King v Perpetual Trustee Co Ltd

[1955] HCA 70

94 CLR 70

it arose pursuant to the dealings between McDonald Scales Ltd. and Driver and, on this point, it is of no consequence to say that the latter had no authority to contract on behalf of the appellant for McDonald Scales Ltd. did not purport to contract on behalf of the appellant though it would make little difference in the result if they had. What that company did was to pay Driver for the subject goods in accordance with the terms arranged between them and if they had no authority on behalf of the appellant to deal in this fashion on its account that circumstance cannot affect the respondents. It may be that McDonald Scales Ltd. exceeded the instructions given to it but this would leave its own contractual obligations with Driver untouched and would affect only the respec- tive rights of the appellant and McDonald Scales Ltd. as between themselves. The arrangements pursuant to which the payment was made also provided for delivery to McDonald Scales Ltd. the payment was to be a payment against documents for goods sold. In these circumstances I fail to see how it can be said that the goods the subject of the appellant's claim were delivered by or on behalf of the respondents in performance or purported perfor- mance of their contractual obligations. Accordingly I cannot assent to the argument that the arrangements made in England were intended merely as a convenient method of carrying out a contract which had been locally made; on the contrary it is probable-though this in itself is not a determining factor-that, whatever was the legal effect of the local dealings, the appellant believed that direct contractual relations had been established with Driver and that the subsequent dealings between it and McDonald Scales Ltd. were conducted on this basis. But whatever the appellant or McDonald Scales Ltd. believed about the matter,

I am satisfied that in the events which happened the delivery was made pursuant to arrangements made, in the absence of the respon- dents, between McDonald Scales Ltd. and Driver and that those arrangements prescribed the manner of such delivery and obliged McDonald Scales Ltd. to pay Driver for the goods either against invoices or upon delivery. That being SO the evidence does not support the breaches of contract alleged.

For the reasons given I am of the opinion that the appeal should be dismissed and I find it unnecessary to consider any of the other arguments advanced on behalf of the respondents.

Appeal dismissed with costs. Solicitors for the appellants, Morgan, Fyffe &Mulkearns. Solicitor for the respondent, John F. Carroll.

94 CLR 71

[ ]

KING AND OTHERS

APPELLANTS; DEFENDANTS,

PERPETUAL TRUSTEE COMPANY (LIMI-

TED) AND OTHERS

RESPONDENTS.

PLAINTIFF AND DEFENDANTS,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Will-Construction-Residuary estate-Gift for division equally amongst children

of named relatives in equal shares absolutely-Per capita or per stirpes. SYDNEY,

Where there is a gift of residue to the children of named persons in equal shares, it is a settled rule of construction that, in the absence of a sufficient Nov. 25; Dec. 15.

indication of a contrary intention, the persons comprising the class take per capita.

A testator after providing an annuity of five pounds per week for his widow and of one pound per week for his brother P gave legacies to named children of P. He further directed his trustee to settle £3,000 upon trust to pay the income therefrom to his sister B for life and after her death to pay such sum to such of her children as should survive her in equal shares absolutely. He made similar provision for his niece I and her children and his nephew

J and his children save that in the latter case the sum to be set aside was £4,000 instead of £3,000. He then disposed of his residuary estate upon trust " to divide the same equally amongst the children of my sister B the children of my brother P the children of my niece I and the children of my nephew

J in equal shares absolutely ".

Held, that the children of B, P, I and J were entitled to share in the residuary estate per capita and not per stirpes.

Decision of the Supreme Court of New South Wales (Myers J.), reversed.

APPEAL from the Supreme Court of New South Wales.

John O'Flaherty late of Bellevue Hill, Sydney, New South Wales, died on 26th July 1937, having first made and published his last will dated 15th March 1937 whereof he appointed Perpetual Trustee Co. (Ltd.) executor and trustee. Probate of such will was granted

94 CLR 72

by the Supreme Court of New South Wales in its Probate Jurisdic- tion to such company on 2nd November 1937.

