Public Trustee v Loney & Ors

[2009] SASC 17

Supreme Court of South Australia

(Testamentary Causes Jurisdiction: Civil)

In the Estate of RAE MARGARET RUTT

PUBLIC TRUSTEE v LONEY & ORS

[2009] SASC 17

Judgment of The Honourable Justice Sulan

30 January 2009

SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - GENERALLY - GENERAL PRINCIPLES OF CONSTRUCTION - ASCERTAINMENT OF TESTATOR'S INTENTION AS EXPRESSED OR IMPLIED BY WORDS OF WILL

SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - GENERALLY - DIVISION PER CAPITA OR PER STIRPES

SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - GENERALLY - DESCRIPTION OF LEGATEES AND DEVISEES - OTHER WORDS AND PHRASES OF DESCRIPTION

Construction of wills - testatrix left will which provided that her entire residual estate would pass to her husband in the event he survived her for at least one calendar month - testatrix's husband pre-deceased her - clause provided that in the event of husband pre-deceasing testatrix one half of residual estate would pass to husband's children and the other half to the testatrix's mother, brother and sisters and nephews and nieces - substitution clause provided that where a beneficiary pre-deceased the testatrix, issue of the deceased beneficiary take per stirpes as though the devised interest had vested in the deceased beneficiary - whether husband's children entitled to entire residual estate by virtue of substitution clause - whether testatrix intended to include siblings, nephews and nieces of the half blood in testamentary gifts - whether the term 'issue' to be given broad construction encompassing all lineal descendants of a beneficiary or narrow construction including only children of a beneficiary.

Held:  substitution clause does not operate to vest entire interest in residual estate to husband's children.

Held:  textatrix did not intend to include siblings, nephews and nieces of the half blood in testamentary gifts.

Held:  'issue' to be given broad construction.

Lynneberg & Ors v Kildahl & Ors [1948] NZLR 207; Re Hewitt [1945] SASR 102, applied.
Buick v Equity Trustees (1957) 97 CLR 599; Fell v Fell (1922) 31 CLR 268; Matthews v Williams (1941) 65 CLR 639; Nicol v Chant & Ors (1909) 7 CLR 569, discussed.
Grieves v Rawley (1852) 68 ER 840; In re Croxon; Croxon v Ferrers [1904] 1 Ch 252; Re Carrig (Deceased) [1972] VR 655; Re Wardle (1979) 23 SASR 214; Ritchie v Magree (1964) 114 CLR 172, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"issue"

In the Estate of RAE MARGARET RUTT
PUBLIC TRUSTEE v LONEY & ORS
[2009] SASC 17

Civil

1. SULAN J:             This is an application by the Public Trustee for determination of beneficiaries under the Will of the deceased, Margaret Rae Rutt (“the testatrix”).  A determination is also sought in respect of the manner in which the testatrix’s estate is to be distributed amongst the beneficiaries, once their identities have been determined.

   This issue

2. The relevant groups of potential beneficiaries who are considered in interpreting the Will include the testatrix’s brother and two sisters, her half brother and half sister, her stepson and stepdaughter, her nephews and nieces, and nephews and nieces of the half blood.

   The Will

3. The testatrix made her Will on 15 November 1983.  Clause 3 of the Will provides:

   I GIVE DEVISE AND BEQUEATH the whole of my real and personal estate of whatsoever nature and wheresoever situate not otherwise hereinbefore disposed of after payment therefrom of my just debts funeral and testamentary expenses all taxes and any duties which may from time to time be charged against my estate (hereinafter called “my residuary estate”) UNTO my husband WALTER BEVAN CHARLES RUTT for his own use and benefit absolutely PROVIDED my said husband shall survive me for a period of one (1) calendar month after my death AND I DIRECT that should my said husband predecease me or survive me but die within one (1) calendar month of my death then UNTO my trustees UPON TRUST as follows:--

   (a)As to one-half (½) thereof UNTO CHARLES COLLINS LEIGHTON RUTT and PHILIPPA PRENTICE SHEPHERD being the children of my husband in equal shares for his her or their own use and benefit absolutely as tenants in common.

