DURBIN v PERPETUAL TRUSTEE COMPANY LTD IN THE ESTATE OF WALTER ALBURY DURBIN (DEC'D) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBY J, MEAGHER and HANDLEY JJA 13 July 1994, 11 August 1994 [1994] NSWCA 358 CONTRACT. deed- construction of — suggested repugnancy of clauses — whether early clause takes priority over later — held: (1) No repugnancy; (2) (By maj): Early clause operates, in its terms, to exclude application of later. CONSTRUCTION — contract — proper approach to- repugnancy rule — priority to clause earlier in sequence — last resort to arbitrary rule — preference to search for intention of parties derived from the words used. CONTRACT — construction of — deed — agreement between brothers for severance of joint tenancy upon conditions which were fulfilled — agreement reserved to one brother the right to reside in the property but, if he ceased permanently to so reside, the property to be sold and the net proceeds equally divided between the brothers — deed also provides that, in the event of one brother's predeceasing the other, the latter was to have the right to elect within a month to reside rent free in the property during his lifetime and thereafter to be divided between the respective estates of the brothers in equal shares — agreed facts indicate that brother resident in property died in hospital soon after his admission there for serious illness including inoperable cancer — that brother in hospital did not intend to return to the property to reside there — primary Judge (Windeyer J) finds repugnancy in clauses of deed — applies rule of construction so that the earlier clause of the deed (providing for sale) took priority over the later (providing for survivor's right of residence) — on appeal- held: (1) (By the Court) There was no repugnancy within the deed and upon the arguments of both parties, no repugnancy was suggested. Doe and Leicester v Biggs (1809) 2 Taunt R 109 distinguished; Forbes v Git and Ors [1922] 1 AC 256 (PC); The Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140; Maile v Jennings [1956] VLR 45 (SCV) considered; (3) (Per Meagher and Handley JJA; Kirby P dissenting) (dismissing appeal): The specific clause providing for the eventuality of the resident brother's ceasing permanently to reside in the property came into effect upon his permanent departure from the residence and admission to hospital so that the property was to be sold - The surviving brother had no right of free residence because, in such circumstances, the succeeding clause had no operation. CONSTRUCTION OF INSTRUMENTS - contract - rules of construction suggested incompatibility between clauses in deed severing joint tenancy - proper approach to resolution of alleged inconsistency - whether inconsistency amounts to contradiction or repugnancy - whether priority should be given to earlier over later clauses of the deed - held: (1) The primary rule is that the court should give meaning to every clause and every word of the deed. The Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140 applied; (2) The arbitrary rule of priority to earlier over later clauses is inappropriate until the Court has exhausted all other means of deriving the intention of the parties from the words which they have used. 2 UNREPORTED JUDGMENTS Forbes v Git and Ors [1922] 1 AC 256 (PC) applied; (3) (Per Meagher and Handley JJA; Kirby P dissenting); In the instant case the true construction of the deed required priority to be given to the application of the earlier clause but because its words operated in their terms upon the facts agreed not because the clause was earlier in sequence in the deed. ORDERS Appeal dismissed with costs. Kirby P In Forbes v Git and Ors [1922] 1 AC 256 (PC), the Privy Council considered the rules of construction to be applied to a contract alleged to contain repugnant clauses. In the result, their Lordships reversed the majority judgment of the Supreme Court of Canada. By that judgment (with the Chief Justice and Duff J dissenting) the Supreme Court of Canada had, in turn, reversed the judgment of the Full Court of the Supreme Court of Ontario. The Full Court had, in turn, reversed the primary judge. The effect of the Privy Council's decision was to confirm that the primary judge had erred, as had Canada's Supreme Court. At each level of the judicial hierarchy, a different result ensued. This is what tends to happen when different judicial minds are brought to bear upon the meaning of a written document, said to be ambiguous. There is rarely an absolutely correct interpretation. The judicial mind is searching for the preferable construction. Different judges will perceive the same document in different ways. They will reach different conclusions as to its meaning. To assist in promoting, as far as possible, consistent