Re Pacella
[2019] VSC 170
•19 March 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TESTATORS FAMILY MAINTENANCE LIST
S CI 2017 02330
| IN THE MATTER of Part IV of the Administration and Probate Act 1958 | |
| - and - | |
| IN THE MATTER of the will and estate of FRANCESCO ANTONIO PACELLA, deceased | |
| BETWEEN: | |
| PATRICIA FLEMING | Plaintiff |
| - and - | |
| EMIDIO PACELLA (in his capacity as an executor of the will and estate of FRANCESCO ANTONIO PACELLA, deceased) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 19 March 2019 |
CASE MAY BE CITED AS: | Re Pacella |
MEDIUM NEUTRAL CITATION: | [2019] VSC 170 |
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WILLS AND ESTATES — Construction of will — Where disposition in will for construction of family crypt not for charitable purpose — Whether non-charitable purpose is valid — Where trust found to be invalid — South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259 — Re Endacott; Corpe v Endacott [1960] Ch 232 — Pooley v Royal Alexandra Hospital for Children (1932) 32 SR (NSW) 459 — Pedulla v Nasti (1990) 20 NSWLR 720.
FAMILY PROVISION — Where testator made limited provision for domestic partner — Proceeding compromised subject to determination of construction of the will — Where determination of construction question may affect adequacy of the further provision for plaintiff — Further submissions required on the adequacy of the further provision — Administration and Probate Act 1958, s 91.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Wells | Maddens Lawyers |
| For the Defendant | Mr S McNab | BJT Legal Pty Ltd |
HER HONOUR:
Francesco Antonio Pacella (‘the deceased’) died on 10 May 2015. He was survived by his domestic partner, Patricia Fleming (‘the plaintiff’), and his son, Emidio Pacella (‘the defendant’).
On 18 August 2015, probate of the deceased’s will dated 9 May 2015 was granted to the plaintiff and the defendant. The inventory of assets and liabilities filed with the application for probate valued the net estate at $826,558 with the principal asset of the estate being the deceased’s real estate in Stephensons Road, Mount Waverley.
Clause 3 of the will directs the trustees to realise and hold upon trust the deceased’s estate, including his property in Stephensons Road, subject to a right of residence to the plaintiff until her death or permanent vacation of the property, or if by mutual agreement, the property is sold. The estate is then further subject to a number of specific bequests, which are only to be paid upon the sale of Stephensons Road, and are set out in the balance of cl 3 of the will.
By originating motion filed 19 June 2017, the plaintiff sought further provision from the estate of the deceased, pursuant to Part IV of the Administration and Probate Act 1958. The proceeding was issued out of time by 16 months and it was agreed that the extension application and the provision claim would be heard at the same time. On 23 October 2017, the defendant filed an affidavit disputing the plaintiff’s claim and set out the basis for his competing claim.
The terms of settlement
On 4 October 2018, terms of settlement were signed by the parties. The terms provide for Stephensons Road to be sold and for $350,000 of the proceeds of sale to be paid to the defendant’s solicitors, in full and final satisfaction of the defendant’s entitlements pursuant to the will, inclusive of costs. The remaining amount, after payment of the costs of the sale of the Stephensons Road property and the plaintiff’s legal costs is to be paid to the plaintiff.
While not particularly clear, the intention of the terms of settlement appears to be that the payment to the defendant’s solicitors is to allow the defendant to do all things necessary to administer the estate as reflected in the defendant’s submissions as follows:
The defendant as executor of the will proposes that from the $350,000 paid into the estate that:
(a) he pays the three legacies of $20,000 each under clauses 3 (b), (c) and (d) of the will to the deceased’s nephews, Nando and Sandro and niece Maria.
