Peter Parkinson v Diabetes Australia
[2011] NSWSC 1530
•25 November 2011
Supreme Court
New South Wales
Medium Neutral Citation: Peter Parkinson v Diabetes Australia & Anor [2011] NSWSC 1530 Hearing dates: 24/11/2011 Decision date: 25 November 2011 Jurisdiction: Equity Division Before: Bryson AJ Decision: 1. Order and declare that upon the true construction of the last will of the late Noel James Poore made on 19 March 2007 and in the circumstances which have happened the object of the gift contained in cl (b) of this will and there referred to as, "DIABETES AUSTRALIA", is the first defendant.
2: Order that the costs of the plaintiff of and incidental to these proceedings be paid or retained by the plaintiff on the indemnity basis out of that part of the rest and residue of the estate of the deceased which would otherwise pass to the first defendant; so far as the same shall extend and insofar as it does not so extend out of the rest and residue of the estate of the deceased.
3: Order that the costs of each defendant be paid by the plaintiff out of that part of the rest and residue of the estate of the deceased which would otherwise pass under the gift in paragraph (b) of the will to the first defendant.
4: The exhibits may be returned
Catchwords: WILLS PROBATE and ADMINISTRATION - Construction of will - Gift in will to Diabetes Australia - two incorporated bodies existed, one named Diabetes Australia and one named Diabetes Australia-New South Wales - review of evidence of testator's association and means of knowledge, and of usage of names by persons associated with Diabetes Australia-New South Wales - no significant evidence of testator's use of language except that he gave gifts in same terms in two wills - held that the name used was ambiguous in the circumstances but it had not been shown that he did not intend to benefit the body the name of which he literally used Cases Cited: Charter v Charter (1874) LR7HL 364
Evans, In re; Evans v Allott [1950] VLR 60
Hulbert v Hulbert [2004] NSWSC 130
Jones v Loder [Kearney J, Supreme Court of New South Wales, 4 December 1984, unreported]
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749
National Society for the Prevention of Cruelty to Children v Scottish National Society for the Prevention of Cruelty to Children [1915] AC 207
Perrin v Morgan [1943] AC 399Category: Principal judgment Parties: Peter Parkinson (Plaintiff)
Diabetes Australia (First Defendant)
Australian Diabetes Council (Second Defendant)Representation: Counsel:
B Townsend (Plaintiff)
R Wilson (First Defendant)
TM Dinh (Second Defendant)
Solicitors:
Willis & Bowring (Plaintiff)
Tress Cox Lawyers (First Defendant)
Gadens Lawyers (Second Defendant)
File Number(s): 2011/00197794
Judgment
Noel James Poore, an advertising clerk who lived in Caringbah, died on 27 April 2010. These proceedings concern the effect of one of the gifts in his last will which he made on 19 March 2007. The will appointed the plaintiff who is his cousin to be executor and trustee and he obtained probate on 1 September 2010. He has sued for a determination which of the defendants is the object of one of the gifts in the will.
The will, after revoking former wills and directing prompt payment of obligations appointed the plaintiff executor and trustee, gave a legacy of money to another cousin and dealt with the residue in this way:
" I GIVE to my Trustee the rest and residue of my estate both real and personal of whatsoever kind and wheresoever situate UPON TRUST to sell call in and convert into money such part or parts thereof as shall not consist of money with power to my Trustee to postpone the sale and realisation thereof for so long as he in his absolute discretion shall deem expedient and TO DIVIDE the net proceeds thereof together with any ready moneys belonging to me at the time of my death into three (3) equal parts and TO HOLD such parts upon the trusts following:-
(a) As to One (1) part thereof for the NATIONAL HEART FOUNDATION OF AUSTRALIA and I DIRECT that the receipt of the Secretary or other authorised officer for the time being shall be a sufficient discharge to my Trustee;
(b) As to One (1) part thereof for DIABETES AUSTRALIA and I DIRECT that the recept of the Secretary or other authorised officer for the time being shall be a sufficient discharge to my Trustee;
(c) As to One (1) part thereof for OUR LADY OF FATIMA CHURCH CARRINGBAH and I DIRECT that the receipt of the Secretary or other authorised officer for the time being shall be a sufficient discharge to my Trustee.
These three gifts are not gifts for charitable purposes but absolute gifts to the three entities named. There is no difficulty about giving effect to two of the gifts. The problem is to identify which of two possible entities is to receive gift (b).
There have been organisations in New South Wales concerned with the interests of persons suffering from diabetes for over seventy years and both defendants have associations with earlier bodies.
