Re Coghlan; Merriman v Attorney-General for the State of Victoria
[2020] VSC 392
•26 June 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2019 00896
IN THE MATTER of the estate of CHARLES CAMPBELL COGHLAN, deceased
| MARIE BERNADETTE MERRIMAN | Plaintiff |
| v | |
| ATTORNEY-GENERAL FOR THE STATE OF VICTORIA (and others according to the attached schedule) | Defendants |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 26 June 2020 |
CASE MAY BE CITED AS: | Re Coghlan; Merriman v Attorney-General for the State of Victoria |
MEDIUM NEUTRAL CITATION: | [2020] VSC 392 |
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EQUITY AND TRUSTS — Where deceased bequeathed charitable gift by his will — Where will named one entity but gave address of another — Where deceased made donations to a third entity throughout his lifetime — Plaintiff seeks determination of proper recipient of testamentary gift — National Society for the Prevention of Cruelty to Children v Scottish National Society for the Prevention of Cruelty to Children [1915] AC 207; Parkinson v Diabetes Australia [2011] NSWSC 1530.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J McComish | Coulter Roache Lawyers |
| For the First Defendant | Victorian Government Solicitor | |
| For the Second Defendant | King & Wood Mallesons | |
| For the Third Defendant | Health Legal Pty Ltd | |
| For the Fourth Defendant | Hendersons Legal |
HER HONOUR:
Introduction
Charles Campbell Coghlan died on 26 March 2017. On 10 July 2017, probate of the deceased’s will dated 5 June 2013 was granted to the plaintiff. The deceased’s estate is valued at approximately $23,702,495.
Clause 6(c) of the will bequeaths one third of the residue of the estate to ‘Diabetes Australia of 26 Arundal Street Glebe New South Wales’. There is, however, no entity that fits that name and address. Three entities exist that may have been the intended recipient of the deceased’s testamentary bounty, each of which are defendants to this proceeding:
(a) the second defendant, Diabetes Australia (ACN 008 528 461) (‘Diabetes Australia’), is the entity named in the will;
(b) the fourth defendant, Diabetes NSW (ACN 001 363 766) (‘Diabetes NSW’), operates from 26 Arundel Street, Glebe, NSW; or
(c) the third defendant, Diabetes Australia – Victoria (ACN 005 239 510) (‘Diabetes Victoria’), is an entity with which the deceased had substantial contact throughout his life.
Plaintiff’s application
By originating motion filed 4 March 2019, the plaintiff sought an answer to the following question:
On the true construction of the deceased’s will dated 5 June 2013, is the entity described in clause 6(c) of the will as ‘Diabetes Australia of 26 Arundal Street Glebe New South Wales’ a reference to:
(a) Diabetes Australia (ACN 008 528 461);
(b) Diabetes Australia – Victoria (ACN 005 239 510);
(c) Diabetes NSW (ACN 001 363 766);
(d) more than one of the entities listed in (a) – (c); or
(e) some other entity, and if so, which?
The plaintiff submits that the funds should be paid to the second defendant, as it is the entity named in the will. The plaintiff informed the Court that the second to fourth defendants agree to her submission.
By letter to the plaintiff’s solicitors dated 3 February 2020, the first defendant indicated that she did not intend to oppose the orders sought by the plaintiff or otherwise make submissions in the proceeding.
Background
The deceased was a retired farmer and grazier who lived his entire life in or around Ballarat. The deceased was widowed and had no children.
In the late 1980s or early 1990s the deceased was diagnosed with diabetes. Around that time he became a member of Diabetes Victoria. Although he was provided with some education regarding his condition, the deceased largely managed his condition independently. The plaintiff deposed that during the deceased’s lifetime he:
(a) received communications from unspecified diabetes organisations working in Victoria;
(b) was a member of Diabetes Victoria;
(c) made donations to unspecified diabetes organisations working in Victoria by purchasing raffle tickets during fundraising drives;
(d) was attended upon by educators from unspecified diabetes organisations working in Victoria when initially diagnosed, and either visited by or referred to the same organisations when he was hospitalised for diabetes related conditions; and
(e) benefitted from subsidised podiatry treatment and medical aides for monitoring his blood sugar levels, provided by unspecified diabetes organisations working in Victoria.
