Re Leaver

[1996] QSC 28

IN THE SUPREME COURT

OF QUEENSLAND  O.S. No. 932 of 1995

[Re Leaver (dec’d)]

IN THE MATTER of section 96 of the Trusts Act 1973

IN THE MATTER of O.64 r.1A of the Rules of the Supreme Court

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IN THE MATTER of the Will and Codicil of COLIN WILLIAM JOHN LEAVER, deceased, late of Tomewin, Upper Currumbin in the State of Queensland Teacher

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IN THE MATTER of an application by JOHN GERARD McDONALD, the Executor and Trustee of the said Will and Codicil

JUDGMENT  -  DERRINGTON J.

Delivered:7 March 1996

CATCHWORDS:     Will - Construction of Codicil - Further beneficiary - included as joint tenant - two "previously named" beneficiaries - whether each receive one third share - whether half share to two quarter shares.

Constructive trust - devise of dwelling house - 6.634 ha block - subdivision approval denied - whether constructive trust can arise - whether trust contrary to law - Local Government (Planning and Environment) Act 1992

Counsel:Mrs D. Mullins for the Applicant

Mr L. Bowden for the Respondent Hall

Mr R. Petersen for the Respondents A.K. Pittman and F.E. Pittman

Mr M. Stewart for the Respondent Johnston

Solicitors:Stubbs Barbeler Grant for the Applicant

H.W. Smith and Associates for the Respondent Hall

de Groot & Co for the Respondents A.K. Pittman and F.E. Pittman

W.T. Purcell, Chadwick and Skelly for the Respondent Johnston

Hearing Date:   21 February and 3 March 1996

JUDGMENT  -  DERRINGTON J.

Delivered 7 March 1996

By his last will the above-named testator made the following provision:

" I . . . GIVE DEVISE AND BEQUEATH the whole of my estate of whatkindsoever and wheresoever situate unto my trustees upon trust to pay thereout with all convenient speed after my death all of my just debts, funeral and testamentary expenses and all death and estate duties, State or Federal upon the whole of my dutiable estate AND to hold the remainder upon trust for the said ANDREW KEITH PITTMAN and his wife FAY ELIZABETH PITTMAN absolutely as Joint Tenants or to the survivor alone if only one of them should survive me . . . "

By an informal but valid codicil in manuscript he made the following relevant provisions:

" . . .The main changes I wish to make are:-

1.To include David Dean Hall of the above address equally as a Joint Tenant with the previously named Andrew Keith Pittman and his wife Fay Elizabeth Pittman named as Joint Tenants in the 1989 Will.

2.To leave to David Dean Hall of the above address the dwelling house that it contents in which I have resided since buying the property from my late stepfather Wallace Eichmann and the entire contents for his use and disposal.

3.To leave to David Dean Hall the adjoining garage building to my dwelling house.

4.To leave to David Dean Hall my Subaru Leone Sedan motor car.

5.For my trustees to proceed with a the negotiations and transaction with the Qld National Parks and Wildlife Service or whatever their official title is at the time of my death for the 125 acre block.

6.That moneys from the transactions with the Qld National Parks and Wildlife Service be^JL and subsequent sale of any subdivision be divided into two equal portions after expenses have been deducted and one of these half shares to go to David Dean Hall and the other to Andrew Keith Pittman. that^JL . . ."

The executor and trustee seeks directions as to the following questions:

1. Whether the effect of paragraph 1 of the codicil is that David Dean Hall should share equally in the rest and residue of the estate with Andrew Keith Pittman and Fay Elizabeth Pittman, that is, so that each will receive a one third share;  or alternatively whether the said David Dean Hall should share that entitlement equally with the pair of beneficiaries Andrew Keith Pittman and Fay Elizabeth Pittman, that is, so that David Dean Hall receives one half share and Andrew Keith Pittman and Fay Elizabeth Pittman receive the other one half share between them.

