Kean v Murphy

[2012] NSWSC 948

Supreme Court

New South Wales

Medium Neutral Citation:	Kean v Murphy [2012] NSWSC 948
Hearing dates:	16 August 2012
Decision date:	21 August 2012
Jurisdiction:	Equity Division
Before:	Ball J
Decision:	See paragraph 30 of this judgment.
Catchwords:	WILLS - construction and effect - general principles of construction - court should give words their ordinary meaning in the context of the will - whether ordinary meaning should be departed from because arguably inconsistent with the "basic scheme" of the will - admissibility of evidence of intention of the deceased.
Legislation Cited:	Succession Act 2006 (NSW)
Cases Cited:	Gale v Gale (1914) 18 CLR 560 King v Perpetual Trustee Co Ltd (1953) 94 CLR 70 Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 Re McPherson, deceased [1968] VR 368
Category:	Principal judgment
Parties:	John Warwick Kean (Plaintiff) Paul Alan Murphy (First Defendant) Marita Murphy (Second Defendant)
Representation:	Ms JAD Needham SC (Plaintiff) SC Fisher (First Defendant) In Person (Second Defendant) Osbornes Lawyers (Plaintiffs) In Person (First Defendant) In Person (Second Defendant)
File Number(s):	2012/88474

Judgment

Introduction

1. These proceedings concern the correct construction of the will of the late Sister Eileen Kean who died on 9 July 2011 at the age of 94.

1. Before dealing with the issues in the case, something should be said about the parties. The plaintiff, John Warwick Kean, is one of Sister Eileen's nephews and is a beneficiary under the will. The first defendant, Paul Alan Murphy, was appointed executor of the will. He is also a nephew of Sister Eileen and one of the beneficiaries. He is a cousin of the plaintiff. Originally, the first defendant filed a submitting appearance. As a result, the second defendant, Marita Murphy, who is also a beneficiary and a sister of the first defendant, was joined as a defendant.

1. At the hearing of the matter, Mr Fisher appeared for the first defendant and sought leave to withdraw the first defendant's submitting appearance. The second defendant appeared for herself. I gave the leave sought by the first defendant. In those circumstances, there was no reason for the second defendant to continue to be a party to the proceedings. However, no application was made either by the plaintiff or second defendant in that regard and the second defendant limited her role in the proceedings to making short submissions at the end of the case.

The will

1. Sister Eileen made her last will on 2 March 2011. Probate of the will was granted on 2 February 2012. The will was a standard form which Sister Eileen filled in by hand. There is no evidence to suggest that she received any legal advice in preparing the will. The critical and operative provision of the will is cl 5 which provides:

5. Residuary/Residue of my Estate

I direct my Executor(s) to pay all my debts and then I give the residue whole of my estate to that I may possess at death to be divided evenly among the children of my brothers John Francis (dec), Thomas James (dec) and my sister Doreen Phyllis - the house to be sold. Should any of the family desire possessions in the house - they may take them - otherwise they should be sold. A small a/c is located in the St George Bank.

All property, goods and money to be divided into three equal parts - then divided evenly amongst the groups of my three siblings.

The handwritten part of the clause is in italics and the printed part in roman script. The words that have been crossed out were crossed out by Sister Eileen.

The issue

1. The issue in the proceedings is whether by cl 5 Sister Eileen left her estate to be divided equally between all of the children of her three named siblings or whether she left her estate to be divided into three equal parts with each part then to be divided equally between the children of each of her three named siblings, with the result that the children of each sibling would receive an equal share of a one-third interest.

Background facts

1. Sister Eileen was one of 8 children. I will refer to her siblings as Jack, Monica, Tom, Doreen, Kevin, Alan and Reginald. All but Reginald had children of their own with the result that Sister Eileen had 22 nephews and nieces in all.

1. It appears that Reginald continued to live with his parents in the family home in Dulwich Hill and when they died he inherited it from them. Reginald died in 1982 and left the house and a sum of approximately $20,000 to Sister Eileen. Sister Eileen, who had been a teacher and administrator in the Order of the Sisters of Charity, retired in about 1999 and at that time permanently moved into the house at Dulwich Hill.