In 2006, the deceased became a registered member of the National Diabetes Service Scheme (‘NDSS’). The NDSS is administrated by Diabetes Australia.
The plaintiff deposed that, in around 2008, the deceased’s interaction with unspecified diabetes organisations increased as his health declined and he began to suffer hypoglycaemic episodes.
The deceased’s penultimate will dated 10 December 2003 also bequeathed funds to ‘Diabetes Australia of 26 Arundal Street Glebe New South Wales’.
The solicitor who took instructions and prepared both wills has since retired. He has no personal recollection in relation to the deceased’s instructions. His firm provided a file note dated 14 May 2013, but does not otherwise hold any files, notes or correspondence in relation to either will. The file note stated with regard to the charitable gifts:
He wanted to include the charity that was involved in his care on a regular basis. He said the staff that visited him at home were very good and he wanted to leave them something. I asked if he wanted to leave them a legacy or a share of the residue. He wanted to leave them a similar amount to his nieces of $1M.
It is not clear which charity is being referred to by the author of the file note. The reference to a legacy, rather than a share in the residue, suggests that the reference is to St John of God Hospital, Ballarat, as clause 5 of the will provides for a legacy of $1 million to that entity.
Procedural history
The plaintiff filed an affidavit sworn 27 February 2019. She exhibited, inter alia, correspondence with the defendant charities in which each agreed that the funds ought to be paid to Diabetes Victoria.
Between 22 March 2019 and 26 April 2019, the defendants each filed appearances in the proceeding. None of the defendants have since filed any evidence or submissions.
By email dated 4 October 2019, the plaintiff’s solicitors invited the Court to consider the proceeding on the papers and forwarded written submissions which sought orders that the funds be paid to Diabetes Australia. This relief was in contrast to the correspondence exhibited to the plaintiff’s affidavit which reflected consensus among the three charities that the funds be paid to Diabetes Victoria. By return email dated 9 December 2019, the Court noted this inconsistency and informed the parties that the proceeding would be listed for hearing.
The proceeding was listed for hearing on 21 February 2020. By email dated 18 February 2020, the plaintiff’s solicitors informed the Court that the defendant charities had each consented to the funds being paid to Diabetes Australia, attached revised submissions on the part of the plaintiff and requested the proceeding be determined on the papers. By reply email dated 18 February 2020, the Court confirmed that the matter would be determined on the papers.
By email to the parties dated 11 March 2020, the Court raised concerns with regard to the state of the evidence before it. The Court informed the parties that it could not determine the proper construction of the deceased’s will on the basis of an agreement between the three defendant charities. The Court requested further evidence to support the plaintiff’s submission that Diabetes Australia was the proper recipient of the bequest. By reply email dated 12 March 2020, the plaintiff’s solicitors explained that no further information was known to the plaintiff, and clarified that her submission was that Diabetes Australia was the proper recipient on the basis of ‘the ordinary principles of construction; and not by force of any consensus between the charities.’
By further email dated 12 March 2020, the Court reiterated its concern regarding its ability to determine which of the two entities referred to in the will the deceased intended to benefit. The Court invited the parties, in the absence of any further evidence, to file submissions regarding whether an administrative scheme was an appropriate means of applying the testamentary gift. By reply email dated 25 March 2020, the plaintiff’s solicitors provided supplementary submissions on behalf of the plaintiff. Those submissions did little more than to repeat the plaintiff’s prior submissions, and refer the Court to the decision in Parkinson v Diabetes Australia (‘Parkinson’).[1] By reply email dated 25 March 2020, the Court noted that it did not consider that the decision in Parkinson was of any material assistance in resolving the proceeding, for reasons discussed further below. The Court invited the parties to file any further submission by 3 April 2020. No further submissions were filed by any party.
[1][2011] NSWSC 1530.
The charities
Diabetes Australia
Diabetes Australia is a company limited by guarantee, which has been the registered holder of the name ‘Diabetes Australia’ since 1987. Its business address in 2013 was 101 Northbourne Avenue, Turner, ACT. Diabetes Australia remains registered at that address.
