6.12980/45 'HE. Day, Gor. Print., Melb. oricinaL ~& IN THE HIGH COURT OF AUSTRALIA PERPETUAL TRUSTEE COMPANY (LIMITED) AND OTHERS REASONS FOR JUDGMENT | Judgment delivered at__.._ Sydney... _ on__.. Thursday, 8th May19470000000 ABIGAIL & ANR. ve PERPETUAL TRUSTEE COM ANY (LIMITED) & MS. REASONS FOR JUDGMENT. LATHAM Cede PERPETUAL TRUSTER COMPANY (LIMITED) & ORS. REASONS FOR JUDGMENT. DATHAM Cede The provisions of the will which require interpretation in this appeal may be set out as follows:— -in-law (1) Income of the whole estate to wife, sister/and son of the testator during their respective lives. -in-law (2) After the death of the wife or sis ter/the income payable to either of them to be paid to the grandchildren, two- thirds to the grandson and one-third to the grand-daughter until the younger of them (the grandson) arrives at the age of 30 years. C(3) No provision is made with respect to the disposition of the income payable to the son if he should die before the wife or sister or before the grandson arrives at the age of 30 years.) (4) "hen" (that is when the grandson arrives at the age of 30 years) the trustees are to realise the whole estate and divide it between the two grandchildren, two-thirds to the grandson and one-third to the grand-daughter. {5) A codicil to the will "cancelled and cut out completely" any bequest or devise to the testator's son. The son died in 1935. It was held by this court in -in-law Austin v. Abigail, 49 C.L.R. 177, that the wife and sister/were still thereafter entitled only to one-third each of the income, not to one-half each. It was also held (p. 186) that there was no intestacy as to the income which would mve gone to the son if tl codicil had not been executed, that that income followed the fate of the corpus (p. 186) and that it was applicable to the 'maintenance of the grandchildren during their infancy. The grandchildren have now each attained the age of 21 years. Roper J. has held that they have a vested interest in two undivided third parts of the whole estate expectant upon the life estates respectively of the wife and stator ie the testator but only a contingent interest in the remaining one-third of the corpus. The appellants contend that the interest in the remaining one-third is also vested. The / The words of gift of the corpus are to be found in the direction to the trustees to realise the whole estate and divide "grandchildren it between the/, The result of the decision of the Supreme Court is that these words produce a different effect in the case of two-thirds of the estate (namely a vested interest) from that which they produce in the case of the other one-third of the estate (namely a contingent interest). This decision was based upon the fact that two-thirds of the income was given to the grandchildren (after the deaths of the wife and sister of the testator) but that as a result of the codicil to the will there was no disposition of the other one-third of the income. It is true that as a general rule when property is given to @ person only when he attains a particular age the gift is prima facie contingent upon the attaining of that age by the donee, this being a quality or description which the donee must in general possess in order to claim under the gift: see cases cited in Laws of England, 2nd Bdn., Vol. XOXIY, p. 374. But the attainment of the age of 30 years by the younger grandchild cannot be regarded as a description of the donee in the case of the gift to the elder grandchild. In the present case the intention of the testator that the grandchildren shall have the whole of the corpus is plain. As to two-thirds of the corpus it is not contested that their interests are vested. There is a gift of two-thirds of the income of the whole estate to the grandchildren. There is no gift over of the interests of the grandchildren upon any event and the gift is a gift of residue: see 49 C.L.R. at p. 186. When to these considerations is added tie presumption against intestacy - and there would be an intestacy if tie interest were held to be contingent and a grandchild died before the younger one attained the age of 30 years - the result is in my opinion that it can properly be held that the interest in the remaining one- Rich, McTiernan and third of the estate is vested. My brothers/W¥illiams have referred to a number of authorities which support this conclusion and I agree in theirreasons for judgment. In my opinion the appeal should be allowed' and the judgment of Roper J. varied in the manner stated by them. » UAL RUS: Ve co RICH J. McTIERNAN J. WILLIAMS J. ABIGAIL & ANG Ve PERPETUAL TRUSTEE CO. LTD. & ORS e RICH J. McTIERNAN J. JUDGMENT. WILLIAMS J The appellants Ernest Robert Abigail and Gloria Smedley are two of the beneficiaries under the will of Ernest Robert Abigail, who died on 28th September 1931. They