Jeffree Wilfred Hegarty v
[2011] NSWSC 1194
•21 September 2011
Supreme Court
New South Wales
Medium Neutral Citation: Jeffree Wilfred Hegarty v [2011] NSWSC 1194 Hearing dates: 21 September 2011 Decision date: 21 September 2011 Jurisdiction: Equity Division - Probate List Before: Gzell J Decision: Advice that executor would be justified in paying trust fund to remainderman
Catchwords: SUCCESSION - Will, Probate and Administration - Construction and effect of testamentary dispositions - ex parte application for judicial advice under the Trustee Act 1925, s 63 turned into an administration suit - non-charitable purpose trust - failure of earlier distribution - whether subsequent distribution accelerated Legislation Cited: Trustee Act 1925
Uniform Civil Procedure Rules 2005Cases Cited: Morice v Bishop of Durham (1804) 9 Ves Jun 399; [32 ER 656]
In re Recher's Will Trusts [1972] Ch 526
In re Dean. Cooper-Dean v Stevens (1889) 41 Ch D 552
Re Budge, Ex parte Pascoe [1942] NZLR 350
In re Endacott Decd. Corpe v Endacott [1960] Ch 232
Pedulla v Nasti (1990) 20 NSWLR 720
Pooley v Royal Alexandra Hospital for Children (1932) 32 SR (NSW) 459
Public Trustee v Nolan (1943) 43 SR (NSW) 169
In re Flower's Settlement Trusts [1957] 1 WLR 401
In re Taylor, Decd [1957] 1 WLR 1043
Tompkins v Simmons [1931] HCA 8; (1931) 44 CLR 546
Re Boning (1997) 2 Qd R 12
Public Trustee v Hayles (1993) 33 NSWLR 154Category: Principal judgment Parties: Jeffree Wilfred Hegarty (Plaintiff) Representation: R Kako (Plaintiff)
N Kirby (Royal Society for the Prevention of Cruelty to Animals New South Wales)
Willis & Bowring (Plaintiff)
File Number(s): 2011/231042
EX TEMPORE Judgment
The late Barbara Anne Pollack died between 21 and 24 October 2010 in Kingsgrove, New South Wales. The deceased appointed the Plaintiff, Jeffree Wilfred Hegarty, the executor and trustee of her will. Probate of the will was granted to Mr Hegarty.
Mr Hegarty sought the advice of the court as to the proper construction of the will under s 63 of the Trustee Act 1925. Because the Royal Society for the Prevention of Cruelty to Animals New South Wales wished to be heard on the application I made an order that Mr Hegarty would be justified in serving all beneficiaries named in the will with the summons and the statement of facts under s 63 and the Uniform Civil Procedure Rules 2005, Pt 55, r 55.1. None of the other beneficiaries wished to be heard.
After making provision for several legacies, clause (h) of the will provided:
"As to the sum of THIRTY THOUSAND DOLLARS ($30,000) to my Trustee UPON TRUST to pay thereout of capital as well as income to arise therefrom the sum of TWO THOUSAND DOLLARS ($2,000) per annum to KAREN HAYWOOD for the maintenance and care of any pets in my possession at the date of my death during the life of my said pets as long as she produces the said animals alive to my Trustee or other person appointed by my Trustee for that purpose and upon the death of my said animals I GIVE the remaining capital together with any unpaid income to THE ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS NEW SOUTH WALES (RSPCA NSW)
I DIRECT that the said KAREN HAYWOOD shall have absolute discretion as to the welfare of my said pets either caring for them personally or arranging for their care through an appropriate facility.
IN THE EVENT THAT I have no pets in my possession at the date of my death then I GIVE AND BEQUEATH the said sum of THIRTY THOUSAND DOLLARS ($30,000) to the aforementioned Society."
The clause was followed by further legacies in favour of various charities after which the following residuary clause appeared:
" I GIVE TO MY Trustee the rest and residue of my estate both real and personal of whatsoever kind and whatsoever situate UPON TRUST to sell call in and convert into money such part or parts thereof as shall not consist of money with power to my Trustee to postpone the sale and realisation thereof for so long as he in his absolute discretion shall deem expedient and TO DIVIDE the net proceeds thereof together with any ready moneys belonging to me at the time of my death into four (4) equal parts and TO HOLD such parts upon the trusts following: -
1. As to One (1) part thereof for the GUIDE DOGS ASSOCIATION OF NEW SOUTH WALES & ACT
2. As to One (1) part thereof for the ROYAL BLIND SOCIETY OF NEW SOUTH WALES
3. As to One (1) part thereof for the CHRISTIAN BLIND MISSION INTERNATIONAL
4. As to One (1) part thereof for the CHRISTIAN CHILDREN'S FUND (CCF)."
The deceased died leaving four pets - a dog (a Shelti), two cats (long haired) and a bird (budgerigar).