(b) he pays the costs and disbursements of the estate in the proceeding to 28 November 2018, which are –
Solicitor’s costs $12,382.00
Disbursements $2,590.24
Barristers’ fees $10,220.00
Total $25,192.24
(c) He seeks orders from the Court as to the effect of clause 3(a) of the will; and lastly
(d) Pays the balance of the remaining funds to himself as the residuary beneficiary after taking into account any sums that are to be paid if the $200,000 legacy in clause 3(a) of the will is found to be valid.
Remaining issue in dispute[1]
[1]While the defendant recognises that strictly speaking the remaining issue is a separate application, he sought determination of the issue in this proceeding due to the amount involved, namely, $200,000.
The remaining issue in dispute is the construction of cl 3(a) of the will which provides as follows:
The sum of Two Hundred Thousand Dollars ($200,000.00) to my nephew EMIDIO PACELLA (son of my brother PEPPINO PACELLA) for the sole purpose of enabling him to construct a family crypt in my name in a cemetery in Italy chosen by my Executors and if my Executors fail to choose a cemetery within 90 days of the sale of such property then such cemetery is to be chosen by my son EMIDIO PACELLA with such crypt to house 20 coffins;
The deceased apparently informed his nephew of the content of cl 3(a) prior to his death and the defendant also informed him prior to the mediation of the proceeding. The nephew’s daughter asked that her father be notified of the decision of the Court.
Submissions of the defendant
The defendant submits that cl 3(a) is invalid and that the $200,000 should fall into the deceased’s residuary estate. He submits that cl 3(a) is invalid because it is not for a charitable purpose and is uncertain in its operation.
In support of the submission that cl 3(a) is not for a charitable purpose, the defendant submits that the legacy is a trust for the sole purpose of constructing a family crypt at a location to be chosen in Italy and it is not for the benefit of the public at large. Although gifts for the maintenance of burial grounds attached to churches have been found to be valid charitable trusts,[2] a gift outside a churchyard is not charitable unless it can be brought within the fourth head of charitable purposes, being for public benefit.[3]
[2]Re Manser [1905] 1 Ch 68, 73.
[3]Chesterman v Mitchell (1923) 24 SR (NSW) 108, 112–13; Scottish Burial Reform and Cremation Society v Glasgow Corporation [1968] AC 138, 151.
On the issue of uncertainty, the defendant contends that there are no persons, alive or dead, nominated in the will as being entitled to be interred in the structure and the word ‘family’ is not defined in the will. Furthermore, the deceased is interred in the same cemetery in Italy where his parents, grandparents and certain uncles and aunts are buried. There is no interest shown in re-interring those family members who have already died, and the defendant and his son do not wish to be interred in the crypt.
If cl 3(a) is found to be void, the defendant will apply those funds as provided for in the will and it would also have ‘the effect of supplementing his entitlement in the estate’.
Submissions of the plaintiff
The plaintiff agrees that cl 3(a) is invalid on the basis that the clause is ‘not a charitable gift and is in effect void for uncertainty’. The plaintiff submits that if cl 3(a) is void, the funds should be distributed in accordance with the proportions reflecting her intended benefit under the terms of settlement.
The plaintiff submits that regard must be given to the valuation of Stephensons Road at $1,075,000 obtained on 9 February 2018 for the use of both parties prior to the terms of settlement being entered into on 4 October 2018. In accordance with the valuation, pursuant to the terms of settlement the plaintiff would have received $705,000 and the defendant $64,807 (after payment of the legacies and costs) or, in percentage terms, the plaintiff would have received 91.58% of the estate. As Stephensons Road sold for $820,000, the amount the plaintiff would receive is now $450,000.
The plaintiff submits that although her claim was settled by the terms of settlement, she should now be treated as a substantial beneficiary of the estate[4] and as a consequence, if cl 3(a) is found to be void, the $200,000 should be distributed between the plaintiff and defendant in the same relative proportions, which would mean $183,160 (91.58%) to the plaintiff and $16,840 (8.42%) to the defendant.
[4]Administration and Probate Act 1958, s 97(4).