1. The nature and extent of the benefit derived by the said DAVID DEAN HALL from the provisions of paragraphs 2 and 3 of the codicil having regard to the following facts:

(a)that the house and garage therein referred to are erected on land owned by the deceased having an area of 6.634 hectares and on which is also erected a second dwelling house;  and

(b)that the land is so zoned that it cannot be subdivided.

QUESTION (1)

Some doubt has been engendered in the mind of the executor because of the principle that under a will the Court will in case of doubt generally find against a joint tenancy and in favour of a tenancy in common because of the inconvenience and possible unfairness that attends a joint tenancy, particularly during the minority of any beneficiary; and it will give effect to the slightest indications that a tenancy in common is intended.  This indication is usually found in the use of the word "equally".  See Rentoul v. Rentoul [1944] VLR 205; Re Rose Deceased [1962] QWN 4. For the purposes of this case this principle should be assumed to apply here, for although no beneficiary is a minor, Mr Hall is not related to Mr and Mrs Pittman, so that a joint tenancy between them has little to recommend it.

The effect of the above authorities went merely to the nature of the tenancies under which the respective interests were held and not to the proportion of the respective shares.  In each case equality of division remained.  Consequently assuming that the reference to joint tenancy, where it appears in both the will and codicil, should be read as a tenancy in common, it is difficult to see that, except that a tenancy in common permits of inequality of shares, the change effects any difference to the present issue. 
           If the testator had expressed the gift in the will to Mr and Mrs Pittman as passing equally to them as tenants in common, and if he added by his codicil that he wished "to include David Dean Hall . . . equally as (a tenant in common) with the previously named Andrew Pittman and his wife Fay Elizabeth Pittman named (as tenants in common) in the . . . will", then he would have been doing no more than adding Mr Hall to the group to participate in the gift with the same tenancy.  The alteration to the tenancy does not assist with the determination of proportionality.  In any case, there would be something incongruous in substituting a technical change to the words used by the testator and then using the changed meaning to interpret his intention on a different issue.
           What is significant is that he described the interests taken by the respective beneficiaries in identical terms as to the tenancy and with an express and simple specification of equality.  There is nothing in the provision in the codicil, whether read as referring to a tenancy in common or otherwise, to suggest that the equality referred to should in some way apply differently between the parties referred to.
           On the contrary, taken as a whole the combination of those terms saying that he wished "to include" Mr Hall "equally" with and having the same tenancy as the other parties named strongly suggests that party's inclusion in the group where he was to have equality with the others per capita.  The combination of inclusiveness in the group and equality with identity of interest fortify a construction of simple equality among the members of the group and displaces any reason to read the passage otherwise.
           It would require in the expression of the gift something more, which does not exist, to mean that his share was to be equal to that of the other two as a pair.  To rely only on the reference of equality for Mr Hall with the other persons who, as it happens, are named as a pair would fail to read the passage as a whole and to afford any significance to these other factors.  That would be unjustified.
           It follows that the answer to this question is that each of the beneficiaries to this gift take as tenants in common in equal shares.

QUESTION (2)

This concerns the devise of the house and garage to Mr Hall by paragraphs 2 and 3 of the codicil.  It gives rise to several issued each sequential on the answer to its predecessor.

