Williamson v Carter [1935] HCA 65; (1935) 54 CLR 23 (17 October 1935)

HIGH COURT OF AUSTRALIA

Williamson Defendant, Appellant; and Carter and Others Plaintiffs and Defendants, Respondents.

H C of A

On appeal from the Supreme Court of New South Wales.

17 October 1935

Rich, Starke, Dixon, Evatt, and McTiernan JJ.

Miller (with him Roberts), for the appellant.

Kitto, for the respondents Annabella Susanna Greentree and Victoria Maria Isabella Hawley.

Leaver, for George Albert Massey,

Miller, in reply.

The following written judgments were delivered:—

Oct. 17

Rich, Dixon, Evatt and McTiernan JJ.

This appeal raises a question whether a share of residue is, in the event which has happened, undisposed of, or forms part of the estate of a deceased son of the testatrix, or is distributable among her other children.

The deceased son, whose name was Wilfred John de Lissa Massey, was one of seven children who survived the testatrix. He died without issue seventeen years after her death. The will contains a devise of specific real property in the following terms:—"Upon trust for my said son Wilfred John de Lissa Massey during his life (subject as hereinafter mentioned) with remainder to his children in equal shares as tenants in common in fee. But if he shall die without leaving children him surviving then the last mentioned property shall fall into and form part of my residuary estate." The testatrix directs that the residue of her real and personal estate shall be converted and the proceeds held upon trust after payment thereout of debts and funeral and testamentary expenses "to divide the surplus thereof equally between all my children who shall then be living and the children of such of them as shall then be dead the children of a deceased child taking only the share to which his her or their parent would have been entitled if living and if more than one equally between them. But so that if my said son Wilfred John de Lissa Massey shall then be living my trustees or trustee shall retain and pay his share into a savings bank and make him an allowance out of the moneys for the time being to the credit of such account at the rate of one pound ten shillings per week during his life. And after his decease shall hold the balance of such moneys upon trust for his children in equal shares as tenants in common. And if there shall be only one such child then the whole shall be in trust for such one child only."

At the death of Wilfred John de Lissa Massey childless, the land, the subject of the specific devise to him for life with remainder to his children, fell into residue as a result of the direction that it should, in that event, fall into and form part of the residuary estate. But the trust to sell and convert the residuary estate is immediate and is followed by the direction to divide the proceeds between the children "then living and the children of such of them as should then be dead." At what time is the class to be ascertained among whom the distribution is made of so much of the residue as arises from the failure of the specific devise? Long Innes C.J. in Eq. has decided that the class taking residue is ascertained once for all on the death of the testatrix or within twelve months therefrom and that consequently Wilfred John de Lissa Massey took a share. This conclusion is attacked on behalf of the other residuary legatees upon the ground that the class taking residue is not, upon the construction of the residuary clause, to be ascertained once for all, but independently as to each distribution required by the terms of the clause. It is said that, while the net residue which, according to the trusts of the will, is ascertainable at or within a year of the death of the testatrix is distributable among the class of children living at that time and the children of those then dead, yet what afterwards becomes part of residue as a result of the subsequent failure of prior gifts is distributable among the class of children at that time living and the children of those then dead. According to this construction of the residuary gift, as the very occasion of the accretion to residue was the death of Wilfred John de Lissa Massey without children, he could not form a member of the class taking the proceeds of the accretion. Two difficulties stand in the path of this contention. A disposition of residue is a disposition of property conceived of as one subject matter. When, upon the failure of the specific devise, the land sinks into residue it merely swells the quantum of that subject matter; it does not supply a new subject of a distinct disposition. The second difficulty is akin to the first. It lies in the fact that the gift of residue is actually expressed as a trust to divide the surplus among children then living and the children of those then dead. This language describes a single class—not two classes—and a single fund, viz., the surplus. These difficulties appear insuperable. Accordingly the decision of Long Innes C.J. in Eq. is right that the class sharing in residue was ascertainable before the death of Wilfred John de Lissa Massey so that he was a member of it.

