Russell v Perpetual Trustee Co (Ltd) - [1956] HCA 44

RUSSELL AND OTHERS

APPELLANTS; DEFENDANTS,

PERPETUAL TRUSTEE COMPANY (LIMI-

RESPONDENTS. TED) AND ANOTHER

PLAINTIFF AND DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES. Vill-Construction-Special power of appointment-Exercise-Gift " (subject as

hereinafter provided) to named persons as tenants in common in equal shares- Proviso to pay them income with limitations to children-Children not objects of power-Limitations void-Absolute interest in named persons.

In purported exercise of a special power of appointment over the residuary estate of her deceased husband a testatrix directed her trustees to hold the property subject to the power upon trust to divide it into two hundred equal parts and to hold those parts upon certain specified trusts. The trust here in question read :-" (iv) As to a further thirty-four of such equal parts or shares Upon Trust (subject as hereinafter provided) for such of them A, B, and C (three of the children of my sister X) as shall be living at the date of my death and if more than one as tenants in common in equal shares Provided that the share of each of the three named children of my said sister X shall be held Upon Trust to pay the income of his or her share to him or her during his or her lifetime And upon the death of the same child To Hold the said share Upon Trust for such of his or her children (living at the date of my death) as shall survive him or her and shall have attained or shall live to attain the age of twenty-one years and if more than one as tenants in common in equal shares." The gift of corpus to the children of A, B, and C after their respective deaths was void, in that it gave the fund to persons not objects of the power of appointment.

Held, that the subsequent limitations being void, A, B and C were entitled to absolute interests in the said thirty-four parts as tenants in common in equal shares.

95 CLR 390

Lassence v. Tierney (1849) 1 Mac. &G. 551 [41 E.R. 1379] and Hancock V. Watson (1902) A.C. 14, applied Trustees Executors &Agency Co. Ltd. Jenner (1897) 22 V.L.R. 584; In re the Estate of Patrick O'Brien dec'd. (1898) 24 V.L.R. 360; In re England (1906) V.L.R. 94; In re Antrobus; Henderson V. Shaw (1928) N.Z.L.R. 364 and In re Loza (Dec'd.) Fernandez v. Hesketh TRUSTEE

(1934) N.Z.L.R. 717, approved. (LTD.).

Decision of the Supreme Court of New South Wales (Myers J.), reversed.

APPEAL from the Supreme Court of New South Wales.

Albert Henry Nathan late of Woollahra, Sydney, New South Wales died on 20th November 1940, having first made and pub- lished his last will dated 30th October 1936 and a codicil thereto dated 3rd November 1936 of which said will and codicil he appointed Perpetual Trustee Co. (Ltd.) and his widow Katey Nathan executor and executrix save in SO far as, his estate situated in the United…

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.

Keep reading for free

Create a free CaseChat account to read Russell v Perpetual Trustee Co (Ltd) and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [1956] HCA 44
Decision Date: 13 August 1956

CaseChat Overview and Summary

The appeal concerned the construction of a will and the exercise of a special power of appointment. The appellants, Naida Russell, Charles Russell, and Lena Young, were beneficiaries under a trust established by the testatrix in purported exercise of a special power of appointment. The dispute arose because the limitations of the trust, which provided for life interests to the appellants and then for the corpus to go to their children, were partly void. The appellants argued they were entitled to the corpus absolutely, while the respondent, representing those entitled in default of appointment, contended they only received life interests.

The High Court was required to determine whether the testatrix's exercise of the special power of appointment created an absolute gift to the named beneficiaries in the first instance, or if the limitations imposed by the proviso effectively restricted their interest to a life tenancy. Specifically, the court had to consider the impact of the phrase "subject as hereinafter provided" on the initial gift and whether the subsequent void limitations to the beneficiaries' children meant the absolute gift, if established, would take effect.

The court reasoned that the rule in *Lassence v. Tierney* applied. This rule dictates that if an absolute gift is made in the first instance, and subsequent trusts engrafted upon that gift fail, the absolute gift takes effect to the extent of the failed trusts. The court found that the initial words of the trust, despite the qualifying phrase "subject as hereinafter provided," constituted an absolute gift to the appellants as tenants in common in equal shares. The subsequent limitations to their children were void as they were not objects of the power of appointment. Therefore, the void limitations did not defeat the initial absolute gift.

The High Court allowed the appeal, overturning the decision of the Supreme Court of New South Wales. The court declared that the appellants were entitled to the thirty-four parts of the residuary estate absolutely, as tenants in common in equal shares. The costs of all parties for the appeal were ordered to be paid out of the testator's estate.

Orders