Nicol v Chant

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.