Public Trustee (as executor of the estate of the late Claude Donald Smith) v Donoghue
[1999] TASSC 147
•20 December 1999
[1999] TASSC 147
CITATION:Public Trustee (as executor of the estate of the late Claude Donald Smith) v Donoghue & Ors [1999] TASSC 147
PARTIES:PUBLIC TRUSTEE
(as executor of the estate of the late
SMITH, Claude Donald)
v
DONOGHUE, SusanDONOGHUE, Nathan (an infant)
HARRIS, Sharon
HARRIS, George
HARRIS, John
SMITH, Tracy
HARRIS, Lorraine
SMITH, Dennis
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M453/1995
DELIVERED ON: 20 December 1999
DELIVERED AT: Hobart
HEARING DATES: 26 November 1999
JUDGMENT OF: Underwood J
CATCHWORDS:
Succession - Wills probate and administration - Construction and effect of testamentary dispositions - General principles of construction - Reading will as a whole - General principles.
Perrin v Morgan [1943] AC 399; Pyke v Walters 40/1983, followed.
Aust Dig Succession [145]
Succession - Wills probate and administration - Construction and effect of testamentary dispositions - General principles of construction - Condition forfeiture and gift over - Uncertainty - What constitutes.
Clavering v Ellison (1859) 7 HLC 707, followed.
Perpetual Trustees Executors and Agency Company of Tasmania Limited v Walker (1953) 90 CLR 270, referred to.
Aust Dig Succession [200]
REPRESENTATION:
Counsel:
Applicant: T J Williams
First - Fourth Respondents: M Chambers
Sixth Respondent: In Person
Eighth Respondent: D J Geason
Solicitors:
Appellant: Public Trustee
First - Fourth Respondents: Shields Heritage
Sixth Respondent: In Person
Eighth Respondent: Butler McIntyre & Butler
Judgment Number: [1999] TASSC 147
Number of Paragraphs: 30
Serial No 147/1999
File No M453/1995
THE PUBLIC TRUSTEE (as executor of the estate of the late
CLAUDE DONALD SMITH) v SUSAN DONOGHUE,
NATHAN DONOGHUE (an infant), SHARON HARRIS, GEORGE HARRIS,
JOHN HARRIS, TRACY SMITH, LORRAINE HARRIS and DENNIS SMITH
REASONS FOR JUDGMENT UNDERWOOD J
20 December 1999
Claude Donald Smith, formerly of Blackwood Creek ("the testator") died on 15 July 1994. On 21 February in the same year, he wrote out his own will. He actually wrote out the same will twice, one document being a fair copy of the other. The formalities of due execution were complied with and both copies admitted to probate on 7 September 1995. The Public Trustee became the executor and trustee of the estate by virtue of the executors named in the will exercising the power of appointment conferred by the Public Trustee Act 1930, s15.
By an originating application, the Public Trustee seeks a determination of no less than 13 questions that arise from the testator's will.
At the outset it is appropriate to acknowledge the very valuable assistance given to me by the learned written and oral submissions made by Mr Williams, who appeared as counsel for the Public Trustee on the hearing of the application.
The testator's will provided:
"i give devise and bequeath
At my death I want my property and assets to go to Susan Donoghue, Nathan Donoghue, Sharon Harris and George Harris in equal shares each person pays share of transfer.
Susan Donoghue will look after her son (Nathan share until he becomes of age.
The property is not to be sold but passed on to future generations. There is to be no monies borrowed against the property. If the property gets into debt and has to be sold the monies to be divided between the four owners and John Harris.
The timber is to be reserved on the property for Hydro Poles, mill logs for their own use, the rest of the bush can be used for firewood for above property.
The property must not be wood-chipped and no new land to be cleared with bulldozer or any other machinery.
Tracy Smith to have rights to take firewood for his own use.
Lorraine Harris can come to property and stay if she wishes.
The land is to stay as is which is in one block and only used for grazing purposes.
After my funeral expenses are paid, any monies over I want to be divided equally between above owners.
Should any of above people leave the property, he or she does so at their own wish and forfeits their rights of a share."
