Re Cobcroft

[2015] NSWSC 346

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Re Cobcroft [2015] NSWSC 346

Hearing dates:

23 February 2015

Date of orders:

01 April 2015

Decision date:

01 April 2015

Jurisdiction:

Common Law

Before:

Young AJA

Decision:

1. Will constructed
2. Applications for rectification of wills dismissed.
3. Other applications dismissed.
4. Adjourn the matter for short minutes of order and arguments as to costs to 2pm on 26 May 2015 before Young AJA.

Catchwords:

WILL CONSTRUCTED – applications for rectification of wills dismissed – other applications dismissed

Legislation Cited:

Probate and Administration Act 1898
Succession Act 2006 (NSW)

Cases Cited:

Application of Spooner; the Estate of David (Hodgson J, 28 July 1995, unreported)
Baird v Smee [2000] NSWCA 253
Bigg v Queensland Trustees Ltd [1990] 2 QDR 11
Birmingham v Renfrew (1937) 57 CLR 666
Cobcroft v Bruce [2013] NSWSC 774; (2013) 9 ASTLR 397
Estate of Cross (M McLelland CJ in Eq, 9 May 1996, unreported)
Gill v Gill (1921) 21 SR (NSW) 400
Gray v Perpetual Trustee Company Ltd [1928] AC 391
Hendry v Perpetual Executors & Trustees Association of Australia Ltd [1961] HCA 44; 106 CLR 256
In re Goodchild [1997] 1 WLR 1216
Rawack v Spicer [2002] NSWSC 849
Re Balcock [1968] 2 NSWR 697
Re Morgan [2015] NSWSC 194
Tantau v Macfarlane [2010] NSWSC 224

Texts Cited:

GL Certoma, The Law of Succession in New South Wales (2010, 4th edition, Law Book Company) [para 4.260]

Category:

Principal judgment

Parties:

2013/00373067 (John’s Will)
(Plaintiff) Robert Ritchie Bruce
(Defendants 1-15) Nicklas William Baxter Cobcroft, David Gavin Baxter Cobcroft, Robert Charley, Helen Foote, Carole Byrnes, Peter Brown, Jennifer Menzies Cobcroft, Parraweena Pty Limited, Parraweena Highlands Pty Ltd, Daisy Evelyn Cobcroft, Jasper Nicklas William Cobcroft, Hermione Fiona Cobcroft, Benjamin William Baxter Cobcroft, Amanda Jane Cadwallader Cobcroft, Teya Ellie Cobcroft

First Cross-Claim
(Cross-Claimants 1-2) Nicklas William Baxter Cobcroft, David Gavin Baxter Cobcroft
(Cross-Defendants 1-14) Robert Ritchie Bruce, Robert Charley, Helen Foote, Carole Byrnes, Peter Brown, Jennifer Menzies Cobcroft, Parraweena Pty Limited, Parraweena Highlands Pty Ltd, Daisy Evelyn Cobcroft, Jasper Nicklas William Cobcroft, Hermione Fiona Cobcroft, Benjamin William Baxter Cobcroft, Amanda Jane Cadwallader Cobcroft, Teya Ellie Cobcroft

Second Cross-Claim
(Cross Claimants 1-6) Daisy Evelyn Cobcroft, Jasper Nicklas William Cobcroft, Hermoine Fiona Cobcroft, Benjamin William Baxter Cobcroft, Amanda Jane Cadwallader Cobcroft, Teya Ellie Cobcroft
(Cross Defendant) Robert Ritchie Bruce

2013/00373085 (Brien’s Will)
(Plaintiffs 1-3) Robert Ritchie Bruce, James Duncan Rae, Roger Audley Hann
(Defendants 1-15) Nicklas William Baxter Cobcroft, David Gavin Baxter Cobcroft, Robert Charley, Helen Foote, Carole Byrnes, Peter Brown, Jennifer Menzies Cobcroft, Parraweena Pty Limited, Parraweena Highlands Pty Ltd, Daisy Evelyn Cobcroft, Jasper Nicklas William Cobcroft, Hermione Fiona Cobcroft, Benjamin William Baxter Cobcroft, Amanda Jane Cadwallader Cobcroft, Teya Ellie Cobcroft

Second Cross-Claim
(Cross Claimants 1-6) Daisy Evelyn Cobcroft Cross, Jasper Nicklas William Cobcroft, Hermoine Fiona Cobcroft, Benjamin William Baxter Cobcroft, Amanda Jane Cadwallader Cobcroft, Teya Ellie Cobcroft
(Cross Defendants 1-3) Robert Ritchie Bruce, James Duncan Rae, Roger Audley Hann

2015/00044258 (Jennifer Cobcroft v Bruce)
(Plaintiff) Jennifer Menzies Cobcroft
(Defendant 1) Robert Ritchie Bruce
(Defendant 2) James Duncan Rae
(Defendant 3) Roger Audley Hann

Representation:

Counsel:
2013/00373067 (John’s will)
Mr NC Hutley SC with Mr M Green (Plaintiff)
Mr MS Wilmott SC (Defendants 1&2)
Mr R Wilson SC (Defendant 7)
Mr C Harris SC (For Michelle Anne Johnson Tutor for Defendants 10 to 15)
Other Defendants submit

2013/00373085 (Brien’s will)
Mr BJ Burke (Plaintiff)
Mr MS Wilmott SC (Defendants 1&2)
Mr R Wilson SC (Defendant 4)
Mr C Harris SC (For Michelle Anne Johnson Tutor for Defendants 10 to 15)
Other Defendants submit

2015/00044258 (Jennifer Cobcroft v Bruce)
Mr R Wilson SC (Plaintiff)

Solicitors:
2013/00373067 (John’s will)
Bruce & Stewart (Plaintiff)
Foulsham & Geddes PL (Defendants 1&2)
L Rundle & Co (Defendant 7)
Gordon Salier, Solicitor (for Tutor for Defendants 10 to 15)

2013/00373085 (Brien’s will)
Bruce & Stewart (Plaintiff)
Foulsham & Geddes PL (Defendants 1&2)
L Rundle & Co (Defendant 4)
Gordon Salier, Solicitor (for Tutor for Defendants 10 to 15)