By his said will the testator, SO far as is here material, directed his trustee to set apart and invest such sum as would produce income sufficient to provide an annuity of five pounds per week for his widow for life or until remarriage and upon her death or remarriage he directed that such sum should fall into and form part of his residuary estate. Provision of an annuity of one pound per week for life was directed in favour of his brother Patrick Flaherty, the fund to fall into and form part of residue on his death. Legacies each of £1,000 free of all probate estate and other duties were bequeathed to the two sons and one daughter of the said Patrick Flaherty. As to the sum of £3,000 the testator directed his trustee to pay the income therefrom to his sister Bridget King of Barobuckmore Currondulla County of Galway, Ireland, for life and on her death as to both capital and income to such of her children as shall survive her if more than one in equal shares absolutely. As to the further sum of £3,000 he directed his trustee to pay the income therefrom to his niece Irene Sheehy of Old South Head Road, Waverley, New South Wales, for life and on her death as to both capital and income to her children if more than one in equal shares absolutely. Similar provision was made for his nephew James Patrick Ford of Edgecliff Road, Woollahra, New South Wales, and his children, save that the fund set aside was £4,000. The testator then gave his residuary real and personal estate to his trustee "upon trust to divide the same equally amongst the children of my sister Bridget King the children of my brother Patrick Flaherty the children of my niece Irene Sheehy and the children of my nephew James Patrick Ford in equal shares absolutely'

The sister of the testator, Bridget King, died leaving her surviving six children, namely Patrick King, Thomas King, John King, Michael King, Brigid King and Edward King all resident in Eire. His brother Patrick Flaherty had two children, namely Mary A. Hill of Pennsylvania, U.S.A. and Thomas Flaherty, the latter having died after the death of his father. Perpetual Trustee Co. (Ltd.) was granted letters of administration of the estate of the said Thomas Flaherty by the Supreme Court of New South Wales in its Probate Jurisdiction. His niece Irene Sheehy left living at her death three children, namely Shirley Irene Schell, Daniel D'Arcy Sheehy and Patricia Muriel Bray all of Sydney, New South Wales. His nephew James Patrick Ford left living at his death two children,

94 CLR 73

namely Patricia Margaret Ford and D'Arcy Hubert Ford both of Enfield, New South Wales, the latter being an infant.

Doubts having arisen as to whether the residuary estate of the testator was distributable amongst the children hereinbefore men- tioned per capita or per stirpes, the trustee Perpetual Trustee Co. (Ltd.) by originating summons sought the determination of (LTD.).

the Supreme Court of New South Wales in its equitable jurisdic- tion upon the following questions namely :-whether upon the true construction of the will of the testator and in the events which have happened the trustee should distribute the residuary estate of the testator (a) in equal shares amongst the children of each of the four named relatives of the testator still living and the Perpetual Trustee Co. (Ltd.) as administrator of the estate of the said Thomas Flaherty deceased or (b) amongst the following in the proportions respectively set forth namely: Shirley Irene Schell-one-twelfth Daniel D'Arcy Sheehy--one-twelfth Patricia Muriel Bray-one- twelfth Patricia Margaret Ford-one-eighth D'Arcy Hubert Ford-one-eighth Patrick King-one-twenty-fourth Thomas King - one-twenty-fourth John King - one-twenty-fourth Michael King-one twenty-fourth; Brigid King-one-twenty- fourth; Edward King-one-twenty-fourth; Mary A. Hill-one eighth; Perpetual Trustee Co. (Ltd.) as administrator of the estate of Thomas Flaherty deceased--one-eighth.

Myers J. before whom the said originating summons came for hearing declared that the said residuary estate of the testator should be distributed in the manner set forth in question (b) above- mentioned, which said question provided for distribution per stirpes.

From this decision the defendants Patrick King, Thomas King, John King, Michael King and Edward King, being the children of the testator's sister, Bridget King, appealed to the High Court.

J. D. Evans Q.C. (with him G. H. Bullock), for the appellants. There is nothing in the will to remove it from the operation of the rule of construction that prima facie in cases such as this the distri- bution is per capita. By the repetition of the provision for equal distribution the testator has made it clear that distribution per capita is desired. [He referred to Sumpton v. Downing 1.] There must be a clear indication of a contrary intention not a mere sug- gestion of one before the prima facie rule will be displaced. [He referred to Neil v. McDonnell (2).] There is nothing in the repeti- tion of the words " the children of " to take the matter out of the

1(1947) 75 C.L.R. 76, at pp. 87, (2) (1949) 79 C.L.R. 177, at p. 190. 94 CLR 7494 CLR 7594 CLR 76

SO indicates that the particular form of words was adopted for the purpose of creating four distinct classes each consisting of children of each of the named persons.

