Ellaway v Lawson & Anor [2006] QSC 170

SUPREME COURT OF QUEENSLAND CITATION: Ellaway v Lawson & Anor [2006] QSC 170 PARTIES: MARGARET INA LESLEY ELLAWAY (applicant) v VERONICA JANETTE LESLIE LAWSON AS EXECUTOR OF THE ESTATE OF MARY KNIGHT, DECEASED (respondent) FILE NO: 2887 of 2006 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court, Brisbane DELIVERED ON: 12 July 2006 DELIVERED AT: Supreme Court, Brisbane HEARING DATE: 27 April 2006 JUDGE: Douglas J ORDER: Application contained in paragraphs 1 and 2 of the originating application filed 5 April 2006 is dismissed. CATCHWORDS: SUCCESSION – WILLS, PROBATE AND ADMINISTRATION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS – GENERALLY – CONDITION, FORFEITURE AND GIFT OVER – MARRIAGE – MARRIAGE GENERALLY – where a clause of the will states that applicant does not receive her bequest until she either divorces her current husband or her current husband dies – where there is a gift over to a charity if this gift does not take effect – whether clause is invalid on public policy grounds Succession Act 1981 (Qld), s 41. Church Property Trustees, Diocese of Newcastle v Ebbeck (1960) 104 CLR 394, cited. Fender v St John-Mildmay [1938] AC 1, cited H v W (1857) 69 ER 1157, cited Ramsay v Trustees Executors and Agency Co Ltd (1948) 77 CLR 321, followed Re Caborne; Hodge v Smith [1943] Ch 224, cited Re Johnson’s Will Trusts [1967] 1 Ch 387, cited Re Ramsay [1948] VLR 347, cited. -- 1 of 7 -- 2 Re Thompson [1939] 1 All ER 681, cited COUNSEL: R Cameron for the applicant D Mullins SC for the respondent SOLICITORS: Bridge Brideaux for the applicant Martinez Quadrio for the respondent [1] Douglas J: Mrs Mary Knight, the deceased, who died on 6 July 2005, left a will appointing one of her two daughters, the respondent, Mrs Lawson, as executrix. Both Mrs Lawson and her sister, the applicant, Mrs Ellaway, are named as beneficiaries. Mrs Lawson is directed to sell their mother’s home, worth about $280,000, and divide the proceeds, after payment of the estate’s debts and testamentary expenses, equally between herself and her sister. [2] Mrs Lawson receives her share immediately but by cl. 3(c)(ii) of the will, Mrs Ellaway does not receive her bequest “until such time as … (she) … either – “(i) divorces her current husband; or (ii) her current husband dies …” [3] If the gift does not take effect there is a gift over to a Catholic Parish church which was served, and responded through the Archdiocese, but did not appear on the hearing of the application. [4] The applicant contends that the limitation imposed by the will on Mrs Ellaway’s receipt of the bequest is void as being contrary to public policy. The respondent’s executrix, Mrs Lawson, argues that the High Court decision in Ramsay v Trustees Executors and Agency Co Ltd (1948) 77 CLR 321 requires me to determine this issue in favour of the will as it stands and to dismiss the application. [5] It is clear that the testatrix wished to prevent her son-in-law from benefiting from a bequest to her daughter. That conclusion stems from the terms of the will. I was also presented with evidence dealing with Mrs Knight’s wishes in respect of that issue. There was no objection to my receiving it, although Mr Mullins SC for the respondent executrix, who swore the relevant affidavit, submitted that, in the ordinary case, such extrinsic evidence would not be admissible where the words of limitation are clear. He submitted that these words were clear but that the admissibility of such evidence was not free from doubt on a review of the relevant authorities; see Re Caborne [1943] Ch 224, 228; Re Thompson [1939] 1 All ER 681 and Re Johnson’s Will Trusts [1967] 1 Ch 387, 394. Latham CJ said that the question must be decided without evidence in Ramsay at 327. Mr Mullins also submitted that the evidence in the affidavit led at least to the conclusion that Mrs Knight was not motivated by a wish to see her daughter divorced or her son-in-law dead but by a wish to ensure that her daughter’s financial interests were protected. [6] It seems to me that such evidence is unlikely to be useful in the ordinary case and I was not assisted in the construction of this clause by the evidence led here. My view about the usefulness of the evidence is also influenced by the approach of the majority in the High Court in Ramsay, which was to examine objectively the tendency of the clause attacked to ascertain whether it was contrary to public policy. -- 2 of 7 -- 3 [7] Such an approach was applied by Lowe J at first instance in the Victorian Supreme Court in In re Ramsay [1948] VLR 347. There the will provided that the estate be held by trustees: “to pay the income of my estate to my son George Binnie Ramsay for such period and so long as he shall remain married to his present wife Irene Ramsay and on the termination of such period in trust for my said son absolutely provided however that should my said son predecease his said wife during such period my estate shall go to my said nephew Robert Ramsay and my sister Mary Marshall Baillieu in equal shares.” [8] His Honour analysed the relevant test usefully at 349-350. He concluded, in reliance on a statement of Lord Atkin in Fender