have appealed from part of a decretal order made by Roper J. sitting as the Supreme Court of N.S.W. in Equity} whereby it was declared that upon the true construction of the will and codicil of the testator, and in the events which have happened, the appellants have a vested remainder in an undivided third part of the whole estate of the testator expectant upon the life estate of Mabel Mary Morrison, and a vested remainder in an undivided third part of the whole estate of the testator expectant upon the life estate of Florence Kate 'Primrose, and an executory interest in the remainder of the whole estate of the testator contingent upon the attainment of the younger of them of the age of thirty years. The decretal order contains other declarations consequential upon this declaration. This appeal is from that part of the declaration relating to the remainder of the whole estate, and the consequential declarations. The appellants claim that they --+= acquired a vested interest in possession in this remainder on the death of the testator. The will of the testator which is dated 19th July 1928 is (omitting formal parts) in the following terms:= "I give devise and bequeath unto my trustee all my estate peal and personal upon the following trusts, to divide the rents and profits of my estate equally between my wife, Mabel Mary, her sister Florence Kate Primrose, and my son Ernest Robert Abigail during their lifetime and without in each case power of anticipation, if either one of these three charges mortgages or assigns their interest or does any act with that intent the interest of that such one to cease and go to the remaining one or two innocent parties. After the death of Mabel Mary and Florence Kate Primrose the interest so payable to each or either of them to be paid to the children of my son Ernest Robert in the following ratios: two-thirds to ny / my grandson Ernest Robert Abigail Junior secundus and one- third to his sister Gloria Abigail until the younger of them arrives at the age of thirty years, then to realize the whole estate and divide between those two children in the aforesaid ratios two-thirds to Ernest Robert and one-third to Gloria." There is also a codicil to the will dated 21st November 1930, which is (omitting formal parts) in the following terms:= "I cancel and cut out completely any bequest or devise to my son Ernest Robert Abigail so that he does not benefit from my estate to the extent of one single shilling." Gloria Smedley, the elder of the two appellants, was born on 15th August 1923: the other appellant was born on 3rd April 1925; so that both appellants are now of age. The two life tenants Mabel Mary Abigail, now Mrs. Morrison, and Florence Kate Primrose are still alive. Ernest Robert Abigail, the son of the testator, died on the 9th August 1935. The will and codicil have already been construed to some extent by the Supreme Court, and on appeal by this Court. The case is reported under the name of Austin ve Abigail in 49 C.L.R., 177. The will is not a conspicuous example of the draftsman's skill, and is difficult to construe. It made no express. provision for the destination of income of the one-third share of corpus in which the son had a life estate in the event of his death before the younger appellant attained the age of thirty years. When this life estate was revoked by the codicil, no express provision was made for the destination of this income between the date of the death of the testator, and that of the younger appellant attaining the age of thirty years. The effect of the decretal order under appeal is to divide the capital of the estate so that the appellants have vested interests in remainder in two thirds, and executory interests in the remaining third, wntingent upon the younger attaining the age of thirty years. Assuming that Roper J. was right in so declaring, the strange result follows that if the younger appellant dies under the age of thirty years, the elder will not take any interest in the remaining third of the estate even.though she has attained that age; whereas if she dies under the age of thirty years, and the younger attains / => attains that age, her estate will become entitled to a" one-third share. Further, there is no gift over in the event of the younger appellant dying under the age of thirty years. By the will, the testator devised and bequeathed "all my estate real and personal unto my trustee upon the following trusts", so that the will discloses on the threshold a clear intention to dispose of the whole estate. The beneficial trusts of income follow this general devise and bequest. The life tenants are entitled to the rents and profits of their respective undivided third parts of the corpus in specie. Therefore, the estate could not be realised as a whole until the death of the survivor of the three