and predictable approaches to the task of construction (given that few disputants can afford the languid and expensive journey through the judicial hierarchy) rules of construction have been devised. Yet even these are only of partial or occasional assistance. Drawing on the experience of past cases, the rules send signals to the mind of the decision-maker: usually reminding him or her of nothing more than principles of common sense. I start these reasons with those sobering observations in order to remind myself that there is no objectively correct answer to the question now before the Court. The procedure is by way of appeal. Thus, the appellant must show error on the part of the primary judge (Windeyer J). But if this is done, the basic problem remains. In the end, what is involved may be no more than the exposition of judicial impression. In reasons such as these, we must seek to explain (as much to ourselves as to those who read such opinions) the way in which one impression seems more reasonable than the other which competes for the mind's assent. TWO BROTHERS REARRANGE PROPERTY INTERESTS (BY DEED) Two brothers were originally registered as proprietors, as joint tenants, of a property known as 18, The Tor Walk, Castlecrag in Sydney. They were Mr Walter Durbin (Walter) (the deceased) and Mr Raymond Durbin (Raymond) (the appellant). On 19 December 1987 the brothers executed a deed to readjust their interests in the property. By the deed, they agreed that the deceased would pay the appellant $100,000 on execution, together with two further sums each of $25,000 on specified dates in 1988 and 1989. They would convert the joint tenancy into a tenancy in common, held in equal shares. The deceased would have a right, to the exclusion of the appellant, to reside, rent free, in the property until his death unless the property were sold as provided in the deed, the deceased then paying all outgoings. The deed then provided in the following terms in the clauses which have Riven rise to this litigation: "5. In the event that Walter for any reason whatsoever ceases permanently to reside in the residence, the residence shall be sold and the URIRBIN v PERPETUAL TRUSTEE COMPANY LTD IN THE ESTATE OF WALTER ALBURY DURBIN (DEC'D) (Kirby P) nett proceeds after payment of agent's commission, if any, and legal costs shall be divided between Walter and Raymond in equal shares. 6. In the event that Walter predeceases Raymond, Raymond shall have the right to elect within one (1) calendar month of Walter's death to reside rent free in the residence during his lifetime, he paying all rates and taxes and other outgoings thereon and keeping the same in good and habitable state of repair, fair wear and tear and damage by fire, lightning, flood and tempest excepted and he keeping the same insured against fire. Notice in writing of such election shall be served upon Walter's executor. In the event that Raymond does not elect to reside in the residence, the residence shall be sold and the nett proceeds after payment of agent's commission, if any, and legal costs shall be divided between Raymond and Walter's estate in equal shares. " After the execution of the deed, the severance of the joint tenancy occurred. The Court was shown, without contest, the report of the Registrar General indicating the change in the title. Subsequently, the deceased died. A dispute arose as to the application to the facts of CL5 and CL6 of the deed. The Perpetual Trustee Company Ltd (the respondent) is the executor of the will of the deceased. It took out a summons, in the Equity Division of the Supreme Court, seeking judicial advice with respect to questions set out in a statement of facts filed. The proceedings ultimately came before Windeyer J for determination. A STATEMENT OF AGREED FACTS The following is the statement of agreed facts which the parties placed before Windeyer J for his opinion on the meaning of CLS and CL6 of the deed: "1. The [respondent] is the executor of the will of the late Walter Albury Durbin ('the deceased') who died on 8 May 1993 leaving a will dated 22 January 1986. The deceased was born on 18 May 1913. 2. Probate of the deceased's will was granted to the [respondent] on 19 August 1993. Annexed and marked 'A' is true copy of the grant of probate with the will annexed thereto. 3. Annexed and marked 'B' is a true copy of a deed dated 19 December 1987 ('the deed') between the deceased and the [appellant] relating to a property known as 18 The Tor Walk, Castlecrag ('the property'). 4. The deceased and the [appellant] were brothers. 5. The registered proprietors of the property are the deceased and the [appellant] as tenants in common in equal shares. Annexed and marked 'C' is a true copy of a computer folio search of the property. 