Muir v Winn

[2009] NSWSC 857

CITATION:	MUIR v WINN [2009] NSWSC 857
HEARING DATE(S):	6 August 2009
JUDGMENT DATE :	27 August 2009
JUDGMENT OF:	Bryson AJ at 1
DECISION:	On the Amended Summons: 1. Dismiss the proceedings on the Amended Summons. On the Cross-Claim: 2. Declare that the Executor is justified in taking no further steps to obtain subdivision approval and subdivision of the property known as Meadowvale, Gilead. 3. Declare that the Executor is justified in proceeding to sell Meadowvale so as to enable him to administer the estate of the deceased. 4. Declare that in the events and circumstances which have happened, and in particular, consequent upon the failure to obtain subdivision approval of Meadowvale: (a)clause 1.6 including clause 1.6.15 have effect; (b)the executor is to sell Meadowvale in its entirety in order to realise the gifts in clause 1.6, and is to ascertain the balance of the proceeds of sale to which clause 1.6.15 applies by ascertaining the value of that part of Meadowvale which is not part of the front 100 acres and deducting that value from the proceeds of sale: and is to apply the remaining proceeds of sale first in payment of the gifts in clause 1.6.1 to clause 1.6.14 inclusive, so that the balance thereafter is the balance of the proceeds of sale to which clause 1.6.15 applies; (c)the second sentence of clause 1.9 has effect; (d)clause 1.8 has effect; (e)the proceeds of sale of Meadowvale are to be disposed of in accordance with declaration 3(b) and thereafter in accordance with the last sentence of clause 1.9; 5.Reserve further consideration of claim 4 and claim 5 in the Cross-Claim 6.Declare that no interest is payable on legacies and that income is to be distributed in accordance with the second sentence of clause 1.13. 7. Costs reserved.
CATCHWORDS:	WILLS PROBATE AND ADMINISTRATION - Will construction - non-standard terms of will appeared to leave no fund out of which one gift was to be paid - consideration of principles of construction - lack of internal logic but will showed intention to make gift - HELD on the construction of the will the gift was effective - decision turned on provisions of will under consideration
CASES CITED:	Sidle v Queensland Trustees Ltd (1915) 20 CLR 55 at 560-1 Perpetual Trustees Ltd v Wright & Ors Re: Will of the late James Paul Gee Cox (1987) 9 NSWLR 18 at 33 Coorey v George (NSWSC unreported 27 February 1986 BC 8601222) Perpetual Trustees WA Ltd v Riverwest Pty Ltd [2004] WASC BC200402496
PARTIES:	Andrew MUIR - Plaintiff Peter WINN (As Executor of the Estate of the Late Vida Mary Muir) - First Defendant Kathryn MUIR - Second Defendant (submitting)
FILE NUMBER(S):	SC 2008/6185
COUNSEL:	Ms J Needham SC - Plaintiff Mr L Ellison SC - First Defendant
SOLICITORS:	Atkinson Vinder Musgrave Peach Lawyers

- 8 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

No: 6185/08

BRYSON AJ

Thursday, 27 August 2009

OF THE LATE VIDA MARY MUIR

JUDGMENT

1 HIS HONOUR: Vida Mary Muir, late of Gilead, New South Wales, a retired teacher who conducted a riding school, died on 9 April 2006 and on 26 June 2006 this Court granted the first defendant Mr Winn probate of her last will dated 15 March 2006.

2 The most substantial benefits under the will were conferred on Mr Andrew Muir the plaintiff, and in his Amended Summons he seeks orders establishing a number of matters about entitlements in the estate. Mr Winn the executor, who is a Chartered Accountant, has cross-claimed for orders establishing some related and further matters. The second defendant Ms Kathryn Muir filed a submitting appearance and took no active part in the hearing, although she was present.

3 Will construction is not an exercise in which any passage in a will can be isolated from the whole document; see Sidle v Queensland Trustees Ltd (1915) 20 CLR 557 at 560-561 (Isaacs and Powers JJ), including the following passage:

“But one universal principle is that the whole will must be read before finally arriving at an opinion as to the meaning of any controverted portion. You read the whole document through in the first place to ascertain whether it contains anything to affect the meaning of the passage in controversy.”

