Sier v Seikegba
[2006] WASC 299
SIER -v- SEIKEGBA & ANOR [2006] WASC 299
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 299 | |
| Case No: | CIV:1440/2006 | 12 DECEMBER 2006 | |
| Coram: | MASTER NEWNES | 21/12/06 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Directions given as to proper construction of Will | ||
| B | |||
| PDF Version |
| Parties: | DEBRA ANN SIER VICKY JANE SEIKEGBA DAVID MICHAEL SIER |
Catchwords: | Succession Will Application for directions as to proper construction Gift of use of house Whether gift of life interest or house absolutely Whether conditions attached to gift Turns on own facts |
Legislation: | Administration Act 1903 (WA), s 45 Wills Act 1970 (WA), s 26(a), s 28 |
Case References: | Brennan v Permanent Trustee Co of NSW Ltd (1945) 73 CLR 404 Charter v Charter (1874) LR 7 HL 364 Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 Perpetual Trustees WA Ltd as Executor of the Estate of Henry James Darvell v Darvell [2001] WASC 123 Re Alsopp (decd) [1968] 1 Ch 39 Re Harrison (1885) 30 Ch D 390 Re Hodgson; Nowell v Flannery [1936] 1 Ch 203 Roddy v Fitzgerald (1858) 6 HL Cas 823 Australian Broadcasting Commission v Australasian Performing Right Associated Ltd (1973) 129 CLR 99 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
and
The Estate of Alan Michael Sier
- Plaintiff
AND
VICKY JANE SEIKEGBA
First Defendant
DAVID MICHAEL SIER
Second Defendant
Catchwords:
Succession - Will - Application for directions as to proper construction - Gift of use of house - Whether gift of life interest or house absolutely - Whether conditions attached to gift - Turns on own facts
(Page 2)
Legislation:
Administration Act 1903 (WA), s 45
Wills Act 1970 (WA), s 26(a), s 28
Result:
Directions given as to proper construction of Will
Category: B
Representation:
Counsel:
Plaintiff : Mr D F Van Zalm
First Defendant : Ms P E Cahill
Second Defendant : Ms P E Cahill
Solicitors:
Plaintiff : Damien Brennan
First Defendant : Beere May & Meyer
Second Defendant : Beere May & Meyer
Case(s) referred to in judgment(s):
Brennan v Permanent Trustee Co of NSW Ltd (1945) 73 CLR 404
Charter v Charter (1874) LR 7 HL 364
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348
Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60
Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785
Perpetual Trustees WA Ltd as Executor of the Estate of Henry James Darvell v Darvell [2001] WASC 123
Re Alsopp (decd) [1968] 1 Ch 39
Re Harrison (1885) 30 Ch D 390
Re Hodgson; Nowell v Flannery [1936] 1 Ch 203
Roddy v Fitzgerald (1858) 6 HL Cas 823
(Page 3)
Case(s) also cited:
Australian Broadcasting Commission v Australasian Performing Right Associated Ltd (1973) 129 CLR 99
(Page 4)
1 MASTER NEWNES: I have before me an application by the plaintiff ("Ms Sier") under s 45 of the Administration Act 1903 (WA) for directions as to the construction of the Will of the late Alan Michael Sier (the "testator").
The facts
2 The testator died on 23 July 2004. The testator had prepared a Will by completing a printed form available at stationers. The Will is dated 19 May 1997. The relevant parts of the Will are as follows:
"I Give Devise and Bequeath
1. from any monies accrued by AM Sier the sum of five thousand dollars (5000) shall be placed in fixed deposit in the names of
(a) Amy Kate Coverley
(b) Maverick Anemene Seikegba
(c) any further issue of Vicki Jane Seikegba and David Michael Sier such monies so invested shall remain so until the 18th birthday of each individual beneficiary.
2. the balance of such monies having accrued to the estate shall be divided between
(a) Debra Ann Sier
(b) Vicki Jane Seikegba
(c) David Michael Sier
on the basis of fifty percent (50%) to (a) and twenty five percent (25%) each to (b) and (c).
3. the property known as Doc Sier's retreat 82 Layman Road Wonnerup shall remain for the use of Debra Ann Sier or to be sold as she sees fit.
4. all funeral expenses etc shall be born by the estate prior to distribution of proceeds together with the payment of all outstanding debts.
