to be held by her legal personal representatives on the same trusts on which they held her personal estate to be distributed by reference to the dispositions of the child with regard to her own property.
In coming to this conclusion, Farwell J relied on two other decisions. The first was Long v Watkinson (1852) 17 Beav 471; 51 ER 116. In that case, the will provided for the residuary of the estate to pass to the testator’s sister and that, in the case of her death, the estate was to be paid to the executors which the sister may appoint. Romilly MR held that the executor of the sister took the estate as trustee to be administered by her as if it formed part of the property coming into her hands as the executor of the sister, such that beneficially, the estate belonged to the persons who are interested in the estate of the sister.
The second was Lord Advocate v Bogie [1894] AC 83. In that case, the will provided that the residuary estate was bequeathed to three named persons equally and, if they predeceased the testator (‘S’), ‘to their several and respective executors and representatives whomsoever’.[14] Lord Herschell held (at 91) that the will must be taken as speaking from the time of S’s death, and where one of the named persons (‘M’) had predeceased S, its effect was that S’s estate passed to the executors of M to administer S’s estate as if it were part of M’s estate. Lord Watson held (at 95) that a trust was created by the will, with the trustees being the executors of M and the purpose of the trust being for S’s estate to be administered by the trustees as a separate estate in the same manner and subject to the same conditions as if it had originally been the property of M himself.
These authorities show that, to circumvent the doctrine of lapse, the will must disclose:
(a)an alternative disposition to the personal representative(s) of the intended but deceased beneficiary; and
(b)that the personal representative(s) is(are) to hold the disposition in trust for those who take the estate of the intended but deceased beneficiary.
Construction of the Will
Ordinarily, the construction stage of a will follows the grant of probate.[15] In the probate stage, the Court functions as a court of probate to determine (essentially) the validity of the will. Matters of uncertainty and ambiguity in the will are addressed after the grant of probate to determine the proper application of the estate. However, it is sometimes necessary for a court of probate to construe a will, for example, to determine who should be granted probate or administration.[16] That is what is required by the reference in this matter.
Clauses 3, 4 and 5 of the Will are expressly directed to the circumstance of Mr Johnston dying before the deceased and clearly seek to circumvent the doctrine of lapse. Clause 5 seeks to make an alternative disposition to Ms and Mr Buntain to hold the disposition in trust for Mr Johnston, who is contemplated by cl 5 (by reference to cl 3) to be deceased.
As at the date of the deceased’s death:
(a)Mr Johnston had died.
(b)Mr Johnston’s will[17] had been executed (on the same date as the Will). It was in similar terms and form to the Will, providing that the deceased be appointed executor and the whole estate be bequeathed to the deceased if she survived Mr Johnston by 30 days and, if she did not, appointing Ms and Mr Buntain as joint executors and trustees with the whole estate bequeathed to them to sell, and out of the estate to pay his debts, funeral and testamentary expenses, duties and costs incidental to the execution of the trusts of the will and to hold the remainder upon trust for Ms Buntain, Heather McMaster and Nancy Johnston.
(c)Ms and Mr Buntain had been granted letters of administration in relation to Mr Johnston’s will because the deceased had a stroke in 2013 or 2014 and did not have the capacity to act as executor of Mr Johnston’s will.[18]
Clause 5 of the Will, as a disposition in the alternative to the disposition in cl 2, bequeaths the whole of the deceased’s estate to Ms and Mr Buntain, who were the personal representatives of Mr Johnson, who was the intended beneficiary of the bequest in the Will. Given the express intention in cl 5 that the estate be held by Ms and Mr Buntain on trust for Mr Johnston, and that the clause expressly contemplated that Mr Johnston would be deceased in the circumstances where that gift was to take place (cl 3), it seems plain that the intention was that the deceased’s estate pass to Ms and Mr Buntain to administer as if it were part of Mr Johnston’s estate in the same manner and subject to the same conditions as if it had been the property of Mr Johnston himself.
There is a question as to whether it matters that the Will identified Ms and Mr Buntain by name instead of referring to personal representatives (or executors or administrators) generally.
At the time the Will was made, it was envisaged by Mr Johnston’s will that, if he died first, the deceased would be the executor of his will, not Ms and Mr Buntain. If she had been appointed the executor and had been granted probate of Mr Johnston’s will, Ms and Mr Buntain would not have been Mr Johnston’s personal representatives. In those circumstances, the alternative disposition in the Will would probably have been ineffective to circumvent the doctrine of lapse because it named Ms and Mr Buntain as the intended trustees and they did not then have any function or duty in the administration of Mr Johnston’s estate.
