Askin (litigation guardian of Gizelle Ghidella) v Sciacca (executor of estate of Celestino Ghidella) & Ors [2001] QSC 135

SUPREME COURT OF QUEENSLAND CITATION: Sciacca v Ghidella, Reghenzani (103 of 2000) [2001] QSC 134 Askin v Ghidella, Reghenzani (112 of 2000) [2001] QSC 135 PARTIES: IGNAZIO SCIACCA as executor of the estate of CELESTINO GHIDELLA (Applicant) VIRGINIA GHIDELLA (First Respondent) PHILIP ASKIN as litigation guardian of GIZELLE GHIDELLA (Second Respondent) OLIVIA DIANE REGHENZANI (Third Respondent) GREGORY VINCENT REGHENZANI (Fourth Respondent) STEPHEN BRETT REGHENZANI (Fifth Respondent) CHRISTOPHER TINO REGHENZANI (Sixth Respondent) PHILIP ASKIN as litigation guardian of GIZELLE GHIDELLA (Applicant) IGNAZIO SCIACCA as executor of the estate of CELESTINO GHIDELLA (First Respondent) VIRGINIA GHIDELLA (Second Respondent) OLIVIA DIANNE REGHENZANI (Third Respondent) GREGORY VINCENT REGHENZANI (Fouth Respondent) STEPHEN BRETT REGHENZANI (Fifth Respondent) CHRISTOPHER TINO REGHENZANI (Sixth Respondent) FILE NO/S: 103 of 2000 112 of 2000 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court, Cairns -- 1 of 17 -- 2 DELIVERED ON: 30 March 2001 DELIVERED AT: Cairns HEARING DATE: 5 December 2000 JUDGE: Jones J ORDER: CATCHWORDS: SUCCESSION – WILLS, PROBATE AND ADMINISTRATION – construction and effect of testamentary dispositions – validity of proviso to will – whether particular condition of proviso void as against public policy – whether proviso internally inconsistent – whether proviso intended to qualify earlier bestowed rights or gifts – interpretation of term “fixed real property investments” – whether testator’s shares in company “fixed real property investments” – whether conditioned entitlement to sole occupancy of place of residence “life interest” – interpretation of “life interest” – whether place of residence “residuary estate” if not specifically devised – whether specific devise of business premises qualified by proviso - validity of codicil to will – interpretation of express words of codicil. Anti-Discrimination Act (Qld) 1991 Carrodus –v- Carrodus [1913] VLR 1, considered Cowen –v- Truefitt Ltd [1899] 2 Ch. 309, considered Doe d. Hearle –v- Hicks (1832) 8 Bing 475 at 480, considered Egerton –v- Brownlow (1853) 4 HLC 1, considered Knoch –v- Mitchell (1895) 13 NZLR 348, considered Lucas –Tooth –v- Lucas-Tooth [1921] 1 AC 594, considered Mitchell –v- Reynolds (1711) 1 P Wms 181, considered Peter Shipway (1908) 7 Cl.R. 232, considered Re Charleson [1968] VR 252, considered Re Exeter (QSC unreported, 1090 of 1987, 9 March 1988), considered Re Freeman [1910] 1 Ch 681, considered Re Gifford [1944] Ch 186, considered Re Hartman; Broomby –v- Wagstaff [1960] Tas SR 16, considered Re Hoppe [1976] VR 381, considered Re Kipping [1948] St. R. Qd. 247, considered Re Lewis [1984] 3 All ER 930, considered Re Lilly’s Will Trusts [1948] 2 All ER 906, considered Re Syme [1980] VR 109, considered Re Thomson [1966] SASR 278, considered Re Wray [1951] Ch 425, considered Wilkinson –v- Osborne (1915) 21 CLR 89, considered -- 2 of 17 -- 3 Wilkinson –v- Wilkinson (1871) 12 LR Eq 604 at 608, considered COUNSEL: Mr Pope for the Applicant in Application No. 112 of 2000 and for the 2nd Respondent in Application No.103 in 2000 Mr Philp for the Applicant in Application No. 103 of 2000 and for the 1st Respondent in Application No. 112 of 2000 Mr Drew for the 1st Respondent in Application No. 103 of 2000 and for the 2 nd Respondent in Application No.112 of 2000 Mr Mullins for the 3 rd 4th 5th 6th Respondents in Application No. 103 of 2000 and Application No. 112 of 2000 SOLICITORS: MacDonnells Solicitors for the Applicant in Application No. 103 of 2000 Connolly Suthers Solicitors for the Applicant in Application No. 112 of 2000 Lagois Magoffin Rose Solicitors for the 1st Respondent in Application No.103 of 2000 Macdonnells Solicitors for the 1 st Respondent in Application No. 112 of 2000 Connolly Suthers Solicitors for the 2 nd Respondent in Application No .103 of 2000 Lagois Magoffin Rose Solicitors for the 2nd Respondent in Application No.112 of 2000 James Byrne & Rudz Solicitors for the 3rd 4th 5th and 6th Respondents in Application No. 103 of 2000 James Byrne & Rudz Solicitors for the 3rd 4th 5th and 6th Respondents in Application No. 112 of 2000 [1] On 5 November 1998 Celestino Ghidella (the