life tenants, although the younger appellant had attained the age of thirty years. When the life estate of the son was revoked by the codicil, the estate could still not be realised as a whole until the death of the survivor of Mrs. Morrison and Florence Primrose. Therefore, the direction in the will that upon the younger appellant attaining the age of thirty years, the estate is then to be realised md the proceeds of sale divided between them, must be read subject to the rights of any life tenants then surviving, and as referring to the composite event of the younger appellant attaining the age of thirty years and the death of the survivor of the life tenants. We cannot construe this direction as other than a clear expression of the intention of the testator that the whole of the proceeds af sale should be disposed of in the same manner,that is to say, divided into two unequal parts and paid, two-thirds to Ernest Robert Abigail, and one-third to Gloria Smedley. The appellants must either have acquired vested interests in the whole of these proceeds at the death of the testator, or-their right to participate at all must be contingent upon the younger appellant attaining the age of thirty yearse It is clear that a gift may vest before the appointed time although the only gift is in a direction to pay or divide in futuro. "The general rule where the will or other instrument is silent as to the period of vesting,is that the gift is vested immediately / Ae immediately on the donee coming into existence, or on the instrument coming ints operation (whichever last happens) if the enjoyment is postponed merely for the convenience of the estate, or to allow of an intervening or other limited interest, but if the postponement of enjoyment. is for reasons personal to the donee, the gift will be contingent.": In re Couturier, Couturier v. Shea, 1907 1 Ch. 470 at 472: Browne ve Moody, 1936 A.C. 635 at 645-646, The learned author of Theobald 9th edition, in explaining what is meant by reasons personal to the donee, says at p. 472:- "Thus, a gift to a person at, or if, or as and when he shall attain, or upon attaining, or from and after attaining twenty-one, will not vest till the age is attained", The direction in the present will for realisation and distribution does nd wa She shares of the appellants in the corpus contingent upon their attaining the age of thirty years, or the share of the elder appellant contingent on her being alive when the younger appellant attains this age. The will as a whole manifests an intention to divide the administration of the estate into two periods, the first being until the survivor of the life tenants dies, or the younger appellant attains the age of thirty years, whichever last happens. During this period the administration of the estate is to remain in the hands of the trustee. In the second period, the trustee is to realise the estate and distribute the proceeds of sale. There are no alternative beneficiaries or classes of beneficiaries to or amongst whom the proceeds of sale are to be paid or distributed, their alternative rights depending upon some contingency to permit the happening of which it is necessary to postpone the enjoyment of the proceeds of sale. The only beneficiaries are the appellants whether in the result the time for realisation:is the death of the survivor of the tenants for life, or the younger appellant attaining the age of thirty years. Apparently the testator did not wish that the appellants should be placed in control of their capital until they had reached what he considered would be an age of discretion, and - it is for this reason that he directed that the corpus should remain in the hands of the trustee until the younger beneficiary De attained the age of thirty years. On this construction the post- ponement of realisation and enjoyment of the proceeds of sale would be for the benefit of the estate and in order to allow the testator to create the preceding intervening limited interests. It is trite law that in construing one will little rel iance can be placed upon decisions upon another will, except in so far as they establish some rule of law or principle of construction. But such decisions are often cited and prove helpful in a general way, and there are similarities between the present will and those which were considered in three reported cases which we think make their citation worth while. In each of these cases there were, as in the present will, trusts of income until a certain beneficiary attained a certain age, and upon his attaining that age, a trust to realise and divide the proceeds of sale or to distribute the corpus. In two of these cases the gifts were residuary gifts, there were no gifts over, and the court relied upon the presumption against intestacy. In Cooper v. Cooper, 29 B. 229, a testator