4 The whole terms of the will and its surrounding circumstances may well show that the language used has some meaning other than its ordinary meaning; see Re Hodgson; Nowell v Flannery [1936] 1 Ch 203 at 206 (Farwell J). I stated my general views in Perpetual Trustees Ltd v Wright and ors: Re will of the late James Paul Gee Cox (1987) 9 NSWLR 18 at 33, after I referred at 32-33 to the need to consider the basic scheme which the deceased conceived for dealing with the estate; to ascertain:

“… what was the basic scheme which the deceased had conceived for dealing with his estate, and, then, so to construe the will as, if it be possible, to give effect to the scheme so revealed.”

in the words of Powell J in Coorey v George (NSWSC, unreported 27 February 1986, BC8601222).

5 The principal asset in the estate is “Meadowvale” in Appin Road, Gilead; Lot 1 DP 602888, a rural property of 70.19ha, with several dwellings and other improvements. In the probate application its value was estimated at $5 million. There have been other estimates and they range very widely. I do not make a finding about value but Meadowvale is worth several million dollars at the least. The will refers to acres and 70.19ha is approximately 173 acres.

6 The testatrix also owned a home unit at Manion Ave, Rose Bay valued in the probate application at $400,000. Her other assets were valued at $ 72,000 in all; livestock and farm equipment, furniture, jewellery and personal effects, most or all in a dwelling on Meadowvale, and two motor vehicles. The livestock included some horses. The estimates of value for all assets total $5,472,000.

7 In the will clauses 1.1 to 1.4 revoked earlier wills, appointed Mr Winn executor and trustee and directed him:

1.4 I direct my executor to pay my funeral expenses and any other charges or duties payable on my death from my estate.

8 Clause 1.5 directed reimbursement of some amounts to Mr S K Mendel. This has not led to any dispute.

9 Clauses 1.6 and 1.7 are:

Specific cash gifts
1.6 I direct my executor to subdivide, as soon as practicable after my death, my property known as Meadowvale at 717 Appin Road Gilead NSW 2560 (Meadowvale) so that the front 100 acres maybe sold in such manner as my executor thinks fit with the proceeds of sale(s) being applied to the following cash gifts:


1.6.1 The amount of $250,000 to Agnes Dearberg.

1.6.2 The amount of $20,000 to David Langer.

1.6.3 The amount of $20,000 to Donna Langer.

1.6.4 The amount of $20,000 to Jennifer Cottle.

1.6.5 The amount of $20,000 to James Dalziel.

1.6.6 The amount of $20,000 to Melissa Halkerston.

1.6.7 The amount of $10,000 to James Chant of Marulan, New South Wales.

1.6.8 The amount of $10,000 to Catriona Cottle.

1.6.9 The amount of $10,000 to Garth (Son of D Langer).

1.6.10 The amount of $10,000 to William Jones.

1.6.11 The amount of $10,000 to Alysson Peters of Northbridge, New South Wales.

1.6.12 The amount of $10,000 to cancer research (to a registered charity chosen by my executor).

1.6.13 The amount of $5,000 to Diane Abbot of Wingello, New South Wales.

1.6.14 The amount of $5,000 to Kirk Abbot of Wingello, New South Wales.

1.6.15 The balance of the proceeds of such sale(s) to be divided equally between Andrew Muir (or his nominee) and Kathryn Muir unless my trustee considers in his absolute discretion that the balance of such proceeds should be divided 60% to Kathryn Muir and 40% to Andrew Muir (or his nominee) in which case he may do so. In any event, any proceeds to be derived by Kathryn Muir are to be held on trust by my executor and applied in accordance with the terms of this document.

1.7 In the event approval for the subdivision of Meadowvale is refused by the applicable local council or any other governmental authority from which consent is required, or if such consent is unable to be obtained within two years of the date of my death, my executor may sell Meadowvale in its entirety in order to realise the gifts referred to above. In this regard my executor may also apply his discretion to ensure the gifts referred to above are paid at such times as are most beneficial to the entirety of my estate such that borrowing and other costs are minimised or avoided entirely and so that such payments are made only when immediately available and cleared funds are available to satisfy them.

