Re Lewis; Caddick & Staples v Lewan
[2018] VSC 615
•18 October 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S CI 2017 03354
| IN THE MATTER of the estate of ZYGMUNT LEWIS, deceased. | |
| BETWEEN: | |
| ALISON CADDICK and JENEFER KAREN STAPLES (as executors of the estate of ZYGMUNT LEWIS, deceased) | Plaintiffs |
| v | |
| WAYNE LEWAN | Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 October 2018 |
DATE OF JUDGMENT: | 18 October 2018 |
CASE MAY BE CITED AS: | Re Lewis; Caddick & Staples v Lewan |
MEDIUM NEUTRAL CITATION: | [2018] VSC 615 |
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WILLS AND ESTATES – Application for advice and orders – Whether residuary estate to be paid to beneficiary of trust upon termination of trust – Whether residuary estate passes to next of kin on an intestacy.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr S Newton | Suzanne Jones Lawyers |
| For the Defendant | Ms U Stanisich | Maurice Blackburn |
HIS HONOUR:
Zygmunt Lewis died on 1 November 2016. Probate was granted on 30 December 2016. His final will was executed on 11 March 2016.
The primary question in the present proceeding is whether the residuary of Mr Lewis’ estate is to be paid to his great nephew Jakob Lewandowski (‘Jakob’) upon his attaining the age of 21 years.
The plaintiffs, who are the executors of the estate, submit that this question should be answered in the affirmative. The defendant, a child of Mr Lewis’ deceased brother, submits that, upon Jakob turning 21 years of age, the residuary of the estate passes on an intestacy. The defendant is one of Mr Lewis’ next of kin for intestacy purposes.
The relevant provisions of the will
The question for determination arises out of cl 3(i) of the will. However, for the purposes of construing that clause, it is necessary to set out cl 3 in its entirety.
I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever nature and wheresoever situate unto my Trustees including investment with CBA and cheque account no. 10166266 with Commonwealth Bank of Australia, Balwyn branch, Victoria, UPON TRUST with the specific condition to sell my house and contents and personal effects and after payment thereout of my just debts and duties or taxes payable in connection with my estate to distribute the balance remaining upon the following terms:-
(a)To my brother SLAWOMIR LEWANDOWSKI of 18m 33 Korotynskiego, Warsaw 02-123, Poland, I give FIVE HUNDRED THOUSAND DOLLARS ($500,000) as shall survive me or if he shall predecease me to his Estate.
(b)If she survives me I give to my friend ALISON CADDICK of 12 Mark Street, North Fitzroy, Victoria 3068 FIVE HUNDRED THOUSAND DOLLARS ($500,000) for her sole use and benefit absolutely.
(c)If she survives me I give to my friend MELODY HAI HONG ZHANG of Unit 20, 36-40 Disraeli Street, Kew, Victoria 3101 FIFTY THOUSAND DOLLARS ($50,000) for her sole use and benefit absolutely.
(c)If she survives me I give to my friend NANA LIU of Unit 20, 36-40 Disraeli Street, Kew, Victoria 3101 TWO HUNDRED THOUSAND DOLLARS ($200,000) for her sole use and benefit absolutely.
(d)If she survives me I give to my friend ROSALIND MARCELLE of 7 Peter Godden Street, Woodend, Victoria 3442 FIFTY THOUSAND DOLLARS ($50,000) for her sole use and benefit absolutely.
(e)If she survives me I give to my friend (and Trustee) JANNIE STAPLES of 88a Mont Albert Road, Canterbury, Victoria 3126 FIFTY THOUSAND DOLLARS ($50,000) for her sole use and benefit absolutely.
(f)I give to ARENA PUBLICATIONS ASSOCIATION of 2 Kerr Street, Fitzroy, Victoria 3065, TWO HUNDRED THOUSAND DOLLARS ($200,000) to be used for costs of production of publications.
(g)If she survives me I give to PAMELA MORTON of 174 Garstang Road, Fulwood, Preston, United Kingdom ONE HUNDRED THOUSAND DOLLARS ($100,000) for her sole benefit absolutely.
(h)If she survives me I give to SHEILA THOMPSON of 40 Melrose Avenue, Fulwood, Preston, United Kingdom ONE HUNDRED THOUSAND DOLLARS ($100,000) for her sole benefit absolutely.
