Re the Will of Frederic William Shephard, Deceased No. Scgrg-99-305

[2000] SASC 200

RE THE WILL OF FREDERIC WILLIAM SHEPHARD, DECEASED
[2000] SASC 200

Civil

1................ DEBELLE J...... This is an application for the determination without administration of a question which has arisen in the administration of the trusts of the will of the deceased, Frederic William Shephard, whom I shall call “the testator”.  The application is made by the executor of the estate.  In the affidavit in support of the application, the executor says that it seeks “advice and directions from the court as to the true construction of the will” of the testator.  An application for advice and directions under the Administration of Probate Act 1919 is not to be confused with an application under the Supreme Court Act and the Rules thereunder for the determination without administration of a question which has arisen in the administration of the trusts of the will of the deceased.  The two procedures are not to be joined in one: see In the estate of Hunter (Deceased) [1957] SASR 194 per Napier CJ at 195 – 196. In this action, the executor applies under the Supreme Court Act and Rules for the determination of a question which has arisen in the administration of the trusts of the will of the testator.

1. The testator, who lived at Nairne, was a grazier.  He died on 5 June 1959.  Probate of his will was granted on 16 October 1959 to the widow of the testator and to his son.  Both of the executors have since died and Executor Trustee Australia Limited is now the executor.

2. Only one asset now remains in the estate of the testator and that asset is the subject of this application.  It is 99 acres of land on Harrogate Road, Nairne.  It is called “the Selection Paddock”.  The land is valued at some $96,000.

3. The will contains an express provision dealing with the Selection Paddock.  It is clause 6 which is in these terms:

   “6.     I GIVE that portion of Section 4412 in the Hundred of Kanmantoo known as the ‘Selection Paddock’ as fenced unto my trustee UPON TRUST

   (a)     to permit my son Stanley Scott Shephard to have the use occupation and enjoyment thereof and to receive the income therefrom during his lifetime he paying all rates taxes interest and other outgoings thereon and keeping the same and the improvements thereon in good repair and condition and insuring all buildings and erections and keeping the same insured against loss or damage by fire storm tempest and earthquake to an amount fixed by and to the satisfaction of my trustees

   (b)     on the death of my son Stanley for such of the sons of my son Stanley as are living at his death and if more than one in equal shares absolutely but if there is no son of my said son Stanley living at his death then for my son Douglas Frederic absolutely.”

Stanley died without having any sons but Douglas died before Stanley.  The question is who is entitled to take the Selection Paddock.  The testator was survived by his widow and by three sons, Douglas, Reginald and Stanley.  All of those persons have now died.  They all left wills and probate has been granted of each will, save and except for the will of Stanley Shephard.

1. The testator’s wife died on 16 April 1960.  By her will she gave the whole of her estate to her three sons, all of whom survived her.

2. Douglas Shephard died on 21 August 1985.  Reginald Shephard died on 19 August 1991.  The children of Douglas and Reginald benefit under their respective wills.  Stanley Shephard died on 21 July 1997.  He and his wife had one child, a daughter who has married and is called Heather Sowerby.  Stanley died without any son having been born.  His wife is the beneficiary of his estate.  She is still alive.

3. At his death, the testator was the registered proprietor of five sections of land in the Hundred of Kanmantoo.  They were Sections 1886, 1887, 4411, 4412 and 5820.  After appointing his executors, the testator made the following bequests.  By clause 3 of his will he gave all his interest in all minerals in Sections 1886, 1887 and 5820 to his three sons as tenants in common in the proportions of nine-twentieths to Douglas, seven-twentieths to Reginald, and four-twentieths to Stanley.  Subject to the gift of the interest in the minerals, the testator gave Sections 1886 and 1887 to Douglas and Section 5820 to Reginald.

4. By clause 4 of his will he gave all of the sheep belonging to him at his death to be divided equally between his three sons.

5. By clause 5 of his will he gave portion of Section 4411 to Douglas subject to a life interest to his widow to reside in the house on that section and subject to a payment of an annuity to her by Douglas during her lifetime.

6. The testator held two parcels of land which comprise part of Section 4412.  The Selection Paddock is one of them.  The Selection Paddock is subject to clause 6 of the will.  The testator gave the balance of Section 4412 to Douglas by clause 7 of the will.  By clause 8 of the will, the residue of the estate was given to the testator’s widow.

7. Clause 9 of the will included a direction that, if any person beneficially interested under the will died during the testator’s lifetime leaving a child or children living at his death, then the child or children should take the share of their parent.  That clause did not come into operation because all of the beneficiaries under the testator’s will survived him.  The remaining provisions of the will contain certain directions and powers of the trustees.  For present purposes, there is no need to refer to them.

