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Reilly v Gengos

Reilly v Gengos

Case [2006] NSWSC 139 10 March 2006

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CITATION: Reilly v Gengos [2006] NSWSC 139

HEARING DATE(S): 9 March 2006

JUDGMENT DATE :
10 March 2006

JURISDICTION: Equity Division
Probate List

JUDGMENT OF: Rein AJ

DECISION: See [19] and [21].

CATCHWORDS: PROBATE - Construction of will - Factual issue of whether first plaintiff indebted to testator at time of testator’s death, requiring debt to be offset against entitlement to recover benefit of bequest - defendants failed to discharge onus of establishing monies were loans and not gifts - Whether particular clause in will required legacy to second plaintiff to be offset against mortgage debt bequeathed to first plaintiff

LEGISLATION CITED: Wills, Probate and Administration Act 1898, s 21

CASES CITED: Allgood v Blake (1873) 8 LR Ex 160
Butler v The Trustees Executors and Agency Co Ltd (1906) 3 CLR 435
Coorey v George (NSWSC, 22/02/86, unreported)
Coshott v Sakic (1998) 44 NSWLR 667
Edwards v Edwards [1909] AC 275
Heydon v Perpetual Executors Trustee and Agency Co (WA) Ltd (1930) 45 CLR 111
Peoples v Simpson [2005] NSWSC 355
Perpetual Trustee Co Ltd v Attorney-General (NSW) and Public Trustee (Estate of the late Richard Harris) (NSWSC, 27/3/87, unreported, BC8701477)
Perpetual Trustee Co Ltd v Wright; Re Will of James Paul Gee Cox Junior deceased (1987) 9 NSWLR 18
Perrin v Morgan [1943] AC 399
Towns v Wentworth [1858] 11 Moo PC 526; 14 ER 794
Watson v Ralph (1982) 148 CLR 646

PARTIES: Anne Reilly (First Plaintiff)
Mark Gregory Reilly (Second Plaintiff)
George Gengos (First Defendant)
Lance Richard Dowle (Second Defendant)

FILE NUMBER(S): SC 102334/05

COUNSEL: P Hallen SC (Plaintiffs)
L Ellison SC (Defendants)

SOLICITORS: Uther Webster & Evans (Plaintiffs)
Sparke Helmore (Defendants)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
PROBATE LIST

Rein AJ

10 March 2006

102334/05 Anne Reilly and Anor v George Gengos and Anor

JUDGMENT

1 HIS HONOUR: These proceedings concern the will of the late Lionel Vincent Reilly (“the testator”) who died on 25 December 2003. The will was the subject of a grant of probate on 10 May 2004.

2 The first named plaintiff Anne Reilly (“Mrs Reilly”) was named a beneficiary under the will and the second named plaintiff her son Mark (“Mark”) was also a named beneficiary. The defendants are the executors of the will. Mrs Reilly had been married to the testator’s step-son Gregory Reilly, but Gregory Reilly had passed away in 1995 following a long period of ill health.

3 Mr Hallen SC appears for the plaintiffs and Mr Ellison SC appears for the defendants. I have received outlines of submissions from both prior to the hearing and received oral submissions.

4 There are two issues only: the first is a construction issue and the second is a factual matter. Clause 6 of the will provides:

“6. I DIRECT that any moneys owed to me at the time of my death by any beneficiary shall be deducted by my Trustees from the moneys payable to such beneficiary under this my Will.”

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Reilly v Gengos

Details

AGLC: Reilly v Gengos [2006] NSWSC 139
Case: [2006] NSWSC 139
Decision Date: 10 March 2006

CaseChat Overview and Summary

The matter before the court involved Reilly, as the first plaintiff, and Gengos, as the defendants. The dispute centred on the interpretation of a will and whether certain debts owed by the first plaintiff to the testator at the time of the latter’s death should be offset against her entitlement to recover the benefit of a bequest. The second plaintiff was also involved in the proceedings, contesting the interpretation of a clause in the will that might require a legacy to be offset against a mortgage debt bequeathed to the first plaintiff. The case was heard in the Supreme Court of Victoria.

The court was required to determine two primary legal issues. Firstly, whether the first plaintiff was indebted to the testator at the time of the testator’s death, and if so, whether these monies should be treated as loans rather than gifts. Secondly, the court needed to interpret a particular clause in the will to determine whether the legacy to the second plaintiff should be offset against a mortgage debt bequeathed to the first plaintiff. The outcome of these issues was critical in resolving the distribution of the testator’s estate among the plaintiffs.

In addressing these issues, the court found that the defendants had not discharged the burden of establishing that the monies owed by the first plaintiff to the testator were loans and not gifts. The evidence did not support the characterisation of these monies as loans, and thus they were to be treated as gifts. Regarding the second issue, the court determined that the particular clause in the will did not require the legacy to the second plaintiff to be offset against the mortgage debt bequeathed to the first plaintiff. This interpretation was based on a detailed analysis of the will's language and context.

The court’s decision resulted in the first plaintiff being entitled to recover the benefit of the bequest without any offset for the debt owed to the testator. The legacy to the second plaintiff was also not subject to any offset against the mortgage debt. Consequently, the distribution of the estate was determined in favour of the plaintiffs according to the terms of the will, as interpreted by the court.

Orders