ON APPEAL FROM THE SUPREME COURT OF Will-Interpretation-Devis of real estate-Land subject to option of purchase-
Exercise of option after death of testator-Conversion into personalty-Contrary intention expressed in will.
The rule laid down in Lawes v. Bennett, 1 Cox Cas. in Ch., 167, that, where a testator by his will gives his real estate to A. and his personal estate to B., and his land is at his death subject to a lease with an option of purchase, upon the exercise of the option the land is converted into personalty, and that the con- version operates retroactively so as to entitle B. to the purchase money, only applies where the testator gives his real estate to one and his personal estate to another simpliciter, and there is no context from which a contrary intention may be gathered.
A testator when he made his will was possessed of a hotel property subject to a lease for a term of seven years with an option in the lessor to purchase during the term for a certain sum, and the hotel property was then subject to a mortgage. By his will he devised all his "real estate' to his trustee upon trust to pay the rent and income thereof to his wife for life, and after her death he directed his trustee to stand possessed of his " said real estate " upon trust to sell and convert, and to divide the net proceeds and the rent and income thereof until sale among four named persons. He then bequeathed to his wife a number of named classes of personal chattels and also " all other my per- sonal property absolutely," and he then empowered his trustee to raise any money on his "real estate" or any portion thereof for the purpose of paying off any mortgage on his "real estate." At the death of the testator the hotel
property was the only real estate he had, and it was still subject to the mort- gage, to the lease, and to the option of purchase, and that option was exercised four years afterwards.
Held by Griffith C.J. and Barton J. (Isaacs J. dissenting) that the intention of the testator as expressed by the will was that the hotel property should not be included in the words "all other my personal property," but that in any event his wife should have a life interest only in the hotel property, and, therefore, that the rule in Lawes v. Bennett, 1 Cox Cas. in Ch., 167, did not apply.
Lawes v. Bennett, 1 Cox Cas. in Ch., 167, distinguished. Decision of the Supreme Court of Tasmania (Nicholls J.) affirmed.
APPEAL from the Supreme Court of Tasmania.
In 1901 one Mary Ann Lawton owned certain land and premises in Hobart, known as the Empire Hotel.
On 14th March 1902 she made her will, by which she devised all her real and personal property to Frederick…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Nicol v Chant [1909] HCA 4
Case
[1909] HCA 4
Decision Date
CaseChat Overview and Summary
This case concerned an appeal from the Supreme Court of Tasmania regarding the interpretation of a will. The testator, Frederick Henry Lawton, owned a hotel property subject to a lease with an option to purchase. He devised all his "real estate" to a trustee for his wife's life, with remainder to his nieces and adopted child, directing the property to be sold and converted into money after his wife's death. He also bequeathed his personal property to his wife absolutely. The option to purchase the hotel was exercised after the testator's death. The dispute arose between the testator's widow, who claimed the proceeds of the sale as part of the residuary personal estate, and the beneficiaries of the real estate, who argued the proceeds should be held on the trusts declared for the real estate.
The central legal issue before the High Court was whether the rule in *Lawes v. Bennett* applied, which dictates that where land subject to a purchase option is devised as real estate and the option is exercised after the testator's death, the land is converted into personalty and passes to the residuary personal estate. Alternatively, the court had to determine if the testator's intention, as expressed in his will, excluded the application of this rule, thereby preserving the character of the property as real estate for the benefit of the named beneficiaries.
The majority of the High Court, comprising Griffith C.J. and Barton J., held that the rule in *Lawes v. Bennett* did not apply. Their reasoning was that the testator's intention, as evidenced by the specific provisions in his will, was to create successive interests in the hotel property, granting his wife a life interest and the remainder beneficiaries the proceeds of sale after her death. This intention was considered inconsistent with the retroactive conversion of the property into personalty upon the exercise of the option. The court emphasised that the rule in *Lawes v. Bennett* only applies where the testator gives real and personal estate simpliciter, without any context indicating a contrary intention. The specific bequests of personal chattels followed by "all other my personal property" were also interpreted as suggesting the testator did not intend the hotel property to fall into the latter category. Isaacs J., dissenting, would have applied the rule in *Lawes v. Bennett*.
The High Court affirmed the decision of the Supreme Court of Tasmania. The appeal was dismissed, and the proceeds of the sale of the hotel property were to be held by the trustee on the trusts declared for the testator's real estate.