Surman v Dinsdale (No 2)

[2009] QSC 436

SUPREME COURT OF QUEENSLAND

CITATION:

Surman & Anor v Dinsdale & Ors (No 2) [2009] QSC 436

PARTIES:

JOHN THOMAS SURMAN AND MARGAERT JOY DINSDALE AS EXECUTORS FOR THE ESTATE OF THE LATE NELLIE IVORENA SURMAN
(applicants)
v
MARGARET JOY DINSDALE, JOHN THOMAS SURMAN, TREVOR HERBERT SURMAN, NOEL DOUGLAS SURMAN, NEIL GORDON SURMAN AS BENEFICIARIES UNDER THE WILL OF THE DECEASED
(respondents)

ALLAN PAUL SURMAN, JACLYN PETA SURMAN, THOMAS LEE SURMAN, DOUGLAS JAMES SURMAN AS THE GRANDCHILDREN OF THE DECEASED WITH AN INTEREST IN THE ESTATE
(intervenors)

FILE NO:

BS 12948 of 2009

DIVISION

Trial

PROCEEDING:

Applications

DELIVERED ON:

3 December 2009

DELIVERED AT:

Brisbane

HEARING DATE:

3 December 2009

JUDGE:

Fryberg J

ORDERS:

1.   Order that Jaclyn Peta Surman, Thomas Lee Surman, Douglas James Surman and Allan John Surman be joined as respondents to these proceedings.

2.   Declare that upon a true construction of Clause 3 of the Will of Nellie Ivorena Surman, deceased, dated 7 December 2006, the word “children” contained therein shall be read and construed as meaning “those children still living at the time of the Deceased’s death”.

3.   Declare that upon a true construction of Clause 4 of the said Will, the proceeds of sale of the Deceased’s house and land situated at 14 Newcross Street, Indooroopilly, are a specific bequest to be divided between each of the Deceased’s children that have survived her in equal shares in Tenants in Common.

4.   Order that the costs of the respondents, Jaclyn Peta Surman, Thomas Lee Surman and Douglas James Surman, of and incidental to the Application, be paid out of the Estate on the standard basis.

5.   Order that the executors’ costs of and incidental to the Application be reserved.

CATCHWORDS:

Succession – Wills, probate and administration – Construction and effect of testamentary disposition – Generally – Description of legatees and devisees – Children and grandchildren – “Children” – Particular instance

Succession – Wills, probate and administration – Construction and effect of testamentary disposition – Generally – Uncertainty and failure to dispose – In respect of subject matter of gift – Division of proceeds from sale of house to unrelated party

Succession Act 1981 (Qld), s 33C

Fell v Fell (1922) 31 CLR 268; [1922] HCA 55, cited
Pride v Fooks (1858) 3 DeG. & J. 252; [1858] EngR 1188, cited

COUNSEL:

N A Martin for the applicants
No appearance for the respondents
P A Kronberg for the intervenors

SOLICITORS:

Williamson & Associates for the applicants
No appearance for the respondents
Southside Property & Commercial Lawyers for the intervenors

HIS HONOUR:  The executors of Nellie Ivorena Surman, the deceased, have applied to the Court for the determination of whether on the true construction of para 3 of the deceased's will it was intended to include the grandchildren of any child of the deceased where that child of the deceased was no longer living at the time of the deceased's death and whether para 4 of the will was intended to be read so that the net proceeds of sale of the home of the deceased, where the home was sold to a person not one of the deceased's children, was to form part of the residuary estate.

The relevant clauses of the will were as follows:

"3.  I give all the money of which I possess to each of my Children and if more than one in equal shares as Tenants in Common.

4.   I give my House and Land at 14 Newcross Street, Indooroopilly to my Trustees with express direction that anyone or more of my children may purchase my House and Land within 12 months of the date of my death at an agreed price and failing agreement at a Valuation as obtained from a registered Valuer.  The Net proceeds of such sale to anyone or more of my children shall form part of the rest and residue of my Estate and it is my stated intention that the Transfer of the said 14 Newcross Street, Indooroopilly House and Land together with the sale proceeds obtained shall be divided by each of them, my children, as shall survive me in equal shares in Tenants in Common.

5.   I give the contents of my House at 14 Newcross Street, Indooroopilly to my Trustees to divide equally between each of my Children as shall survive me and if more than one in equal shares as Tenants in Common at my Trustee's discretion."

