Tower Trust Limited & Worden v Worden & Worden - [2004] SASC 159

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
TOWER TRUST LIMITED & WORDEN v WORDEN & WORDEN
Judgment of The Honourable Chief Justice Doyle
8 June 2004
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - GENERALLY - UNCERTAINTY AND FAILURE TO DISPOSE
Construction and effect of terms of a will - whether terms of will fails to deal with proceeds of sale of real estate - whether terms of will result in partial intestacy - whether clause void for uncertainty - summons dismissed.
Brown v Heffer (1967) 116 CLR 344, discussed.
In Re Tarca (1981) 29 SASR 152, considered.

TOWER TRUST LIMITED & WORDEN v WORDEN & WORDEN
[2004] SASC 159
Civil

DOYLE CJ The plaintiffs in this action are the executors of the estate of Robert James Worden, a son and one of the executors and beneficiaries of the will of Jack Worden (“Mr Worden”).
The plaintiffs claim that clause 7 of the will of Mr Worden is void for uncertainty. The first defendant, Kevin Lloyd Worden, informed the court that he would abide the outcome of the action. The second defendant, John Elliott Worden, disputes the plaintiff’s contention. Each defendant is also an executor and beneficiary of the will.
The Will
The will of Mr Worden is a straightforward one. I will refer only to the provisions that are material to the issue before me.
Clause 4(2) of the will deals with Mr Worden’s real estate. This clause leaves his real estate to his wife for life, and then to such of his three sons (R J Worden, K L Worden and J E Worden already referred to) as should survive him. Clause 4(2) provides as follows:
“AS REGARDS my real estate to allow my wife to have the use and occupation thereof or to receive the rents and profits therefrom during her lifetime and from and after her decease upon trust subject to clause 7 hereof for such of my sons as shall be living at the date of my decease and if more than one in equal shares as tenants in common PROVIDED THAT during her lifetime my wife shall pay the rates taxes and any other lawful assessments or impositions raised or charged in respect of my said real estate and properly chargeable against income and shall keep my said real estate including all improvements thereon in good condition and repair and shall repay to my trustees premiums of insurance on policies which my trustees may effect and keep on foot over the said improvements from time to time.”
Mr Worden was survived by his wife and his three sons. His wife has since died.
Clause 4(3) disposes of Mr Worden’s residuary estate in a similar fashion. It provides that his executors and trustees are to convert the residuary estate into money, and after payment of debts are to hold the balance on trust to pay the income to his wife for life and then to hold the funds for his three sons in equal shares as tenants in common.
Clause 7, the clause in question, provides as follows:
“I DIRECT my trustees to offer the whole of the real estate owned by me at my death to my said son JOHN for purchase of the same by him at a price which shall be unanimously agreed between him and the other trustees or failing agreement at a price fixed by a licensed valuer appointed by agreement between him and the other trustees or failing agreement as to such an appointment by a licensed valuer appointed by the President for the time being of the Real Estate Institute of South Australia at the request of any one of my trustees such offer to be made in writing within twelve months after the date of my death or the date of death of my wife whichever shall last occur and the cost of any such valuation to be a charge against my estate and I FURTHER DIRECT that my said son JOHN subject to him complying with the directions contained in clause 8 hereof shall have five years after the date of my death or the date of death of my wife whichever shall last occur in which to accept such offer and I DECLARE that such option of purchase is personal to my said son JOHN to be exercised by him during his lifetime and not by any person after his death.”
I proceed on the basis that John Elliott Worden wishes to purchase the real estate in accordance with the provisions of clause 7.
Submissions
The plaintiffs submit that clause 7 does not deal with the proceeds of sale of the real estate under clause 7. They submit that there is no other provision of the will that does so. Accordingly, they argue that if clause 7 were valid there would be a partial intestacy, that is, as to the proceeds of sale. They argue that the court should declare clause 7 void for uncertainty, rather than allow a partial intestacy to occur.
The second defendant submits the contrary. His submission is that clause 7 does no more than give directions as to the method of sale of the real estate. There is no reason why it should provide for the disposition of the funds received. Counsel for John Elliott Worden submits that the proceeds of sale pass under clause 4(2) of the will, or at worst under clause 4(3) of the will. Accordingly, clause 4 disposes of the proceeds of the real estate and there is no question of a partial intestacy. Accordingly, the premise for the argument advanced by the plaintiffs is not made out. In any event, the submission is that the clause is not uncertain, even if it gives rise to a partial intestacy.
Conclusions
The last step in the submission for the plaintiffs seems to me to be at odds with basic principle. True it is that a court aims to interpret the provisions of a will so as to avoid an intestacy. But it is going a long way to say that an apparently clear provision, such as the right to purchase in clause 7, fails for uncertainty because it will give rise to an intestacy as to the proceeds of sale. The argument advanced is based not so much on the uncertainty of the provision, as on the unwanted consequence of its apparent meaning.
Be that as it may, I reject the earlier steps in the submission for the plaintiffs.
On the death of Mr Worden a life interest in the real estate vested in his widow. At the same time a remainder interest in the real estate vested in the three sons, the enjoyment of that interest being subject to the widow’s life interest.
I emphasise that the remainder interest vested on the death of the testator. That interest having vested in the sons at that time, it follows that they are entitled, by virtue of that interest, to the proceeds of a sale of the land, should a sale take place. For example, were the property to have been compulsorily acquired after the death of the testator, the remainder interest in the proceeds of sale would be held by the three sons of the deceased. Mr Jenner, counsel for the plaintiffs, appeared to agree that that was so. I can see no reason why a different result would ensue as a result of a sale in exercise of the rights and obligations created by clause 7 of the will.
Counsel did not refer me to any case precisely in point. Nor could I find a case precisely in point in the brief researches that I undertook. But in my opinion my conclusion accords with principle.
An interest in the real estate vested in the three sons of Mr Worden at his death, and that vesting is unaffected by later changes in the form of the property. To so hold is consistent with decisions holding that there is no ademption of a devise of land in a case in which the testator has, prior to death, entered into a contract for the sale of the land that is not specifically enforceable as at the date of death. In such a case the person to whom the land is devised is entitled to the proceeds of the sale, should it eventuate after the death of the testator. As the majority of High Court said in Brown v Heffer (1967) 116 CLR 344, with reference to a case in which the contract for the sale of land was not specifically enforceable at the death of a testator (at 350):
“…It follows that the land, not having been converted into money under the principles of equity during the testator’s lifetime, was still his to dispose of at his death, though it was even then bound by a contract which, if the Minister’s consent should thereafter be obtained, would become a contract of sale with the result that the respondent as devisee would in the end receive only the purchase money.”
On this point see also InRe Tarca (1981) 29 SASR 152.
By parity of reasoning, my conclusion is that the proceeds of a sale of the land in question, in the event of a sale under clause 7 of the will, pass under clause 4(2) of the will. There is no intestacy as to the proceeds of the sale. Accordingly, the basis for the argument advanced by the plaintiffs is not made out.
Even if I were satisfied that there was an intestacy as to the proceeds of the sale of the land, I would not conclude that clause 7 is void for uncertainty. My view is that the meaning of the clause is clear, and the clause cannot be declared void. If there were to be a partial intestacy in relation to the proceeds of sale of the land, those proceeds would simply pass as on intestacy.
It was not disputed that in the event of me concluding that clause 7 is not void for uncertainty, the summons issued by the plaintiffs should be dismissed. Accordingly, I order that the summons be dismissed.