Diabetes Australia is also registered under the same name with the Australian Charities and Not-for-profits Commission (’ACNC’), and the Australian Securities and Investments Commission (‘ASIC’).
Diabetes Australia is the national body for people affected by diabetes. It operates the NDSS, which is administered with the assistance of State based diabetes organisations.
Diabetes Victoria
Diabetes Victoria is a company limited by guarantee. Its registered address was, and remains, 568-570 Elizabeth Street, Melbourne, Victoria.
Diabetes Victoria is a member or affiliate of Diabetes Australia.
Diabetes Victoria is currently registered with the ACNC and ASIC under the name ‘Diabetes Australia – Victoria’.
Diabetes NSW
Diabetes NSW is a company limited by guarantee. In 2013, its trading name was ‘Australian Diabetes Council’. At that time it was not a member or affiliate of Diabetes Australia. In December 2014, the Australian Diabetes Council adopted the name ‘Diabetes NSW’ and became a member or affiliate of Diabetes Australia.
The business address of Diabetes NSW was, and remains, 26 Arundel Street, Glebe, NSW. That property is listed in ASIC’s records under the name ‘Diabetes Australia House’.
Diabetes NSW is currently registered with the ACNC under that name.
Diabetes NSW has been registered with ASIC under that name since December 2014. It was previously registered as ‘Australian Diabetes Council’ from December 2010 to December 2014, and ‘Diabetes Australia – New South Wales’ from April 1987 to December 2010.
Applicable principles
The principles that apply to the construction of wills are well accepted. The Court’s task is to give meaning to the intentions of the testator as expressed in the terms of the will itself.[2] It was to that end that Isaacs J, in Fell v Fell, identified the following ten generally accepted principles which aid in the construction of testamentary instruments:[3]
[2]Perrin v Morgan [1943] AC 399, 420 (Lord Romer).
[3](1922) 31 CLR 268, 273–6.
(a) The meaning of the will must be discovered from the writing itself. Extrinsic evidence is relevant only in order to enable the Court to understand the words used by the testator.
(b) The terms of the will must be construed according to their plain meaning in the context of the document as a whole. In the event that there is inaccuracy or inconsistency the Court must ascertain the meaning of the will, taken as a whole, in order to give effect to the testator’s intentions.
(c) If the will evidences an intention that some interest be given, but no words in the will expressly do so, the Court may remedy the defect by implication. In so doing the Court moulds the words of the testator so as to carry into effect their intention evidenced by the document as a whole.
(d) Inferences can only be drawn from reading the will as an entire document. Such inferences must be of such strong a probability that a contrary intention cannot reasonably be attributed to the testator.
(e) The Court cannot give effect to any intention which is not expressed or necessarily implied in the language of the will.
(f) In the event that a word is incorrectly omitted from or inserted into the will, the Court may insert or omit the term in order to fulfil the intention of the testator.
(g) If the will is incapable of bearing any meaning in the absence of additional words, the Court may supply those words only if it sees clearly and precisely on the face of the will what those omitted words are. Such terms may be supplied by the Court in order to prevent an intestacy.
(h) Where faced with two modes of reading a will, one which destroys and the other preserves it, the Court ought favour that which preserves the will and continues to give effect to the testator’s intention.
(i) Finally, the Court should adopt a construction of the will which will not lead to intestacy. If there is, on a fair construction, a reason not to conclude that the testator intended to die intestate, that construction should be adopted.
Consideration
Significance of the use of a name
The plaintiff’s primary submission is that the accurate use of the name Diabetes Australia in clause 6(c) of the will creates a presumption against any entity not in possession of that name. In regard to the submission, the plaintiff refers to the decisions of the House of Lords in National Society for the Prevention of Cruelty to Children v Scottish National Society for the Prevention of Cruelty to Children (‘National Society’),[4] and Parkinson, a decision of the New South Wales Supreme Court.
[4][1915] AC 207.