testator) executed his last will. On 2 September, 1999 he added a codicil to that will. When he died on 28 September 1999 these two documents detailed his testamentary intentions.1 He was then 81 years of age. His first wife Zina, with whom he had two children, died in 1993. He remarried in January 1994 and with his second wife, had a daughter. [2] The terminology and language employed in the two documents has given rise to disputes as to the true construction of the documents and what were the testator’s intentions. Before me are two separate applications which pose a number of 1 The Last Will and Testament of Celestino Ghidella appear as Exhibit E to the Affidavit of Ignazio Sciacca sworn 25 September 2000. -- 3 of 17 -- 4 questions whose answers depend upon a determination of the proper construction of the will and codicil. Background [3] At the date of his death the testator was survived by – 1. His wife Virginia Ghidella (hereinafter “Virginia”) 2. Their daughter Gizelle Ghidella (“Gizelle”) – aged 4 years at the time of the application 3. His daughter by an earlier marriage Olivia Reghenzani (“Olivia”) and her three children, Gregory, Stephen and Christopher. 4. His son by the earlier marriage, Morris Ghidella (“Morris”) received no benefit under the will. [4] The property which constituted the testator’s estate at the time of his death comprised 2 : 1. The testator’s principal place of residence at 27 Gray Street, Meringa (“the residence”) – valued at $260,000.00; 2. Business premises at 12/14 George Street, Gordonvale leased to Mulgrave Motors (“the business premises”) - valued at $135,000.00; 3. Deposits with the First Australian Building Society totalling $133,155.00 which he held jointly with Virginia and which thereby passed to her by survivorship; 4. Two motor vehicles valued at $25,000.00; and 2 Mr Ignazio Sciacca in his Affidavit sworn 2 November 2000 details the testator’s total assets and liabilities. -- 4 of 17 -- 5 5. Shares in the private company Dranline Pty Ltd (“Dranline”) which owned real estate in Brisbane leased to the ANZ Bank and real estate in Tully, leased to the National Bank. [5] As a matter of historical comment the cane farming business of the Ghidella family was carried on in the name of a trustee company Ghidella Holdings Pty Ltd, which acted as trustee of the Ghidella Family Unit Trust. 3 The testator and his first wife held the two issued shares of the company. Those shares and all the units of the trust were sold to Morris in or about 1977, 4 well before the execution of the will and codicil 5 . [6] Dranline was acquired as a shelf company in 1990 as the vehicle by which the testator and his first wife would hold investment properties. They held one share each. During the lifetime of his first wife, she and the testator acquired, in the name of the company, the two properties in Tully and Brisbane, respectively. Following the death of the testator’s first wife there was a transfer of her share to the testator and an allotment of further shares resulting in the testator holding 996 shares and Olivia and Morris one share each. The valuation of the assets of Dranline Pty Ltd at the time of the testator’s death exceeds $1.3million. [7] By his Will, the testator appointed three trustees, one of whom immediately renounced his executorship. Probate was granted to the other two (hereinafter “the trustees”) on 3 May, 2000. [8] With specific regard to the intended beneficiaries who survived the testator, his will provided that: (i) the business premises be devised to Olivia and her three children; (ii) $50,000 be paid to Olivia and her three children in equal shares; 3 Note Affidavit of Olivia Diana Reghenzani paras 10 and 11. 