There was very little evidence. At the date of the testator's death the estate comprised the following:
House and land at Blackwood Creek including timber standing on the land $188,650.00 Westpac Bank Launceston ¾ Account No 737004026690 $1,936.69 Accrued Interest $6.05 Commonwealth Bank Launceston ¾ Account No 76005001599 $2,667.06 Accrued Interest $2.08 Furniture $2,000.00 Unregistered Tractor $2,000.00 $197,261.88 Liabilities ¾ Funeral Expenses
$1,816.00
It appears that since the death of the testator, the furniture and the unregistered tractor have disappeared. Police were said to be investigating the disappearance. The valuation reports tendered in evidence describe the real estate as a small farm of a little more than 60 hectares, situate in the foothills of the Western Tiers. About one third of the farm is pasture and the remainder bushland. There is timber on the bushland in commercial quantities. On the property are three "shacks for residential accommodation" and farm sheds. The description of each is not encouraging.
On his death, the testator was survived by three children, namely, Tracy Smith, Dennis Smith and Lorraine Harris. The relationship between the four beneficiaries named in the first paragraph of the will and the testator are as follows:
Susan Donoghue A grandchild ¾ Lorraine Harris' daughter. Nathan Donoghue A great grandchild ¾ Susan's Donoghue's son. Sharon Harris Ex-wife of John Harris who is Lorraine Harris' son. George Harris
A grandchild ¾ also Lorraine Harris' son.
Dennis Smith has made a claim pursuant to the provisions of the Testator's Family Maintenance Act. It is awaiting the outcome of this application. John Harris and Lorraine Harris were served with the application but by their solicitors, indicated that they did not wish to be heard.
The primary task of the Court is to give effect to the testator's intention, so far as it can be ascertained from the terms of the will, read as a whole, and considered in the light of any relevant and admissible evidentiary material. In Perrin v Morgan [1943] AC 399, Lord Romer said at 420:
"My Lords, I take it to be a cardinal rule of construction that a will should be so construed as to give effect to the intention of the testator, such intention being gathered from the language of the will read in the light of the circumstances in which the will was made. To understand the language employed the court is entitled, to use a familiar expression, to sit in the testator's armchair."
At 421, his Lordship emphasised the need to examine "the language of the whole will" in order to interpret a part of it. See also Pyke v Walters 40/1983 at 2 - 3.
It is clear from reading the will as a whole that the first paragraph is the primary clause. It purports to dispose of the whole of the testator's estate to the four named beneficiaries. The second paragraph logically follows by creating one of the named beneficiaries a trustee for another named beneficiary who was not sui juris at either the date of death or the date of the will.
The balance of the will, other than the last paragraph, appears to amount to a number of conditions subsequent or directions, imposed upon the beneficiaries purporting to govern their use of the property. The final paragraph provides:
"Should any of the above people leave the property, he or she does so at their own wish and forfeits their rights of a share."
The first step is to determine the nature of the interest conferred upon the four beneficiaries by the primary clause. Prima facie, it appears to confer an absolute interest. There are a number of expressions in the document that confirm that prima facie construction. In the first paragraph itself the testator speaks of each of the four beneficiaries paying a "share of the transfer". Absent words indicating the contrary, a transfer can only be a reference to a transfer of the testator's absolute interest to each of the beneficiaries. In the third paragraph the testator refers to the possibility of the property getting into debt ¾whatever that means ¾and in the context of directing what action is then to be taken, refers to the persons named in the primary clause as "the four owners". Finally, the reference to forfeiture in the last paragraph supports the proposition that, absent the event causing forfeiture, the four persons named in the primary clause have taken the property absolutely.
There is nothing in the document to indicate that the prima facie construction may not be correct. The will contains no provision for a gift over in the event of the determination of the interest conferred by the first paragraph. Although it may be argued that the direction in the second paragraph that the property "is not to be sold but passed on to future generations" indicates an intention to confer something less than an absolute interest, it is equally consistent with a direction that the persons named in the first paragraph are to make provision in their own testamentary instruments accordingly. It may be noted that after the first paragraph, the majority of the will consists of directions from the testator as to how the beneficiaries are to manage the property after his death. Accordingly, I hold that it was the intention of the testator to confer an absolute interest in all his property upon each of the persons named in the first paragraph of the will in equal shares.
