Kuenen v Robert Leslie Hortin and Adrian Mark Bickford as Executor of the Estate of Late Leslie Mervyn Hortin

[2024] WASC 152

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   KUENEN -v- ROBERT LESLIE HORTIN AND ADRIAN MARK BICKFORD as Executor of the Estate of LATE LESLIE MERVYN HORTIN [2024] WASC 152

CORAM:   HILL J

HEARD:   22 NOVEMBER 2023

DELIVERED          :   3 MAY 2024

PUBLISHED           :   3 MAY 2024

FILE NO/S:   CIV 1670 of 2023

BETWEEN:   PAUL VINCENT KUENEN

First Plaintiff

KANE MATTHEW KUENEN

Second Plaintiff

SHANE WILLIAM GARDNER as administrator of the estate of KAYE PATRICIA GARDNER

Third Plaintiff

DENE CLINTON KUENEN

Fourth Plaintiff

SUSAN MAREE NEWBOLD

Fifth Plaintiff

AND

ROBERT LESLIE HORTIN AND ADRIAN MARK BICKFORD as Executor of the Estate of LATE LESLIE MERVYN HORTIN

First Defendant

ROBERT LESLIE HORTIN

Second Defendant

Catchwords:

Wills - Construction - Family farming partnership - Proper construction of clause in will - Meaning of phrase 'F.V. Hortin & Sons' - Whether deceased intended to refer to partnership in existence at the date of execution of will or at the date of death - Whether intention on part of deceased to gift interest in partnership - Turns on own facts

Wills - Doctrine of ademption - Whether gift of partnership interest adeemed - Turns on own facts

Legislation:

Partnership Act 1895 (WA)
Wills Act 1837 (UK)
Wills Act 1970 (WA)

Result:

Questions answered

Category:    B

Representation:

Counsel:

First Plaintiff	:	M L Bennett
Second Plaintiff	:	M L Bennett
Third Plaintiff	:	M L Bennett
Fourth Plaintiff	:	M L Bennett
Fifth Plaintiff	:	M L Bennett
First Defendant	:	E M Heenan SC & J R C Sippe
Second Defendant	:	E M Heenan SC & J R C Sippe

Solicitors:

First Plaintiff	:	Bennett
Second Plaintiff	:	Bennett
Third Plaintiff	:	Bennett
Fourth Plaintiff	:	Bennett
Fifth Plaintiff	:	Bennett
First Defendant	:	Seymour Legal
Second Defendant	:	Seymour Legal

Case(s) referred to in decision(s):

Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507

Backwell v Child (1755) Amb 280; 27 ER 173

Brennan v Permanent Trustee Company of New South Wales (1945) 73 CLR 404

Hendry v Perpetual Executors & Trustees Association of Australia Ltd (1961) 106 CLR 256

In the Will of Green [1907] VLR 284

Livingstone v Commissioner of Stamp Duties (Qld) (1960) 107 CLR 411

Mannigel v Aitken (1985) 9 FCR 1

Perrin v Morgan [1943] AC 399

Re Barrance [1910] 2 Ch 419

Re Leeming [1912] 1 Ch 828

Re Russell (1882) LR 19 Ch D 432

Re Slater [1907] 1 Ch 665

Re Willis [1996] 2 Qd R 664

Sharp v Union Trustee Co of Australia Ltd (1944) 69 CLR 539

Tatham v Huxtable (1950) 81 CLR 639

Walsh v Sloan as executor of the estate of the late Keddie [2019] WASCA 107

HILL J:

1. By originating summons filed 23 June 2023, the plaintiffs seek declaratory relief as to the proper construction of cl 2.3 of the will of the late Leslie Mervyn Hortin (Leslie) dated 23 August 1994 (Will), pursuant to s 26(1) of the Wills Act 1970 (WA) (Act). The plaintiffs are five of the six residuary beneficiaries of Leslie's estate, with the sixth residuary beneficiary being the second defendant. Given that many of the people referred to in these reasons share the same surname, I have referred to each of them by their first name. In doing so, I intend no disrespect.

2. Clause 2.3 of the Will concerns the disposition of Leslie's interest in a farming partnership which is described in the Will as 'F.V. Hortin & Sons'.

3. Specifically, the plaintiffs sought the court's determination of the following questions:

   (a)To which partnership known as 'F.V. Hortin & Sons' was Leslie referring to in his Will?

   (b)If Leslie was referring to the partnership known as 'F.V. Hortin & Sons' which existed at the time of the making of his Will on 23 August 1994, were the surviving partners entitled to Leslie's interest in the partnership known as 'F.V. Hortin & Sons'?