P. J. Kenny, for the respondent Perpetual Trustee Co. (Ltd.) as trustee of the estate of the testator. The earlier dis- positions of the will indicate that the testator did not intend to displace the prima facie rule. The earlier dispositions are made upon a differential basis, some legatees receiving more than others, probably by reason of the different claims which each legatee had upon him. The different claims may well have arisen from the different degrees of relationship to the testator of each such legatee. The will bears the evidence of careful drafting and if the residuary estate were to be divided according to the relationship of the legatees to the testator and not on a per capita basis one would expect a clear indication of it in the language of the will. The cases cited by Mr. Kerrigan on a difference in generation being indicative of stirpital distribution are not applicable here, as the primary matter to be decided in each such case was the identity of the beneficiaries. Where the courts speak of persons being of the same generation in these cases, they mean persons who are more or less contemporaneous in time, in other words persons of roughly the same age. The word generation" is not used in its strict sense. Upon that basis there is here no difference in generation. There could not here be stirpital distribution properly SO called because each stirps begins with a person of a different degree of relationship to the testator.

J. D. Evans Q.C., in reply. [WILLIAMS J. referred to Capes v. Dalton 1.] We adopt that statement which was expressly approved by Halsbury L.C. in Kekewich v. Barker 2. The later English cases have departed from the settled rules of construction on this subject and should not be followed. There is here no trust to divide into four groups, but a trust to divide amongst a group of people described by reference to four distinct individuals. The mere fact that differ- ent generations are included in the class does not affect the con- struction of the words, unless there is something in the words used to justify taking the different generations into account as a relevant factor. The restriction on the prima facie rule sought to be imposed by Vaisey J. in In re Jeeves; Morris-Williams V. Haylett 3 is not justified by the earlier cases. In In re Birkett

1(1902) 86 L.T. 129, at p. 131. 2(1903) 88 L.T. 130, at p. 131. 3(1949) Ch., at p. 51. 94 CLR 7794 CLR 78

The plan of the will which is dated 15th March 1935 is simple and the beneficiaries easy to identify. There is first a direction to the trustee of the will to set apart and invest a sum sufficient to produce an income to meet an annuity of five pounds per week which the testator directed his trustee to pay to his widow during her life or widowhood (later increased on an application under the Testator's Family Maintenance and Guardianship of Infants Act 1916 to seven pounds per week during her life or widowhood) and after the death or remarriage of his wife a direction that the sum so set apart shall fall into and form part of his residuary estate. The widow did not remarry and died on 16th October 1947. The testator further directed his trustee to set apart and invest a sum of money sufficient to produce an annuity of one pound per week which he directed his trustee to pay to his brother Patrick during his life and directed that from and after his death the sum SO set apart should fall into and become part of his residuary estate. He further directed his trustee to pay to the two sons and to the daughter of his brother Patrick the sum of £1,000 each. He then directed his trustee to settle £3,000 upon trust to pay the income arising therefrom to his sister, Bridget King, during her life and after her death to pay this sum to such of her children as should survive her if more than one in equal shares absolutely. He also directed his trustee to set aside a further sum of £3,000 and pay the income to his niece, Irene Sheehy, during her life and after her death to pay this sum to her children if more than one in equal shares absolutely. He also directed his trustee as to a further sum of £4,000 to pay the income arising therefrom to his nephew, James Patrick Ford, during his life and after his death to hold this sum upon trust for his children if more than one in equal shares absolu- tely. Up to this point the testator has made provision for his widow, his sister and brother, his niece and nephew and the children of his sister, brother, niece and nephew. The gifts to the sister, brother, niece and nephew, and their children are made to them as distinct families and vary somewhat in the amount and manner of their enjoyment. Then comes the residuary gift the text of which has already been set out.

The gift of residue is a gift to the children of four named persons in equal shares and it is a settled rule of construction that in the case of such a gift, in the absence of a sufficient indication of inten- tion to the contrary, the persons comprising the class take per capita. The rule was first established by King L.C. in Blackler V. Webb 1 and has therefore had a long life. The headnote to that

1(1726) 2 P. Wms. 383 [24 E.R. 777]. 94 CLR 79

A. case is that One having had five children, A., B., C., D. and E.

B. is dead leaving several children, and by will the testator devises the residue of his personal estate to his son A. and to B.'s children, and to his daughter C. and D.'s children, and to his daughter E. D. is living and has children; decreed the children of B. and the children of D. shall take per capita, and not per stirpes, as if all (LTD.).

