King v Perpetual Trustee Co Ltd

The appeal concerned the construction of a will and the distribution of a testator's residuary estate. The testator's will directed his trustee to divide his residuary estate "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". The primary issue was whether the beneficiaries were to take the estate per capita, meaning each child received an equal share regardless of their parent, or per stirpes, meaning the estate was divided into branches based on the testator's relatives, with each branch receiving an equal share and then being subdivided among the children of that relative.

The court was required to determine the correct method of distribution of the residuary estate, specifically whether the beneficiaries, who were the children of four named relatives of the testator, were to take the estate per capita or per stirpes. This involved interpreting the language of the will and applying established rules of construction regarding gifts to classes of beneficiaries.

The High Court held that the residuary estate was to be distributed per capita. The court applied the settled rule of construction that where a will directs a division of residue equally amongst the children of named persons, the beneficiaries take per capita in the absence of a clear indication to the contrary. The court found no sufficient indication within the language of the will to displace this rule. The repetition of the direction for equal division was considered to be emphasis rather than an indication of a double division (first by stocks, then by individuals within each stock). The court rejected arguments that differences in generation or the structure of prior gifts in the will were sufficient to imply a per stirpes distribution, emphasizing that the testator's intention must be ascertained from the words of the will itself. The appeal was allowed, and the decision of the Supreme Court of New South Wales was reversed.