Weaver & Anor v Brashear as Executor of the estate of the late Marjory Joyce Brashear [2005] ACTSC 79 (19 August 2005)

Last Updated: 14 September 2005

CRAIG & DEARNE WEAVER v ROBERT LEE BRASHEAR AS EXECUTOR OF THE ESTATE OF THE LATE MARJORY JOYCE BRASHEAR [2005]

ACTSC 79 (19 August 2005)

WILLS - construction - relevant principles - whether clause provided for life estate apparently terminable upon sale - whether clause providing right to compensation intended that reimbursement be from whole property of estate.

Administration and Probate Act 1929 (ACT), sch 4

Trustee Act 1925 (ACT), s 63

Hardwick v Hardwick (1873) LR Eq 168

Shelton v Anna Kilsby as executor of the estate of the deceased and others [2000] WASC 180

Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99

Gleeson v Fitzpatrick (1920) 29 CLR 29

Hill v Crook (1873) LR 6 HL 265

Brennan v Permanent Trustee Co of NSW Ltd (1945) 73 CLR 404

Hiscocks (decd) v Hiscocks (1839) 5 M & W 363

Higgins v Dawson [1902] AC 1

McRobert v McRobert (1920) 27 CLR 331

Wendt and ors v Orr and anor [2004] WASC 28

I. J. Hardingham, M. A. Neave and H .A. J. Ford, Wills & Intestacy in Australia and New Zealand, (2nd ed, 1989) at [1102]

No SC 185 of 2003

Judge: Crispin J

Supreme Court of the ACT

Date: 19 August 2005

IN THE SUPREME COURT OF THE )

) No SC 185 of 2003

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: CRAIG AND DEARNE WEAVER

Plaintiffs

AND: ROBERT LEE BRASHEAR AS EXECUTOR OF THE ESTATE OF THE LATE MARJORY JOYCE BRASHEAR

Defendant

ORDER

Judge: Crispin J

Date: 19 August 2005

Place: Canberra

THE COURT ORDERS THAT:

1. it be declared that the beneficial interest granted to the defendant by clause 4a of the will of the late Marjory Joyce Brashear is an equitable life interest terminable upon sale and that upon any sale of the property situated at and known as 36 Jauncey Court, Charnwood, ACT he would have no beneficial interest in that portion of the proceeds of sale referable to half interest granted by clause 4;

2. it be declared that the phrase "trust assets" in clause 6 of the will referred to in order 1 means the assets of the said estate held in trust pending distribution.

1. The parties seek rulings as to the proper construction of certain portions of the will of the late Marjory Joyce Brashear ("the testatrix") dated 2 July 2001.

2. The testatrix died on 28 August 2001. She was survived by her second husband, who is the defendant in the present proceedings, and her children, who are the plaintiffs. Probate was subsequently granted to the defendant, who had been appointed as executor and trustee of the will on 18 October 2001.

3. After the grant of probate, the defendant proceeded to distribute a number of items of jewellery and other personal effects of the deceased that had been the subject of specific bequests made by clause 3 of her will.

4. However, it quickly became apparent that the value of the residuary portion of the estate would be insufficient to cover the debts of the estate, and that it would be necessary to draw upon the assets specifically disposed of by the will, rateably according to value (see sch 4, pt 4.1 of Administration and Probate Act 1929 (ACT)).

5. As this became known to the testatrix's family, a number of disputes arose: first as to the defendant's entitlements under clause 4 of the will; second, as to his entitlements under clause 6; and, third, as to the return of the items that had been the subject of specific bequests under clause 3 or the ascertainment of their value so that the amount payable by or on behalf of the recipients could be determined.

6. On 21 March 2003 the plaintiffs lodged a caveat on the title to the property at 36 Jauncey Court, Charnwood, ACT, which may be referred to as the "residence", to use the term employed in the will. The defendant responded by lodging an application with the ACT Registrar General for the lapsing of the caveat and on 11 April 2003 the plaintiffs commenced proceedings for an order entitling them to maintain the caveat indefinitely. An exchange of correspondence then ensued and the matter was listed before the Master on a number of occasions. The plaintiffs ultimately abandoned the claim to be entitled to maintain a caveat and in lieu thereof obtained leave from the Master to convert the proceedings into a construction suit.