4 ibid -- 5 of 17 -- 6 (iii) one half of the balance of the estate be given to Virginia; (iv) one half of the balance of the estate be held on trust for Gizelle until she attains the age of 21 years and should Gizelle not reach the age of 21, her share is to pass to Virginia; and by the proviso, that: (v) Virginia is to have the right to sole occupancy of the residence during her lifetime and whilst she remains unmarried; and (vi) the Trustees are to hold all fixed real property investments and apply the income therefrom to the welfare, education and maintenance of Gizelle. [9] Provision was made for the disposition of the property in the event these beneficiaries did not survive the testator but it is not necessary to consider those terms of the will. [10] The terms of the proviso and of the codicil have given rise to conflicting views as to their proper construction. The arguments centre on whether the proviso terms are against public policy, what is the nature of the interest created by the right to residency and what happens to the residence at the expiration of the term of the trusteeship. With regard to the codicil, reference is made to the disposition of the testator’s shares in a trust company or companies. [11] The only company in which the testator had any interest at the time of his death was Dranline Pty Ltd. It was not a trustee company but as is stated above, it did own property in Brisbane (Woodridge) leased to the ANZ Bank and in Tully leased to the National Bank. Arguments centre on whether these shares form part of the residuary estate, whether they are “fixed real property investments” referred to in the proviso to be held by the trustees during the term of the trusteeship or whether they are bequeathed to Olivia absolutely. 5 The codicil to the testator’s will provides, in relation to Morris that, “I declare that I have not provided for my son Morris because I have made adequate provision during his and my lifetime and I have not had any recent support from him”. -- 6 of 17 -- 7 The proviso [12] In order to properly construe the proviso three key issues must be considered. First, whether the proviso is valid; secondly, what the testator intended by directing that his wife, Virginia Ghidella, “be entitled to the sole occupancy of [his] principal place of residence during her lifetime and whilst she remains unmarried” and what was included in the phrase “fixed real property investments”. [13] The proviso reads: “Provided further that notwithstanding the provisions of this my will I direct that my wife, Virginia Ghidella shall be entitled to the sole occupancy of my principal place of residence during her lifetime and whilst she remains unmarried, and I direct my trustees to hold my fixed real property investments and my principal place of residence during her lifetime and whilst she remains unmarried and I direct my trustees to hold my fixed real property investments and my principal place of residence and to use the income from those fixed real property investments for the welfare, education and maintenance of any child or children of my marriage to Virginia Ghidella during the term of the Trusteeship created under this my Will”. [14] In relation to the validity of the proviso, respective counsel for Virginia and Gizelle submitted that the will should be construed as if there were no proviso because: (a) “the tied use to Virginia is against public policy; and (b) the proviso is internally inconsistent because there can be no income from the principal place of residence”. Initially, they argued also that such a provision was contrary to the Anti- Discrimination Act (Qld) 1991 but these submissions were subsequently withdrawn. [15] Mr Mullins of Counsel, for Olivia, contended that by the proviso, the testator intended to provide a life interest to Virginia, subject to the contingency that she remain unmarried – that contingency is neither remarkable nor repugnant as qualifying a life interest to Virginia. Counsel also alerted me to difficulties that -- 7 of 17 -- 8 may arise in the event of the remarriage of Virginia there being no express gift over of the principal place of residence. This point will be considered later. [16] Principles of public policy are principles that the community as a whole has adopted as part of its way of life. 6 A condition is against public policy if it is not in the interests of society that it should be carried out. 7 [17] I do not accept that the testator’s gift to his wife of a right to occupy his principal place of residence during her lifetime and whilst she remains unmarried is against public policy. The condition does not go so far as to be in general restraint of marriage, 8 nor does it constitute a threat or represent a condition in terrorem. 9 Such circumstances have been deemed contra public policy, though they do not represent the complete list. In Wilkinson –v- Wilkinson10 , Sir John Stuart V.C. citing Lord Macclesfield in Mitchell –v- Reynolds (supra) identified invalid conditions as falling within one of the following headings – “1st . Either to do something that is malum in se or malum prohibitum. 