Plumridge v Burns
[1998] VSC 185
•10 December 1998
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION
Not Restricted
No. 5423 of 1998
CHRISTOPHER PLUMRIDGE Plaintiff v ALAN PETER BURNS Defendant
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JUDGE: Mandie J WHERE HELD: Melbourne DATE OF HEARING: 10 December 1998 DATE OF JUDGMENT: 10 December 1998 CASE MAY BE CITED AS: Plumridge v Burns MEDIA NEUTRAL CITATION: [1998] VSC 185
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WILLS - construction - “any interest that I may have” in named company - whether
debt included.
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APPEARANCES: Counsel Solicitors For the Plaintiff Mr B.R. Fitzgerald Messrs Barry Fried Solicitors For the Defendant Mr S. Minahan James Taylor & Co
HIS HONOUR:
By her will dated 19 January 1996, the testatrix appointed the defendant, Alan Peter Burnes, solicitor, (who also drew the will) as her executor and trustee. After providing for a number of bequests and legacies, clauses 7 and 8 of the will provided as follows:
"7. I give and bequeath any interest that I may have in Plumridge Nominees Pty Ltd to my sons Phillip Plumridge, John Plumridge and Christopher Plumridge to be divided equally between them; provided also however that I direct that any income derived in my interest in Plumridge Nominees Pty Ltd be passed to my husband for a period of two years from the date of my death and I direct that no asset of Plumridge Nominees Pty Ltd shall be sold for a period of two years from the date of my death without my husband's prior consent. 8. Finally I give and bequeath the rest and residue of my estate to my husband for his own use absolutely."
The testatrix died on 28 January 1996. She was survived by her husband and three sons, one of whom is the plaintiff. At the time of making her will, and on her death, the testatrix held three shares in Plumridge Nominees Pty Ltd (the company) and the company was indebted to her in the sum of $180,239.20 in its capacity as trustee of the D. E. Plumridge Family Trust. The debt appeared in the balance sheet under the heading of "beneficiaries loan accounts". The company had been incorporated on 30 April 1979 and the family trust was established by deed at about that time.
The deed sets up a discretionary trust, and it is common ground that the trust is not vested and that the testatrix had no interest in the trust except as one of the objects of the discretion which might be exercised from time to time by the trustee.
The Originating Summons, as amended, seeks determination of the following question:
"Whether the sum of $180,239.20 referred to in the Inventory of Assets and Liabilities produced to the defendant at the time of swearing his affidavit in support of the Originating Motion for Grant of Probate was an interest held by the deceased as at the date of her death within the meaning of the expression in clause 7 of the will 'any interest that I may have in Plumridge Nominees Pty Ltd'."
The correct approach to this question of construction is to look at the words used and give them their usual and ordinary meaning. That construction, in this case the description of the property in clause 7, should then be checked against the relevant facts, in this case the items of property comprised in the estate of the testatrix at her death.
In construing clause 7 of the will, the court should also consider any relevant acts, facts and circumstances touching the intention of the testatrix (see section 22A(1) of the Wills Act 1958 which, although repealed, still applies to this will - see section 52(2) Wills Act 1997.)
Looking at the words used in clause 7 of the will, their ordinary meaning, in my opinion, relates to any shareholding which the testatrix may have in Plumridge Nominees Pty Ltd. The usual and ordinary meaning of the words "any interest that I may have" in a company would, if one knew nothing further, be expected to relate to shares held by a testatrix in that named company. That interpretation is strengthened when one looks at the further proviso in clause 7 which relates to any income derived from her interest.
One would expect that that reference was a reference to dividends derived from the shareholding in the named company. The only difficulty about that interpretation is the direction that no asset of Plumridge Nominees Pty Ltd should be sold for a period of two years from the date of the testatrix's death without her husband's prior consent. It seems inappropriate and incongruous that there should be a direction that no assets of the company be sold when all that has been given were shares in the company.
I suppose that, just looking at the words of the will, that it is possible that the testatrix was intending to protect her husband from some early dissolution of the company or sale of its assets on a winding up and distribution which the sons might have been able to achieve by virtue of the passing of the shareholding interest.
When one passes from what I think is the ordinary meaning of the words, simply looking at the will, to checking that position with the assets of the testatrix and the facts which existed at the time of her death, I think that a different situation arises. It then appears that Plumridge Nominees Pty Ltd has no assets in its own right, and acts only, and at all times has acted, as a trustee of the family trust. The shares in the company for that reason have no value, and it can be assumed have never given rise to any income. Therefore, when one looks at the facts, one is struck with considerable doubt concerning the intention which the testatrix had as conveyed by the ordinary meaning of the terminology contained in clause 7 of the will. The ordinary meaning of the words does not then comfortably relate to a situation where the shareholding interest is of no value, or to a situation where there was nothing of value for the testatrix to divide between her three sons equally, where the shareholding had never produced any income, and where the company had no assets in its own right which could be the subject of a direction that they not be sold for a period of two years without her husband's prior consent.