10 Clause 1.8 is:

Application of cash gift to Kathryn Muir
1.8 Any cash gift provided to Kathryn Muir under this document is to be held on trust by my executor and applied as follows:

1.8.1 Towards the purchase of a home.
1.8.2 Such home will be:
(a) Chosen by Kathryn Muir but subject to the approval of my executor and Charles Karl Mendel acting jointly and in their absolute discretion.
(b) For the use, rent free, of Kathryn Muir and her family and maintained in good order by Kathryn Muir and at her expense (unless in my executor’s absolute discretion he considers it appropriate and desirable to apply funds from my estate for such purpose and he may then do so but only to the extent such funds are available out of funds held on trust for Kathryn Muir under the terms of this document).
(c) Purchased by my executor on trust for Kathryn Muir for a period of 10 years from the, date of my death and on the date which is 10 years after the date of my death the legal ownership of such home will be transferred to Kathryn Muir absolutely and I direct my executor accordingly.
(d) Purchased at a price up to the limit of the cash gift provided to Kathryn Muir and outlined above and free of any debt, mortgage or other security interest. If the home chosen is however more expensive than the total cash gift provided to Kathryn Muir under the terms of this document, my executor may agree to such home being purchased provided that Kathryn Muir is able to personally finance the additional funds required and otherwise in his absolute discretion.
1.8.3 …

11 Clause 1.9 is:

Specific non-cash gifts
1.9 I direct my executor, as soon as practicable after my death, to transfer to Andrew Muir full legal and beneficial ownership of the remainder of Meadowvale after the subdivision referred to above has been effected (the remainder being the back 92 acres of the property including the homestead and other buildings), all household furniture in the homestead (other than the bookcase and cedar table dealt with below) and all remaining possessions located on the Meadowvale property. Alternately, and in the event that such subdivision has not been effected and Meadowvale has been sold in its entirety, I direct my executor to apply the remainder of the proceeds of such sale to Andrew Muir.

12 Clause 1.11 gives the home unit at Rose Bay to the executor on trust for Kathryn Muir, with detailed provisions about the terms of the trust.

Clause 1.11.2 is:

1.11.2 Such property is to be maintained in good order by Kathryn Muir and at her expense (unless in my executor’s absolute discretion he considers it appropriate and desirable to apply funds from my estate for such purpose and he may then do so but only to the extent such funds are available out of funds held on trust for Kathryn Muir under the terms of this document.

Clause 1.12 is:

1.12 I make the following further gifts absolutely:


1.12.1 I give to Charles Kari Mendel any motor vehicle(s) I own as well as the subscription to Opera Australia which despite being maintained in my name is a subscription for which he has always paid and this should be transferred into his name.

1.12.2 I give to Charles Greg Mendel my jewellery piece "Aqua Marine" being a large aqua marine stone surrounded by baguette diamonds.

1.12.3 I give my Patek Philippe watch to Kathryn Muir.

1.12.4 I give the remainder of my estate to Andrew Muir (or his nominee) except to the extent, I have elsewhere identified specific items and any wish for such items to be given to other individuals.