   (c)Does the gift of Leslie's entitlement in that partnership known as 'F.V. Hortin & Sons' which existed at the time of making his Will fail if, when the partnership known as 'F.V. Hortin & Sons' dissolves, pursuant to s 44 of the Partnership Act 1985 (WA), prior to Leslie's death?

4. The plaintiffs contend that the partnership known as 'F.V. Hortin & Sons' which existed at the date the Will was executed had dissolved prior to Leslie's death.  As a result, the plaintiffs say the bequest provided by cl 2.3 of the Will fails, and that Leslie's entitlement in the surplus of the assets of the partnership known as 'F.V. Hortin & Sons' which existed at the date of his death forms part of the residue of his estate.

5. The defendants reject these contentions and say that on the proper construction of the Will, cl 2.3 was a valid gift.  Alternatively, the defendants say that the partnership which existed at the date of Leslie's death was the same partnership in name and form as the partnership at the date the Will was executed, and that no ademption has occurred.

6. For the reasons set out below, I consider that cl 2.3 of the Will should be construed as referring to Leslie's share of the partnership known as 'F.V. Hortin & Sons' as at the date of his death.  On this basis, I consider that cl 2.3 was a valid gift of his interest in this partnership to his surviving partners, Robert and Zak.  As a result, the other questions do not arise for consideration.

Evidence on the application

1. At the hearing, the plaintiffs read the affidavit of Ms Gina Nofal, a solicitor employed by the plaintiffs' lawyers, filed 23 June 2023.  Ms Nofal's affidavit annexed, among other things, a copy of the Will.

2. The defendants read the affidavit of Robert Leslie Hortin, filed 23 August 2023.  Robert was the nephew of Leslie (his father, John, and Leslie were brothers) and is a partner of the family partnership of 'F.V. Hortin & Sons' that carries on the farming business.

Factual background

1. The Hortin family are, and have been for some considerable time, livestock and dairy farmers in Kronkup in the Great Southern region of Western Australia.

2. In November 1971, Hortin Grazing Co Pty Ltd was incorporated (Company).  The minutes of a directors' meeting on 3 December 1971 record that two shares were issued: one to Leslie and one to John and that an amount was borrowed from 'F.V. Hortin & Sons' to cover the costs of incorporation and the purchase of the property referred to in the minutes.[1]

   [1] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH2A'.

3. Most of the land farmed by the partnership known as 'F.V. Hortin & Sons' was and is owned by the Company which then leases the land to the partnership.  The partnership pays rent on the land to the Company.[2]

   [2] See for example, Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH2A', pages 18 ‑ 20, 'RLH2B'.

4. On 18 September 1981, 'F.V. Hortin & Sons' was registered as a business name with the Australian Securities and Investments Commission (ASIC).  The registration is still current.  The current and historical business name extract (which is confirmed by a current business name extract)[3] records that, as at 14 July 2023:[4]

   (a)Mary (John and Leslie's mother) was an historic business name holder from 18 September 1984 until 3 November 1987;

   (b)John was an historic business name holder from 18 September 1984 until 4 October 2001;

   (c)Leslie was a partner from 18 September 1984 until 31 October 2021;

   (d)Dawn (Robert's mother and John's wife) was a partner from 18 September 1984 until 31 October 2021 and an historic business name holder (as executor) from 30 June 2003 until 30 June 2003;

   (e)the current business name holder is a partnership in the name of 'Dawn Patricia Hortin, Leslie Mervyn Hortin, Robert Leslie Hortin'.  This partnership has owned the business name since 18 September 1984; and

   (f)the current partners are Robert (since 18 September 1984) and Zak (since 1 April 2018).

   [3] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH13'.

   [4] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH12'.

5. In 1984, Robert became a partner in the family partnership.  In 1984, Mary, Leslie, John, Dawn and Robert executed an agreement which provided that:[5]

[5] Affidavit of Gina Nofal filed 23 June 2023, 'GN-1'; Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH1'.

1. Robert's evidence is that throughout his time as a partner of F.V. Hortin & Sons, various partners have died or retired and new partners have joined.[6]  Prior to Leslie's death, all partners have been family members.[7]  On Leslie's death, for a short period, his executors became partners of the partnership, one of whom (Mr Bickford) is an accountant and not a family member.

   [6] Affidavit of Robert Leslie Hortin filed 23 August 2023 [12].

   [7] Affidavit of Robert Leslie Hortin filed 23 August 2023 [19] - [23].

2. Notwithstanding the changes in partners and, as a result, partnerships, Robert's evidence is that continuing family members have 'always continued the same family farming business' and 'operated like one continuous business'.[8]  This has included having and using the same bank account with the National Australia Bank (NAB) since at least 12 July 1993, and the continued use of plant and equipment in the business, no matter when it was purchased.  Vehicles that were partnership property were registered in the name of one of the partners of the family business.  When a partner died or retired from the partnership, the registration was transferred to another partner.[9]

   [8] Affidavit of Robert Leslie Hortin filed 23 August 2023 [13].

