Expressions such as 'after the decease of', 'upon the death of', and 'immediately upon the death of' preceding an ulterior gift in wills with successive interests will ordinarily be read as meaning 'subject to the determination or failure of the preceding interests' rather than as importing a contingency that the prior interest must have taken effect in possession.
PERMANENT TRUSTEE CO. OF NEW SOUTH WALES LTD. v. D'APICE [1968] HCA 29; (1968) 118 CLR 105
Wills
High Court of Australia
Kitto(1), Taylor(2) and Menzies(3) JJ.
CATCHWORDS
Wills - Construction - Nature of interest - Vested or contingent - Gift subject to prior interests - Limitation expressed in form of conditional limitation - "Immediately".
HEARING
Sydney, 1968 March 28;DECISION
May 27.2. Maud Harper died in 1965 leaving no issue her surviving. Her three sisters had predeceased her, Ruby having died in 1927, Frederica in 1934 and Lillian in 1937. The question that has been raised for decision in these circumstances is whether, on the one hand, Lillian took upon the death of Frederica a vested estate in remainder expectant upon the death of Maud Harper, so that upon Maud Harper's death Lillian's legal personal representative became absolutely entitled in possession to the house property and consequently to the residuary estate, or, on the other hand, Frederica and Lillian took upon the death of Ruby a remainder for their joint lives expectant upon the death of Maud Harper and contingent upon their both surviving her, and each of them took also a remainder in fee simple expectant upon the death of the other of them and contingent upon their joint life estate having taken effect in possession; in which case there is now an intestacy in respect of the house property and the residuary estate. (at p107)
3. In the Supreme Court Street J. decided in favour of intestacy, being of opinion that the intention disclosed by the language in which the trusts of the fourth stage (as I have called it) were expressed was an intention to entitle the last survivor of the three sisters to the fee simple of the house property if, and only if, she and another sister had been enjoying the income of the property up to the time of that other's death. As Maud Harper outlived all three of her sisters and therefore none of them ever enjoyed the income of the property, his Honour held that the trusts of the fourth stage failed. He was influenced mainly by the expression which introduced those trusts, namely "immediately upon the death of one of such survivors", which he took to mean that the trust for the last survivor should take effect, if at all, by way of translation of a life estate in possession into a fee simple in possession. (at p107)
4. In the argument in this Court the view his Honour took was supported, as it had been below, by a contention that not only the final trust but each of the trusts in respect of the house property after the trust of income for Maud Harper was introduced by a word or an expression showing an intention to subject the trust to the contingency that the previous estate should have taken effect in possession. Thus the trust for Maud Harper's children and remoter issue was expressed to take effect "after her decease", and the argument was that that meant after she had become the life tenant and had died; the trust expressed to take effect if there should be no child or issue of Maud Harper was subject to the same contingency, not only because of that expression but because it was separately introduced by the words "then upon trust after the decease of the said Maud Harper"; and the trust for the two sisters who should survive the other was actually expressed in terms of contingency, beginning: "in the event of the death of any one of them then to pay . . .", and (it was said) since the death of one of them must necessarily occur the intended contingency must have been the death of one of them after the three had commenced to receive the income. In the setting thus provided, the argument went on, the expression "immediately upon the death of one of such survivors" should be understood, as Street J. thought, as referring to the death of one of two survivors who as such had come into enjoyment of the income, the word "immediately" being intended to indicate that there should be no gap in time between the duration of the trust of income for the two survivors and the taking effect in possession of the estate in fee simple in favour of the last survivor of them. (at p108)
5. The appellant's contention on the other hand is that the true significance of each of the expressions which literally refer to the time of cesser of a preceding estate is that the enjoyment, but not the vesting, of the estate about to be created is postponed until the preceding estate is out of the way for whatever reason; that is to say that the various estates subsequent to the life estate of Maud Harper are successive estates in remainder none of which is contingent upon the preceding estate's having taken effect in possession. On this reading of the will, the words "immediately upon" in the expression "immediately upon the death of one of such survivors" simply means subject only to the joint life estates of the last two sisters to die. (at p108)