What of the balance of the will? The provision that "the property is not to be sold but passed on to future generations" is void for repugnancy with the primary clause. Such a restriction is totally inconsistent with the granting of an absolute interest. In Hood v Oglander (1865) 34 Beav 513; [55 ER 733], the Master of the Rolls said at 522 [737]:
"Then comes the expression of the testator's earnest hope and particular request. I will read this as being an express direction, and as if the testator has said, 'I expressly desire and direct' that my said son shall keep all the real estate, and shall not sell, alienate, or dispose of the same, or any part thereof, except by way of exchange, or for reinvesting the value in the purchase of other estates.
So reading it, I am of opinion that it is a condition repugnant to the gift of this estate, for a person cannot give to another an estate in fee-simple, and say, but you shall not sell, alienate, or dispose of it. If a testator is desirous of imposing such a restriction, he must do it in a different form, giving a limited estate as for life; if he gives an absolute estate in fee-simple, and annexes such a condition to it, the condition is altogether repugnant to the gift of the estate itself and wholly inoperative."
In accordance with the principle enunciated in Yates v University College, London (1875) LR 7 HL 438, the devise and bequest effected by the first paragraph persists unaffected by the void condition. See also re Jones; Williams v Rowlands [1948] 1 Ch 67.
The next sentence, "There is to be no monies borrowed against the property" is equally repugnant to the bequest and devise conferred by the first paragraph. The following sentence, "If the property gets into debt and has to be sold the monies to be divided between the four owners and John Harris" is difficult to understand. Of course, a business being conducted on a property could easily get into debt, but the idea of the property itself getting into debt seems difficult to understand. At all events, the proposition that in the event of that happening, the property is to be sold and the monies divided, not between the beneficiaries referred to in the first paragraph, but between them and another, John Harris, is obviously also void for repugnancy.
The will next provides:
"The timber is to be reserved on the property for Hydro Poles, mill logs for their own use, the rest of the bush can be used for firewood for above property.
The property must not be wood-chipped and no new land to be cleared with bulldozer or any other machinery."
I am satisfied that all these provisions are no more than precatory words. Although in earlier times there was a tendency to construe words of recommendation as creating a trust, the tendency has been the reverse in relatively more recent times. See Hill v Hill [1897] 1 QB 483; Williams v Williams [1897] 2 Ch 12; Comiskey v Bowring-Hanbury [1905] AC 84. In any event, the precatory words in this case are incapable of constituting a trust as there is no charitable element involved and no object of the trust other than, possibly, the trustees themselves. See Jacobs' Law of Trusts in Australia 6 edn, pars105 - 109 and cases noted there.
The next paragraph in the will provides:
"Tracy Smith to have rights to take firewood for his own use."
Mr Williams submitted that this paragraph might operate to confer a profit à prendre on the sixth-named respondent. In Duke of Sutherland v Heathcote [1892] 1 Ch 475, Lord Lindley, delivering the judgment of the court, said at 484 - 485:
"A profit à prendre is a right to take something off another person's land; such a right does not prevent the owner from taking the same sort of thing from off his own land; the first right may limit, but does not exclude, the second."
In National Executors & Trustees Co of Tasmania v Edwards [1957] Tas R 182, it was put to the Full Court that a royalty on minerals taken from the land constituted a profit à prendre. As to this, Morris CJ said at 187:
But with this I am unable to agree, for one of the characteristics of a profit à prendre is that it must be something taken out of the soil (see per Patteson J in Manning v Wasdale (1836) 5 Ad & E 758 at p 764)."
In McCauley v Federal Commissioner of Taxation (1944) 69 CLR 235, Rich J said at 244:
"On the other hand, if the contract creates a right to enter the land whenever the party is disposed to do so, and to cut and take therefrom such timber (or such timber of a specified class) as he may from time to time desire to obtain, on payment of a sum determined by the quantity taken, the contract is not one of sale but creates a profit à prendre."