13 The will goes on.

Management, income, borrowings and expenses before conversion complete
1.13 Until conversion of my property into money is complete, my trustee may manage my assets in the way my trustee thinks fit. Any income from my estate is to be treated as income and is to be distributed among recipients of cash gifts in the proportions outlined above.
1.14 I recognise that the subdivision of Meadowvale and the sale of part of it required to effect the cash gifts listed above will take some time and require some expenditure for relevant applications, approvals and associated documentation. Accordingly, my trustee may borrow against the assets of my estate whatever funds are required for this purpose and to effect such subdivision and sale(s) and/or, in his absolute discretion, my trustee may borrow funds to pay out the cash gifts listed in clauses 1.6.1 to 1.6.14 inclusive above prior to realisation of any proceeds from the sale of any part of Meadowvale. All interest associated with any such borrowings is to be met by my estate.
Family maintenance claims
1.15 I have thought very carefully about the distribution of my estate and I have given careful consideration to the capacity and character of each recipient of a gift under this document and, equally, to the inclusion or non-inclusion of a range of individuals. Accordingly, I have ensured that Kathryn Muir receives a generous portion of my estate but that she receives it under such terms as best enable the value of the gifts to her to be preserved for her benefit. This has proven necessary in view of how she has handled the inheritance received from her late father.
1.16 I desire the terms of this document to be observed in full and for my executor to, subject to his discretion, contest any family maintenance claim in the event any is made by any person.
My executor’s powers
1.17. My executor has the same powers in relation to the investment, realisation, management and every other aspect of my estate as he would have if he were the legal and beneficial owner of my estate. Those powers are exercisable in his absolute discretion.

14 There are further provisions dealing with trustee’s remuneration and funeral arrangements.

15 It would not be possible to carry out the provisions of the will without raising money by sale of all or part of Meadowvale. The terms of the will show in several places that the testatrix fully understood this, and made several provisions which contemplated that all or part of Meadowvale would be sold by the executor. Clause 1.6 contains a scheme for a number of cash gifts to be paid by applying money raised by selling “the front 100 acres”. Clause 1.7 shows that the testatrix understood and contemplated that this sale may not be possible, and makes other provisions “in order to realise the gifts referred to above.”

16 It in fact was impossible to sub-divide the front 100 acres and to sell that part of the land to raise money. Mr Winn attempted to do so, and went to some lengths, including obtaining expert legal advice and making an application to Campbelltown City Council for development approval, which was refused; as it had to be having regard to town planning provisions which imposed minimum sizes of lots.

17 The difficulty with the construction of the will is that if one attempts to apply all the words in it literally the internal logic of the document does not work. If Clause 1.6 is applied literally, the amount of gift in Clause 1.6.15 cannot be known unless there is a sale or sales of the front 100 acres and the various gifts referred to in Clause 1.6.1 to Clause 1.6.14 are paid out of the proceeds. The plaintiff’s Senior Counsel contended that the result is that the gift in Clause 1.6.15 does not take effect and no benefits under Clause 1.6.15 pass to Andrew Muir or Kathryn Muir. This would not have any practical adverse effect on Andrew Muir because under the disposition in the last sentence of Clause 1.9 he would receive any part of the proceeds of sale of Meadowvale which had not otherwise been disposed of.

18 The consequence of the plaintiff’s argument is not an intestacy or partial intestacy; it is complete lack of effect of a provision of money for Kathryn Muir, leaving all the proceeds of sale to pass to Andrew Muir, so that all references to a gift of money to Kathryn Muir are superfluous. There is no indication anywhere in the terms of the will that the testatrix ever turned aside from the project of making a cash gift to Kathryn Muir. The difficulty is the apparent absence of the fund out of which the gift is to be made, not the absence of an intention to make the gift. There are irreducible defects in the internal logic of the language used in the will. There is a general reluctance of courts to find that a will fails for uncertainty. Making a will is a serious project, obviously intended to achieve the benefactions of which the will speaks.

19 In my opinion the testatrix intended something to pass to Andrew Muir and to Kathryn Muir out of proceeds of sale of “Meadowvale in its entirety” under Clause 1.7. This is clear because there is no qualification or restriction on the reference in Clause 1.7 to the gifts which are to be paid out of those proceeds – “ in order to realise the gifts referred to above.” The disposition in Clause 1.6.15 is one of “the gifts referred to above”; those dispositions are gifts in the ordinary meaning of the word “gifts” and they are gifts of money, which is what will be realised from the sale of Meadowvale in its entirety. The will refers to them as gifts in the heading “Specific cash gifts” which introduces Clause 1.6 and in the reference to the list of “the following cash gifts” which precedes subclauses 1.6.1 to 1.6.15. Clause 1.7 refers to the decision of the executor in his discretion “to ensure the gifts referred to above are paid”.