6. The learned judge recognized that on the construction which he favoured an awkward question would have arisen if events had happened differently. Had two only of the three sisters predeceased Maud Harper, would the last survivor have taken the fee simple? She would not have been in enjoyment of any of the income in the interval between the death of the second of the three sisters to die and the death of Maud Harper, but did the will really mean that for that reason she should not take the corpus even though she outlived Maud Harper? Suppose again that one of the three sisters, but only one, had predeceased Maud Harper, would the other two be disentitled to receive the income for their joint lives simply because the trust of income for the three during their joint lives had never taken effect in possession? It is difficult to suppose that a construction can be right which would produce such capricious results; but his Honour did not regard that consideration as weighty enough to be decisive. (at p109)
7. In the class of cases to which the present belongs the courts, gathering from the words that have been used a fuller meaning than a literal reading would allow, have followed a consistent line of decision to the general effect that "where a testator, after giving an estate or interest for life, proceeds to dispose of the ulterior interest in terms which, literally construed, would seem to make such ulterior interest depend on the fact of the prior life interest taking effect . . . it is considered that the testator merely uses these expressions of apparent contingency as descriptive of the state of events under which he conceives the ulterior gift will fall into possession (the supposition being that the successive interests will take effect in the order in which they are expressed), and not with the design of making the vesting of the posterior gift depend on the fact of the prior tenant for life happening to live to become entitled in possession". Jarman states the matter thus (A Treatise on Wills, 1st ed., p. 735; 8th ed. (1951), p. 1362) (though the italics are mine), and he cites as an illustration the old case of Webb v. Hearing (1617) Cro Jac 415 (79 ER 355) . The case was decided in favour of the plaintiff, but it loses none of its persuasiveness by Sir George Croke's concluding remark that he was of counsel with the plaintiff. It was a strong case, for the devise was to A. after the death of B., and if C., D. and E. or any of them should survive A. and B. and the heirs of the body of B. then to them for life with remainder to F.; and it was held that the remainder was not contingent upon the event of C., D. and E. surviving A. and B., the words of contingency importing only the time at which the remainder should take effect in possession. A case comparable with the present is Pearsall v. Simpson [1808] EngR 131; (1808) 15 Ves 29 (33 ER 666) , where a legacy was given in trust to pay the interest to A. for life, and after her decease as to the capital for her children; but if she should have no child to pay the interest to her husband during his life, and from and after his decease, "in case he shall become entitled to such interest" then to pay the principal to other persons. A. had no children. Though the husband died during his wife's life, and therefore never became entitled to the interest, the ultimate gift of the principal to the other persons was held to take effect. (at p110)
8. The general proposition was crystallized by Wood V.C. in Maddison v. Chapman (1858) 4 K & J 709, at p 719 [1858] EngR 962; (70 ER 294, at pp 298, 299) (aff (1859) 3 De G. & J. 536 (44 E.R. 1375)). in these terms: "The class of authorities, of which Pearsall v. Simpson [1808] EngR 131; (1808) 15 Ves 29 (33 ER 66) may be taken as the leading case, merely establish that, where there is a limitation over, which, though expressed in the form of a contingent limitation, is, in fact, dependent upon a condition essential to the determination of the interests previously limited, the court is at liberty to hold that, notwithstanding the words in form import contingency, they mean no more, in fact, than that the person to take under the limitation over is to take subject to the interests so previously limited. I apprehend the true way of testing limitations of that nature is this: Can the words which in form import contingency be read as equivalent to 'subject to the interests previously limited'? Take the simplest case: A limitation to A. for life, remainder to B. for life, and, upon the decease of B., 'if A. be dead', then to C. in fee. There the limitation to C. is apparently made contingent upon the event of A.'s dying in the lifetime of B. Nevertheless, inasmuch as the condition of A.'s death is an event essential to the determination of the interest previously limited to him, the court reads the devise as if it were to A. for life, remainder to B. for life, and on B.'s death, subject to A.'s life interest (if any), to C. in fee." (at p110)
