Elwin (dec'd), Re [1996] QSC 251

---------------------------------- -------- () o o IN THE SUPREME COURT OF OUEENSLAND No 9321 of 1996 Brisbane Before the Hon. Mr Justice Mackenzie [re: Elwin dec'd] IN THE MATTER of the Property Law Act 1974 - and - IN THE MATTER of the Trusts Act 1973 - and - IN THE MATTER of the Succession Act 1981 - and - IN THE MATTER of the trusts of the Will of TONY ELWIN late of 345 Adina Avenue, Bilinga in the State of Queensland, building inspector, retired, deceased JUDGMENT - MACKENZIE J. Judgment Delivered 17 December, 1996 CATCHWORDS: Counsel: Solicitors: Hearing date: Construction and effect of clauses in a will pUIporting to create a testamentary trust - whether the clauses satisfy s.209 Property Law Act 1974. K.J. Lynch for the applicant. A.M. Wilson for the class of respondents represented by Mr P. Wilson. D.G.Mullins for the class of respondents represented by Mr G Lanham. McCullough Robertson for the applicant. Thynne & Macartney for the class of respondents represented by Mr P. Wilson. Minter Ellison for the class of respondents represented by Mr G Lanham. 5 December 1996 This ju~gment is to be copie· ~ L-;·r Ute purpose of research and private study only. Jt JS not to be reso~d 0. ; ;.:~~'..j -i;)f republication _in any other way Without permission, -- 1 of 6 -- o o o o IN THE SUPREME COURT OF QUEENSLAND Brisbane Before the Hon.Mr Justice Mackenzie [re: Elwin dec'd] - --------- --------- ---- -------- No 9321 of 1996 IN THE MATTER of the Property Law Act 1974 - and - IN THE MATTER of the Trusts Act 1973 - and - IN THE MATTER of the Succession A ct 1981 - and - IN THE MATTER of the trusts of the Will of TONY ELWIN late of 345 Adina Avenue, Bilinga in the State of Queensland, building inspector, retired, deceased JUDGMENT - MACKENZIE J. Judgment Delivered 17 December, 1996 The testator left a will whereby he appointed Perpetual Trustees Queensland Limited to be executor. Probate was sealed on 23 January 1996 and questions concerning the construction of the will and its consequences have arisen. The nearest of kin are the testator's brothers, his sister and the children of a half-brother Mr Church who is deceased. Mr Church was the child of the testator's mother's second marriage. In summary the questions asked about the true construction of the will are the following: (a) Does c1.5(c) constitute a charitable trust. (b) Does the provision in cl. 5(g) constitute a specified number of years within the -- 2 of 6 -- ---------- o 2 meaning of s.209 of the Property Law Act 1974. (c) If the provisions referred to in (b) are not a specified number of years within the meaning of s.2~9, whether the provisions of c1.5(g) continue to have effect either for the duration of the perpetuity period applicable thereto or for a period of 80 years from the death of the testator if the period is within the perpetuity period; and (d) Whether the provision in c1.5(g) fails at the date Of death of the testator. Other determinations are sought as to amongst whom the capital and any accumulated income should be distributed upon the determination or failure of the fund as provided in () c1.5(g) of the will and a determination whether on the true construction of the will the children and remoter descendants of Mr Church are "nieces or nephews or their direct descendants" of the testator. Orders were also sought appointing two solicitors to represent persons entitled or to become entitled to benefit from the distributions from the fund provided under cl. 5(c) of the will and to represent the nieces and nephews and their direct descendants o living at the date of termination of the fund. The Attorney-General was served but indicated that he would not be appearing to o argue the question concerning a charitable trust. It is common ground in each of the submissions that the provision in c1.5(c) is not a charitable trust. The submissions were based on Re Compton 1945 Ch. 123, Oppenheim v. Tobacco Securities Trust Co Ltd 1951 AC 297 andRe Evans 1957 Qd. R. 345. The common basis of the submissions, which I accept, is that the disposition in favour of any of the testator's nieces or nephews or the direct descendants while such persons are under the age of 25 years and in the process of completing a post-secondary educational course creates a class of persons with a purely personal relationship to the testator without another quality -- 3 of 6 -- C) 3 which makes the trust charitable. The second question arises from cl.5(g) which is as follows: "If, for any reason, the value of the fund falls to a level where my trustee and each Assessor unanimously agree that it is inappropriate to continue the operation of the fund then my trustee may terminate the fund in accordance with the conditions in Clause 5(t), otherwise the fund will continue to operate for a period of EIGHTY YEARS from the date of my death, or for a longer period if subsequent