2015/00044258 (Jennifer Cobcroft v Bruce)
L Rundle & Co (Plaintiff)

File Number(s):

2013/003730672013/003730852015/00044258

Judgment

1. HIS HONOUR: These reasons are provided with respect to three pieces of litigation. Here and throughout this judgment I will refer to people by their first name, without meaning any disrespect, because the surname in almost every case is Cobcroft. The three pieces of ligation are:

A.   2013/00373067 Bruce v Cobcroft – concerning the will of the late Gavin (John) Cobcroft [John].

B.   2013/00373085 Bruce v Cobcroft – concerning the will of the late Brien Cobcroft [Brien].

C.   2015/00044258 Cobcroft v Bruce – claims by Jennifer, the widow of Brien [Jennifer].

2. Case A involves questions as to the construction of clause 10 of John’s will. There are also two cross-claims. The first by the first and second defendants, the two sons of Brien, Nicklas and David. This cross-claim is for rectification of clause 10. The second cross claim by the six minor children of Nicklas and David, the eldest of whom is Daisy, is that John’s will of 27 May 2005 and Brien’s will of 1 August 2005 were mutual wills.

3. Case B involves some questions as to the construction of clauses 15 to 18 of Brien’s will. There are also two cross-claims analogous to those filed in respect of John’s estate.

4. In both Cases A and B, the plaintiffs are the executors or surviving executors of the will.

5. Case C is a claim by Jennifer under s 59 of the Succession Act 2006 (NSW) (a family provision claim) in respect of Brien’s estate. Case C only becomes a case that has to be tried if Jennifer is unsuccessful in Cases A and B.

6. I had previously heard proceedings involving John’s will when I had to construe clause 9. My judgment is [2013] NSWSC 774 and is reported (2013) 9 ASTLR 397. I refer to this later as “my former judgment”.

7. I heard the present three sets of proceedings together on 23 February 2015. Mr NC Hutley SC and Mr M Green appeared for the plaintiff in Case A. Mr BJ Burke appeared for the plaintiffs in Case B. Mr MS Willmott SC appeared for Nicklas and David and Mr Raoul Wilson SC appeared for Jennifer. Mr C Harris SC appeared for Daisy and those in like interests.

8. All counsel provided helpful written submissions. Mr Willmott’s submissions very helpfully set out the facts in a logical manner. I indicated at the hearing that I would adopt those facts if there was no objection, and there was none. Accordingly, with thanks to Mr Willmott for his industry, I set out the following statements of fact about which there is no contest.

(a)   Gavin John Baxter Cobcroft ('John'), who executed his last Will on 27 July 2005 and Codicil thereto on 24 August 2005, died on 5 September 2005; Probate of that Will and Codicil was granted to Denise Adele Cobcroft ('Denise'), Brien William Baxter Cobcroft ('Brien') and Mr Bruce (the plaintiff in proceedings 2013/373067) on 23 November 2005.

(b)   Denise was John's widow and Brien his brother.

(c)   Denise died on 13 May 2010 and Probate of her last Will dated 4 May 2010 was granted to her executors, Helen Foote, Robert Charley, Carole Byrnes and Peter Brown (the third defendants in both proceedings) on 15 February 2011.

(d)   Brien, who executed his last Will on 15 June 2010, died on 11 July 2010; Probate of that Will was granted to Mr Bruce, James Rae and Roger Hann (the plaintiffs in proceedings 2013/373085) on 3 September 2010.

(e)   John, as noted above, was survived by his widow, Denise, but had no children. Brien was survived by his wife, Jennifer Menzies Cobcroft ('Jennifer') who is the fourth defendant in both proceedings and his two children, Nicklas William Baxter Cobcroft ('Nicklas') and who is the first defendant in both proceedings and David Gavin Baxter Cobcroft ('David') and who is the second defendant in both proceedings.

(f)   John and Brien had for many years up to and before the former's death farmed two properties at Willow Tree known as "Parraweena" and "Parraweena Highlands". "Parraweena" comprised (and comprises) nine parcels of land — three of which were registered at all relevant times and up to the time of his death in John's sole name, two of which were registered at all relevant times and up to the time of his death in Brien's sole name and four of which were registered at all relevant times, and remain so registered, in the name of Parraweena Pty Limited. "Parraweena Highlands" comprised three parcels of land at all relevant times and up to the time of Brien's death registered in the name of Parraweena Highlands Pty Limited; after Brien's death Parraweena Highlands Pty Limited acquired a closed road so that now "Parraweena Highlands" comprises four parcels of land.

(g)   Up until the time of John's death, he, Brien, Parraweena and Parraweena Highlands conducted a grazing and cropping business known as "Parraweena Pastoral Co". After John's death, his executors and Brien agreed that the former's estate and the latter would each surrender their respective interests in that partnership to Parraweena Pty Limited and Parraweena Highlands Pty Limited as and from 1 July 2008 in satisfaction of debts owed by each to the partnership; so that, from that date the partnership has been conducted by Parraweena Pty Limited and Parraweena Highlands Pty Limited.

(h)   There is a homestead known as "Parraweena" situated on one of the parcels of land registered in the name of Parraweena Pty Limited. This was the residence of Brien and Jennifer at the time of John's death and Jennifer has, it seems, continued to live there since Brien's death.

(i)   At the time of John's death, the shares in Parraweena Pty Limited (which had been incorporated on 5 February, 1953) were held:

• John - 12,000 $2.00 ordinary shares partly paid to 10c each;

• Brien - 1 $2.00 ordinary fully paid share and 11,999 $2.00 ordinary shares partly paid to 10c each; and

• Langlo Pty Limited - 1,000 $2.00 ordinary fully paid shares.

(j)   At the time of John's death, the shares in Parraweena Highlands Pty Limited (which had been incorporated on 28 February 1977) were held:

• 1 ordinary fully paid $1.00 share held by GJB Cobcroft Pty Limited; and

• 1 ordinary fully paid $1.00 share held by BWB Cobcroft Pty Limited.

(k)   At the time of John's death, the shares in Langlo Pty Limited were held:

• John - 10 $1.00 ordinary fully paid shares;

• Brien - 10 $1.00 ordinary fully paid shares; and

• Bodumba Pty Limited - 30,800 $1.00 fully paid cumulative preference shares.

