Pendergast v Shingles

[2025] NSWSC 909

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Estate of Pendergast; Pendergast v Shingles [2025] NSWSC 909

Hearing dates:

12 May 2025

Date of orders:

13 August 2025

Decision date:

13 August 2025

Jurisdiction:

Equity - Probate List

Before:

Slattery J

Decision:

The will of the deceased is construed in accordance with interpretation (b). Parties are also directed to bring in short minutes of order, including any proposed consequential orders for the administration of the Estate.

Catchwords:

SUCCESSION – Construction – General principles – Structure and scheme of will – a will contains provisions dividing the deceased estate after notionally augmenting the value of the estate to include the value of certain real property distributed to one beneficiary, the plaintiff, during the lifetime of the deceased (the inter vivos distribution) – parties dispute whether (a) the provisions in substance divide the net value of the estate and ignore the inter vivos distribution to the plaintiff, or (b) whether the inter vivos distribution to the plaintiff is brought to account and deducted from the distribution to the plaintiff.

Legislation Cited:

Succession Act 2006, ss 31 and 32

Cases Cited:

Brennan v Permanent Trustee Company of New South Wales (1945) 73 CLR 404

Fell v Fell (1922) 31 CLR 268

Hatzantonis v Lawrence [2003] NSWSC 914

Henry John Northey v Jennifer Frances Juul & Anor [2014] NSWSC 464

James v Douglas [2016] NSWCA 178

Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60

NSW Trustee and Guardian v Reid [2023] NSWSC 1053

Perrin v Morgan [1943] AC 399; 1 All ER 187

Re Buckton (1907) 2 Ch 406

Reeves v Reeves [2024] NSWSC 134

Re Willis [1996] 2 Qd R 664

Category:

Principal judgment

Parties:

Karl Pendergast (Plaintiff)
Lordona Maree Shingles (First Defendant)
Errol Vincent Pendergast (Second Defendant)

Representation:

Counsel:
D C Price (Plaintiff)
K Boettcher (Defendants)

Solicitors:
Robinson & McGuiness (Plaintiff)
Blaxland Mawson & Rose (Defendants)

File Number(s):

2024/433469

Publication restriction:

No

JUDGMENT

1. The late Brian Patrick Pendergast (the “deceased”) was a grazier at Hobbs Range, Moonbah, a district which lies just South of Jindabyne in the Snowy Mountains of New South Wales. He died on 19 August 2023 aged 87 leaving a will dated 28 July 2015. The plaintiff, Karl Pendergast, is one of the deceased’s surviving children. The defendants, Lordona Pendergast and Errol Pendergast, are the named executors in the will. Lordona is another of the deceased’s children and Errol is the deceased’s brother.

2. The deceased was survived by three of his four children, Karl, Lordona, and Jeremy Pendergast. His fourth child, Dean Pendergast predeceased him. Dean was survived by two children and his wife, Tarina Pendergast. Probate of the will was granted to the defendants on 28 May 2024.

3. By his Summons dated 21 November 2024, the plaintiff, seeks declaratory relief in relation to the proper construction of the will and other consequential orders. Prayers for relief 2 and 4 of the Summons were pressed at the hearing. They sought the following relief:

“2 A DECLARATION that, on the proper construction of the Will, the plaintiff is entitled to receive, by the operation of clauses 2.4, 2.5, 2.6 and 3.3, one-quarter of the net value of the Deceased's estate.

4 An ORDER that the Plaintiff's costs of and relating to these proceedings be paid out of the estate of the late Brian Patrick Pendergast.”

4. The Summons was heard in the Probate list on 12 May 2025. Mr D C Price instructed by Robinson + McGuinness of Canberra appeared for the plaintiff. Ms K Boettcher instructed by Walker Gibbs & King of Cooma appeared for the defendants.

5. The parties to these proceedings are family members and referred to each other by their first names. Without intending any disrespect to any family member, in these reasons for convenience, the Court will generally adopt the same practice.

Background to the Dispute

6. The construction issue arises out of several clauses in the will which adjust gifts to the deceased’s children to account for the value of certain parcels of land given to Karl during the deceased’s lifetime. On 9 November 2005, some 18 years before he died, the deceased gifted Karl two parcels of land. These parcels of land are sufficiently defined in the Summons. But for present purposes can be referred to as Lot 22 and Lot 29. Karl sold Lot 22 in 2016, but he still retains Lot 29.

