Perkins v Perkins

[2015] WASC 84

PERKINS -v- PERKINS [2015] WASC 84

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2015] WASC 84
Case No:	CIV:1904/2014	Heard:	4 MARCH 2015
Coram:	MASTER SANDERSON	Delivered:	11/03/15
No of pages:	8	Judgment Part:	1 of 1
Result:	Defendant interpretation preferred
Category:	B
PDF Version

Parties:	GARY STEVEN PERKINS as Beneficiary and Residuary Beneficiary of the Estate of ERNEST SEXTUS READER PERKINS ANTHONY ROY PERKINS as Executor of the Estate of ERNEST SEXTUS READER PERKINS JAIDEN SHAY PERKINS TANIKA JADE PERKINS
Catchwords:	Probate Proper interpretation of will of deceased Turns on own facts
Legislation:	Wills Act 1970 (WA)
Case References:	Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : PERKINS -v- PERKINS [2015] WASC 84 CORAM : MASTER SANDERSON HEARD : 4 MARCH 2015 DELIVERED : 11 MARCH 2015 FILE NO/S : CIV 1904 of 2014 MATTER : The Estate of ERNEST SEXTUS READER PERKINS late of 12 Murray Road, Welshpool, Western Australia (dec)

Order 58 r 2(a) and (c) and r 10 of the Rules of the Supreme Court 1971 (WA)

Section 45 of the Administration Act 1903 (WA)

BETWEEN : GARY STEVEN PERKINS as Beneficiary and Residuary Beneficiary of the Estate of ERNEST SEXTUS READER PERKINS

Plaintiff

AND

ANTHONY ROY PERKINS as Executor of the Estate of ERNEST SEXTUS READER PERKINS
Defendant

JAIDEN SHAY PERKINS
TANIKA JADE PERKINS
Second Defendants

Catchwords:

Probate - Proper interpretation of will of deceased - Turns on own facts

Legislation:

Wills Act 1970 (WA)

Result:

Defendant interpretation preferred

Category: B

Representation:

Counsel:

Plaintiff : Dr J J Hockley
Defendant : Mr R J Nash
Second Defendants : Mr A C McIntosh

Solicitors:

Plaintiff : Integra Legal
Defendant : Clifton Tham
Second Defendants : Muries Lawyers

Case(s) referred to in judgment(s):

Nil


1 MASTER SANDERSON: This is the return of the plaintiff's originating summons seeking orders as to the proper interpretation of certain clauses of the will of the late Ernest Sextus Reader Perkins (the deceased). To understand the nature of the relief sought by the plaintiff and the issues that have arisen in relation to the interpretation of the will it is necessary to provide some background facts.

2 As at the date of the death of the deceased he and his wife Edna Fay Perkins (Edna) owned three lots of land in the Torbay area just on the Denmark side of Albany. These three lots were agricultural land and for present purposes they can be designated as 'lot 68', 'lot 71' and 'lot 76'.

3 The deceased and Edna had three sons - Anthony Roy Perkins (the defendant), Gary Stephen Perkins (the plaintiff) and Christopher Neil Perkins. They also had four grandchildren. Jaiden Shay Perkins and Tanika Jade Perkins are the children of Christopher Perkins. The defendant also has two children but they play no part in this litigation and will not be further mentioned.

4 In the 1980s the deceased and his wife purchased lot 76 and included their son Anthony's name on the title with them as joint tenants. It appears Anthony always intended to sell lot 76 upon the death of the deceased and Edna and that is precisely what he did. Lot 76 then is of no further relevance to this action.

5 In 2003 the deceased and Edna had wills prepared. It is clear the wills had a number of objectives. First, the surviving spouse would inherit the whole of the estate when the other spouse passed away. Second, when the surviving spouse passed away lot 68 and lot 71 would be placed in a testamentary trust to preserve the family farm for the couple's grandchildren Jaiden and Tanika. Third, the remaining assets of the joint estate would be divided equally between the three sons when the surviving spouse died.

6 On 29 December 2011 the deceased and Edna were involved in a serious car accident. Edna predeceased her husband; she died at the scene of the accident. The deceased survived the accident but died on 29 December 2011. As at the date of death the estate had no significant liabilities. The deceased's will is the operative will.