After the death of the deceased, Ms Haywood declined to look after the pets. The testatrix did not provide for this eventuality.
On 10 November 2010, Mr Hegarty surrendered all the animals to the RSPCA.
It was submitted that the express words used in clause (h) of the will, "...the sum of THIRTY THOUSAND DOLLARS ($30,000) to my Trustee UPON TRUST " suggests an intention to create a testamentary trust. Additionally, the direction to the trustee "... to pay thereout of capital as well as income..." contains words that are common to trusts.
The RSPCA submitted that clause (h) set up a trust of $30,000 to be held by the executor and to be paid at the rate of $2,000 per annum to Ms Haywood for the maintenance and care of the testatrix's pets; that clause (h) went on to provide that upon the death of those animals, the remaining capital and income was to go to the RSPCA; and that the clause further provided that if the testatrix had no pets at the date of her death, then she gave the $30,000 to the RSPCA.
In my view, clause (h) sets up a trust for a purpose, namely, the care and maintenance of the testatrix's pets. A trust for a purpose is, as a general rule, void unless it is for a charitable purpose. Such a trust will often offend the rule against perpetuities or the rule that requires a cestui que trust to enforce it.
The principle was stated by Sir William Grant MR in Morice v Bishop of Durham (1804) 9 Ves Jun 399; [32 ER 656] at 404-405; [658] thus:
"There can be no trust, over the exercise of which this Court will not assume a control; for an uncontrollable power of disposition would be ownership, and not trust. If there be a clear trust, but for uncertain objects, the property, that is the subject of the trust, is undisposed of, and the benefit of such trust must result to those, to whom the law gives the ownership in default of disposition by the former owner. But this doctrine does not hold good with regard to trusts for charity. Every other trust must have a definite object. There must be somebody, in whose favour the Court can decree performance."
But clause (h) of the will is not, obviously, a trust for charitable purposes because it specifically refers to the testatrix's pets and is not for the benefit of animals generally. It lacks a purpose that can be said to be beneficial to the community or that fosters a charitable object.
Prima facie a trust for a non-charitable purpose, as distinct from a trust for individuals, is void because there is no beneficiary ( In re Recher's Will Trusts [1972] Ch 526 at 538 per Brightmen J).
Notwithstanding the apparent strictness of the principle that non-charitable purpose trusts fail, there is authority that upholds certain trusts for the maintenance of animals provided they do not infringe the rule against perpetuities.
In In re Dean. Cooper-Dean v Stevens (1889) 41 Ch D 552, William Clapcott Dean devised estates to the use of Cooper (the Plaintiff) for life with remainders to the use of Cooper's sons in tail male, subject to and charged with the payment of an annuity of 750 to his trustees for 50 years if any of his horses and hounds should so long live, on trust to apply that annual sum to the maintenance of the horses and hounds, any part thereof remaining unapplied to be dealt with at their discretion.
It was held that the trust for the maintenance of the animals was valid although it was not a charity and could not be enforced by any one.
North J rejected the argument that the trust failed because there was no beneficiary and said at 556-557:
"Then it is said, that there is no cestui que trust who can enforce the trust, and that the court will not recognise a trust unless it is capable of being enforced by some one. I do not assent to that view. There is not the least doubt that a man may if he pleases, give a legacy to trustees, upon trust to apply it in erecting a monument to himself, either in a church or in a church-yard, or even in unconsecrated ground, and I am not aware that such a trust is in any way invalid, although it is difficult to say who would be the cestui que trust of the monument. In the same way I know of nothing to prevent a gift of a sum of money to trustees, upon trust to apply it for the repair of such a monument. In my opinion such a trust would be good, although the testator must be careful to limit the time for which it is to last, because, as it is not a charitable trust, unless it is to come to an end within the limits fixed by the rule against perpetuities, it would be illegal."
In re Dean was considered by Fair J in Re Budge, Ex parte Pascoe [1942] NZLR 350 at 351. In respect of the above passage Fair J said this:
"This, however, is only a dictum, and it occurs in a decision that has been severely criticized, if and in so far as it decided that the life of an animal could be a life for the purpose of a perpetuity period: Jarman on Wills , 7th Ed. 249 ( q ); 24 Halsbury's Laws of England , 2nd Ed. 95, ( u ); and Re Kelly [1932] I.R. 255."
In In re Endacott Decd . Corpe v Endacott [1960] Ch 232 at 246 Lord Evershed MR said he was opposed to any extension of these "anomalous" cases because to extend them, "would be to validate almost limitless heads of non-charitable trusts". Harman LJ went further and said at 250-251:
"[T]here have been decisions at times which are not really to be satisfactorily classified, but are perhaps merely occasions when Homer has nodded, at any rate these cases stand by themselves and ought not to be increased in number, nor indeed followed, except where the one is exactly like another. Whether it would be better that some authority now should say those cases were wrong, this perhaps is not the moment to consider. At any rate, I cannot think a case of this kind, the case of providing outside a church an unspecified and unidentified memorial, is the kind of instance which should be allowed to add to those troublesome, anomalous and aberrant cases."