7. The deceased’s July 2015 will dealt with the gifts of Lots 22 and 29 as follows:

2 Definitions and Interpretation

…

2.4 “Karl’s Land” means Lot 29 DP [not included in reasons] and Lot 22 DP [not included in reasons]. At the date of this Will that land is owned by my son Karl Patrick Pendergast.

2.5 “The value of Karl’s Land” means the market value of Karl’s land at the date of my death determined by a valuer chosen by my Executors, and that value is to be determined whether or not at the date of my death my son Karl Patrick Pendergast owns Karl’s land.

2.6 “My augmented estate” means the net value of my Estate plus the value of Karl’s land.

3 Main Part

…

3.2 I GIVE to such of my children LORDONA MAREE SHINGLES, JEREMY THOMAS PENDERGAST and DEAN WILLIAM PENDERGAST as survive me, one quarter of my augmented Estate provided that if any of them predecease me themselves leaving children who survive me and attain the age of eighteen (18) years, such children shall take the share that their parent would have taken had that parent survived me.

3.3 IF he survives me, I give to my son KARL PATRICK PENDERGAST an amount represented by one quarter of my augmented Estate less the value of Karl’s land, provided that if he predeceases me leaving children who survive me and attain the age of eighteen (18) years, such children shall take the share that their parent would have taken had that parent survived me.

3.4 in the event that the gift in paragraph 3.3 would otherwise wholly fail to be distributed pursuant to this Will, then it is to be distributed between such of my children LORDONA MAREE SHINGLES, JEREMY THOMAS PENDERGAST and DEAN WILLIAM PENDERGAST as survive me provided that if any of them predecease me leaving children who survive me and attain the age of eighteen (18) years, such children shall take the share that their parent would have taken had that parent survived me.

Applicable Law

8. The principles for the construction of wills are well established. In Fell v Fell (1922) 31 CLR 268 at 273–4, Isaacs J stated the main principles, and they have been applied repeatedly since. The first two of these principles are that the meaning must be discovered from the writing of the will itself “aided only by such extrinsic evidence as is necessary in order to enable us to understand the words which the testator has used”; and, that the instrument must receive a construction according to the plain meaning of the words looking at the whole instrument: see also Hatzantonis v Lawrence [2003] NSWSC 914 at [6]–[10], NSW Trustee and Guardian v Reid [2023] NSWSC 1053 and Reeves v Reeves [2024] NSWSC 134 at [371]–[386].

9. What is sometimes called the “armchair principle” may be applied in the construction of a will. Under that principle the Court may ascertain all the facts known to the testator at the time the will was made to place itself in the testator’s position to ascertain the meaning and application of the language in the will, as the testator would have understood it: Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 at 65.

10. The task of construction involves moulding the language of the testator to carry into effect as far as possible the intention which the testator has, in the whole will, sufficiently declared: Brennan v Permanent Trustee Company of New South Wales (1945) 73 CLR 404 at 414. In Perrin v Morgan [1943] AC 399; 1 All ER 187 (at 190) Viscount Simon LC stated:

… the fundamental rule in construing the language of a will is to put upon the words used the meaning which, having regard to the terms of the will, the testator intended.

11. The correct approach to be adopted by the Court in interpreting a will containing ordinary English words “is not to assume that one of several meanings holds the field as the correct meaning until it is ousted by some other meaning regarded as ‘non-legal’, but to ascertain without prejudice as between various usual meanings which is the correct”: Perrin v Morgan (at 407–408). A will should not be construed in a strictly technical or legalistic sense and the construction should be sensitive to the factual context of ordinary life and circumstances: Re Willis [1996] 2 Qd R 664 (‘Willis’) at 667.

12. Succession Act 2006, s 31 also provides that where a will provides for a gift or other disposition of property which fails either wholly or in part, the will is to take effect as if the property, or undisposed part of the property were part of the residuary estate of the testator unless there is a contrary intention in the will. Succession Act, s 32 permits the admission of extrinsic evidence (including of the testator’s intention) to assist in the construction of a will, if the language makes the will or any part of the will meaningless, ambiguous on its face or ambiguous in the circumstances.