In National Society, the House of Lords considered a testamentary gift to the ‘National Society for the Prevention of Cruelty to Children’. The deceased was a Scotsman and had no connection with the London based National Society for the Prevention of Cruelty to Children. The deceased did, however, have some connection with the similarly named Scottish National Society for the Prevention of Cruelty to Children. Their Lordships held that notwithstanding extrinsic evidence of the deceased’s connection to Scotland, it was insufficient to displace the primary meaning of the terms used in the will.
The speeches of Earl Loreburn, Lord Dunedin and Lord Parmoor reflect slightly different approaches to the presumption in favour of the named recipient, all of which lead to the same conclusion. Earl Loreburn, with whom Lord Atkinson and Lord Shaw agreed, considered that the accurate use of the name of an individual or organisation generally creates a ‘presumption’ against any institution not in possession of that name:
My Lords, I think the true ground upon which to base a decision in this case is that the accurate use of a name in a will creates a strong presumption against any rival who is not the possessor of the name mentioned in the will. It is a very strong presumption and one which cannot be overcome except in exceptional circumstances. I use as a convenient method of expressing one's thought the term “presumption.” What I mean is that what a man has said ought to be acted upon unless it is clearly proved that he meant something different from what he said.[5]
[5]Ibid 212-13.
Lord Dunedin took the view that there was ambiguity in the terms of the will by asking whether the description would have fitted the Scottish society if the English society did not exist.[6] Having identified an ambiguity, his Lordship nonetheless considered that the extrinsic evidence was not sufficient to support a finding that the description in the will was inaccurate.
[6]Ibid 214.
Lord Parmoor agreed with Earl Loreburn’s presumption in favour of the entity actually named in the will. His Lordship recited ‘[t]he leading principle in all cases of this character… that the Court has not to make a will, but to interpret the words which the testator has used.’[7] His Lordship agreed that the presumption was not absolute, but considered that it should only be rebutted in an ‘abnormal case of a special character.’[8]
[7]Ibid 215.
[8]Ibid 216.
The plaintiff described the decision in Parkinson as ‘almost identical’ to this proceeding. In Parkinson, the testator left one third of the residue of his estate to ‘Diabetes Australia’. However, during his lifetime the testator had been a member of, and donor to, Diabetes NSW. He had had little involvement with Diabetes Australia beyond his participation in the NDSS. Little was known about the testator’s precise intentions.
Bryson AJ considered the decision in National Society in some detail. He expressed a preference for the approach of Lord Dunedin, although his Honour recognised that this was not the view of the majority in that case. Bryson AJ considered that an ambiguity arose as to which entity the deceased intended to benefit, and referred to several English and Australian cases in which the use of a name has not itself been conclusive.[9] His Honour characterised the central question of the case as being ‘what is the meaning of the words used by the testator having regard to the testator’s circumstances bearing on his use of language?’[10] Bryson AJ considered that the extrinsic evidence was not sufficient to form any conclusion as to the deceased’s use of the language contained in the will as ‘[t]he evidence gives only the most oblique and indeterminate indications of how [the deceased] used language.’[11] His Honour concluded that the proper recipient of the gift was the entity named in the will, Diabetes Australia.
[9]See, Charter v Charter (1874) LR 7 HL 364; Jones v Loader (Supreme Court of New South Wales, Kearney J, 4 December 1984); Hulbert v Hulbert [2004] NSWSC 130; Re Evans, dec’d; Evans v Allot [1950] VLR 60.
[10]Parkinson (n 1) [47].
[11]Ibid [48].
As observed by Earl Loreburn in National Society, and subsequently reflected in the decision of Bryson AJ in Parkinson, the ‘presumption’ is really a reflection of the principle that the Court’s role is to give effect to the deceased’s intentions as reflected in the terms of the will. Although Earl Loreburn and Lord Parmoor did not consider extrinsic evidence in National Society, their concession that the presumption is not absolute indicates that further enquiry will be permitted in some circumstances. Unless extrinsic evidence is sufficient to show that a deceased person did not actually mean what is said in a will, the Court is not entitled to re-write it. Neither National Society nor Parkinson involved an alternative recipient named or referred to in the will itself; in both cases the alternative was merely an entity with which the testator had some connection during his lifetime. It follows that the ‘presumption’ is of more limited assistance in circumstances where the will itself refers to one entity by name and a different entity by address, and otherwise provides no indication as to which of those entities the deceased intended to benefit. The ‘presumption’ in favour of a named entity is therefore not determinative of the proper construction of clause 6(c) of the will.