devised his real estate to trustees on trust to apply the rents towards the mainten- ance of his children until the youngest attained twenty-one, then upon trust to sell, and "pay, share and divide the moneys between his children in manner following:= one fifth to William, one fifth to Thomas, one fifth to Sarah, and two fifths to John." Sarah died an infant. Sir John Romilly M.R. held that her share was vested and passed to her representatives. At.p. 232 he said:~ "It (the residue) is not given to a class, but on the happening of a particular event the residue is to be divided into four unequal portions and given to four named Llegatees. If it had been a gift to a classas to the surviving children, the three who survived-would have taken the whole: but this they cannot do, for they only take the share allotted to them by the testator; and the share' of Sarah Ann, if mt vested in her, does not go to the remaining devisees, but is spose if the will .... If, instead of devising the residue amongst his children he had directed that, on the youngest of his children / children attaining twenty-one, the residue should be divided among the children of A.B. (a stranger) in the following shares and proportions, that is to say - William one fifth, etc. according to the terms of the will, no one could, I think, have doubtea that the shares would be vested, and that the representatives of one who died before the period of distribution would be entitled." In Jones v. Mackilwain,1 Russ 220, a testator bequeathed one half of a residuary fund to trustees upon trust to pay the interest to his daughter A during her life and after ha death, to pay £100 per year to her husband during his life, and to apply the remainder of the dividends to the maintenance and education of her children until they attained the age of twenty-one respectively, and when they attained their respective ages of twenty-one, upon trust to pay the principal to them in equal shares. The mother survived the testator, and left two children who died under twenty-one. Lord Gifford M.R. held that the moiety of the residue vested in these children. His Lordship said:- [he bequest oh i t_is. ihe benefit of A's) children; the yearly interest is given to these children until they attain twenty-one, and, when they attain that age, the principal is to pass into their possession, and there is no gift over, in the event of their death. My opinion, therefore, is, that the children,thoughthey did not attain 21, took vested interests in this moiety of the residue." In Lloyd v. Lloyd, 3 Ke & J. 20 at p. 24, Sir W. Page-Wood V.C., in referring to Jones v. Mackilwain (supra), said that:- "there, the limitation of the rents and profits was to each of the children respectively, and then there was a gift to them of the capital at twenty-one; atid, therefore, that case was brought within the principle of Hanson v. Graham, 6 Ves. 239, and children who died under twenty- one were held entitled to take." (The above italics are ours.) In re Lodwig, 1916 2 Che 26, the testator gave his residuary ! realty and personalty to trustees upon trust to sell and convert and out of the proceeds to pay a weekly sum to his daughter-in-law until / 7. until the youngest of her children should attain the age of thirty years. He directed that after the youngest child should attain that age, the trust fund should be divided between his daughter-in-law and her children in equa} shares, and that in the event of any one of his grandchildren dying leaving lawful issue him or her surviving, the share of the parent so dying should be divided between his or her children. It was held that the interests of grandchildren who survived the testator vested at his death. It will be seen that the will contained a substituted gift of the share of a grandchild dying leaving lawful issue which was relied upon as an indication of intention that the children were to take vested interests at birth, but it would appear that without this gift, the Court of Appeal would still have held that the interests of the grandchildren vested at the testator's death. At p. 36 Lora Cozens-Hardy M.R. said - "Upon the construction of this will there is nothing to make the gifts to these grandchildren contingent merely by reason of the fact that postponement of the division is directed until the youngest grandchild attains thirty". Neville J. said:— "Under the words used no obligation is imposed on the grandchildren to attain the age of thirty years before they can take a vested interest." Roper J. thought that, apart from the trusts to pay the income of the two undivided third parts to the appellants after the deaths of Mrs. Morrison and Kate Primrose respectively, the whole gift of the proceeds of sale of the corpus would be contingent. But he thought that he would be justified in applying to these