Looking at the facts which existed both at the date of death of the testatrix and at the date of making the will, and there is only a small time interval between those two dates, the inference is almost inescapable in my view that the testatrix intended by clause 7 of the will to give to her three sons equally such interest as she had in the assets of the family trust which she identified with the name of the company.
The clause then makes reasonable sense because it is clear that the testatrix did, during her lifetime, derive an income from her entitlements under the family trust, albeit that she did not have any vested interest because it was a discretionary trust. Plumridge Nominees Pty Ltd did have legal title but not any beneficial interest in the assets which produced that income and which could be sold if what the testatrix thought was her interest in those assets were to be passed to her sons.
On that analysis, clause 7 of the will has failed to achieve the intent of the testatrix because contrary to the belief that she may well have had, she had no interest whatever in the assets of the family trust which she could dispose of by her will. At least, it is not suggested by either party before me that she did have any interest in the trust and it appears, so far as I have been able to ascertain from the trust deed, that she did not.
In those circumstances, counsel for the plaintiff submitted that "interest" should be given a wide interpretation so as to include not only a proprietary interest or interest of a shareholder, but also any other kind of right, title, advantage etc. connected with the company, and that the word should be interpreted so as to comprehend the debt owed by the company to the testatrix.
The difficulty is that a debt does not naturally fall within the language used or within the alternative concept of interest in the trust estate. It was submitted by counsel for the plaintiff that the word should be interpreted to include any rights connected with the company. It was further submitted that there were other indications in clause 7 that that was the intention of the testatrix. The first indication, it was submitted, was that it was directed that any income derived from the interest in Plumridge Nominees should be passed to her husband for 2 years. It seems to me that that is not so. There is no evidence that the debt was an income producing "asset" or ever had produced income. It was simply an amount in the beneficiary's loan account, presumably of undistributed income in the past, but there was no evidence that it bore interest so that, I do not think, is an indication of any intent that the debt was intended to be covered by the language.
It was then contended that the direction that no asset should be sold indicated that it was a reference to the debt because, on the evidence, assets would need to be sold in order that the debt be paid. That is no doubt true, but the direction could equally indicate the intent to which I have earlier referred, that there be no sale of assets resulting from the changes of shareholding in the company or that there be no sale of assets resulting from the passing of what the testatrix assumed was her interest in the trust estate.
Finally, counsel for the plaintiff submitted that the emphasis should be placed on the words "any" in the phrase "any interest that I may have" and this should be interpreted as meaning or as implying the further words "of any nature whatsoever". I do not think that the words of the will justify that interpretation. It seems to me that once one passes from the ordinary language of the will to the facts which are disclosed as at the date of the death of the testatrix and as at the date of the will, one is faced with an alternative version of the intention of the testatrix which is equally incompatible with the construction urged by the plaintiff.
So that in my opinion, whether one looks at the words of the will or looks more widely at the acts, facts and matters which might indicate the property which the testatrix had in mind when she used the words "any interest that I may have", either approach does not lead to a conclusion favourable to the contentions put forward by counsel for the plaintiff.
In my opinion, for those reasons, the question asked in the originating motion should be answered adversely to the plaintiff: that the sum of $180,239.20 referred to in the inventory of assets and liabilities of the deceased was not an asset covered by the words in clause 7 of the will "any interest that I may have in Plumridge Nominees Pty Ltd".
The other question which is raised by the originating motion is an application pursuant to section 34(1)(c) of the Administration of Probate Act 1958 for an order that the defendant be removed from the office of executor of the will and estate of the deceased, and that State Trustees Limited be appointed in his place. I hasten to say that I have not heard submissions by counsel for the defendant on this question. But nevertheless, I think I should say that a somewhat persuasive argument was put forward by counsel for the plaintiff which, if he had succeeded on his point of construction, would have presented the defendant with a number of substantial matters to answer.
I have not heard the answering arguments because it seems to me that even if the plaintiff demonstrated that the defendant was unfit to continue as executor, that in my discretion, I should not remove him in circumstances where there is no demonstrated lack of satisfaction or confidence in him by anyone taking under the will other than the plaintiff, and on my interpretation of the will, the plaintiff's only interest at best is one share in a trustee company having no value.
The plaintiff therefore has nominal standing to make the application, but no real reason to be concerned in the light of my conclusion about the way that the estate is administered. There is no suggestion that the other legacies and bequests have not been paid or will not be paid. There is a strong inference that the residuary beneficiary has no dissatisfaction with the defendant. So although the plaintiff raised strong arguments about the fitness of the executor, and I repeat that, of course, I have not heard any arguments in answer to those, I would not in any event exercise my discretion under section 34 of the Administration of Probate Act to remove the defendant. That application is dismissed.
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