(Page 5)
- 5. whatsoever vehicle that I shall own at the time of my demise shall be left to Debra Sier and to include caravan and horse float."
3 Letters of administration with the Will attached were granted to Ms Sier on 1 November 2005. The named executor had predeceased the testator.
4 It appears from the statement of assets and liabilities filed with the application for letters of administration that, at the date of the testator's death, he was the registered proprietor of the property at 82 Layman Road, Wonnerup ("the house"), which was then valued in the sum of $750,000. The only other asset of his Estate which appears in the statement of assets and liabilities is an amount of $11,503.55 in a bank account. An amount of $60,627.83 was shown as owing to Challenge Bank, secured by a mortgage over the house. A small credit card debt and funeral expenses totalled $7,857.33. There were therefore net assets of the Estate to the value of $693,018.39. There was no reference in the statement of assets and liabilities of a caravan, horse float or motor vehicle.
5 It appears, however, from an affidavit which Ms Sier has filed that the caravan referred to in the Will has been valued at between $30,000 and $32,000 and a Landcruiser motor vehicle owned by the testator at his death is valued at between $5000 and $10,000. The testator also apparently had a superannuation policy with a value of approximately $47,500. Ms Sier says that the house has now been valued at $1,100,000. It is clearly the most substantial asset of the testator's Estate.
6 In her affidavit, Ms Sier says that at the time the Will was executed by the testator, she was residing with him as husband and wife in the house. They had been married for approximately eight months at the time. Ms Sier says she and the testator lived together in the house from the time it was purchased until the testator's death. At the time of his death they had separated but both continued to live in the house.
7 Ms Sier says that while the house was purchased in the name of the testator alone, after its purchase their mutual funds were thereafter "put into the home" and they shared their day-to-day living expenses equally.
The issues
8 The defendants are the children of the testator from a previous marriage. An issue has arisen between Ms Sier and the defendants as to
(Page 6)
- the extent of Ms Sier's entitlement under the testator's Will in respect of the house.
9 Ms Sier seeks the following directions:
"1. In respect of clause 3 of the Will:
(i) Does it give the Plaintiff a right to reside in the property at 82 Layman Road, Wonnerup for life?
(ii) If it does give a right to reside for life to the Plaintiff, are there any conditions attached to that right?
(iii) If so, under what conditions does the Plaintiff have the right to reside for life?
2. If the property at 82 Layman Road, Wonnerup is sold, is the Plaintiff to receive the proceeds of sale, or do the proceeds of sale fall into the residue of the Estate?"
The plaintiff's submissions
10 It was submitted on behalf of Ms Sier that under the Will she is entitled to the use of the house for life and, if she chooses to sell it, the proceeds of sale will belong to her absolutely.
11 Counsel submitted that that construction was supported by the terms of the Will read as a whole, including the fact that the distribution of the moneys of the testator were dealt with in cl 1 and cl 2, without any reference to the proceeds of the sale of the house if Ms Sier chose to sell it.
12 Counsel argued that it would be a capricious result if Ms Sier was not entitled to the proceeds of sale if she decided to sell the house. She would then be denied funds with which to buy alternative accommodation. It is clear from cl 3 of the Will that the testator was concerned to provide somewhere for Ms Sier to live during her lifetime.
13 It was submitted that Ms Sier's entitlement to reside in the house for life was conditional on the payment by her of the outgoings, but that she would be a creditor of the Estate to the extent of the outgoings paid by her, apart from those actually related to her personal use, such as water and electricity consumption charges.
(Page 7)
The defendants' submissions
14 Counsel for the defendants argued that it was clear from cl 3 of the Will that there was no intention on the part of the testator to give the house to Ms Sier absolutely. If Ms Sier was entitled to the whole of the proceeds from the sale of the house should she elect to sell it, that would be, for all practical purposes, a gift to her of the house absolutely and that was inconsistent with the intention of the testator as appeared from the terms of the Will.
15 On the proper construction of the Will, Ms Sier was entitled to reside in the house for so long as she wished and, if she did not wish to reside there or when she ceased to reside there, the house was to be sold and the proceeds were to be distributed in accordance with cl 2 of the Will.
16 An alternative construction was that upon the sale of the house the proceeds would fall into the residuary Estate. However, the Will does not deal with the residuary Estate and, accordingly, the proceeds would then have to be dealt with on an intestacy. It is well established that the Court should interpret a Will so as to avoid intestacy. In the present case, there is no reason to prefer that construction to the construction that the proceeds of sale are to be distributed in accordance with cl 2 of the Will.
