Rainoldi v Rainoldi
[2015] WASC 312
•20 AUGUST 2015
RAINOLDI -v- RAINOLDI [2015] WASC 312
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 312 | |
| Case No: | CIV:1325/2014 | 22 JULY 2015 | |
| Coram: | MASTER SANDERSON | 20/08/15 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Will interpreted | ||
| B | |||
| PDF Version |
| Parties: | SALLY ANN RAINOLDI as Administrator of the will of STEVEN RAINOLDI (Dec) SALLY ANN RAINOLDI BARBARA ANN DUECKERSHOFF as Guardian Ad Litem for KAYLA JANE RAINOLDI MICHAEL STEVEN RAINOLDI TRACEY ANNE RAINOLDI |
Catchwords: | Administration of estate Proper interpretation of homemade will Turns on own facts |
Legislation: | Administration Act 1903 (WA) Partnership Act 1895 (WA) Wills Act 1970 (WA) |
Case References: | Gray v Gray [2013] WASC 387 Sier v Seikegba [2006] WASC 299 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
The will of Steven Rainoldi (Dec)
- Plaintiff
AND
SALLY ANN RAINOLDI
First Defendant
BARBARA ANN DUECKERSHOFF as Guardian Ad Litem for KAYLA JANE RAINOLDI
Second Defendant
MICHAEL STEVEN RAINOLDI
Third Defendant
TRACEY ANNE RAINOLDI
Fourth Defendant
Catchwords:
Administration of estate - Proper interpretation of homemade will - Turns on own facts
Legislation:
Administration Act 1903 (WA)
Partnership Act 1895 (WA)
Wills Act 1970 (WA)
Result:
Will interpreted
Category: B
Representation:
Counsel:
Plaintiff : Mr M S Macdonald
First Defendant : Mr P G McGowan
Second Defendant : No appearance
Third Defendant : Mr H O Moser
Fourth Defendant : Ms W F Gillan
Solicitors:
Plaintiff : Macdonald Rudder
First Defendant : Haynes Legal
Second Defendant : No appearance
Third Defendant : K G Sorensen
Fourth Defendant : Biddulph & Turley
Case(s) referred to in judgment(s):
Gray v Gray [2013] WASC 387
Sier v Seikegba [2006] WASC 299
1 MASTER SANDERSON: By originating summons issued 7 March 2014, the plaintiff as administrator of the estate of the late Steven Rainoldi sought certain directions under s 45 of the Administration Act 1903 (WA). Essentially the plaintiff sought an interpretation of a homemade will left by the deceased. By the time the matter reached a hearing, three of the five issues raised in the originating summons had fallen away. But, two issues remained. Before setting out these two issues I should state the relevant facts. There was no dispute between the parties to the facts.
2 The deceased died on 8 April 2011 leaving a will dated 13 July 2006. The will was homemade and appears to have been drafted after discussions between the deceased and the first defendant. Letters of administration with the will annexed were granted to the plaintiff, the deceased's de facto wife, on 29 May 2012. The third and fourth defendants are children of the deceased from a previous marriage. The second defendant is a child of the plaintiff and the deceased.
3 The plaintiff and the deceased lived together in a residence situated at 152 Holden Road Roleystone. The second defendant resided with them at all material times. As at the date of the will, the deceased had been diagnosed with life threatening cancer. The second defendant was then 9 years of age. The deceased and the plaintiff were operating an orchard business from the land in partnership.
4 It is convenient at this point to set out the terms of the homemade will. They are as follows:
1. I give the orchard property at 152, lot 10 Holden rd Roleystone equally to Sally Michael Tracey and Kayla Rainoldi.
2. The property cannot be sold until Kayla the youngest child reaches the age of twenty one and that all four parties be in agreement for the sale to proceed, and then divided four ways equally.
