Tschirn v Australian Executor Trustees Ltd

[2016] SASC 149

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

TSCHIRN v AUSTRALIAN EXECUTOR TRUSTEES LIMITED

[2016] SASC 149

Judgment of The Honourable Justice Doyle

16 September 2016

SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION

The respondent and first appellant are the executors and trustees of the estate of the deceased. Until 2007, the deceased lived in a property in Erindale. Following this, for approximately two and a half years prior to her death, the deceased lived with the appellants, and the Erindale property was leased to generate rental income. The deceased’s Will contained a number of specific bequests of various items of her property, including a specific devise of the Erindale Property to the first appellant.

Whilst the respondent was investigating the estate after the deceased’s death, it discovered that in excess of $600,000 had been withdrawn from the deceased’s bank accounts in the period she had been living with the appellants. As a result of this, the respondent sought and obtained judicial advice to the effect that it was appropriate to commence proceedings against the appellants and for its costs to be paid out of the residue of the estate.

The funds that were set aside from the residue of the estate to pursue the ligation have been exhausted. The respondent brought an application seeking a declaration that on the proper construction of the Will the rental income generated from the Erindale property since the deceased’s death fell within the residue of the estate. It also sought judicial advice and directions to the effect that it is appropriate that the respondent use the rental income to fund the respondent’s costs of the proceedings. A Master of the Court made this declaration and granted the judicial advice sought.

On appeal, the appellants contended that the Master erred in finding that on the proper construction of the Will the rental income fell within the residue of the estate. Accordingly, they contended that the Court should re-exercise its discretion to give judicial advice.

Held per Doyle J, allowing the appeal:

1.       On the proper construction of the Will, the rental income from the property does not form part of the residue of the Estate.

2.       It is not appropriate to give the judicial advice and directions sought.

Administration and Probate Act 1919 (SA) s 69; Supreme Court Civil Rules 2006 (SA) r 17(2), referred to.
Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66, applied.
O’Brien v McCormick [2005] NSWSC 619; Re Atkinson [1971] VR 612, discussed.

TSCHIRN v AUSTRALIAN EXECUTOR TRUSTEES LIMITED
[2016] SASC 149

Magistrates Appeal:   Civil

DOYLE J:

1. The plaintiff is an executor and trustee of the estate of Joyce Atkinson (the deceased), who died on 1 November 2009 at the age of 95.

2. The deceased’s Will nominated her late husband’s godson (Mr Tschirn, the first defendant) as the other…