Parties’ Submissions as to Construction

13. Karl submits that the gift to him in clause 3.3 is in substance a gift of one quarter of the net value of the Estate. He submits that the calculation involving Karl’s Land can in effect be ignored as the calculation “cancels out”.

14. Karl contended, in the alternative, that the gift in clause 3.3 must be read to exclude the deduction of Karl’s Land because it would appear to gift something which did not belong to the deceased and which the deceased was in no position to give by his will.

15. The executors submit that these provisions of the will provide for an amount equal to the value of Karl’s Land to be added to the value of the net value of the Estate to ascertain the Augmented Estate. The executors submit that Lordona, Jeremy and Dean, are to each receive an amount equal to the value of one quarter of the Augmented Estate and the gift to Karl by clause 3.3 is of one quarter of the Augmented Estate less the value of Karl’s Land. For the reasons which follow the Court generally prefers the defendants’ construction.

Proper Construction of the Will

16. It is useful for the Court to give its own construction of the disputed provisions of the will, before analysing the parties’ submissions.

17. The disputed provisions provide a calculation for the distribution of the deceased's Estate. The provisions require in the calculation that the market value of the prior gift of land to Karl to be brought to account, as if it were being distributed as part of deceased’s Estate under the will. The aim of the provisions was to treat the beneficiaries equally by notionally including the prior gift of Karl’s Land to Karl in the distribution of the Estate. To bring Karl’s Land into the calculation, the definition of "my Augmented Estate" aggregates the net value of the deceased’s actual Estate with the market value of Karl’s Land at the time of the deceased’s death. The distribution to the beneficiaries is then based on this notional aggregation, which is called "my Augmented Estate".

18. For the purposes of effecting distribution, the beneficiaries are then divided into two groups, being Karl (clause 3.3) and the other three children (clause 3.2). Each group of beneficiaries receives one quarter of "my Augmented Estate". But only the gift to Karl is lessened by "the value of Karl's Land".

19. There is a slight difference in language between clauses 3.2 and 3.3. The gift to the other three children in clause 3.2 gives "one quarter of my Augmented Estate". The gift to Karl gives “an amount represented by one quarter of my Augmented Estate less the value of Karl's Land" (emphasis added). The words in italics indicate that what Karl receives is the product of two mathematical operations: first, dividing the Augmented Estate into quarters, then subtracting the value of Karl’s land from Karl’s quarter. Importantly and for emphasis, what Karl receives first involves the division of the Augmented Estate into quarters is then followed in calculating Karl’s gift by the deduction of the value of Karl's Land.

20. In practice, if the market value of Karl's Land is more than one quarter of the Augmented Estate, Karl receives nothing in the calculation and the gift to Karl fails. But for the other three children, clause 3.4 is then enlivened. In those circumstances where clause 3.3 fails, clause 3.4 displaces clause 3.2 for the gifts to Lordona, Jeremy and Dean’s family. Clause 3.4 divides “it”, (meaning the net value of the Estate) for distribution three ways to Lordona, Jeremy and Dean.

21. On the other possible scenario, if the market value of Karl's Land is less than one quarter of the Augmented Estate, Karl receives under clause 3.3 the difference between the market value of Karl's Land and one quarter of the Augmented Estate.

22. Karl’s submission is not persuasive. It does not correctly apply the mathematical formula set out in the will for accounting for the value of Karl’s Land. Karl’s submissions wrongly interpret the language of the gift to Karl in clause 3.3. That gift provides for an amount represented by “one quarter of my Augmented Estate”. Those words require the net value of the Estate and Karl’s Land to be added together before being divided by four (being the number of beneficiaries). Karl’s submission divides the net value of the Estate by four, and only then adds the value of Karl’s Land to that quarter of the net value of the Estate. This is not the calculation for which clause 3.3 provides.

23. It is not surprising that reading clause 3.3 in this way would make the market value of Karl’s Land appear irrelevant, because that same value would be first added and then subtracted from the calculation. Moreover, an instruction to add and then subtract the same number is such a pointless mathematical ceremony that it is a likely indicator of a wrong construction of clause 3.3.