9. The proposition so stated was approved and applied by Farwell J. in In re Shuckburgh's Settlement; Robertson v. Shuckburgh (1901) 2 Ch 794 . There a marriage settlement gave life interests to the husband and wife successively, and subject thereto the fund was settled upon trust for the issue of the marriage as the husband should appoint. An appointment by the husband to the issue in certain proportions "after the death of my said wife" was held to take effect as if the expression had been "subject to my wife's interest". See also In re Burden; Mitchell v. Trustees of St. Luke's Hostel (1948) Ch 160, at pp 174, 175 . The case of In re Wragg; Hollingsworth v. Wragg (1959) 1 WLR 922 throws no doubt upon the correctness of these decisions or the general applicability of the principle they illustrate. It merely provides a warning that what the cases mean by expressions such as "subject to my wife's interest" is "subject to the determination or failure" of a preceding interest and not "subject to the satisfaction" of a concurrent interest. The Court of Appeal there decided only that words like "after the death of" an annuitant, or a life beneficiary to whom part only of the income has been given, do not ordinarily mean "subject to the interest" of the annuitant or life beneficiary, in the sense that provided the annuity or the part interest in income is satisfied the balance of income remaining during the currency of the annuity or life interest is to be paid to the person whose interest is expressed to take effect only after the death of the annuitant or life beneficiary. This shows only that the principle I have been discussing is misunderstood when it is applied to such a case as In re Wragg (1959) 1 WLR 922 . (at p111)
10. Of the many other cases cited by Jarman on this kind of question (see also Halsbury's Laws of England, 3rd ed., vol. 39, p. 1126, par. 1663) it will suffice to draw attention to the case of Leadbeater v. Cross (1876) 2 QBD 18 , where the principle was applied by a court consisting of Cockburn C.J. and Mellor and Lush JJ. The important point to observe is that in this field judges have not been inventing or submitting to some arbitrary rule, and by its aid or under its compulsion placing upon wills an artifical gloss outside the proper process of interpretation. The truth is that while fully aware of the literal limitations of the language used, they have not been insensitive to implications, and have been content to accept the principle because they have been satisfied that it is the result of bringing to the task of getting at the real meaning of instruments a knowledge of the habits of men in expressing intentions on such matters incompletely, yet indicating them none the less. (at p111)
11. It seems to me that we ought to maintain the principle. The employment of the word "immediately" in the present case is relied upon to some extent as indicating a contrary intention, but it is at best an ambiguous word. In a lawyer-drawn will it is apt to mean without the intervention of any other estate or interest, and I should understand it in that sense here. At least it seems to me far too weak a reed upon which to rely for a conclusion that what would otherwise be a vested remainder was intended to be contingent upon the preceding gift of income having actually been enjoyed. (at p111)
12. Accordingly I am of opinion that in Mary Riley's will the words creating the ultimate trust of the house property should be held to mean that subject to the determination or failure of the preceding trusts of income the last survivor of the three grand-daughters is to be entitled absolutely to the property immediately, that is to say without the intervention of any other estate or interest. (at p112)
13. I would allow the appeal, set aside the declaration of intestacy, and make a declaration that the remaining assets of the estate are held upon trust for the defendant Permanent Trustee Co. of New South Wales Limited as executor and trustee of the will of Lillian Charlotte MacIntosh deceased. (at p112)
TAYLOR J. I agree entirely with the reasons prepared by Kitto J. and have nothing to add. Accordingly I am of the opinion that the appeal should be allowed. (at p112)
MENZIES J. This appeal concerns the will of Mary Riley who died on 3rd September 1920, leaving a will dated 15th December 1916 and three codicils. For present purposes the codicils can be disregarded. (at p112)