In Pedulla v Nasti (1990) 20 NSWLR 720 a purported trust for the construction and maintenance of a vault to house the testator's ashes was held to be void as a perpetuity for a non-charitable object by Needham J. His Honour approved what had been said by Long Innes J in Pooley v Royal Alexandra Hospital for Children (1932) 32 SR (NSW) 459 at 463:
"...A gift for building a monument or tomb, not forming part of the fabric or ornament of a church may be valid as a private trust, if not involving a perpetuity..."
His Honour also cited with approval the decision of Roper J in Public Trustee v Nolan (1943) 43 SR (NSW) 169 at 172:
"...These cases, however, appear to me to be anomalous exceptions to the general principle and to be restricted to trusts for the erection of monuments and (subject to there being no perpetuity involved) for the maintenance of animals or of monuments or graves."
Being limited to a 15-year period with addition for any income increasing the $30,000 fund, if the animals should live so long, there is no perpetuity in clause (h) of the will.
But I do not have to decide whether this non-charitable purpose trust fails on that ground or is valid as falling within the anomalous class because the trust failed when Ms Haywood declined to look after the pets.
Clause (h) of the will is divided into three sub-paragraphs. The first sets up the trust of $30,000 and the conditions of its dispersal with the remaining capital and income to go to the RSPCA. The second provides Ms Haywood with a discretion as to the pets' welfare. The third provides for the contingency that the testatrix died without any pets, in which case a bequest of $30,000 would be made to the RSPCA.
In my view, the first sub-paragraph sets up a trust for the pets with a gift over of the fund or its remainder to the RSPCA.
The second sub-paragraph gives Ms Haywood an absolute discretion as to the welfare of the pets. Although expressed as a wide discretion, it does not give Ms Haywood the ability to choose not to care at all for the pets. If that were the case, the result would be that the trust had determined and the bequest to the RSPCA would have vested in possession. The absolute discretion is modified, however, by the condition that Ms Haywood care for them personally or through an appropriate facility.
The contingency in the third sub-paragraph was not activated. The testatrix died with pets. Its presence is still important, however, when divining the testatrix's intention.
When the three sub-paragraphs are read together, the irresistible inference is that the testatrix set aside $30,000 first for the maintenance of her pets and secondly for the RSPCA.
Whether an interest deferred for the period of a prior interest is to be accelerated on the failure or earlier determination of a prior interest will depend upon the language of the will ( In r e Flower's Settlement Trusts [1957] 1 WLR 401).
If gifts following the determination of the prior estate are still contingent there can be no acceleration because, being still contingent, one cannot tell whether they will take effect. ( In re Taylor, Decd [1957] 1 WLR 1043 at 1045 per Upjohn J).
It was submitted there was nothing in the clause that could divest the RSPCA of its interest.
Mr Hegarty submitted that the terms of the will did not support an argument that the gift of $30,000 to the RSPCA was accelerated in the event of the failure of the intermediate trust. The testatrix had prefaced the gift by the words "upon the death of my said animals" and it was submitted that those words constituted a condition precedent to the gift to the RSPCA.
The RSPCA submitted on the other hand, that given that Ms Haywood disclaimed her part of the trust as carer for the animals, that interest had determined and the RSPCA's interest was accelerated.
In Tompkins v Simmons [1931] HCA 8; (1931) 44 CLR 546 and in Re Flower's Settlement it was said that the mere use of expressions such as "after his death" do not prevent acceleration.
In Tompkins , Dixon J said at 558-559 that while words such as "upon", or "after his death", or "from and after his decease" may have one of two imports, prima facie they are understood merely to denote the order of succession of limitations:
"In a limitation to a donee for life and after his death upon trust for his children, or some other donee, the reference to his death whether expressed by the words "upon," or "after his death," or "from and after his decease," or otherwise, may have one of two imports. It may mean that the second donee shall take nothing until the death of the first, or it may merely show the order of the limitations through which the estate or interest is to pass. It is well established, that, prima facie, these words are to be understood as denoting the order of succession of limitations. (See per Turner L.J., Lainson v. Lainson (1854) 5 DeG. M. & G., at p. 756; 43 E.R. at p 1064.)"
Similarly, in Re Flower's Settlement at 405, Jenkins LJ said:
"The principle, I think, is well settled, at all events in relation to wills, that where there is a gift to some person for life, and a vested gift in remainder expressed to take effect on the death of the first taker, the gift in remainder is construed as a gift taking effect on the death of the first taker or on any earlier failure or determination of his interest, with the result that if the gift to the first taker fails - as, for example, because he witnessed the will - or if the gift to the first taker does not take effect because it is disclaimed, then the person entitled in remainder will take immediately upon the failure or determination of the prior interest, and will not be kept waiting until the death of the first taker."