(l)   At the time of John's death, the shares in Bodumba Pty Limited were held:

• BWB Cobcroft Pty Limited - 1 ordinary fully paid $1.00 share and 52 $1.00 fully paid preference shares;

• GJB Cobcroft Pty Limited - 1 ordinary fully paid $1.00 share and 52 $1.00 fully paid preference shares;

• John - 3 fully paid preference shares and 100 'B' class $1.00 fully paid shares; and

• Brien - 3 fully paid preference shares and 100 'A' class $1.00 fully paid shares.

(m)   At the time of John's death, he held the controlling interest in the shareholding and management of GJB Cobcroft Pty Limited and Brien held the controlling interest in the shareholding and management in BWB Cobcroft Pty Limited.

9. I should add:

(n) Brien had previously been married to a lady named Jillian; and

(o) The executors have duly published their notices under s 92 of the Probate and Administration Act 1898.

10. All interested parties were joined: those whom I have not mentioned filed submitting appearances.

11. It is now necessary to set out part of John’s will and part of Brien’s will.

12. John’s will, so far as presently relevant provides,

“9.   I give to my wife DENISE ADELE COBCROFT:

(vi)   the dividends to which I or my estate may be entitled to receive from Bodumba Pty Limited which should be remitted to her at least every six months following my death;

….

10.   I direct that my Trustees maintain and preserve the interest that i own directly or indirectly with my brother Brien, in the rural properties known as "Parraweena" and "Parraweena Highlands", together with my interest in the business known as "Parraweena Pastoral Co" on the following terms and conditions:

….

(c)   to permit my brother Brien, the opportunity to manage such properties and business during his lifetime and upon his death or at his earlier request and direction to sell my interests in such properties and business and after payment of all of the charges upon such properties and business to hold the net proceeds then remaining as follows:

….

(iii)   to apply up to 15% of the net funds remaining to purchase a property and to insure, paint, maintain and keep in good repair the home and garden thereupon pay all rates and allow my brother to use that property for so long as they wish on the same terms as they would have been entitled to do had "Parraweena" not been sold.

(iv)   upon the death of my wife, my brother and his wife to sell any substituted properties acquired by my trustees pursuant to sub-paragraphs (ii) and (iii) hereof and then to hold the whole of the net proceeds then remaining both in respect of those properties "Parraweena", "Parraweena Highlands" and the assets of "Parraweena Pastoral Co" as follows:

A.	for my said nephew David William [Gavin] Baxter Cobcroft on condition that he applies out of such gift sufficient funds to provide for the maintenance, education and well being of his children	Twenty five percent (25%) of such net proceeds
B.	for my said nephew Nicklas William Baxter Cobcroft on condition that he applies out of such gift sufficient funds to provide for the maintenance, education and well being of his children	Twenty five percent (25%) of such net proceeds
C.	for each of the children of my said nephews David William Baxter Cobcroft and Nicklas William Baxter Cobcroft provided that they attain the age of twenty five (25) years and establish to the satisfaction of my trustees that they have not been convicted in a competent Court of an indictable offence involving the use of, or trafficking in, a prohibited drug, and that they are not addicted to the use of such substance.”	An equal part to the remainder of such net proceeds as is available, to those entitled under this provision as at the date that their interest vests.

13. Brien’s will is, so far as presently relevant provides,

“15.   I GIVE to my wife JENNIFER MENZIES COBCROFT the following:

(a)   my property at 102 Windsor Road, Paddington together with all of the furnishings, fittings and other contents thereof;

(b)   all my interest and entitlement to both capital and income in the Superannuation Fund that I created prior to 30 June 2007;

(c)   all of my shares in Bodumba Pty Limited;

(d)   all the public company shares registered in my name, or held in trust for me, as at the date of my death, together with the dividends or any further shares that may be issued by such companies after my death and prior to the transfer of such interests to her;

(e)   such motor vehicles as may be registered in my name as at the date of my death; and

(f)   except for my interest in Parraweena Pty Limited and Parraweena Highlands Pty Limited dealt with under Clause 18 hereof, the rest and residue of my Estate.

AND I direct that my Trustees otherwise make the following arrangements for the benefit of my said wife JENNIFER MENZIES COBCROFT:

g)   to cause Bodumba Pty Limited and/or "Parraweena Pastoral Co" to pay to her during her lifetime the sum of One thousand Dollars ($1,000.00) per week indexed by reference to movements within the Consumer Price Index (All Groups) Sydney from the date of my death; and

(h)   to ensure the right to live in and reside in our home at "Parraweena" Willow Tree for as long as she wishes to do so, and in such period to hold that property insured and maintain such home and its gardens.

16.   SUBJECT to the provisions of the Will of my late brother Gavin John Baxter Cobcroft ["John"] (identified in clause 4 hereof) I GIVE to my son NICKLAS WILLIAM BAXTER COBCROFT ["Nicklas"] all my right title and interest in the lands, which are registered in my name or held on my behalf through corporations of which I am a shareholder, that comprise the rural property known as "Parraweena" Willow Tree, conditional upon Nicklas satisfying my Trustees that he will respect and honour the provisions of John's Will in relation to the balance of the lands that comprise "Parraweena" and "Parraweena Highlands" which are presently held by the Trustees of John's estate, and further that Nicklas will adjust to the satisfaction of my Trustees the monetary imbalance between himself and his brother DAVID GAVIN BAXTER COBCROFT under this clause and clause 17 hereof.

17.   SUBJECT to the provisions of John's Will I GIVE to my son DAVID GAVIN BAXTER COBCROFT ["David"] all my right title and interest in the lands, which are registered in my name or held on my behalf through corporations of which I am a shareholder, that comprise the rural property known as "Parraweena Highlands" Willow Tree, conditional upon David satisfying my Trustees that he will respect and honour the provisions of John's Will in relation to the balance of the lands that comprise "Parraweena" and "Parraweena Highlands" which are presently held by the Trustees of John's estate.