7 Probate of the will of the deceased was granted to the defendant on 5 April 2012. Leave was reserved to the plaintiff who was the other substituted executor appointed under the will. The will itself is not an easy document to understand. It can be divided into three parts. First, cl 1 - cl 5 deal with revocation of earlier wills, appointment of an executor (and substituted executors), interpretation of the provisions of the will, payment of the debts and powers of the executor. Second, cl 6 and cl 7 create a testamentary trust. Third, cl 8 - cl 12 relate to specific legacies, the residuary estate, beneficiary succession, the appointment of estate solicitors and the disposal of the deceased's body.

8 Turning to the provisions of the will cl 3.1 is in the following terms:

3.1 The following words have the following meaning:

'my child' or means:
'my children'
(i) ANTHONY ROY PERKINS ('Tony');

(ii) GARY STEPHEN PERKINS ('Gary'); and

(iii) CHRISTOPHER NEIL PERKINS ('Chris');


'Farming includes all or any of the following:
Assets'
(i) shares in any company of which I am a shareholder and which has as part of its assets any asset;

(ii) any land registered in my name, including the Torbay Lots if Edna predecease me;

(iii) any interest in any partnership;

(iv) any other interest in any property;

which at the date of my death is utilised in any farming enterprise
'Fund' means any trust created by this Will;

'my Trustee' Includes my Executor;


'my Residence' Means14 Murray Road, Welshpool, Western Australia and being the land described on Certificate of Title Volume 174 Folio 138 and, if that property is sold prior to my death, includes any property purchased as our new residence with the proceeds of its sale;

'Torbay Lots' means:

(i) Torbay Agricultural Area Lot 68 and being the land described on Certificate of Title Volume 610 Folio 196A which I own as a joint tenant with Edna; and

(ii) Torbay Agricultural Area Lot 71 and being the land described on Certificate of Title Volume 610 Folio 54A which I own as a joint tenant with Edna.

9 Clause 6 of the will has as a heading 'Testamentary Trust for Farming Assets'. It is in the following terms:

6.1 If Edna predeceases me, THEN subject to clause 7 below, my Trustee shall vest my Farming Assets on my sister LORIS DAWSON of Unit 6, 11 South Coast Highway, Albany, Western Australia and my friend OLLIE MORETH of Lake Sadie Road, Youngs Siding, Western Australia to hold on trust to a Fund ('the Perkins Farming Fund') for the benefit of:

(a) Gary;

(b) Chris;

(c) my grandson JAIDEN SHAY PERKINS ('Jaiden'); and

(d) my granddaughter TANIKA JADE PERKINS ('Tanika').

10 There was no dispute between the parties as to the scheme of the will. The definition in cl 3 of 'Farming Assets' includes the 'Torbay Lots'. On the death of the deceased the Farming Assets vested in the executor, the defendant. Under the provisions of cl 6 a testamentary trust was created with the deceased's sister Loris Dawson and his friend Ollie Moreth as trustees of the trust. They were to hold the Farming Assets in a fund designated 'the Perkins Farming Fund'. The rest of cl 6 sets out the beneficiaries of the Perkins Farming Fund and gives directions as to how it was to be administered.

11 For reasons best known to himself the defendant, as executor of the deceased's estate, did not transfer the Farming Assets to Ms Dawson and Mr Moreth as he was directed to do by cl 6. He sold everything - lot 68 and lot 71, all the cattle on the property, and all the machinery. He now stands possessed of a Fund of just under $800,000. The issue raised by this action is what is to become of that Fund.

12 Before dealing with the respective positions of the parties there are two matters which I dealt with at the commencement of the hearing and which require explanation. First, on the morning of the hearing solicitors instructed on behalf of Jaiden and Tanika applied to have a guardian ad litem appointed to represent their interests and to have them joined as parties to the proceedings. Although in broad terms they supported the defendant's position it was submitted their interests were possibly affected by the proceedings and they ought be represented. After hearing argument I granted the application. As it turned out the submissions made by counsel on behalf of the second defendants did not differ significantly from those made on behalf of the first defendant.

13 Second, when counsel for the first defendant lodged his submissions he objected to certain parts of an affidavit of the plaintiff filed in support of this application. In large measure I upheld those objections. As it turns out none of the affidavit material played any part in the resolution of the issues raised by this application. The result is entirely dependent upon the terms of the will itself.