Defendant’s reply submissions
In reply, the defendant submits that the terms of settlement specifically gave the entire conduct of the sale to the plaintiff. The only restriction was that the reserve price should not be less than $700,000. Moreover, during negotiations the defendant made no secret of the fact that he would apply to the Court regarding the validity of cl 3(a) and, if the clause was found to be invalid, he would apply the funds as provided in the will, which would have the effect of supplementing his share from the estate. He submits that through correspondence from the plaintiff’s solicitors, the plaintiff agreed she would support any application made to the Court and never sought any share of the $200,000. It was on the basis that the legacy moneys would be paid to him in the event cl 3(a) is void that the application was made to the Court.
Applicable principles
In construing a will, the task of the court is to give effect to the testator’s intention through examination of the words used in the will, having regard to the will as a whole, aided as necessary by any admissible extrinsic evidence.[5] Prima facie, the words of a will must be given their ordinary meaning.[6]
[5]Fell v Fell (1922) 31 CLR 268, 273–74; Perrin v Morgan [1943] AC 399, 420; Wills Act 1997 (Vic) s 36. See also Re De Bruyn [2016] VSC 6, [11].
[6]Re De Bruyn [2016] VSC 6, [11], citing Fell v Fell (n 11) 273, quoting Ralph v Carrick (1879) 11 Ch D 873, 878.
Testamentary dispositions seeking to have a monument or tomb built, together with cases such as those relating to the care and maintenance of animals, occupy a unique place within the law of trusts aptly described by Burchett AJ as an ‘arcane by-way’.[7] In England such cases have been referred to as ‘troublesome, anomalous and aberrant’, and having a scope which ‘should not be extended’.[8]
[7]South Eastern Sydney Area Health Service v Wallace (2003) 59 NSWLR 259, 261 (‘Wallace’).
[8]Re Endacott; Corpe v Endacott [1960] Ch 232, 246 and 251 (‘Re Endacott’).
Where the proposed monument or tomb is to form the fabric of a church, the disposition may be valid as a charitable trust falling within the third ‘Pemsel category’ of charitable trusts.[9] Similarly, if the monument has a public element, the fourth Pemsel category may be applicable.[10] Difficulties arise, however, where the disposition does not form a valid charitable trust, yet is intended to be a trust for purpose. Generally, a trust that has no beneficiaries or does not have a charitable intent is void.[11] At times, however, trusts for non-charitable purposes such as the construction of tombs have been found to be valid. These cases form an exception to the general rule, or an exceptional method of construction.[12]
[9]Hoare v Osbourne (1866) LR 1 Eq 585; see also Re Manser (n 6) 73. The phrase ‘Pemsel category’ is used to refer to the four categories described by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531, 583.
[10]See Re Mitchner [1922] St R Qd 39.
[11]Leahy v Attorney-General for New South Wales [1959] AC 457, 478–79 and 484; Re Endacott (n 14) 246; see Wallace (n 13) 261; Public Trustee v Nolan (1943) 43 SR (NSW) 169, 172 (‘Nolan’).
[12]See Re Endacott (n 14) 246; Nolan (n 17) 172–73.
In Mussett v Bingle a trust for the erection of a private monument was considered ‘perfectly good’.[13] Trusts for the construction of monuments and tombstones in Re Filshie,[14] South Eastern Sydney Area Health Service v Wallace (‘Wallace’),[15] and Wiseman v Kildahl[16] were similarly held to be valid. Those cases involved the erection of tombstones or monuments in cemeteries, and the use of sums that the executors ‘saw fit’ or were reasonable. In Mellick v President and Guardians of the Asylum, where aside from issues of delay the Court would have upheld the disposition, the proposed monument was considered to be akin to ‘an expensive funeral’.[17]
[13][1876] WN 170.
[14][1939] NZLR 91.
[15](n 13). See also Re Spehr [1965] VR 770, where trusts for the erection of monuments were accepted by the parties to be valid.
[16](1880) 6 VLR (E) 78.