2ndly. To omit the doing of something that is a duty. 3rdly To encourage such crimes and omissions. Such conditions as these the law will always, and without any regard to circumstances, defeat, being concerned to remove all temptations and inducements to those crimes”. There is nothing of these characteristics in the terms of the proviso. [18] I do not accept the argument that the proviso is internally inconsistent “because there can be no income from the principal place of residence”. For the reasons later set out, I have come to the view that the right to occupy creates a life interest, not a proprietary interest and further, does not require personal use so as to prevent the donee from letting and thus raising income. [19] In construing the testamentary document as a whole, 11 it is clear in my view that the testator did intend, by the proviso, to qualify earlier bestowed rights or gifts.12 The 6 Wilkinson –v- Osborne (1915) 21 CLR 89. The Laws of Australia – Wills at p185 per Atherton, R. et. al. 7 ibid 8 Re Hartmann; Broomby –v- Wagstaff [1960] Tas SR 16; Carrodus –v- Carrodus [1913] VLR 1 [34 ALT 125; Re Thomson [1966] SASR 278. 9 Egerton –v- Brownlow (1853) 4 HLC 1; Mitchell –v- Reynolds (1711) 1 P Wms 181. 10 (1871) 12 L.R. Eq 604 at 608. 11 “An essential rule of the construction of wills is that the whole of the instrument must be considered … It is to the whole intention that effect should be given”. Kirby-Smith –v- Parnell [1903] 1 Ch 483 at 489 per -- 8 of 17 -- 9 very introduction, “notwithstanding the provisions of this my will…”, in my mind conveys an intention, on the part of the testator, that the other provisions of the testamentary document be read subject to the proviso. I do not see any internal inconsistency in the terms of the will. [20] As to the proper interpretation of the words, “fixed real property investments”, counsel for Gizelle contended that, “there are no fixed property investments which the trustees are required to hold under the Will during the period of the trusteeship”. 13 Submissions on behalf of the trustees argued the meaning of “investments” to be the “laying out” of money in the purchase of some species of property … with a view to obtaining a return” 14 and classified the Mulgrave Motors property as “realty” and productive of income through rent and therefore, a “fixed real property investment”. [21] There is not before me any case law evidencing previous interpretation by the Courts of the term “fixed real property investments”. In terms of considering its “ordinary meaning”, I have referred to various dictionaries. The word “fixed” in the context of property is defined in The Oxford English Dictionary as “that which consists in immovables, as land and houses”. 15 “Real property”, a legal term, 16 denotes, “(1) land and things attached to land so as to become part of it; and Buckley LJ; Lucas-Tooth –v- Lucas-Tooth [1921] 1 AC 594 at 601 per Lord Birkenhead LC in Lee, W.A. op.cit. p242. 12 “If the Court determines that the testator’s intention was to qualify a gift made earlier in the will, effect will be given to that intention”. Knoch –v- Mitchell (1895) 13 NZLR 348 and Re Syme [1980] VR 109 at 113. 13 Note page 3 of Mr Pope’s submissions. 14 Re Lilly’s Will Trusts [1948] 2 All ER 906 at 907 per Harman J, obiter. 15 The Oxford English Dictionary 2 nd ed. 1989. 16 Just as words are to be taken in their ordinary sense (Lee, W.A. op. cit. p242), if the testator uses technical words, the usual rule of construction is that their technical meaning will be given to them on the grounds that that is what the testator must have intended, unless the will shows a clear intention that they are to be understood in another sense and that sense can be ascertained from the will. (Lee, W.A. op. cit. p243, specific reference is made to “lawyers’ expressions”.) -- 9 of 17 -- 10 (2) rights in the land which endure for a life or were, under the law before 1926, inheritable, whether these involve full ownership or only some partial enjoyment of the land or the profits”. 