Slack-Smith v Slack-Smith & Ors

[2009] NSWSC 847

CITATION:	Slack-Smith v Slack-Smith & Ors [2009] NSWSC 847
HEARING DATE(S):	19 August 2009
JUDGMENT DATE :	19 August 2009
JURISDICTION:	Equity
JUDGMENT OF:	Windeyer AJ
DECISION:	Gift held to be vested.
CATCHWORDS:	WILLS - Probate – Construction of wills - Will giving life estate in shares to widow and the remainder to sister of widow - Sister of widow predeceased the life tenant – Whether interest in the remainder vested absolutely or vested subject to defeasance or was contingent upon surviving the life tenant.
CATEGORY:	Principal judgment
PARTIES:	Alan Richard Slack-Smith (P) Victor John Slack-Smith (D1) Thelma Margaraet Phelps (D2) Phillip Charles Robert Slack-Smith (D3) Leah Evelyn Carolan (D4)
FILE NUMBER(S):	SC 1795/09
COUNSEL:	L J Ellison SC and M Meek (P) J Needham SC and D Williams (D1&3) A Rogers (D2) J E Armfield (D4)
SOLICITORS:	Lee & Lyons (P) Collaery Lawyers (D1&3) Doyle & Associates (D2) R J O'Halloran & Co (D4)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER AJ

WEDNESDAY, 19 AUGUST 2009

1795/09 ALAN RICHARD SLACK-SMITH v VICTOR JOHN SLACK-SMITH & ORS

JUDGMENT

1 HIS HONOUR: Ivan James Slack-Smith died on 18 July 1969. He left a will dated 31 January 1963. Probate of that will was granted to his widow and a brother Evyn Jack Slack-Smith on 3 March 1970.

2 There have been various appointments of trustee as a result of deaths or age of the original executors and trustees and the present trustees of the will are Victor John Slack-Smith and Thelma Margaret Phelps, the first and second defendants to these proceedings.

3 The third defendant in the action is Phillip Charles Robert Slack-Smith and he and the first defendant have been appointed to represent the estate of Ellen Margaret Slack-Smith who died on 16 June 2004. The first and third defendants are the children of Ellen, and the plaintiff is also one of her children. The widow of the deceased is still living aged 102.

4 There have been various vicissitudes this morning in connection with the proper constitution of these proceedings but, as a result of representative orders made, the estate of Ellen is now represented. There has been no grant of probate of her will which is said to have been made on 3 November 1993, and there is of course no evidence that it is a valid will or that it is her last will.

5 The fourth defendant has been appointed to represent those persons who would be entitled on intestacy or partial intestacy in the estate of the said Ivan James Slack-Smith, deceased, if the result of these proceedings is that it were held that there was a partial intestacy in his estate.

6 By his will, to which I have referred, Ivan James Slack-Smith - whom I will refer to as ‘the deceased’ - after making various administrative provisions, provided the following in paragraphs 5, 6 and 7 of his will.

“ 5 I DIRECT my Trustees to hold the shares entitling me to occupy the flat number 3 in Corowa Home Units Pty Limited at 89 Ocean Beach Road, Manly, UPON TRUST to allow my Wife to reside therein during her lifetime AND UPON the death of my said Wife I GIVE DEVISE AND BEQUEATH such shares UNTO the Sister of my Wife namely ELLEN MARGARET SLACK-SMITH absolutely.

6 I DIRECT my Trustees to hold my Residuary Estate UPON TRUST (subject as aforesaid) to pay the income to be derived therefrom unto my said Wife during her lifetime.

7 UPON the death of my said Wife I direct my Trustees to stand possessed of my grazing properties known as Leander and Mogil Together with the Livestock and plant thereon or used in connection therewith and also any other assets (excepting my shares in Corowa Home Units Pty Limited which I have already disposed of) both real and personal UPON TRUST for my nephew ALAN RICHARD SLACK-SMITH (son of my said Executor) absolutely SUBJECT to the payment by him of all Death Succession or other duties then payable in my Estate consequent upon my Wife’s death AND also subject to legacies of Eight thousand pounds (£8,000.0.0) each to his Brothers PHILLIP CHARLES ROBERT SLACK-SMITH and VICTOR JOHN SLACK-SMITH and declare that such legacies may be paid by fifteen successive annual payments commencing on the anniversary of my Wife’s death Together with interest on the amounts from time to time remaining unpaid at the rate of 2% per annum calculated from the date of my Wife’s death Provided that should either of such legatees predecease my said Wife then the survivor shall be paid a legacy of Sixteen thousand pounds (£16,000.0.0) payment with interest to be made in manner aforesaid AND PROVIDED further that should the said Alan Richard Slack-Smith predecease my said Wife THEN I DIRECT that upon my Wife’s death the whole of my Estate then in the hands of my Trustees shall be help UPON TRUST for my Nephews the said Phillip Charles Robert Slack-Smith and Victor John Slack-Smith or the survivor of them (should one predecease my said Wife) absolutely”.

7 Under her will Ellen gave all her property to her sons, Victor and Phillip, in equal shares apart from her interest in the company title home unit property at Manly, which she had acquired from her sister, and she gave those shares to those two sons again in equal shares and said she had in made no provision for her son Alan “because of family considerations concerning matters in his relationship with my sister Mary Elizabeth Slack-Smith”.

8 I have been told from the bar table without objection that Ellen had no assets other than whatever interest she had in what I will call the Manly home unit property, which presumably explains the reason why there has been no claim for representation in her estate.

