NSW Trustee and Guardian v Malone
[2011] NSWSC 382
•04 May 2011
Supreme Court
New South Wales
Medium Neutral Citation: NSW Trustee and Guardian v Malone [2011] NSWSC 382 Hearing dates: 4 May 2011 Decision date: 04 May 2011 Jurisdiction: Equity Division Before: Windeyer AJ Decision: 1. Questions in the summons answered as follows:
a) Paragraph 1(a), (b), (c), (d), (e), (f), (g), (h), (i) - no.
b) In relation to paragraph 2, declare upon the true construction of the will dated 31 August 2006 of Patricia Flynn, deceased, and in the events which have happened, the gift of "my property and home" under the heading of "Gifts" in the said will is a gift to Michael Perroux upon trust, to be shared by him with his sisters Denise Perroux, Suzanne Malone, Narelle Perroux and Margaret Perroux as they think fit; and, if they do not agree, then upon trust for the five in equal shares as tenants in common.
c) Questions in paragraphs 3-5 not answered.
d) Paragraph 6 - no.
2. Costs of all parties be paid out of the estate of the deceased; those of the plaintiff on the indemnity basis.
Catchwords: SUCCESSION - construction of will - gift of home to A to be shared with his sisters as they see fit - whether absolute gift to A; or gift to the five in shares as they agree and failing agreement in equal shares; or gift to A but to share right of use or occupation with his sisters as they agree; or gift of the legal estate to A to be held upon trust for A and his sisters in such shares as they agree and failing agreement in equal shares - held the last was correct Category: Principal judgment Parties: NSW Trustee and Guardian (plaintiff)
Suzanne Patricia Malone (first defendant)
Michael Perroux (second defendant)
Thekla Samuel (third defendant)
Peter Allmond (fourth defendant)
Marist Mission Centre, Hunters Hill (fifth defendant)
Mary (Molly) Perroux (sixth defendant)
Keith Perroux (seventh defendant)Representation: P Blackburn-Hart SC (plaintiff)
G Carolan (first defendant)
M Gorrick (second defendant)
Clinch Long Letherbarrow Lawyers (plaintiff)
Thorburn & Marshall (first defendant)
Teece Hodgson & Ward (second defendant)
File Number(s): SC 2010/350204
EX TEMPORE Judgment
This case concerns the proper construction of the will dated 31 August 2006 of the late Patricia Flynn, who died on 22 August 2007. Letters of administration with the will annexed of her estate were granted to the Public Trustee on 2 October 2009, the executors named in the will having renounced probate. The plaintiff, being New South Wales Trustee and Guardian, is the successor in title to the Public Trustee.
The will was written by the deceased on a will form, presumably purchased from some stationer's shop. That means that part of it is in printed form and the dispositions in other parts of it are written in the handwriting of the deceased. In this judgment the printed sections are produced in bold type.
The property first dealt with in the will is the property of the deceased at 29 Burran Avenue, Mosman. The disposition is in the following terms:
" GIFTS
I hereby make the following gifts:
I LEAVE MY PROPERTY & HOME TO MY NEPHEW, MR MICHAEL PERROUX, 5A PRINCESS ST, ROSE BAY, 2029 TO BE SHARED WITH HIS SISTERS: DR DENISE PERROUX, MRS SUZANNE MALONE, MISS NARELLE PERROUX, MISS MARGARET PERROUX, AS THEY SEE FIT"
Underneath that, the second disposition, also under the heading "Gifts", is of the deceased's motor car to Miss Narelle Perroux.
The third disposition is as follows:
" RESIDUARY ESTATE
I give the residue of my estate AS SHOWN IN WESTPAC A/C NO 732291/568811, AND THE CREDIT UNION OF AUSTRALIA A/C NO 10744239 BSB NO 804050 TO BE SHARED EQUALLY BETWEEN MRS THEKLA SAMUEL, MR PETER ALLMOND, AND THE DIRECTOR FOR THE TIME BEING OF THE MARIST MISSION CENTRE, 3 MARY ST, HUNTERS HILL, AND MY SISTER AND BROTHER-IN-LAW MOLLY AND KEITH PERROUX OF 44 HAINES ST, CURTIN 2605. I ALSO LEAVE MY CAR REG NO OWH946 TO MISS NARELLE PERROUX."
I should make it clear that that is the second disposition of the same motor car but to the same person.
The principal asset of the deceased was the Mosman property, now valued at $3,200,000. There are assets in addition to the bank account and credit union account referred to in the clause which I have just set out. Those additional assets amount in all to approximately $26,000.
