Richard Digby REES-WEEBE (as Executor of the Estate of Elizabeth Lodge (Dec)) v Ta and D Boyne and Son
[2004] WASC 125
RICHARD DIGBY REES-WEEBE (as Executor of the Estate of ELIZABETH LODGE (DEC)) -v- TA & D BOYNE & SON & ORS [2004] WASC 125
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 125 | |
| Case No: | CIV:1799/2003 | 28 APRIL 2004 | |
| Coram: | SIMMONDS J | 11/06/04 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| B | |||
| PDF Version |
| Parties: | RICHARD DIGBY REES-WEEBE (as Executor of the Estate of ELIZABETH LODGE (DEC)) TA & D BOYNE & SON ST JOHN AMBULANCE ASSOCIATION (INC) SILVER CHAIN NURSING ASSOCIATION (INC) KOORDA & DISTRICTS MUSEUM & HISTORICAL SOCIETY INCORPORATED SUSAN LODGE-CALVERT JANET de GRAAF REX LODGE-CALVERT KATHRYN LYNNE HINSHAW JENNIFER ANDREWS MARTIN COLEMAN |
Catchwords: | Wills and estates Ademption Legacy comprised of multiple parcels of land Part extinction of legacy during testator's lifetime Whether remaining property falls to residue Wills and estates Option to purchase land Failure to exercise an option within a specified time Whether option has expired Relief against forfeiture Application by executor for directions |
Legislation: | Non-Contentious Probate Rules 1967 (WA), r 43A Trustees Act 1962 (WA), s 89 |
Case References: | Brooke v Garrod (1857) 3 K & J 608 Hawkesley v May [1956] 1 QB 304 In re Avard (Dec); Hook v Parke [1948] Ch 43 In re Lewis; Lewis v Lewis [1904] 2 Ch 656 Legione v Hateley (1983) 152 CLR 406 Congregated Union of New South Wales & Burchmore v Thistlethwayte (1952) 87 CLR 375 In re Williams (Dec); Bendigo & Northern District Base Hospital Bendigo v AttorneyGeneral [1955] VLR 65 Powell v Rawle (1874) LR18Eq 243 Re Dehnert (Dec) [1973] VR 449 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
TA & D BOYNE & SON
First Defendant
ST JOHN AMBULANCE ASSOCIATION (INC)
Second Defendant
SILVER CHAIN NURSING ASSOCIATION (INC)
Third Defendant
KOORDA & DISTRICTS MUSEUM & HISTORICAL SOCIETY INCORPORATED
Fourth Defendant
SUSAN LODGE-CALVERT
Fifth Defendant
JANET de GRAAF
Sixth Defendant
(Page 2)
- REX LODGE-CALVERT
Seventh Defendant
KATHRYN LYNNE HINSHAW
Eight Defendant
JENNIFER ANDREWS
Ninth Defendant
MARTIN COLEMAN
Tenth Defendant
Catchwords:
Wills and estates - Ademption - Legacy comprised of multiple parcels of land - Part extinction of legacy during testator's lifetime - Whether remaining property falls to residue
Wills and estates - Option to purchase land - Failure to exercise an option within a specified time - Whether option has expired - Relief against forfeiture - Application by executor for directions
Legislation:
Non-Contentious Probate Rules 1967 (WA), r 43A
Trustees Act 1962 (WA), s 89
Result:
Application allowed
Category: B
(Page 3)
Representation:
Counsel:
Plaintiff : Mr I L K Marshall
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eight Defendant : In person
Ninth Defendant : In person
Tenth Defendant : In person
Solicitors:
Plaintiff : Mayberry Hammond
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eight Defendant : In person
Ninth Defendant : In person
Tenth Defendant : In person
Case(s) referred to in judgment(s):
Brooke v Garrod (1857) 3 K & J 608
Hawkesley v May [1956] 1 QB 304
In re Avard (Dec); Hook v Parke [1948] Ch 43
In re Lewis; Lewis v Lewis [1904] 2 Ch 656
Legione v Hateley (1983) 152 CLR 406
(Page 4)
Case(s) also cited:
Congregated Union of New South Wales & Burchmore v Thistlethwayte (1952) 87 CLR 375
In re Williams (Dec); Bendigo & Northern District Base Hospital Bendigo v AttorneyGeneral [1955] VLR 65
Powell v Rawle (1874) LR18Eq 243
Re Dehnert (Dec) [1973] VR 449
(Page 5)
1 SIMMONDS J: This matter is the return of an originating summons by the executor of the Will of Elizabeth Lodge ("the deceased") seeking directions relating to the administration of the estate. An affidavit of the executor was the principal evidentiary material before me, apart from affidavits as to service and a related affidavit. No memoranda of appearance for the first, second or fifth defendant had been lodged, but there were memoranda of appearance for all other defendants, who comprised all but one of the residuary legatees (the sixth through tenth defendants) and one (the fourth defendant) of what were at the hearing accepted to be the three charitable institutions named in the Will as beneficiaries of a trust fund, the Francis and Mary Lodge Trust Fund ("the F and M Lodge Trust"), which it appears was established under the Will.