17 In relation to the term “investments” I accept the definition referred to above. [22] Accordingly, it seems to me that the term “fixed real property investments” connotes that real estate which is productive of a return. This phrase would clearly encompass the testator’s principal place of residence at 27 Gray Street, Meringa (productive of a return should it be rented) and his business premises at 12/14 George Street, Gordonvale (also productive of income through rent). [23] Both applications before me specifically request clarification as to whether the testator’s shares in Dranline Pty Ltd, referred to in the codicil, constitute a “fixed real property investment” and therefore, whether any gift of such shares is affected by the proviso. [24] The company, Dranline Pty Ltd, not the testator, is the proprietor of such land and buildings. The testator merely owns shares in that company (albeit shares amounting to a controlling interest) and therefore, is only capable of bequeathing such shares, as opposed to title in the properties themselves.18 Shares constitute a “right to a specified amount of share capital of a company, carrying with it certain rights and liabilities while the company is a going concern and in its winding up. The shares or other interest of any member in a company are personal estate …”.19 [25] Therefore, aside from the testator’s personal residence at 27 Gray Street, Meringa and his business premises at 12/14 George Street, Gordonvale, the remainder of the testator’s estate constitutes “personalty” and is not affected by the proviso. 20 The residence at 27 Gray St, Meringa 17 Words and Phrases Legally Defined Vol 4, 1990 at p 10. 18Re Lewis [1984] 3 All ER 930 19 Words and Phrases Legally Defined Vol 4 1990 at p.179. 20 The Affidavit of Ignacio Sciacca sworn 2 November 2000 identifies the balance of the estate. -- 10 of 17 -- 11 [26] There is no specific reference to the devise of this property. The proviso, as noted above, stipulates that Virginia is entitled to the sole occupancy of the principal place of residence during her lifetime and whilst she remains unmarried. What then is the nature of Virginia’s interest? [27] The gift of sole occupancy confers a life interest unless a contrary intention is shown. In Re Exeter 21 McPherson J (as he then was) considered a testamentary grant of permission to reside in certain premises. He said (at p.2) – “Trusts or directions concerning the use of residential property after the death of its owner are not uncommon in wills in Australia. Usually they are in favour of widows or other relatives of the testator, and they may assume one of several forms which are capable of giving rise to either a life interest or no more than a personal right to reside in the house. Because the result depends very much on the words used in the context of the will or other instrument, it is not really possible to arrive at binding rules of construction based on decided cases. Nevertheless, it is a useful starting point to treat a disposition to “use and enjoy” or “use and occupy” as suggesting an intention to confer a life interest: see Rabbeth –v- Squire (1859) 4 De G. & J. 406; 45 E.R. 157; Re Gibbons [1920] 1 Ch. 372, at 379; Re Hoppe [1961] V.R. 381, at 387; ex p. Middleton [1983] Qd.R 170, at 171. Contrast Re Wallace’s Trusts [1921] V.L.R. 446; and Stevenson –v- Myers (1930) 47 W.N. (N.S.W.) 94, where there were held to be indications from the nature of the gift and the language used that a mere personal right of residence was intended”. In the circumstances of that case, His Honour found that an equitable life interest was created. In Re Hoppe22 Pape J considered a similar provision and said: “In this case, there are indications in the clause that the testator intended to give no more than a personal right of residence. They are, firstly, that the right given is to “reside” in a house, not to “use and occupy” the house. These later words point more readily to the gift of a life estate, while words such as “the right to reside” are indicative of a mere personal right to live in the house …” Much therefore depends on what was the testator’s intention though the starting point is to acknowledge the distinction between “use and occupy” and “residence”. [28] On behalf of Olivia, Mr Mullins of Counsel submitted that a life interest was created by the words in the proviso. Counsel on behalf of Virginia and Gizelle 21 QSC unreported, 1090 of 1987, 9 March 1988. 