I agree with the submission of the RSPCA that the words in clause (h) of the will "and upon the death of my said animals" did not prevent acceleration of its interest.
There is no sense of contingency here, a factor considered by White J in Re Boning (1997) 2 Qd R 12 at 19. The testatrix left the $30,000 for the non-charitable purpose that failed and to the RSPCA.
In my view, upon the proper construction of the will the gift to the RSPCA was accelerated upon the failure of the trust.
There is a further basis for accelerating the gift to the RSPCA, the rule in Jones v Westcomb.
In Public Trustee v Hayles (1993) 33 NSWLR 154 at 167-168, Young J explained:
"The way in which Australian courts have traditionally approached this problem has been down another track. The basal approach has been to construe the will to see whether the gift over is saved by the rule in Jones v Westcomb . This case is reported in three sets of old nominate reports, namely (1711) Prec Ch 316; 24 ER 149; 1 Eq Ca Abr 245; 21 ER 1022 and (1710) Gilb Rep 74; 25 ER 52. None of the reports of the judgment of Lord Harcourt LK are very long, the report in (1711) Prec Ch 316; 24 ER 149 being the best. The facts were that a man made a will in favour of his wife for life and then after her death to the child with which she was then pregnant, but if such child died before twenty-one, then the wife should take. In fact the wife was not pregnant at the relevant time. The decision was that though the wife was not pregnant at the time the devise to her was good.
As Rowland explains in (1993) 2 APLJ 99 and following, the principle to be gleaned from Jones v Westcomb can be and has been stated in various ways. For Australia it is common to see it said as Nicholas CJ in Equity said in Union Trustee Co of Australia Ltd v Church of England Property Trust, Diocese of Sydney (1946) 46 SR (NSW) 298 at 306, that one applies the principle enunciated in Jones v Westcomb "particularly as explained in Re Fox's Estate [1937] 4 All ER 664 and in the remarks of Bowen LJ in In re Tredwell [1891] 2 Ch 640 at 650".
In Re Fox's Estate [1937] 4 All ER 664, the English Court of Appeal (at 666) explained the rule thus:
"... Where a testator has provided for the determination of an estate in any of two or more events, and has then given a gift over expressly to take place in one only of those events, the court will, in the absence of any indication to the contrary, imply, by way of necessary implication, an intention on the part of the testator that the gift over shall take effect, not merely in the specified event, but on the happening of any of the events which were to determine the previous estate."
In Re Tredwell [1891] 2 Ch 640 Bowen LJ said (at 656):
"... Now, where a gift over is expressed to take effect on the discontinuance or defeasance in some specified manner, or on the happening of some specified event, of a preceding gift or limitation, it is true that if you can see from the deed of from the nature of its provisions that really the intention of the testator was that the executory gift should take effect on any failure whatsoever of the preceding limitation, whether it was the specified event or whether it was any other event of any kind, then you must give effect to the intention of the testator. It is immaterial in such a case,... whether the first gift or limitation fails in its inception or fails in the result...."
Thus the courts have jurisdiction to effect a gift over even if the first gift fails "at its inception or fails in the result."
The questions raised for the consideration of the court under the Trustee Act 1925, s 63 may be answered in this fashion:
"(a) Whether, on the true and proper construction of clause (h) of the Will, the deceased intended to establish a non-charitable purpose trust for the maintenance of her animals?"
The plaintiff would be justified in construing the will in that fashion:
"(b) If the answer to (a) is yes, is the non-charitable purpose trust valid or invalid? [because (i) it infringes the beneficiary rule; or (ii) infringes the rule against perpetuities or by reason of both (i) and (ii)?]."
There is no need to answer this question because the trust either failed from its inception or when Ms Haywood declined to care for the pets:
"(c) If the answer to (a) is no, whether on the true and proper construction of clause (h) of the Will, the sum of $2,000 per annum is a conditional gift to Ms Haywood."
That is not applicable:
"(d) Subject to the answers to (a)-(c) how funds to be applied?"
The plaintiff would be justified in paying the funds to the RSPCA.
By an amended summons, the plaintiff sought a declaration as to the proper construction of clause (h) of the will and an order that he would be justified in distributing the estate in accordance with the declaration. I have dealt with those matters in answer to the specific questions raised in the statement of facts filed in court.
I make these orders:
1. The costs of the executor and trustee are to be paid out of the estate on an indemnity basis.
2. The costs of the RSPCA, fixed in the amount of $5,000, are to be paid out of the estate.
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Decision last updated: 11 October 2011
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