People who suffer from diabetes have many shared interests and needs including interests in dealings with the Commonwealth government and its National Diabetes Services Scheme. There are now eight State and Territory diabetes organisations and there is also a Federal body which functions as a national secretariat for government lobbying and policy development.
The second defendant is the organisation which functions in New South Wales. It was incorporated on 15 October 1976. It seems that a predecessor existed earlier. When incorporated its name was Diabetic Association of New South Wales but by the time Mr Poore's activities can be seen from evidence its name had become Diabetes Australia - New South Wales. It changed its name again on 3 December 2010 and its name now is Australian Diabetes Council.
The first defendant was created at the initiative of State and Territory organisations. Its office and its main activities are in Canberra. It was incorporated on 8 September 1976 and was then named The Diabetes Federation of Australia. Later its name was changed to Australian Diabetes Foundation. Then on 8 November 1988 its name was changed to Diabetes Australia and it still has that name.
It is a company limited by guarantee and when it took its present name it was licensed to omit the word "Limited" from its name. Some witnesses spoke of it as once being named Diabetes Australia Limited and being sometimes referred to even now by the abbreviation "DAL" but search papers of ASIC records in evidence do not show that it ever had the word "Limited" as part of its name. Yet that word appears at least once in its documents in evidence: Court book 34, front page of copy of its Constitution.
The first defendant is a national body and its principal objects include promotion of research into all aspects of diabetes, prevention and early detection and advocating access to treatment. Its inaugural members included twenty-five individuals who were founding life members. There were also State associations. Not all State associations still are members. There are other member organisations and special members. It seems on the terms of its constitution that it is possible that an individual might become a member or associate member but this is not usual. Its members are almost all organisations, not individuals.
The second defendant resigned from the first defendant in 2008. Mr Poore cannot ever have been a member of the first defendant.
The second defendant's members are mainly individuals. There are perhaps thousands of members. Its activities include considerable attention to membership and subscriptions. It maintains active communication with members and with community organisations to which members belong. There are some special classes but generally membership must be renewed annually and a membership fee must be paid annually in most cases.
The second defendant maintains records of personal information about its members relevant to its activities. In these records little was known of Mr Poore in the second defendant's office. However, its records do show that he was diagnosed with type 1 diabetes in 1974. He made a payment which seems to show that he had become a member or had given a donor's pledge by 18 November 1987. He clearly appears in records as a concession member from about 28 April 2003 onwards and he may have been a subscribing member earlier.
In the ordinary course he would have received many communications from the second defendant. An example is the membership renewal form used by the second defendant from 2004 to 2006. At the head of its front page is the name Diabetes Australia, with the second defendant's ACN number. The same appears at the head of the second page and there are other references to the second defendant as DA-NSW and as Diabetes Australia-NSW. Its email address and website include "diabetesnsw".
Mr Poore probably received other correspondence each year or more often on a letterhead which included the name, Diabetes Australia-New South Wales and DIABETES AUSTRALIA-NSW, with references in the body of the letter in similar terms.
A membership application brochure used in 2006 and 2007 showed the name Diabetes Australia-New South Wales prominently. Mr Poore probably saw many printed items which showed the second defendant's name in full and also many which showed it in several different abbreviated forms, occasionally as Diabetes Australia without more. This material did not refer to or point out that there was a separate national entity. Mr Poore was not a member of any community organisation associated with the second defendant.
The second defendant had a practice in 2006 and 2007 of sending members quarterly magazines, one published by itself called Issues and another published by the first defendant called Conquest. A person who read these with attention would see that they were published by different organisations. Each magazine regularly gave editorial information identifying the publisher and its address.
Mr Poore gave donations and made payments to the second defendant in most years from 1987 until he died. Some of these were designated as gifts for DART, a research trust controlled or supervised by the first defendant.
When the second defendant received designated gifts for DART it accumulated them and sent the total collected on to DART from time to time with a further donation of its own. DART is not identified with either defendant and these donations and their treatment to do not assist in deciding the issue.
Apart from its quarterly magazine the first defendant took no particular step to bring its existence or keep its existence before individuals. Persons suffering diabetes and interested in dealings with the Federal government could well be aware of there being a separate national body and of its name but would not necessarily be so aware.
A person who carefully or regularly read the quarterly magazine could not fail to know that there were separate State and national entities with similar names. A person who gave them less than close attention could easily miss this distinction.
Nothing is known as to Mr Poore's personal characteristics or acuity except that he was employed as an advertising clerk and that he was interested enough to make donations over many years which suggests that he could well have thought about where his donations were going. He was interested enough to designate DART repeatedly for his donations. He left estate assets which suggest a careful and regular life. He used the name Diabetes Australia twice in wills. Otherwise, nothing is known about how he used language when dealing with organisations in the diabetes field. Practically nothing is known about how he used language at all.
