Parremore v Gangell [1962] HCA 17; (1962) 107 CLR 118 (5 April 1962)

HIGH COURT OF AUSTRALIA

PARREMORE v. GANGELL [1962] HCA 17; (1962) 107 CLR 118

Will

High Court of Australia
Dixon C.J.(1), McTiernan(2) and Owen(3) JJ.

CATCHWORDS

Will - Construction - Devise by testator of farming properties to two sons as tenants in common for life and their widows during "their respective lives" and after "their respective deaths" on trust for the children of the two sons - Whether per stirpes or per capita distribution to children.

HEARING

Hobart, 1962, February 14;
Sydney, 1962, April 5. 5:4:1962
APPEAL from the Supreme Court of Tasmania.

DECISION

April 5.
The following written judgments were delivered:-
DIXON C.J. This appeal depends upon the meaning and operation of a will made Tasmania, farmer, who died on 9th June 1912. At the time of his death he was seised of two pieces of land upon which he carried on his farming. One consisted of a farm of 1100 acres at Tea Tree; he called it "Cremorne". The other consisted of 100 acres some distance away at Richmond. He left him surviving a widow, three sons and five daughters. Of the three sons one, George Edward Gangell, had married and had children but not long after his father's death, namely on 21st November 1913, he died. He left a widow and four children; the widow and one child have since died. Another son, John James Gangell, married after his father's death. There was only one child of the marriage and he died in childhood on 6th March 1918. John James Gangell's wife died on 3rd January 1942. He did not remarry, and he died on 14th September 1958. The third son of the testator was named William James Gangell. He survived his father and died on 3rd July 1952 but he does not come into the consideration of this case, for the testator, as his will declared, made no provision for William James "he having been provided for by me in my lifetime". (at p121)

2. On the death on 14th September 1958 of John James Gangell it became necessary to make finally a distribution of what remained in the hands of the trustees representing the farm "Cremorne" and the 100 acres. The question who at that date took raised an immediate difficulty. To explain why that was so, it is necessary to turn to the directions contained in the provisions of the will. In the earlier part of his will the testator made bequests to his wife and daughters. He also bequeathed to his two sons George Edward and John James absolutely in equal shares the live and dead stock and farming implements upon his estate known as "Cremorne" and upon his 100 acres at Richmond. Then after certain other dispositions which do not affect the matter, he gave and devised his farm known as "Cremorne" and his one hundred acres to his trustees to the use that his wife should receive a rent charge of 100 pounds a year and be permitted to reside in the homestead on his farm "Cremorne" and that his son John James (who it will be remembered was at that time unmarried) should be entitled to reside there and his son George Edward at his present home (which one may infer was on the estate). The will proceeds "subject to the said rent charge and to the right of my said wife to live on the said farm as aforesaid to the use of my two sons George Edward Gangell and John James Gangell as tenants in common for life". There then follow limitations expectant on the life estate or estates upon the meaning and effect of which the appeal may be said to turn. But before stating these limitations it is convenient to say that they are followed by a direction subjecting the devise of the farm and of the 100 acres to an obligation on the part of the sons to pay for fifteen years an annual payment of 100 pounds to each of his five daughters and to a named son-in-law. As to the daughters the purpose of this annual payment was to enable them to pay off a mortgage to the testator on a certain property of theirs of 1500 pounds. There are further directions about this provision and about other sums advanced to children. Finally the residue of the testator's real and personal property is devised and bequeathed to the trustees upon trust for his wife absolutely. (at p121)