Significance of the use of an address
The plaintiff submitted that the use of a street address is of limited assistance in determining the institution that the deceased intended to benefit, particularly where it is used in conjunction with a name, referring to the decision of the Court of Chancery in Re Wedgwood.[12] The case of Re Wedgwood concerned the question of whether a gift ‘To Saint Mary's Home for Women and Children of 15 Wellington Street Chelsea’ had lapsed due to a change in address of that institution from ‘15 Wellington Square, Chelsea’ to ‘14 Trafalgar Square, Chelsea’ after the date of the will but before the date of a confirmatory codicil and the testator’s death. There was no evidence that the incorrect address contained in the will was that of another institution to which the testator may have intended to confer a legacy. Mr Justice Joyce considered that, on the facts of that case, the change in address made no difference to the validity of the gift.[13] Re Wedgwood is not of assistance to the plaintiff, save that it is support for a general conclusion that where the deceased’s intention is otherwise clear, the erroneous use of an institution’s former address will not necessarily be fatal to a testamentary gift.
[12][1914] 2 Ch 245.
[13]Ibid 250.
There is also inconsistency between the plaintiff’s submission and the well-established principle, reflected in the observations of Kaye J in Re Edwards (dec’d), that there exists ‘no cannon of will construction which requires greater weight to be given to either a name or a description of an intended beneficiary.’[14] In that case, his Honour quoted the following passage from the fifth edition of Williams on Wills:
...where a description is correct and sufficient an incorrect name may be neglected. In cases where either the name alone or the description alone is sufficient to identify a subject, and they do not identify the same subject, then, according to the circumstances of the case, the description and not the name, or the name and not the description, may prevail. The name is in fact only a description, and the question is to determine which portion of the whole description is to prevail. A test often adopted by the court in such a case is to inquire whether the testator was in the circumstances more liable to err when he described the donee by name or when he attempted to point him out by some further adjunct; and the Court adopts that description which in each instance appears to be least open to error.[15]
[14][1981] VR 794, 797.
[15]Ibid, citing CH Sherrin, RFD Barlow and RA Wallington, Williams on Wills (Butterworths & Co, 5th ed, 1980), 491–2.
There is no reason why an address contained in a will does not fall within the meaning of ‘description’ for these purposes. Accordingly, the inclusion of the address of Diabetes NSW in clause 6(c) of the will cannot be dismissed out of hand. The reference to the name of one entity and the address of another therefore gives rise to an ambiguity on the face of the will that must be resolved.
Resolving ambiguity – extrinsic evidence
In the event that the terms of the will are ambiguous or equivocal, the Court may have regard to extrinsic evidence to aid in its interpretation. Extrinsic evidence may be admissible at common law, pursuant to the ‘armchair principle’,[16] or pursuant to s 36(1) of the Wills Act 1997.
[16]Boyes v Cook (1880) 14 Ch D 53, 56 (James LJ); Perrin v Morgan (n 2) 420 (Lord Romer).
At common law, evidence of the circumstances surrounding the deceased at the time of executing the will may be admissible in order to understand the language used therein.[17] Evidence which may be admitted under the armchair principle extends to evidence of the deceased’s general habits and knowledge, but not to evidence of the deceased’s actual testamentary intention. Where the description contained in a will may refer to more than one entity, evidence that the deceased made contributions during his lifetime to that institution, otherwise had involvement with that institution, or referred to that institution by a particular name, may be admissible evidence to support a particular construction.
[17]Perrin v Morgan (n 2) 420 (Lord Romer).
Where the terms of the will are equivocal the Court may go further, taking into account evidence of the testator’s actual intention.[18] As observed, there is no material evidence of the deceased’s testamentary intention in this case.