Evidence from the second defendant's staff and members shows a variety of ways of referring to the second defendant, sometimes by abbreviations, sometimes in ways which could be taken to refer to the first defendant depending on context. These usages show a low level of advertence among the members who gave evidence to the existence of separate entities. Plainly, reference to the second defendant by the words Diabetes Australia often happens in everyday usage among a wide range of people. Equally plainly, that usage is far from universal. No evidence shows that that usage is common or happens at all on serious occasions such as writing out contracts or wills.
A member of the second defendant, Mr Hirling, who gave evidence only became aware that there were separate entities after some years of active involvement when, as he said, word got around there was a problem. Mrs Humphries, also a member with active involvement, did not know that there were separate bodies. She thought it was all one.
There are many day-to-day uses of names where precision is not needed and explanations are superfluous. Answering the telephone is an example. The second defendant and its staff often used abbreviations, and its staff and members often referred to it simply as Diabetes Australia. Those words appear prominently on the facade of its office building clearly visible to traffic in Parramatta Road.
But the second defendant also often used its own correct name especially as the level of formality rose such as in accounts and letterheads. Its correct name was apparent to anyone who dealt with the second defendant and thought about what its correct name was. The difference between the two entities was no secret. To a person concerned with correct names such as for a legal document like a will the second defendant's correct name was readily available.
To resolve the issue brought before the Court I should ascertain what is the meaning of the words used in the will. There can be many different forms of uncertain uses of names in wills.
The first rule to apply was stated in Perrin v Morgan [1943] AC 399 with clarity by Lord Simon LC at 406. The decision in that case establishes clearly, and differently to opinions which were common earlier, that there are no fixed rules of construction applicable to particular words. The Courts are not writing a dictionary for testators to use.
In that case the House of Lords decided the meaning of the word "money" on the basis of its context in the provisions of the will in question and rejected established judicial opinion as the basis for finding its meaning.
There are many cases where courts have looked at evidence beyond the context and terms of the document to discover the meaning of a will. These include many cases where names used in a will are erroneous in some respect.
As is general for the interpretation of documents, ambiguity can be resolved by extrinsic evidence showing how the testator used names, and evidence showing circumstances of probability which show whom he intended to refer to when the name in a will if read literally could apply to two or more persons or entities.
The broad view established in Perrin v Morgan informs approaches to earlier authority, in which the decision most strongly claiming attention is the decision of the House of Lords in the National Society for the Prevention of Cruelty to Children v Scottish National Society for the Prevention of Cruelty to Children [1915] AC 207. The facts in that case show remarkable similarities to the facts in the present case.
There are three shades of opinion in the speeches given in the House of Lords when disposing of that appeal. All three shades led to the same conclusion. Lord Loreburn, (who presided) spoke at pp 212-214. Lords Atkinson and Shaw agreed with Lord Loreburn. His observations are to the effect that there is no rigid rule, but that accurate use of a name in a will creates a strong presumption against any rival who is not the possessor of the name mentioned in the will.
By a presumption his Lordship meant that what a man has said ought to be acted upon unless it is clearly proved that he meant something different from what he said. In his Lordship's view there was no ambiguity in the will in question, but he went on to review the evidence and concluded that it did not show that when the testator said one thing he meant another.
Lord Dunedin spoke in somewhat more liberal terms. In his view there was an ambiguity, and he applied this test for ambiguity:
"Supposing that there had been no competitor would the description have fitted the claimant".
I interpose that applying that test, plainly there is an ambiguity in the present case, the description would certainly have fitted the second defendant if the first defendant had not existed.
In Lord Dunedin's view, when an ambiguity is seen by applying this extremely undemanding test, there can be an inquiry into such facts and circumstances as may give you a key to the meaning of the words which the testator used. His Lordship also said to the effect that you must have positive evidence of some cogent sort to make you prefer the description which is not quite accurate to the accurate description.
Lord Parmoor at 215 and 216 used less flexible terms. He said that the presumption should only be rebutted in some abnormal case of a special character. This echoes older opinion which I regard as eclipsed by the National Society decision.
Although it is not supported by a majority view I regard Lord Dunedin's test of ambiguity, sometimes called "equivocation" in this context, as persuasive. On Lord Loreburn's test there would be no ambiguity in the present case but his Lordship was prepared to look at the evidence.