24. The error in Karl’s submission as to his clause 3.3 entitlement can be illustrated symbolically:

Karl’s Submission: (Net Estate/4) + Karl’s Land – Karl’s Land

Correct calculation: (Net Estate + Karl’s Land)/4 – Karl’s Land

25. Karl’s second argument against the Court’s construction of the provisions is not persuasive. Clauses 3.2 and 3.3 do not purport to give away something that is not part of the deceased’s estate. They are merely a mathematical calculation of what is due to Karl, which will always come from the value of the net Estate. If the gift in clause 3.3 to Karl fails, then the other three children share the net value of the Estate equally under clause 3.4. If the gift in clause 3.3 operates, Karl and the other beneficiaries still only receive distributions from the value of the net Estate.

26. But for some minor inconsistent capitalisation of defined terms, there is no other ambiguity such as to enliven the operation of Succession Act 2006, s 32 for the Court to require the Court to turn to extrinsic evidence to construe the will. The construction reached here is available without recourse to extrinsic evidence.

Consequential Issues

27. Several consequential matters arise. The parties agree that if Karl's contention about the proper construction of the will were accepted that it would not be necessary to value either Lots 22 or 29. But both parties also accepted that if the executors’ construction of the will were accepted and if valuations of the Lots were not agreed that the Court would have to appoint a valuer to value both properties.

28. The Court will not permit a contest of about valuations to take place in this case. The estate cannot afford it. The Court will if necessary, appoint a valuer under the Uniform Civil Procedure Rules 2005, r 31.46 as a single court appointed expert. The parties discussed the names of possible valuers during the hearing but did not resolve upon a single name. The parties should bring in short minutes of order that include the appointment of such a valuer if required. As clause 2.5 of the will requires, the valuer should now be instructed to provide a market value of Karl's Land being Lots 22 and 29 as at the date of the deceased’s death.

29. As Lot 22 was sold in 2016, it is now in the hands of a third party. This may provide an obstacle to valuation. If the current owner of Lot 22 does not co-operate in allowing access to the property it may be possible to value Lot 22 merely from photographs, cadastral plans and available satellite photographs. Seeking that owner’s reasonable cooperation should be the first approach. But if cooperation cannot be secured and the valuer requires access, then the executors should bring a motion in these proceedings joining the owner as a respondent seeking orders for access. Every endeavour should be made to negotiate a reasonable regime for access with the current owner. It may assist those negotiations to record that provided the terms upon which access is sought are reasonable and not unnecessarily inconvenient to the owner, the Court would usually grant access to the property of a third party such as this, to advance the just determination of this dispute.

30. Finally, there is the question of costs. The Court directed the parties to put on submissions in relation to costs. There is no issue that the executors’ costs should be paid out of the estate on the indemnity basis.

31. Based on the principles stated in Re Buckton (1907) 2 Ch 406 at 414 – 415 and followed frequently since (see Henry John Northey v Jennifer Frances Juul & Anor [2014] NSWSC 464 and James v Douglas [2016] NSWCA 178 at [155]), Karl submits that this is a case of a beneficiary making an application for construction of a will which could have been made by the executors, so the costs of all parties should be paid from the estate. Karl submits that this is not in the third category in Re Buckton where a beneficiary makes a claim adverse to other beneficiaries, so the proceedings are in substance litigation inter partes where costs should ordinarily follow the event.

32. The Court has reached the view that costs should follow the event and that Karl should pay the executors’ costs of the proceedings on the ordinary basis. This is so for two reasons. First, the proceedings are partly inter partes litigation in that one of the executors, Lordona, is also a beneficiary with an interest opposed to the interests of Karl (as Karl himself pointed out in submissions). Secondly, Karl’s construction argument involved a somewhat stretched interpretation of clause 3.3 of the will involving a degree of misinterpretation of its words. Whilst this suited Karl's financial interests, it was not a very persuasive argument.

33. The proceedings will be adjourned for mention on 21 October 2025, if any other consequential orders in relation to valuation are needed. This date can be cancelled by arrangements with my chambers if not required.

Orders

34. For these reasons, the Court:

1. DIRECTS the parties by 29 August 2025 to provide to chambers short minutes of order giving effect to these reasons, including any proposed consequential orders for the administration of the Estate.

2. ADJOURNS the proceedings to 21 October 2025 at 9:30am.

3. GRANTS liberty to apply.

Amendments

18 August 2025 - Representation

Decision last updated: 22 August 2025