named " 1. The Lord Chancellor at first seemed 'inclinable" that the grandchildren should take per stirpes only, yet at length he decided that the testator's son James, and the children of the deceased son Peter and his daughter Traverse, and the children of his daughter Webb, and his daughter Man (being in all fourteen in number), should each of them take per capita, as if all the grand- children had been named by their respective names. He decided that to determine that the grandchildren should take per stirpes would be to go too much out of the will, and contrary to the words, when the meaning of the testator might be according to his words, and that meaning a reasonable and sensible one. The existence of this rule of construction was conceded in the present case. It was a concession from which there was no escape. But it was contended that there were sufficient indications of intention in the will to exclude the rule and that the division should be per stirpes. This contention found favour with the learned judge below. Before us it was sought to support it on three grounds (1) that the trust to divide the residue equally amongst the children of the four named relatives indicates that the division is to be between them by stocks 2 that the rule is excluded where the beneficiaries are not in the same generation but of different generations to the testator and to each other and here two of the stocks are the children of a brother and sister and the other two are the children of a niece and nephew; (3) that the repetition of the initial direction for equal division at the commencement of the gift occurring at its conclusion indicates that there is to be a double division, first an equal division between the stocks and then an equal division of each sub-division between the members of each family. None of these grounds can find any support in the language of the will and it is from the words of the will that the intention of the testator must be ascertained, aided only by such facts as existed and were known to the testator at the date of the will which it is permissible to take into account in interpreting that language. This is trite law. In Towns v. Went- worth (2) it was said in the Privy Council: In order to determine the meaning of a will, the court must read the language of the

1(1726) 2 P. Wms. 383 [24 E.R. 2(1858) 11 Moo. P.C. 526 [14 94 CLR 80

testator in the sense which it appears he himself attached to the expressions which he has used, with this qualification, that when a rule of law has affixed a certain determinate meaning to technical expressions, that meaning must be given to them, unless the testator has by his will excluded, beyond all doubt, such construc- tion' 1. In Charter v. Charter 2 the Lord Chancellor (Lord Cairns) said "But, my Lords, there is a class of evidence which in this case, as in all cases of testamentary dispositions, is clearly receivable. The court has a right to ascertain all the facts which were known to the testator at the time he made his will, and thus to place itself in the testator's position, in order to ascertain the bearing and application of the language which he uses, and in order to ascertain whether there exists any person or thing to which the whole description given in the will can be, reasonably and with sufficient certainty, applied " 3. If these principles are applied to the present case, all these grounds disappear. The directions for equal division at the commencement and conclusion of the residuary gift, on their ordinary natural and grammatical construction, relate to one division and one only, that is to the division of the whole of the residuary estate in equal shares amongst one class consisting of all the children of the praepositi living at the death of the testa- tor, and the reference to their parents provides a means and nothing more of identifying these beneficiaries. In Sumpton v. Downing 4 Dixon J. (as he then was) said: "Prima facie, under a gift to the children of named persons as a class, the children take per capita and not per stirpes. It has been said that no man who was guided only by a knowledge of English speech would suppose that a direction to distribute money between the children of A and of B equally could mean anything but a division in which each child took a share equal with that of every other child, whether his parent was A or B. However this may be, it is enough that at least the prima-facie legal meaning of such a direction is that the distribution should be per capita. This is SO whether in point of expression the class is described as the children of A and (of) B or as the children of A and the children of B " 5. Here the class described as the children of A, of B, of C, and of D which is as clear an example as can be had of a gift to a class per capita. At most the repetition of the direction for equal division of the residue gives emphasis to the intention of the testator that it should be equally divided among the members of the class. The double

1(1858) 11 Moo. P.C., at p. 543 [14 2(1874) L.R. 7 H.L. 364. 3(1874) L.R. 7 H.L., at p. 377. 4(1947) 75 C.L.R. 76. 5(1947) 75 C.L.R., at pp. 87, 88. 94 CLR 81

direction has no more significance than the commonplace expression which SO often occurs in wills " equally between them share and share alike (and in some cases with the addition " and in equal proportions )'). It would be a misuse of language to construe the residuary words in the present case as meaning that there is first to be a division of the residue into four equal parts and that these (LTD.).

four parts are then each to be sub-divided into a number of equal parts corresponding to the number of children of each of the named relatives of the testator. The language is concerned and concerned only with the division of residue into equal shares not between the four named relatives and their children, which might provide sufficient context for a stirpital construction, but between all the children of all these relatives as a composite class.