There are several other cases where reference to the name of one person has not concluded the question to whom the testator intended to refer. An elaborate and somewhat strange decision is Charter v Charter (1874) LR7HL 364. This is not a clear authority as opinion in the House of Lords was evenly divided and the appeal was dismissed for lack of a majority in favour of allowing it. This was an instance where the name used in the will fitted one claimant much better, although not perfectly, than it fitted the other and the prevailing opinion relied on interpretations of evidence of considerations based on provisions made in the will but also on evidence of social context and behaviour extrinsic to the actual terms of the document.
Jones v Loder , an unreported decision of Kearney J in this Court of 4 December 1984, is an instance where after most elaborately detailed consideration of the terms of the will and the provisions which it made his Honour departed from what at first impression might be thought to be a plain identification of one of the beneficiaries, because the provisions could not be seen as altogether rational unless the alteration were accepted.
Hulbert v Hulbert [2004] NSWSC 130 a decision of Master Macready is another decision in this Court where the literal identification of a beneficiary in a will was departed from after a review of the social context and the structure of the dispositions.
I was referred to In re; Evans , deceased, Evans v Allott [1950] VLR 60 where Barry J considered a problem of an equivocal description, in that case references by names to two persons in a will. His Honour appeared to be ready to apply principles generally similar to those in the National Society case, although he did not refer to it, and disposed of the case on a different basis because in his Honour's view the descriptions fitted neither possible claimant.
My principal guide is the National Society decision. The primary question is about the language used by the testator, how he used language and what the words used meant when he used them.
In the background is the important question, what would the testator say if he really did intend to give his gift to the person whose exact name he gave? I see this consideration as part of the basis of readiness to speak of the starting point as a presumption or strong presumption in favour of literal meaning.
In my opinion I should not apply to will construction the observations of Lord Hoffmann in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 776G and following where his Lordship turned to illustrate his views on the construction of notices to quit and break notices under leases with references to will construction.
I do not regard it as simple or persuasive to move from reasoning about the use of background and mutually known facts for understanding commercial documents and leases, which are bilateral and in their nature are preceded by negotiations and exchanges of information, to thinking to be applied to the meaning of a will which in the nature of things is not made in any like context.
But further, in my opinion, the account of the law given by Lord Hoffmann at 776G to 777D does not correctly reflect the position established by case law on the construction of wills. National Society is not, as Lord Hoffmann saw it, an instance of inconsistency in that case law. It is an authority which establishes how a case such as the present should be decided. I return to what I regard it as having established, that the question is: What is the meaning of the words used by the testator having regard to the testator's circumstances bearing on his use of language?
None of the evidence in this case really shows anything about Mr Poore's use of language and, in particular, the evidence does not show anything about how he identified one or other of the entities operating in this field. The evidence gives only the most oblique and indeterminate indications of how Mr Poore used language.
The fact that he had a long continuing association with the second defendant does not explain what he meant when he gave the name of the first defendant. That consideration could only have much force if it were proved that he did not know that the first defendant existed and had its own name. There is no proof of that. He could well have known about the first defendant and its name. He could well have been aware that there were two different societies. That information was repeatedly made available to him. It could be understood from the quarterly magazines. The full name of the second defendant and also the full name of the first defendant were often before him.
It would only be a speculation to suppose or act on the basis that he did not know that there were two and that each had a name of its own. Mr Poore had strong associations with the second defendant. If anything, this suggests that he would have had means of knowing its correct name and using it, if he meant to refer to it on a serious occasion.
In this case, as in the National Society case, there is a need for clear demonstration that where the correct name is used something else was intended. In the present case the evidence before me does not resolve the doubt in a clear way, it does not resolve it in favour of the second defendant. Nothing overcomes the question: What would Mr Poore have said if he did intend to benefit the first defendant?
My conclusion is that he named the first defendant and the evidence does not show that he did not mean what he said. I intend to dispose of the case in that sense.
The Orders are:
Order 1. Order and declare that upon the true construction of the last will of the late Noel James Poore made on 19 March 2007 and in the circumstances which have happened the object of the gift contained in cl (b) of this will and there referred to as, "DIABETES AUSTRALIA", is the first defendant.
Order 2: Order that the costs of the plaintiff of and incidental to these proceedings be paid or retained by the plaintiff on the indemnity basis out of that part of the rest and residue of the estate of the deceased which would otherwise pass to the first defendant; so far as the same shall extend and insofar as it does not so extend out of the rest and residue of the estate of the deceased.
Order 3: Order that the costs of each defendant be paid by the plaintiff out of that part of the rest and residue of the estate of the deceased which would otherwise pass under the gift in paragraph (b) of the will to the first defendant.
Order 4: The exhibits may be returned
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Decision last updated: 12 December 2011
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