(i)I give the balance of my remaining estate to my great-nephew JAKOB LEWANDOWSKI of 7-66 Ogolna, Warsaw, Poland, to be held in Trust by the Executors until JAKOB turns 21 years, for the sole purpose of his completing tertiary education absolutely as he shall survive me.
(j)FUNERAL: My body is donated to Department of Anatomy and Cell Biology, University of Melbourne, Telephone: 9347 5979.
Ms Stanisich, who appeared for the defendant, submitted:
There is nothing in the plain and natural words as expressed in the Will that dispose of the remainder interest at the end of the trust period. The inclusion of the word ‘absolutely’ cannot be construed as gifting the remainder interest to Jakob, as it simply makes no sense within the sentence if such a meaning is attempted to be given to it. The word does, however, make sense if it is used to emphasise that the purpose of the trust is not to be disturbed. That is, the completion of tertiary education is ‘the sole purpose…absolutely’. This interpretation gives expression to the plain and natural meaning of the words used.[1]
[1]Defendant’s submissions, 9 October 2018, [14].
Mr Newton, who appeared for the plaintiffs, submitted that Mr Lewis’ intention in making the gift to Jakob in cl 3(i) is most likely that the gift be made absolutely, not to be paid to him until attaining 21 years of age and pending the attaining of that age to be used to further his education.[2]
[2]Submissions of plaintiffs, undated, [20].
The will is to be objectively construed.[3] Clause 3(i) is to be construed in the context of the will read as a whole.[4] Where there is ambiguity a court should lean away from the interpretation which leads to an intestacy or partial intestacy.[5]
[3]Perrin v Morgan [1943] AC 399, 406.
[4]Muir v Winn [2009] NSWSC 857 [3]; Fell v Fell (1922) 31 CLR 268, 273–274.
[5]Fell v Fell (1922) 31 CLR 268, 275.
A reading of the will as a whole supports a finding that Mr Lewis intended the residuary of his estate to pass to Jakob upon him attaining 21 years. The introductory words of cl 3 make clear that Mr Lewis intended that by his will he would dispose of the entirety of his estate:
I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever nature and wheresoever situate unto my Trustees including investment with CBA and cheque account no. 10166266 with Commonwealth Bank of Australia, Balwyn branch, Victoria, UPON TRUST with the specific condition to sell my house and contents and personal effects and after payment thereout of my just debts and duties or taxes payable in connection with my estate to distribute the balance remaining upon the following terms…[6]
[6]Emphasis added.
The structure of the will is significant. The balance of Mr Lewis’ estate is distributed in two discrete ways:
(i) The cash gifts totalling $1.75 million in cls 3(a) to (h); and
(ii) The bequest of the remainder of the estate to Jakob in cl 3(i).
In contradistinction to cl 3(i), the bequests in cls 3(a) to (h) are of both the beneficial and legal interest in the gift bequeathed. This conclusion is reinforced by the use of the phrase ‘sole use and benefit absolutely’ in cls 3(b) to (e), (g) and (h).
The bequest created by cl 3(i) is of an entirely different character. It is subject to a trust. It is not in contention that until Jakob turns 21 years old he only has a beneficial interest in the remainder of the estate. That beneficial interest is comprised of the right to have funds distributed to him by the trustees solely for the purpose of meeting expenses associated with completing his tertiary education. The legal interest in the remainder of the estate vests in his trustees until such time as Jakob turns 21 years old. Prior to Jakob attaining the age of 21 years he does not have an absolute interest in the remainder of the estate.
Ms Stanisich submitted that the word ‘absolutely’ makes no sense in cl 3(i) if it is construed as gifting the remainder of the estate to Jakob. I reject this submission. The word ‘absolutely’ has the effect that upon the trust created by cl 3(i) terminating upon Jakob attaining 21 years, his interest in the remainder of the estate converts from a beneficial interest to an absolute interest (that is, both a beneficial and legal interest). This construction is consistent with the use of the word ‘absolutely’ in cls 3(b) to (e), (g) and (h). In each of these paragraphs ‘absolutely’ has the meaning that the beneficiary has both a beneficial and a legal interest in the bequest. Upon the termination of the trust created by cl 3(i), Jakob similarly has both the beneficial and legal interest in the remainder of Mr Lewis’ estate.
Conclusion
Mr Lewis’ residuary estate is to be paid to Jakob Lewandowski upon him attaining the age of 21 years. I shall provide the parties with an opportunity to make submissions on the question of costs.
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