Melbourne Hospital v Perpetual Executors and Trustees Association of Australia Limited

The case of *Melbourne Hospital v Perpetual Executors and Trustees Association of Australia Limited* concerned the construction of a will and codicil. The testator, James Mason, had by his will directed that surplus income from his estate be invested for ten years, with the accumulated funds to be distributed thereafter. By a codicil, he revoked the provisions for the distribution of these accumulations and instead directed a sum of £10,000 to the Corporation of the Borough of Walsall, along with several legacies of £2,000 each to named individuals. The dispute arose as to whether these bequests in the codicil were presently payable or deferred until the expiration of the ten-year period stipulated in the will. The Supreme Court of Victoria had held that the bequests were payable only at the end of the ten-year period.

The High Court was required to determine the date at which the £10,000 bequest to the Corporation of Walsall and the several £2,000 legacies were payable. The central legal issue was whether the revocation of the distribution provisions in the will, coupled with the new directions in the codicil, impliedly revoked the original direction for accumulation and investment, thereby rendering the codicil bequests immediately payable.

The High Court reasoned that the testator's direction in the will for the investment of surplus income for ten years was ancillary to the original gift of those accumulations. When the testator, by his codicil, revoked all provisions for the distribution of those accumulated monies, this revocation implicitly extended to the provisions for their investment. The Court found that the language of the codicil, directing the executors to "remit" and "give" the specified sums, prima facie indicated present payment. As there was no independent reason for accumulation suggested by the nature of the gifts in the codicil, the Court concluded that the original direction for accumulation in the will did not cut down the immediate effect of the codicil's directions.

Consequently, the High Court varied the decision of the Supreme Court, ordering that the £10,000 and the several £2,000 legacies were payable immediately. The costs of the cross-appeal and the appeal were ordered to be paid out of the estate on a solicitor-client basis.