2 At the hearing, the executor was represented by counsel, while some of the residuary legatees appeared in person. There was no opposition to the orders sought by the executor under the originating summons, as amended at the hearing. However, my attention was drawn to a fax sent to the Court, apparently for the purpose of this hearing, and apparently from the first defendant, indicating their position should I determine one aspect of the matter against the executor. At the hearing I discussed with counsel for the executor whether or not I should reserve my judgment until I had given the first defendant a further opportunity to make submissions against the position of the executor. In such a case, I further indicated, it would be difficult to avoid offering a similar opportunity to other parties. However, in light of the opportunities already so afforded to the first defendant to make submissions, I have determined not so to proceed.
3 The Will in this case was executed on 6 August 1974, the deceased died on 8 January 2002, and the executor was granted probate of the Will on 7 October 2002. Two sets of issues arose in respect of its administration on which the originating summons sought directions. These were called at the hearing respectively the "clause 2(h)" issues, and the "clause 2(j)" issues. They arose out of parallel provisions. I deal with the issues in that order.
Clause 2(h) issues
4 Clause 2(h) of the Will provides in material part for the trustees under the Will to proceed as follows:
"(h) To sell my property "Elemore", being more particularly known as:
(Page 6)
- (i) Avon Location 14428 being the whole of the land comprised in Certificate of Title Volume 1298 Folio 933.
(ii) Avon Location 24530 being the whole of the land comprised in Certificate of Title Volume 843 Folio 101, and
(iii) Avon Location 16396 being the whole of the land comprised in Certificate of Title Volume 1052 Folio 999.
- SUBJECT TO the following conditions:
(i) The members for the time being of the partnership known as T. A. & D BOYNE & SON shall be given the option of buying the aforementioned land at the price of FOURTEEN THOUSAND DOLLARS ($14,000.00) such right to be exercised by notice in writing to my Executors within six months of the date of my death.
(ii) Should the aforementioned persons not exercise the option of purchase as aforesaid then the said land shall be sold, and if possible to a farmer whose existing holdings of land (in fee simple) are in the opinion of my Trustees too small to be an economic farming unit according to the economic conditions prevailing at the date of my death at the price of FOURTEEN THOUSAND DOLLARS ($14,000.00)."
6 I should also indicate the terms of the residuary clause, cl 2(l) of the Will, which is as follows:
"(l) As to the rest and residue of my estate both real and personal after payment thereout of all my just debts, funeral and testamentary expenses and all probate estate
(Page 7)
- and succession duties both State and Federal payable on the whole of my dutiable estate for such of my counsins [sic cousins] namely:
- SUSAN LODGE-CALVERT
JANET LODGE-CALVERT
REX LODGE-CALVERT
CATHRYN LODGE-CALVERT
JENNIFER COLEMAN
MARTIN COLEMAN
- who exercise the rights contained herein to purchase my land absolutely and if more than one in equal shares and as to real estate as tenants in common; and in the event that none of them exercise the said rights to purchase my aforesaid land then for all of them in equal shares absolutely and as to real estate as tenants in common."