17 It was submitted thatthe construction contended for by the defendants was consistent with the circumstances that had existed immediately prior to the testator's death, namely that the testator and Ms Sier had been married only since September 1996 and were separated, that the testator had two adult children adopted during a previous marriage, and that those children are, with Ms Sier, the beneficiaries named in cl 2 of the Will.
18 It was submitted on behalf of the defendants that the entitlement of Ms Sier to live in the house for so long as she chose to do so was not subject to any condition. Clear words were normally required by a testator to convey an intention that the interest given to a beneficiary is conditional upon the satisfaction of certain obligations, rather than that the assumption of personal obligations by the beneficiary is merely a consequence of the acceptance of the bequest: Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 793; Perpetual Trustees WA Ltd as Executor of the Estate of Henry James Darvell v Darvell [2001] WASC 123 at [7].
19 It was suggested by counsel for the defendants that the beneficiaries with an interest in the house, namely the beneficiaries referred to in cl 2 of
(Page 8)
- the Will, would each bear a proportion of the cost associated with the mortgage pursuant to s 28 of the Wills Act 1970 (WA) but Ms Sier would incur personal liability to meet other outgoings for so long as she continued to have use of the house, that being the consequence of accepting the gift of the use of the house. She would not be a creditor of the Estate in respect of the amount of those outgoings.
The relevant principles
20 The approach that is to be taken by a Court when construing a Will was stated by Lord Wensleydale in Roddy v Fitzgerald (1858) 6 HL Cas 823, at 876:
"The first duty of the court expounding the will is to ascertain what is the meaning of the words used by the testator. It is often said that the intention of the testator is to be the guide: but the expression is capable of being misunderstood, and may lead to speculation as to what the testator may have supposed to have intended to write, whereas the only proper enquiry is 'what is the meaning of that which he has written'? That which he has written is construed by every part being taken into consideration according to its grammatical construction, and the ordinary acceptance of the words used, with the assistance of such parole evidence of surrounding circumstances as is admissible to place the court in the position of the testator."
21 See also Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 76 - 77; Hope v RCA Photophone of Australia Pty Ltd(1937) 59 CLR 348 at 357.
22 In Brennan v Permanent Trustee Co of NSW Ltd (1945) 73 CLR 404 Dixon J at 414 said:
" ... to determine the meaning of the will, the language of the testator must be read in the sense which he himself appears to have attached to the expression he used, that is unless a rule of law gives some fixed operation. When the main purpose and intention of the testator are ascertained to the satisfaction of the court, if particular expressions are found in the will which are inconsistent with that intention, though not sufficient to control it, such expressions must be discarded or modified. The language of the testator should be moulded to carry into effect as far as possible the intention which, in the opinion of the court, the testator has, on the whole will, sufficiently declared."
(Page 9)
23 If a literal interpretation gives rise to a capricious result which the Court is satisfied the testator can never have intended, then it should reject that interpretation and seek a sensible interpretation which does accord with his intention: Re Alsopp (decd) [1968] 1 Ch 39 at 47.
24 Where a Will is capable of two constructions, one of which would lead to an intestacy and the other to a testacy, the Court should, if possible, read the Will so as to lead to a testacy: Re Harrison (1885) 30 Ch D 390 at 393.
25 The Court is entitled to consider the context or surrounding circumstances in which the Will was made to construe the words for the purpose of ascertaining the testator's intention: Charter v Charter (1874) LR 7 HL 364 at 377; Re Hodgson; Nowell v Flannery [1936] 1 Ch 203 at 206; Brennan v Permanent Trustee Co of NSW Ltd (supra) at 415.
26 Unless a contrary intention appears from the Will, it is to be construed, with reference to the property comprised in it, as if it had been executed immediately before the death of the testator: Wills Act, s 26(a).
The proper construction of the Will
27 It was not in issue between the parties that the effect of the Will was that Ms Sier was entitled to reside in the house for so long as she chose to do so. In the course of argument, counsel for Ms Sier sought to expand the issue to include whether Ms Sier had a right to use the house in any other respect and, in particular, to let it and receive the rent. That, however, was not a question raised in the originating summons and was not one which counsel for the defendants had come prepared to argue. In the circumstances, I do not consider it is appropriate that that question be determined at this stage.