It is a mistake to attempt to ascertain the meaning of one will from the meaning attributed to another. But that does not mean that where there is a settled rule of construction the same start cannot be made in the construction of all wills to which the rule is prima facie applicable. To do otherwise is to open wide the field to pure conjecture. In Lady Lincoln v. Pelham 1, the ultimate bequest in the will of the testatrix of a settled legacy was that it should be equally divided among the younger children of the Duke of Newcastle by her late daughter Catherine and the younger children of another daughter, Lady Sondes. Lord Eldon said :- "Upon the next question, whether the distribution is to be per stirpes or per capita, I am not quite sure, that my opinion is not against the intention. If there is a settled construction, founded upon cases decided, applying to the terms used, it is better to adhere to that settled construction, though I may entertain some doubt, whether it is according to the intention, than upon grounds, on which I cannot rest in every view of the case, to come to a decision, having a tendency to shake that, which forms a rule of construction; and which may in practice have been acted upon in many cases. It is clear, that if this had been a bequest to the younger children of two persons, equally to be divided between and among them, the division would be per capita The particular circumstances are very strong to raise conjecture and doubt as to the intention but do they, by the inference arising from them, overpower the settled construction of the words ?

Whatever the actual inten- tion may have been, the legal effect is a distribution per capita; and I cannot safely draw an inference from the other part of the will; introducing distinctions, tending to shake the settled doctrine

1(1804) 10 Ves. Jun. 166 [32 E.R. 808]. 94 CLR 8294 CLR 8394 CLR 84

which was equal to the whole amount given to the unmarried daughters taken together but on the whole I am of opinion that

I should be attributing too much meaning to the word by that construction " 1. In line with these cases are certain decisions in the Australian courts and in particular the decision of Cussen J. in Inre Jones; Harris v. Jones 2; Macfarlan J. in In re McInnes Trustees Executors &Agency Co. Ltd. v. McInnes 3 Harvey J. in Gibson v. Abernethy 4 and Sugerman J. in Perpetual Trustee Co. (Ltd.) v. Pryde 5. Later English cases where the distribution was held to be per capita include In re Dale; Mayer V. Wood 6 In re Cossentine; Philp v. Wesleyan Preachers' Associa- tion 7 (a decision of Maugham J. as he then was) and In re Alcock; Bonser v. Alcock 8 (a decision of Evershed J. as he then was). On the other hand in In re Walbran; Milner v. Walbran 9 (criticized by Sargant J. in In re Harper; Plowman v. Harper 10 and by Maugham J. in In re Cossentine Philp v. Wesleyan Preachers' Association (7); Re Daniel Jones v. Michael 11; In re Hall (dec'd.) Parker v. Knight 12; In re Jeeves; Morris-Williams V. Haylett 13 and In re Birkett (dec'd); Holland v. Duncan 14 the division was held to be per stirpes. In these cases, apart perhaps from Re Daniel Jones v. Michael (11) where assistance could be derived from the context of the will, what appeared to be very chimerical circumstances were held sufficient to displace the prima facie rule of construction. For instance, in In re Hall (dec'd.); Parker v. Knight (12) Harman J. expressed the opinion that

through the authorities runs a reconciling principle that cases of capital distribution are cases of distribution between strangers or persons of no corresponding relationship and that cases of stir- pital distribution are cases of family distribution" " 15. He had already said that he would expect the stirpital basis in family gifts. With respect it is impossible for us to find any such reconciling basis in the authorities and we are unable to expect the stirpital basis in family gifts. All this is pure conjecture. In In re Jeeves; Morris-Williams v. Haylett (13), Vaisey J. was convinced that it was a matter of guesswork and equally convinced that it was his

1(1914) 1 Ch., at p. 76. 2(1910) V.L.R. 306. 3(1925) V.L.R. 496. 4(1918) 18 S.R. (N.S.W.) 122; 35 5(1949) 49 S.R. (N.S.W.) 203; 66 6(1931) 1 Ch. 357. 7(1933) 1 Ch. 119. 8(1945) 1 Ch. 264. 9(1906) 1 Ch. 64. 10(1914) 1 Ch. 70. 11(1945) 2 All E.R. 101. 12(1948) Ch. 437. 13(1949) Ch. 49. 14(1950) 1 Ch. 330. 15(1948) Ch., at p. 440. 94 CLR 85