7 Clause 2(h) issues arose out of the facts that two of the three titles making up "Elemore" had ceased to be owned by the deceased by the date of her death (leaving Avon location 14428, numbered (i) above), that the option referred to in proviso (i) had not been exercised by the partnership within the six-month period referred to (or it seems at all), and that the executor had determined, in the words of the second limb of proviso (ii), that it was not "possible" to implement the disposition to "a farmer whose existing holdings of land (in fee simple) are in the opinion of my Trustees too small to be an economic farming unit according to the economic conditions prevailing at the date of my death".
8 In addition, counsel for the executor submitted that the F and M Lodge Trust arrangements offended against the rule against perpetuities. This was apparently on the basis that there was no end point referred to in the Will for the application of the income of the Trust.
9 Counsel further submitted that if there was no "Elemore" for the purposes of cl 2(h) then the remaining land from that farm fell into the residuary cl 2(l). If, contrary to this submission, there was an Elemore represented by that remaining land, then counsel submitted it fell to be sold on the open market at the best price that could be reasonably obtained pursuant to the first limb of proviso (ii), which begins with the words
(Page 8)
- "Should the aforementioned persons not exercise the option of purchasers aforesaid". The proceeds of such sale should then, it seems to have been envisaged by counsel, be dealt with under cl 2(l).
10 If there was no Elemore for the purpose of the Will at the date of death, then on these submissions the Court should infer it was the testator's intention that the provisions of cl 2(h) for an option, and for sale, would have no application, and thus its provisions for distribution to the F and M Lodge Trust would have no application. There would in such case, in the terms of the Law of Wills, be established an "intention to adeem" the provision: see Hockley, J et al, Wills, Probate and Administration Service Western Australia, [25.055.1] and [25.060]. There was evidence before me that the remaining part of Elemore represented by the land, Avon Location 14428 being the whole of the land comprised in Certificate of Title Volume 1298 Folio 933, was a relatively small part of the total farm, representing that portion of the farm on which the homestead and certain sheds were located. The balance, comprising the other two pieces of land referred to in cl 2(h) had in fact been sold some 14 years previously to the first defendant, which is a farming partnership on adjoining land. On this analysis, the remaining part of Elemore would indeed appear, as counsel submitted, to fall under cl 2(l): see Hockley et al, [24,690].
11 However, as counsel noted, it is necessary to determine whether or not the intention of the deceased was that there should be an ademption on the facts here: see Hockley et al, [25,055.1]. Although no argument was addressed to me on the point, if I determined there was no intention there be an ademption, then I might in this case infer an intention that a sum corresponding to the proceeds of the sale of that part of Elemore sold before the date of death, plus the proceeds of the disposition in the remaining part, be dealt with by way of the investment and income distribution provisions of cl 2(h): see Hockley et al [25,655.1.5]. This would, of course, be subject to the outcome of consideration of the argument that such part of cl 2(h) was affected by the rule against perpetuities as was the submission of counsel.
12 I have determined, however, that I should infer an intention to adeem in this case. As counsel for the executor argued before me, the stipulation of an option price for Elemore in the terms of the proviso (i) strengthens the inference that I would otherwise have been inclined to draw from the opening words of cl 2(h), when those words are read against the indication from the annexures to the affidavit of the executor that the deceased had sold all but the remaining part of Elemore to the first defendant during her
(Page 9)
- lifetime: see Hockley et al, [25,055.15] and [25,0606]. I note, from annexure "RRW13" to the executor's affidavit, a letter to him from the first defendant, dated 31 January 2003, that refers to the remaining part as "an integral part of the whole Elemore farm", that the first defendant had, following the sale to them of the other parts, agreed to the deceased retaining the remaining part as it contained her "homestead dwelling", and that the first defendant had "since leased this block for 15 years", contributing to "building sheds and maintaining fencing". I have some difficulty following the chronology in this letter. However, I do not infer from the letter, without more, that the testator did not intend an ademption in this case, and indeed see some support for inferring such an intention.
