Re Bell (No 4)

[2005] NSWSC 812

CITATION:	Re Bell (No 4) [2005] NSWSC 812
HEARING DATE(S):	08/03/05 [then written submissions]
JUDGMENT DATE :	11 August 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
DECISION:	Preliminary judicial advice given.

CATCHWORDS:	EQUITY [205]- Trusts- Advice to trustees- Nature of advice given. SUCCESSION [175] [214]- Surrender of life interests- Whether remainders accelerated- Whether acceleration advances date on which class closes. WORDS & PHRASES- "Next of kin being determined in accordance with laws of distribution on intestacy".
LEGISLATION CITED:	Conveyancing Act 1919, s 33 Trustee Act 1925, s 63 Wills Probate & Administration Act 1898
CASES CITED:	Bassett v Bassett (2003) 58 NSWLR 258 Deane v Lombe (1925) 25 SR (NSW) 502 Perpetual Trustee Company Ltd v Johnson (1977) 1 BPR 9345 Re Bonis Gilligan [1950] P 32 Re Morgan [1920] 1 Ch 196 Re Will of Cunliffe [1921] VLR 499
PARTIES:	Helen Mary Bell and Gemma Patricia Sherwood (P)
FILE NUMBER(S):	SC 3553/04
COUNSEL:	M A Bradford (P)
SOLICITORS:	Peacocke Dickens & Price (P)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 11 August 2005

3553/04 – RE BELL (NO 4)

JUDGMENT

1 HIS HONOUR: This is the fourth set of reasons concerning the will of the late John Gordon who died on 3 August 1963. The history of the matter is set out in my third judgment of 6 December 2004 and I will not repeat it.

2 The application before the Court is for judicial advice under s 63 of the Trustee Act 1925. The parties and persons interested in the estate have always taken the view that there are not sufficient funds to have the matter properly argued out by way of originating summons and the approach has been taken by consent of the trustees putting the facts before the Court and having the Court advise on them. As indicated in earlier judgments, I have reluctantly concurred in this.

3 I have previously set out the principal questions. What appears to remain is what steps should the trustees take to bring about final distribution of the capital and how should the capital be distributed.

4 In my reasons of December 2004 I thought I mapped out what was to happen, and that was: (a) the trustees would decide on a plan to wind up the trusts; (b) the trustees would obtain counsel's advice that it was appropriate to do so in that mode; and (c) the Court would be asked under s 63 of the Trustee Act to advise that it would be appropriate to take that course.

5 That is not actually what happened. Counsel's advice was sought,but it was not sought on any particular definite proposal, and somehow or other counsel appears to have thought that I had requested him to advise on the four questions that were put before the Court last year.

6 The matter has had such a history that I will not cause further problems by going back to taws. I will give reasons for my views on the principal problems that remain, publish my reasons and then stand the matter over for short minutes.

7 The trustees should then file an affidavit that they do (or do not) propose to distribute in accordance with the reasons of counsel and myself, and I will then formally advise them that they will be justified in doing so without the need for any further appearance in Court unless complications arise.

8 I do not propose to set out all the facts yet again. The problems have arisen because the scheme which the testator envisaged of retention of his grazing property for generations was frustrated as long ago as 1968, yet the trustees have valiantly attempted to keep to his wishes so far as they have been able to do so.

9 The will provided for life estates and gifts of income and there are two life tenants still in esse, Joan and Ellen. They are prepared to surrender their interests in income.

10 The first question that arises is whether this accelerates the remainders. I considered that matter in some of my earlier reasons; counsel considered it also and it seems clear, particularly in light of Bassett v Bassett (2003) 58 NSWLR 258, that the answer is "Yes".

11 The next question is whether acceleration also advances the date when the class closes. Again, although this is a little more doubtful, on the same authority, the answer is "Yes".

12 This then leaves the question as to the meaning of the definition of "next of kin" in the will, "such next of kin being determined in accordance with the laws of distribution on intestacy."

13 The question here is whether this phrase takes up the option set out in s 33 of the Conveyancing Act 1919 that next of kin means next of kin in accordance with the Wills Probate & Administration Act 1898, that is, common law next of kin plus spouse, or whether it refers to pre-Conveyancing Act laws as to distribution to next of kin.

14 Unfortunately, counsel does not answer this question in his advice, though there is a fairly strong flavour in the advice that the expression means the latter.

15 The key decision to consider is that of Holland J in Perpetual Trustee Company Ltd v Johnson (1977) 1 BPR 9345. In that case, a will made in 1936 left property to the testatrix's "next of kin according to the Statutes of Distribution". Holland J held that "statutes of distribution" with capital letters and "statutes" being in the plural referred to the English Acts of Charles II and James II and not to s 33 of the Conveyancing Act 1919.

16 At p 9349 his Honour made it clear that at common law the term "next of kin" referred to one's nearest blood relations and did not include a spouse.

17 Section 33(1A) of the Conveyancing Act 1919, as in force as at the date of death of the testator, provided that:

"Where … any property vests in
(a) the heirs of any person; or
(b) the next of kin of any person; or
(c) the next of kin of any person to be determined in accordance with the Wills Probate & Administration Act 1898,
the property shall vest in the persons who on the death of such person intestate would be beneficially entitled to his real and personal estate under Division 2A of Part II of the said lastmentioned Act, and in the same shares … ".

18 At p 9349 his Honour said:

"I think I may put aside at once decisions as to the meaning of words such as 'the persons or person who would at (the specified time) have been entitled under the statutes (or 'Statutes') for the distribution of the estates … of intestates' ".

His Honour referred to Re Morgan [1920] 1 Ch 196; Re Will of Cunliffe [1921] VLR 499 and Deane v Lombe (1925) 25 SR (NSW) 502. He continued:

"In a gift in such words, the reference to 'persons' generally rather than to 'next of kin' makes it possible to admit husbands and the reference to 'statutes (with or without a capital 'S') for the distribution of estates of intestates' makes it possible to say that no particular statutes were meant but that the statute law generally that governed distribution on intestacy at the relevant time was intended."

He then went on to say that the same latitude did not apply where the words "next of kin according to the Statutes of Distribution" were used.

19 I have seriously considered what counsel has said. With great respect, I cannot share his analysis of Holland J's decision. It seems to me, reading that decision and reading the decision of Pilcher J in Re Bonis Gilligan [1950] P 32 (a decision which was not in any way dependent on special legislation in England), the way in which one construes the words "next of kin being determined in accordance with the laws of distribution on intestacy" is by reference to the laws relating to distribution on intestacy currently in force in the relevant jurisdiction, namely NSW.

20 Accordingly, spouses receive a share.

21 If the trustees are content to recommend a proposal whereby the trust is to be ended and the capital distributed, it would follow that a distribution in accordance with paras 42(a), 43(a), 44(a), 45(a), 46(a) and 47(a) of counsel's advice would be appropriate.

22 Otherwise the views reached by learned counsel should be adopted.

23 Thus, if the trustees come to the view that that is the way in which they wish to determine the trust and distribute the remaining income and capital, they should amend the summons so as to ask the question as to whether they would be justified in carrying out that proposal and I will in chambers give the appropriate advice.

24 For computer purposes I better list the matter for the next time I am rostered as Duty Judge, namely 21 November 2005 at 9.50 am but hopefully the matter can be disposed of in chambers before that date.

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