18.   I DIRECT my Trustees to participate in and continue the operation of the business known as "Parraweena Pastoral Co" after my death for as long as practicable and during such time to ensure that the provisions that I have made for my wife, JENNIFER MENZIES COBCROFT, under clause 15(g) and (h) of this Will are complied with. I FURTHER DIRECT that my Trustees should in their discretion assist in the ultimate orderly administration of and winding up of the said business and that they should distribute the remaining assets thereof through the corporations which are the principals thereof, either in specie or otherwise, equally between my said sons DAVID GAVIN BAXTER COBCROFT and NICKLAS WILLIAM BAXTER COBCROFT as tenants in common in equal shares PROVIDED THAT from the time that the gifts made under this clause vest or my Trustees wind up the business, or they retire from office whichever shall first occur THEN my said sons or the survivor of them shall have the obligation to honour the gifts made by me in favour of my said wife JENNIFER MENZIES COBCROFT under clause 15(g) and (h) hereof.”

14. The only matter of fact that I should make clear is that under John’s will in clause 9 (vi) his widow Denise was to receive the income from Bodumba Pty Limited. Under Brien’s will, his shares in Bodumba Pty Limited passed to Jennifer as well as the direction that the Trustees should cause Bodumba Pty Limited or Parraweena Pastoral Co to pay Jennifer during her life one thousand dollars ($1,000.00) per week, indexed.

15. I now turn to the questions which I am asked to answer. In Case A they are (a) to (f ) as follows:

(a)   On the true construction of clause 10 of the said will, what interests of the deceased in the properties known as "Parraweena" and "Parraweena Highlands" are the subject of the direction to sell contained in subclause 10(c) of the said will?

(b)   On the true construction of clause 10 of the said will, and in the events which have happened, what interest of the deceased, if any, in the business known as "Parraweena Pastoral Co" is subject to the direction to sell contained in subclause 10(c) of the said will?

(c)   On the true construction of sub-clause 10(c)(iv) of the said will, what is the earliest time at which the executor can distribute the net proceeds referred to in the sub-clause or any part thereof to any of the beneficiaries mentioned in sub-clauses 10(c)(iv) A, B and C?

(d)   On the true construction of sub-clause 10(c)(iv) A of the said will, what interest, if any, do the thirteenth, fourteenth and fifteenth defendants take under the sub-clause?

(e)   On the true construction of sub-clause 10(c)(iv) B of the said will, what interest, if any, do the tenth, eleventh and twelth [sic] defendants take under the sub-clause?

(f)   On the true construction of sub-clause 10(c)(iv) C of the said will:

(1)   is the fund the subject of the sub-clause, 50% of the whole of the net proceeds of sale referred to in the opening paragraph of sub-clause 10(c)(iv) or some other fund and, if so, which fund?

(2)   when do the gifts made in the sub-clause vest in interest?

(3)   how does the sub-clause operate to determine what portion of the net proceeds the subject of the clause will vest in interest in any of the tenth to fifteenth defendants inclusive?

16. In Case B, they are (a) to (m) as follows:

(a)   On the true construction of sub-clause 15(g) and clause 18 of the said will, and in the events which have happened, are the plaintiffs obliged to cause Bodumba Pty Ltd and, or in the alternative, Parraweena Pty Ltd and Parraweena Highlands Pty Ltd as the partners of the partnership known as "Parraweena Pastoral Co", to make the weekly payments to the seventh defendant referred to in the said clause 15(g)?

(b)   If the answer to (a) is in the affirmative, during what period are the plaintiffs obliged to cause the said payments to be made to the seventh defendant?

(c)   On the true construction of sub-clause 15(h) and clause 18 of the said will, what comprises the residence referred to as "our home at "Parraweena" Willow Tree" in sub-clause 15(h)?

(d)   On the true construction of sub-clause 15(h) and clause 18 of the said will, are the plaintiffs obliged to ensure that the seventh defendant has a right to live in and reside for as long as she wishes in the residence identified in the answer to (c) above?

(e)   If the answer to (d) above is in the affirmative, on the true construction of the said will what part of the estate of the deceased is liable to pay for the insurance of the residence identified in answer to (c) above and for the maintenance of the said residence?

(f)   On the true construction of clause 16 of the said will, what right, title and interest of the deceased in the lands, known as "Parraweena", Willow Tree, are the subject of the gift to the first defendant contained in the said clause?

(g)   On the true construction of clause 17 of the said will, what right, title and interest of the deceased in the lands, known as "Parraweena Highlands", Willow Tree, are the subject of the gift to the second defendant contained in the said clause?

(h)   If any lands are identified in answer to (f) above as being the subject to the gift contained in clause 16 of the said will, on the true construction of the said clause and in the events which have happened, what is the meaning of the words "conditional upon Nicklas satisfying my Trustees that he will respect and honour the provisions of John's Will in relation to the balance of the lands that comprise "Parraweena" and "Parraweena Highlands" which are presently held by the Trustees of John's estate, and further that Nicklas will adjust to the satisfaction of my Trustees the monetary imbalance between himself and his brother DAVID GAVIN BAXTER COBCROFT under this clause and clause 17 hereof ?

(i)   If any lands are identified in answer to (g) above as being the subject of the gift contained in clause 17 of the said will, on the true construction of the said clause and in the events which have happened, what is the meaning of the words "conditional upon David satisfying my Trustees that he will respect and honour the provisions of John's Will in relation to the balance of the lands that comprise "Parraweena" and "Parraweena Highlands" which are presently held by the Trustees of John's estate"?

(j)   On the true construction of clause 18 of the said will, and in the events which have happened, are the plaintiffs obliged to participate in and continue the operation of the business known as "Parraweena Pastoral Co"?

(k)   If the answer to (j) is in the affirmative, on the true construction of clause 18 of the said will, and in the events which have happened, during what period should the plaintiffs participate in and continue the operation of the said business?

(I)   On the true construction of clause 18 of the said will, and in the events which have happened, what is the meaning of the words "I further direct that my Trustees should in their discretion assist in the ultimate orderly administration of and winding up of the said business and that they should distribute the remaining assets thereof through the corporations which are the principals thereof, either in specie or otherwise, equally between my said sons DAVID GAVIN BAXTER COBCROFT and NICKLAS WILLIAM BAXTER COBCROFT as tenants in common in equal shares"?