7. Despite the pendency of these proceedings, the defendant then made an ex parte application for directions pursuant to s 63 of the Trustee Act 1925 (ACT), and on 3 December 2003 Ryan J delivered judicial advice on the construction of the will. During the course of the present application, Mr Ward, who appeared on behalf of the defendant, submitted that, by reason of subs 63(8), the plaintiffs were bound by this advice. For the reasons which I gave during the course of an extemporaneous judgment and which need not now be repeated, I rejected this contention and proceeded to hear argument on the proper construction of the relevant clauses of the will.

8. The dispute which I will deal with first concerns the construction of clause 4 of the will and, in particular, whether it confers any right on the defendant to retain and use a relevant portion of the net proceeds of the sale of the residence. The defendant acquired an unqualified half interest in the residence by virtue of clause 5 and further rights in relation to the other half interest by virtue of clause 4, which is in the following terms:

I GIVE one-half my interest in my residence at 36 Jauncey Court, Charnwood in the Australian Capital Territory (my residence) to my trustee upon trust that:

a. My husband ROBERT is to have ownership, control, use and occupation of the residence during his lifetime or until such time as he sells the residence.

b. My trustee is to ultimately distribute to my son CRAIG and daughter DEARNE (in equal shares) either the proceeds of selling one-half the residence or a one-half share in the residence equally divided as tenants in common.

c. ROBERT shall have the discretion of deciding when to make distributions to CRAIG and DEARNE (upon selling or upon death), except in any case distributions are to be arranged to occur not later than upon his death.

d. Any deviations from the above will require agreement between ROBERT, CRAIG, and DEARNE.

If ROBERT does not survive me or dies within thirty days of my death, I give this one-half interest in the residence to CRAIG and DEARNE in equal shares as tenants in common.

9. Mr Crowe SC, who appeared for the plaintiffs, submitted that clause 4 clearly conferred upon the defendant an interest terminable on either death or sale. He argued that the use of the word "ultimately" in subclause (b) merely indicated that the distributions would have to be made at some unspecified time in the future when one of those two contingencies occurred. He maintained that subclause (c) merely gave the defendant a discretion to decide whether to make the relevant distributions, whether during the period he remained as trustee of the residence, upon its sale or upon his death.

10. On the other hand, Mr Ward submitted that clause 4 reflected the testatrix's intention that the defendant would have the benefit of the whole of property throughout his life and that, whilst she may never have considered the possibility that the property might have to be sold to pay the debts of her estate, the clause should be construed as reflecting an implied intention that he retain the benefit of the balance of any net proceeds of sale in such an event. He argued that such a construction was confirmed by the use of the word "ultimately" which, he suggested, meant upon the defendant's death. Mr Ward also argued that the discretion provided by subclause (c), to decide when to make distributions to the plaintiffs would be illusory if, as Mr Crowe had suggested, the testatrix had intended that it be exercised only upon sale or death, when in either event the defendant's trusteeship of the property would have concluded.

11. Mr Ward suggested that considerable support for his contentions could be obtained from the terms of the judicial advice given by Ryan J. In response to this suggestion, Mr Crowe submitted that it had been quite inappropriate for the defendant to have sought such advice when there were proceedings on foot in which the construction of the will was an issue. Mr Ward sought to answer this criticism by pointing out that s 63 of the Trustee Act entitles a trustee to apply for advice concerning the interpretation of a trust instrument without notice to any other person, notwithstanding the existence of disputes as to its proper construction. That may be so, but there is nothing in s 63 to suggest that it is appropriate for a defendant in proceedings pending before the court to commence further proceedings with a view to obtaining judicial advice after an ex parte hearing when, in the absence of an application under subs (7), the advice could bind the other parties to the pending litigation and might, in any event, bolstered the defendant's case by reason of its persuasive value.