14 On behalf of the plaintiff it was submitted the intention of the deceased was that the Farming Assets, not the proceeds of the sale of the Farming Assets, be the subject of a trust. Looked at objectively the object of the trust was to preserve the Torbay Lots for two of the deceased's grandchildren. In order to achieve that aim the testator limited the power of the executor under cl 5 of the will so that while the sale of the estate's 'assets' was authorised the clause did not authorise the sale of Farming Assets. It was submitted that was made plain by cl 5.1(c) of the will which gave a power of sale over the estate assets 'not otherwise dealt with in this will'. Clause 5.1(e) was to the same effect.

15 It was further submitted in selling the Farming Assets the defendant acted in a way not authorised or contemplated by the will. That means the deceased's intention cannot be carried out. The Fund held by the executor does not pass to the Perkins Farming Fund and no trust is established. As a consequence the Fund falls into the residuary estate and is to be distributed pursuant to cl 9.2 of the will.

16 The defendants take an entirely different approach. It was submitted the starting point is to look at the property which lies in the estate immediately before the deceased's death: see s 26(1)(a) of the Wills Act 1970 (WA). The identification of the Farming Assets for the purposes of construing the operation of cl 6 is by reference to those assets that conform to the description as at the date of death. As at that date the Torbay Lots were in existence and had not been sold by the executor. A beneficiary of a trust or a legatee of an estate has a right to the proceeds of sale of assets that represent the legacy given. It is submitted that the proceeds therefore remain subject to the trust obligation or gift as set out in cl 6.

17 Counsel further referred to the established principle that a testator's intention cannot be defeated by the acts of an attorney of his estate of which acts he was unaware and did not approve. In such a case the beneficiaries entitlement can be traced to the proceeds of the sale of the asset. Counsel submitted this principle applied to the actions of the executor in this circumstance.

18 To further support their position counsel for the defendants referred to the equitable doctrine of marshalling between beneficiaries. Where estate assets have been converted in the course of the administration of the estate by an executor to pay the debts of the estate the beneficiaries retain the right in equity to have the benefit of their bequest still met in the proper order of distribution. The defendants submit if the plaintiff's approach to the construction of cl 6 were correct, and if it had been necessary for the farming land to be sold to apply towards estate debts, then the entitlements of the beneficiaries under cl 6 would be lost despite the doctrine of marshalling.

19 With respect it does not seem to me the submission in relation to marshalling adds much to the defendants' position. The fact is this estate was debt free. No matter what the position might have been had there been insufficient liquidity in the estate to meet any debts it is a situation which does not arise. In my view it cannot inform the proper interpretation of the will.

20 Counsel for the defendants also referred to cl 6.2(f) and (g) of the will. It was submitted these two provisions indicated the deceased anticipated the prospect the Farming Assets would be sold and allowed the trustees of the Perkins Farming Fund to do just that. Counsel made the point the sale by the executor while not authorised nevertheless left the estate assets in the same situation as might have arisen had the Perkins Farming Fund actually been put in effect.

21 There is no easy way to resolve this dispute. Only two cases were referred to by counsel and neither is of any real assistance. The main difficulty is that the will appears not to have contemplated the possibility that the Farming Assets would be realised before the Perkins Farming Fund was established. That seems plain from the exclusion of the Farming Assets from the power of sale under cl 5 of the will. It is further confirmed by cl 7 of the will which gives to Mr Moreth an option to lease all of the Farming Assets when they fall into the Perkins Farming Fund.

22 The main difficulty with the approach adopted by the defendants is that it appears entirely inconsistent with the way the will is structured. What is really being said is that the Farming Assets are now the Fund held by the executor. If that is so the Fund would have to pass to Ms Dawson and Mr Moreth as trustees of the Perkins Farming Fund. Presumably then they would administer the Fund in accordance with cl 6.2 of the will. It is simply the power of sale given by cl 6.2(f) and (g) has been usurped by the executor.

23 However, on balance I am satisfied this is the proper outcome of this application. It is clear what the deceased intended - he just did not anticipate sale of the Farming Assets by the executor. Now this has happened, it is the Fund which will comprise the Perkins Farming Fund. The approach to the will which best reflects the intention of the deceased is the interpretation contended for by the defendants.

24 I will hear the parties as to the form of orders and as to costs.