Lohman v Amanda Louise Lohman as executor of the estate of John Alexander Lohman
[2024] WASC 35
•14 FEBRUARY 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: LOHMAN -v- AMANDA LOUISE LOHMAN as executor of the estate of JOHN ALEXANDER LOHMAN [2024] WASC 35
CORAM: WHITBY J
HEARD: ON THE PAPERS
DELIVERED : 14 FEBRUARY 2024
FILE NO/S: CIV 2191 of 2022
BETWEEN: ADAM JOHN LOHMAN
Plaintiff
AND
AMANDA LOUISE LOHMAN as executor of the estate of JOHN ALEXANDER LOHMAN
First Defendant
AMANDA LOUISE LOHMAN
First-named Second Defendant
MARGARET PEARL OSBORNE
Second-named Second Defendant
Catchwords:
Wills - Construction - Turns on own facts
Legislation:
Administration Act 1903 (WA)
Income Tax Assessment Act 1997 (Cth)
Non‑Contentious Probate Rules 1967 (WA)
Rules of the Supreme Court 1971 (WA)
Wills Act 1970 (WA)
Result:
Proper construction of cl 8 of the will permits executor to forgive debt owed by trust to deceased
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| First-named Second Defendant | : | No appearance |
| Second-named Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | In person |
| First Defendant | : | Mony De Kerloy |
| First-named Second Defendant | : | Hammond Legal |
| Second-named Second Defendant | : | In person |
Case(s) referred to in decision(s):
Muir v Winn [2009] NSWSC 857
Mustard v Oikonomov (Unreported, WASC, Library No 980468, 19 August 1998)
Perrin v Morgan [1943] AC 399
Sidle v Queensland Trustees Ltd [1915] HCA 48
Walsh v Sloan [2019] WASCA 107
WHITBY J:
John Alexander Lohman died on 29 November 2020. John died leaving his last will and testament dated 25 December 2020 (Will). John had two children, Adam John Lohman (the plaintiff) and Amanda Louise Lohman (the first defendant and first‑named second defendant). At the date of his death, John had a de facto partner, Margaret Pearl Osborne (the second‑named second defendant). Given a number of the parties share the same last name, I will refer to the parties by their first names with no disrespect intended.
By the Will, John appointed Amanda and Gary Ian Thomas as his executors. Mr Thomas renounced probate. Amanda was granted probate of the Will on 9 July 2021. In support of the application for probate, Amanda filed a statement of assets and liabilities pursuant to r 9B of the Non‑Contentious Probate Rules 1967 (WA) (NCPR) which estimated the net assets of John's estate to be $4,374,886 (Rule 9B Statement).
Under the Will, John bequeathed the residue of his estate to three separate testamentary trusts in equal shares created for the respective benefit of Adam, Amanda and Margaret as primary beneficiaries.
Adam contends that the assets of John's estate include a debt owed to John by the Sholl Street Trust (Sholl Street Trust Debt) in the amount of $11,025,917 and that Amanda, as executor, is required to call in the Sholl Street Trust Debt.
Amanda says that, on the proper construction of cl 8 of the Will, she is entitled to forgive the Sholl Street Trust Debt.
Margaret has indicated that she will abide by the decision of the court.
The issue in this action is whether, on the proper construction of cl 8 of the Will, Amanda is entitled to forgive the Sholl Street Trust Debt, in which case it does not become part of the John's estate.
For the reasons that follow, I find cl 8 of the Will permits Amanda, at her election, to forgive the Sholl Street Trust Debt.
