Alice Critchley made a Will consisting of only four clauses, in October 1964, (‘the Will”) and died in December 1967 survived by her eleven children. Probate of the Will was granted in May 1968.
Clause 1 of the Will directs that her home in Kirrawee (”the Kirrawee property”) – or another property that may be acquired with the proceeds of sale of the Kirrawee property – is to be held in trust for two of her daughters Dulcie and Leonie to ”use and enjoy during their lifetimes”
Clause 2 directs “all the rest and residue of the estate” be held on trust “to pay the income to my daughters”, clause 3 of the Will provides that upon the remarriage of either Dulcie or Leonie
“the other daughter shall be entitled to the exclusive use of the property at Kirrawee or such other property as may be acquired and the income from the residue of my estate until her death or remarriage.”
However, the Will didn’t gift the residue of the estate in the event that any of Alice’s other children survive Dulcie and Leonie.
The Will provided that if both Dulcie and Leonie request the trustee to sell the Kirrawee property, the trustee shall acquire such other residential property from the proceeds and permit Dulcie and Leonie to use and enjoy the property on the same terms as the Kirrawee property.
The NSW Trustee and Guardian (“the plaintiff”) was appointed as trustee of the trusts created under the Will by deed in April 1992.
Leonie remarried before 2002 relinquishing the use of the Kirrawee property and the income from the residue of Alice’s estate.
In 2002, the plaintiff sold the Kirrawee property, using the proceeds of the sale to purchase a property at Clear Island Waters in Queensland (“the Queensland property”); the excess funds from the sale were invested in a fund administered by the plaintiff. Dulcie resided at the Queensland property and received the income from this fund until her death in 2017.
Deed of Family arrangement
A deed of family arrangement is a variation of the terms of a trust agreed to by beneficiaries and enforceable by a court.
In August 2003, seven of Alice’s then surviving children and 12 of her grandchildren (children of three of the children who had survived Alice but had died before August 2003) entered into a Deed of Family Arrangement (“the Deed”)
“the residuary beneficiaries have agreed to a distribution of the estate assets, which in their considered opinion creates a fair and equitable distribution of the estate”
that the children of any deceased children of the testator would take instead of their deceased parent; and, the Deed would be binding upon and enforceable by the executors of the parties to it.
The plaintiff although acting as trustee of Alice’s estate, Dulcie and one other of Alice’s children were not parties to the Deed.
The current proceeding
The plaintiff sought the determination of questions arising under the Will and the Court held that upon the true construction of the Will the phrase, “residue of my estate” includes the Queensland property;
”amongst my surviving children equally” means those children of the deceased surviving as at 19 December 2017;
therefore as Leonie and Ann Dransfield are the only surviving children of the testator as at 19 December 2017 the plaintiff as executor and trustee of the Will is at liberty to distribute the residue of the estate to them equally.