   [9] Affidavit of Robert Leslie Hortin filed 23 August 2023 [13] - [14], [17], 'RLH2D'.

3. Various bank statements of the NAB account are annexed to Robert's affidavit.  These bank statements disclose that:[10]

   (a)between at least 11 August 1993 and 10 June 1994, bank statements were sent to 'The Manager FV Hortin & Sons' for an account in the name of 'Robert Leslie Hortin, Dawn Patricia Hortin, John Frances Hortin & Leslie Mervyn Hortin trading as FV Hortin & Sons'; and

   (b)between at least 30 March 2018 and 30 June 2023, the bank statements were sent to 'The Directors FV Hortin and Sons' for an account in the name of 'Robert Leslie Hortin, Dawn Patricia Hortin & Leslie Mervyn Hortin trading as FV Hortin & Sons'.

   [10] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH2', 'RLH11'.

4. Robert's evidence is that the trading name of the partnership has always been 'FV Hortin & Sons' which is sometimes written as 'F.V. Hortin & Sons'.  He says that the difference in the naming convention is not deliberate nor significant.[11]

   [11] Affidavit of Robert Leslie Hortin filed 23 August 2023 [31].

5. On 3 November 1987, Mary died.  Robert's evidence is that following Mary's death, his aunt, Margaret Kuenen, was paid an amount from Mary's estate in lieu of becoming a partner of the partnership.[12]

   [12] Affidavit of Robert Leslie Hortin filed 23 August 2023 [19].

6. On 23 August 1994, Leslie executed the Will.[13]  Relevantly, cl 2.3 of the Will provides that:

   [13] Affidavit of Gina Nofal filed 23 June 2023, 'GN-2'.

1. Pursuant to cl 2.5 of the Will, Leslie gave the balance of his real and personal estate to his siblings, John and Margaret Kuenen, in equal shares and if either or both predeceased him, the adult children of each sibling would be entitled to equal proportions of their parent's share.

2. On 4 October 2001, John died.  Dawn was the executor of John's estate[14] and, for a short time, became a partner of the partnership in that capacity.[15]  Robert received John's share in the partnership under John's will, which Robert believes occurred with effect from 1 July 2003.[16]

   [14] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH3'.

   [15] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH12'.

   [16] Affidavit of Robert Leslie Hortin filed 23 August 2023 [21], 'RLH12'.

3. Since 1 July 2003, the trading name 'FV Hortin and Sons' has been registered in the Australian Business Register with Australian Business Number 81 422 691 302.[17]  These records disclose that 'FV Hortin and Sons' is a family partnership.  Under the heading 'Entity name', five different entities are recorded.  These are:

   [17] Affidavit of Gina Nofal filed 23 June 2023, 'GN-4'.

Entity name	From	To
R.L Hortin & Z.T Hortin	31 Oct 2021	(current)
D.P Hortin & R.L Hortin & Z.T Hortin & The Trustee for Leslie Mervyn Hortin	25 May 2021	31 Oct 2021
D.P Hortin & L.M Hortin & R.L Hortin & Z.T Hortin	24 Apr 2018	25 May 2021
D.P Hortin & L.M Hortin & R.L Hortin	9 Nov 2004	24 Apr 2018
D.P Hortin & L.M Hortin & R.L Hortin	1 Jul 2003	9 Nov 2004

1. On 26 March 2018, Robert, Dawn and Leslie entered into a written partnership agreement (Agreement).[18]  The Agreement records that the parties have carried on the business of 'FV Hortin & Sons ABN 81 422 691 302 trading as FV Hortin & Sons' (defined as the Partnership) since 1 July 2003 and now wish to reduce their agreements to writing.[19]  The Partnership interest of each of the partners as of the date of the Agreement is recorded as Robert holding 39.58%, Dawn holding 22.92%, and Leslie holding 37.50%. 

   [18] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH4'.

   [19] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH4', Recital A.

2. Clause 4 of the Agreement concerns the duration of the Partnership, and records the Partnership as having commenced on 1 July 2003.  Clause 12 of the Agreement addresses what is to occur on the death of a partner. If this occurs, pursuant to this clause, the remaining partners are required to admit the legal personal representative of the deceased partner to the partnership if they consent to be bound by the Agreement and enter into a deed of covenant providing such.  Similarly, any beneficiary of the deceased partner's will can only be admitted to the Partnership where they agree to be bound by the Agreement and enter into an accompanying deed of covenant.  If either or both of these parties decline to do so and instead require the deceased partner's share to be paid out, the Partnership may continue provided there are at least two remaining partners who elect to do so.[20]

   [20] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH4', pages 125, 130 ‑ 131.