two parts the principle that a gift of a legacy or share of residue, otherwise contingent, is vested if the interest is given to the legatee in the meantime, and to hold that the shares of the appellants in two thirds of the corpus were vested. This principle, which is discussed in the cases of Hanson v. Graham, 6 Ves. 239, and in re Gossling, 1903 1 Ch. 448, to which His Honour referred, applies though the interest may be given subject to an annuity or to a life estate. Jane v. Goudge,9 Ves. 229; Jones ve Mackilwain (supra); In / or) t dnre Rogers, 1944 1 Ch. 297. We think, however, that it is clear that the. testator intended that the appellants were to have the same interest, either vested or contingent, in the proceeds of sale as a whole, and that it would be wntrary to his intention to subject the proceeds of sale to different trusts in this manner. Nevertheless we think that the trusts of income in question somewhat assist the view that the testator intended the whole gift of the corpus to vest at death; for as Lord Langdale M.R. said in Davies ve Fisher, 5 Beav. 201, at 211:- "Too much reliance must not be placed on the expression 'the whole interest', which has been used in sme of the casese In Jane v. Goudge (supra) £30 a year, part of the interest, was given to an annuitant for life. In Jones v. Mackilwain (supra) an annuity of £100 was given out of the interest to the father of the children, and in Bland v. Williams, (3 Myl. & K. 411), there was a direction and not a mere power or authority to apply the interest, or a sufficient part thereof for the maintenance of the children, and to transfer the capital, with so much of the interest as should not be applied in maintenance, to the children, when and as they should attain twenty-four years, and in those cases the rights were held to be vested." Further, there would be no sense in the testator providing an income for the elder appellant until the younger appellant attained the age of thirty years if her interest under the will was to cease if the younger appellant died under this age. We think that on the whole we are justified in calling in aid the presumptions against intestacy and in favour of early vesting, especially as this is a case of a residuary gift with no gift over, and that these presumptions, together with the various indications of intention to which we have referred, especially in the absence of any clear words of contingency in the will, are sufficient = ete, +++ for us to hold that the word "then" in the will refers to the time when the testator intended that the appellants should.be let into possession, and that the appellants acquired vested interests in futuro in the whole of the proceeds of sale at the date of his death: cf. Lane ve. Goudge (supra) at p. 230. For / Ge For these reasons we are of opinion that the appeal should be allowed, the declarations in the decretal order under appeal set aside, and in lieu thereof that declarations should be made answering questions 1(a), and 4(a) and (b) in the affirmative; answering question 5 that the appellants are entitled in the proportion of two-thirds to Ernest Robert Abigail, and one-third to Gloria Smedley, to one-third of the income of the estate of the testator since the attainment by them respectively of the age of twenty-one years until the distribution of the whole of the corpus of the estate. Costs of all parties of this appeal to be paid out of the estate, those of the respondent trustee as between solicitor and client. ABIGAIL & ANOTHER Ve PERPETUAL TRUSTEE COMPANY LIMITED & OTHERS JUDGMENT STARKE J. I agree with the order announced. The case depends upon no rule of law or of construction but simply upon the meaning of the will of E.R. Abigail deceased. The judgment declares that the appellants here took a vested interest in two undivided third parts of the whole estate of the testator but only an executory interest in the remainder of the whole estate contingent upon the attainment by the younger of the appellants of the age of 30 years. This conclusion is somewhat remarkable for the words effecting these gifts are expressed by the same words, in the same sentence of the will: "then to realise the whole estate and divide" between the appellants. That appears to me to show that the testator intended to leave the | appellants the same sort of interest in the whole estate, not vested as to two undivided third parts and contingent as to the remainder. It was not disputed on this appeal that the appellants "took a vested interest in the two undivided third parts of the whole estate and the same conclusion as to the remainder of the estate appears to me to be the true effect of the will of the testator. Moreover this construction has the merit of avoiding an intestacy if the younger of the appellants does not attain the age of 30 years.