v St John-Mildmay [1938] AC 1, 13, that, if a court was inquiring whether the tendency of a gift was such as to make it invalid, that tendency could only be established if the “generality of mankind will be induced by a gift of the kind in question to act in the way which is against the policy of the law.” Having analysed the likely consequences in that case, he concluded, at 351, when dealing with the tendency of the clause to encourage a divorce: “I find it almost impossible to suppose that a wife whose husband is enjoying the income of a fund from which she will benefit while she is his wife and who must know that her conduct will probably result in her losing that benefit and her injured husband getting the corpus of the estate, would ordinarily be willing to terminate it.” [9] His approach proved influential when the matter went on appeal to the High Court. Latham CJ said at 326-329: “I agree with Lowe J.--and the contrary has not been argued upon this appeal--that the provision in this particular case was intended (so far as intention is important) to secure an income to the son during the marriage, and to prevent his wife obtaining any interest, either directly under the father's will, or indirectly through her husband's will, in the corpus. There is nothing illegal in such an intention--it is simply a case of a testator choosing his beneficiaries. What then is the tendency of the provision as affecting the conduct of the son? In applying the principle which was called in argument "the tendency test," what is to be considered is the general tendency of the provision, and not the particular circumstances or characteristics of the persons concerned: see In re Wallace; Champion v. Wallace, at p. 278. The learned judge applied the test as stated by Lord Atkin in Fender v. St. John-Mildmay in his consideration of the validity of an agreement for marriage to take place after a decree nisi should be made absolute. The agreement was attacked as tending to lead to immorality in the form of irregular sexual relations during the period before the decree was made absolute. Lord Atkin said:--"But assuming, as we must, that the harmful tendency of a contract must be examined, what is meant by tendency? It can only mean, I venture to think, that taking that class of contract as a whole the contracting parties will generally, in a majority of cases, or at any rate in a -- 3 of 7 -- 4 considerable number of cases, be exposed to a real temptation by reason of the promises to do something harmful, i.e., contrary to public policy; and that it is likely that they will yield to it. All kinds of contracts provide motives for improper actions, e.g., benefits deferred until the death of a third party, and contracts of insurance. To avoid a contract it is not enough that it affords a motive to do wrong: it must surely be shown that such a contract generally affords a motive and that it is likely to be effective." The appellant contends that this rule was properly applied in the case of In re Caborne; Hodge v. Smith. This decision of Simonds J. was the basis of the appellant's argument. In that case the court considered the validity of a provision which was different in form, but was identical in substance with that to be found in the present case. The only difference was that there was an absolute gift in the first instance to a son of a testatrix which was cut down to a gift of income if his then wife was still alive and married to him. It was held that this provision could fairly be represented "as a direct encouragement, either himself to commit those acts which would enable his wife to proceed against him" [for divorce], "or to take advantage of his wife's offences. The decision was that the provision was void. The question whether a case falls within the prohibited class must be determined by a consideration of its general tendency, as Lord Atkin said, to provide a temptation and an estimate of the risk that persons would yield to that temptation. … In spite of what is said in In re Caborne I can see no adequate reason for presuming that it can be said generally of beneficiaries under a will that they would be likely to use wrongful methods in order to obtain a divorce so as to get money. The question is whether such provisions would, in general, present a temptation to a man to destroy his marriage by improper means to which it would be likely that he would yield. The fact that it would be known that he would obtain a pecuniary advantage by bringing his marriage to an end would in itself be an element which would deter most persons from setting out to destroy their own marriages. Some persons, however, would not be influenced by consideration of what might be called social sanctions as distinct from moral considerations, but, on as good a judgment as I can form on the matter, I am not prepared to adopt the view of mankind which was applied in In re Caborne. The result of that view would be that if a father had a married daughter and provided in his will for the payment of an allowance to her if her husband died before her or if she were unfortunate enough to be divorced from him, the provision would be invalid because it would tempt her to