legislative amendments allow." The question of construction is what is meant by the words "for a period of 80 years from the, date of my death or for a longer period if subsequent legislative amendments allow". The possibilities suggested by counsel were that the testator intended that if at some time after his death the law was amended to allow for a longer period the trust was to continue for that period or alternatively that it was intended that if during the currency of his lifetime there was a legislative change allowing for a longer period if ¢,at period was to apply. One other suggested possibility was that it might extend to the passing of a legislative amendment which, after his death, created retrospectivity although the repercussions of that upon prior /\ distributions in certain events were recognized. The will as drafted shows an appreciation of 1,-) the significance of a period of 80 years under the Property Law A ct in its current form. o While it is always possible that a partial misunderstanding of the law may occur, I am of the view that the testator's intention was that if a legislative amendment occurred during his lifetime the longer period was to apply without the need to make a new will. As the law allowed an accumulation period of 80 years at the time of testator's death that is in my view the relevant period. This approach also has the consequence of being consistent with the approach of a court leaning in favour of a construction which will give an interest to intended beneficiaries if at all possible (Re Pears: Union Trnstee Co (A ust) Ltd v. Hives 1940 St.R. Qd. 296. Once the interpretation is settled in favour of that view it becomes unnecessary to answer questions (c) and (d) in the summons. -- 4 of 6 -- ( 4 The next question is amongst whom the capital and any accumulated income of the estate should be distributed upon the determination or failure of the fund in terms of c1.5(g) of the will. If, as is the case, question 1(b) is answered in the affirmative, the distribution of the fund would be made equally among nieces and nephews and their direct descendants living at the termination of the fund (at the end of 80 years) on a per capita basis. There is in my view nothing in the will which supports a per stirpes construction, and it was not submitted otherwise. Question 3 is concerned with determining whether on the true construction of the will the terms "nieces or nephews or their direct descendants" in c1.5(c) and the term "nieces and Cj nephews and their direct descendants" in cl.5(f) include the children and remoter descendants of Clive Church. The internal evidence of the will, where Graham Church is described in cl.5(d)(i) as "my nephew Graham Church", makes it clear that in using the phrases the testator intended that Mr Church was to be within the description "nephew". That is not inconsistent with authority. (Re Stark (1969) 7 DLR (3d) 313). Because of the potential conflict of interest between the interests of persons who might become entitled to the benefit from distributions under c1.5(c) and those of nieces and o nephews and their direct descendants living at the date of termination of the fund the order in paragraph 4 of the summons was sought. The following orders and declarations are made: 1. I order that Mr Gary Lanham, Senior Associate, of Minter Ellison Solicitors, Brisbane be appointed to represent the persons entitled or to become entitled to benefit from distributions from the fund provided under cl.5(c) of the will. 2. I order that Mr Peter Wilson, Partner, of Thynne and Macartney, Solicitors, Brisbane be appointed to represent the nieces and nephews and their direct descendants living at the date of termination of the fund. -- 5 of 6 -- 5 3. I declare that the trust set up under cl.5(c) of the will was not a valid charitable trust. 4. I declare that the provision in cl.5(g) of the will that the fund referred to therein will continue to operate for a period of 80 years from the date of the testator's death or for a longer period if subsequent legislative amendments allow creates a specified number of years, namely 80 years, within the meaning of s.209 of the Property Law Act 1974. 5. I declare that upon determination of the trust on 16 October 2075 the capital and income of the fund shall be distributed to the testator's nephews nieces and their direct descendants per capita. 6. I declare that on the true construction of the will the term "nieces or nephews or their direct descendants" in cl.5(c) thereof and the term "nieces and nephews and their , direct descendants" in cl.5(f) (the second clause so identified in the will) includes the children and direct descendants of Clive Church. 7. I order that the parties' costs of and incidental to this application be allowed and taxed as between solicitor and own. client and paid out of the estate of Tony Elwin deceased. -- 6 of 6 --