1. At the time of Sister Eileen's death, the house was estimated to be worth approximately $1,166,000. Apart from a small amount of cash, it was her only asset of any real worth.

1. Of her siblings, Sister Eileen was closest to Jack, Tom and, in later years, Doreen. Jack had 3 children including the plaintiff, John. Tom had 3 children and Doreen had 5 children including the first and second defendants, Paul and Marita. The evidence is that Sister Eileen maintained contact with a number of the children of Jack, Tom and Doreen to varying degrees. From at least 1980, she had little or no contact with the families of her other siblings.

Principles of construction

1. There is no dispute between the parties on the correct approach to the construction of the will. The will should be read as a whole and the words it contains should normally be given the meanings that would ordinarily be given to them in the context in which they appear: Gale v Gale (1914) 18 CLR 560 at 567 per Isaacs J (who dissented in the result). An exception exists if the ordinary meaning leads to some absurdity or obviously is not in accord with an intention expressed in the will as a whole: Re McPherson, deceased [1968] VR 368 at 371 per Adam J.

1. In construing the words of a will, the court can also take into account the facts that were known to the testator at the date of the will: King v Perpetual Trustee Co Ltd (1953) 94 CLR 70 at 78.

1. In addition, s 32 of the Succession Act 2006 (NSW) provides:

(1) In proceedings to construe a will, evidence (including evidence of the testator's intention) is admissible to assist in the interpretation of the language used in the will if the language makes the will or any part of the will:

(a) meaningless, or

(b) ambiguous on the face of the will, or

(c) ambiguous in the light of the surrounding circumstances.

(2) Despite subsection (1), evidence of the testator's intention is not admissible to establish any of the circumstances mentioned in subsection (1) (c).

(3) Despite subsection (2), nothing in this section prevents evidence that is otherwise admissible at law from being admissible in proceedings to construe a will.

1. In reliance on that section, the first defendant sought to lead evidence concerning Sister Eileen's intention and the plaintiff sought to rebut that evidence with evidence of a contrary intention.

1. The evidence sought to be led by the first defendant was of two types. First, there was direct evidence of statements said to have been made by Sister Eileen either some time before or after she made her will concerning what she intended to do or the effect of what she had done. Second, there was evidence of what Ms Needham SC, who appeared for the plaintiff, called "implied intention". That evidence consisted of evidence concerning the closeness of the relationship between Sister Eileen and a number of Doreen's children. I admitted both categories of evidence provisionally and indicated to the parties that I would consider its admissibility in my judgment. For reasons which will become apparent, I do not think that evidence of intention falling within either category is admissible in this case.

The correct construction of the will

1. In construing cl 5 of the will, it is important to bear in mind that it was drafted without legal assistance. Sister Eileen was obviously an intelligent and well educated person, but she was old and frail at the time she prepared her will and it cannot be expected that she would use language as precisely as a lawyer normally would.

1. Clause 5 has two paragraphs. The critical words of the first paragraph are the words that state that the whole of her estate is "to be divided evenly among the children of my brothers John Francis (dec), Thomas James (dec) and my sister Doreen Phyllis".

1. It is clear that by "evenly" Sister Eileen meant "equally" and taken alone those words suggest that her estate was to be divided equally between the children of Sister Eileen's named siblings.

1. However, the second paragraph of cl 5 provides:

All property, goods and money to be divided into three equal parts - then divided evenly amongst the groups of my three siblings.

1. It is not disputed, nor could it be, that the reference to "[a]ll property, goods and money" is a reference to the whole of Sister Eileen's estate. Nor is it disputed that the reference to "my three siblings" is a reference back to the three siblings named in the previous paragraph.

1. In my opinion, it is clear that Sister Eileen included the second paragraph as an explicit statement of how she intended the first paragraph to operate. In my opinion, that explicit statement is clear. First, the paragraph states that Sister Eileen's estate is to be divided into three equal parts. Then (to use Sister Eileen's word), the result is to be divided equally among the identified groups. What Sister Eileen must have intended was that each one third part would be divided equally between the members of one of the three identified group. If what she had intended was that the whole be divided, there would have been no purpose in providing first for the division into three equal parts.