   (b)As to the remaining half of my said residuary estate UNTO such of them my mother GERTRUDE MARIAN LONEY my brother and sisters and nephews and nieces as shall be living at my death and shall attain or shall thereafter attain the age of twenty one (21) years for his her or their use and benefit absolutely as tenants in common.

4. Clause 4 of the Will provides:

   I DIRECT that should any beneficiary of this my will predecease me leaving issue him her or them surviving and living at my death then such issue shall stand in the place of his her or their deceased parent and take per stirpes and equally between them the share of and interest in my estate which such deceased parent would have taken had he she or they survived me and attained a vested interest.

5. The Public Trustee seeks determination of three issues in relation to the construction of the Will.  First, whether the substitution of beneficiaries provided for in clause 4 applies to the interest in the estate of the deceased’s husband, with the result that his issue are entitled to the whole of the deceased’s residuary estate in equal shares.  Second, in the event that they are not entitled to the whole of the deceased’s residuary estate, whether the beneficiaries referred to in sub-clause 3(b), namely, ‘my mother, my brother, my sisters and nephews and nieces’ include her sister of the half blood and her children, and her brother of the half blood.  Third, whether ‘issue’ in clause 4 means all lineal descendants or is confined in meaning to include only the child or children of a beneficiary.

   Family relations of the testatrix

6. The testatrix was born on 11 April 1930 and died on 11 February 2007.  She was the daughter of Gertrude Marian Loney (“Gertrude”) and Ernest Sterling Loney (“Ernest”).  Both parents are deceased.  Ernest died on 26 July 1974 and Gertrude died on 30 July 1994.  The testatrix was one of four children.  The other children were two sisters, Ruth Lloyd (“Ruth”) (deceased) and Jacqueline Nance Loney (“Jacqueline”), and a brother, Colin John Loney (“Colin”) (deceased).  Ruth has four living children, James Alexander Lloyd (“James”), Cynthia Mary Lloyd (“Cynthia”), Frederick Stanley Lloyd (“Frederick”) and Barbara Theresa Lloyd (“Barbara”), to whom I will refer collectively as “Ruth’s children”.  Colin has two living children, Andree  Peta Loney (“Andree”) and Mark Osborne Loney (“Mark”), to whom I will refer collectively as “Colin’s children”.  Jacqueline has no children.

7. The testatrix was married to Walter Bevan Charles Rutt (“Walter”).  He died on 11 January 1988.  Walter was survived by his two children, Charles Collins Leighton Rutt (“Charles”) and Philippa Prentice Shepherd (“Philippa”). Gertrude and Ernest were divorced.  Ernest remarried in 1953.  He and his wife, Shirley, had two children, Margaret Robin Halsmith (“Margaret”) and Ross Ernest Loney (“Ross”).  Margaret has three children:  Vanessa Caitlin Halsmith (“Vanessa”), Elizabeth Jane Halsmith (“Elizabeth”) and Rosemary Frances Halsmith (“Rosemary”), to whom I will refer collectively as “Margaret’s children”.

8. I annex to this judgment a diagram showing the family relationships which I have described.

9. By order of a Master, Jacqueline was appointed to represent the interests of Andree, Mark, James, Cynthia, Frederick and Barbara, as nephews and nieces of the testatrix of the whole blood.  Margaret was appointed to represent the interests of Ross, Vanessa, Elizabeth and Rosemary as siblings and nieces of the testatrix of the half blood.

10. There was no disagreement between any of the defendants as to the manner in which this matter ought to proceed.  Mr Keith of counsel appeared for all of the defendants in these proceedings.