12. As Mr Crowe ultimately conceded, neither the wisdom nor the propriety of the defendant's conduct in seeking judicial advice in these circumstances could be of any relevance to the final construction of the will. However, the weight that might properly be given to judicial advice obtained in these circumstances is obviously limited, if only by the fact that it was given following an ex parte hearing, and hence in the absence of any argument from the plaintiffs. In the present case, the persuasive value of the judicial advice is further eroded by the fact that it was not supported by any statement of reasons. Furthermore, if I may say so with respect, there are some aspects of the advice with which I am unable to agree. For example, I am unable to accept that the defendant could lawfully transfer the whole of the title to the residence to himself absolutely and, in lieu of the half interest which is the subject of clause 4, hold on trust only an amount of money calculated by taking the present value of the property and deducting the costs of the proceedings between the parties in this case and the costs of obtaining judicial advice. Accordingly, whilst I have carefully considered the approach that his Honour apparently took in relation to some of the issues raised in argument before me, I have ultimately concluded that little weight should be placed upon the advice.

13. The operative words of clause 4 grant the defendant a half interest in the residence upon trust. The legal interest granted to him in his capacity as trustee is not qualified, but the beneficial interest granted to him is limited to "ownership, control, use and occupation" during his lifetime "or until such time as he sells the residence." At face value the language employed in this clause clearly suggests that the beneficial rights given to the defendant in relation to the relevant half interest in the residence are to exist only during any period prior to his death or its sale. In that event, of course, there could be no basis for any claim of a continuing right to either the property or the proceeds of sale after the occurrence of either contingency.

14. Mr Ward argued that the words "or until such time as he sells the residence" had not been intended to limit the duration of the defendant's rights under clause 4 and could be dismissed as a mere acknowledgment of the inescapable fact that he would not be able to use, occupy or control the property after it had been sold. Accordingly, he maintained, the addition of those words did not prevent the clause from being construed as conferring upon the defendant a beneficial life interest in the property and, upon its sale, a beneficial life interest in the relevant portion of the proceeds of sale.

15. The most obvious impediment to the adoption of such an approach is that it involves imputing to the testatrix an intention that is inconsistent with the manner in which she chose to express subclause 4(a), when there is no other provision in the will capable of demonstrating that she did not intend the plain meaning of the relevant phrase.

16. As a matter of general principle, the words of the Will must be interpreted in the context in which they appear according to their usual or primary meaning: see I. J. Hardingham, M. A. Neave and H .A. J. Ford, Wills & Intestacy in Australia and New Zealand, (2nd ed, 1989) at [1102]; Hardwick v Hardwick (1873) LR Eq 168; Shelton v Anna Kilsby as executor of the estate of the deceased and others [2000] WASC 180 at [4]. It is true that the meaning of any disputed clause must be construed by reference to the will as a whole; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109 - 111; Gleeson v Fitzpatrick (1920) 29 CLR 29 at 35. However, it has been said that "the Will is its own dictionary": Hill v Crook (1873) LR 6 HL 265 and that "the language of the testator must be read in a sense in which he himself appears to have attached to the expression that he used": Brennan v Permanent Trustee Co of NSW Ltd (1945) 73 CLR 404 at 414 - 415. It has also been suggested that the court may not accept extrinsic evidence of the testator's direct intentions even in cases of ambiguity: Hiscocks (decd) v Hiscocks (1839) 5 M & W 363 at 367-370; Hardwick v Hardwick; Shelton v Anna Kilsby as executor of the estate of the deceased at [4]. Indeed, in Higgins v Dawson [1902] AC 1 at [9] Lord Chand said that "...even if it could be shown that the intention of the Testator was something different from the language of the will, that intention would not prevail, but the language of the will must settle the rights of the parties". See also McRobert v McRobert (1920) 27 CLR 331 and Wendt and ors v Orr and anor [2004] WASC 28.

17. In the present case, it is difficult to find any basis for concluding that a subclause apparently providing for the defendant to have a beneficial interest in the residence until the occurrence of either of two events should be construed as providing for him to have further beneficial rights following the occurrence of one of those events. Furthermore, there is nothing in the will to suggest that the testatrix had intended to make any provision for the defendant to sell the property and hold the proceeds of sale on trust for the balance of his life, whether the sale was due to the need to pay debts, a desire to move house, or any other reason. Had the testatrix had such an intention, one would have expected to see, if not detailed provisions governing the use and investment of such moneys, at least some indication that his beneficial interest was to extend beyond rights to use, control and occupy the residence until death or sale.