6. On 8 March 1993, the deceased granted a power of attorney to the [respondent]. Annexed and marked 'D' is a true copy of the power of attorney. 7. On 4 May 1993, in the course of a visit to the deceased by a representative of the [respondent], the deceased signed a written direction to the [respondent] in respect of the property. Annexed and marked 'E' is a true copy of the said direction. 8. As at 4 May 1993, the deceased's medical and personal situation was as follows: (i) The deceased had been diagnosed as suffering from cancer of the prostate with bony metastases. This condition was incurable and inoperable. (ii) The deceased was suffering from depression and a degree of mental confusion (but not so as to affect his legal capacity). (iii) The deceased was incontinent of urine and faeces. 4 UNREPORTED JUDGMENTS (iv) The deceased had been assessed by a medical team at the Hornsby Hospital where he was then a patient and had been assessed as appropriate for nursing home care. (v) The deceased was, because of his medical and physical problems, unable to care for himself independently and could not have cared for himself at the property. 9. The deceased was aware of his medical condition and did not intend to return to the property to reside there. 10. The deceased died on 8 May 1993 without having revoked the direction dated 4 May 1993. 11. The deceased, before his death, did not communicate to the [appellant] the fact of having made his direction dated 4 May 1993. The [appellant] was not aware that the deceased was unable to live in the property or that the deceased had formed any particular intention or desire in relation to the property. 12. The [appellant], within one calendar month of the deceased's death, purported to exercise the right of election referred to in para6 of the deed and has requested of the [respondent] that he be allowed so to reside. Annexed and marked 'F' is a true copy of a document executed by the [appellant] on 31 May 1993 and received by the [respondent] on | June 1993 " It is unnecessary to refer to any of the annexed documents. OPINION OF THE PRIMARY JUDGE Windeyer J considered that there was "repugnancy" between the two clauses "as they stand'. He decided to give primacy to the clause first in appearance i.e. CLS. He appears to have done this for two reasons (a) that there was logic in the clauses being treated in their order in the deed; and (b) that this was the result of the operation of the "rather weak principle of interpretation of deeds that when two clauses of a deed are repugnant to each other the first will be received and the latter rejected". Before this Court, neither the appellant nor the respondent contended that CL5 and CL6 were repugnant. The Court was informed that neither had so contended before Windeyer J. Accordingly, each agreed that his Honour had introduced at least the second factor leading to his decision without invitation of the parties. The respondent contended that, far from there being repugnancy, the two clauses were perfectly compatible. CL5 was to deal with an event which, by definition, had to occur in the deceased's lifetime. It contemplated permanent departure from the residence in the deceased' s lifetime, after which it was necessary that the residence should be sold. In the event that the circumstances in CL5 brought the clause into operation in the deceased' s lifetime, CL6 would have no operation. It only arose if CL5 had not been activated. The appellant, too, submitted that there was no repugnancy. He urged that Windeyer J had misunderstood or misapplied the principle as to repugnancy. This condition would only exist if, in the words of the Privy Council in Forbes, the later clause is "... repugnant and void for, it altogether destroys the covenant". The appellant argued that CL6 did not destroy CLS. It merely provided for a different eventuality in the lives of the two brothers. What was involved was not the resolution of repugnancy but the giving of meaning to the two successive clauses in a way which would ensure their sensible operation to achieve the purposes manifest in the deed. Because neither the appellant nor the respondent adopted the resolution favoured by Windeyer J and because neither acknowledged having put that argument to his Honour, this Court is entitled to look to the reasoning of his URIRBIN v PERPETUAL TRUSTEE COMPANY LTD IN THE ESTATE OF WALTER ALBURY DURBIN (DEC'D) (Kirby P) Honour to decide whether it displays error. For reasons which will become apparent, I am of the view that error is shown. I do not consider that this is a case of repugnancy. In any case, as his Honour rightly indicated, the rule of chronological preference is a "rather weak" principle. It does not, with respect to his Honour, provide the key that unlocks the legal riddle of this