    Construction of wills

11. It is a general rule of construction that, where a Court is considering an ambiguous Will, the favoured interpretation ought to be that which gives effect to the intention of the testatrix.  In Nicol v Chant & Ors,[1] Griffith CJ stated the principle of construction as follows:[2]

    In construing a will the first duty of the Court is to examine it, and to discover the meaning of the language of the testator as applied to the circumstances existing at the date of the will, and to give effect to the intention so discovered unless some authoritative rule of law or construction requires a different conclusion.  The inverse process, of first taking up a supposed rule assume to be prima facie applicable, and then inquiring whether the words of the will exclude the operation of the rule, is, as has often been said, likely to lead to erroneous conclusions.  I need not cite authorities (which are numerous) for this position.

    [1] (1909) 7 CLR 569.

    [2] Ibid at 577.

12. In construing a will, the Court must first ascertain the intention of the testatrix as expressed in the written terms of that will.[3]  The written terms are the primary guide to ascertaining the intention of the testatrix.  Where an intention is not expressed explicitly or plainly implied, the Court must not speculate on that intention.[4]  The will must be read as a whole instrument, as some parts of the will are likely to be informed by others.[5]  Such a reading may provide the Court with insight into any general scheme for distribution intended by the testatrix.  The will must be construed according to the plain meaning of the words and sentences contained in it.

    [3]    Nicol v Chant & Ors (1909) 7 CLR 569; Fell v Fell (1922) 31 CLR 268,273.

    [4]    Fell v Fell (1922) 31 CLR 268, 274.

    [5]    Ritchie v Magree (1964) 114 CLR 173, 182; Fell v Fell (1922) 31 CLR 268, 273-4.

13. Insofar as is possible, a will is to be read so as to give effect to all of its provisions, and no word is to be treated as otiose unless to do so would violate the general purpose of the will or result in absurdity.

    The substitution clause

14. The first matter to be determined is whether clause 4 of the Will, which provides that issue of a beneficiary shall stand in the beneficiary’s place where that beneficiary predeceases the testatrix, allows for Philippa and Charles, as Walter’s issue, to inherit the whole of the testatrix’s estate.

15. It was agreed by all parties that clause 4 should not be construed so as to allow Philippa and Charles to receive the entirety of the testatrix’s estate.  The specific terms of clause 3 should prevail over the general terms of clause 4 in respect of the gift to Walter contained in clause 3.

16. In this case, in considering clause 3, it is clear that the testatrix wished her entire estate to pass to Walter, provided he survived her by a period of at least one calendar month.  In the event that he predeceased her, or did not survive her by the required period, the Will provides a particular method by which the testatrix’s residuary estate is to pass to the various beneficiaries named and referred to therein.  From this it can be inferred that the testatrix did not intend that her husband’s children should receive her entire estate in the event that Walter predeceased her.  To find otherwise would be to ignore the clear and specific directions for distribution of the testatrix’s estate provided in clause 3.

17. Further, if I were to interpret clause 4 in such a way as to allow Charles and Philippa to receive the entirety of the testatrix’s residuary estate, this would render sub-clauses 3(a) and (b) of no utility.  When construing the terms of a will, the Court should attempt to read it in a manner that gives effect to all words and provisions.[6]  An interpretation which gives effect (even if only partial) to all words and provisions is to be preferred over an interpretation which gives no effect to a provision or provisions.

    [6]    Re Hewitt [1945] SASR 102, 107.

18. I find that the provisions of clause 4 do not entitle Charles and Philippa to receive the gift to Walter provided for in clause 3.  I make this finding for the reasons that the specific term of clause 3 providing for distribution of the testatrix’s estate should her husband predecease her are to take precedence over the general terms of clause 4, and that to apply clause 4 would render the balance of clause 3 of no utility.  Sub-clauses 3(a) and (b) provide that the testatrix contemplated a particular method of distribution in the event that she was predeceased by her husband.  Upon reading the Will as a whole, I am satisfied that the testatrix did not intend the entirety of her residual estate to pass to Charles and Philippa in the event that Walter predeceased her.  Clause 4 is subordinate to clause 3 in the sense that it provides a mechanism for distribution of the testatrix’s residuary estate pursuant to sub-clauses 3(a) and (b).  Subject to the following findings, the residuary estate of the testatrix is to be distributed according to sub-clauses 3(a) and (b) of the Will.