3. Returning to the limitations expectant upon the trust for (or "to the use of" as the will expresses it) the testator's sons George Edward and John James "as tenants in common for life", the will proceeds as follows: "And after the decease of either or both of my said sons in trust for his or their respective widows during their respective lives and after their respective deaths in trust for the children of my said sons George Edward Gangell and John James Gangell upon their respectively attaining the age of twenty-one years". As appears from the facts already stated, George Edward died leaving a widow, who died subsequently, and leaving children who are now living; John James died last, leaving neither widow nor children, his only child and his wife having predeceased him. If on the true interpretation of the will two undivided shares in "Cremorne" and in the 100 acres were created devolving according to the limitations set out above, one to the widow and children of one brother, and the other to the widow and children of the other brother, the result is apparent: the undivided share attributable to John James, upon his death in 1958 must on that footing fall into residue and pass to the estate of the testator's widow and devolve according to her testamentary dispositions whatever they may have been. It must fall into residue because John James left no widow and his child did not attain twenty-one and there is no limitation of that share to any other object: there is none expressed and there is no ground for implying cross-remainders or the like. Turn now to the contrary interpretation of the trusts to take effect after the tenancy in common of the two sons. That interpretation means that the undivided shares do not persist through the limitation of the trusts of "Cremorne" and of the 100 acres and the will is taken to intend that on the death of the last to survive of the two sons and of their respective widows, if any, the entirety of the estate in the lands is to be held in trust for the children of George Edward and John James who attain twenty-one. On that footing it is almost unnecessary to say that the final limitation would be construed as creating a single class who would take per capita and not per stirpes. In the events that happened all would devolve upon the surviving children of George Edward and the estate of any deceased child who had lived to twenty-one. This was the view of the limitation which the Chief Justice of Tasmania adopted. (at p122)