3. On 29 March 2018, a partners' meeting of 'FV Hortin & Sons' was held and attended by Leslie, Dawn and Robert.[21]  The minutes record that both Dawn and Leslie wanted to dispose of part of their interest in the partnership.  The meeting resolved that these interests be transferred to Robert's son, Zak.  This was subject to Zak signing a deed of covenant agreeing to be bound by the Agreement, which was done.  On 1 April 2018, the offered interests were transferred and Zak became a partner in 'FV Hortin & Sons'.[22]

   [21] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH5'.

   [22] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH5'.

4. On 25 May 2021, Leslie died.  On 11 October 2021, the court issued a grant of probate for Leslie's estate to Mr Bickford and Robert, as the nominated executors in the Will.[23]

   [23] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH6'.

5. Between 22 August 2021 and 8 September 2021, Mr Bickford and Robert paid $100,000 to each of the plaintiffs.[24]  On 31 October 2021, and pursuant to cl 2.3 of the Will, Mr Bickford and Robert transferred Leslie's share in the partnership of 'FV Hortin & Sons' in equal shares to Dawn, Robert, and Zak via written agreement.[25]  After this transfer, the partnership interests in 'FV Hortin & Son', as recorded in this agreement, were Dawn with 18.96%, Robert with 47.08%, and Zak with 33.96%.

   [24] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH7'.

   [25] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH8'.

6. In about October 2021, Dawn decided to retire from the partnership and on 31 October 2021 sold her interest to Robert via written agreement.[26]  After this transfer, the partnership interests in 'FV Hortin & Sons', as recorded in this agreement, were and are Robert with 66.04% and Zak with 33.96%.

   [26] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH9'.

7. On 15 September 2022, Robert and Zak jointly and severally trading as 'FV Hortin & Sons (A Partnership)' and the Company entered into a formal written lease in respect of the farming properties on which the partnership carries on its farming business.  This agreement was varied in 2023.[27]

   [27] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH2C'.

Legal principles

Construction of wills

1. The principles that govern the construction of a will are well settled and were not in dispute.  These principles were comprehensively set out by the Court of Appeal in Walsh v Sloan as executor of the estate of the late Keddie[28] and can be summarised as follows.

   [28] Walsh v Sloan as executor of the estate of the late Keddie [2019] WASCA 107 [23] - [34].

2. The starting point is that the object of construing a will is to ascertain the testator's intention as expressed in the will itself.  This requires consideration of what the written words mean in the particular case to determine the 'expressed intentions' of the testator.[29]

   [29] Perrin v Morgan [1943] AC 399, 406.

3. In identifying the meaning of the words used by the testator, the court focusses on the objective intention of the testator at the time the will was made and not at the time of their death.  This is reflected in the 'armchair principle', which allows the court to admit extrinsic evidence about the testator's property, family, acquaintances, and friends for the purpose of putting the court in a position where it can read the will as the testator would have read it.  This principle is reflected in s 28A of the Act.

4. In so far as there is property which is the subject of the will, the will takes effect as at the date of the testator's death.  This is reflected in s 26(1)(a) of the Act.  As a result, while the meaning of the words in the will do not change, because of events that have occurred after execution of the will, the words used may denote different property.  That is, 'the words have a fixed connotation but their denotation may differ from time to time'.[30]

   [30] Walsh v Sloan as executor of the estate of the late Keddie [29].

5. In construing the words used, the court must recognise that what is being construed is a gift.  The question to be asked is 'what is the thing (if any) that the testator, by the words used in the Will, expressed an intention to give?'.[31]

   [31] Walsh v Sloan as executor of the estate of the late Keddie [31].

6. The language in the will must be read in the sense that the testator appears to have attached to the expressions used.[32]  It should not be construed in a strictly technical or legalistic sense but be sensitive to the factual context, ordinary life and circumstances.[33]

   [32] Brennan v Permanent Trustee Company of New South Wales (1945) 73 CLR 404, 414.

   [33] Re Willis [1996] 2 Qd R 664, 667 (Derrington J) cited with approval in Walsh v Sloan as executor of the estate of the late Keddie [34].

7. Where property that is the subject of disposition is void or fails to take effect, this property is to be included in any residuary disposition which is contained in the will.[34]

   [34] Wills Act 1970 (WA) s 26(1)(b).

8. Once probate is granted, the court cannot change the contents of the will[35] or delete or insert words into the will.[36]

Doctrine of ademption

[35] Re Barrance [1910] 2 Ch 419.