    Siblings of the half blood

19. Counsel for the Public Trustee and counsel for the defendants each submit that siblings of the half blood are not beneficiaries under the Will.  It follows that Ross and Margaret are not entitled to a share of the testatrix’s residuary estate.

20. Absent any demonstrated contrary intention in a will, the general principle of construction is that brothers and sisters of the half blood fall within the description ‘my brothers and sisters’.[7]  This principle may be displaced where there is evidence that the testatrix had in mind a narrower class of persons than that ordinarily denoted by that phrase.[8]  In Lynneberg & Ors v Kildahl & Ors,[9]  the testator bequeathed a part of his estate to ‘my uncles and aunt on my mother’s side’.  The testator had one aunt of the whole blood, and two aunts of the half blood.  The court was required to determine whether he intended to benefit only his aunt of the whole blood, or also his two aunts of the half blood.  Gresson J decided that, by referring twice to his aunt in the singular, the testator had demonstrated an intention to benefit only his aunt of the whole blood.  He said:[10]

    … there is an insistence on “aunt” in the singular.  If it had occurred once only, it might have been regarded as a slip … This double use of the singular is indicative, I think, of the testator having in mind one aunt only.

    [7]    Lynneberg & Ors v Kildahl & Ors [1948] NZLR 297, 209; Grieves v Rawley (1852) 68 ER 840, 841.

    [8]    Lynneberg & Ors v Kildahl & Ors [1948] NZLR 297, 209.

    [9] [1948] NZLR 297.

    [10] Ibid, 211.

21. Gresson J decided that, having found the testator intended that a portion of his estate be bequeathed to one aunt only, the aunt in question must have been his aunt of the whole blood.

22. The Will uses the singular rather than plural to describe one of the beneficiary relationships.  Clause 3(b) bequeaths equal portions of the testatrix’s estate to ‘my mother … my brother and sisters and nephews and nieces as shall be living at my death …’ [emphasis added].  At the time of making her Will, the testatrix had two living sisters and one living brother of the whole blood, and one each living brother and sister of the half blood.

23. There is only one reference in the Will to the testatrix’s brother.  I have considered whether the singular use of the term ‘brother’ is a slip, or an example of loose drafting.  I reject that possibility.  Only the reference to the testatrix’s brother is in the singular.  I conclude that the testatrix intended by this reference in the singular to confine the class of beneficiaries under her Will to Colin, her brother of the whole blood, thereby excluding Ross.

24. As to the reference in the Will to sisters, although there is nothing in the description ‘sisters’ to point towards an intention to exclude a sister of the half blood, in my view the term ‘sisters’ is to be interpreted so as to mean ‘sisters of the whole blood’, in order to maintain conformity with the meaning ascribed to ‘brother’.[11]

    [11] Ibid, 211.

    Nephews and nieces of the half blood

25. Having determined that it was the testatrix’s intention to benefit only siblings of the whole blood, I conclude that it would be inconsistent to interpret ‘nephews and nieces’ to include nephews and nieces of the half blood.  I have so concluded, notwithstanding what may be regarded as the general principle that the term ‘nephews and nieces’ includes nephews and nieces of the half blood.[12]  In the present case, if nephews and nieces of the half blood were entitled to share in the estate it would have the result that Ross and Margaret do not benefit under the Will, while Margaret’s children do.  I consider that this result was not intended by the testatrix.  The Will is to be read as a whole and, as far as possible, in a manner that is internally consistent.  Given that I have found siblings of the half blood are not entitled to take under the Will, I also find that nephews and nieces of the half blood are similarly not entitled.

    [12] Grieves v Rawley (1852) 68 ER 840, 841.

    ‘Issue’ in clause 4

26. I am required to determine how the term ‘issue’ in clause 4 is to be construed.  If it is construed narrowly, it will be taken to mean ‘a child or children of the deceased beneficiary’.[13]  If construed broadly, ‘issue’ will mean all lineal descendants of a deceased beneficiary.  Usually, ‘issue’ bears the broad construction,[14] but it may be held to bear the narrow construction depending upon the context in which it is used.