If the whole of the residue other than the accounts and car listed does not pass under the residuary gift, then there would be an intestacy as to those additional assets to that value. If there were an intestacy, then those assets would go to the deceased's sister, who is the sixth defendant, Mrs Mary (Molly) Perroux. However, as they would be assets undisposed of by the will, they would be the first assets to bear the debts, funeral and testamentary expenses payable in the estate, including the trustee's commission and the legal costs of these proceedings. It is accepted, therefore, that there would be no ultimate residue; in other words, no assets beyond those specifically referred to in the residuary estate clause available for distribution under the will or on partial intestacy. It follows that although the questions raised by the summons include a question as to whether or not there is a partial intestacy, it is accepted there is nothing to be gained by answering this question as the answer would not have any bearing on the entitlement of persons in the estate.
I pass to the Mosman property. The first words to look at are "my property and home". The property is 29 Burran Avenue, Mosman. That was the home of the deceased. A question is raised in the summons as to whether that disposition included the contents of the home. No argument was addressed to this. I think it is clear that those words do not include the contents.
The question then is as to entitlement to the Mosman home. The questions brought forward in the summons are: (1) is this a gift to the deceased's nephew Michael Perroux absolutely?; or (2) is it a gift to Mr Michael Perroux and his siblings in equal shares, or in such other shares as they agree absolutely?; or (3) is it a gift to Mr Michael Perroux absolutely, subject to any equitable or other rights of use in favour of his siblings as they all agree? There is a further question, namely whether the effect of a failure on the part of the persons named in the gift of the deceased's "property and home", to share that gift "as they see fit", is that the said gift is a gift to Michael Perroux absolutely.
The gift could not be an absolute gift to Mr Perroux unless the subsequent words were in some way void or perhaps fail for uncertainty. There can be no doubt that the nieces of the deceased were intended to share in the property. If that were not the position, then they would not have been mentioned.
Counsel for the trustee put the main alternatives on this construction issue as follows. Either:
(1) the property is given to Mr Perroux and his four sisters beneficially, and they would take equally if they are unable to agree on some other division; or
(2) the property is given to Michael Perroux, but the use (and possibly occupation) of the home and property is to be shared with his sisters in a way in which they all agree.
Counsel for the plaintiff had put these questions before the Court and the competing arguments have been put by counsel representing the nieces through a representative party and counsel representing Mr Michael Perroux. Those arguments can be put shortly as follows. For the nieces it is said that sharing is not normally referable to use or occupation but usually refers to some division in shares. For Mr Perroux it is said the words should be compared with the residuary clause, where residue is given to be shared equally between five residuary beneficiaries. In other words, that is perfectly clear that each of those persons mentioned is to take an equal share. It is also submitted that as there are only two bedrooms in the property then agreement as to use and occupation would be required and this points against an interest in fee simple in the land. There is some force in this argument but I do not think it carries the day.
While it seems from the words that the testatrix did give careful attention to what she was writing, I do not think the difference in the words in the particular gift clause and the residuary estate clause determine the matter. So far as the property was concerned, the testatrix could be said to give the beneficiaries a choice as to their shares, while not thinking that was appropriate in respect of the residue. It does not, I think, mean that their share was not a share in the real estate, but rather, was a right to use and occupy the property as they agreed.
I consider that there is a third alternative as to the proper construction of the clause, and that is that the gift is not an absolute one but a gift which vests the legal estate in Mr Michael Perroux, but vests it subject to a trust, that the property will be shared with his sisters as they decide. The words "to be shared" are not precatory; they are more than that. They are dispositive. No discretion is given to Mr Perroux as to whether he shares with his sisters or does not. There is a discretion as to whether he wishes to take any share, but that is an entirely different matter. The wording is, I think, appropriate to vest the legal estate in him, but to hold it on trust to share with his sisters as they decide. It does not, I think, really matter whether "as they think fit" refers to only the sisters or to all five. If there is no agreement as to the sharing, then as equity considers equality to be fair, in the absence of agreement to the contrary they would take in equal shares.
I propose to answer the questions in accordance with these reasons. Answer questions in the summons as follows:
(1) Paragraph 1(a), (b), (c), (d), (e), (f), (g), (h), (i) - no.
(2) Declare upon the true construction of the will dated 31 August 2006 of Patricia Flynn, deceased, and in the events which have happened, the gift of "my property and home" under the heading of "Gifts" in the said will is a gift to Michael Perroux upon trust, to be shared by him with his sisters Denise Perroux, Suzanne Malone, Narelle Perroux and Margaret Perroux as they think fit; and, if they do not agree, then upon trust for the five in equal shares as tenants in common.
(3) Questions in paragraphs 3, 4, 5, not answered
(4) Answer the question in paragraph 6 no.
The costs of all parties be paid out of the estate of the deceased; those of the plaintiff on the indemnity basis.
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Decision last updated: 05 May 2011
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