18. One may speculate that, if the testatrix had considered the possibility of the defendant being forced to sell the house in order to meet debts of the estate, she may have changed the provisions of subclause 4 to provide for a further trust of the relevant half of the net proceeds of sale after the payment of such debts. However, as the High Court said in a unanimous judgment in McRobert v McRobert "the only question is what intention has the testator expressed by the [relevant] words" with reference to the subjects and objects (emphasis in original judgment). I am unable to find any clear expression by the deceased of an intention to create a further or continuing trust of the kind suggested.

19. For these reasons, I am satisfied that clause 4 provides only for a life interest terminable upon sale, and does not confer upon the defendant any beneficial right in the proceeds of any sale of the relevant half interest in the residence.

20. A further issue arises as to the construction of clause 6 which is in the following terms:

I DECLARE THAT my trustee shall have the following powers:

a. To sell, call in and convert into money such parts of my estate as shall not consist of money with power to postpone such sale calling in and conversion for so long as my trustee shall think fit notwithstanding that such parts may be of a terminable or wasting nature or may consist of a hazardous investment.

b. To retain for so long as my trustee shall in my trustee's discretion think fit any real or personal property owned by me at the time of my death notwithstanding that such property may be of a terminable or wasting nature or may consist of a hazardous investment.

c. To control, manage, maintain and make improvements to the trust assets in any manner not specifically prohibited by law.

d. To be compensated from the trust assets for legal expenses incurred while preforming [sic] as trustee.

e. To be compensated from the trust assets for the payment of debts and expenses associated with the trust assets.

21. Mr Ward submitted that whilst subclauses 6(a) and (b) referred to all or any property of the estate, the reference to "trust assets" in sub paragraph (c), (d) and (e) should be taken to mean the half interest in the residence held by the defendant on trust pursuant to clause 4 of the will, and not to the overall assets of the estate that he held as executor and trustee pursuant to clause 2. He argued that such a construction should be adopted because, whilst subclause (a) referred to "such parts of my estate" and subclause (b) referred to "any real and personal property", in subclauses (c), (d) and (e) the deceased had used the term "trust assets".

22. There are a number of points which may be made about this submission. First, it should be noted that clause 2 provides that the expression "my trustee" shall mean "the trustee of this my Will for the time being ..." and the powers specified in clause 6 are clearly intended to be exercised by the defendant in that capacity. Second, as Mr Ward quite properly conceded, clause 6 could only have effect during that period in which the defendant remained the trustee of the will. Third, save for the argument based upon differential use of terminology, the term "trust assets" would be equally applicable to the whole of the property of the estate held in trust pursuant to subclause 2. Fourth, read as a whole, clause 6 appears to provide a range of powers of the kind that one would typically expect an executor and trustee of an estate to be given in relation to the whole of the estate's property. Fifth, each subclause provides a power or powers of a different nature from the others and there is no repetition of the kind that might have been expected if it had been intended that the last three subclauses should apply only to a more limited class of property than the others. Sixth, it seems unlikely that the testatrix intended that the power to be compensated for legal expenses incurred as a trustee of the will should be confined to reimbursement from one half of the ultimate proceeds of the sale of the residence, when he had been given the right to use and occupy it for life and, if he were to do so, only his heirs would obtain the compensation.

23. In these circumstances, the phrase "trust assets" in subclauses (c), (d) and (e) must, in my opinion, be construed to mean the assets of the estate held in trust pending distribution.

24. I have been informed that the third dispute is likely to be resolved by agreement and have not been asked to resolve any issue that might have arisen from it.

25. I will hear counsel as to costs.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.

Associate:

Date: 19 August 2005

Counsel for the plaintiffs: Mr R L Crowe SC

Solicitor for the plaintiffs: Hill & Rummery

Counsel for the defendant: Mr C Ward

Solicitor for the defendant: Tetlow Tigwell Watch

Date of hearing: 10 August 2005

Date of judgment: 19 August 2005