A profit must be limited in some way as to quantity, either by reference to some defined quantity or by reference to the needs of the dominant tenement. See Clayton v Corby (1843) 5 QB 415 at 419 - 420. See also Lord Chesterfield v Harris [1908] 2 Ch 397. This limit is sometimes called a "stint". Mr Williams submitted that the profit conferred upon Mr Smith was limited to the taking of firewood for his own use and, like Buckley LJ in Lord Chesterfield v Harris, Mr Williams had recourse to Blackstone's Laws of England. At 421 - 422 Buckley LJ referred to Blackstone, Book II, Ch3, at 35, which deals with the profit, or common of estovers or necessaries, eg, the taking of firewood necessary for one's house or farm ¾fire-bote. More mundanely, Mr Williams referred to Cheshire's Modern Real Property, 5 edn, at 281 where the relevant passage from Blackstone is also set out. I accept Mr Williams' submission that the grant of a profit à prendre to the sixth named respondent is sufficiently limited and hold that the clause in the will operates to confer a profit à prendre upon the sixth-named respondent.
The testator's will next provides:
"Lorraine Harris can come to property and stay if she wishes".
A testator may of course, attach conditions to his devise or bequest, provided such conditions are not void for repugnancy, uncertainty, illegality or for being contrary to public policy. If there is acceptance of the gift, the beneficiary takes with all the benefits and burdens that are attached to that gift by law. See Messenger v Andrews (1828) 4 Russ 478. Such conditions may be conditions precedent or subsequent. The former condition has to be fulfilled before the gift takes effect, while the failure to fulfil the latter will result in forfeiture of the gift. See In Re Boulter, Capital and Counties Bank v Boulter [1922] 1 Ch 75 as an example of the latter. The provision concerning Lorraine Harris staying at the property is not a condition precedent. At best it can only be regarded as a condition subsequent. If so, it is clearly void for uncertainty. The general principle was expressed in Clavering v Ellison (1859) 7 HLC 707 at 725 as follows:
"Where a vested estate is to be defeated by a condition on a contingency that is to happen afterwards, that condition must be such that the Court can see from the beginning precisely and distinctly upon the happening of what event it was that the preceding vested estate was to determine."
Some of the authorities that have considered the certainty of conditions concerning residence or occupancy are dealt with in Perpetual Trustees Executors and Agency Company of Tasmania Limited v Walker (1953) 90 CLR 270 at 279 et seq, but each case falls to be determined upon the words of the will in question. See Sifton v Sifton [1938] AC 656 at 675. The word "stay" is of uncertain meaning. Does it mean in one of the houses or "shacks" on the property or does it merely refer to the land? If the latter, what is encompassed by a "stay" on the land? The paragraph is unlimited as to time. Is the right to be exercised to the exclusion of the beneficiaries, and if so, with respect to the whole of the property? All of these matters lead to the conclusion that if the paragraph is a condition subsequent then it is void for uncertainty.
However, an alternative, and probably better, view of this paragraph is that it is not intended to be a condition, in which case, if sufficiently certain, the failure to accept it would result in forfeiture of the gift conferred by the first paragraph. Having regard to the style used by the testator to express himself in the majority of the will, the direction that "Lorraine Harris can come to the property and stay if she wishes" really amounts to no more than precatory words, or an expression of the wishes of the testator not constituting either a condition subsequent or a trust.
The next paragraph, "The land is to stay as is which is in one block and only used for grazing purposes", like the other clauses that purport to control the use of the land after death, amounts to precatory words not constituting a trust. The final paragraph of the will is clearly a condition subsequent providing for forfeiture in the event of its non-fulfilment. However, it fails for uncertainty, leaving the gift unaffected. The word "leave" is, if anything, more uncertain in meaning than the word "stay". It is impossible to determine what would constitute a leaving. For instance, would a temporary departure for the purpose of shopping constitute a leaving? If no, would a departure for a holiday constitute a leaving? Would living away from the property but keeping of goods on there constitute a leaving and so on? The uncertainties are endless.
With respect to the remainder of the will, no argument was addressed on the paragraph concerning payment of funeral expenses. I was informed from the Bar Table that one of the bank accounts may have been impressed with a trust to be dispersed for this purpose. In any event, in the light of these reasons it is immaterial from which part of the estate the debts are paid.
I hold that the will of the testator operates to confer the whole of his estate upon the four beneficiaries named in paragraph one thereof absolutely in equal shares, subject only to a profit a prendre in favour of the sixth-named respondent to take firewood off the testator's real estate for his own use. I also hold that the interest of the second-named respondent is held in trust for him by the first-named respondent until he reaches the age of majority. In the light of that ruling I think it is unnecessary to answer seriatim, the 13 questions set out in the originating application, but in case it is needed, I reserve liberty to apply generally.
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