[17][1821] 37 ER 818, 820.
In contrast, in Johansons v ANZ Executors & Trustee Company Ltd (‘Johansons’), the relevant disposition was considered void.[18] There, the testator directed that part of a house was to be used to create a museum, as well as a crypt for the testator’s ashes and those of his family members who chose to have their ashes placed there. Smith J determined that the proposed crypt did not come within ‘the accepted anomalies relating to windows and churches and the upkeep of graves and vaults’.[19] Additionally, the crypt was impracticable as no funds were allocated to its maintenance. Similarly, in Chesterman v Mitchell a direction to establish a private cemetery was considered invalid.[20] In Pooley v Royal Alexandra Hospital for Children (‘Pooley’), a disposition with the purpose of erecting a monument in a cemetery and the perpetual care of the ground was determined to be invalid.[21] This approach was followed in Pedulla v Nasti, where the testator sought to have a vault and chapel erected to house his ashes.[22]
[18][1999] VSC 219 (‘Johansons’).
[19]Ibid [15].
[20](1923) 24 SR (NSW) 108, 112–113.
[21](1932) 32 SR (NSW) 459 (‘Pooley’).
[22](1990) 20 NSWLR 720.
Four limits appear to exist regarding non-charitable purpose trusts. First, the obligation of the executor in the context of such trusts has been identified as ‘imperfect’.[23] Although the executor may give effect to the relevant clause if she or he chooses, she or he cannot be compelled to do so. In this regard, it has been acknowledged that while there are no interested beneficiaries to enforce the trust, if the disposition is not followed by the executor, the residuary beneficiaries or next of kin may be able to pursue the property on a resulting trust.[24]
[23]JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) [11-01]; LexisNexis, Halsbury’s Laws of Australia (last updated 30 January 2018) 430 Trusts, ‘Persons and objects in whose favour trusts may be created’ [430-275] n 4 (‘Halsbury’s’), citing Re Dean; Cooper-Dean v Stevens (1889) 41 Ch D 552, 557 (‘Re Dean’), Pettingall v Pettingall (1842) 11 LJ Ch 176, and Re Thompson; Public Trustee v Lloyd [1934] Ch 342; Raymond Jennings, Jarman on Wills (Sweet & Maxwell, 8th ed, 1951) 899.
[24]Halsbury’s (n 29); Trimmer v Danby (1856) 25 LJ (N S) Ch 424, quoted in RM Eggleston, ‘Purpose Trusts’ (1941) Res Judicatae 27, 118.
Secondly, a non-charitable purpose trust that lasts longer than the perpetuity period is void.[25] While in Re Carson, reference was made to ‘the rule against perpetuities’,[26] the difficulty does not surround the vesting of interests, to which that rule is directed. Rather, an analogous rule applies limiting the duration of non-charitable purpose trusts.[27] The development of the rule has been explained by Hart as follows:
[t]here is … a series of decisions establishing clearly that a non-charitable purpose trust, although it cannot not be enforced, is nevertheless not necessarily void. Moreover the cases appear to have developed a rule which in reality is a[n] … offshoot of the confused union of the two senses in which Gray speaks of the word ‘perpetuity’. The modern rule against perpetuities, with its prescription of a period of a life or lives in being and twenty-one years thereafter, deals admittedly with the vesting and not with the duration of interests. The rule against inalienability again admittedly refers neither to the vesting nor the duration of interests but to their quality of being marketable: it is a branch of the more general principal of repugnancy. But the cases relating to non-charitable purpose trusts, largely it is submitted through the loose use of the word ‘perpetuity’, do seem to have built up a rule which requires that such trusts shall not be of a greater duration than a life or lives in being and twenty-one years thereafter.[28]
[25]Re Dean (n 29) 557; Nolan (n 17); Re Endacott (n 14) 246; Pooley (n 27); Wallace (n 13).
[26][1956] QSR 466; see also RM Eggleston (n 30) 118.
