Will Interpretation: Understanding the Gift Over Clause

The court interpreted a will's gift over clause, determining that 'issue' refers to descendants of every degree, not limited to immediate children, and that the division should be per stirpes.

OUTCOME: Allowed

New South Wales Supreme Court

CITATION : [NAME_1] & [NAME_2] v [NAME_3] & [NAME_2] [2005] NSWSC 355

HEARING DATE(S) : 06/04/05

JUDGMENT DATE : 20 April 2005

JUDGMENT OF : Gzell J

DECISION : Gift was to all issue of the children of [NAME_4] living when gift over took effect, the issue taking their shares per stirpes

CATCHWORDS : SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - Construction and effect of testmentry dispositions - Gift over to [NAME_5], the issue of any deceased child standing in loco parentis - Whether issue confined to [NAME_7] - whether division per capita or per stirpes

LEGISLATION CITED : Supreme Court Rules 1970

Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 Mathews v Williams (1942) 65 CLR 639 Buick v Equity Trustees Executors and Agency Co Ltd (1957) 97 CLR 599 In re [NAME_8]. National Trustees Executors and Agency Co Australasia Ltd v Brentnall (1935) VLR 333 Mackintosh v Gerrard [1947] AC 461 at 473 CASES CITED : Re Jeeves. Morris-Willaims v Haylett [1949] Ch 49 at 51 Dowding v Smith (1841) 3 B 541 (49 ER 213) Re Orton's Trust (1866) LR 3 Eq 375 Re Earle's Settlement (1971) 1 WLR 1118 Oxford Latin Dictionary, Oxford University Press, Oxford, 1983

[NAME_10] and [NAME_12] PARTIES : [NAME_3] as representative of the class of beneficiaries being [NAME_6] of the deceased - 1st Defendant [NAME_15] as representative of the class of beneficiaries being great [NAME_6] of the deceased - 2nd Defendant

FILE NUMBER(S) : SC 5325/04

[NAME_18] COUNSEL : [redacted] [NAME_20] - 2nd Defendant

[NAME_21] SOLICITORS : [redacted] [NAME_23] :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

WEDNESDAY 20 APRIL 2005

5325/04 [NAME_10] & [NAME_2] v [NAME_3] & [NAME_2]

JUDGMENT 1 By a codicil to his will, [NAME_24] left a house in [ADDRESS], Sydney to his daughter [NAME_25] and her children [NAME_26] and [NAME_27] with a gift over on the death of the last survivor of them, in the events that occurred, to his children then surviving, the issue of any deceased child standing in loco parentis. The question for determination is whether the gift over is limited to [NAME_7] or whether it includes his great [NAME_6].

Background 2 [NAME_4] had eight children, [NAME_28], [NAME_29], [NAME_13], [NAME_30], [NAME_32], [NAME_16], [NAME_33] and [NAME_25]. He made provision in his will and codicils for all of them. 3 The gift in question was in the following terms: "… AND I NOW DEVISE the said house and land known as Number [ADDRESS] aforesaid to my daughter [NAME_25] and her two children [NAME_26] and [NAME_27] during their joint lives and to the survivors of them during their joint lives and the last survivor of them during his or her life AND on the death of the last survivor of them I DEVISE the said house and land known as Number [ADDRESS] aforesaid to the child or children of such last survivor and if more than one in equal shares as tenants in common AND in the event of such last survivor of them the said [NAME_25] [NAME_26] and [NAME_27] dying without leaving any child or remoter issue him or her surviving THEN I DEVISE the said house and land known as Number [ADDRESS] aforesaid to my children then surviving (the issue of any deceased child of mine standing in loco parentis)." 4 [NAME_26] was the last survivor of the group. He died on 22 December 2003. Neither he nor his sister had any children. On 22 December 2003 none of [NAME_4]'s children were alive. On that date [NAME_4]'s living descendants were six [NAME_6] and eleven great [NAME_6]. 5 Pursuant to the Supreme Court Rules 1970, Pt 8 r 13(2), orders were made appointing the first defendant, [NAME_3], to represent the [NAME_6] and the second defendant, [NAME_15], to represent the great [NAME_6].