13 This conclusion makes it unnecessary for me to deal with the questions whether or not the option in proviso (i) had lapsed, or the effect of the impossibility determination of the executor for the purposes of the second limb of proviso (ii). Nor do I need to determine whether or not the F and M Lodge Trust arrangements offended against the rule against perpetuities. However, the first and second of these issues, as to the option and impossibility, also arise for the purposes of cl 2(j). I deal with cl 2(j) and its option below.
Clause 2(j) issues
14 Clause 2(j) of the Will provides in material part for the trustees under the Will to proceed as follows:
"(j) TO SELL the following pieces of land:-
(i) Cowcowing Agricultural Area Lot 176 being the whole of the land comprised in Certificate of Title Volume 707 Folio 162, and
(ii) Cowcowing Agricultural Area Lots 188, 177 and 224 being the whole of the land comprised in Certificate of Title Volume 1035 Folio 599.
SUBJECT TO the following conditions:-
(i) Such of my cousins named hereunder as may so elect within six (6) months of the date of my death by notice in writing to my Executors shall be given the right to buy the abovementioned land at the purchase price of FIFTEEN THOUSAND DOLLARS ($15,000.00):
(Page 10)
- SUSAN LODGE-CALVERT
JANET LODGE-CALVERT
REX LODGE-CALVERT
CATHRYN LODGE-CALVERT
JENNIFER COLEMAN
MARTIN COLEMAN
and if more than one of them shall so elect then they shall buy the land as tenants in common in equal shares.
- (ii) Should none of my aforementioned cousins exercise the right of purchase as aforesaid then the said land shall be sold and if possible to a farmer whose existing holdings of land (in fee simple) are, in the opinion of my Trustees, too small to be an economic farming unit according to the economic conditions prevailing at the date of my death at the purchase price of FIFTEEN THOUSAND DOLLARS ($15,000.00)."
15 Following consequential provisions parallel to those of cl 2(h), the direction in cl 2(j) is for the Trustees to "divide the proceeds of such sale amongst my aforementioned cousins [that is, those listed above, whom it was agreed at the hearing were the fifth through the tenth defendants] in equal shares absolutely".
16 The cl 2(j) issues arose out of the facts that, although both pieces of land referred to were part of the deceased's estate at her death, the option referred to in proviso (i) had not been exercised within the six month period referred to (or it seems at all), and that the executor had determined in the words of the second limb of the proviso (ii) that it was not "possible" to implement the disposition to "a farmer whose existing holdings of land (in fee simple) are, in the opinion of my Trustees, too small to be an economic farming unit according to the economic conditions prevailing at the date of my death". That is, there applied to cl 2(j) two of the issues that also applied to cl 2(h).
17 Counsel for the executor at the hearing indicated to me, as I had previously indicated, that I should then direct the executor to transfer
(Page 11)
- those pieces of land to the fifth through tenth defendants as tenants in common in equal shares. I understood at the hearing that none of these defendants had indicated any objection to that manner of proceeding, and this appeared to be confirmed to me by the eighth, ninth and tenth defendants who represented themselves at the hearing. This would have the effect of saving the expense of a sale of those pieces of land and the distribution of proceeds in accordance with the final words of cl 2(j). Instead, there would be the cost of a transfer to the defendants as tenants in common in equal shares.
18 I have determined that I should conclude the option in proviso (i) to cl 2(j) lapsed in this case. Counsel referred me to what appears to be the leading authority on this point, In re Avard (Dec); Hook v Parke [1948] Ch 43, where the legal personal representative purported to exercise an option under the Will, which was required to be exercised by notice in writing within three calendar months after the death of the person permitted by the testator to occupy or enjoy the rents and profits of the premises the subject of the option. The legal personal representative in Avard only received notice of the death of that person shortly after the expiry of the three calendar months. The option was held not to be well exercised as the purported exercise was out of time.