9 There has also been put into evidence a summons in this court under which Alan seeks an order under the Family Provision Act 1982 for benefit out of the estate of his mother. It is really for that reason that I allowed these proceedings to continue because, at the present time, as the widow of the deceased is still alive - albeit not in occupation of the home unit premises at Manly - Alan has no vested interest in the estate of the deceased unless he survives the life tenant.

10 The questions which arise for determination under the summons are, first, whether the gift under clause 5 of the deceased’s will of the shares in Corowa Home Units Pty Limited, a company properly called Corowa Units Pty Limited, vested on the death of the deceased so that, upon the death of the widow of the deceased, the remainder interest in those shares goes to the estate of Ellen who, as I have said, predeceased the deceased.

11 A second question arises if that question is not answered in the affirmative; namely, in the event that the remainder interest subsequent to the life interest of the widow has not vested, but has lapsed whether the interest in the Manly property passes under the residuary gift in clause 7 of the will of the deceased or whether it goes on intestacy.

12 I should say that, if it did go on intestacy, there are surviving brothers and sisters of the deceased, as well as the widow, all of whom would be entitled to take as well as children of the deceased’s brothers and sisters who would be entitled to stand in place of their parents’ share. None of that arises if the interest under clause 5 which cannot vest in possession until the death of the widow is vested in interest absolutely.

13 Thus two questions arise. First, whether that interest is a vested interest and was a vested interest from the death of the deceased. Second, if it is a vested interest, whether it is liable to divestment or defeasance if the person entitled to it did not survive the life tenant.

14 The argument of Mr Ellison SC, senior counsel for the plaintiff, Alan, was that the interest was a vested interest subject to divestment in the event that the tenant for life or, if you like, the person entitled to occupy the unit during her life, predeceased the deceased. He did not submit the interest was contingent only.

15 The argument of counsel for the first and third defendants, who are the representatives of the estate of their mother, was that the interest was a vested interest not subject to divestment so that, upon the death of the life tenant, the particular asset will pass in possession to the estate of Ellen. That argument was supported by the second defendant who really represents the executors of the will of the deceased. It was not supported by counsel for the fourth defendant who argues for contingency and an intestacy.

16 In matters such as this the duty is to look at the words of the will and to determine the intention of the testator using those words.

17 It is not necessary to go deeply into the law in this matter. Generally speaking courts, if possible, steer clear of intestacy for the simple reason that it should not be expected that a person making a will has not intended to dispose of the whole of his or her estate. Secondly, the law tends towards vested interests as opposed to contingent interests. Thirdly, where there are successive estates, the first being one for life and being determined at the end of that life, the coming to an end of that life is not a contingency; it is an event which brings into existence or into possession the next succeeding estate. In this particular case the wording of clause 5 on its face would establish that, while Ellen was not entitled to an interest in possession in the shares in the Manly unit during the lifetime of her sister, the widow of the deceased, she was entitled to what in real property terms would be called an estate in remainder vested in interest but not in possession from the date of the deceased. For the purposes of this determination, as I understand it, there can be no difference between the position which would arise in respect of personal property as contrasted with real property.

18 The question is whether or not there is some reason to displace what would appear to me to be clear wording giving a vested interest to Ellen. I do not think that there is anything which would show such an intention or would point to such a meaning. In fact the wording of the will seems to be against this.

19 The deceased appears to have thought that he had disposed of the whole of his interest in the Manly property when the wording of clause 7 of the will is considered. That is because clause 7 is the residuary clause which disposes of the whole of his residuary estate other than “my shares in Corowa Home Units Pty Limited, which I have already disposed of”. Those words must indicate that the deceased thought that the gift in clause 5 of the will was a complete disposition of his interest in those shares. The words in clause 6 “subject as aforesaid” support this view.

20 In my view there is nothing in the will which would point to a conclusion different from this. It is important to understand that survival of a life tenant is not necessary to enter or to enable a person to obtain an interest in remainder in the property in which there is an interest for life. If it were so necessary, then it would really be no difference between contingent remainders and vested remainders. Neither, when the wording of this clause is considered, is there any reason to think that the vested interest for which the plaintiff contends is in some way subject to divestment if the person the subject of the second successive interest does not survive the person taking the first interest.

21 Words such as “after death” or “survive” are generally intended to mark out the successive estates and are not necessarily intended to depend upon survival. Cases on acceleration of interest make that clear. Thus it is clear in my view that the ordinary principles apply and that therefore Ellen was from the death of the deceased entitled to a vested interest in the remainder, which interest formed part of her estate on her death, which will vest in possession so far as the whole of the shares are concerned upon the death of the widow of the deceased; and I so hold. No argument was addressed on whether right of occupancy had been or could be surrendered.

22 The effect of that determination is that it is not necessary to determine whether or not, there was a partial intestacy and, as it is not necessary to determine that, I do not think it proper to embark upon that consideration.

Order:

23 Determine that: Upon the true construction of the will dated 31 January 1963 of Ivan James Slack-Smith, Deceased, and the events which have happened, the gift by the deceased in clause 5 of his will of the remainder interest in the shares in Corowa Units Pty Limited vested on the death of the deceased so that upon the death of Mary Elizabeth Slack-Smith the shares will be held for the estate of Ellen Margaret Slack-Smith who died on 16 June 2004 thereby pre-deceasing the life tenant.

24 The costs of all parties of the proceedings are to be paid out of the estate; those of the second defendant on an indemnity basis.

25 The exhibits can be returned.

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