A recent decision of the Supreme Court in NSW Trustee & Guardian v Reid [2021] NSWSC 1053 has provided some helpful guidance as to the correct approach to take when construing troublesome clauses in a Will.
The proceedings concerned two sisters. The first sister (Sister 1) left her estate to her son for the duration of his life only, which included a property at Blair Athol in South-West Sydney. After the son’s death, Sister 1’s estate was to pass to the second sister (Sister 2). The son of Sister 1 held a “life interest” and Sister 2 held the “remainder” of that interest.
Sister 2 made a will gifting “all of my real estate” to her sister-in-law, with the residue of Sister 2’s estate to be distributed to her other relatives.
In 2005 Sister 1 died and her son enjoyed the benefit of living in the Blair Athol property.
On 29 June 2019 Sister 2 died and a few days later, on 7 July 2019, the son died. NSW Trustee & Guardian (T&G) was appointed executor of Sister 2’s estate. Sister 2’s will contained two important clause:
- “all real estate” was left to Sister 2’s sister-in-law; and
- the residuary of Sister 2’s estate was left to an assortment of family members and friends.
The issue arose in the administration of Sister 2’s estate whether the words “all my real estate” in Sister 2’s will were broad enough to include the Blair Athol property, in which Sister had a residual interest at the time of her death. If so, the Blair Athol property would be left to Sister 2’s sister-in-law. If not, the Blair Athol property would fall to the residuary beneficiaries of Sister 2’s estate.
The proceedings were brought by T&G, which was the executor of an estate. T&G submitted that, in a difficult construction case, the question falls to be determined on basic principles; as to what the written words of the will mean in the particular case and what are the expressed intentions of the testator.
In this case, T&G submitted that the correct construction of Sister 2’s will, in all the circumstances, was that Sister 2 intended her residual interest in the Blair Athol property to be included in the words “all my real estate’.
Ward CJ in Eq carefully considered the relevant provisions of the Succession Act and the case law. Her Honour approved of the approach put forward by T&G and concluded that, to the extent that the remainder interest of Sister 2 comprise a right (exercisable upon the Son’s death) to call for the transfer of the Blair Athol property, it fell within the generic description of “all my real estate”.
However, the reasoning of Ward CJ in Eq is to the effect that it is necessary to construe the precise terms of the will according to the circumstances known to the testator at the date it was made, and in light of the property of which they stand possessed at the date of their death.
Parties litigating similar cases in the future should be careful to not interpret this case as simply standing for the proposition that in all cases and for all time a testator can effectively dispose of a future interest in property held in remainder only at the date of their death. The exercise of construction requires a broader, comprehensive analysis of all the circumstances to construe the testator’s intention.
How can Carneys Lawyers will dispute lawyers help you?
Carneys Lawyers’ will dispute lawyers regularly manage complex estate litigation and are equipped to guide you carefully through the dispute resolution process. If you need to resolve a will dispute, get in touch today.