However, that is not what happened. Ms and Mr Buntain, and not the deceased, were appointed as Mr Johnston’s personal representatives, with the function and duty of administering his estate. It is to them that cl 5 bequeaths the deceased’s estate to hold it on trust for the benefit of Mr Johnston, which in context (ie that he is deceased) is clearly a reference to his estate. There is a principle of construction that a person who fills the description in the will at the date of the will takes the gift.[19] However, that principle yields to a contrary intention[20] and in my view a contrary intention appears because cl 5 is directed (by cl 3) to the situation at the date of death and within the 30 day period thereafter. Hence, it is immaterial that, at the date the Will was made, it was not the case or contemplated that Ms and Mr Buntain would be Mr Johnston’s personal representatives. What matters is whether they had that status at the date of death.
I note s 6(2) of the Wills Act, which provides that a person may dispose by will of property to which their personal representative becomes entitled by virtue of their office as such after the death of the person. By s 6(3), this applies whether or not the entitlement of the person or the personal representative exists at the date of making the will or at the time of the person’s death. This confirms that the deceased’s estate can, upon passing to Ms and Mr Buntain as Mr Johnston’s personal representatives, be disposed of under and in accordance with Mr Johnston’s will.
For these reasons, the gift made by the Will did not lapse. The Will deals with the deceased’s assets and she did not die intestate.
The deceased’s testamentary capacity
The deceased died on 30 May 2019, almost 11 years after she made the Will on 24 July 2008. The death certificate states that the causes of death were ‘1. Chest infection 2. Dementia’ and that the duration of last illness was ‘1. 3 days 2. longstanding’.
Ms Buntain attested that, prior to applying to the Court for a grant of probate or letters of administration in relation to the estate of Mr Johnston, the deceased suffered a stroke in 2013 or 2014 ‘and did not have capacity to act as executor’ of Mr Johnston’s will.[21] On 24 August 2015, Ms and Mr Buntain were appointed as joint adult guardians of the deceased.[22] On 11 November 2016, after the deceased moved to an aged care facility in Queensland, Ms and Mr Buntain were appointed jointly and severally as administrators for the deceased for all financial matters.[23]
Other than what is set out in the death certificate referred to above, there is no suggestion in any of the affidavit material before the Court or in the Will itself (which was prepared by solicitors) that the deceased suffered dementia in 2008. Noting the presumption of capacity if the will is rational on its face and duly executed, I infer, from the facts referred to in paragraph [30] above, that at the time she made the Will, the deceased had testamentary capacity[24] and, in particular, did not suffer from dementia to any incapacitating extent. I further infer the deceased did not suffer from dementia to any incapacitating extent until after the stroke in 2013 or 2014.
Order
The Will does not fail to deal with the deceased’s assets so she did not die intestate. Consequently, it is not appropriate to issue letters of administration. The proper course is for probate to be sought by, and issued to, Ms and Mr Buntain jointly.
If an application for probate were to be made by Ms and Mr Buntain, it should issue to them in accordance with the Will to administer the estate as if it were part of the estate of Mr Johnston under his will dated 24 July 2008.
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[1] Ms Buntain’s husband’s name is Timothy Claud Buntain, but there is no doubt of which I am aware that, despite being referred to as ‘Claud Buntain’ in the Will, he is the person intended to be referred to.
[2] Affidavit, [31].
[3] Affidavit, [33].
[4] Wills Act 2000 (NT), s 34(1).
[5] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013) [7.13].
[6] Ibid.
[7] Ibid, [7.14].
[8] Ibid.
[9] Ibid, [7.15].
[10] Ibid.
[11] Including Long v Watkinson (1852) 17 Beav 471; 51 ER 116; Lord Advocate v Bogie [1894] AC 83; Re Cousen’s Will Trusts; Wright v Killick [1937] Ch 381 and Re Bosanquet; Unwin v Petre (1915) 113 LT 152.
[12]At 572.
[13]At 381.
[14]At 628.
[15] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013) [8.1].
[16] Ibid, [8.2].
[17] Affidavit, Annexure KB4.
[18] Affidavit, [11]-[12], [15].
[19] G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013) [8.48].
[20] Ibid, [8.49].
[21] Affidavit, [11]-[12], [15].
[22] Affidavit, [15].
[23] Affidavit, [17].
[24] As to which, see G E Dal Pont & K F Mackie, Law of Succession (LexisNexis Butterworths, 1st ed, 2013) [2.2]-[2.5], [2.17].
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