[27]See JHC Morris and W Barton Leach, The Rule against Perpetuities (Stevens & Sons, 2nd ed, 1962) 324.
[28]William O Hart, Some Reflections on Re Chardon [1937] 53 The Law Quarterly Review 24, 28.
According to the learned authors of ‘The Rule against Perpetuities’, the purpose of the rule, similar to the rule against perpetuities and the rule against inalienability, is in ‘avoiding the withdrawal of property from commerce’, that is, preventing capital from being tied up for too long. [29] In the text ‘The Modern Law of Perpetuities’, the rule is described as follows:
[t]he rule is that a gift is void under the rule against indefinite duration if, by terms of the gift or of the trust to which it is given, it is required to be retained by the trustees (as a fund) for a period which might exceed the perpetuity period.[30]
[29]JHC Morris and W Barton Leach (n 33) 326.
[30]RH Maudsley, The Modern Law of Perpetuities (Butterworths, 1979) 171; see also Re Cain; National Trustees Executors & Agency Co of A/asia Ltd v Jeffrey [1950] VLR 382, 391, in which the rule was discussed in the context of a gift to a non-charitable organisation.
In Pooley, Long Innes J determined that the direction to build a monument was void on account of the rule:
[t]he intention of the testatrix in the present case was that the monument in question should constitute a perpetual memorial to her son, and I have consequently held that the gift for the purposes of erection of the monument, equally with that for the perpetual care of the ground, fails as a perpetuity not being a charity.[31]
[31]Pooley (n 34) 463–34.
His Honour was unable to distinguish Thomson v Shakespear, in which a gift of funds to establish a museum at William Shakespeare’s house was held to be invalid as the intention of the testator was that the building was to stand and be in perpetual memory of Shakespeare;[32] that is, it was the intention that the structure exist in saecula saeculorum.[33]
[32]Thomson v Shakespear (1860) 1 De G. F. & J. 399, 401. Here, the gift was in the will of John Shakespear.
[33]‘into ages of ages’.
Pooley was followed in Pedulla v Nasti, in which Needham J found a direction regarding the construction of a vault and chapel void. In doing so, his Honour discussed the ‘rule restricting the duration of purpose trusts’, as distinct from the ‘rule against perpetuities’,[34] and noted that as it had not been suggested that the Perpetuities Act 1984 of New South Wales applied, the distinction was not presently relevant. The potential relevance of s 16 of the Perpetuities Act 1984 (NSW) does not appear to have been brought to his Honour’s attention.
[34]Pedulla v Nasti (n 28) 721; Pooley (n 27), which was followed in Phillips v McCabe [2016] SASC 27, a case involving the maintenance of family graves.
In contrast, the issue of perpetuity was raised and rejected in Re Filshie, Wallace and Wiseman v Kildahl. In Re Filshie, the rule invalidated a trust for the maintenance of headstones, but not the construction of the headstones, and the two trusts were considered to be severable.[35] The trust in Wiseman v Kildahl was not viewed as offending the rule against perpetuities as it was the corpus of the fund, rather than the income, that was directed to be used on both construction and maintenance.[36] In Wallace, a trust to apply income for the upkeep of graves was deemed invalid as it would ‘continue forever’, but an initial provision for the erection of a headstone and turf was not viewed as involving a perpetuity. Pooley and Pedulla v Nasti were distinguished on the basis that, in those cases, the terms required the building and maintenance to be treated as one disposition.[37]
[35]Re Filshie (n 20).
[36]Wiseman v Kildahl (n 22).
[37]Wallace (n 13) 264.
Of relevance is s 18 of the Perpetuities and Accumulations Act 1968 (Vic) which provides:
18 Non-charitable purpose trusts
(1) Except as provided in subsection (2) nothing in this Act shall affect the operation of the rule of law rendering non-charitable purpose trusts and trusts for the benefit of corporations which are not charities void for remoteness in cases where the trust property may be applied for the purposes of the trusts after the end of the perpetuity period.
