Mcbride v Hudson
(1962) 107 CLR 604(Judgment by: Windeyer J)
Mcbride
vHudson
Judges:
Dixon CJ
Mctiernan J
Taylor J
Windeyer J
Case References:
Bond v Barrow Haematite Steel Co - (1902) 1 Ch 353
Bothamley v Sherson - (1875) LR 20 Eq 304
Boyd v Thornley - (1925) VLR 569
Clifford Mallam v McFie - (1912) 1 Ch 29
Dodd v Williams - (1921) 1 Ch 178
Evans v Powell - (1909) 1 Ch 784
Gage Crozier v Gutheridge - (1934) Ch 536
Hawkins Public Trustee v Shaw - (1922) 2 Ch 569
Hops v Daniell - (1911) 55 Sol Jo 633
Inglis v Gillins - (1909) 1 Ch 345
Jones v Palmer (No 2) - (1895) 2 Ch 657
Lady Langdale v Briggs - (1856) 8 De G, M
&
G 391; 44 ER 44; 126 LJ Ch 27
Leeming Turner v Leeming - (1912) 1 Ch 828
Little v O'Brien - (1946) 62 TLR 594; (1946) 175 LTR 406
M'Afee - (1909) 1 IR 124
Mallam v McFie - (1912) 1 Ch 29
McIntyre v McIntyre - (1914) 15 SR (NSW) 45; 31 WN 132
O'Connor Westminster Bank Ltd v O'Connor - (1948) 1 Ch 628
Paine v Countess of Warwick - (1914) 2 KB 486
Porter v Porter - (1930) 31 SR (NSW) 115; 48 WN 17
Ritchie v Trustees Executors and Agency Co Ltd - (1951) 84 CLR 553
Robinson v Addison - (1840) 2 Beav 515; 48 ER 1281
Rose Midland Bank Executor and Trustee Co Ltd v Rose - (1949) 1 Ch 78
Rose Rose v Inland Revenue Commissioners - (1952) 1 Ch 499
Thornley v Boyd - (1925) 36 CLR 526
Turner v Leeming - (1912) 1 Ch 828
Warwick v Willcocks - (1921) 2 Ch 327
Webb v Australian Deposit and Mortgage Bank Ltd - (1910) 11 CLR 223
Willcocks Warwick v Willcocks - (1921) 2 Ch 327
Judgment date: 9 February 1962
Judgment by:
Windeyer J
I have had the advantage of reading the judgment of Taylor J On the first matter argued, namely the rights of life tenant and remaindermen, I do not wish to do more than briefly to express my concurrence in what he has written and my view on some matters referred to during the argument. All the livestock on the property at the death of the testator's widow formed part of the testator's estate. The entries, appearing at the end of the livestock trading account for the period of 1 July 1956 to 23rd February 1957, whereby some of the flock are treated as corpus and the others as belonging to the life tenant, are thus the result of a misconception. The right of the life tenant was to have the profits of the business considered as a whole, whether it was well managed or ill managed. Whether or not on any given day there were more or less stock running on the property than prudence and proper management might have then dictated, could not make the life tenant the owner of any particular beast or any number of beasts or of the value thereof. The position is quite different from a case where stock on a farm is enjoyed by a legal tenant for life subject to his maintaining the flock or herd, as in re Powell; Dodd v Williams (1921) 1 Ch 178. There is perhaps more analogy with the case of a life tenant in possession adding to a herd of deer, the fresh deer becoming subject to the trusts of the will, as in Paine v Countess of Warwick (1914) 2 KB 486. But cases concerning life tenants in possession are not really much help in considering the duties of trustees carrying on pastoral businesses in Australia. The discretions they must exercise in doing so are ordinarily such that the rights of beneficiaries cannot be determined by applying at all times and in all circumstances some simple formula about keeping up the number and value of flocks and herds. There are, in the long line of cases on this matter ending with the judgment of Burbury CJ in Re Archer (1961) Tas LR 1 statements of general principles that may guide trustees in the administration of station properties. But all these have to be read in their proper contexts. In this case the annual accounts are compiled in accordance with an appropriate method of accounting. I agree that there is no reason why, so far as they relate to transactions up to the widow's death, they should be rewritten.
I may add that the evidence does not, in my view, support the allegation made in argument that when the trustees entered upon the management of the property they had to restock and restore it after it had been denuded by drought, and that they did so at the expense of the life tenant; or that, in any other way, they failed to hold the scales properly as between life tenant and remainderman.