[36] In the Will of Green [1907] VLR 284, 288; Tatham v Huxtable (1950) 81 CLR 639.

1. Under the doctrine of ademption, if the subject matter of a gift ceases to exist as part of the testator's property at the time of death, the gift fails and the beneficiary takes nothing.  However, if the change to the property is in name and form only, then ademption will not occur.[37]

Partnership law

[37] Re Slater [1907] 1 Ch 665, 672.

1. A partnership does not have a legal personality which is distinct from that of the individual partners.[38]

   [38] Atwell v Roberts [2013] WASCA 37; (2013) 43 WAR 507 [121] (Buss JA).

2. The starting point is that subject to any agreement between the partners, every partnership is dissolved by the death of any partner.[39]  Should the parties wish for the partnership to continue notwithstanding the death of a partner, a specific agreement must be made by all the partners before the death.[40]

   [39] Partnership Act 1895 (WA) s 44(3).

   [40] Mannigel v Aitken (1985) 9 FCR 1.

3. It is a fallacy that a partnership is a continuing entity which survives the death or retirement of members.  It is a fundamental principle in the law of partnership that any change in the membership dissolves the partnership.[41]

   [41] Atwell v Roberts [9], [11] (Pullin JA), [122] (Buss JA).

4. The death of a partner and automatic dissolution of the partnership crystallises the deceased partner's share in the partnership and allows for an account to be taken to enable their estate to access that partner's 'share in the ultimate surplus'.[42]  A partner's share in a partnership is a chose in action.  It is a right to a proportion of the surplus after the assets of the partnership have been realised and the debts and liabilities paid, and not a title to specific property.[43]

   [42] Sharp v Union Trustee Co of Australia Ltd (1944) 69 CLR 539, 551 (Rich J); Livingstone v Commissioner of Stamp Duties (Qld) (1960) 107 CLR 411, 453 (Kitto J).

   [43] Atwell v Roberts [142] (Buss JA).

5. On dissolution of the partnership, each partner retains a 'beneficial interest' in every asset of the partnership which continues until the partnership is actually or notionally wound up (such as where the parties agree on a sale of the outgoing partner's share to one or more of the remaining partners).[44]

   [44] Atwell v Roberts [143] (Buss JA).

Parties' submissions

1. There is broad agreement between the parties that from its inception until the date of the hearing, there have been eight or nine different combinations of partners comprising the Hortin farming partnership.[45]  These are:

   [45] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH10'; Plaintiffs' submissions [8].

Relevant period	Partners	Reason for change
From either a date prior to 1967 or at least from 1971 until 30 June 1984	Mary, Leslie, John, Dawn	Addition of Robert
1 July 1984 - 3 November 1987	Mary, Leslie, John, Dawn, Robert	Death of Mary
4 November 1987 - 30 June 1990	Trustees of Mary's estate, Leslie, John, Dawn, Robert	Completion of the administration of Mary's estate
1 July 1990 - 31 December 2001	Leslie, John, Dawn, Robert	Death of John
1 January 2002 - 30 June 2003	Leslie, Trustees of John's estate, Dawn, Robert	Completion of the administration of John's estate
1 July 2003 - 31 March 2018	Leslie, Dawn, Robert	Addition of Zak
1 April 2018 - 25 May 2021	Leslie, Dawn, Robert, Zak	Death of Leslie
26 May 2021 - 31 October 2021	Trustee of Leslie's estate, Dawn, Robert, Zak	Removal of both the Trustee of Leslie's estate and retirement of Dawn
31 October 2021 – present	Robert, Zak

1. The plaintiffs emphasise two matters in relation to this history.  First, the initial description of the partnership was 'F.V. Hortin & Sons' compared to the current name of 'FV Hortin & Sons'.[46]  Second, two partnership agreements have been executed over this time.  The first, in respect of a partnership titled 'F.V. Hortin & Sons', was executed in 1984 and the second, in relation to 'FV Hortin & Sons', was executed on 26 March 2018.

   [46] Affidavit of Gina Nofal filed 23 June 2023, 'GN-4'; Plaintiffs' submissions [9].

2. The plaintiffs say that, at the time the Will was signed, Leslie had an interest in the partnership of 'F.V. Hortin & Sons' comprising Leslie, John, Dawn and Robert.  They say that it is this partnership interest that is the subject of the gift in cl 2.3 of the Will.  At the time Leslie signed his Will, no partnership agreement existed which provided that the partnership would survive the death of a partner. Given this, the plaintiffs say that upon John's death in 2001, the partnership of F.V. Hortin & Sons dissolved and should have been wound up.  As a consequence, Leslie's interest in this partnership no longer exists and cannot be the subject of a gift. 

