Ramsay v Trustees Executors & Agency Co Ltd [1948] HCA 44

High Court of Australia Latham C.J. Starke, Dixon, McTiernan and Williams JJ. Ramsay v Trustees Executors & Agency Co Ltd [1948] HCA 44

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 14 Latham C.J.

This is an appeal from an order of the Supreme Court of Victoria (Lowe J.) with respect to the validity of a provision contained in the will of the late George Binnie Ramsay. The testator directed that his property be sold and converted into money and after providing for certain legacies the will continued:—"Subject thereto 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." Thus the testator gave the income of his estate to his son during the period of his then existing marriage and upon the termination of that marriage the corpus was given to the son if he were alive, but, if the period of the marriage were terminated by reason of his death before the death of his wife, the corpus was given to the nephew and sister. If the provision is valid the son becomes entitled to the corpus in the following events: (1) if his wife (still being his wife) dies before him; or (2) if his marriage is terminated by divorce. If, however, the son predeceases his wife during their marriage the corpus goes to the testator's nephew and sister. Upon an originating summons taken out by the son it was held by the learned judge that the son was not entitled to an immediate absolute interest in the residuary estate of the testator, that his present interest was an interest in the income thereof so long as he lived and remained married to his present wife, and finally, that if he died during the subsistence of that marriage the gift in favour of the nephew and sister of the testator would take effect. It was argued for the son that the interest in the corpus was given upon an illegal condition because the form of the gift provided an inducement to the son to bring about a divorce so as to satisfy the condition contained in the words "on the termination of such period," whereupon he would obtain an absolute right in the corpus. The evil feature which produces the illegality is said to depend upon the alternative gift of the corpus (which is not a "gift over") to the nephew and sister. They take only if the son should predecease his wife during their marriage. This provision is attacked as providing an inducement to the son to bring his marriage to an end so that the condition upon which the nephew and sister would take can never be satisfied. If it is invalid the son would, it is argued, be entitled to the income first and then to the corpus and, under the rule in Saunders v. Vautier [1] , to the whole interest in the corpus absolutely and immediately.