Evidence before the court
The evidence before the court is comprised of the following:
1.Affidavit of Adam sworn on 4 November 2022 (First Adam Affidavit);
2.Affidavit of Service by Andrew Charles Hunt sworn on 17 January 2023 in relation to Margaret;
3.Affidavit of Dean Gordon Klesser filed on behalf Amanda, as executor, sworn 8 May 2023 (First Klesser Affidavit);
4.Affidavit of Amanda as executor of the estate of John sworn 8 May 2023 (Amanda Executor Affidavit);
5.Affidavit of Amanda in her capacity as beneficiary of the estate of John sworn 8 May 2023 (Amanda Beneficiary Affidavit);
6.Affidavit of Adam sworn 15 June 2023 (Second Adam Affidavit);
7.Supplementary affidavit of Amanda, as executor, sworn 22 June 2023 (Supplementary Amanda Executor Affidavit);
8.Supplementary affidavit of Dean Gordon Klesser sworn 22 June 2023 (Second Klesser Affidavit); and
9.Affidavit of Bernadette Joy Duell sworn 12 July 2023 (Duell Affidavit).
Procedural background
Adam commenced this action by way of an originating summons dated 11 November 2022.
The plaintiff seeks to invoke the powers of the court under s 45 of the Administration Act 1903 (WA) (Administration Act) and O 58 r 10 of the Rules of the Supreme Court 1971 (WA) (Rules).
Section 45(1) of the Administration Act provides:
The Court may make such order with reference to any question arising in respect of any will or administration, or with reference to the distribution or application of any real and personal estate which an executor or administrator or Public Trustee may have in hand, or as to the residue of the estate, as the circumstances of the case may require.
Order 58 r 10 of the Rules provides:
Any person claiming to be interested under a deed, will, or other written instrument, may apply by originating summons for the determination of any question of construction arising under the instrument, and for a declaration of the rights of the persons interested.
By amended originating summons filed on 8 June 2023, Adam, as beneficiary of the estate of the deceased, seeks the following orders:
1.a declaration that the Rule 9B Statement of Assets and Liabilities filed by the Defendant in support of the application for the grant of probate dated 9 July 2021 in respect of the Deceased's last will and testament dated 29 November 2020 (Will), erroneously omitted as an asset of the Deceased's estate a debt, alternatively entitlement, in the sum of $11,025,917 owed to the Deceased's estate by Lohman Nominees Pty Ltd as trustee for The Sholl Street Trust (Sholl Street Trust Debt);
2.the Court's determination as to the proper construction of the powers conferred on the executor by clauses 8(a) and 8(b) of the Will to:
a.postpone calling in or to forgive loans owing to the estate, including the Sholl Street Trust Debt, and
b.postpone calling in, disclaim or relinquish entitlements that the Deceased's estate may have in any trusts, including the Sholl Street Trust Debt;
3.a declaration that on a proper construction of the Will as a whole, any powers conferred on the executor to postpone calling in or to forgive the Sholl Street Trust Debt, and any other debts, is subject to the overriding obligation imposed on the executor under the Will to ensure that one third of the Deceased's total wealth as at the date of his death (save to the extent of the specific testamentary gifts made by clauses 9, 10, 11 and 13 of the Will), is distributed to the plaintiff or to the plaintiff's benefit; and
4.an order that the defendant pay the plaintiff's costs of the action.
Adam was legally represented from the commencement of the proceedings until his solicitors obtained an order of a registrar of the court on 9 November 2023 that they cease acting for him upon compliance with O 8 r 7 of the Rules. The solicitors complied with O 8 r 7 on 13 November 2023.
The matter was listed for a strategic conference on 15 November 2023. On the morning of the conference, Adam provided a medical certificate to the court which said that he would be unfit for work from 9 November 2023 to 16 November 2023. Also on the morning of 15 November 2023, Adam telephoned the associate to my chambers in relation to the strategic conference and was advised that he could attend by telephone. Adam told the associate that he did not wish to do so and would not be able to attend court in the future due to health reasons. The associate advised Adam that the strategic conference would proceed in his absence and the court would provide him with a copy of any orders made.