deed. THE APPLICABLE RULES OF CONSTRUCTION I take the following rules to be those which the Court should adopt in its approach to the resolution of the tension [to use a neutral word] between CLS and CL6 of the deed: 1. The primary obligation is to give meaning to the document viewed in its entirety. See Australian Guarantee Corporation Ltd v Balding (1930) 40 CLR 140, 151. The decision-maker will only appreciate the true meaning of the several clauses by approaching their meaning in the context of the instrument as a whole. An attempt must be made to bring the apparently disharmonious clauses into harmony so long as the construction then resulting does no violence to the language used by the parties. Behind this approach is an assumption, to which common sense contributes, that the parties would not themselves have executed the deed with an intention of adopting disharmonious, repugnant or incompatible provisions. See Halsbury's Laws of England Vol 12 (4th edition), paral469. So far as possible, the Court's task is to give effect to every word and every clause. 2. Where there is apparent disharmony between the provisions of different clauses, unless one effectively destroys the other, it will be assumed that the disharmony involves qualification by one of the other, not incompatibility. In Forbes (above) at 259, Lord Wrenbury, delivering the judgment of the Privy Council, expressed the rule thus: "The principle of law to be applied may be stated in few words. If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails... Thus if A covenants to pay 1001. and the deed subsequently provides that he shall not be liable under his covenant, that later provision is to be rejected as repugnant and void, for it altogether destroys the covenant. But if the later clause does not destroy but only qualifies the earlier, then the two are to be read together and effect is to be given to the intention of the parties as disclosed by the deed as a whole. Thus if A covenants to pay 1001 and the deed subsequently provides that he shall be liable to pay only at a future named date or in a future defined event or if at the due date of payment he holds a defined office, then the absolute covenant to pay is controlled by the words qualifying the obligation in manner described... In the latter case, there could be no question if the later provision of the deed were introduced by the word "but" or the words "provided always nevertheless", or the like. But there is no necessity to find any such words. If a later clause says in so many words or as matter of construction that an earlier clause is to be qualified in a certain way, effect can be given and must be given to both clauses. 3. The chronological or sequential rule (on which Windeyer J relied) is not only a "rather weak" principle. It is an expedient to which the Court very reluctantly has recourse, and never until it has exhausted every other means in its power to reconcile apparent inconsistencies. See Bush v Watkins [1851] Beav 425, 432. This is because it has an element of the arbitrary about it. It is difficult to say, as a general rule, that incompatibility in clauses of an instrument suggests that the earlier rather than the later clauses were intended to have operation. The 6 UNREPORTED JUDGMENTS later may, indeed (if drafting of the clause was interrupted), represent the later and better thoughts of the drafter. That is why the arbitrary chronological or sequential rule is generally to be avoided. See Maile v Jennings (1956) VLR 45 (SCV), 46. Instead, the Court should bend its efforts to find, from the instrument and permissible surrounding circumstances, the true purpose of the entirety of the document upon the assumption that it was intended to operate in a consistent and coherent way. In the present case the procedure adopted by the parties of seeking judicial advice within the constraints of an agreed statement of facts has deprived the Court of background detail which might have lent colour to, and provided permissible explanation of, the clauses in question so as to resolve the suggested tension between them. This Court, like Windeyer J, must confine its opinion to the clauses of the deed as elaborated by nothing more than the agreed statement of facts. THE PREFERABLE CONSTRUCTION OF THE CLAUSES I accept the force of a number of the arguments advanced for the respondent concerning the way in which the Court should approach the meaning of CLS and CL6 of the deed. 1. If the Court takes "ceases permanently to reside in" the residence as meaning literally the moment, in the lifetime of the deceased, that he formed the intention to cease residence in the Castlecrag property and gave effect to that intention, CL5 can live with CL6. So construed, CLS simply ousts CL6 from operation at that