8. The testator gave Stanley no land other than the life interest in the Selection Paddock.  Subject to that life interest and to his interest in the minerals in Sections 1886, 1887, and 5820, the testator gave all his land to his sons, Douglas and Reginald.  Douglas was the eldest son.  He has received the largest interest in the minerals.  There is no evidence as to the size of the respective parcels of land but it appears that Douglas also has been given more land than Reginald.

9. Stanley Shephard and his wife held a farm property at Nairne.  It was a third part of Section 4412.  They worked it with the Selection Paddock.  During the 1970s, Stanley Shephard and his wife transferred the farm to their daughter, Heather Sowerby, and her husband.  After that transfer, Mrs Sowerby and her husband worked the Selection Paddock with their farm in partnership with Stanley Shephard and his wife until Stanley died in 1997.

10. The question for determination is whether on the true construction of the testator’s will the Selection Paddock is now vested in the estate of Douglas or in the estate of the testator’s widow or is vested in some other person.

11. The task of the court is to effect the intention of the testator as that intention is expressed in the words of the will: Beaudry v Barbeau [1900] AC 569. For the purpose of ascertaining the testator’s intention, the will is read in the first place without reference or regard to the consequences of any rule or canon of construction: Edwards v Edwards [1909] AC 275 at 277. So, in Perrin v Morgan [1943] AC 399 at 408, Viscount Simon LC said:

    “[F]or in most instances, the duty of a judge who is called on to interpret a will containing ordinary English words is not to regard previous decisions as constituting a sort of legal dictionary to be consulted and remorselessly applied whatever the testator may have intended, but to construe the particular document so as to arrive at the testator’s real meaning according to its actual language and circumstances.”

See also Bruyn v Perpetual Trustee Co Ltd (1974) 131 CLR 387 at 392. In light of the events which have happened, if effect is given only to the natural meaning of the words of clause 6 without applying any presumptions of law or canons of construction, one interpretation might be that the gift of the Selection Paddock lapses and falls into the residue of the estate of the testator. That is a consequence of the fact that the will provides that, once the life interest of Stanley has determined, there is a gift of the Selection Paddock to Stanley’s sons but, if Stanley has no sons, there is a gift over to the testator’s son, Douglas. It might be said that the gift to Douglas is thus contingent upon Stanley having no sons and Douglas surviving Stanley with the result that, as Stanley had no sons and Douglas died before Stanley, the contingency was not satisfied. On that view, the gift lapses and falls into residue. If that is the correct reading, by clause 8 of the testator’s will, the residue of his estate passes to the widow’s estate and, according to the terms of her will, is divided into three equal shares between the estates of the three sons.

1. That reading of the will requires that the testator intended that Douglas should take only if he survived Stanley and Stanley had no sons.  However, it cannot be assumed that the testator intended that the gift to Douglas was contingent upon both of those events.  That is to imply a term that Douglas should be living at the death of Stanley.  The testator may have intended that the gift to Douglas should be made even if he died before Stanley.

2. It is a corollary of the conclusion that clause 6 imports a term that Douglas should survive Stanley that, if Douglas did not survive Stanley, the gift of the Selection Paddock would lapse and fall into the residue of his estate and so pass to the testator’s widow.  There are two reasons which suggest that the testator did not intend that result.  First, the only interests which the testator gave his wife under the will were an annuity and a life interest to reside in the house on Section 4411.  It is, therefore, unlikely that he intended that a parcel of farming land should come to her if Douglas predeceased Stanley and Stanley had no sons.  Secondly, Douglas received Section 4411 and part of Section 4412 under the will.  It may, therefore, be likely that the testator intended that, if Stanley had no sons, the Selection Paddock, which is close, if not adjacent, to the part of Section 4412 held by Douglas, should pass to Douglas.  It is not possible to be more precise about the location of the Selection Paddock as there is no evidence concerning the relationship between the two parcels of land.  It is relevant to note that the Selection Paddock is also very close to Section 4411.  These two facts not only suggest that it was unlikely that the testator intended that the Selection Paddock should pass with the residue of his estate but that he intended that it should pass to Douglas.