3. The orchard business partnership between Steven and Sally Rainoldi operating at Lot 10 Holden rd is to be continued by Sally Rainoldi and Sally is to stay as manager and caretaker of above property. The remuneration for managing the business and property is free lease of the house business land and all profit made from running the business. However she must meet all cost and upkeep of running the property, including the outstanding balance of the morgage (sic) to Mr Abele Rainoldi as in the agreement already set up by Steven and Abele Rainoldi on the 21st day of September 1995.
4. The condition of Sally Rainoldi having a fourth share in Lot 10 Holden rd is that she relinquishes her share in 11A 11B Damson Grove and 7B Kara crt Armadale, and the three properties to be given to Michael Tracey and Kayla Rainoldi, deciding each house by Balot and the remaining mortgage of each house divided equally between Michael Tracey and Kayla Rainoldi.
5. My share in the remaining two properties being 24 Freeduff drive Wattle Grove and 16 Raeburn rd Roleystone is to be given to Sally Rainoldi.
6. All plant and machinery to remain at lot 10 Holden rd until the property is sold.
5 The problems occasioned by this will are obvious on its face. Turning then to the originating summons, the plaintiff sought directions on five separate matters. They were as follows:
(1) Whether the first sentence in clause 3 of the Will the testator made an absolute gift of Lot 10 Holden Road, Roleystone to the plaintiff and the second, third and fourth defendants in equal shares and whether such gift was as tenants in common or joint tenants;
(2) Whether the gift to the plaintiff of an equal share in Lot 10 Holden Road, Roleystone is subject to the condition set out in the sixth sentence of Clause 3 of the Will or whether the condition is void;
(3) Whether the restriction on the sale of Lot 10 Holden Road, Roleystone imposed by the second sentence of Clause 3 of the Will is effective.
(4) Whether the provision as to the continuation of the business partnership between the testator and the plaintiff set out in the third, fourth, fifth and final sentences of Clause 3 of the Will is effective;
(5) Whether there is a partial intestacy as to the testator's interest in the business partnership between himself and the plaintiff.
6 The first three of these questions have now fallen away. The parties have been able to agree those issues among themselves. It is the final two questions which remain to be answered. Before dealing with those issues, I should set out briefly the legal framework pursuant to which this matter is to be determined. There was no disagreement between the parties as to the principles to be applied.
7 There are four overriding principles. First, in construing the will the object of the court is to ascertain the intention of the testator as expressed in the will. Second, the will must be read as a whole and in the light of the surrounding circumstances. Third, in relation to surrounding circumstances the 'armchair' principle permits the court to receive evidence of the state of the testator's family, his property, his friends and acquaintances in order that a court may read the will from the position of the testator making it, as if sitting in the testator's 'armchair'. Finally, prima facie, the words and phrases used in the will are to be given their ordinary meaning. These principles are drawn from a number of decisions which are summarised in the decisions of Sier v Seikegba [2006] WASC 299; Gray v Gray [2013] WASC 387.
8 In addition to the above, there is s 26 of the Wills Act 1970 (WA). That section provides, inter alia, that unless the contrary intention appears by the will the following general rules of construction apply:
(a) the will is to be construed, with reference to the property comprised in it, to speak and take effect as if it has been executed immediately before the death of the testator; and
(b) property that is the subject of a disposition that is void or fails to take effect is to be included in any residuary disposition.
9 Turning then to the questions raised. Issue four really is whether or not cl 3 in effect grants a lease over Holden Road to the plaintiff. It was the first defendant's submission that clause 3 of the will, in effect, granted a lease over Holden Road to the first defendant as manager or caretaker thereof. The first defendant acknowledged there was no express temporal limitation on the grant. However, it was submitted that it was possible to infer two such limitations. They were:
(a) until the first defendant was no longer able or willing to live at Holden Road; or
(b) until the first defendant was no longer able or willing to conduct the orchard business from Holden Road.