3. The defendants reject this construction of cl 2.3 of the Will for two primary reasons. 

4. First, the defendants say a distinction must be drawn between the dissolution of a partnership where the business continues (a notional winding up), and a dissolution of the partnership and a winding up of the business (an actual winding up). They contend that in this case, the surviving partners agreed to continue the business of a partnership after the death of one of their partners, which in their submission, is not contrary to s 44 of the Partnership Act 1895 (WA).

5. Second, while the defendants accept that the partnership that existed at the time of the deceased's death is a different partnership to the one in place on the date the deceased made the Will, they contend this does not assist in the proper construction of the Will.  In their submission, the issue in relation to the proper construction of cl 2.3 of the Will is what the Deceased intended the gift to be.  They contend that on its proper construction, cl 2.3 bequeathed all of Leslie's rights in the partnership conducting the farming business at the date of his death.

6. In the alternative, the defendants submit that, through the application of the ademption doctrine, the gift made by cl 2.3 has not adeemed.  In support of this submission, counsel for the defendants referred to three cases: Re Leeming,[47] Backwell v Child,[48] and Re Russell,[49] the significance of which I discuss below.  The defendants contend after executing his Will, Leslie continued to have a share in the partnership known as 'F.V. Hortin & Sons', which continued to conduct the same business using essentially the same assets as each previous partnership.  On this basis, the defendants say there was no ademption of the gift made by cl 2.3 of the Will.

   [47] Re Leeming [1912] 1 Ch 828.

   [48] Backwell v Child (1755) Amb 280; 27 ER 173.

   [49] Re Russell (1882) LR 19 Ch D 432.

Disposition

1. Before turning to the questions raised on the originating summons as to the proper construction of the Will, it is necessary to first address the issues raised in respect of the partnership at the heart of these proceedings.

2. It is not in dispute that a business of a farming partnership has been conducted on the land owned by the Company (and leased from other entities) since at least the early 1970s.  As set out above at [44], it is accepted by the parties that this business has been conducted by at least eight or nine different partnerships. 

3. At the time of Leslie's death, the 2018 partnership agreement governed the partnership.[50]  This agreement specifically provided for the partnership to continue notwithstanding the death of a partner.  Prior to this, there was no written agreement as to what would occur on the death of a partner.

   [50] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH4'.

4. As a matter of law, on the retirement or death of a partner in the partnership carrying on the farming business, that specific partnership dissolved.  On dissolution, each partner's share in the partnership comprises a right to a proportion of the surplus after realisation of assets and payment of debts and liabilities. 

5. For the following reasons, on the dissolution of each of the partnerships of FV Hortin & Sons, I find that:

   (a)there was a notional and not an actual winding up of the partnership; and

   (b)the continuing partners agreed to continue the farming business under the same partnership name each time a new partnership was formed.

6. First, I accept and find that the partnerships have farmed on the same land (subject to new acquisitions) leased from the Company since late 1971.  At no stage has the land been sold and profits distributed to the then partners of FV Hortin & Sons.

7. Second, since at least 1993 (and through at least six different partnerships), the business has continued to use the same bank account.  The name of the bank account reflected some of the partnership changes (although not all) and reflected that the partnership traded at all times during this period as 'FV Hortin & Sons'. The bank account was not closed on the dissolution of each partnership with new bank accounts opened.

8. Third, I accept Robert's evidence that the partnerships have used the same plant and equipment (subject to new purchases and retirement of old equipment) over this time.  The plant and equipment has not been sold and any profits from the sale distributed to the then partners.

9. Fourth, the historical searches of both the ABN details of 'FV Hortin and Sons' and the ASIC search of the business name of 'F.V. Hortin & Sons' broadly reflect the changes in the partnership summarised in [44], with some minor discrepancies as to the dates on which changes occurred.

10. I turn then to the proper construction of cl 2.3 of the Will.  The question to be considered, as set out by the Court of Appeal in Walsh v Sloan as executor of the estate of the late Keddie, is what do the words of cl 2.3 of the Will reveal that Leslie intended to give (if anything) to the identified beneficiaries.[51]  It is not to be answered, as was noted by the High Court in Hendry v Perpetual Executors & Trustees Association of Australia Ltd, by a strict legal analysis of Leslie's rights as a partner during his lifetime but by determining what Leslie meant by the words used in the Will.[52]

    [51] Walsh v Sloan as executor of the estate of the late Keddie [42].

    [52] Hendry v Perpetual Executors & Trustees Association of Australia Ltd (1961) 106 CLR 256.