3. Mr Haines, who appeared for the beneficiaries of the estate of Douglas, submitted that the trust of this will fell within the class of authorities of which Pearsall v Simpson (1808) 15 Ves 29, 33 ER 666 is a leading case. The principles in that decision were adopted and applied in Maddison v Chapman (1858) 4 K&J 709 at 719, 70 ER 294 at 298 – 299, and, more recently, by the High Court in Permanent Trustee Co of NSW Ltd v D’Apice (1968) 118 CLR 105 at 110. Those are cases which establish that, where there is a limitation over, which, though expressed in the form of a contingent limitation, is, in fact, dependent upon a condition essential to the determination of the interests previously limited, the court is at liberty to hold that, notwithstanding the words “in form import contingency, they mean no more, in fact, than that the person to take under the limitation over is to take subject to the interests so previously limited”. Thus, Mr Haines contended, the gift to Douglas, though expressed in the form of contingent limitation, was, in fact, intended to be subject to the interests previously limited. I do not think that it is possible to construe clause 6 in this way. On any view of the matter, the gift to Douglas is contingent upon Stanley having no sons. It is a contingent interest quite unlike those which are “subject to the interests which are previously limited” as that expression is explained in Maddison v Chapman (supra).  Those are limitations which do little more than specify the order in which persons will be entitled to enjoy the interest devised to them.

4. The facts that the gift to Douglas is contingent upon Stanley having no sons, and that Douglas died before Stanley, do not necessarily mean that the Selection Paddock is not transmitted to the estate of Douglas.  Mr Jarman identifies circumstances in which an interest will be transmissible, notwithstanding that it is contingent and has not vested.  In the 8th edition of Jarman on Wills at 1342, the following passage appears:

   “[A] contingent interest will or will not be transmissible to the personal representatives of the legatee, according to the nature of the contingency on which it is dependent.  If the gift is to children who shall live to attain a certain age, or shall survive a given period or event, the death of any child pending the contingency has obviously the effect of striking the name of such deceased child out of the class of presumptive objects; and, consequently, such an interest can never devolve to representatives, as it becomes vested and transmissible at the same instant of time.  Where, however, the contingency on which the vesting depends is a collateral event, irrespective of attainment to a given age and surviving a given period, the death of any child pending the contingency works no such exclusion; but simply substitutes and lets in the legatee’s representative for himself.

   Thus, where a testator bequeathed his personal estate to A., and if he shall die without leaving issue, then over to B.; in the event of B. surviving the testator, and afterwards dying in the lifetime of A., testate or intestate, his contingent or executory interest will devolve to his executor or administrator (as the case may be.)”

Instances of the application of this principle are to be found in Re Cresswell, Parkin v Creswell (1883) 24 Ch D 102, and in Re Shannon (Deceased), Public Trustee v Redmayne [1968] NZLR 852. In Re Creswell at 107, Kay J said:

“As far as I can discover, the only case in which a contingent future interest is not transmissible is where the being in existence when the contingency happens is an essential part of the description of the person who is to take.”

In Re Shannon at 860, the Court of Appeal in New Zealand added a further condition stating the principle in these terms:

“From all these authorities the principle may clearly be derived: an interest given by a will, though contingent, may be transmissible though the beneficiary die before the contingency takes place, provided (1) that, in the words of Kay J., it is not an essential part of the description of the person who is to take that he should be in existence at the date when the contingency happens and (2) that the language of the will as a whole supports the conclusion that it was the testator’s intention that the interest should be a transmissible one.”

In this case, the designation of Douglas as legatee does not include the requirement that he should be living when Stanley dies without sons.  It would be to add words to the designation of Douglas as legatee to import such a requirement.  It would, in truth, be adding one further contingency.  Furthermore, there is nothing elsewhere in the will which would justify the importation of such a contingency: cf. Re Cresswell at 107.

1. It is not entirely clear what the second requirement as stated in Re Shannon is intended to embrace.  Certainly, if there are words in the will which show that it was not the intention of the testator that the interest should be transmissible, effect should be given to them.  However, if, as here, there are no words which require that the person who is to take should be in existence at the date of the testator’s death and the balance of the will contains no such requirement, then it is difficult to understand why effect should not be given to it.  I would prefer to express this latter condition in these terms – that the language of the will as a whole is not inconsistent with the conclusion that it was the testator’s intention that the interest should be a transmissible one.  There is nothing in the terms of this will which is inconsistent with the conclusion that the contingent interest of Douglas is transmissible to his estate.  That conclusion is not inconsistent with the fact that the testator gave Douglas his interest in Sections 4411 and 4412 and may therefore have intended the Selection Paddock as part of Section 4412 should pass to Douglas or his estate if Stanley had no sons.

2. For these reasons, I determine that the land known as the Selection Paddock is now vested in the estate of Douglas Frederic Shephard.