(m)   On the true construction of clause 18 of the said will, and in the events which have happened, if it is found that any gift or gifts of property are made under the clause to the first and second defendants, do the words contained in the said clause "then my said sons or the survivor of them shall have the obligation to honour the gifts made by me in favour of my said wife JENNIFER MENZIES COBCROFT under clause 15(g) and (h) hereof annex any conditions to the said gift or gifts, and, if so, what are those conditions?

17. After the proceedings were commenced, Mr Hutley SC gave a comprehensive opinion. I have not seen that in accordance with the usual procedure in will construction cases, but it would seem that all other counsel agreed with almost everything that Mr Hutley SC had written. Two consequences flow from this. First, because all the eminent counsel in this case agree on the answer and my consideration of their written and oral submissions confirm that they were correct in taking this course, I can very briefly answer most of the questions which are posed. The second is a point raised by Mr Willmott and supported by Mr Wilson that these proceedings which were initially listed for three days (but which were heard in one), were overkill. The Trustees should merely have sought judicial advice and that the extra costs should not be borne by the residuary beneficiaries. I will come to this in due course.

18. So far as questions of construction in John’s will are concerned, the focus is on John’s Bodumba shares. He held a hundred B shares and three preference shares. In his will these pass to Denise, in Denise’s will they pass to Brien, in Brien’s will they pass to Jennifer. Mr Hutley SC poses the question “did the act of distribution by John’s executors comply with the will which preserved his interest in the Parraweena properties?”. Mr Hutley SC submits that the answer to this question is, “yes”. Basically this is because the hundred B shares had no substantial rights, no interest in capital and the three preference shares were really just vehicles for dividends. Mr Wilson would agree with this. Mr Willmott, on the other hand, submits, though I must confess, relatively faintly, that the Bodumba shares were part of the gift of the testator’s direct or indirect interest in Parraweena or the Parraweena Highlands.

19. I need accordingly to turn to questions (a) and (b) in John’s estate.

20. As noted in fact (f) above, at the date of John’s death, Parraweena comprised land in nine titles, three of which were in John’s sole name, two in Brien’s sole name and four in the name of Parraweena Pty Ltd. Parraweena Highlands Pty Ltd was the proprietor of the whole of Parraweena Highlands.

21. The two properties were also worked in partnership by the various interests of which John and Brien were equal venturers.

22. It is thus clear that John did not own the whole of the land comprising Parraweena or Parraweena Highlands in his own right, neither did Brien.

23. What then does the gift to the Trustees to “maintain and preserve the interests that I own directly or indirectly with my brother Brien in the rural properties known as “Parraweena” and “Parraweena Highlands” together with my interests in the business known as “Parraweena Pastoral Co” cover?

24. There are a number of cases where a testator has purported to give land in his will whereas in fact he did not own the land but a company which he wholly owned had the title to it and the courts have had no difficulty in holding that the expression, the gift of my real estate, passed the shares in the company. The most prominent examples are Hendry v Perpetual Executors & Trustees Association of Australia Ltd [1961] HCA 44; 106 CLR 256 and Re Balcock [1968] 2 NSWR 697.

25. It would seem quite clear under this principle, and indeed, it was not seriously contended otherwise that John’s shares in Parraweena Pty Ltd and Parraweena Highlands Pty Ltd pass under this gift. There was no argument that John’s shares in Langlo Pty Ltd fell into the same category as did the one share his company GJB Cobcroft Pty Ltd had in Parraweena Highlands Pty Ltd also passed. The disputed question was that whether the shares in Bodumba also passed.

26. Nicklas and David say that those shares did so pass. This is strongly resisted by Jennifer who is otherwise the proprietor of the shares.

27. The facts are that Bodumba holds public company shares said to be worth about 3.2 million dollars. It has substantial cash holdings as well as a loan to the Parraweena group. Bodumba also holds 30,800 cumulative preference shares in Langlo Pty Ltd. Langlo Pty Ltd owns 1,000 fully paid shares in Parraweena Pty Ltd.

28. Mr Wilson submits that the link between Bodumba and Parraweena is too remote to characterise John’s interest in Bodumba as an indirect interest in Parraweena. Bodumba’s only interest is to a fixed culmulative preference dividend and a right of return of $30,800 capital. As I noted earlier, Mr Hutley SC agrees with this.

29. Having read the written submissions and re-read the transcript of the oral submissions, it does not seem to me that there is much logical opposition to this position. It seems to me that it is too remote. Furthermore, the position put forward by Mr Wilson is supported by clause 9(vi) of John’s will which makes provision for the dividends of Bodumba to flow to his widow Denise.

30. Accordingly, I can answer questions (a) and (b), “the land holdings of the Trustee in Parraweena Pty Ltd and Parraweena Highlands Pty Ltd and his shares in Parraweena Pty Ltd and Parraweena Highlands Pty Ltd and Langlo Pty Ltd and the one share that GJB Cobcroft Pty Ltd held in Parraweena Highlands Pty Ltd”.

Question (c)

31. It is now agreed that the answer to this question is “on the death of Jennifer”.

Questions (d) and (e)

32. These questions relate to paragraph 10(c) A and B of the will which essentially provide that the net proceeds of sale of the Parraweena properties are to pass to David and Nicklas “on condition” in each case “that he applies out of such gifts sufficient funds to provide for the maintenance, education and well being of his children. The persons affected are Daisy, her siblings and cousins, being children of Nicklas and David for whom Mr Harris appears.

33. In his written submissions, Mr Willmott puts that there are two possible constructions of these gifts. First, that the words are merely precatory. Secondly, that there is some sort of Gill v Gill (1921) 21 SR (NSW) 400 condition, such as I held to be the case in my former judgment with respect to clause 9 of John’s will. Mr Willmott puts that the words are merely precatory. He submits (vide page 12 of his written submissions) that if there was a Gill v Gill condition, so that equitable obligations were imposed on David and Nicklas to provide sufficient for their children, there are very great problems in working out what is meant by the words “sufficient funds” and for how long David and Nicklas will be liable to provide for maintenance, etcetera. There are no easy answers of Mr Willmott for these questions, so it is submitted that the better view is that the direction is precatory only.