11. Leslie's Will is a simple two-page document containing two clauses.  In cl 1, he appoints Robert and his accountant, Mr Bickford as executors and trustees of his Will.  Clause 2 addresses the disposition of his estate.  By this clause, he gives all of his real and personal estate to his Trustees (Robert and Mr Bickford) on trust to first, pay his funeral and testamentary expenses; second, to deal with his share in Hortin Grazing Co Pty Ltd; third, to gift his interest in the partnership of 'F.V. Hortin & Sons'; fourth, to gift his 'shares stock units and options'; and finally, to address the balance of his estate.

12. Specifically, in cl 2.3, Leslie left all of his 'estate right title and interest in the partnership known as "F.V. Hortin & Sons" to such of my partners thereof who shall survive me'.

13. In my view, Leslie's intention in cl 2.3 of the Will is clear.  By using the expression 'the partnership known as "F.V. Hortin & Sons"', Leslie intended to give his interest in the family partnership that carried on the farming business to his surviving partners.  This is the only asset to which the expression used in the Will by Leslie could apply.

14. This construction is consistent with the factual circumstances that existed at the date Leslie executed his Will; namely, that a significant part of his estate was his interest in the family farming business which comprised the Company which owned the property and a partnership which operated under the business name 'F.V. Hortin & Sons'.  Clause 2.2 addresses the gift of Leslie's share in the company and, in my view, cl 2.3 concerns his interest in the partnership.

15. This construction is supported by the identification of the beneficiaries as 'to such of my partners thereof' in cl 2.3.  This can be contrasted to the remaining clauses of the Will, which name specific individuals.  This construction accords with the evident intention of Leslie, objectively ascertained, as to how his interest in the family business was to be dealt with.  Further, it pays proper regard to the context of this family partnership, where over time it had been notionally wound up and reconstituted, to reflect the changes in the members of the partnership. 

16. For these reasons, I consider and hold that cl 2.3 of the Will should be construed as referring to Leslie's share in the partnership known as 'FV Hortin & Sons' at the date of his death.

17. The second issue that arises is the proper construction of the term 'F.V. Hortin & Sons' in cl 2.3 of the Will and whether this is a reference to the current partnership of 'FV Hortin & Sons' or a different earlier partnership.  Counsel for the plaintiff accepted at the hearing that nothing was to be made of the full stops after the F and V.[53]

    [53] ts 16.

18. For the reasons set out at [56] ‑ [59] and the additional matters set out below, I consider this was an appropriate concession to make.  First, Robert's evidence, which I accept, is that 'F.V. Hortin & Sons' and 'FV Hortin & Sons' were used interchangeably to describe the family partnership.  Second, the historical searches of both the ABN details of 'FV Hortin and Sons' and the ASIC search of the business name 'F.V. Hortin & Sons' were broadly consistent with the dates of partnership changes since 1 July 2003.  There is no suggestion or evidence that the Hortin family had two partnerships at the same time.  This supports a conclusion that each of these searches were referring to the same and not different partnerships.  Third, this is also consistent with the general decline since the late 1960s in using full stops to signify an abbreviation, particularly where people's initials are used.

19. While the written partnership agreement recites that the parties had carried on the business of 'FV Hortin & Sons ABN 82 422 691 302 trading as FV Hortin & Sons ("Partnership") since 1/7/2003',[54] I accept the submission of senior counsel for the defendants and find that this recital reflects the date on which the partnership was registered for goods and services tax and obtained an ABN, as opposed to the date on which the partnership itself commenced.[55]

    [54] Affidavit of Robert Leslie Hortin filed 23 August 2023, 'RLH4'.

    [55] ts 18.

20. In case I am wrong in my construction of cl 2.3, I now turn to consider the doctrine of ademption.  In doing so, it is necessary to consider in detail (in chronological order) the cases on which the defendants relied.

21. The first of the cases was Backwell v Child.  In this case, the deceased together with two others, were partners in a banking business.  The articles governing this partnership provided that if a partner died, their share was to go to their executor.  At the time of making his will, the deceased was entitled to nine-twelfths of the profits of the partnership.  In his will, the deceased left one-ninth to his partners and the remaining shares to his wife and children (in specified proportions).  After making his will, the partners of the business entered into new arrangements under which the deceased was entitled to fourteen of twenty‑four shares.  The deceased did not make any amendment to his will to reflect this change. 

22. Lord Chancellor Hardwicke relevantly found that the gift in the Will was a 'specific legacy of quantity; bequeathed out of a certain body' and, if the body subsisted at the date of death, the gift was required to be paid out of it.  In this case, the articles governing the partnership provided for what was to occur on the death of any of the partners.  On this basis, the Lord Chancellor held that:[56]

    The partnership is not to be considered as at the time of making the will, but variable and ambulatory.  Where a person in trade makes provision out of his share for his family, and afterwards renews the partnership, by which perhaps his interest is varied, yet it is not a revocation; if it was, it would occasion great confusion.

