Hunt v Korn [1917] HCA 66; (1917) 24 CLR 1 (4 December 1917)

Hunt and Others Defendants, Appellants; and Korn and Others Defendants and Plaintiff, Respondents.

Harvey J., in the decision which is the subject of this appeal, acted, no doubt, upon the right principle. That principle has been stated in several recent cases, and the outcome of them, as stated by Neville J. in In re Nutt's Settlement; McLaughlin v. McLaughlin[1], is this:—"With regard to the granting of equitable estates a grant of land upon trust for A passes to A, if there is nothing more, only a life estate; but words of limitation with regard to an equitable estate are not, in my opinion, indispensable, because I think that what estate is given to a beneficiary depends upon the construction of the document purporting to give him the benefit and must be determined by the whole of the deed or document which has to be interpreted. I think, therefore, that if you can find in the documents themselves, or in the document itself that you have to examine, a sufficient indication of a desire to pass not a life estate, but an equitable estate in fee, that intention must prevail." The same principle had been expressed in several previous cases, among which was In re Tringham's Trusts; Tringham v. Greenhill[2]. There Joyce J.[3] cited passages from Butler's Notes to Coke upon Littleton, from Hayes's Introduction to Conveyancing, and from Lewin on Trusts, which state the same principle in varying terms. In the last mentioned passage Lewin, at p. 117 of the 10th ed., puts it in a form which impels us to quote it because of its brevity and completeness:—"In creating a trust, a person need only make his meaning clear as to the interest he intends to give, without regarding the technical terms of the common law in the limitation of legal estates. An equitable fee may be created without the word heirs, and an equitable entail without the words heirs of the body, provided words be used which, though not technical, are yet popularly equivalent, or the intention otherwise sufficiently appears upon the face of the instrument."

In the trusts now under consideration John Korn, the settlor, did not use the ordinary technical words of the common law in the trusts for the beneficiaries, and the learned Judge did not find within the four corners of the settlement, which was voluntary and post-nuptial, sufficient evidence of an intention to confer the fee on the settlor's children. His answer to the question put in the originating summons therefore declared that on the true construction of the deed the shares and interests thereby vested in the children of Korn and his wife, Susan, were for their respective lives only.

In In re Tringham's Trusts[4] Joyce J., speaking of a decision of Chitty J. (see In re Whiston's Settlement; Lovatt v. Williamson[5]) which had "not been universally approved," said: "It has been thought by some that if the Court had been astute to find in that case sufficient indication of an intention to confer absolute interests upon the children it might have succeeded in doing so." In a case like this, where we, in common with Harvey J., have little doubt of that which the settlor was endeavouring to express, we feel ourselves entitled to scrutinize the words of the trusts with some closeness. The result of that scrutiny is that, with great respect, we find ourselves unable to agree in the conclusion arrived at by the learned Judge. If there were nothing more to be found in the deed than the several considerations which Harvey J. thought insufficient to establish the necessary intention, we should uphold his conclusion. But we think there is more. Of the several matters which we shall mention we do not rely on any by itself. But we think their effect is cumulative and conclusive.

The property settled is land. The settlor recites in the deed his desire to make such provision for his wife "and their issue" as was thereinafter contained. The estate in the lands which he confers on the trustees is to "their heirs and assigns for ever." In giving estates to his wife and himself for their joint lives he shows that when he means to give a life estate he expresses it as one. There is a distinct change of language between the passage giving the life estate to the settlor and his wife and that giving the estate, whatever estate it was, to their children. The life estates created eo nomine are given by exclusive reference to the rents, issues and profits of the lands, which the trustees are to receive and to pay to Korn and his wife and the survivor. But after the decease of the survivor all of the children who survive their parents and attain the age of twenty-one, being a son or sons, and who attain or marry under that age, being a daughter or daughters, are made tenants in common both of "the lands hereditaments and premises" and of "the rents issues and profits thereof," that is, both of the subject of the settlement and of its income. Then a child dying before both parents have died does not share personally, but, "if he leaves issue," the "share" to which he or she "would have been entitled" under the last-quoted trust is given to his or her child or children. No doubt that is a substitionary gift, but it is a gift of the same share as the settlor's child would have taken. As ex facie there could not be any such share in the case of a life estate, it being then exhausted, the inference is strong that the estate of the settlor's child was more than a life estate. It cannot be that there is a life estate in the grandchild or grandchildren, a position which Mr. Wilson sought to establish by analogy to the case of the children. For if there were more than one grandchild they would be given equal shares, that is, they would be tenants in common. Consequently, there would be several persons holding for life equal shares distinct as among themselves. But that again makes it quite clear that such a gift is not a gift of the share "which the parent would have taken" under the trust mentioned. Although this position appears from the substitionary gift, it nevertheless goes to show that the shares of Korn's children must have been greater than mere life estates. But if they are greater than life estates there is nothing to be found in restriction of them, and therefore they must be absolute estates in the shape of equitable tenancy in common in fee.

We think, therefore, that the cumulative effect of the various expressions we have pointed out is that they amount to an indication of intention which impels us to say that the question before the learned Judge should have been answered thus: On the true construction of the said indenture of settlement the shares and interests of the children of the settlor John Korn and his wife Susan Korn are absolute.

We think, therefore, that the appeal must be allowed, and the question answered accordingly. The costs of all parties as between solicitor and client to be paid by the respondent Ralph Mate Thompson out of the real and personal estate in his hands or vested in him as the sole trustee of the indenture of settlement.

The case to be remitted to the Supreme Court in Equity to be further dealt with.

Appeal allowed and question answered accordingly. Case remitted to Supreme Court in Equity. Costs of all parties as between solicitor and client to be paid out of the trust estate.

[1] (1915) 2 Ch., 431, at p. 435.

[2] (1904) 2 Ch., 487.

[3] (1904) 2 Ch., at pp. 491, 492.

[4] (1904) 2 Ch., at p. 494.

[5] (1894) 1 Ch., 661.

High Court of Australia

Hunt v Korn [1917] HCA 66; (1917) 24 CLR 1 (4 December 1917)

HIGH COURT OF AUSTRALIA