Evidence has been placed before the Court that at the time of the death of the deceased three of her children had already died.  One had died in infancy and two had died as adults leaving in each case a child or children, though those children were, of course, the grandchildren of the deceased.
She also left surviving her five living children.

The evidence discloses that the deceased had made an earlier will shortly after the death of her husband on 26th October 2006.  After he died she instructed her solicitor to alter her then existing will.  That will had provided as follows so far is relevant:

"3.  I GIVE DEVISE AND BEQUEATH all of my estate both real and personal of whatsoever nature and wheresoever situate to my husband JOHN HERBERT SURMAN for his sole use and benefit absolutely.

4.   IF the said JOHN HERBERT SURMAN predeceases me or dies before taking a vested interest under my Will THEN but not otherwise I GIVE the following directions to my Trustees concerning my estate:-

(i)  I GIVE all my money of which I die possessed to each of my children in equal shares as tenants in common.
(ii) I GIVE my house and land at 14 Newcross Street, Indooroopilly to my Trustees with expressed direction that any one of more of my children may purchase the house and land within twelve months of the date of my death, ('the sale') at an agreed price and failing agreement at a valuation as obtained from a registered valuer.  The net proceeds of such sale to any one or more of my children shall form part of the rest and resident of my estate and it is my stated intention that the transfer of the said 14 Newcross Street, Indooroopilly house and land, together with the sale proceeds obtained, shall be divided between each of them my children as shall survive me in equal shares as tenants in common.

(iii)     I GIVE the contents of my house at 14 Newcross Street, Indooroopilly to my Trustee to divide equally between each of my children in my Trustee's discretion.

5.   PROVIDED however and I HEREBY DECLARE that if any child of mine predeceases me or dies before taking a vested interest under this my Will leaving a child or children who survive me THEN such child or children shall take and if more than one in equal shares as tenants in common the share which their parent would have taken had he or she survived me."

She instructed her solicitor to remove her husband as the sole beneficiary and also so remove Allan John Surman as an executor.  Allan Surman was a son who had already died.  She also instructed her solicitor to delete para 5 of the earlier will, which I should add was executed on the 6th March 2004, and that it was her intention to remove any deceased children and their surviving issue, preventing the issue from taking a benefit under the will.  The will of which probate has now been granted was the result of the solicitor's drafting efforts. 

Paragraph 3 of the will, standing alone, has no apparent ambiguity.  However, one cannot construe one paragraph of a will in isolation.  A will must be construed looking at the whole of the document.  See Fell v Fell (1922) 31 CLR 268 at pp 273-4.

The removal of the original cl 5 of the will suggests that the intention of the testatrix in her new will was to limit the operation of cl 3 to her surviving children.  On the other hand, the new cl 5, which was previously cl 4(iii), was expressly altered to ensure that this outcome was achieved and it may be asked why was the same not done in cl 3.

There are, in that sense, arguments each way.  The result is, I think, that it can be fairly be said that cl 3 was ambiguous and I did not understand Mr Kronberg, who appeared for the three grandchildren who have decided to contest the interpretation of the will to argue otherwise.

Once the ambiguity is exposed it is possible to receive evidence on the actual intention of the testatrix pursuant to s 33C of the Succession Act 1981. That evidence, to which I have already referred, strongly supports the view that cl 3 in the effective will was intended to be limited to those children who were living at the date of the testatrix's death and was not intended to include the grandchildren of any child who had predeceased the testatrix. Accordingly, I construe cl 3 in that sense.

Clause 4 gives rise to greater difficulties.  It must be read in the light of the fact first that there was no other dispositive clause in the will apart from the three which I have quoted already.  In other words, there was no disposal of residuary estate.  That is bad drafting as far as a will is concerned but it may be that it was understandable in the present case.

The testatrix did not have a lot of property.  She had some money.  She had the house and land at Newcross Street and she had the contents of that house.  That is all.  The question which arises is whether cl 4 demonstrates an intention that only in the event of a sale to one of the children should the clause operate or whether there is scope for part of the clause to operate in the event that there is no such sale.

One difficulty in the clause is the reference in the second limb of the clause to the transfer.  By the second limb I mean so much of cl 4 as commences, "It is my stated intention."  Whichever view one takes of the proper interpretation of that clause I find myself unable to assign any meaning to the reference to the transfer.  It is written with a capital T and it simply makes no sense.  In my judgment in interpreting the will it must be ignored.