moment. The determination having been made, the regime which it lays down is followed. The regime which CL6 lays down is excluded; 2. The clauses must be given operation in the range of circumstances to which they might apply. It is not to be construed only by reference to the circumstances which ensued by which the deceased departed from the residence to hospital where (as it may be inferred) he soon thereafter died. CLS contemplated the possibility of a range of differing circumstances. The deceased might have permanently ceased to reside in the Castlecrag residence and taken up residence in a retirement village. Or he might have been transferred to long term care in a hospital for the aged and infirm. Or he might have proceeded to live with another family member. Or he might have entered a hospital for long term treatment. Or he might have purchased an entirely new residence, then needing the proceeds from the sale of the residence at Castlecrag. Any of these possibilities could have arisen. CL5 was designed to deal with the various options open to the deceased. These were not limited to the option of purchase of an entirely new and different residence; 3. The clauses are to be understood against the significant sum which the deceased paid for the severance of the joint tenancy and for securing the right permanently to reside in the residence at Castlecrag. It thereafter became his home. But he was not to be confined to the residence which was, after all, to be the environment in which he lived. Not only did the deceased secure rights under CLS but those taking by his will secured certain rights. Those rights became vested so long as the preconditions in CLS were satisfied. In the present case, it was put, the preconditions were satisfied so that the right to have the residence sold had come about. Once that occurred, the subsequent death of the deceased 4. Emphasis was also placed for the respondent upon the words "for any reason whatsoever". Those words themselves contemplate a variety of reasons for the deceased's ceasing permanently to reside in the residence. They argue against a narrow construction of the application of CLS, given the language which the parties themselves adopted or accepted. URIRBIN v PERPETUAL TRUSTEE COMPANY LTD IN THE ESTATE OF WALTER ALBURY DURBIN (DEC'D) (Kirby P) The foregoing argue for the construction urged by the respondent. However, I consider that the preferable argument is that contended for by the appellant: 1. Rather than ousting CL6, it is preferable that CL5 and CL6 should be given meaning and effect in a deed which was intended to operate as a whole and to cover the eventualities of the future developments in the lives of the two brothers. From the statement of facts it is clear that they were men of advanced years. The deceased was almost exactly eighty when he died. It is in these circumstances that the rule of compatible construction comes into operation and is to have preference to any principle of chronological or sequential construction. The two clauses can quite readily work together in the manner suggested by the Privy Council in Forbes (above) at 259. CL6 of the deed can retain its operation, in the facts which have occurred, by the simple device proposed in Forbes. That is by inserting in CL6 ("the later provision of the deed") the introductory word "but" or the words "provided always nevertheless""- exactly as proposed in Forbes. Once this is done, it is made clear that CL5 will have its effect if the deceased had both ceased permanently to reside in the residence and had sold the residence. But if he had not done so, and he predeceased the appellant, the appellant would continue to enjoy the right granted by CL6. There is then no defiance of the language of the two clauses in adopting this approach. On the contrary, doing so ensures that each of the clauses has suitable work to perform; 2. The construction urged by the respondent would imply that if the deceased had been felled by a cerebral or cardiac incident and died at the residence, CL6 would take effect. Yet if the deceased were not immediately to die but were taken by ambulance to hospital - thereby ceasing permanently to reside in the residence - his later demise within the hospital, or even in the ambulance, would invoke CL5. That seems scarcely likely to be the operation which the brothers intended. Yet it is the result of taking the "vested right" approach to the interpretation of CL5. With respect, this is an approach which involves the error of reading the words of CLS in isolation and failing to give them their intended operation in their context; 3. That context was the provision of suitable arrangements for the possibilities which were envisaged in the lives of the two brothers following the severance of the joint