On 15 November 2023, counsel for Amanda and Amanda appeared. Counsel expressed his view that the special appointment listed on 28 November 2023 to hear the matter should proceed given the orders requiring evidence and submissions to be filed had been complied with. At the strategic conference, I made orders that the action be determined on the papers. I considered it was in Adam's interests to have the matter determined on the papers that had already been filed with the benefit of legal advice and in light of his health issues. I also ordered that the parties file any further submissions and affidavit evidence they intended to rely upon by 29 November 2023.
On 28 November 2023, by way of letter to the court, Adam sought relief which differed from that sought in the amended originating summons. In the absence of any further amendment to the amended originating summons, I intend to deal with the application on the basis of the relief sought in the amended originating summons.
Adam filed written submissions, by his then solicitor, dated 8 June 2023. Adam sent the court further written materials on 28 November 2023. Those materials, for reasons which I will detail, are not relevant to the issues before the court.
Amanda, as executor, filed written submissions dated 13 July 2023.
The parties' contentions
Adam contends that, as at the date of John's death, the Sholl Street Trust Debt that was owed to John's estate was an asset of John's estate that must be recorded in the Rule 9B Statement filed by Amanda.
Rule 9B (1) of the NCPR provides:
(1)Subject to subrule (3), the affidavit of an applicant for a grant shall exhibit and verify a statement giving particulars of -
(a)all movable property, wherever situated, and all immovable property in Western Australia, comprised in the estate of the deceased;
(b)the value at the time of death of the deceased of the property referred to in paragraph (a); and
(c)all debts, wherever situated, owing by the deceased at the time of his death.[1]
[1] Rule 9B(3) of the NCPR has no application to this case.
Adam says that upon a proper construction of the Will as a whole, any powers conferred upon the executor to postpone calling in or to forgive the Sholl Street Trust Debt are subject to the overriding obligation imposed on the executor under the Will to ensure that one third of John's total wealth as at the date of his death (other than the specific testamentary gifts made by cl 9, cl 10, cl 11 and cl 13 of the Will) is distributed to Adam or for Adam's benefit.
Adam relies upon the following clauses of the Will in support of his asserted construction of cl 8 of the Will:
1.cl 14, by which the residue of John's estate is to be distributed in equal shares to three testamentary trusts to be created for Margaret, Amanda and Adam;
2.cl 16, by which Adam submits John expressed his intention that his Total Wealth (including wealth not part of his estate) be distributed in accordance with his intentions in the Will and by which John allows for gifts to be satisfied from assets outside of his estate; and
3.cl 17(e), by which Adam submits that John expressed his intention to see the effects of taxation on the distribution of his wealth being minimised.
Adam also submits that the scope of the executor's powers contained in cl 8 of the Will ought to be construed in a manner that is consistent with and recognises that the executor owes a fiduciary duty to the beneficiaries to administer the estate in a way that is consistent with the overall testamentary intent revealed by the terms of the Will.
On the other hand, Amanda, as executor, says that cl 8 of the Will is clear and unambiguous - it permits the executor to forgive all or any part of any loans owed to John by his Trusts and Companies - this includes the Sholl Street Trust Debt. In any event, Amanda, as executor, submits that the evidence of surrounding circumstances clearly supports a construction of cl 8 which is consistent with John's expressed intention that the Sholl Street Trust Debt be forgiven.
Legal principles applicable to the construction of the Will
In construing a will, the object is to ascertain the intention of the testator as expressed in the will itself. In an oft‑cited passage, Lord Simon LC said in Perrin v Morgan:[2]
[T]he fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case - what are the 'expressed intentions' of the testator.
[2] Perrin v Morgan [1943] AC 399, 406, cited with approval in Walsh v Sloan [2019] WASCA 107 [24] (Walsh).