1. Mr Fisher sought to resist the conclusion of the previous paragraph. The starting point for his submission was the proposition, which is not disputed, that the court should seek first to ascertain the basic scheme of the will: see Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 at 33 per Bryson J. According to Mr Fisher, the basic scheme of the will in this case is equal division, as can be seen from the first paragraph of cl 5. The second paragraph of cl 5 should be given an interpretation which is consistent with that basic scheme. Or, to put the point another way, if there is an inconsistency between the first and second paragraphs, that inconsistency should be resolved consistently with the basic scheme which is that the identified beneficiaries should share equally. That can be achieved by interpreting the second paragraph literally as saying that "[a]ll property, goods and money" should be divided evenly (that is, equally) among the identified beneficiaries.

1. In my opinion, however, there are two difficulties with this submission.

1. First, the basic scheme of the will is set out in cl 5. That clause must be read as a whole. To say that the basic scheme of the will is equal distribution between each of the beneficiaries is to assume the answer to the issue requiring resolution.

1. Second, in my opinion, it is not possible to give a sensible construction of the second paragraph of cl 5 which produces the result contended for by Mr Fisher. Mr Fisher submits that on the correct construction of the paragraph what must be divided "evenly amongst the groups of my three siblings" is "[a]ll property, goods and money". However, that interpretation has three problems. First, it makes the initial division into three equal parts pointless. Second, it does not give any weight to the word "then". Third, it does not lead to the conclusion for which Mr Fisher contends. If the paragraph is read as stating that all property, goods and money must be divided "evenly amongst the groups of my three siblings" the effect of the clause would be to require equal division between the three groups, not equal division between all beneficiaries. The clause would then be silent on how the property was to be distributed among the members of each group. That cannot be what Sister Eileen intended and is not consistent with the two stage process contemplated by the paragraph.

1. It is true that the first paragraph read alone suggests that the quality of evenness or equality is to be measured by reference to what each beneficiary receives and not what each family group receives. However, as I have said, the second paragraph was to spell out in more detail how the distribution contemplated by the first paragraph was to occur. For the reasons I have given, in my opinion the purpose of the second paragraph is clear. Having regard to the terms of the second paragraph, I do not think it does any great violence to the first paragraph to interpret it so that the word "evenly" applies to the three groups of children rather than to each individual child.

1. I should add that I do not think that the conclusion I have reached is so extraordinary that the court should strive to give the words some other meaning. Sister Eileen had a close relationship with her three siblings and had relationships of various degrees of closeness with their children. There is nothing odd in those circumstances in a decision to seek to treat the three families equally.

1. It follows from what I have said that there is no ambiguity in cl 5. Consequently, the evidence of intention is not admissible.

Costs

1. In my opinion, the position taken by the first defendant was arguable. Consequently, it is appropriate that the plaintiff's costs be paid out of the estate.

1. In my opinion, the estate should not be liable for two sets of costs of resisting the relief sought by the plaintiff. The position taken by the second defendant was no different from the position taken by the first defendant. It is doubtful that the second defendant incurred any significant costs. In any event, no order for costs should be made in her favour.

Orders

1. The court makes the following orders:

(1)   Declare that on the true construction of the will dated 2 March 2011 made by the late Sister Eileen Veronica Kean and in the events which have happened, the gift in cl 5 of the will requires the executor to divide the estate into three equal parts, and to pay each part so that it is divided per stirpes between the children of each of the deceased's siblings, John Francis Kean, Thomas James Kean and Dorothy Phyllis Kean, so that the group formed by the children of each sibling and living at the death of the deceased receives one equal part of the deceased's estate to be divided equally between those children.

(2)   The costs of the plaintiff and the first defendant assessed on an indemnity basis be paid out of the estate of the deceased.

(3)   There be no order for costs of the second defendant.

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Decision last updated: 21 August 2012