Upon this footing the question arises whether, under the terms of the additional provision describing how the gift to him of a share of residue is to be dealt with on his death without issue, it failed so that his share is distributable among the next of kin. Long Innes C.J. in Eq. decided that this was so. The question concerns the application of the rule in Lassence v. Tierney[1]. Is there a primary gift to him of a share of residue definitively made over to his purposes and then subjected to a superadded direction controlling the extent of his enjoyment and the mode in which the share shall devolve among his family? Or, on the other hand, upon the total effect of the residuary disposition considered with the rest of the will, is there no more than a gift to him of an allowance out of an aliquot share of the estate and on his death a gift to his children of the corpus remaining of the share? Long Innes C.J. in Eq. said that in each case the question is whether one can find an absolute gift in the first instance, and that, in this case, he had come to the conclusion that he could not; that other Judges might come to a different conclusion and it was for them to say, if the matter went further. It has gone further and we have come to a different conclusion. We think the trust to divide the surplus among the children amounts to a primary gift to each which, as between him and the estate, is absolute. The particular provision relating to the share of Wilfred John de Lissa Massey is introduced by the words "But so that". These are apt to describe a restriction or modification which, when expressed, does not go to undo the effect of the earlier direction to divide but to impose a fetter upon the enjoyment and disposal of the gift. The words "if my said son ... shall then be living" state only the contingency which makes the ensuing provision relevant, namely, the contingency of his being a member of a class sharing in residue. The direction to retain the share and pay it into a savings bank is expressed in language which acknowledges a prima facie right in him to receive the share cash in hand. It is directed to the manner in which the trustees shall secure the benefit to him and his children. Further, it is described as "his share." The argument that the direction to "retain" cancels the dispositive efficacy of the word "divide," because it forbids "payment" and it is only because "divide" involves payment that it is dispositive, is fallacious, as well as artificial in its analysis. For the word "divide," as used in the main gift, carries the three notions of proportioning, making over in point of property and actually distributing in point of enjoyment. The allowance is not restricted to the income of the share, and we were informed that in fact the income is insufficient to meet it. It is only the balance which is to go to his children after the death of Wilfred John de Lissa Massey. Thus there is nothing to suggest that the chief objects of the gift were his unborn children. The purpose of the gift of his share remains the benefit of himself. But, for reasons which other provisions of the will suggest, it was thought right to restrain his enjoyment of the gift.

The appeal should be allowed. The decretal order should be varied by omitting the declarations answering the sixth and eighth questions in the originating summons and substituting therefor a declaration answering the sixth question that the legal personal representative of Wilfred John de Lissa Massey deceased is entitled to the balance remaining at his death of the moneys representing his share of the residuary estate of the testatrix, and a declaration answering the eighth question that the proceeds therein referred to form part of the residuary estate of the testatrix in which the legal personal representative shares in accordance with the declaration made in answer to the sixth question. Cross-appeal dismissed. All parties to have their costs of the appeal and the cross-appeal out of the estate.

Starke J.

This appeal depends upon the construction of the will of Isabella Massey. One of the questions raised is whether a gift to trustees to call in and convert all the residue of her real and personal estate and after payment of debts, funeral and testamentary expenses to divide the surplus equally between all her children who shall then be living, is diminished or cut down, so far as her son Wilfrid John de Lissa Massey is concerned, by succeeding directions or trusts engrafted on the gift to the effect that the trustees of the will shall retain and pay his share into a savings bank account and make him an allowance of thirty shillings per week during his life and after his decease hold the balance of such moneys upon trust for his children in equal shares as tenants in common. The son survived the testatrix by many years, but died without ever having had a child. Long Innes C.J. in Eq., with some hesitation, declared that the testatrix died intestate as to the balance of the moneys remaining at the death of the son in the savings bank account.

If there be an absolute gift to a legatee in the first instance, and directions or trusts are engrafted or imposed on that absolute interest which fail, then the absolute gift takes effect so far as the directions or trusts have failed, but if the absolute gift is diminished or cut down by the succeeding directions or trusts, the Court can only give effect to the gift as so cut down or diminished (Lassence v. Tierney[2]; Hancock v. Watson[3]; Re Richards; Williams v. Gorvin[4]). The gift in the present case belongs, I think, to the former class of cases. It is absolute in form in the first instance and in my opinion the succeeding directions do not diminish it or cut it down; they restrict the manner of the son's enjoyment of his share during his life and then enjoin in effect that the balance of the share remaining after his death be held upon trust for his children. The declaration to the contrary should therefore be set aside and a declaration substituted that the personal representative of the son is entitled to the balance of the moneys remaining in the savings bank at his (the son's) death.

Another question raised on the appeal arises out of a gift of certain real property to the testatrix's son during his life with remainders to his children, but if he should die without leaving children him surviving, then such property should fall in and form part of the testatrix's residuary estate. As stated above, the testatrix directed that her residuary real and personal estate should be called in and converted, debts paid, and the surplus divided equally between all her children "who shall then be living." Long Innes C.J. in Eq. declared that the children of the testatrix entitled to share in the distribution of the residuary estate were the children living at the death of the testatrix or at the expiration of one year after her death. It was not necessary, the learned Judge said, to say which, because the class in either case was the same. The argument before us, as I followed it, was that the provisions of the will necessarily indicated an intention to treat the property given to the son separately from other portion of the residue, so that the class entitled to share in its division would be ascertained when it fell into residue. But I cannot think that the language of the will warrants any such conclusion; the residue is given as a whole and divided as a whole. The declaration of Long Innes C.J. in Eq. in this respect was therefore right and should be affirmed.

Appeal allowed. Cross-appeal dismissed. Costs of all parties both of appeal and cross-appeal out of estate.

Solicitor for the appellant, J. J. Lynn.

Solicitors for the respondents, Makinson & D'Apice.

[1] [1849] EngR 1185; (1849) 1 Mac. & G. 551; 41 E.R. 1379.

[2] [1849] EngR 1185; (1849) 1 Mac. & G. 551; 41 E.R. 1379.

[3] (1902) A.C. 14.

[4] (1883) 50 L.T. 22.