The Wills Act 1970 (WA) (Wills Act) contains various provisions which set govern construction of a will. Section 26(1) of the Wills Act provides:
26.General rules of construction
(1)Unless the contrary intention appears by the will -
(a)the will is to be construed, with reference to the property comprised in it, to speak and take effect as if it has been executed immediately before the death of the testator;
(b)property that is the subject of a disposition, other than the exercise of a power of appointment, that is void or fails to take effect is to be included in any residuary disposition contained in the will;
(c)a general disposition of land or of the land in a particular area includes leasehold land whether or not the testator owns freehold land;
(d)a general disposition of all the testator's property or of all the testator's property of a particular kind includes property over which the testator had a general power of appointment exercisable by will and operates as an execution of the power;
(e)a disposition of property without words of limitation whether to a person beneficially or as executor or trustee is to be construed as passing the whole estate or interest of the testator therein;
(f)a disposition of the residue of the estate of a testator, or of the whole of the estate of a testator, that refers only to -
(i)the real estate of the testator; or
(ii)the personal estate of the testator, is to be construed to include both the real and personal estate of the testator;
(g)if any part of a disposition in fractional parts of the whole or of the residue of the estate of a testator fails, the part that fails accrues to the part that does not fail, and, if there is more than one part that does not fail, to all those parts proportionately.
Section 28A of the Wills Act provides:
28A.Use of extrinsic evidence to clarify will
(1)In proceedings to construe a will, evidence, including evidence of the testator's intention, is admissible to the extent that the language used in, or other content of, the will renders 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)Evidence of a testator's intention is not admissible to establish any of the circumstances referred to in subsection (1)(c).
(3)Nothing in this section prevents evidence that is otherwise admissible at law from being admissible in proceedings to construe a will.
(4)This section applies to the will of any person dying on or after the day on which section 22 of the Wills Amendment Act 2007 comes into operation, whether the will was made or executed before, on or after that day, but does not apply to the will of a person who died before that day.
Section 28A largely reflects the common law position known as the 'armchair principle'. In Mustard v Oikonomov,[3] referring to the armchair principle, Owen J said:
This principle 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 to read the will as the testator would have read it. That is, the court will allow evidence to be admitted of factual circumstances surrounding the testator when the will was made: Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 at 65. Under this approach, evidence as to the testator's intentions is not admissible. If after the admission of this factual evidence the words still remain ambiguous, then (except in the case of equivocation) no further evidence will be admitted and the disposition will be void for uncertainty.
[3] Mustard v Oikonomov (Unreported, WASC, Library No 980468, 19 August 1998) 7, cited with approval in Walsh [26].
The 'armchair principle' of construction does not mean that only evidence as to assets at the date of the Will is relevant to the task of construing a will. This is evident from s 26(1) of the Wills Act which provides that 'the will is to be construed, with reference to the property comprised in it, to speak and take effect as if it has been executed immediately before the death of the testator'. It is important to note that s 26(1)(a) does not change the meaning of the words in the Will, rather that there may be circumstances which follow the execution of the Will which mean that the words in the will refer to different property.[4]
[4] Walsh [28] ‑ [29].
In undertaking the task of construing a will, the court does not consider passages or clauses in isolation, but construes them having regard to the terms of the will as a whole.[5]
[5] Sidle v Queensland Trustees Ltd [1915] HCA 48; Muir v Winn [2009] NSWSC 857 [3] ‑ [4].
Terms of the Will
Clause 8 of the Will provides:
8.EXISTING LOANS AND OTHER ENTITLEMENTS
(a)My Executor are to do all in their power to secure repayment of loans that remain owing to me by any of My Trusts and My Companies (in this clause only referred to as 'the Loans'), unless in respect of any of the Loans my Executor within the later of 180 days after the date of my death or such longer period as they deem appropriate, first elect to:
(i)continue any of the Loans and postpone the demanding of the repayment of any of the Loans, and if so, on such terms as they see fit including but not limited to:
(A)requiring security or permitting the Loans to be unsecured; and
(B)charging interest at such a rate as they see fit or permitting the Loans to be interest free; or
(C)forgive all or any part of the Loans.