22 [1967] VR 381 per Pape J at p387. -- 11 of 17 -- 12 made no submission on this point, instead limited their arguments to the issue of the proviso’s validity. [29] The general tenor of the gift to Virginia of sole occupancy of the residence and the direction to the trustee to hold it and to use income therefrom suggests the creation of a life interest rather than a mere right to reside. The fact that the gift is conditioned upon her remaining unmarried simply identifies a circumstance in which the life interest will be determined. Therefore, Virginia, for her lifetime and whilst she remains unmarried, has the option of residing in the premises or leasing them - any income from rent to be put towards the maintenance, welfare and education of Gizelle for the term of the trusteeship. [30] As there is no express gift over of the principal place of residence, I can only conclude that it was the testator’s intention that the property form part of the balance of the estate referred to in clause (c) of the Will, subject to the qualification in the proviso. Therefore, pursuant to clause (c), Gizelle and her mother are each to take ½ of the balance of the estate - Gizelle’s half to be held on trust until she attains the age of 21 years. The devise of the proprietary interest to Gizelle is, of course, subject to Virginia’s right of occupancy throughout her lifetime and whilst she remains unmarried. Business premises at 12/14 George Street, Gordonvale [31] This property was owned by the testator and leased, as a garage, to Mulgrave Motors 23 . As determined above, being realty and productive of income through rent, the property qualifies for inclusion in the testator’s “fixed real property investments”. [32] Clause (a) of the Will denotes a specific devise of the property to Olivia Reghenzani and her 3 sons equally as tenants in common. However, as discussed above, the proviso requires that the property be held by the trustees and that any income from such a fixed real property investment be used for the welfare, 23 Affidavit Ignazio Sciacca, para 10(b). -- 12 of 17 -- 13 education and maintenance of Gizelle during the term of the trusteeship on her behalf. [33] Counsel for Olivia, in considering the effect of the proviso on clear terms denoting a specific gift, drew my attention to a long established rule of construction that “if the words of the will clearly confer an interest upon a beneficiary, subsequent ambiguous words contained in the same or a later clause … will be inoperative to cut down that interest.” 24 This principle must be construed, however, in light of the Court’s overriding task which is to determine the intention of the testator. If the Court determines that the testator’s intention was to qualify a gift made earlier in the will, as has occurred in this case, effect will be given to that intention. [34] Counsel for Olivia, however, conceded that “the property is not permitted to pass pursuant to the specific devise in clause (a) of the will until satisfaction of the contingency made plain by clause (c) namely, Gizelle attaining 21 years. At that point and not before, the property may be transferred to, or, the income enjoyed by, Olivia and her sons”. [35] I find that the testator’s intention was for the business premises at 12/14 Gordon Street, Gordonvale to be held on trust to apply the income therefrom for the benefit of Gizelle during the term of the trusteeship for her interest. Thereafter, the proprietary interest and the enjoyment of all income from the investment will vest in Olivia and her 3 sons in accordance with the specific devise in clause (a). The codicil [36] By the codicil, the testator sought to deal with his shareholding in an unnamed company or companies. It reads: “As to the share or shares in any trust company only if and being as the trustee holding the ANZ Bank Property in Brisbane and the National Bank in Tully I give devise and bequeath to Olivia Reghenzani absolutely as I 24 Note Mr Mullins’ submissions at p11 citing Doe d. Hearle –v- Hicks (1832) 8 Bing 475 at 480; Re Kipping [1948] St. R.Qd. 247; Peter Shipway (1908) 7 Cl.R.232 at 243 per Griffith CJ.; Re Freeman [1910] 1 Ch 681 at 691. -- 13 of 17 -- 14 am satisfied that she will exercise any discretion fairly and I would accept her such discretion should it be found that the company is trustee…” [37] A codicil is generally construed so as