(2) If any such trust is not otherwise void the provisions of sections 5 and 6 shall apply to it and the property subject to the trust may be applied for the purposes of the trust during the perpetuity period but not thereafter.
On the reference to ‘the rule of law’, the relevant second reading speech states that s 18 retains the ‘present principle that trusts for non-charitable purposes are valid only in so far as they are framed to apply trust property within the perpetuity period’.[38]
[38]Victoria, Parliamentary Debates, Legislative Assembly, 10 April 1968, 4223, referring to the Report from the Statute Law Revision Committee upon the proposals contained in the Perpetuities and Accumulations Bill, Legislative Council 1968.
Section 6 establishes the ‘wait and see rule’, such that where, inter alia, a disposition consisting of the conferring of any power option or other right would be void on the ground that the right may be exercised at too remote a time, the disposition is considered void only so far as it is not exercised within the perpetuity period.
It does not appear that the application of s 18, or the equivalent interstate provisions, has been considered before.[39]
[39]As noted, the equivalent NSW provision, Perpetuities Act 1984 (NSW) s 16, was not considered in Pedulla v Nasti (n 28), it was raised in Anthony R Cant vKirby [2011] NSWSC 1193 and The Garden Clubs of Australia Incorporated v Eyres [2002] NSWSC 801, but considered inapplicable in each instance. In Phillips v McCabe [2016] SASC 27, Gray J determined that a South Australian provision regarding the rule against perpetuities, Law of Property Act 1936 (SA) s 61, had no application to the question of whether a trust for a non-charitable purpose of perpetual duration is void.
Thirdly, at times, non-charitable purpose trusts fail on account of an identified purpose that is wasteful or otherwise against public policy. In Brown v Burdett, a direction to brick up a property for 20 years was considered invalid.[40] Re Boning was a similar case. In Re Boning, White J viewed a clause requiring a property to be shut up for 20 years as having the effect that the proposed trust did not have an object for those years, and that the trust was not the kind to which the law would give effect.[41] A testamentary direction that a house is to be destroyed has also been held to be invalid.[42] In a Scottish case involving the proposed creation of bronze statues depicting family members of the testatrix in a private enclosure, the Court refused to uphold the trust on public policy grounds. Lord Salvesen stated:
… it involves a sheer waste of money, and not the less so the expenditure would give employment to a number of sculptors and workmen in other ways. I think, further, that it would be a dangerous thing to support a bequest of this kind which can only gratify the vanity of testators, who have no claim to be immortalised, but who possess the means by which they can provide for more substantial monuments to themselves …
For many years they had apparently contemplated the erection of similar statues, but they could not bring themselves to part with the money during their own lifetimes. Such considerations do not restrain extravagance or eccentricity in testamentary dispositions, on which there is no check except by the Courts of law. A testator may still leave his means to be expended in stone and lime which will form a monument to his memory, provided the bequest he makes serves some useful public purpose and is not merely for his own glorification … money would require to be expended in perpetuity merely to gratify an absurd whim which has neither reason nor public sentiment in its favour. On these grounds I am for answering the first question in the negative.[43]
[40](1882) 21 ChD 667.
[41][1997] 2 Qd R 12.
[42]Re Headrick’s Will [1953] QWN 23.
[43]McCaig’s Trustees v Kirk-Session of United Free Church of Lismore [1915] SC 426, 434; see also McCaig v University of Glasgow (No 2) [1907] SC 231.
His Lordship distinguished, however, the public sentiment in a memorial stone to the testator.[44]
[44]Ibid 433.
Finally, Ford and Lee identify that a trust for a non-charitable purpose ‘is not the sort of trust that the Court can carry into effect’, in cases where there is no trustee or the trustee is refusing to act.[45] More generally, as demonstrated in Johansons, issues of impracticability may arise, analogous to those encountered in the context of charitable trusts.[46]
[45]Thomas Reuters, Westlaw, The Law of Trusts: Ford & Lee, ‘The inability of the court to carry a non-charitable purpose trust into effect’ [5.12130] (last updated 30 October 2016).