terminate her marriage in order to get the allowance. Where certain grounds exist a person is entitled under the law to a divorce. In the present case the mere existence of the provision in question in the father's will would lead a court to scrutinize very carefully the evidence in any divorce proceedings to which the son was a party. In my opinion it is not to be assumed that persons will, notwithstanding all deterrents, do unlawful or corrupt acts in order to -- 4 of 7 -- 5 obtain a divorce so as to get money. The argument of the appellant in this case asks the court to determine the validity of the challenged provision by reference to what may not unfairly be described as ‘highly improbable contingencies.’” [10] Similarly Starke J said at 330-331: “A disposition by will is contrary to public policy if it is injurious to public interests or has a tendency to injure public interests (Fender v. St. John-Mildmay). Some provisions are recognized as harmful in themselves, for instance, provisions in general restraint of marriage or provisions requiring the separation of husband and wife. Others have a tendency to injure the public interests of which Egerton v. Brownlow is an example. But it must be a general tendency to injure public interests; to do something harmful to public interests having regard to human nature and not the character of particular individuals. The tendency must be ‘substantial and serious’, ‘a real temptation ... to do something harmful, i.e. contrary to public policy’ and one to which parties are likely to succumb. The question whether such a tendency exists is one of law for the court and depends upon the provisions of the will and any relevant surrounding circumstances. It is clear that the testator desired to exclude his son's wife, so far as he could, from any benefit from his estate. But testators frequently, I am afraid, cut off their children with the proverbial penny for marrying against their will. Dispositions of this character, unjust though they may be, do not infringe any rule of public policy. But what are the harmful tendencies of the present will? It was not seriously suggested that the general tendency of the will would operate as an inducement to the son to get rid of his wife by criminal means. Such a suggestion would be ‘fanciful and unreal’ and has even been described as ‘ridiculous.’ But it was contended that the general tendency of the will would operate as a direct encouragement to the son either to commit matrimonial offences which would enable his wife to divorce him or to take advantage of his wife's offences. It is not, as Lord Atkin observed, contrary to public policy that married persons should be divorced. The contention ignores, I think, the moral standards and conduct of decent and ordinary members of the community and concludes that these standards would be wholly insufficient to withstand the temptation of the pecuniary advantage arising under the terms of the will. It should be observed that the termination of the marriage by means of divorce could not be achieved without the active participation of the wife in the proceedings. And if the husband and wife acted in concert to procure a divorce they might easily defeat their ends and lay themselves open to a charge of conspiracy. The contention that the provisions of the will have a tendency to induce departure from the standards of ordinary moral and decent persons for a pecuniary advantage is, I think, unreal and fanciful. So far I cannot think that the public interests are in any way impaired or harmfully affected by the terms of the will. -- 5 of 7 -- 6 Next it was contended that the provisions of the will are contrary to public policy because they tend to weaken the consortium vitae of matrimony--the matrimonial relations of husband and wife, to foster inharmonious relations between husband and wife. This contention is also, I think, unreal and fanciful. I cannot accept the view that the provisions of the will expose persons to the temptation of destroying or weakening the serenity, comfort and affections of their home life for the pecuniary advantages provided in the will. The contention envisages a standard of morality and conduct so strange that I dismiss the notion that ordinary and decent members of the community might by reason of the provisions of the will destroy or weaken the consortium vitae of matrimony. But the case of In re Caborne; Hodge v. Smith was relied upon. It is not identical in terms with the present will but I agree that in effect it is indistinguishable from the present case and is contrary to the view I have expressed. The case is not binding upon this Court and, with respect, I am unable to adopt the conclusion there reached. To adopt Lord Atkin's phrase it affords ‘another instance of the horrid suspicions to which high minded men are sometimes prone’. The ‘unruly horse’, public policy, got away, I am afraid, with the learned judge and carried him off the course.” [11] See also McTiernan J at 333-335. Dixon and Williams JJ dissented and Dixon CJ did not repent his dissent in Church Property Trustees, Diocese of Newcastle v Ebbeck (1960) 104 CLR 394, 403 but, in my view, Ramsay does create a significant