Ainslie v Trustees Executors & Agency Co Ltd [1922] HCA 45; (1922) 31 CLR 122 (13 November 1922)

Ainslie and Others Defendants, Appellants; and The Trustees, Executors and Agency Company Limited and Others Plaintiffs and Defendants. Respondents.

Herring, for the respondent the Public Trustee, representing the persons entitled under an intestacy (if any) of the testator.

Weigall K.C. (with him Russell Martin), for the respondent the Trustees, Executors and Agency Co. Ltd.,

By his will the testator, John Robert Murphy, disposed of certain real estate, being part of Allotment 12 Section 2 City of Melbourne, in the following words:—[The portion of the will above set out was then stated.] The trusts declared by the will with respect to the land devised for the benefit of Mrs. Steavenson and her children were to permit Mrs. Steavenson to receive the rents and profits for life, remainder among her children as she should by deed or will appoint; and, in default of appointment, among such of her children as being sons should attain twenty-one or being daughters should attain that age or marry, in equal shares as tenant in common. The will contained a general residuary devise and bequest. Felix Mueller died without ever having been married. It was conceded that the gift of the £10,000 for the benefit of the grandchildren of Felix Mueller was void for remoteness, and that consequently the direction that the money should sink into and become part of the testator's residuary estate also failed.

In these circumstances the trustees of the will sought the direction of the Supreme Court upon the question who were or would be the persons beneficially entitled to the sum of £10,000 which the trustees were empowered to raise for the benefit of the issue of Felix Mueller. In the view which we take of this question it is unnecessary to refer to the other questions raised by the trustees. The motion was heard by McArthur J., who decided that on the death of Felix Mueller it was the duty of the trustees to raise the said sum of £10,000 and that the residuary legatees under the will and codicil were the persons beneficially entitled to that sum. It is from this decision that this appeal is brought.

On the argument of the case before this Court a number of authorities bearing on the question were cited, to none of which had the attention of the learned Judge of the Supreme Court been directed. But, applying the principle of these authorities to the provisions of this will, we think his decision cannot be supported.

For the purpose of deciding this appeal it may be assumed that the power to raise £10,000 on the death of Felix Mueller amounts to a direction to raise that sum. On this footing the question whether the £10,000 goes to the residuary legatees under the general residuary gift, or to the next of kin as on an intestacy, or sinks into the property directed to be charged, for the benefit of the devisees of that property, depends upon whether the testator excepted £10,000 out of the devised property—that is, gave the property minus the £10,000, or only charged the £10,000 upon the property (Tucker v. Kayess[1]). Unless the testator intended to sever the gift from the devise for all purposes so as to make it an exception from the devise, the devisee will take the benefit of its failure, whether the failure is caused by lapse or by any other means (Jarman on Wills, 6th ed., vol. i., p. 445). The question, therefore, is one of intention to be ascertained from the language of the will. What is there in this will to indicate any intention on the part of the testator to do more than charge the property devised for the benefit of Mrs. Ainslie and her children with the payment of £10,000 for the benefit of certain other persons? The gift of the property—subject only to the allowances to Felix and Elsa—for the benefit of Mrs. Ainslie and her children was clearly absolute in the first instance. Having so given the property, the testator directed his trustees on the death of Felix Mueller to raise by mortgage of it the sum of £10,000 and to hold such sum on certain trusts. The words of the testator contain no express exception of the sum of £10,000, but rather throw the burden of the sum directed to be raised upon the devised property. As Kindersley V.C. said in Sutcliffe v. Cole[2], there is here a devise of the property subject to a charge for the particular purpose of a benefit to some individuals, and that is a devise of the whole property and not of the property less something. In Re Cooper's Trusts[3] Wood V.C. pointed out that he could not find a single case in the books where a sum of money to be paid out of an estate had ever been held to be an exception. The decision in that case was affirmed by the Lords Justices on appeal[4]. In our opinion it is impossible, consistently with the principle of the authorities to which we have referred, to hold that this sum of £10,000 is an exception from the property given as distinguished from a charge on that property.

Consequently the appeal should be allowed, and the order of McArthur J. of 11th May 1922 varied by substituting for the order and directions numbered 1, 2, 3 and 4 secondly contained therein a declaration that the charge of £10,000, which the trustee was empowered by the said will to raise on the death of Felix Mueller by mortgage of the property known as "The Olderfleet," has in the events which have happened sunk for the benefit of the persons beneficially interested under the trusts in the said will declared in favour of Mrs. Ainslie and her children, and that the trustee is under no duty to raise the said sum; and an order that the costs of all parties (those of the trustee as between solicitor and client) of the proceedings in the Supreme Court and of this appeal should be raised and paid out of the property known as "The Olderfleet."

Solicitors for the respondents, H. R. Hamer; Smith & Emmerton; Gordon H. Castle, Crown Solicitor for the Commonwealth.

[1] [1858] EngR 637; (1858) 4 K. & J., 339.

[2] [1855] EngR 240; (1855) 3 Drew., 135.

[3] (1853) 23 L.J. Ch., 27 (n.).

[4] (1853) 4 DeG. M. & G., 757.

High Court of Australia

Ainslie v Trustees Executors & Agency Co Ltd [1922] HCA 45; (1922) 31 CLR 122 (13 November 1922)

HIGH COURT OF AUSTRALIA