It is not seriously disputed that in general and unless there is some reason to the contrary a devise of a house will pass the land on which it stands and that which forms the curtilage around it that corresponds with the usage of it by the testator during his lifetime:  Steele v The Midland Railway Co (1855) L.R. Ch. App. 275, 289, 290-1; Re Willis (1911) 2 Ch 563, 569. Here, the block of land on which the house stands is large in area, more than was suggested to be reasonably associated with the testator's use of the house, and another house also occupies the same block.
           Although Mr Hall presses for a construction that would bring him the entire block, the testator's mode of expression of the gift is against this.  The specific reference to one identified house and garage when another house also occupies the land clearly implies a limit that would exclude that other house and also the land not necessary to support the devise.  If the testator had intended more, it would have been easier and more direct to refer to the land itself, as he did in another part of the codicil in respect of the other block of land that he owned.  Moreover, to have included the whole of the relevant land in the gift would have effectively emptied the rest and residue clause of all its subject matter, and this is inconsistent with the testator's specific inclusion of Mr Hall as a residuary beneficiary by the first clause of his codicil.
           It being comfortably established that the gift comprised the house garage and an excised area of curtilage to be determined on a practical basis, the most difficult issue appears because the required excision is impeded by the zoning of the land that does permit of subdivision.  It is not that, as with the Land Sales Act 1984, a disposition (in that case a sale) of part of land without approved subdivision is prohibited and made void, or as with the Local Government Act 1936-1982, which has now been superseded, the sale and certain other dealings with subdivided land without approved subdivision is forbidden and the transaction made conditional on such approval.  It is only that subdivisional approval cannot be obtained under the Local Government (Planning and Environment) Act 199 , which however does not expressly prohibit or avoid any dealings with part of land that has not been subdivided in accordance with it.
           Further, the definition of 'subdivision' in the Planning and Environment Act does not encompass the present case.  It reads:-

"subdivision"  means the division of land into parts by means of:

(a)sale, transfer or partition;

(b)any agreement, dealing or instrument inter vivos (other than a lease for any term not exceeding 5 years without the right of renewal) rendering different parts thereof immediately available for separate disposition or separate occupation.

(c)the creation of an indefeasible title under the Land Title Act 1994 for a part of the land;  or

(d)the excision of land from an allotment for dedication to the Crown;"