to interfere as little as possible with dispositions in a will and in particular, an ambiguous clause in a codicil does not usually revoke a clear bequest in a will. 25 In this case, there has been no specific bequest of shares made in the body of the will and therefore, the testator’s intention in relation to the shares must be determined from the express words of the codicil. If the codicil was to have any effect, it would impact on the bequest of the residuary estate to Virginia and Gizelle. [38] The codicil was obviously drafted without the draughtsmen having any knowledge or understanding of the assets of the testator. If the terms of the codicil are faithful to the instructions given by the testator (and I must assume they are) he likewise had little knowledge of his shareholding in or the function of Dranline Pty Ltd. Nonetheless, I must, if possible, determine his intention from the express words. [39] Counsel for Olivia argued that there is equivocation in these words and that the intention only becomes clear when regard is had to extrinsic facts. He relies particularly on the evidence presented in the affidavits of Mr Ignazio Sciacca and Ms Olivia Reghenzani to the effect that the only company in which the testator has held any shares for the last 23 years has been Dranline Pty Ltd, which is not a trustee company and that since 1977 when the testator sold his entire interest in Ghidella Holdings Pty Ltd, he has not had any involvement with a trustee company. He contended that the testator simply intended to pass his shares in Dranline but wrongly described the company, in generic language, as a trustee company. Therefore, in applying the principle of falsa demonstratio non nocet26 he argued that the shares in Dranline would pass to Olivia. 25 Re Wray [1951] Ch 425. 26 In this regard, Mr Mullins of Counsel referred me to: Jarman on Wills, generally at p 1233 et seq; and in particular, Theobold on Wills 15 th ed. p 277FF: The principle of falsa demonstratio non nocet means that “if, on considering the language of a Will with the aid of any admissible extrinsic evidence, the Court comes to the conclusion that the testator intended to pass something and can determine what that something is, then the fact that the testator gave it a wrong description in his Will does not prevent the Will taking effect in regard to the subject matter intended by the testator”. Re Gifford [1944] Ch 186 at 188 per Simmonds J. Therefore, the “false” part of a description will not vitiate a gift. The Court may simply reject the false part of the description and give effect to its true part. Re Charleson [1968] VR 252 at 255. -- 14 of 17 -- 15 [40] Counsel for Gizelle argued that the testator intended the gift would only take effect if in fact “the company was a trustee”. [41] What did the testator intend to pass? Was it the unconditional transfer to Olivia of the beneficial interst in the shares of any company, including Dranline, or only the shares of any company acting as trustee of the specific properties in Brisbane and Tully (which extrinsic evidence identifies as being Dranline). Counsel for Olivia, having identified Dranline as the company, contends that all reference to being a trustee is simply a misdescription, that the “leading or most important words” 27 of the passage are the bequest “absolutely” to Olivia. But that approach ignores completely the repeated reference to the qualifying words “trust” and “trustee”. As I read the terms they relate to the control of any trust company. The term includes, but is not limited to, Dranline is not limited to Dranline as the arguments on behalf of Olivia suggested. But even then, the inclusion of Dranline is emphatically conditioned – “only if and being as the trustee”. Dranline does not meet this condition. What was being transferred was not so much the beneficial ownership of any shares but the power to exercise a discretion. But again that transfer of power was conditioned upon it being “found that the company is a trustee”. [42] To make some sense of all the words used and to acknowledge the undoubted reference to Dranline, I would recast the passage to read – “As to the share or shares in any trust company, including Dranline if it be a trustee, I give, devise and bequeath to Olivia Reghenzani absolutely as I am satisfied that she will exercise any