2. By her will the testatrix disposed, inter alia, of her land and house, No.
173 Macquarie St., Sydney, by a devise to her trustees
as follows:
"UPON TRUST to receive the rents and profits and incomeThe testatrix also declared
thereof and after payment thereout of all outgoings including
repairs and insurance to pay the surplus thereof to my
grand-daughter
Maud Harper for and during her life for her separate
use without power of anticipation and so that her receipts alone
shall be a sufficient discharge for the same AND after her decease
UPON TRUST for her children and remoter issue (such remoter
issue being born in her lifetime) in such shares and proportions
and generally in such manner as the said Maud Harper shall
by any deed and by her last Will and Testament and Codicil
thereto direct limit or appoint AND in default of any such
direction limitation or appointment and so far as any such
if incomplete shall not extend THEN UPON TRUST for all her
children who shall be living at her decease in equal shares as
tenants in common AND if there shall be only one such child
then the whole to be in trust for such one child only PROVIDED
ALWAYS that if any child of the said Maud Harper shall die
in her lifetime leaving issue such issue shall take the share to
which his or their parent would have been entitled if he or
she had survived the said Maud Harper and if more than one
then in equal shares as tenants in common But if there shall be
no such child or issue THEN UPON TRUST after the decease of the
said Maud Harper to continue to receive the rents and profits
and income of my said house and land number 173 Macquarie
Street Sydney aforesaid and after payment thereout of all
outgoings including repairs and insurance to pay the surplus
thereof to my said three grand-daughters Ruby and Lily and
Freda during their joint lives in equal shares as tenants in
common AND in the event of the death of any one of them then
to pay such surplus to the survivors of them during their joint
lives in equal shares as tenants in common AND immediately
upon the death of one of such survivors then my Trustee or
Trustees shall stand possessed of my said house and land
number 173 Macquarie Street Sydney aforesaid UPON TRUST
for the last survivor of them my said three grand-daughters
absolutely."
"that my Trustee or Trustees shall stand possessed of myThe grand-daughter Maud Harper lived until 29th December 1965 when she died without any child having been born to her. Between the death of the testatrix and the death of Maud Harper, the grand-daughter Ruby died on 18th March 1927, the grand-daughter Freda died on 12th December 1934 and the grand-daughter Lily died on 6th October 1937. (at p113)
residuary estate and the investments for the time being
representing the same and the income arising therefrom UPON
the same trusts in all respect as are hereinbefore declared with
regard to my house and land number 173 Macquarie Street
Sydney aforesaid".
3. The question which has arisen is whether the provisions of the will set out previously carry the Macquarie St. land and house and the residuary estate of the testatrix to the Perpetual Trustee Co. of New South Wales Limited as the executor of the will of Lily - Lillian Charlotte MacIntosh - or whether there is in the circumstances stated an intestacy as to this property after the death of Maud Harper. (at p113)
4. Street J. decided that there is such an intestacy and from his declaration to that effect an appeal has been brought to this Court. (at p113)
5. Because Maud Harper had no children, the trust in favour of her children and remoter issue prefaced by the words "and after her decease" never became effective. The condition for the operation of the succeeding provision of the will, viz., "But if there shall be no such child or issue", was accordingly fulfilled and the trust prefaced by the words "THEN UPON TRUST after the decease of the said Maud Harper" must be given the full effect that its language permits in the circumstances which have occurred. The trustee could, of course, "continue" to receive rents and profits and pay outgoings, but the direction "to pay" the surplus to the three named grand-daughters was ineffective because the grand-daughters to receive the payments were already dead. The subsequent direction to pay the surplus to the survivors was also ineffective. (at p114)
6. This brings me to the critical words
"AND immediately upon the death of one of such survivorsThere is no doubt that Lily, upon the death of Freda in 1934, became the last survivor of "them my said three grand-daughters", although I regard it as doubtful whether Freda was "one of such survivors" for the purposes of the clause. Whether she was or not however is, in my opinion, immaterial because, if she were, I cannot construe the will as vesting any estate in Lily when Freda died. The whole provision is governed by the words "after the decease of the said Maud Harper", and the words upon which the case for the appellant depends, "immediately upon the death of one of such survivors then my Trustee or Trustees shall stand possessed of my said house and land number 173 Macquarie Street Sydney aforesaid UPON TRUST for the last survivor of them my said three grand-daughters absolutely", are in my opinion words that could have no operation during the lifetime of Maud Harper. When Freda died in 1934 it would be entirely wrong to say that the trustees then stood possessed of the house and land upon trust for Lily absolutely. They did no such thing, for Maud Harper was alive. She was not only entitled to a life interest but the trusts in favour of her children or remoter issue were in 1934, and thereafter until she died, in full force and effect. (at p114)
then my Trustee or Trustees shall stand possessed of my said
house and land number 173 Macquarie Street Sydney aforesaid
UPON TRUST for the last survivor of them my said three
grand-daughters
absolutely."