Structure of will 6 As Bryson J said in Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18, in construing a will the structure of which purports to reveal a scheme, the court must, if possible, first ascertain what was the basic scheme that the deceased had conceived for dealing with his estate and then construe the will, if possible, to give effect to that scheme. 7 The structure of this will was, first, that with respect to two sons, [NAME_16] and [NAME_28], the devises to them for life with gifts over to their children, with substitution of issue for deceased [NAME_7], followed by an ultimate gift over, if the sons died childless, to [NAME_4]'s other children, with substitution of issue for deceased children. The gift to [NAME_28] was as follows: " I DEVISE my houses and land known as Numbers 14 and [ADDRESS] aforesaid and my two houses and land known as Numbers 7 and 9 Brighton Boulevarde Bondi aforesaid to my son the said [NAME_24] (the Younger) during his life and on his death to his children in equal shares (the issue of any deceased child of my son the said [NAME_24] (the Younger) standing in loco parentis) AND in the event of my son the said [NAME_24] (the Younger) dying without leaving any child or children or remoter issue him surviving then I DEVISE my said houses and land known as Numbers 14 and [ADDRESS] aforesaid and also my two houses and land known as Numbers 7 and 9 Brighton Boulevarde Bondi aforesaid to my other children then surviving (and the issue of any deceased child of mine standing in loco parentis)." 8 Secondly, [NAME_32] predeceased [NAME_4] leaving a son, [NAME_33], to whom [NAME_4] made the primary devise with gift over on death to his children, great [NAME_7]. There was no gift over to remoter issue. Again, there was an ultimate gift over, if [NAME_33] died childless, to [NAME_5] with substitution of issue for deceased children. The gift to [NAME_33] was as follows: " I DEVISE my house and land known as Number [ADDRESS] aforesaid to my grandson the said [NAME_33] during his life and on the death of the said [NAME_33] then to his child or children if more than one and if more than one in equal shares as tenants in common AND in the event of my grandson the said [NAME_33] dying without leaving any child or remoter issue him surviving then I DEVISE the said house and land known as Number [ADDRESS] aforesaid to my children then surviving (and the issue of any deceased child of mine standing in loco parentis)." 9 Thirdly, the gift to [NAME_13] was for life with a gift over to [NAME_33]. If he predeceased her, there was the gift over, in by now familiar form, to [NAME_4]'s children with substitution of issue for deceased children. 10 Fourthly, the gift to [NAME_30] was for life with gift over to [NAME_4]'s other children with substitution of issue for deceased children. 11 In the first codicil to his will, [NAME_4] left another property to [NAME_33] on like terms to his other devise to that grandson. 12 Fifthly, he left the property in question to [NAME_25] and her children in the terms set out above. 13 Sixthly, by a second codicil, [NAME_4] left a property to [NAME_29] absolutely. 14 The will dos not demonstrate a single scheme of [NAME_4]. But it does contain a formula for the ultimate gift over with respect to all but the devise to [NAME_29].

The meaning of terms 15 The use of the term in loco parentis is curious. It is usually used in relation to a person assuming the responsibilities of a parent of a child. The Oxford Latin Dictionary, Oxford University Press, Oxford, 1983 has parens and the masculine parentis as a parent or father and maiores as ancestors or forebears, a term of antecedent relationship to denote removal by one or two generations. Locus means a place, so that the possessive in loco parentis means in place of his father. 16 Issue is a flexible word taking its meaning from its context. But, prima facie, it means descendants of every degree. It would normally encompass [NAME_6], great [NAME_6] and more remote descendants (Mathews v Williams (1942) 65 CLR 639 at 650-651). 17 There are many examples in the cases of the word issue being construed in its general sense. For example, in Buick v Equity Trustees Executors and Agency Co Ltd (1957) 97 CLR 599 there was a gift over on the death of the wife of [NAME_4] "to my children in equal shares and on the death of any of my children the proportion of my real and personal estate to which such deceased child was entitled shall be divided between the issue of such child per stirpes on each of such issue attaining the age of twenty-one years". It was held by a majority that issue meant all lineal descendants and not simply [NAME_7]. At 603 Dixon CJ said: "I do not think "issue" in this clause means "children" but of course it includes them. It is a clause in which "issue" has a "sliding" application and the word "parent" has a corresponding application. It applies to the parent of whatever particular "issue" in the successive order is found to be the specific descendant who takes under the clause. There is therefore nothing in the use of the word "parent" warranting the cutting down of the natural sense of the word "issue" to mean "children"." 18 On the other hand, in In re [NAME_8]. National Trustees Executors and Agency Co Australasia Ltd v Brentnall (1935) VLR 333 there was a gift over upon the death of a [NAME_34] to be held in trust for all [NAME_4]'s children living at the daughter's death with the following proviso: "I Hereby Declare that the issue of any child of mine shall be entitled by way of substitution as tenants in common in equal shares per stirpes if more than one to the share to which the parent of such issue would have been entitled under the preceding trust had such parent survived such deceased child of mine. It was held that issue meant children. At 340-341 Mann J said: "The word "issue" in the passage I have read must in this codicil be interpreted as "children"; that is to say, the great [NAME_7] do not take under it. This interpretation, it seems to me, necessarily arises by reason of the use made of the word "parent," in relationship to the issue, and I do not think there is anything to lessen the force of that word to be found in the presence of the words " per stirpes" in the passage read. I think that in using the expression per stirpes [NAME_4] was contemplating the case of more than one family of [NAME_6] becoming entitled under the gift in question because of the decease of their respective parents before the death of a son or [NAME_34], without children." 19 Reference to other cases, however, is of limited assistance. It is the will itself that is to be construed. As Lord Thankerton said in Mackintosh v Gerrard [1947] AC 461 at 473: "Your Lordships have been exhorted, times without number and by the highest authority, when construing a will, to read the document by itself and to "give the natural meaning to the words and to the sentences therein contained." So said the Earl of Halsbury in Gorringe v Mahlstedt [1907] AC 225 at 226, and added: "I believe that half the difficulties have arisen by adopting some words that learned judges have used on another occasion with reference to another will as if it was a cannon of construction for all wills"."