20 There are other indications in the terms of the will of the intention of the testatrix that Kathryn Muir should receive a cash gift, that is a gift in addition to the property at Rose Bay. These indications include the detailed provisions in Clause 1.8, and the heading to that clause, dealing with how any cash gift is to be dealt with. It is to be dealt with for as basic a need as the purchase of a home, on terms to which the testatrix gave detailed attention; and for the investment of any residual amount. Clause 1.11.2 shows contemplation that there well may be funds held on trust for Kathryn Muir under the terms of the will at a future time. The statement at Clause 1.15 shows the testatrix’ understanding that she had thought very carefully about the distribution of the estate, and that she had ensured that Kathryn Muir received a generous portion of her estate. The generous portion of the estate was a plurality of gifts “… the value of the gifts to her…”. Clause 1.16 stated the testatrix’ desire for “the terms of this document to be observed in full” (and I have added the emphasis).

21 The plaintiff’s counsel contended that the first word – “Any” – in Clause 1.8 showed contemplation by the testatrix that it was possible that there would be no cash gift. I notice also the use of the word “any” in clause 1.6.15 – “… any proceeds to be derived…”. This is an available conclusion about the reason for choosing the word “Any” but it is not the only conclusion available. The word “Any” may have been chosen to indicate an intention that Clause 1.8 should apply to a cash gift no matter how much or how little it was. “Any” is susceptible of a distributive meaning in which it extends to each of a plurality of cash gifts. Clause 1.8 could, in concept, have entered the drafting at a point before the testatrix had finally decided all other terms, and before she reached the position in which only one cash gift was possibly available to Kathryn Muir. In theory there is some conditionality about the gift in Clause 1.6.15 in that it is possible that after all the amounts given in Clauses 1.6.1 to 1.6.14 had been paid by applying the proceeds of sale of the front 100 acres there would be no balance left. On an overall view of the value of Meadowvale, this is an unlikely explanation for the choice of the word “Any”. In my opinion the reasons contended for that choice put forward by Senior Counsel are unlikely to a similar degree. The choice of the word “Any” as an indication favourable to the construction of the will for which the plaintiff contends is in my opinion overborne by other indications appearing at various places throughout the will, including places later than Clause 1.8, that the testatrix understood that she had ensured that Kathryn Muir received a generous portion of her estate, and that the generous portion was made up of a plurality of gifts.

22 In practical terms it is an impossible reading that the terms of the will as a whole show that the testatrix intended that if the sub-division was refused the first 14 of the gifts referred to in Clause 1.6 would be paid but that nothing would be given under the two gifts referred to in Clause 1.6.15. If it truly was the testatrix’ intention that Clause 1.6.15 would not be represented in a distribution under Clause 1.7 it is not in my opinion possible to accept, as rational intended human behaviour, that that intention would be conveyed in the language found in Clause 1.7; that is, that general words apparently adopting all the gifts in Clause 1.6 should be used with the intention that nothing would actually happen with respect to the gift in Clause 1.6.15.

23 It is not in my understanding a correct approach to the construction of wills to understand what they say only in entirely literal terms. It is improbable that the testatrix intended to bring about the result for which the plaintiff contends, and entirely improbable that she would have expressed that intention in the almost undetectably obscure way attributed to Clause 1.7. Interpreting a will is not an exercise from the logic schools nor is it an exercise in entire purity of language. The Court seeks to ascertain the intention of the testator as expressed in the language used, while understanding that the language used might not express that intention perfectly.

24 It is necessary to seek to understand the scheme of a testator’s dispositions. Where the terms of the will are perfectly clear search for the scheme may be of little use, but where the language is obscure or the effects of the literal reading and the reasoning impliedly underlying it are startlingly unlikely, as in this case, the scheme of dispositions is very important. In that scheme overall it appears to me that, apart from the gifts of stated amounts of money and other gifts of relatively small items of property, the testatrix wished to provide Kathryn Muir with a fund of money to buy a home and also to provide her with the property at Rose Bay, and that she also wished a relatively much larger part of her property to go to Andrew Muir. In this scheme Kathryn Muir would receive a generous portion of her estate, a description which the testatrix gave to that provision after earlier dealing in separate ways with gift and management of a fund of money, and gift and management of the Rose Bay property. It was part of this scheme that if the gifts in Clause 1.6 could not feasibly be raised out of the front 100 acres they should be raised out of Meadowvale as a whole. Clause 1.7 and its provisions for selling Meadowvale as a whole if sub-division should not be possible were means of making sure that the gifts in Clause 1.6 were paid; it was not part of the scheme that provision of Clause 1.7 only dealt partially with the gifts in Clause 1.6, or subtly elided two of them without mentioning the project of leaving them out.