    [13] Re Wardle (1979) 23 SASR 214.

    [14] Matthews v Williams (1941) 65 CLR 639, 650.

27. Counsel for the defendants submits that ‘issue’ ought to be interpreted as referring to a child or children of the deceased beneficiary, not the lineal descendants of a deceased beneficiary.  This outcome, it is submitted, is more consistent with the reference by the testatrix in clause 4 to issue taking the interest of a ‘parent’.  Counsel further submits that the specific inclusion of nephews and nieces as beneficiaries under sub-clause 3(b) of the Will supports the restricted construction of ‘issue’ as referring only to children of beneficiaries under the Will.  The defendants therefore seek that the entirety of Gertrude’s share be distributed to Jacqueline, as she is Gertrude’s only surviving child.[15]

    [15] Defendant’s Written Submissions, 6-8.

28. Should I construe ‘issue’ in a narrow manner, Gertrude’s share of the testatrix’s residuary estate will pass in its entirety to Jacqueline, who is her only surviving child.  Ruth and Colin’s respective shares as siblings of the whole blood will pass to their surviving children.  Should I adopt the broad approach to the construction of the term ‘issue’, Gertrude’s share will be divided per stirpes in thirds among Jacqueline, Ruth’s children and Colin’s children.   The children of Ruth and Colin will be entitled to a portion of Gertrude’s share of the residuary estate by virtue of clause 4, as they will fall within the broad construction of ‘issue’ of a deceased beneficiary.

29. Clause 4 provides that issue of a deceased beneficiary:

    … shall stand in the place of his, her or their deceased parent and take per stirpes and equally between them the share of and interest in [the testatrix’s] estate which such deceased parent would have taken had he she or they survived [the testatrix] and attained a vested interest.

30. The use of the phrase ‘his her or their deceased parent’ may be an indication that the testatrix intended to displace the usual meaning of ‘issue’, and use that term in a more confined manner.  However, as Cox J observed in Re Wardle:[16]

    … a reference to the parents of issue will not necessarily confine the issue to one generation.

    He stated:[17]

    [I]t comes back then, to, collecting the testator’s meaning from the expressions he has used in this and other parts of the will.

    [16] (1979) 23 SASR 214, 219.

    [17] Ibid.

1. This restates the general principle that the written terms of the Will must be carefully examined to determine the testatrix’s intentions.  Both Matthews v Williams[18] and Buick v Equity Trustees[19] make it clear that ‘parent’ may have what is referred to as a ‘sliding’ application.  That is, the term refers and relates to each parent of each successive generation, not necessarily only the parent specifically named as a beneficiary of the Will.[20]

   [18] (1941) 65 CLR 639, 653-4.

   [19] (1957) 97 CLR 599, 603 and 607.

   [20] Re Carrig (Deceased) [1972] VR 655, 657.

2. There is nothing in the Will to indicate whether the testatrix intended ‘issue’ to bear a broad or narrow meaning.  I am not persuaded that the use of the term ‘parent’ in clause 4 demonstrates an intention to invest ‘issue’ with a narrow meaning.  I conclude that ‘issue’ in clause 4 should be read to include all lineal descendants.  Therefore, pursuant to the terms of clause 4, Ruth’s children and Colin’s children are entitled to receive a portion of Gertrude’s share of the testatrix’s residuary estate.

3. The interpretation of ‘issue’ I have adopted does not affect the persons to whom shares of the estate will be distributed, but does affect the amount each beneficiary receives.  In the event that Jacqueline, as the sole surviving child of Gertrude, takes her share and the entirety of Gertrude’s share, she will receive a one-fifth share of that part of the estate.  However, if Gertrude’s share is to be divided per stirpes among the issue of her children, pursuant to clause 4, then it is necessary to split her share into equal thirds.  I have, therefore, divided the relevant share into 60 units for the purpose of calculating each beneficiary’s entitlement.  In this instance, Jacqueline will receive one-third, Ruth’s children will share equally in one-third, as will Colin’s children. 

