Penny v Milligan

This case concerned an appeal from a decision of Street J. in the Supreme Court of New South Wales regarding the construction of the will of John Eyers. The testator's will provided a life interest in his real estate and personal estate residue to his wife, followed by a life interest to his stepdaughter, and then to such of the stepdaughter's children as survived her. A key provision stated that the gift to the wife was "in lieu of dower and thirds." The gift to the stepdaughter's children failed as they all predeceased the stepdaughter. This failure resulted in a partial intestacy. The dispute centred on whether the widow's estate was entitled to a share of this intestate personal property, in addition to the provision made for her in the will.

The legal issues before the court were: (1) whether the declaration that the provision for the wife was "in lieu of dower and thirds" imposed a condition that excluded her from any share in the partial intestacy; and (2) whether the testator's intention, as evidenced by the will, was to exclude the widow from such a share, thereby implying a gift of her intestate portion to the next of kin. The appellants argued that the declaration, in light of the potential for intestacy, should be construed as a condition preventing the widow from benefiting from any undisposed-of property.

The court, affirming the decision of Street J., held that the widow was entitled to both the provision made for her in the will and her distributive share of the intestate personal estate. The reasoning applied was that the testator had not contemplated the events that led to the partial intestacy. The declaration "in lieu of dower and thirds" was intended to apply to the property that the testator had effectively disposed of by his will. In the absence of a clear intention to exclude the widow from a share in an intestacy that was not foreseen, the general rule that a widow is entitled to her statutory share in undisposed-of property applies. The court distinguished cases where an intestacy was apparent on the face of the will or where the language used unequivocally indicated an intention to exclude the widow from any share in such circumstances. The court found no such clear intention or contemplation of intestacy in the present will.