Mark Gerard Ireland as Executor of the Estate of the late Charles Stuart Gordon v Sandra Jane Retallack

[2011] NSWSC 1510

Supreme Court

New South Wales

Medium Neutral Citation:	Mark Gerard Ireland as Executor of the Estate of the late Charles Stuart Gordon v Sandra Jane Retallack & Ors [2011] NSWSC 1510
Hearing dates:	29 November 2011
Decision date:	29 November 2011
Jurisdiction:	Equity Division
Before:	Pembroke
Decision:	See [6]
Catchwords:	SUCCESSION - wills - construction - specific devise - costs of transfer to be borne by devisee as a general rule - general rule must yield where contrary intention can be sufficiently inferred
Cases Cited:	Lloyd v Frape (1923) 22 SR (NSW) 11 In Re Pearce; Crutchley v Wells [1909] 1 Ch 819 In Re Rooke; Jeans v Gatehouse [1933[ 1 Ch 970 O'Brien v McCormick (2005) NSWSC 619
Category:	Costs
Parties:	Mark Gerard Ireland as Executor of the Estate of the late Charles Stuart Gordon - plaintiff Sandra Jane Retallack - first defendant Gordon Family Corporation Pty Ltd - second defendant Richard d'Apice - third defendant
Representation:	Mark Petrucco, solicitor - for the plaintiff L Ellison SC - for the first defendant P P O'Loughlin - for the second and third defendants Argyle Lawyers Pty Ltd - for the plaintiff King Cain Solicitors - for the first defendant Makinson & d'Apice Lawyers - for the second and third defendants
File Number(s):	2010/00360339

Judgment

1. In my principal decision given on 12 August 2011 I held that on the proper construction of the will, and having regard to my discretion, the costs of the parties to the proceedings should be paid out of the residue. I explained that in the testator's later years, after the death of his wife, he moved into the home of Mrs Johnstone in Blayney and that as a result the homestead at Glengowan became unoccupied. Mrs Retallack then moved from Binnaway where she and her husband conducted a farming business, to Glengowan where they occupied the homestead and conducted a farming business from the testator's property. I held that not only was she the holder of her mother's share in the company but following her mother's death she and the testator were the only directors. I also held that she was obviously close to the testator. I explained that on those facts it was understandable that the testator may want to give Glengowan to his daughter unencumbered but I added that the terms of his will made this clear beyond any doubt.

1. In particular the will states expressly that the devise of Glengowan is to be free of any mortgage, charge or lien and to be for Mrs Retallack's own use and benefit absolutely. The effect of my decision was that the gift of Glengowan was, in my view, the primary gift. The residue was secondary. Glengowan was to be unencumbered and the residue, not the gift of Glengowan, should carry the burden of expenses such as the costs of the proceedings.

1. The testator gave a further clue to his intention by clause 17. He said that the gift of Glengowan to his daughter was given on the basis that it was not meant to necessarily represent equity in value "but to secure her a viable grazing property being the property on which she has lived and has had the benefit for a number of years prior to my death". It seemed to me that the testator clearly wanted to ensure that his daughter received Glengowan without any additional cost burden. That was the principal reason why I held that the costs of the proceedings should be paid out of the residue.

1. For the same reasons, having regard to the testator's clear intention, I have concluded that the costs of the transfer of Glengowan relating to stamp duty, capital gains tax, or other costs that may be incurred in that process, should be paid out of the residue. The paramount consideration is the intention of the testator, which I wish to faithfully replicate. In my view, the testator intended that the primary gift of Glengowan should be kept whole, not indirectly diluted by Mrs Retallack having to pay the expenses associated with its transfer to her.

1. It may well be that in other cases involving specific devises of parcels of land, it is appropriate that the costs of each transfer be borne by each devisee. That may be so particularly where there are multiple devises among various members of a family. That was the result in Lloyd v Frape (1923) 22 SR (NSW) 11. But as Campbell J made clear in O'Brien v McCormick (2005) NSWSC 619 at [39], this consideration - perhaps it may fairly be said to be almost a general rule - must yield to the proper construction of the gift in a particular case where the inference is sufficiently clear. For that authority, Campbell J recited a number of cases: In Re Pearce; Crutchley v Wells [1909] 1 Ch 819 at 821; Lloyd v Frape (1922) 23 SR (NSW) 11; In Re Rooke; Jeans v Gatehouse [1933] 1 Ch 970. I adopt that observation of Campbell J (as he then was). This is such a case.

1. In the result, I have construed the will in order to divine the testator's intention in relation to the specific gift of Glengowan. I am satisfied that the proper course is to declare that the costs of the transfer of Glengowan to Mrs Retallack be paid out of the residue. The careful arguments put forward on behalf of the third defendant should be given less weight than they might otherwise deserve in different circumstances, having regard to the overall importance of the construction of the will which I have reached and the necessity of adhering faithfully to the testator's intention.

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Decision last updated: 08 December 2011