    [56] Backwell v Child (174).

23. The second of the cases is Re Russell.  At the time of making his will, the deceased bequeathed 'all my part, share, and interest of and in the said co‑partnership trade or business' he was then carrying on with his two brothers to trustees to continue the business during his wife's life, with a discretion for his wife to discontinue the business.  After making his will, he acquired the shares of his brothers and carried on the business in the same name as sole owner until his death.

24. Bacon VC commenced his reasons by noting that a conclusion that the deceased died intestate so as to deprive his wife of any interest in the business was 'not tenable' and that, as a fixed principle of law, the court leans against intestacy in all cases.[57]  Bacon VC concluded, by reference to s 23 of the Wills Act 1837 (UK), that the acquisition of the remaining shares in the partnership, with the effect that the partnership had ceased to exist, did not affect the disposition in the deceased's will.  At the time, this section provided that:

    No conveyance or other Act made or done subsequently to the execution of a will, of or relating to any real or personal estate therein comprised, except an act by which such will shall be revoked as aforesaid, shall prevent the operation of the will with respect to such estate or interest in such real or personal estate as the testator shall have power to dispose of by will at the time of his death.

    [57] Re Russell (439).

25. The final case was Re Leeming, in which the deceased in his will gifted 10 fully‑paid ordinary shares in a company to the defendant.  Between the date of execution of the will and the date of his death, the company went into voluntary liquidation for the purposes of reconstruction.  The reconstructed company was subsequently incorporated under the same name.  Under the reconstruction, each holder of shares in the old company became entitled to new fully‑paid preference shares and ordinary shares in the new company, and share certificates for the shares in the new company were issued to the deceased.  In that case, Neville J held that the shares in the new company were 'in substance' the same as shares in the old company and represented the specific bequest.  On this basis, his Honour concluded that there had been no ademption and the beneficiary was entitled to the shares in the new company.[58]

    [58] Re Leeming (830).

26. In my view, the only authority that is of significant assistance is the decision in Re Russell.  This is because in Backwell v Child, the partners had agreed what was to occur on the death of a partner, which is not the case here, and Re Leeming concerns shares in a company and not a partnership interest.  At the hearing, counsel for the plaintiffs emphasised that Bacon VC relied on s 23 of the Wills Act 1837 (UK) to support his conclusion that the cessation of the relevant partnership did not affect the disposition in the will in this case.  There is no equivalent of this section in the Act.  Section 25 (which appears to be the closest provision in this Act) only deals with the situation where a testator has disposed of an interest in property after making a will and prior to their death.[59]  On this basis, counsel for the plaintiff submitted this case could be distinguished from the facts of this case.

    [59] ts 10 ‑ 14.

27. In this case, the partnership trading as 'F.V. Hortin & Sons' which existed at the time Leslie executed his Will was notionally wound up on John's death in 2001.  The partnership was reconstituted after John's death, comprising Leslie, Dawn and Robert, and continued to operate the farming business using the same assets used by the previous partnership.  This partnership was notionally wound up on 31 March 2018 with the admission of Zak on 1 April 2018.  The new partnership (comprising Leslie, Dawn, Robert and Zac) continued to operate the farming business using the same assets used by the previous partnership.  It is this partnership that was in existence at the date of Leslie's death.

28. Given these factual matters, and taking account of the principle that the court leans against intestacy in all cases, I accept and find that the partnership in existence at the date of Leslie's death was, in nature and substance, the same partnership as at the date that Leslie executed his Will.  In my view, this conclusion is consistent with the view expressed by Lord Chancellor Hardwicke that a change in partnership (which, as a matter of law, dissolves the partnership that existed at the date of the will) does not revoke the gift contained in the will.  To conclude otherwise would, in my view, have significant consequences and cause, to adopt the words of the Lord Chancellor, great confusion.

1. On this basis, I consider there has been no ademption of the gift in cl 2.3 of the Will and that Robert and Zak, as the partners who survived him, are entitled to Leslie's interest in that partnership.

Conclusion

1. For these reasons, I consider that the questions in the originating summons filed 23 June 2023 should be answered as follows:

   (a)Question 1.1

   Clause 2.3 of the Will should be construed as referring to Leslie's share of the partnership known as 'FV Hortin & Sons' as at the date of his death.

   (b)Question 1.2

   Does not arise for consideration.

   (c)Question 1.3

   Does not arise for consideration.

2. My preliminary view is that the plaintiffs, as the unsuccessful parties, should pay the defendants' costs of the originating summons, to be taxed if not agreed.  However, before making any order as to costs, I will hear from the parties.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

JN

Associate to the Honourable Justice Hill

3 MAY 2024