[18]Doe d Hiscocks v John Hiscocks (1839) 151 ER 154, 156 (Lord Abinger CB).
The position is similar under s 36, which provides:
36 When is evidence admissible to clarify a will?
(1) In any proceedings to construe a will, if the language used in a will renders the will or any part of the will —
(a) meaningless; or
(b) uncertain or ambiguous on the face of the will; or
(c)uncertain or ambiguous in the light of surrounding circumstances —
evidence may be admitted to assist in the interpretation of that language.
(2) Evidence which may be admitted under sub-section (1)(c) does not include evidence of the testator's intention.
(3)Nothing in this section prevents the admission of evidence which would otherwise be admissible at law in any proceedings to construe a will.
In the event that the Court remains unable to ascertain the meaning of the deceased’s will, the relevant disposition is rendered void for uncertainty.[19] For a gift to be rendered void, it must be incapable of any clear meaning.[20] As observed in Fell v Fell, the Court must avoid an interpretation that leads to intestacy, thus if a court can arrive at the meaning with a reasonable degree of certainty, the gift will not fail.[21]
[19]GE Dal Pont and FK Mackie, Law of Succession (LexisNexis Butterworths, 2nd ed, 2017) 235 [8.46].
[20]In Re Mason; Mason v Robinson (1825) 2 Sim & St 295; 57 ER 359, 360 (Leach VC).
[21]Adams v Jones (1852) 9 Hare 485; 68 ER 602 (Turner VC).
The plaintiff’s evidence is limited. It points to the deceased’s involvement with Diabetes Victoria following his diagnosis, as well as involvement with other, unspecified, diabetes organisations in Victoria from time-to-time. It is unclear whether Diabetes Australia or Diabetes NSW had any involvement with those activities. The only evidence that the deceased had any involvement with Diabetes Australia is his subscription to the NDSS. There is no evidence that the deceased had any involvement with, or even knew of, Diabetes NSW.
The only entity of which there is any material extrinsic evidence of the deceased’s knowledge and involvement is Diabetes Victoria. However, Diabetes Victoria is not referred to in the will at all. The Court cannot apply the armchair principle to re-write the deceased’s will in terms that are not reflected in the written document. There is no evidence before the Court from which it can determine which of Diabetes Australia or Diabetes NSW the deceased intended to benefit. As observed, the Court raised this issue with the plaintiff’s solicitors on two separate occasions. The plaintiff’s solicitors indicated that there was no further evidence of the deceased’s circumstances as at the date of the will.
The deceased’s subscription to the NDSS is not sufficient evidence upon which to conclude with any certainty that Diabetes Australia is the preferred recipient of his testamentary gift. It is inconsistent with the terms of the will to conclude that the deceased bequeathed funds to both institutions. In the absence of any certainty as to which entity referred to in the will is the proper recipient, the gift must be rendered void.
In its correspondence with the parties, the Court raised the possibility that the gift was best administered by way of administrative scheme. This would be the case if it were established that the gift was a gift for charitable purposes and that the mechanism for administering the gift is deficient. In those circumstances the Court could consider and, if appropriate, approve a scheme for the administration of the gift. The parties did not seek to amend the proceeding to seek such relief.
Conclusion and answers to questions
The gift to ‘Diabetes Australia of 26 Arundal Street Glebe NSW’ in clause 6(c) of the deceased’s will is void for uncertainty. Accordingly, the answers the plaintiff’s questions in (a) to (e) are ‘no’.
After consideration of these reasons, the parties are to forward to the Court any further submissions they may wish to make in regard to the resolution of the issues arising in the proceeding. In the meantime, the costs of the proceeding will be reserved.
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SCHEDULE OF PARTIES
S ECI 2019 00896
| MARIE BERNADETTE MERRIMAN | Plaintiff |
| v | |
| ATTORNEY-GENERAL FOR THE STATE OF VICTORIA | First Defendant |
| DIABETES AUSTRALIA (ACN 008 528 461) | Second Defendant |
| DIABETES AUSTRALIA – VICTORIA (ACN 005 239 510) | Third Defendant |
| DIABETES NSW (ACN 001 363 766) | Fourth Defendant |
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