4. Even on the broad construction given to ‘issue’, Charles and Philippa are not entitled to a share of Gertrude’s interest in the residuary estate.  They are issue of Walter’s first marriage and, as such, are not issue of the testatrix.

   Distribution per stirpes

5. Clause 4 provides that distribution amongst issue of deceased beneficiaries shall be per stirpes.  Distribution per stirpes refers to the equal distribution of an estate among branches or ‘stocks’ of beneficiaries.  Different stocks are likely to have different compositions, and once the initial equal distribution has been made it is likely that the manner in which each portion is divided amongst members of the stock will differ.  In this case, a stirpital distribution would result in Ruth’s children each receiving one-quarter of Ruth’s share of the testatrix’s residuary estate, and Colin’s children receiving one-half of his share of the testatrix’s residuary estate.

6. It is a characteristic of a distribution per stirpes that remote descendants do not take in competition with more immediate living descendants.  In Matthews v Williams,[21] the High Court stated:[22]

   [I]t is well settled that a course of distribution according to the stocks implies that descendants of a lower degree are not let in to compete with any ancestor of theirs, parent, grandparent, et cetera, but only by way of representation of a deceased ancestor.

   [21] (1941) 65 CLR 639.

   [22] Ibid, 653

7. In the present case, this means that Ruth’s children would not be entitled to share in a distribution per stirpes in the event that Ruth had not predeceased the testatrix.  The same situation would obtain in respect of Colin’s children had Colin not predeceased the testatrix.  Similarly, if Jacqueline had children, they would not be entitled to share in any distribution made pursuant to the substitution provision of clause 4, as she survived the testatrix.

8. Counsel for the defendants proposed a model for the division of the residuary estate based on breaking the remaining half after distribution to Charles and Philippa into 40 equal units.  For the reasons I have given, and for the ease of calculation, I will divide the remaining half of the residuary estate into 60 equal units.

9. Jacqueline will receive six units out of 60 as a sister of the whole blood of the testatrix.  She will receive a further two units out of 60, being one-third of the share that would have gone to Gertrude had she not predeceased the testatrix.  Jacqueline will receive a total of eight units out of 60.

10. James, Cynthia, Frederick and Barbara will each receive six units out of 60 as nephews and nieces of the whole blood of the testatrix.  They will each receive a further 1.5 units out of 60, being an equal division between them of the share that would have gone to Ruth as a sister of the whole-blood.  Further, they will each receive 0.5 of a unit out of 60, being one-quarter of a one-third share of Gertrude’s share of the testatrix’s residuary estate.  They receive this share by virtue of clause 4.  James, Cynthia, Frederick and Barbara will each receive a total of eight units out of 60.

11. Mark and Andree will each receive six units out of 60 as nephews and nieces of the whole blood of the testatrix.  They will each receive a further three units out of 60, being an equal division between them of the share that would have gone to Colin as a brother of the whole blood.  Further, they will each receive one unit out of 60, being one-half of a one-third share of Gertrude’s share of the testatrix’s residuary estate.  They receive this share by virtue of clause 4.  Mark and Andree will each receive ten shares out of 60.

    Orders

12. I make the following orders:

    1.That one-half of the residuary estate of Rae Margaret Rutt pass to Charles Collins Leighton Rutt and Philippa Prentice Shepherd for their own use and benefit absolutely as tenants in common.

    2.That the remaining half of the residuary estate be divided into 60 equal units and distributed among the beneficiaries as follows:

    Jacqueline Nance Loney:   Eight units out of 60.

    James Lloyd:  Eight units out of 60.

    Cynthia Lloyd:  Eight units out of 60.

    Frederick Lloyd:                 Eight units out of 60.

    Barbara Lloyd:  Eight units out of 60.

    Mark Loney:  Ten units out of 60.

    Andree Loney:  Ten units out of 60.

    The beneficiaries are to receive their respective shares of the testatrix’s residuary estate for their own use and benefit absolutely as tenants in common.

13. The costs of all parties are to be borne by the estate.

    APPENDIX 1