Davies v Perpetual Trustees Executors & Agency Company of Tasmania Ltd Plantiff &amp [1935] HCA 26; (1935) 52 CLR 604 (3 May 1935)

HIGH COURT OF AUSTRALIA

Davies Defendant, Appellant; and The Perpetual Trustees Executors and Agency Company of Tasmania Limited and Another Plantiff and Defendant, Respondents.

H C of A

On appeal from the Supreme Court of Tasmania.

3 May 1935

Rich, Starke, Dixon, Evatt and McTiernan JJ.

Latham K.C. (with him Clarke), for the appellant.

Smith, for the trustee company.

Baker, for the respondent Cecil Bertram Davies.

The Court delivered the following judgment:—

Rich, Starke, Dixon, Evatt and McTiernan JJ.

The question which came before Crisp J. and is now before us on appeal is whether the appellant is entitled to the accumulations of the unapplied income of what is called in the will under consideration "the second part" of the testator's estate. These accumulations represent so much of the income of "the second part" as was not applied for the appellant's maintenance, education and benefit. The testator divided the balance of the net proceeds of his estate into two parts. The trusts relating to "the first part" do not concern us. The relevant trusts as to "the second part" are a direction to invest it and to pay and apply the interest or income therefrom "to or for the maintenance education and benefit" of the appellant during her minority "with power to the trustees at their absolute discretion to pay the said interest or income to my wife to be applied by her as last aforesaid without liability to account." Upon the appellant attaining her majority the trustees were directed to pay the income of "the second part" to her for and during the term of her life. No question arises with regard to the vesting of the corpus or principal of "the second part." Therefore we lay out of consideration the cases referred to in the judgment of the learned primary Judge. And sec. 47 of the Conveyancing and Law of Property Act (47 Vict. No. 19) does not apply, because a contrary intention is expressed in the will. No rule of law applies. It is merely a question of the intention of the testator which must be gathered from the language of the will. His intention was to make an absolute gift to the appellant throughout her life of the whole of the income of "the second part." During her minority that income was to be applied for her benefit by the trustees or by her mother. "The word applied does not import a power of selection: it simply means devoted to or employed for the special purpose of." And the words "maintenance, education and benefit" are "equivalent to for the benefit of" (Williams v. Papworth[1]). All that is left to the trustees or her mother is to determine in what manner the income may be best employed. There is no indication in the will that any unapplied part of the income should be accessory to the capital of "the second part." What is given is not so much of the interest and income as shall be necessary for maintenance, but the whole interest and income. The income became, as it fell due, the absolute property of the appellant. For these reasons we think the appeal should be allowed; the order made by the learned Judge should be varied by substituting in lieu of the declaration in it a declaration that the appellant is entitled to the accumulations in question, and that the trustees should pay them to her. The costs of all parties to this appeal should be allowed as between solicitor and client and paid out of the accumulations.

Appeal allowed. The order made by the Supreme Court varied by substituting for the declaratory portion thereof a declaration that the appellant is entitled to the moneys in question and an order that the respondent company as such trustee do pay the same to the appellant. The costs of all parties to this appeal to be allowed and taxed as between solicitor and client and be paid out of the accumulation of income.

Solicitors for the appellant, Murdoch, Cuthbert & Clarke.

Solicitors for the respondent company, Dobson, Mitchell & Allport.

Solicitors for Cecil Bertram Davies, Finlay, Watchorn, Baker & Turner.

[1] (1900) A.C., at p. 567.