discretion fairly and I would accept her such discretion should it be found that the company is trustee …” [43] I am of the view, therefore, that the testator did not intend to transfer the beneficial ownership of his shares in Dranline. The testator was simply saying, that if any company in which he held shares was acting as a trustee, then Olivia was to have those shares so as to empower her to exercise any discretion. As Dranline Pty Ltd is not a trust company, acting as a trustee, the conditions within the codicil are not 27 Cowen –v- Truefitt Ltd [1899] 2 Ch. 309 at 311 per Lindley M.R. -- 15 of 17 -- 16 satisfied and no property passes as a consequence of the terms of the codicil. Therefore, the shares fall within the residuary estate, to be distributed between Virginia and Gizelle in accordance with clause (c) of the will. Decision It follows from the above discussion that I would make the following answers to the specific questions raised in the two applications. In Application 103/2000 Question “…(a) Whether Olivia Reghenzani and her three make children (the Fourth, Fifth and Sixth Respondents herein) are entitled to the property at 12-14 George Street, Gordonvale in the State of Queensland absolutely, or whether the final proviso in the said will creates an interest in favour of Gizelle Ghidella, and if so the nature of such interest”. Answer I direct that the “business premises” be devised in accordance with the specific gift in clause (a) of the will, subject to the proviso that any income from such premises provide for the welfare, maintenance and education of Gizelle Ghidella until she attains the age of 21 years. Thereupon the proprietary interest and the enjoyment of all income from the investment shall benefit Olivia and her 3 sons in accordance with the specific devise in clause (a). “(b) Whether pursuant to the said codicil Olivia Reghenzani is entitled to the testator’s shares in Dranline Pty Ltd”. No. In Application 112/2000 “…(a) Whether the provision in the proviso to the said will limiting Virginia Ghidella’s entitlement to occupancy of the deceased’s principal place of residence to the period she remains unmarried is against public policy and should be struck down”. No. “(b) What fixed real property investments the Trustees under the said will are required to hold during the term of the trusteeship pursuant to the proviso. The residence – 27 Gray Street, Meringa - and the business premises – 12/14 George St, Gordonvale. (c) Whether one half of the balance of the deceased’s estate required to be held by the Trustees for any child or children of the deceased’s marriage to Virginia Ghidella until that child or those children attain the age of twenty-one (21) years is qualified and/or defined by the proviso to the said will and if so in what way. Yes. By the equitable life interest in the residence in favour of Virginia. -- 16 of 17 -- 17 (d) Whether the one half of the balance of the deceased’s estate given, devised and bequeathed to Virginia Ghidella is qualified and/or defined by the proviso to the said will and if so, in what way. Yes. By the life interest referred to in the preceding paragraph. (e) Whether the deceased’s shares in Dranline Pty Ltd form part of the residuary estate of the deceased. Yes. (f) Whether the real property investments held by Dranline Pty Ltd fall within the fixed real property investments referred to in the proviso to the said will. No. Declarations [44] I declare that the proviso to the said will operates to create an equitable life interest for the first respondent over the residence at 27 Gray St, Meringa. [45] I further declare that the proviso to the said will creates an equitable interest for the benefit of Gizelle Ghidella over the said residence and over the business premises at 12/14 George St, Gordonvale, whereby she enjoys the income from such properties until she attains the age of 21 years. [46] I further declare that the terms of the codicil executed on 2 September 1999 are limited to dealing with the shareholding in trustee companies and therefore, do not pass any property in the possession of the testator at the time of his death. Costs [47] In relation to costs, I order, by consent, that the costs of and incidental to both applications be paid from the estate of Celestino Ghidella, on an indemnity basis. -- 17 of 17 --