4. An account of the case would be incomplete if nothing was said of a step which in 1929 the parties then claiming under the will took. It is a step which seems to involve the assumption that two undivided shares in the land were created which from beginning to end devolved separately. For the parties so claiming obtained orders partitioning the land. It is not to the point to inquire whether the manner in which the trusts were declared or the interests limited left the remedy of partition available. In fact judicial orders for partition were made and the land constituting "Cremorne" was divided into moieties. As to the 100 acres that land had been sold in 1925 and the proceeds were divided into two equal parts, one part being distributed among the children of George Edward and the other being held by the trustees pending the death of John James. One moiety of the farm "Cremorne" was held by the trustees for the children of George Edward. It was subsequently sold and the proceeds were distributed among those children in equal shares. The other moiety was held by the trustees in trust for John James while he lived and is still held by them pending the ascertainment of the persons entitled thereto under the will in the events that have happened. The operative part of the partition order directed that (upon the division of the land into moieties) one moiety should be allotted as the share of the plaintiffs in the partition suit who were John James Gangell and his wife and the other moiety as the share of the widow of George Edward Gangell (naming her) to be held and enjoyed by them "as their respective moieties in severalty according to such allotments but subject to the trusts and limitation contained and set out in the will". Doubtless the widow of George Edward was named because she was regarded as entitled in possession to the undivided share attributable to him and therefore to the corresponding divided share in severalty. In the same way John James and his wife were named as entitled (doubtless in succession) to the other share in severalty. But in the result that divided half share was in fact dealt with as held in severalty and its proceeds were distributed. How the other divided half share stood might perhaps seem almost to be determined by the order although it mentioned only the widow, who was then living. However, the words "but subject to the trusts and limitation contained and set out in the will" have been taken to remit the question of the devolution of that half share to the terms of the will, notwithstanding the partition and the order or orders. Perhaps the partition order or orders so intended, but however that may be, it seems proper to deal with the case on the footing that the trusts limited by the will prevail and will govern the destination of the remaining divided share. But is the assumption ill founded that the testator meant the separation into undivided equal shares with which the initial gift to his two sons as tenants in common for life begins to persist and prevail to the end? It is to be noted that the ensuing trust is expressed to arise "after the decease of either or both of my said sons" and the trust so arising is "for his or their respective widows during their respective lives". Surely this must mean that after the death of the first of the sons to die his widow shall take his undivided share and become a tenant in common with her brother-in-law for life. When the brother-in-law died his widow would become the tenant in common for life with her sister-in-law. It is because of the possibility of the latter situation that the words "either or both" are used in the expression "either or both of my said sons". The testator is not contemplating the death of both sons simultaneously but an ultimate situation in which both shall be dead; but because he also contemplated a situation in which one should be dead and the other living he spoke of the alternative. It is poor drafting but to attempt in one form of expression to deal with two parallel limitations applying to the separate devolution of two distinct undivided shares is to set about an operation difficult for any draftsman. The use of the word "respective" may often form a trap because of its inadequacy to maintain a continually repeated distinction and that may well be supposed to be one cause of the present difficulty. But the repetition of this word at least evidences an intention to continue a separation or distinction. There can be no doubt that the "respective widows" are to take in common in equal shares but there can also be no doubt that the title of each will begin at a different time from the other and that time will be her husband's death and that in other words it is expected that it is her husband's share that will devolve upon her. Why it should be supposed that each son will leave a widow does not appear, although the will is expressed as if this assumption were made. But it is a fallacy so to infer. The contingency or condition is implied, "if there be a widow". If not, that step in the devolution is doubtless to be praetermitted. According to ordinary principles, if either or both of the sons had died leaving no widow, the next ensuing interest would be accelerated. In fact John James died leaving no widow but when he died George Edward's widow had predeceased him. Is it a sensible interpretation of the limitations to regard it as involving the possibility of any or every interest being suspended until it is ascertained that all four of the persons mentioned, the two sons and the two possible widows, have died? That is the necessary supposition if we postulate that the words "after their respective deaths in trust for the children" etc. mean that the whole estate of "Cremorne" and the 100 acres are to be kept together until by successive deaths it could at last be said that the two sons are dead and that there is no widow of either of them living. If that were the meaning of the words, in the circumstances which occurred no distribution ought to have been made until the death of John James, for until his death it was quite possible that he would remarry and leave a child or children. It is not necessary to go through all the logical possibilities which existed at the time the will was made but it was manifest that the two sons, George Edward and John James, might have died in any order. One or other or both might have left a widow; neither might have left a widow; one or other or both might have left children or neither might have done so; the children whom they left them surviving might have died before attaining twenty-one or might have attained twenty-one either before or after their father's deaths. In all these cases the suspension between the deaths of the life tenants and the actual ascertainment of the parties to take might have continued for lengthy periods of time on the hypothesis that the ultimate distribution was to be among the sons of both brothers per capita who attained twenty-one. The better reading of the will appears to be that although somewhat clumsily expressed it was intended to leave two separate undivided shares, one to each of George Edward and John James, and that the limitations applied separately to that undivided share so that each undivided share devolved without regard to the destination of the other. In a sense the case may be described as one in which it was necessary to decide whether the ultimate distribution was to be among children per capita or per stirpes. It is true that many analogous cases have been discussed on such a basis. But needless to say the fundamental question must be whether in this will there are limitations of two separate undivided shares remaining separate until the final distribution in the case of each. No doubt how you approach the question is important, and in cases of a like description to begin with a presumption in favour of an ultimate distribution per capita may prove sometimes the deciding factor. But the question must be asked - distribution of what? Does it appear that "Cremorne" as an entirety and the 100 acres as an entirety were to await an event, or the emergence of a situation, that is to say the situation of there being no longer alive George Edward, John James or a widow of either of them, and then and not until then were there to be ascertained the persons for whom the entireties were to be held in trust? If that were so, it would follow that the trust was in favour of children per capita of both brothers provided a child attained twenty-one. (at p125)