[46]See eg Fellows v Sarina (Unreported, Supreme Court of New South Wales, Simos J, 9 May 1996).
Consideration
By its terms, cl 3(a) does not form an outright gift to the deceased’s nephew. Rather, the funds are to be paid to him ‘for the sole purpose of enabling him to construct a family crypt’ in the deceased’s name. While the funds may indirectly benefit any ‘family’ who may wish to be interred in the crypt, there is no suggestion that the deceased intended individual family members to somehow hold a beneficial interest in the crypt. The intention apparent from the words of the clause is that the nephew is to hold the funds upon trust for a purpose, rather than for individuals.
As the defendant submits, it can be accepted that cl 3(a) does not create a charitable trust. It is not limited by a restriction that the crypt must be constructed in a church yard. As such, the question arises as to whether the trust should be upheld as falling into the anomalous category of non-charitable purpose trusts.
The words adopted by the deceased in cl 3(a) raise two particular ambiguities. First, as the defendant submits the word ‘family’ is not defined. It is uncertain whether the reference is to the deceased’s immediate family, extended family, family members who predeceased the deceased, or future family members. The size of the crypt was to house 20 coffins. This suggests that the deceased intended the crypt to house more than his immediate living family. Given the ties of the defendant and his son to Australia, it is perhaps unlikely that the deceased assumed that the defendant, the defendant’s son, and any future generations of the family would opt to be interred in the crypt.
In light of the 90-day time frame afforded to the executors, it is more likely than not that the deceased contemplated preservation or reinterment of his body ahead of the crypt being constructed. It is uncertain, however, whether he intended reinterment of wider members of his family. The size of the crypt leans in favour of this conclusion but, if so, practical limitations arise as the funds are disposed for the ‘sole purpose’ of enabling construction of the crypt, not reinterment.
Secondly, of significance is the phrase ‘enabling him to construct’. The natural and ordinary meaning of the phrase suggests that the nephew himself is to construct the tomb. The deceased did not, for example, adopt the phrase ‘for the sole purpose of constructing’. While an alternative construction may view the phrase in a broader sense, such that the nephew coordinates the construction of the crypt, this would appear to strain the language of the clause. The evidence of surrounding circumstances does not assist in resolving this point.
Although cl 3(a) seeks to establish a family crypt, it is uncertain who is to be interred in the crypt other the deceased, and given its size, if the deceased intended family members to be reinterred there, there are no funds provided for this purpose. Moreover, on the plain and ordinary language of the clause, the deceased appears to have specifically identified the nephew as constructing the crypt. It is difficult to see how the Court could ensure that the trust is given effect in such circumstances.
Additionally, while the circumstances do not immediately align with those of Re Boning and Brown v Burdett, which involved the disuse of real property,[47] and the sentiment associated with burial monuments should be afforded due respect, if the trust is given effect and a crypt to house 20 coffins ultimately ends up interring one body, there arises an element of waste. The disposition is not akin to an ‘expensive funeral’ and the sum involved is significant.[48]
[47]Brown v Burdett (n 48); Re Boning (n 49).
[48]cf Wallace (n 28) where the sum involved was described as ‘not large’.
Given the uncertainties surrounding the clause and the waste that will seemingly arise, the trust is invalid and should not be given effect. As a result of this finding, it is unnecessary to consider issues of perpetuity, as the trust falls outside the phrase ‘not otherwise void’ for the purposes of s 18(2) of the Perpetuities and Accumulations Act 1968.
Although it is unnecessary to consider the issues of perpetuity, prima facie, Pooley and Pedulla v Nasti appear to be directly applicable. The former considered the validity of a trust for erecting a monument in a cemetery, and the latter the construction of a vault and chapel to house ashes. As stated, both trusts were deemed invalid on account of the intention, inter alia, that the monument be perpetual.