25 Although the failure of an apparent benefaction is a conceivable outcome there is no indication that it was the testatrix’ intention that Andrew Muir should take a benefit under Clause 1.7 without a gift of money being available for Kathryn Muir. It can be safely assumed that testators do not intend, and that in this case the testatrix did not intend that words which expressly make a gift should not have effect for a reason which is not expressly indicated but is a lacuna or incomplete expression at some other place. It would not be rational to intend to make a gift and also to intend that it would fail for want of a supporting provision for a fund out of which to pay it. If there does not appear to be such a fund, it should be understood that the testatrix intended that there should be one and there should be a careful search to ascertain what it was, including consideration of whether there are any implications which should be understood from the express language used. Apparent failure of a gift is much more likely to mean that the reader has not fully grasped the testator’s intentions than that no effectual intention was expressed; a signal for renewed consideration, and not a sign that consideration has ended.

26 The powers conferred on the executor and trustee by the will are very wide. In the amplitude of the powers in the will, resort to statutory powers could hardly be necessary. By way of example, the executor had decisions and choices to make about the form of the subdivision and the identification of “the front 100 acres” which was to be sold under Clause 1.6. Although the description of “the front 100 acres” does not make an entirely clear identification, and does not correspond with any sub-division or boundary line in the deposited plan, the will provided mechanism for ascertainment of “the front 100 acres” by its directions to the executor. By Clause 1.17 the executor is given extremely ample powers, as if he were the legal and beneficial owner and in his absolute discretion, in relation to “investment, realisation, management and every other aspect of my estate”. This reading is reinforced by Clause 1.16 “I desire the terms of this document to be observed in full…”. These show intention and contemplation that if any difficulties arose with respect to investment, realisation, management or any other aspect of the estate, the executor could choose the means of resolving whatever the problem was. “Realisation” in Clause 1.17 includes the process of realising gifts mentioned in Clause 1.6. The gifts are to be realised and the executor is to be fully empowered to do so, in the manner of his choosing. Of course this does not extend to making a further disposition which the will does not make.

27 The direction to the executor to sub-divide has a concomitant function of directing him to make any choices or decisions necessary in the process of doing so, so as to define the lot to be sold. This means that the difficulties of uncertain language considered at length in Perpetual Trustees WA Ltd v Riverwest Pty Ltd [2004] WASC 181, BC200402496 (Barker J) have no parallel here.

28 In my opinion it must be understood, from the whole terms of the will and the scheme of its provisions, that the testatrix understood and intended that if there had not been a sale of 100 acres and if the means indicated by the terms of Clause 1.6.15 taken on their own for ascertaining the amount of the gift did not provide an answer, the “alternate” mechanism in Clause 1.7 was to be followed and that gift, among others, was to be paid from the proceeds. Unless I attribute irrationality to the testatrix (which I am not willing to do) she must have intended that in the alternate case the amount of the gift in Clause 1.6.15 should be ascertained by consideration of what would have happened if the sale of 100 acres had been possible. Anyone who could hypothetically be asked, the officious bystander, the man on the Clapham Omnibus or the Bondi tram or the testatrix herself waiting for Equity judges on the far bank of the Styx, if asked whether that was what she had intended, would say “Of course it was”.