28 The question of whether, if she chose to use the house, Ms Sier would be a creditor of the Estate to the extent she made payments under the mortgage and in respect of outgoings such as rates, taxes and water charges was again not a matter specifically raised in the originating summons for determination but was raised by counsel for Ms Sier in submissions.
29 There seemed in fact to be no issue between the parties as to Ms Sier's liability to meet the outgoings if she chose to reside in the house, the only issues being whether the payment of outgoings was a condition of Ms Sier's entitlement to use the house - a matter on which the defendants seemed to take a view more favourable to Ms Sier than
(Page 10)
- Ms Sier herself did - and the contention on behalf of Ms Sier that she would be a creditor of the Estate in the amount of those payments.
30 As I think counsel for Ms Sier conceded in the course of argument, not only is the question of whether Ms Sier would be a creditor of the Estate in respect of outgoings paid by her not raised by the application, but it would be necessary to identify the particular outgoings concerned before it would be possible to determine the position in respect of them. It may be that different considerations would apply, for example, to liabilities such as mortgage payments as opposed to land tax or to shire rates or utility consumption charges.
31 It is sufficient for present purposes to say that I accept the defendants' submission that Ms Sier's right to reside in the house is not conditional. Whether, or to what extent, Ms Sier is a creditor of the Estate to the extent that she pays outgoings, and whether s 28 of the Wills Act bears upon payments made under the mortgage, are matters for another day.
32 The principal questions on this application, as I understand it, are whether, upon a sale of the house by Ms Sier, Ms Sier is entitled to the whole of the proceeds of sale and, if not, whether those proceeds fall to be distributed pursuant to cl 2 of the Will or whether they fall into the residuary Estate and therefore are to be distributed as an intestacy.
33 In my view, it is clear that it was not the intention of the testator to make a gift of the house to Ms Sier absolutely. The language of cl 3 of the Will is not consistent with such an intention. The words in cl 3, "shall remain for the use of", are consistent with the grant of a life interest to Ms Sier rather than a gift of the house to her absolutely. The terms of cl 3 are also in marked contrast to cl 1, cl 2 and cl 5 of the Will. In cl 5, for instance, there is a gift to Ms Sier of any motor vehicle owned by the testator at the date of his death and the caravan and horse float. If the testator had intended a gift of the house to Ms Sier absolutely, no doubt he would have used similar language.
34 I consider that once it is concluded that it was not the intention of the testator to make a gift of the house to Ms Sier absolutely but to give her a more limited interest, then it cannot have been his intention that if the house was sold Ms Sier should be entitled to the whole of the proceeds of sale. Otherwise, as submitted by the defendants' counsel, Ms Sier could effectively convert her limited interest into an absolute gift by the simple
(Page 11)
- expedient of selling the house. It is, I think, clear from the Will that that was not the testator's intention.
35 The question then is whether the proceeds of a sale of the house fall to be distributed under cl 2 of the Will or on an intestacy.
36 As I have said, the Court will, if possible, construe a Will to avoid intestacy. I do not consider that the language of the Will requires the Court to find intestacy in this case. While cl 2 of the Will could have been more felicitously phrased, in my view it applies to all moneys which accrue to the Estate from any source. Such moneys are then to be distributed as to 50 per cent to Ms Sier and the balance equally between the defendants, the testator's children from his previous marriage. In my view, it is clear that the proceeds of the sale of the house would constitute money which has accrued to the Estate within the meaning of cl 2 and which therefore is to be distributed in accordance with cl 2.
37 I do not accept the submission of counsel for Ms Sier that that leads to a capricious result. In my view, it manifests a clear and explicable intention of the testator that Ms Sier should have the use of the house for so long as she wanted it. If she did not want it, or when she no longer wanted it, it would be sold and she would receive half of the proceeds and the other half would be divided equally between the testator's two children.
Conclusion
38 In my view, on the proper construction of the Will, Ms Sier is entitled to reside in the house for life if she so wishes and there are no conditions attached to that entitlement. Upon a sale of the house, the net proceeds of sale are to be distributed in accordance with cl 2 of the Will.
39 I would therefore answer question 1 as follows:
(i) Yes;
(ii) No;
(iii) Not applicable; and
would answer question 2:
2. The proceeds of sale would fall within cl 2 of the Will.
6
0