tenancy and their agreement, thereafter, to be tenants in common. CL5 was to be read in the context of a document whose overall purpose was to afford the brothers - the deceased and then the appellant- a prima facie right to reside in the premises during their respective lifetimes, but not together. The deceased, who paid the sum of $150,000.00, was to have the first such right. CL5, upon this view, was intended to provide for the eventuality that the deceased abandoned the residence in Castlecrag and then required "the net proceeds" for the acquisition of an alternative residence. In that regard, there was to be no limitation upon the right of the deceased to elect to reside elsewhere. He could do so "for any reason whatsoever". But that phrase itself imported the notion that the deceased was affirmatively choosing another residence rather than the residence in Castlecrag to be his residence. Such other residence might indeed be a retirement unit, a nursing home or another property. But the clause was not directed at a short term stay in a hospital prior to death, which is what the agreed facts indicate occurred in this case. In such circumstances, there was no point to invoking the machinery of sale of the residence at Castlecrag, the payment of the agent's commission, the payment of the legal costs and then the division of the product between the two brothers. The very machinery which CLS envisages is not apt to the circumstances of a pre-death departure from the residence at Castlecrag to a 8 UNREPORTED JUDGMENTS hospital where the deceased was to die. In short, CLS was never intended to operate in those extreme circumstances. For such a case, it was CL6 that was intended to have effect, so long as the appellant, within a calendar month of the deceased's death, made the election which CL6 envisaged. The appellant did make that election. In these circumstances, to assign this case to CLS and not to CL6 is to indulge the error of applying artificial rules designed for other purposes (such as a taxation statute) rather than truly seeking to give operation to the intention of the parties to the deed. The primary judge' s resort to the chronological or sequential rule is an indication that this is the way he sought to resolve the difference between the parties. In my respectful view, the resort in this Court to indicia of residence expressed for other, quite different purposes is equally erroneous. Safer by far was a search for their apparent intention as disclosed in their deed. I do not doubt that such intention, as revealed in the language of the deed, was, in the event that occurred, the operation of CL6. The notion of solemnly dividing the proceeds of a sale of the residence which had not been sold where no agent's commission was incurred and no legal costs run up, defies the presumed intention of the parties as revealed in CLS and CL6. CONCLUSIONS AND ORDERS The result is that I have concluded that Windeyer J erred in his approach to the construction of the deed. Neither party argued to support his Honour's approach. Although no notice of contention was filed, the attempt of the respondent was to support the declaration and order made by his Honour but upon a different basis which involved no acceptance of repugnancy or inconsistency between the clauses. T agree with both parties that there was no repugnancy or inconsistency. I agree with each that it was inappropriate to adopt the chronological or sequential rule. But in my view the correct approach required that effect be given, in the events that occurred, to CL6. CL5 was, in the circumstances, inapplicable. The orders which I would propose are: 1. Appeal allowed; 2. Set aside the declaration and order of Windeyer J; 3. In lieu thereof (a) declare that, upon the proper construction of the deed dated 19 December 1987 between the appellant and the late Walter Albury Durbin, and in the events which have happened, the appellant has a right to reside rent free in the property situated at 18, The Tor Walk, Castlecrag, being the whole of the land comprised in Certificate of Title Volume 10240 Folio 26. (b) order that the respondent pay the costs of the appellant: (i) of the hearing in the Equity Division; and (ii) of the appeal; (c) order that the said costs be paid, on a common fund basis, out of the Estate of the Late Walter Albury Durbin; and (d) order that, in respect of the costs of the appeal, the respondent, if otherwise so qualified, have a certificate under the Suitors ' Fund Act 1951. Meagher JA I have had the benefit of reading in draft the judgment of Kirby P. I do not agree with it. The facts are fully set out in his Honour's judgment. There is no need to repeat them. His Honour expresses the view that there is no need to rely on the "repugnancy" rule, as Windeyer J