29 It would be close to an absurdity to read the will as conveying an intention that if Meadowvale had to be sold in its entirety there would be no cash benefit for Kathryn Muir. In my opinion, on the true construction of the will the executor, when applying his discretion to ensure that the gifts referred to in Clause 1.6 are paid, is to exercise discretion conferred on him in Clause 1.17 and attribute part of the proceeds of the sale of Meadowvale in its entirety to the front 100 acres. To do this he must come to a view and make a determination about what the inclusion of the front 100 acres has contributed to the proceeds of the sale of Meadowvale in its entirety. This involves a valuation exercise with a significant hypothetical element; a valuation of what Meadowvale would have realised, at the time of the actual sale, if it had not included the front 100 acres; that is, if it had been a sale only of the (approximately) 73 acres more distant from the road, necessarily on the hypothesis that at some time in the past there had been a subdivision and the 73 acres existed as a separate lot available for sale. The contribution of the front 100 acres to the sale can then be ascertained and brought into calculation of the balance of proceeds referred to in Clause 1.6.15.

30 In the hypothetical valuation it is necessary to make some assumptions about the definition of the 100 acre lot; in theory it could take a number of forms depending on the form or angle of its rear lines or line. There is also a need for provision of access to the rear lot. In all practicality there should be no real difficulty in understanding, in a general way, where that rear line is likely to have been. In attributing value to the rear lot the executor would act in exercise of the very wide powers conferred on him including the powers in Clause 1.17. The question is however a question of valuation of the rear lot, for which the executor would no doubt obtain expert valuer advice. As there was reference in submissions to simply allocating the sale proceeds to one lot or the other on the basis of acreage I must say that that would obviously be a wrong approach; any matters relevant to valuation, including improvements, access, services, zoning and the highest and best use are relevant, while a simple acreage allocation is not relevant.

31 I was told during the hearing that Mr. Muir has a project in which he will take Meadowvale itself and pay the executor enough money to meet all other estate entitlements; and the executor took a favourable view of such a project, although it was not established in detail what would be required to carry it out. This would be a departure from the terms of the will, which the testatrix desired be observed in full, in which Meadowvale was to be sold in its entirety, and that it would be prudent to make such a departure only if all concerned, Mr. Muir, the executor and Kathryn Muir, agree on what is to be treated as the balance of proceeds of sale for the purposes of Clause 1.6.15. As the terms of Clause 1.9 show, the executor was to transfer ownership of the remainder of Meadowvale to Andrew Muir only after the sub-division had been effected; and if the sub-division had not been effected, the benefit provided for Andrew Muir by Clause 1.9 was and was only application of the remainder of the proceeds of sale. It is a necessary step for ascertaining the amount of the gift in Clauses 1.6.15 and 1.7 that some or all of the land should have been sold. If the parties make some other arrangement in which it is not sold, there is a need for that arrangement to include agreement on a figure to be substituted for a figure derived following the method in the will.

32 The executor expressed concern and sought a decision of the Court on his obligation to pay interest on unpaid portions of gifts. At an early stage he paid ten percent of the gifts of money in Clauses 1.6.1 to 1.6.14 to the beneficiaries, to do which he borrowed money from a bank. It is customary for the Court to require and direct payment of interest to beneficiaries if they have not been paid within 12 months. It was contended to the effect that for interest to be required to be paid money must have been available, and if it has not as a practical matter (and it has not been) been possible to sell Meadowvale and raise funds to pay the balance of legacies the Court should not require interest to be paid. In my opinion the provisions of Clause 1.13 deal with the entitlement of recipients of cash gifts to income, that they have that entitlement which “relates to any income from my estate” and that entitlement will continue until the estate is fully distributed. Having regard to that right the Court should not direct payment of interest.

33 The first four claims in the Amended Summons claim declarations to establish that the gift to Kathryn Muir referred to in clause 1.6.16, the gift in clause1.7 and the trust in clause 1.8 fail for uncertainty or are otherwise ineffective. These claims should be dismissed. Claim 5 is a claim for a declaration that the first defendant would be justified in transferring Meadowvale to the plaintiff on condition that the plaintiff first pay the specific cash gifts listed in clause 1.6.1 to 1.6.15. This declaration should not be made: first because in the events that have happened the will directs that Meadowvale be sold and this can only be departed from if all interested persons agree, and secondly because the declaration assumes that nothing is to be paid under clause 1.6.16. All the claims in the Amended Summons fail.