The three grandchildren submit that the second limb of cl 4 is engaged only when there is a sale to one of the children.  That interpretation obtains support from two aspects of the clause.  First, the fact that both limbs are included in the one numbered clause suggests an intention that they operate in conjunction on the same subject matter.  Second, that suggested intention is reinforced by the use of the conjunction "and" between the two limbs of the clause.

Mr Kronberg submitted that that outcome could be reinforced by treating the word "transfer" as demonstrating an intention to establish a mechanism to enable the property to be ultimately transferred to one or more of the children.  As I have said I cannot see that intention in the use of the word.

Mr Kronberg submitted that the clause, read in the way I have referred to, had the result that where a sale took place to someone who was not a child, as it did happen, a situation arose to which the testatrix had simply not turned her mind.  That is an odd result to achieve in a will drafted by a solicitor.

One would hope that ordinarily solicitors would manage to think of the contingencies which would arise in a relatively simple situation such as this.  It also would have the result, as Mr Kronberg submitted it did have, that there would be a partial intestacy.  The will would, to some extent, fail.

In Fell v Fell Sir Isaac Isaacs quoted from Lord Brougham, and I quote:

"There are two modes of reading an instrument:  where the one destroys and the other preserves, it is the rule of law, and of equity following the law in this respect (for it is a rule of commonsense...), that you should rather lean toward that construction which preserves, than toward that which destroys."

Mr Kronberg submitted that to construe cl 4 in such a way as that the surviving children would obtain a share of the proceeds of sale of the land to a third party would be to imply a construction which could not be seen in the terms of the will.  Indeed, he went so far as to submit that it would be a construction contrary to the executrix's stated intention.  It seems to me that that does not necessarily follow. 

It is in my judgment open to the Court to construe what I have called the first limb of the disposition as simply a direction to the trustees to permit any one or more of the children to purchase the house and land within 12 months of the testatrix's death and then to construe the second limb as a separate provision referring not only to the proceeds of such a sale but to the proceeds of any sale.

On that construction the word "proceeds" in the third last line of the clause has a different meaning from the same word in the fifth line of the clause.  The effect of the second limb is then to operate as a specific bequest of the proceeds of sale wheresoever derived.

In Fell v Fell, Isaacs J also quoted from the judgment of Lord Justice Knight Bruce in Pride v Fooks and I quote:  "If the contents of a will show that a word has been undesignedly omitted or undesignedly inserted, and demonstrate what addition by construction or what rejection by construction will fulfil the intention with which the document was written the addition or rejection by construction will be made."

In my judgment the rejection of the word "and" between the two limbs of cl 4 achieves this effect and is warranted by that rule.  Such a construction avoids a partial intestacy.  It ensures that the whole of the estate is disposed of.  It creates a result which is consonant with the effect of cl 3 on its proper interpretation and cl 5.

It is, in my judgment, the construction which the testatrix intended.  I would, therefore, determine that para 4 of the will was intended to be read so that the net proceeds of sale of the home of the deceased, where the home was sold to an independent third party and not to one of the children, was to be dealt with not as part of the residuary estate but as a specific bequest.  I think that disposes of all of the issues submitted on the application.  I shall hear the parties on the question of costs.

...

The executors seek an order that they have their costs of the application paid out of the estate on the indemnity basis.  The solicitors for the executors are the same solicitors who drew the will.  It seems to me that I should before making such an order receive submissions as to why that order should not in some way be limited to take account of the fact that a number of the costs incurred - or that much of the costs incurred have been the result of poor drafting of the will.  I will therefore reserve the question of the executor's costs pending receipt of such submissions.

The grandchildren apply for an order for their costs.  I think it is appropriate that their costs on the standard basis be paid out of the estate. They were put in a difficult position by the ambiguity in the will, a matter for which the estate is responsible, and moreover I have found their presence here and the submissions by Mr Kronberg of considerable help in resolving the construction issue.  I will therefore order that their costs as assessed on the standard basis be paid out of the estate.

I would ask that counsel draft an appropriate order to reflect my findings on the interpretation and my findings on costs so far.  And if that order is initialled by both counsel and delivered to my chambers there will be no need for any further attendance.

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