10 It was submitted that the intention to give the first defendant the use of the matrimonial home until she was either unable or unwilling to reside there is to be inferred from the provision of the will that, in effect gave the first defendant a veto on the sale of Holden Road. That veto was expressed to operate it seems, even if the gift to the first defendant of a 25% interest in Holden Road failed. The first defendant says that this is to be inferred from the prohibition on sale unless agreed by 'all four parties'. The effect of that provision was Holden Road could not be sold unless the first defendant and the deceased's three children agreed. Hence, a right of veto on the first defendant.
11 On behalf of the third and fourth defendants it was submitted the words 'the orchard business partnership between Steven and Sally Rainoldi operating at lot 10 Holden rd (sic) is to be continued by Sally Rainoldi' were not effective to continue the operating of the partnership after the death of the deceased. Nor, it was submitted, were they a gift of the testator's interest in the partnership to Sally Rainoldi or a right for Sally Rainoldi to run the business for life or until she chooses otherwise. Counsel submitted there were seven reasons why this was so.
12 First, there were no words of gift contained in cl 3. Second, there was no reference to any life interest in the clause. Third, any restrictions on sale are expressed in the context of a gift in cl 2 following on from cl 1 (when read in conjunction with the condition in cl 4). Fourth, the partnership was as a matter of law dissolved on the death of the testator: s 44(1) of the Partnership Act 1895 (WA). Fifth, it was said that the first sentence in cl 3 must be read in conjunction with the subsequent words of that sentence and the second sentence of cl 3. The effect of that, it was submitted, was to make the remuneration for managing the business and the property the free lease. Sixth, the property at Holden Road containing as it did, a house, a business and the land, required maintenance and upkeep and this led on to point seven. What the clause amounts to is a wish or a direction of the testator to his executor that the orchard as a business continue to operate and that it be operated by the first defendant so that the orchard, the business, and the land, could all be properly maintained until sold.
13 In my view, the submission that the partnership was dissolved on death of the deceased is correct. It is possible for a partnership agreement to provide that on death of one of the partners, the partnership will not be dissolved. But, there is no suggestion that was the case here. After the death of the testator, there was no partnership business to continue. The partnership would then have to be wound up and the assets distributed to the respective parties. Looked at in that light, I accept the submission of the third and fourth defendants that cl 3 did not establish an enforceable right, but rather a directional wish expressed to the executor of the estate that the executor may delay the winding up of the partnership and lease assets to enable the first defendant to undertake a role as manager and caretaker of the orchard, until the land was sold.
14 In my view, the first defendant's role as manager and caretaker does not require or suggest a construction of the will to the effect that she was gifted a life interest in the land, or the testator's share of the orchard partnership or the plant and machinery. In other words, the clause did not establish a lease interest in favour of the first defendant.
15 Given the way the argument played out in this matter, the fourth question posed by the originating summons is not happily worded. On publication of these reasons some consideration should be given to the wording of the question, but there should be no misunderstanding as to the conclusion I have reached. I am not satisfied that cl 3 creates any leasehold interest in favour of the first defendant.
16 As to question five, all parties agree that there was a partial intestacy as to the testator's interest in the business partnership between himself and the plaintiff. There is of course, no residuary clause in the will. However, there was a residuary question for determination. The condition in cl 4 of the will was not satisfied so that the first defendant did not take an interest in the Holden Road property pursuant to cl 1 of the will. The question was whether or not the interest she would otherwise have received passed to the second, third, and fourth defendants, or whether it was part of the residuary estate.
17 The answer, I think, is provided by s 26(1)(g) of the Wills Act. That section is in the following terms:
(g) if any part of a disposition in fractional parts of the whole or of the residue of the estate of a testator fails, the part that fails accrues to the part that does not fail, and, if there is more than one part that does not fail, to all those parts proportionately.
18 There was a distribution in cl 1 in fractional parts - the first to fourth defendants were to take a 25% interest each. It has failed. There were three parts that did not fail. Each of these should take proportionally more. Accordingly, in my view, there is no intestacy as to what would have been the 25% interest of the first defendant. Rather, each of the second, third and fourth defendants takes a one third interest in the property.
19 I will hear the parties as to the form of orders and as to costs.
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