34 In the Cross-Claim the first claim seeks a declaration that the executor is justified in taking no further steps to obtain subdivision approval. This is no longer contentious and the declaration will be made. Claim 2 is a claim for a declaration that the executor is justified in proceeding to sell Meadowvale. In my opinion the executor is not only justified but is required to do this unless all interested persons agree. The declaration sought will be made. Claim 3 claims a number of declarations establishing entitlements under the will. These declarations should be made, not in the exact terms of the Cross-Claim, but in terms establishing what the entitlements are. Claim 4 is a claim for a declaration that the costs referable to attempted subdivision are chargeable against the share in the estate which passes to the plaintiff: or how otherwise. It is not possible to dispose of this claim at present. At a number of places the will directs payments from the testatrix’ estate or from her assets – clauses 1.4, 1.5, 1.14, 1.18. The will makes specific gifts of a number of items of personalty, as well as its provisions dealing with the real property. Before the order of application assets to payment of debts and liabilities and the application of Third Schedule Part II of the Probate and Administration Act 1898 can be fully addressed it would be necessary to establish in detail, with values, what personal property remained after the specific gifts of personal property, what passed to Mr. Muir under the last direction in clause 1.9 and what passed to him under the gift of “the remainder of my estate” in clause 1.12.4. This gift is a residuary gift: debts and liabilities fall on it, but the effect of this cannot be known until the value of the property so passing is identified. It is for consideration whether the gift in the last direction in clause 1.9 is also a residuary gift. If it is not, it is for consideration whether debts and liabilities are payable rateably out of the property the subject of specific gifts. I deferred consideration during the argument, and will reserve consideration of claim 4 in the Cross-Claim.

35 Claim 5 asks for a declaration whether the expenses associated with the maintenance of “Meadowvale” since the death of the deceased and during its occupation by Andrew Muir and prior to its sale should be borne by that part of the estate which passes to Andrew or whether those expenses should be deducted from the proceeds of sale of “Meadowvale” before its division (if such division is to take place) between Kathryn and Andrew. In my opinion the expenses associated with the maintenance of Meadowvale are chargeable out of Meadowvale and should be met out of the remainder of the proceeds referred to in the last direction in clause 1.9. Their standing is different to the costs relating to the attempted subdivision which the executor incurred in carrying out a direction in the will and are part of the general cost of administration of the estate. Claim 6 relates to interest on legacies. I will make a declaration in accordance with my opinion stated above.

36 I have not yet dealt with costs.

Orders

On the Amended Summons:

1. Dismiss the proceedings on the Amended Summons.

On the Cross-Claim:

2. Declare that the Executor is justified in taking no further steps to obtain subdivision approval and subdivision of the property known as Meadowvale, Gilead.

3. Declare that the Executor is justified in proceeding to sell Meadowvale so as to enable him to administer the estate of the deceased.

4. Declare that in the events and circumstances which have happened, and in particular, consequent upon the failure to obtain subdivision approval of Meadowvale:

(a) clause 1.6 including clause 1.6.15 have effect;

(b) the executor is to sell Meadowvale in its entirety in order to realise the gifts in clause 1.6, and is to ascertain the balance of the proceeds of sale to which clause 1.6.15 applies by ascertaining the value of that part of Meadowvale which is not part of the front 100 acres and deducting that value from the proceeds of sale: and is to apply the remaining proceeds of sale first in payment of the gifts in clause 1.6.1 to clause 1.6.14 inclusive, so that the balance thereafter is the balance of the proceeds of sale to which clause 1.6.15 applies;

(c) the second sentence of clause 1.9 has effect;

(d) clause 1.8 has effect;

(e) the proceeds of sale of Meadowvale are to be disposed of in accordance with declaration 3(b) and thereafter in accordance with the last sentence of clause 1.9;

5. Reserve further consideration of claim 4 and claim 5 in the Cross-Claim

6. Declare that no interest is payable on legacies and that income is to be distributed in accordance with the second sentence of clause 1.13.

7. Costs reserved.

**********