(b)My Executor are to do all in their power to enforce any fixed or vested entitlement that I may have in relation to all or any of My Trusts ('My Entitlements'), unless in respect of any such fixed or vested entitlements, my Executor within the later of 180 days after the date of my death or such longer period as they may deem appropriate; first elect to disclaim or relinquish all or part of any of My Entitlements, or to postpone the enforcement of all or any of My Entitlements. Additionally, my Executor may disclaim or relinquish any discretionary entitlement that I may have in relation to all or any of My Trusts. (emphasis added)
Given that the Will must be construed in the context of the Will as a whole, Adam submits that the construction of the Will he contends for is supported by the following clauses:
1.Clause 14:
14.DISTRIBUTION OF MY ESTATE
(a)After payment of all Death Duties, I give the residue of my estate both real and personal property (my residuary estate) to my Executor to hold on trust as follows:
(i)subject to clause 16, then my residuary estate that otherwise would have been held on trust shall be divided into one or more equal parts and such parts shall be held on trust in accordance with the Schedule of this Will and each of MARGARET, AMANDA, and ADAM as shall survive me being the Primary Beneficiary being the Primary Beneficiary of a trust for one such equal part; and
[the remaining sub-paragraphs of cl 14(a) deal with the circumstances where either MARGARET, AMANDA or ADAM do not survive the testator].
…
(c)If any Primary Beneficiary gives a written instruction to my Executor to transfer all or some of the entitlement that would otherwise have vested in their trust, to him/her absolutely, or deal with it in some other way, my Executor is to consider that request.
(d)When distributing assets, my Executor subject always to my intention expressed in clause 14(a), may pay a greater part of any asset, benefit or class of asset or benefits to a particular beneficiary or Testamentary Trust.'
2.Clause 16:
16.DISTRIBUTION OF TOTAL WEALTH
(a)While I understand that my Will can only deal with my personal estate, the wishes and directions set out in this Will represent my intentions with respect to the distribution of:
(i)my personal estate (including any interest I may have in a partnership); and
(ii)my Death Benefits
(collectively referred to as my 'Total Wealth').
(b)Accordingly, I express the desire that my Executor and the trustees of the relevant superannuation fund (my 'Representatives') deal with my Total Wealth in accordance with the intentions of this Will.
(c)In doing this, I express the desire that my Representatives will:
(i)consult each other to achieve my intentions in the most economical and tax effective manner;
(ii)deal with loan accounts and related party debt in a manner which reflects my intentions; and
(iii)when appropriating assets or distributing Death Benefits, to take into account any present or future tax obligation (for example, capital gains tax) that might be payable on the basis that the taxation obligation arose at the time of my death. If there is any dispute, my accountants are to determine the amount of any tax obligation.
For clarity, a gift under this Will may be satisfied from assets outside of my personal estate and the receipt of the beneficiary will be sufficient discharge to my Executor.
3.Clause 17(e):
(e)Taxation, whether State or Federal, can have a big impact on the amount received by a beneficiary and will be an important consideration in the manner and/or the timing of a distribution under this document. I request my Executor to consult an appropriately qualified Accountant as soon as possible after my death regarding these matters and provided the overall intent of my will is complied with, I authorise my Executor with the consent of the particular beneficiary affected to take whatever steps are necessary to maximise the net distributions to my beneficiaries which may include delaying, accelerating or varying any payment or making a payment in specie, lump sum or by instalments.
Surrounding circumstances at the time of making the will
John made the Will on 29 November 2020 and died on 25 December 2020.
Lohman Group
John was a successful businessman and during his life he established a number of interrelated companies and family trusts which own residential and commercial properties in Western Australia and the Northern Territory. These companies and trusts are referred to as the Lohman Group.[6]
[6] Amanda Executor Affidavit [6].
The Lohman Group sold industrial clothing through retail stores in the Pilbara region and the Northern Territory.[7]
[7] Amanda Beneficiary Affidavit [17] ‑ [24].