5. But I think that a close consideration of the will shows that the contrary appears and that the true intention was that two undivided interests should devolve, the distinction between them being maintained. The nature of the problem is discussed in Sumpton v. Downing [1947] HCA 36; (1947) 75 CLR 76, at pp 88, 89 where cases upon analogous interpretations of wills are referred to. It may be useful to repeat from the judgment of Romer J. in Re Errington (1927) 1 Ch 421 the following: "Where a testator gives the income of his estate to two people, A and B, for their lives and follows that gift by a direction that at their death, or at their deaths, or at or after the death or deaths of A and B the property is to go to their issue, the Court does not construe the gift as a gift only to take effect on the death of both in favour of the issue of both, but construes it as a gift, to take effect on the death of each, of the share to the income of which the deceased was entitled, to the issue of the deceased. So that in the simple cases to which I refer, on the death of A leaving issue, the issue of A would take one-half notwithstanding the fact that B still was living. On the death of B, B's issue in the same way would take the share in which B had a life interest" (1927) 1 Ch, at p 425 . His Lordship was dealing with a will where the succession was to "issue" and as his Lordship held the meaning of that word was not restricted to children. But the point of his statement lies not in that but in the intention to maintain the undivided shares in the succession. In the ill-drawn limitations of the trusts I think that is the intention. I think that the appeal should be allowed, the order of the Supreme Court in so far as it answers question 1(a) in the originating summons and declares that it is unnecessary to answer question 1(d) should be discharged and that it should be declared that the gift which would have vested in the child of John James Gangell had he attained twenty-one years and survived his father falls into residue and is distributable as part of the estate of the widow of the testator. The costs of all parties to the appeal should be subject to the same order as were the costs of the summons. (at p126)

McTIERNAN J. I am of the opinion that the appeal should be dismissed. (at p126)

2. The testator has devised his farm "Cremorne" at Tea Tree, Tasmania, subject to certain life tenancies, "in trust for the children of my said sons George Edward Gangell and John James Gangell upon their respectively attaining the age of twenty-one years". This devise denotes one class of beneficiaries only: it makes no distinction between such of his grandchildren as are children of George Edward Gangell, on the one hand, and such others as are children of John James Gangell on the other. The natural implication from the fact that there is no division of the beneficiaries into classes by reference to their descent from the testator is that they take per capita. (at p127)

3. The difficulty in this case arises from the phrase whereby the testator has devised the life tenancies per stirpes: "to the use of my two sons George Edward Gangell and John James Gangell as tenants in common for life and after the decease of either or both of my said sons in trust for his or their respective widows during their respective lives and after their respective deaths in trust for the children of my said sons" etc. The appellant submits that it was the testator's intention by these words that, on the decease of John James Gangell and his widow, or on the decease of George Edward Gangell and his widow, the children of each marriage were to succeed to their parents' moiety of the estate. If this submission is correct, then the devise to the grandchildren must take effect per stirpes. (at p127)

4. I think it is clear that the testator intended a moiety of the estate to pass to each of his sons as tenants in common for life, and that, upon the death of each son, if he was survived by a widow, the widow would succeed to her husband's moiety as a tenant in common for life. Thus a widow might find herself a tenant in common with her brother-in-law, or alternatively with her brother-in-law's widow. (at p127)

5. Upon the extinction of the life tenancies, the gift over to the grandchildren is to take effect and in my opinion the use by the testator of the phrase "after their respective deaths" indicates the manner in which it does so. The word "respective" in relation to "deaths" means that, on the death of either widow, (or if she predeceases her husband, on his death), the undivided class of beneficiaries will succeed to that moiety. Thus, all grandchildren will succeed to the moiety of George Edward Gangell and his widow upon the death of his widow, and similarly they will all succeed to the moiety of John James Gangell and his widow upon her death. Upon this interpretation, there is no reason to conclude that the testator intended the stirpital division amongst the life tenants to be perpetuated amongst the remaindermen and accordingly the grandchildren take per capita. (at p127)

OWEN J. I have had the opportunity of reading the reasons of the Chief Justice. I entirely agree with them and with the order which he proposes. (at p127)

ORDER

Allow appeal. Discharge order of the Supreme Court in so far as it answers question 1(a) in the originating summons and declares that it is unnecessary to answer question 1(d) thereof.

In lieu thereof declare that the gift under the trusts of the Will of William Gangell deceased which would have vested in the child of John James Gangell had he attained the age of twenty-one years and survived his father falls into residue and is distributable as part of the estate of Alice Gangell deceased, the widow of the testator.

Order that the costs of all parties to this appeal be taxed as between solicitor and client and when so taxed be paid or retained by the respondent National Executors & Trustees Company of Tasmania Limited as trustee of the estate of the testator out of the fund of the said estate.