Vertudaches v Public Trustee

[1992] HCATrans 262

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A29 of 1991

a e t w e e n -

JOHN BASIL VERTUDACHES

and	Applicant
PUBLIC TRUSTEE

First Respondent

and

PETER WILLIAM VERTUDACHES

Second Respondent

Application for special leave

to appeal.

Vertudaches 1 2/9/92

MASON CJ' DAWSON; ,I MCHUGH J

TRANSCRIPT Of PROCEEDINGS

AT ADELAIDE ON WEDNESDAY, 2 SEPTEMBER 1992. AT 4.06 AM

Copyright in the High Court of Australia

MS E.F. NELSON, QC:  May it please the Court, I appear with

my learned friend, MR E.G. REINBOTH, for the

applicant. (instructed by Stanley & Partners)

MR R.D. LAWSON, QC:  May it please the Court, I appear with

my learned friend, MR J.S. RODER, for the

respondent. (instructed by Treloar & Treloar)

MASON CJ: There is no appearance for the first respondent?

MR LAWSON:	No, there is not, if the Court pleases.
MS NELSON:	May it please the Court, the Full Court in this

case approved certain questions as answered by

Justice Matheson at first instance relating to the

construction of a will which was admitted to

writings, the latter of which was executed in probate in 1989, that comprising two paper interpretation.

There were various questions posed and the

applicant complains, in essence, of answers being

given in the affirmative to questions l(a) and

2(a), thereby construing the will in such a way as

to constitute the granting of absolute gifts of

real estate, being a house at 4 Hill Street and

personal property comprising two savings bank

accounts to - - -

MASON CJ:  We are familiar with the question and the

provisions of the will. We have read the

judgments. What question of general principle do

you say is involved here?

MS NELSON:  Does the Court have my written outline of

submissions?

MASON CJ: Yes.

MS NELSON:  It is our respectful submission that the

interpretation adopted by the judgment of the

majority which was delivered by Justice Duggan

departs so far from the clearly established

principles relating to the interpretation of wills

in two respects as to constitute a matter of

general importance. Firstly, that His Honour

Justice Duggan failed to construe every part by

taking it into consideration according to its

grammatical construction and, secondly, and perhaps

of more significance to my argument, that the

effect of the majority decision was to alter a

distinct and express consideration made by a will

by using a codicil, that codicil using words in an

indistinct and uncertain way, and that in so far as

that is concerned, it is of general importance and

Vertudaches 2 2/9/92

a proper matter attracting this Court's

intervention.

In essence, it is fair to say that my argument

relies upon this approach, that the dissenting

judgment delivered by the Chief Justice was the

-appropriate approach to the interpretation and

proceeded by the application of proper principles.

The error of His Honour Justice Ouggan's

approach is perhaps best illustrated by looking at

the concession which he makes in the last part of
his judgment at page 43, line 19, and it relates to

the time for which the second piece of real estate,

No 2 Hill Street, was to be rented. The concession

he must make, which he does make on page 44, is

made inevitable by the erroneous approaqh to

construction adopted by him.	He says at line 2 on
page 44:

I appreciate that this does not resolve the

problem as to the time during which 2 Hill

Street was to be let, but the lack of a more specific provision is insufficient to

influence my view as to the intention to be

inferred from the references to 4 Hill Street

and the bank accounts.

That concession would have been unnecessary

had His Honour not chosen to disturb the plain and

express and unequivocal granting of a life interest

in the real estate to Dianne by reason of the first

paper writing.

It was his approach to construction whereby he

interpreted the second paper writing prepared by

the testator himself and handwritten by him as

being dispositive of the real estate and

incidentally of the bank accounts by interpreting

that paper writing as indicative of an intention to

make an absolute bequest.

MASON CJ: That is the natural reading you would place upon

the provision as it stands. That is the ordinary

sense of the words.

MS NELSON:  That was not exclusively the approach adopted by

the court and I say, with respect, the court was
entitled to look at the circumstances of the

testator at the time of his death to the extent

permitted by law. And the only alteration in his

circumstances was the alteration of his financial

situation in that he had sold a property at Magill

and that had released certain amounts of money

which enabled him to make gifts of money inter

vivos and to purchase another house in Hill Street

which was rented out, and the rental from that

Vertudaches 3 2/9/92

property provided a fund to enable the maintenance
not only of that property, but also of No 4 Hill

Street, in which the daughter, in the first paper writing, had a life interest.

:  The daughter, of course, suffered from a

schizophrenic illness and she was, at the time of

the testator's death, although living with him,

still an out-patient at a psychiatric hospital in

this State. So that her status had not altered.

And it was urged upon the Full Court that that

expression was no more than an adjectival phrase

and, indeed, if one looks at the grammatical

construction, that is the correct position.

It was certainly one to which Justice Duggan

gave some attention on page 42 but it was properly

interpreted, in our submission, by the

Chief Justice when he said that the words were

"descriptive of the testator's previous disposition

to his daughter and not dispositive because the

adjectival mode of expression was used and that is

not what anyone would expect if he were intending

to make a major dispositive change." His Honour

the Chief Justice said, at page 32, line 24:

The words relied upon as dispositive appear as

merely incidental to the provision for the

maintenance of the house.

If one is to look at all of the words used in the codicil and to apply not only the ordinary and

usual meanings of those words, given that this man
has not set out nor, perhaps, was he capable of
expressing himself in other than lay terms, that is

the correct construction that should have been put

upon it.