Amanda worked for 30 years with John in the Lohman Group. Approximately three years before John died he reduced his involvement in the business of the Lohman Group. This meant, at the date that John made the Will, Amanda was largely responsible for the management of the Lohman Group on a day‑to‑day basis and was vested with a broad discretion in relation to the business affairs of the Lohman Group.[8]
Sale of Worksense business and creation of Sholl Street Trust Loan
[8] Amanda Beneficiary Affidavit [20], [29].
When John died, the Sholl Trust owed him the amount of $11,025,917 - what I have previously referred to as the Sholl Street Trust Debt.
The following series of events gave rise to the Sholl Street Trust Debt:
1.In 2008, John sold a business called Worksense, a clothing manufacturing and supply business, for approximately $16 million;[9]
2.Worksense was beneficially owned by John within the John Lohman Family Trust (JLFT);[10]
3.As a result of the JLFT receiving the Worksense sale proceeds, a large distribution became payable to John at end of the 2008/2009 financial year;[11]
4.The profit from the sale of Worksense resulted in a large capital gains tax liability within the Lohman Group;[12]
5.John wanted the majority of the Worksense sale proceeds to be applied as working capital for the Lohman Group;[13]
6.John received accounting advice, which he followed, to the effect that the Worksense proceeds should be used to pay down intercompany loans that existed at the time between the JLFT and the Sholl Street Trust and retain the balance within the Sholl Street Trust to purchase investment properties;[14]
7.After applying the Worksense sale proceeds to the intercompany loans in 2008, the balance of the Sholl Street Loan owed by the Sholl Street Trust to John was $7,907,742;[15] and
8.That loan increased to $11,025,917 as at the date of John's death due to addition of further capital amounts.[16]
[9] Amanda Executor Affidavit [14].
[10] Amanda Executor Affidavit [14].
[11] Amanda Executor Affidavit [15].
[12] Amanda Executor Affidavit [16].
[13] Amanda Executor Affidavit [16].
[14] Amanda Executor Affidavit [17].
[15] Amanda Executor Affidavit [18].
[16] Amanda Executor Affidavit [19].
At the same time the Sholl Street Loan was created, a separate loan was created to account for annual distributions payable to John by the Sholl Street Trust but not claimed by John (Trust Distributions Loan). As at the date of John's death, the Trust Distributions Loan was $439,421.
Legal advice received by John in relation to the Will
In late November 2020, John instructed Bernadette Duell, a consultant at the law firm Grondal Bruining, to prepare a will for him.[17]
[17] Duell Affidavit [3].
Ms Duell prepared a draft of the Will and forwarded it to John by email on 27 November 2020 in which she stated:[18]
…
3.As Amanda controls your business entities, as Executor she can deal with the amounts payable and receivable by you at her discretion. By directing these to be forgiven, it may cause inadvertent tax consequences. We don't want this.
Evidence of John's 'intention' to forgive the Sholl Street Trust Debt
[18] Duell Affidavit Annexure BJD-5.
Amanda deposed to occasions on which John expressed his intention for the Sholl Street Trust Debt to be forgiven upon his death. In accordance with the legal principles set out above, evidence of John's actual intention expressed to Amanda are not surrounding circumstances to which regard may be had in construing a will. Therefore, I have given no weight to any evidence of John's expressed intentions to Amanda or any of his advisers.
I have also not placed any weight on the further material provided to the court by Adam on 28 November 2023. None of the matters referred to in that material are relevant to the surrounding circumstances in which John executed his Will or which assist in ascertaining John's intentions expressed in the terms of the Will.
Amanda's decision to forgive the Sholl Street Trust Debt
Following John's death, Amanda exercised her discretion, she says in accordance with cl 8 of the Will, to call in the Trust Distributions Loan and to forgive the Sholl Street Trust Debt.
Disposition - proper construction of cl 8 of the Will
I now turn to consider the proper construction of cl 8 of the Will, having regard to the terms of the Will as a whole.