The omission from this of dealings that are not inter vivos, and even of inter vivos leases under five years, indicates that these are not intended to be affected by the legislation.  This follows the form of the same definition in the former Local Government Act.  It can only be regarded as deliberately manifesting an intention to allow the omitted dealings to have full force without impediment by the legislation, and there may have been good policy reasons for doing so.
           In any case there is strong reason to conclude that a disposition by will is not prohibited or avoided by the present legislation; and learned counsel for the parties point to no other reason for a finding that the subdivision is contrary to law.  As Deane J (as he then was) said in discussion of an analogous subject in Orr v Ford (1989) 167 CLR 316 at 334, "The Act simply does not speak to the lawfulness or enforceability of the equitable interest of the beneficiary". The only difficulty is that there is no machinery provided by the Act to obtain it.
           The distinction would seem to be significant.  An equitable interest by way of constructive trust may arise in respect of part of land that cannot be subdivided:  Timber Top Realty Pty Ltd v Mullens (1974) V.R.312. See also by analogy in principle Orr v Ford (supra);  Steele v Waller (1860) 28 Beav. 466; 54 ER 445; Wood v Browne (1984) 2 Qd R. 593; Gargan v Gargan (Unrep. Sup Ct of Qd 1.8.91); and the War Service Homes cases referred to in Ford & Lee on The Law of Trusts in Australia 3 ed. para 4110 and in Jacobs' Law of Trusts in Australia 5 ed par 905.  They show that even where a trust is prohibited, it is still possible to find, in a dealing amounting to a trust, an irrevocable licence to occupy the premises (Pearce v Pearce (1977) 1 NSWLR 170); a trust in respect of the proceeds of the sale of the property (Horton v Public Trustee (1977) 1 NSWLR 182); and a trust in respect of the property itself after the circumstances changed so that the prohibition no longer had application (Olsen v Olsen (1977) 1 NSWLR 189).
           While equity will usually not come to the aid of a party where the transaction is prohibited by law (Chalmers v Pardoe (1963) 1 W.L.R. 677), the absence in the present case of any prohibition of the transaction, as distinct from the inability of the executor to complete it at law, would avoid this impediment. Even if a prohibition of subdivision were implied by the Planning and Environment Act as to those dealings at which it is directed by the definition, which is very doubtful, the omission of this type of dealing from the defined class means that there is no reason why equity should not come to the aid of the testator's intended gift.  It can do this satisfactorily through the trust on which the executor will hold the land for distribution according to the will when the administration of the estate is complete.
           Learned counsel for the executor questioned whether any trust or equitable interest is involved, citing Commissioner of Stamp Duties (Qld) v Livingstone (1964) 112 CLR 12 at 17-18. It said that while the executor may need to have recourse to any assets to pay the estate's debts, duties, administration expenses, etc. during the course of the administration, the beneficiaries have no equity in any specific assets or indeed in any assets. The effect of this decision has been relevantly explained by Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306, but that is not the reason why it does not support the proposition made here.
           It dealt only with the position pending the conclusion of the performance of the executor's duties, clearly predicating a contrast from the position when all those duties had been performed and the executor held the assets for distribution in accordance with the will.  When that position is reached, even as Livingstone implies and as Schultz clearly indicates, consistently with long authority, the executor then holds the assets in trust for the beneficiaries who are entitled to them.  It is the position at that time, and not during the period of administration, that is the subject of the executor's request for directions in this application and consequently Livingstone has no relevance except perhaps by implication to confirm the existence of a trust which is at least the equivalent of the constructive trust in Timber Top Realty.
           In any case, quite apart from any question of a general executor's trust in respect of the property held for distribution at the completion of administration, the nature of the relevant gift would if required have given rise to an implied trust as a matter of necessity:  cf In re Llanover Settled Estates (1926) 1 Ch 626; Re Rose (1952) Ch 499, See Ford & Lee op.cit. para 3130.
           In the result,at the conclusion of the administration of the estate, if it is still available as an asset for distribution in accordance with the will, the whole of the land will be held by the executor as trustee for those entitled to it, including Mr Hall, as tenants in common for their respective rights and interests.  The curtilage of the house and garage will be held in trust for Mr Hall, and the balance of the land will be held in trust for him and Mr and Mrs Pittman as tenants in common in equal shares.
           If the foregoing analysis had not been available to support Mr Hall's claim to the extent that the testator intended, then the executor would at least have been required to permit him to remove the house and garage from the land before distributing it.  His inability to transfer the title in law did not deprive him of the power to perfect the gift as far as possible.  It would not have been to the point that the buildings were attached to the land and formed part of it, for an owner can sever buildings from his land and the executor would be doing that as the representative of the testator who was the owner.  However, in view of the above conclusion it is not necessary to investigate this question more deeply.
           The parties to the application should have their costs, and because these difficulties arose from the drafting of the codicil the costs should be on a solicitor and client basis; but because all these issues should have been canvassed in the first hearing, the costs of the second hearing when further submissions were called for should not be included.  This does not apply to the costs of Professor Johnston, who should have his costs of the second hearing because of some confusion concerning his attendance; but they should be limited to those of having a representative appear to indicate that the questions continued to be of no concern to him.

It Is Therefore Declared As Follows:

1. On the proper construction of the said will and codicil the residuary estate of the deceased is given to Andrew Keith Pittman, Fay Elizabeth Pittman and David Dean Hall as tenants in common each for an undivided one-third share.

1. The devises in clauses 2 and 3 of the codicil are not void and constitute a gift of the house and garage described therein together with a curtilage of the land on which they stand and the surrounding area sufficient for the purpose of residence to be held in trust by the executor and trustee under the will together with the remainder of land of which it forms part as follows -

(a)As to the said house garage and associated land for the said David Dean Hall absolutely; and

(b)As to the remainder of the said land and the improvements thereon for the said Andrew Keith Pittman, Fay Elizabeth Pittman and David Dean Hall as tenants in common in equal shares absolutely.

It Is Ordered That costs of the parties to the above parts of the application be taxed on a solicitor and client basis except in respect of costs of or incidental to the hearing of 1 March 1996, and be paid out of the estate.

That the costs of William Ross Johnston relating to the hearing of 1 March 1996 be taxed on the basis of the appearance of a representative to indicate to the court that the matters were of no concern to him, and be paid out of the estate.

And that otherwise the application be adjourned with liberty to any party to apply.