34. I consider that this submission is correct. Indeed, I do not see any of the other counsel putting a significant argument to the contrary.

35. Accordingly, I answer this question, none, save that there is a moral obligation on the father of each of the sets of defendants to provide sufficient maintenance for them.

Question (f)

36. This question cannot be simply answered, indeed, with respect, the question does not really cover all the possibilities.

37. It is clear, as Mr Willmott submits, that the fund must be 50% of the net proceeds of sale of John’s interest in Parraweena and Parraweena Highlands because the other 50% of the proceeds are dealt with in clause 10(c)(iv)A and B.

38. The question asks when and how the gifts vest in interest. It is not clear to me whether this is meaningful in the present context.

39. The gifts are contingent upon the children to take, attaining 25 years and complying with the other clause about satisfying the trustees that they have not been convicted of indictable offence involving drugs. I agree with Mr Willmott that the class closes on Denise’s death so that only the six existing children can take. I also agree that the gift is a gift per capita, and not per stirpes.

40. Accordingly, as each of the 10th to 15th defendants attain 25 years and can satisfy the other conditions, they take a vested interest of one sixth. If some of those defendants fail to attain 25 then the other children will increase their share.

41. I now turn to the question of rectification of John’s will.

42. Because John and Brien died in different years, the case of rectification in John’s estate must be considered under s 29A of the Probate and Administration Act 1898, but in the case of Brien’s will the problem must be considered under s 27 of the Succession Act 2006.

43. There is a material difference in the two sections but it does not seem to me in the instant case that it affects the consideration of the problem.

44. In each case the rectification sought is to produce the same result that I have already reached in the case of John and, as will subsequently appear, have reached in the case of Brien, with the exception that the cross-claimant would have the shares in Bodumba included as well. If I were to make an order for rectification of the will then it would only be an order that excluded Bodumba.

45. Mr Willmott cites three cases which he says are authority for the proposition that “even if a construction of (the will) would produce the same result, it will nevertheless be appropriate to order rectification”. Application of Spooner; the Estate of David (Hodgson J, 28 July 1995, unreported); Rawack v Spicer [2002] NSWSC 849 (Campbell J) and Tantau v Macfarlane [2010] NSWSC 224 at [49] (Ward J). I should add the decision of Estate of Cross (M McLelland CJ in Eq, 9 May 1996, unreported).

46. With respect, I consider Mr Willmott has overstated the position. The question of rectification when construction could be enough was dealt with by Campbell J in the Rawack case at [25] where his Honour said:

it is possible for rectification of an unclear clause in the will to be granted ex abundanti cautela, where rectification makes clear the testator’s intention, even if the clause with the testator actually executed, on its proper construction, means the same as the clause that is rectified.

47. This makes it clear that the order for rectification is possible out of more abundant caution. It does not say that this is the ordinary result of a case where there is an obscure provision in the will that is capable of being construed that rectification must necessarily follow.

48. As I mentioned in Re Morgan [2015] NSWSC 194 at [5], the reason for making the rectification order is so that people searching in the future can see exactly what is meant by the will rather than have them have recourse to a judgment of the court. However, it is not good practice to combine a rectification suit with a construction suit because in a construction suit one is very limited by the rules as to when one may look to surrounding circumstances and direct evidence of intention. If one combines a rectification suit with a construction suit a whole lot of extra evidence can be admitted and can be the subject of cross-examination which leads to much longer proceedings and greater costs to the estate so there is less money to the beneficiaries. It is a matter for the discretion of the judge whether he or she will grant rectification when there is a fairly clear construction of the will.

49. In the present case, the construction is fairly clear. As Mr Wilson points out in his submissions, the test is not whether it is convenient that the will be rectified or that rectification would assist in the construction of the will, there needs to be material to suggest that the will contains an error or fails to carry out the testamentary intentions.

50. Whichever way one looks at it, the cross-claim for rectification should be dismissed.

51. I now turn to Brien’s will.

52. Mr Burke, for the plaintiffs suggests that the answers to the questions are as follows:

(a)   On the true construction of subclause 15(g) in clause 18 of Brien’s will and in the events which have happened, are the plaintiffs obliged to cause Bodumba Pty Ltd, or in the alternative, Parraweena Pty Ltd and Parraweena Highlands Pty Ltd as partners of the partnership known as “Parraweena Pastoral Co”, to make the weekly payments to the fourth defendant referred to in the subclause 15(g)? Answer: Yes.

(b)   If the answer to (a) is in the affirmative, during what period are the plaintiffs obliged to cause the said payments made to the fourth defendant? Answer: For the whole of her life or until the arrangement is terminated by consent or otherwise.

(c)   On the true construction of subclause 15(h) in clause 18 of the said will, what comprises the residents refer to as “our home at Parraweena Willow Tree” in subclause 15(h). Answer: the homestead and its curtilage.

(d)   On the true construction of subclause 15(h) and clause 18 of the said will, are the plaintiffs obliged to ensure that the fourth defendant has a right to live in and reside for as long as she wishes in the residence identified in the answer to (c) above. Answer: Yes.

(e)   If the answer to (d) above is in the affirmative, on the true construction of the said will, what part of the estate of the deceased is liable to pay insurance on the residents identified in the answer to (c) above and for the maintenance of the said residence. Answer: Parraweena Pty Ltd.

(f)   On the true construction of clause 16 of the said will, what right, title and interest of the deceased in the lands known as Parraweena “Willow Tree”, are the subject of the gift to the first defendant contained in the said clause. Answer: Brien’s interest as the proprietor of the lands of which he is the proprietor, if he was the proprietor at the date of his death constituting Parraweena as well as corporations (other than Bodumba Pty Ltd) which held direct or indirect interests in any of the real estate comprising Parraweena.

(g)   On the true construction of clause 17 of the said will, what right, type and interest of the deceased in the lands known as Parraweena Highlands Willow Tree are the subject to the gift of the first defendant contained in the said clause. Answer: As (f) mutatis mutandis.