In my view, cl 8 is clear and unambiguous on its face. It provides that the executor, in this case Amanda, is 'to do all in [her] power to secure repayment of loans owing to be by any of My Trusts [in this case that the Sholl Street Trust], unless … [Amanda] …first elect[s] to…forgive all or any part of the Loans [in this case the Sholl Street Trust Debt]' (emphasis added). Clause 8 of the Will entitles Amanda to forgive the Sholl Street Trust Debt owed to John's estate.
In my view, the other terms of the Will do not give rise to any uncertainty as to this construction of cl 8 of the Will for the following reasons.
By cl 16(a) of the Will, the term 'Total Wealth' is a reference to John's personal estate (including any estate he may have in a partnership) and his Death Benefits.
The term 'personal estate' is not defined in the Will. However, cl 16(d) of the Will states that 'a gift under this Will may be satisfied from assets outside of my personal estate …'. In my view, it is clear on the terms of the Will that the term 'personal estate' is not a reference to any assets outside of John's estate. To give it such a meaning would render cl 16(d) non‑sensical.
Death Benefits are defined in cl 1(a)(viii) as 'in relation to superannuation has the meaning given it to by section 307-5 of the Income Tax Assessment Act 1997 (Cth) and "Death Benefits" shall have a corresponding meaning'. Essentially, this is a benefit payable to John from a superannuation fund.
I find that, on the proper construction of the terms of the Will, the reference to 'Total Wealth' in cl 16 is not a reference to John's wealth that sits outside of his estate. Rather the term 'Total Wealth', properly construed in the context of the whole of the Will, is a reference only to John's assets forming part of his estate and any superannuation benefits. This is further supported by the opening words of cl 16(a) which read 'while I understand that my Will can only deal with my personal estate …'.
What follows from this determination is that the terms of the Will, properly construed, do not disclose a broader testamentary intention on the part of John to have any assets that sit outside of his estate distributed in accordance with the Will.
Further, neither cl 14 or cl 17(e) of the Will affect the construction of cl 8. Clause 14 refers to the residuary estate of John - nothing in this clause is inconsistent with cl 8 of the Will. Clause 17(e) merely expresses the intention for distributions under the Will to be done tax effectively - again there is nothing in that clause that is inconsistent with cl 8.
In any event, there is no dispute that the Sholl Street Trust Debt is owed to John in his personal capacity, making it potentially an asset of John's estate. However, by cl 8 of the Will, John expressed the clear intention that any loan that may have been owed to John by one of his Trusts or Companies as at the date of his death may be forgiven at the election of his executor. This accords with the factual circumstances surrounding John at the time he made the Will.
Finally, the issue of a fiduciary duty raised by Adam does not assist in the construction of the terms of the Will. Amanda, as executor, has a fiduciary duty as executor to administer John's estate in accordance with the terms of the Will. However, in accordance with the terms of the Will, specifically cl 8 of the Will, Amanda has a discretion to forgive the Sholl Street Trust Debt. In that event, the Sholl Street Trust Debt does not form part of the estate assets.
In my view, the intention revealed by cl 8 of the Will is clear. Clause 8 of the Will permits Amanda, at her election, to forgive the Sholl Street Trust Debt.
Final orders
I make the following orders:
1.The proper construction of clauses 8(a) and 8(b) of the deceased's last and will testament dated 29 November 2020 is that the executor of the Will may elect to:
(a)postpone calling in or to forgive loans owing to the estate, including the debt owed to the deceased by Lohman Nominees Pty Ltd as trustee for the Sholl Street Trust (Sholl Street Trust Debt); and
(b)postpone calling in, to disclaim or to relinquish entitlements that the deceased's estate may have in any trusts, including the Sholl Street Trust Debt.
2.The amended originating summons be otherwise dismissed.
In relation to costs of the action, the parties are requested to provide the court with any minute of proposed orders within seven days of these reasons being published. In the absence of any minute, the court will make an order that the plaintiff pay the first defendant's and first‑named second defendant's costs of the action to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to the Hon Justice Whitby
14 FEBRUARY 2024
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