hurdle to the success of the applicant’s submissions. [12] The passages I have extracted show that the High Court in Ramsay did not follow the English decision in Re Caborne; Hodge v Smith [1943] Ch 224. That decision was applied in the later English decision In re Johnson’s Will Trusts [1967] Ch 387 where, in that jurisdiction, the law has taken a different course. Mr Cameron sought to distinguish Ramsay on the basis that, first, there is a positive obligation on his client either to divorce her husband, or to hope that he predeceases her and, secondly, because she takes no income from the bequest pending the occurrence of the conditions attacked. He also submits that the separate subclauses dealing with divorce and death are not separable from each other. [13] It does not seem to me to be correct to say that there is any obligation on Mrs Ellaway to divorce her husband. Nor would I have thought that the condition that she not take the bequest until her current husband dies could be attacked. As Latham CJ said in Ramsay at 327: “There is no doubt that in the case of some persons a gift of this character would have a tendency to bring about a divorce. In exactly the same way there is no doubt that in the case of some persons the gift of property to A for life and then to B would lead B to kill or to try to kill A so as to accelerate his interest. But normal human beings do not kill others to get property, and it has never been held that gifts coming into operation upon the death of a person are unlawful as providing encouragement to murder.” -- 6 of 7 -- 7 [14] If it were appropriate to sever the clause about divorce from the clause dealing with death then I expect that I could do it, cf Williams J in dissent in Ramsay at 337. [15] I am slightly more troubled by the fact that, in this will, there is no provision for the applicant to receive any income from the bequest during the continuance of her marriage. Factually, at least, that could provide a greater incentive to divorce than existed in Ramsay. The reasons from the majority decisions extracted above, however, are expressed in general terms in decrying the likely effect of pecuniary advantage on people’s willingness to divorce lawfully. On questions of principle, as this is at least to some extent, there is little merit in reducing a test to be applied in a variety of circumstances to an examination of the precise financial incentive likely to encourage a happily married person to divorce. It should not be a question of debating over the figure for which one will forego one’s spouse. [16] On the other hand, changing attitudes to divorce since Ramsay, reflected in the far greater proportion of marriages that end in divorce and the diminished difficulty of establishing the grounds for divorce brought about by statutory changes since 1948, may suggest that the public policy issues no longer loom so large in allowing provisions such as these to be attacked. Generally speaking, those changes may support an argument that it is no longer forbidden to provide for the possible dissolution of a marriage contract, which the policy of the law was said to be “to preserve intact and inviolate”; see H v W (1857) 3 K & J 382, 387; 69 ER 1157, 1159, relied on by Dixon J in Ramsay at 332 and see Windeyer J in Ebbeck at 414- 415 also. It is not necessary for me to go down that path. Even if it were, there is still significant support for marriage as an institution and little to support the view that any increase in the number of divorces is socially desirable. Again, it is still necessary to establish the statutory grounds for a divorce to be granted by the Courts having jurisdiction under the Family Law Act 1975 (Cth). [17] Another reason for rejecting the argument that this provision is void as against public policy may arise from the provisions of the Succession Act 1981 permitting application to be made to this Court, where adequate provision has not been made from an estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, for better provision to be made; see s 41. In other words, there is a statutory method of ameliorating the effect of a will that may fail to make adequate provision for a person in the applicant’s position so why use the blunt instrument of public policy to attack the clause when a more precise tool has been provided by Parliament? That is recognised by the form of this application which seeks such relief as an alternative. [18] Principally, it is my view, however, that the tendency of the clause is not itself illegal or void as against public policy, and that the decision in Ramsay requires the dismissal of this application. [19] The parties indicated that, should this application fail, the applicant wished to continue with her alternative application for adequate provision to be made for her proper maintenance and support from the estate under s 41 of the Succession Act. If necessary I shall make directions in respect of that application and invite submissions as to any orders for costs in respect of this hearing. [20] The order then is that the application contained in paragraphs 1 and 2 of the originating application filed 5 April 2006 is dismissed. -- 7 of 7 --