(h) and (i)

(h)   If any lands are identified in answer to (f) above as being the subject to the gift in clause 16 of the said will, and on the true construction of the said clause and in the events which have happened, what is the meaning of the words “conditional upon Nicklas satisfying my trustees that he will respect and honour the provisions of John’s will in relation to the balance of the lands that comprise ‘Paraweena’, ‘Parraweena Highlands’ which are presently held by the trustees of John’s estate, and further that Nicklas will adjust to the satisfaction of my trustees the monetary imbalance between himself and his brother David Gavin Baxter Cobcroft under this clause and clause 17 hereof.

(i)   If any lands are identified in answer to (g) above as being the subject to the gift in clause 17 of the said will, and on the true construction of the said clause and in the events which have happened, what is the meaning of the words “conditional upon David satisfying my trustees that he will respect and honour the provisions of John’s will in relation to the balance of the lands that comprise ‘Paraweena’, ‘Parraweena Highlands’ which are presently held by the trustee of John’s estate?

53. Counsel’s submission generally speaking was, it is difficult to determine what Brien was stating in regard to these conditions. I cannot use that escape route but I can say “not answered”. The reason why I should say this is that it is really a matter for the future and a matter as to what the trustees in their bonafide yet otherwise subjective view take about the standard of satisfaction.

54. Assuming that the trustees take the view that although there are some lands involved by the time clause 16 and 17 take effect, the lands have been converted so that there is no need to satisfy any condition, one would have thought that the trustees would be justified in taking the assurance of Nicklas and David that they would respect and honour the provisions of John’s will.

55. So far as Nicklas is concerned in question (h), the testator’s scheme was that Nicklas would take Parraweena and David would take Parraweena Highlands. Parraweena Highlands appears to be less valuable than Parraweena so that Nicklas should pay owelty.

56. The will in clause 16 provides that the gift to Nicklas of Parraweena is “conditional upon” Nicklas satisfying the trustees about respecting John’s will “and further that Nicklas will adjust”. The “and further” does not seem to be part of the condition.

57. What then is the effect of the “and further”? It seems to me they have used a precatory condition that the testator desires that Nicklas put a proposal to David and the trustees as to how, in order to demonstrate some parity between the two devises, he will compensate David. However, it is not a condition of forfeiture nor even a Gill v Gill condition which would lead to equitable remedy.

58. As I say, the best response is “not answered” because so much depends on the attitude of the trustees and as to what evidence they will think themselves satisfied at the appropriate time. I may however, have given a hint which will be of guidance.

(j)   On the true construction of clause 18 of the said will, and in the events which have happened, are the plaintiff’s obliged to participate in and continue the operation of the business known as “Parraweena Pastoral Co”. Answer: All counsel agree the answer is yes.

(k)   If the answer to (j) is in the affirmative, on the true construction of clause 18 of the said will, and in the events which have happened, during what period should the plaintiffs participate in and continue the operation of the said business. Answer: The operation is to continue “as long as practicable”. In other words, it is not to continue longer than the time when it becomes non-viable. However, it is to continue at least until the trustees have satisfied Jennifer’s benefits under clause 15(g) and 15(h) of the will.

(l)   On the true construction of clause 18 of the said will, and in the events which have happened, what is the meaning of the words “I further direct that my trustees should in their discretion should assist in the ultimate orderly administration of and winding up of the said business and that they should distribute the remaining assets thereof through the corporations which are the principals thereof, either in specie or otherwise, equally between my said sons DAVID GAVIN BAXTER COBCROFT and NICKLAS WILLIAM BAXTER COBCROFT as tenants in common in equal shares”? Answer: Counsel agree, as do I, that the answer is “yes”, but there is an obligation of a Gill v Gill type to honour the gifts made in favour of Jennifer and the clauses 15(g) and 15 (h).

59. Three matters remain. (1) Jennifer’s claim under the Succession Act for provision out of the estate of Brien. (2) The second cross-claim filed in each set of proceedings alleging that John and Brien’s wills were mutual wills, and (3) how the costs of these proceedings should be borne.

(1)   So far as Jennifer’s claim under the Succession Act is concerned, on my construction of the will there is no suggestion that she is left without proper provision and accordingly, it would seem to me that this claim should be that this claim should be dismissed. It was always just a backup claim in order to protect Jennifer against a finding in the construction proceedings adverse to her.

(2)   Paragraph 7 of the pleading and particulars in each of the second cross-claim alleges that there was an agreement between John and Brien to include in their wills provisions which had the effect of

(a)   enabling the survivor of them, on the death of the first to die, to continue to operate the business on the properties, by utilising the deceased’s interests in the properties, the business and the assets, until the survivor died or decided that he did not wish to continue to do so;

(a1)   allowing their respective wives to live on “Parraweena” and “Parraweena Willow Tree” respectively for as long as they wished, or to require up to 15% of the proceeds of sale of the properties to be used to purchase other accommodation for them; and

(b)   if the survivor continued to operate the business on the properties until he died, and subject to the gift referred to in (a1) above, to then require the business, the assets and the properties to be sold and the proceeds of sale to be divided as to:

(i)   20% to Nicklas

(ii)   20% to David

(iii)   60% between such of Nicklas’ three children and David’s three children as attained the age of 25 years and was not convicted in a Court of an indictable offence involving drugs or addicted to drugs.

Particulars were that

The agreement was an express oral agreement or alternatively is to be inferred from the joint instructions for, and in the terms of, the wills which were then drafted by the solicitor as set out below.

Conclusion

60. There is no doubt on the authorities as to what a claimant has to establish for there to be mutual wills. The Court of Appeal dealt with it thoroughly in a short but unfortunately unreported judgment of Baird v Smee [2000] NSWCA 253.

61. It is however, helpful to start off with a general excursis of the law of mutual wills. As good as place as any to start is Certoma’s Law of Succession in New South Wales, Fourth Edition (Law Book Company, 2010) [paragraph 4.260]. The text (edited) reads:

where two persons make wills pursuant to an agreement as to the disposal of their property, such wills are referred to as mutual wills. … The essence of mutual wills is the agreement that neither party may revoke without the consent of the other. The agreement must be proved and thus the mere fact that two persons simultaneously make wills with similar provisions is not of itself evidence of such an agreement.