The circumstances in this proceeding are distinguishable both on account of the discrete disposition to construct, and due to the application of the Perpetuities and Accumulations Act 1968. Section 18 of the Act contemplates ‘the rule of law’ that non-charitable purpose trusts may be found void where the trust property may be applied beyond the perpetuity period. This is consistent with the rule against the duration of trusts.
If cl 3(a) is given effect, funds would be transferred to the nephew and he would hold those upon trust for the purpose of construction of the crypt. Once the crypt is built, the funds are disposed of and the trust as intended by the deceased is complete. The issue is whether the trust might not be complete within the perpetuity period. The relevant life, based upon the terms of cl 3(a), appears to be that of the defendant. If the defendant does not identify a cemetery, either jointly with the plaintiff, or individually beyond the 90 day period, the trust will fail. Thus, the perpetuity period is the defendant’s life plus 21 years. There is the potential, however, that despite any nomination by the defendant of a cemetery, the nephew will not construct the crypt within this period. While this would otherwise result in the trust being void, it is saved by the ‘wait and see’ rule. As such, cl 3(a) is not void as offending the rule against trusts of perpetual duration.
Even if, contrary to the above construction, cl 3(a) is valid, it would appear that it creates only an imperfect obligation. The defendant can seek to give it effect if he chooses, but is not otherwise bound.
Conclusion as to construction of cl 3(a) of the deceased’s will
Clause 3(a) of the deceased’s will is invalid. Accordingly, upon a resulting trust, the amount of $200,000 falls to the residuary estate of the deceased.
Resolution of the plaintiff’s Part IV claim
Although the parties have entered into terms of settlement, the parties must obtain the approval of the Court to the settlement.[49] In approving terms of settlement resolving family provision claims, the Court aims to facilitate the settlement without simply acting as a rubber stamp.[50] Brief consideration is given to the evidence and the submissions of counsel and, if the resolution appears reasonable, the Court makes the orders sought.[51] Greater consideration is necessary where persons under a disability, such as minors or unascertained classes of persons, are involved.
[49]Hodge v De Pasquale (2014) 15 Australian Succession and Trusts Law Reports 1.
[50]Ibid [65] and [77].
[51]Hore v Perpetual Trustee Company Ltd (Unreported, Supreme Court of New South Wales, Windeyer J, 8 June 1995) 12–13, as quoted in Hodge v De Pasquale (n 49) [65].
Clauses 3(b), (c) and (d) of the deceased’s will make specific gifts of $20,000 to the deceased’s nephews and niece. Clause 3(e) divides the residue of the estate between the plaintiff and defendant. Clause 3(d) provides for gifts over should the beneficiaries not survive the deceased.
According to the plaintiff, the beneficiaries referred to in clauses 3(b) and 3(c) of the will are both in their fifties and reside in Venezuela. The beneficiary in cl 3(d) resides in Italy. Although there is no evidence of the position of the deceased’s nephews and niece, it is noted that their interests under clauses 3(b), (c) and (d) of the will are preserved by the terms of settlement.
The division of the estate as agreed in the terms of settlement reflects an obligation on the part of the deceased to provide for the plaintiff. The plaintiff was the domestic partner of the deceased since 1970 and is now aged 83 years. She has limited means and ability to earn income. The terms were premised on the principal asset of the estate being valued at $1,075,000, whereas it was valued at $800,000 in the inventory of assets. The property was subsequently sold at auction for $820,000. The terms were entered into when the meaning of cl 3(a) had not been determined. With the $200,000 now falling into the residue of the estate, the value of the estate is higher than when the terms were agreed. In considering the terms, the Court must be satisfied, amongst other matters, that the further provision is sufficient for the plaintiff’s proper maintenance and support.
Accordingly, if the parties are unable to agree on this, further submissions may be made on this discrete issue. The parties are to inform the Court by 9 April 2019 whether the remaining issue is agreed or not.
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