The submissions 20 It was submitted on behalf of the trustees, supported by the representative of the [NAME_6], that the gift over of the property in question to the [NAME_5] with issue standing in loco parentis must be confined to [NAME_6] because only [NAME_6] standing in loco parentis constituted [NAME_5]. 21 On the other hand, the representative of the great [NAME_6] submitted that [NAME_4]'s use of the word issue indicated an intention to benefit persons beyond the level of [NAME_6], the word should be given its general meaning of descendants of every degree and the gift over should be construed in the sliding fashion referred to in Buick with a child standing in the place of his father successively down the chain of descendants of [NAME_4] until all those issue of any degree alive on 22 December 2003 are identified.

The resolution 22 Subject to the operation of the ultimate gift over, [NAME_4] did not provide in his gifts for any issue beyond his great [NAME_6], except perhaps, in his gifts to [NAME_16] and [NAME_24]. Beneficence to that level of descendant would also apply to those gifts if the reference to the substitution of issue for any deceased child of theirs were confined to children of the deceased child. The substitution is in terms: "the issue of any deceased child of my son…standing in loco parentis". And children are, of course, issue. 23 The gifts would then be to [NAME_16] and [NAME_24] for life, on death to their children, with substitution only by children of a dead child as the relevant issue. The reference in the gift over in the event of [NAME_16] or [NAME_24] dying without leaving a child or remoter issue would be a reference to a child or grandchild and the benefit would, like the other gifts, be confined to the level of [NAME_4]'s great [NAME_6]. 24 It seems to me, however, that without doing any violence to the language of the gifts to [NAME_16] and [NAME_24], the word issue can be given its ordinary meaning and descendants of any degree may be substituted for a deceased child in the sliding application to child and parent referred to in Buick. It seems to me that issue standing in loco parentis has the same meaning as issue taking the share of a parent. 25 In that case, the reference to the absence of remoter issue, the trigger for the operation of the gift over to the other children of the deceased, would bear its ordinary meaning of descendants of any degree beyond a child. If [NAME_4] had intended to confine remoter issue to a grandchild of [NAME_16] and [NAME_24] one might have expected him to use the word grandchild rather than remoter issue. 26 This emphasis on the use of the term remoter issue has to be balanced against the meaningless use of the term elsewhere in the will. For example, the gift to [NAME_4]'s grandson [NAME_33] has an intermediary gift over to children of [NAME_33] and an ultimate gift over in the event of [NAME_33] dying without leaving any child or remoter issue. But there was no gift to issue of [NAME_33] remoter than his children. The same applies to the second gift to [NAME_33] in the first codicil. 27 In my view, however, the inaccuracy arises from repetition of the formula for the ultimate gift over and does not detract from the perceived intention of [NAME_4] to benefit issue remoter than the [NAME_6] of [NAME_16] and [NAME_24]. 28 I see no reason for giving the phrase: "the issue of any deceased child of mine standing in loco parentis" in the ultimate gift over a different meaning from that contained in the devises to [NAME_16] and [NAME_24]. It would be strange, indeed, if devises to those sons were to benefit descendants beyond [NAME_4]'s great [NAME_6] and gifts to others of his children were to benefit his great [NAME_6], but the ultimate gift over was to be confined to his [NAME_6]. 29 In my view, the word issue in the gift over to [NAME_4]'s other children of the property in question is to be given its ordinary meaning of descendants of any degree. It is they, the [NAME_6] and great [NAME_7] alive on 22 December 2003 who benefit under the gift in question in the events that have happened.

Per capita or per stirpes 30 The question remains whether [NAME_6] and great [NAME_6] share per capita or per stirpes. 31 There is a prima facie rule that distribution is to be per capita (In Re Jeeves. Morris-Willaims v Haylett [1949] Ch 49 at 51). Thus a gift to A and the children of B goes prima facie to all per capita and not per stirpes (Dowding v Smith (1841) 3 B 541 (49 ER 213)). 32 On the other hand, where issue are to take the share which a parent would have been entitled to had he or she survived, the division is per stirpes (In Re Orton's Trust (1866) LR 3 Eq 375). Thus in In Re Earle's Settlement (1971) 1 WLR 1118 at 1123, Goff J held that a gift for the uncles and aunts of a husband under a marriage settlement, being the children of a named person and the issue of any who might have predeceased the husband, such issue taking equally between them if more than one his, her or their parent's share only, required a division per stirpes. 33 Here the ultimate residuary provision requires the sliding analysis of parent and child through successive descendants of [NAME_4]. At each level, a child is to stand in the position of his parent. That, in my view, requires a division per stirpes.

Conclusion 34 I find that the gift of the property in question was to all the issue of the other [NAME_5] on 22 December 2003, the issue taking their shares per stirpes. 35 I will hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.

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