62. The principal authority cited for the last statement is Gray v Perpetual Trustee Company Ltd [1928] AC 391, the decision of the Privy Council upholding the decision of the High Court of Australia.

63. However, as McPherson J said in Bigg v Queensland Trustees Ltd [1990] 2 QdR 11 at 13 said:

Mutual wills are separate testamentary instruments of two individuals in reciprocal terms. The discovery that such wills have been executed by two or perhaps more persons has in itself no particular legal significance. … What matters is proof that the parties made an agreement to execute their wills in that form and that, expressly or by implication, they contracted not to revoke them.

See also In re Goodchild [1997] 1 WLR 1216 at 1225.

64. In Baird v Smee (supra) Mason P said at [5]:

To succeed in their claim the appellants must establish that Derek and Gwendoline had agreed not to revoke their mutual wills, at least without notice to the other, during their joint lives.

…

[6]   Two legal propositions are, in my view, clearly established:

(1) an express or implied agreement may be constituted or evidenced on the face of mutual wills;

(2) the mere fact that two persons simultaneously make wills with mutually similar provisions does not itself establish an agreement not to revoke.

Handley JA said at [24],

One may readily infer from the form of the wills, the history of their making and their simultaneous execution that Mr and Mrs McDonnell had agreed on the plan of distribution evidenced in their wills. However mere consensus is not enough. There is a legal presumption of some strength that informal agreements between spouses are not intended to be legally binding…

65. The key factual matter to be decided is whether an agreement not to revoke the wills can be inferred from the facts of this case including the terms of the will. Mr Harris, whose clients seek the declaration that there are mutual wills, puts that there are factors in this case that point strongly in that direction. First, he points out that this is not a case involving husband and wife so that any rule about not implying intention to create legal relations between husband and wife has no place. I would agree.

66. Secondly, in the present case the wills were made where one of the testators was suffering from a terminal illness with a very reduced life expectancy and indeed, John died several weeks after the 2005 will was signed.

67. Moreover, the brothers had not been ad idem as to the operation of Parraweena and its destiny after their deaths for some time. They were interviewed about the same time by the maker of the will and it is relatively clear that there was some compromise reached as to how they would leave the property and as a result of that compromise both modified their real desires and made wills that were complimentary to each other.

68. Mr Harris asked rhetorically would John have entered into such compromise and made wills unless there was an implied promise by Brien that he would not revoke his will?

69. These are telling points, however, on the other side we have the situation where an experienced will maker was drafting the wills, he was privy to all the matters that I have just covered, yet there is no clause in the will stating that the wills are mutual wills.

70. Furthermore, Brien’s will, as we have seen, shows that he expected that his sons would carry out his will, that they would honour Brien’s will and John’s will not only in the letter but in the spirit. The flavour then is that there is the hope expressed by the testator that his sons would honour the wills of himself and John rather than the will containing any legal binding obligation. John’s will, with the Gill v Gill condition in clause 9, dealt with in my earlier judgment, is in the same mold.

71. In a number of cases, claims that there are mutual wills have failed because the court has considered that the willmaker’s expectations were founded in honour only. Although the present is not a husband and wife case, I consider it is one where the obligations were binding in honour only.

72. The authorities stress that in this sort of case very strong evidence is required for a court to hold that there is mutual wills. As Dixon J said in Birmingham v Renfrew (1937) 57 CLR 666 at 681, with respect to an agreement to make mutual wills and not to revoke them, “such an agreement can be established only by clear and satisfactory evidence. It is obvious that there is a great need for caution in accepting proofs advanced in support of an agreement affecting and possibly defeating testamentary dispositions of valuable property”. See also Latham CJ to same effect at 674 where he refers to a “heavy burden of proof”. I am not satisfied that even accepting the circumstances focussed upon by Mr Harris that these wills are mutual wills. Accordingly, I should dismiss the second cross-claim.

73. Thirdly, the question of costs is going to be an awkward one. I am going to postpone that until counsel have had an opportunity to digest these reasons. However, I should make some comments which may assist counsel into seeing where my thinking is at present.

74. There is a great temptation in will cases to order that the costs come out of the estate. Particularly is that a temptation where this appears to be a wealthy estate.

75. However, as counsel for Jennifer and Daisy point out, to do that would be to cast the burden on the residuary estate which compared to other benefactions does not appear that great. It would seem to me that it is probably unfair to do that. However, the trustees are entitled to an indemnity. Mr Willmott says that they did not behave as one would expect and that they should have applied for judicial advice as to whether they would be justified in bringing these expensive proceedings or, at the very least, have obtained an opinion like that, that was eventually obtained from Mr Hutley SC before embarking on litigation. If they had done that, a great deal of costs would have been avoided and there is no reason why the beneficiaries should have to pay the extra costs. There is something in that point, but it does have to be balanced with others.

76. Again, the main debate, as things turned out was over whether the shares in Bodumba passed to the persons who were entitled to Parraweena and Parraweena Highlands. On that issue Nicklas and David were unsuccessful and Jennifer was successful and that must be taken into account when deciding on the proper order for costs.

77. The rectification suits failed and that should be at the cost of David and Nicklas.

78. The Family Provision claim by Jennifer was really a defence to the rectification suits or if an adverse finding was made on the construction suit: it was purely defensive. It probably should form part of the costs of the actions in John and Brien’s estate.

79. A challenge of mutual wills failed and costs should follow the event but they are only miniscule compared with the rest of the costs in the proceedings. With those comments I will leave it to counsel to provide submissions either in writing or orally or both as to what is the proper order for costs to be made and indeed they should also be given the task of preparing short minutes of the orders that I should make.

80. I will not be sitting again after this week until the week commencing the 11th of May 2015. It appears that I have half a day on the afternoon of May the 26th. The matter could be fixed for 2pm on that day but I will leave it to counsel to talk amongst themselves and with my associate as to when the matter can be returned to court, but for the purposes of the court computer I will formally now adjourn the matter for short minutes of order and arguments as to costs to 2pm on 26 May 2015 before me.

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Amendments

15 April 2015 - Typographical corrections in Coverpage fields (Parties, Solicitors); and in Judgment (paras 2, 7, 8(g)&(j), 9, 18, 24).

Decision last updated: 15 April 2015