apparently did; that is to say, there is no need to hold that CLS and CL6 totally contradict each other and that therefore CLS prevails simply because it is the earlier. I quite agree. But I URIRBIN v PERPETUAL TRUSTEE COMPANY LTD IN THE ESTATE OF WALTER ALBURY DURBIN (DEC'D) (Handley JA) nevertheless come to a conclusion opposite to his Honour's because the arguments advanced by the respondent and summarised in his Honour's judgment seem to me to be unanswerable. CLS deals with the situation where the deceased departs from the property with the intention of ceasing to live there; CL6 deals with the situation when the deceased dies whilst in residence. I am therefore of the view that Windeyer J reached the right conclusion but for the wrong reason. The appeal should be dismissed with costs. Handley JA I have had the benefit of reading in draft form the reasons for judgment of both Kirby P and Meagher JA. I agree with Meagher JA that the appeal should fail and will express briefly my own reasons for reaching this conclusion. Because of the other judgments there is no need for me to set out the facts in any detail. CL4 of the deed conferred on Walter "the right to the exclusion of Raymond to reside rent free in the residence until Walter's death". CL6 provided that the house "should be sold" if Walter "for any reason whatsoever ceases permanently to reside in the residence". CL6 then provides that in the event that Walter predeceases Raymond, Raymond should have the right to elect to reside rent free in the residence during his lifetime. Walter's interest under CL4, for which he had paid substantial sums, was an equitable life estate or perhaps a contractual licence for life. This interest however was defeasible at his option at any time. The interest was lost if Walter ceased permanently to reside in the property. Courts have had to determine the residence of natural and artificial persons in various contexts and legal principles have been developed for this purpose. See Dicey and Morris "The Conflict of Laws" 12th ed. 1993 at pp 168-163. Thus Walter's residence in the house could not be lost through accidental or temporary absence. Compare Levene v IRC (1928) AC 217 at 225. Intention is an important factor in determining the residence of an adult (Dicey and Morris at 163) and a person's residence can be changed in a day. See Macrae v Macrae (1949) P 397 at 403. In the present case Walter's absence from the house was neither temporary nor accidental. He had been admitted to hospital and had been advised that he could no longer look after himself in his own home. He had formed an intention of going to live in a nursing home after he was discharged from hospital and he manifested this intention on 4 May 1993 when he signed an authority directing his attorney, Perpetual Trustee Company Ltd, to sell his home. The authority was not appropriate for this purpose since Walter was only a tenant in common but it establishes that Walter had abandoned any intention of returning to live in the house. Since he was then in hospital it is clear that by that date at the latest he had ceased permanently to reside in the house. He was already living elsewhere and had decided not to return. When he formed that intention he then and there ceased permanently to reside in his former residence. In my opinion the condition precedent in CLS was satisfied on 4 May 1993 at the latest. Although Raymond may not have been aware that the condition in CL5 had been satisfied, this does not matter for legal purposes. CLS contained an agreement between the brothers that when Walter ceased permanently to reside in the residence "the residence shall be sold". "Thus the clause contained an agreement for the property to be sold subject to a condition precedent and, when 10 UNREPORTED JUDGMENTS this was satisfied there was an enforceable contract between the brothers for the sale of the property. The death of Walter on 8 May 1993 did not avoid this contract. The appellant relies on the literal terms of CL6 which operates "in the event that Walter predeceases Raymond". However it is obvious that CL6 could not operate if CLS had been activated in Walter's lifetime and the property sold or contracted to be sold to a third party before his death. The result is no different if CLS was activated in Walter's lifetime but he died before contracts were exchanged. CLS is the earlier clause in the deed and it is also prior in operation. In the context of the deed as a whole CL6 is subject to CLS so that if the former clause had operated either factually through a sale or legally upon performance of the condition precedent, CL6 cannot operate. I agree with the orders proposed by Meagher JA. Appeal dismissed with costs. Counsel: For the appellant, IM Wales For the respondent, R Brender