Once the parole evidence was admitted for the

purpose of ascertaining the circumstances that
pertained to the testator, not only what he knew
but what he should have known at the time of his

death, the only significant change was that his

property had changed form, not that there was any

significant change in the circumstances of his

daughter.

The limited nature of the original bequest to

Dianne must have been dictated by what the testator

knew of her mental condition. He was not clearly

prepared at the time of the first paper writing to

make any disposition in an absolute sense to her.

All that was left to her at that time was a life

interest in the house and the interest from a

savings investment account, out of which,

presumably, she would be obliged to pay the

Vertudaches 4 2/9/92

outgoings on the house, because that was a specific

provision.

So that if one is to look at the natural

meaning of the words in the broader context, and

paving regard to those external circumstances, then

-it would be my submission that one would have to

derive from all of those matters circumstances

which somehow either affected the daughter's

status, her mental stability, or the father's

perception thereof, in order for him to change the

nature of his bequest to her, because it is a

significant change. It is not a minor change.

None of those factors pertained in that sense,

in my submission, and the approach adopted by the

Chief Justice - and I have referred in my written

outline to those particular paragraphs; I do not

propose to take the Court through them - was the

proper approach.

The principles set out in Kellett v Kellett

support my second proposition; that is, that the

majority of the Full Court were in error in

altering a distinct and express consideration by

interpreting words in a codicil, those words being

indistinct and uncertain.

I have referred Your Honours in my written

outline to the particular passage from Kellett v

Kellett on which I rely, and to the passage in

Roddy v Fitzgerald on which I rely in support of my

first submission.

MASON CJ: Could I ask you this question: were each of the

Commonwealth Savings Bank accounts, excluding the

term deposit, in existence at the time the first

will was made in 1979?

MS NELSON:  I think that is correct, Your Honour. I am

instructed that the term deposit account only came

into existence after - - -

MASON CJ: Yes, I was not concerned with that. I was

concerned with the savings bank accounts other than

the term deposit account.

MS NELSON:  On my instructions, they were in existence at

the time that the first paper writing was executed.

They were referred to in that document as "Dianne's

fund", and it was from that source that she was to

derive the interest for her life.

It follows logically if the whole of that codicil is to be interpreted in a common sense

manner, that if the testator intended to make an

absolute gift to Dianne of No 4 Hill Street, then

Vertudaches 5 2/9/92

he would have made some provision for a time at

which No 2 Hill Street could be sold or ceased to

be rented out or capable of being disposed of in

some way.

The fact that he does not do that really adds

support to my submission that it was only intended

to create a fund which would relieve Dianne from

paying out of the interest she received from the

other savings investment accounts for the

maintenance of No 4 Hill Street. To that extent,

even though the words are perhaps less than

felicitous in their expression, it was merely

incidental to the setting up originally of a life

interest in the home.

The codicil, if I can describe it as such, was

intended to alleviate her from the burden of

maintaining the house. It is particularly

significant that the opening words of that codicil are, "As my financial circumstances have changed",

so that the testator's mind is being directed to

how he can best provide for, in the case of his daughter, her ability to live in that house for

life and for the house to be maintained.

It must have been his intention that No 2 Hill

Street, the house that was rented out, would be

sold when his daughter died and therefore when her

life interest in No 4 Hill Street ceased. I have

taken Your Honours to that particular passage in

the judgement of Justice Duggan who delivered the

majority judgment to illustrate what I say is a

complete anomaly and something which follows

illogically because the basic approach is, with

respect, erroneous.

His Honour the Chief Justice also refers to that particular aspect in his judgment as

reinforcing his approach to interpretation.

MASON CJ: I can follow the force of the arguments you have

put, Ms Nelson, but ultimately a court is faced, in

a case like this, of endeavouring to place a

meaning on a document that is not drawn with any

great skill in respect of which there are

contending arguments either way. As far as this

Court is concerned, a decision on this case is

really not going to advance, as far as I can see,

the principles of law in any particular respect.

MS NELSON:  I understand that that is a hurdle and it may

simply mean that I have to pursue the argument more

vigorously but I cannot put it any higher,

Your Honour, than to say that because the departure

is a significant departure and it is not merely a

different approach to how one interprets a will, it

Vertudaches 6 2/9/92

is the application of the wrong principle. It is

because of that that it is of general importance;

not merely that there are different approaches in

construction, but that the principle which has been

applied is the wrong principle; that His Honour

Justice Duggan should have followed the authority
-of Kellett v Kellett which has been accepted in our

court in Re McGeorge and in other jurisdictions and

should not have attempted to spell out of

uncertain, equivocal words an intention to disturb

an express provision which was not expressed in

equivocal words.

That really summarizes my position, and those

are my submissions, may it please the Court.

MASON CJ: Thank you, Ms Nelson. The Court need not trouble

you, Mr Lawson.

In the view of the Court, this case raises no

question of general principle. The decision turns

on the construction of the particular words of the

documents in question. Accordingly, the

application for special leave to appeal is refused.

MR LAWSON:  I seek an order for costs.

MASON CJ: You cannot oppose that, Ms Nelson?

MS NELSON:  No, I cannot.

MASON CJ: The application is refused with costs.

AT 4.23 PM THE MATTER WAS ADJOURNED SINE DIE

Vertudaches 2/9/92