7. It was argued for the appellant that the words "after the decease of the said Maud Harper" should not be given their literal meaning but should be understood in a sense such as "subject to the interest of the said Maud Harper", or, "subject to the interest of the said Maud Harper and any child or remoter issue of the said Maud Harper". Understandably enough, counsel for the appellant - although invited to do so - did not attempt any greater degree of precision in formulating the construction for which he contended. I must confess, however, that not only do I think the words should bear their literal meaning but I have found it impossible to give them any sensible meaning other than their literal meaning. In a context provided by the words "UPON TRUST for all her children who shall be living at her decease . . . but if there shall be no such child . . . THEN UPON TRUST after the decease of the said Maud Harper", to read the words "after the decease of the said Maud Harper" as "subject to the estate of the said Maud Harper", or, "subject to the estate of the said Maud Harper and any child or remoter issue of the said Maud Harper", seems to me quite impossible. The construction contended for is not made any more acceptable by what follows in the will, for although the words "to continue to receive the rents" etc. and "to pay the surplus" can be read sensibly with the words "after the decease of the said Maud Harper" - if these words are read literally, the direction to receive and to pay cannot be accommodated to a construction of those words such as that for which the appellant contended. The direction to receive rents and to pay surplus to the three grand-daughters, Ruby, Lily and Freda, is in no way subject to the interests of any other person or persons. The direction to pay has no effect unless and until all preceding interests have come to an end. (at p115)
8. Reliance was placed by counsel for the appellant upon cases such as In re Shuckburgh's Settlement; Robertson v. Shuckburgh (1901) 2 Ch 794 , but to my mind the construction adopted in such cases cannot be followed here. In re Wragg (1959) 1 WLR 922 seems to me very much more in point, for here, as there, everything is in favour of a literal meaning, except that it produces a partial intestacy in circumstances which were outside the contemplation of the testatrix. In my opinion the language of the will in the circumstances which have arisen is unambiguous and, that being so, there is no room for calling in aid decisions upon ambiguous language used in other wills as a reason for departing from the literal meaning of the plain language used here. (at p115)
9. Accordingly, in my opinion the words "after the decease of the said Maud Harper" and the words "immediately upon the death of one of such survivors then . . . UPON TRUST for the last survivor of them my said three grand-daughters absolutely", taken in the context of the gift of a life estate to Maud Harper and the gift in remainder to her children or remoter issue, show that, in the events which have happened, the will contains no provision dealing with the Macquarie St. property that has any effect after the death of Maud Harper. There is therefore an intestacy as to this property and likewise with respect to the residuary estate of the testatrix. (at p115)
10. I agree with the judgment of Street J. and would dismiss this appeal. (at p116)
ORDER
Appeal allowed. Decretal order of the Supreme Court of New South Wales varied by omitting therefrom the declaration that upon the true construction of the will of Mary Riley deceased and the events that have happened the trustees of the estate of the said deceased hold the whole of the assets of the said estate upon trust for the next of kin of the said deceased AND substitute therefor a declaration that upon the true construction of the said will and in the events which have happened the said trustees hold the whole of the assets of the said estate upon trust for the Permanent Trustee Co. of New South Wales Limited as executor and trustee of the estate of Lillian Charlotte MacIntosh deceased. Costs of the appeal of all parties as between solicitor and client out of the estate of the said Mary Riley deceased.Solicitors for the appellant, Parish, Patience & McIntyre.
Solicitors for the respondent plaintiff, Makinson & d'Apice.
Solicitors for the respondents, the next of kin of the deceased, Bartier,
Perry & Purcell.
R. A. H.