19 The discussion in that case of the principal authority on which it relied, Brooke v Garrod (1857) 3 K & J 608, quoted from extensively in Avard at 47, 48 indicates to me that in some circumstances there might be relief against strict compliance with the terms of the option. This would at least be where there was "fraud" on the part of the trustees, or such "laches" by them "as to induce the Court to say that the laches were the sole cause of [the optionee] not complying modo et forma with the conditions by the testator" (Brooke v Garrod per Page-Wood VC as quoted in Avard at 47). I also note the jurisdiction of the Court to relieve against requirements of this sort in Legione v Hateley (1983) 152 CLR 406, referred to as a "limited" jurisdiction in Hockley et al, at [24.685.10].
20 I do not find any proof of any such circumstances in this case to set against the expiry of the option period in the Will. In particular, I note the date of the grant of probate, which was after the expiry of the option period. Here, the executor had apparently notified the defendants of the relevant provision about two months after that grant. I also note the terms of the Will's option, and the authorities referred to in Hawkesley v May [1956] 1 QB 304 (distinguishing the position of the case before the Court there of a settlement document's trustees), particularly In re Lewis; Lewis v Lewis [1904] 2 Ch 656, to the effect that no duty falls on an executor to
(Page 12)
- notify those with claims under the Will of the Will's contents. This is based on the nature of a Will (after probate is granted) as a public document (see Non-Contentious Probate Rules 1967 (WA), r 43A). (I note that the reference in Hockley et al, [25,725], to Hawkesley as establishing a duty on an executor "to inform those named in the will as beneficiaries of their interest under the will" appears to involve a misreading of the Hawkesley case.)
21 This leads me to proviso (ii) to cl 2(j), beginning with the second limb of that proviso, which commences "and if possible". I was urged to conclude from the affidavit of the executor indicating at par 12 that "it is not possible to adhere to this [sic] criteria", being to identify the sort of farmer referred to in that limb, that this limb of the proviso should have no operation. In view of the difficulty for the executor so shown to be posed by the open textured character of the terms of that limb of the proviso, I am able to conclude it is not "possible" to sell to that sort of farmer.
22 This means in turn that the executor would be bound to see to it that by the terms of the first limb of proviso (ii), "the said land shall be sold". Counsel for the executor, as I have indicated, submitted to me that I could and should in the circumstances direct the executor to transfer the land in question to the fifth through the tenth defendants as tenants in common in equal shares. I have a difficulty with simply so directing, however.
23 The difficulty I have is one arising out of the words of the first limb of the proviso (ii), which it appears to me to mean I cannot fall back on the Trustees Act 1962 (WA), s 89, which was commended to me in this connection by counsel for the executor at the hearing. Section 89 permits the Court to order a transfer of property to overcome a difficulty faced by a trustee. However, as presently advised it does not seem to me that this provision can operate in the presence of a direction in the Will of the sort represented by the first limb of the proviso (ii). However, I am also of the view that such a transfer as counsel contends for could be made if the executor has the consent of all of the persons amongst whom the proceeds of sale are to be distributed as the proviso indicates in its final words. I did not have evidence of consent from all of them before me at the hearing.
24 It seems to me then that I could direct the sale of the land subject to cl 2(j) unless the executor had secured the consent of all of the persons amongst whom the proceeds of such sale is to be divided in equal shares absolutely as provided for by cl 2(j), as tenants in common in equal shares.
(Page 13)
25 With the qualification just described I would be prepared to make the orders requested by the executor in the minute of order provided to me at the hearing and as amended by the executor then. That minute included one further order, that the plaintiff's costs be payable out of the estate, which would be subsumed by the order I am prepared to make.
26 However, I am prepared to hear from the parties as to the precise terms of the qualification before finalising these orders.
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