Turning to the next question, the effect of the gift in the will of "196 shares in Elder Smith & Co Ltd": The question was argued on the assumption that if this was a general legacy as distinct from a specific legacy, then the donee could take only 196 shares of the kind or denominations or ordinary shares into which the issued capital of the company was divided at the date of the testator's death, namely 196 shares of £1 each (paid to 12s). This, it is said, is the result of s 27 of the Wills Act, 1936 of South Australia, which is in the same terms as s 24 of the English Wills Act, 1837. For this re Gillins; Inglis v Gillins (1909) 1 Ch 345, was relied upon. If, on the other hand, the gift is of specific property, then it is agreed the provision of the Wills Act does not apply, for such a gift is itself regarded as an indication of a contrary intention: see Hawkins on Wills 2nd. ed (1925) p 25. Therefore, if this was a gift of the specific parcel of 196 shares of £10 each (paid to £6) that the testator had when he made his will, then the legatee was entitled to the 1,960 shares of £1 each (paid to 12/-) derived from such 196 shares and forming part of the testator's estate at his death. The company's subdivision of its £10 shares into £1 shares would not operate as an ademption: re Clifford; Mallam v McFie (1912) 1 Ch 29; re Leeming; Turner v Leeming (1912) 1 Ch 828.
The words of the gift, read literally and abstracted from all context and circumstance, are appropriate to a general legacy: and the Court, it is said, leans in favour of treating a legacy as general or demonstrative, rather than specific. That, however, is because when the question has arisen the alternative to treating the legacy as general or demonstrative was that the testator's apparent intention to benefit the legatee would have miscarried as the result of an ademption. A tendency of courts that is the result of a desire to effectuate intention is not to be erected into a general principle that must be observed even if doing so seems likely to frustrate intention. A gift of a thing, although expressed in general terms, cannot be a general legacy unless it be a pecuniary legacy -- that is to say, a direction that if the testator should not possess such a thing at his death, his executor should buy it out of his residuary personalty and hand it over to the legatee.
How then does the matter stand in this case? A gift of a particular number of shares is not a specific legacy merely because the testator in fact had that number at the date of his will. But in this case there is more to it than that. In re Nottage; Jones v Palmer (No 2)(1895) 2 Ch 657, Rigby LJ said: "You have got a long way towards a specific gift if you come to the conclusion that he is trying to describe something which he has" (1895) 2 Ch, at p 664. And that, surely, is so here. It is hardly likely that a testator wishing to give a general legacy of a number of shares in a particular company would choose to give such an odd number as 196. On the other hand, when he had exactly that number it is natural to suppose that he was referring to that parcel. And the place of the gift in the scheme of the will is most significant. The will is framed with numbered clauses. Successive clauses run as follows:
3 -- I give to my wife free of probate succession or estate duties: (a) all my jewellery and ornaments of my person (b) all moneys payable at my death under any and all insurance policies (c) 196 shares in Elder Smith & Co Ltd. 4 -- I bequeath the following pecuniary legacies free of all duties . . . (to one person £300 to another £200). 5 -- I give devise and bequeath the whole of the residue of my estate to my trustees . . . [upon trusts set out].
The legacies of the jewellery and of the insurance moneys are clearly specific. The legacy of the shares appears in the same clause. And that clause is carefully separated from the clause giving general pecuniary legacies. Having regard to all this, the proper conclusion, in my opinion, is that a specific legacy of the testator's shares was what he intended.
I would add, however, that, even if the legacy were a general legacy of 196 shares, I am by no means satisfied that it would have to be read as 196 shares of £1 each. True it is, that in that case what has generally been taken to be the operation of the provision of the Wills Act would not be displaced by the contrary intention that it is said is to be found in the gift of a specific thing. But Lindley LJ in re Portal and Lamb (1885) 30 Ch D 50, after remarking that "the object of this section was not to defeat, but to give effect to the testator's intention" (1885) 30 Ch D, at p 55, went on to say: "it does not say that we are to construe whatever a man says in his will as if it were made on the day of his death" (1885) 30 Ch D, at p 55 . Although the decisions in re Gillins; Inglis v Gillins (1909) 1 Ch 345 and Re M'Afee (1909) 1 IR 124, have not been questioned, I find difficulty in accepting the view that, as Warrington J put it, there is "no distinction between the quantity and quality of the subject of a bequest for the purpose of applying s 24" (1909) 1 Ch, at p 351. A general bequest of all things of a particular sort will, no doubt, carry all things of that sort that the testator had at his death. But that does not mean that a general bequest of a given number of things of one sort is to be construed as a general bequest of the same number of things of another sort. If, when the testator made his will, his language denoted a form of property of one kind, I do not think it right to construe it as denoting property of another kind: I do not think that s 24 requires this. An ordinary share in a company is a right to a specified amount of the issued share capital of that company. For the purposes of ascertaining the rights of the shareholder to dividends and his liability on winding up, it is measured by a sum of money. A subdivision of the fractional interest in capital represented by such a share is not, in my view, giving a share a new quality; it is creating a different share. But however that may be, the legacy here was, I think, specific; and on that ground the legatee was entitled to have the 1,960 shares of £1 each, paid to twelve shillings, that the testator had. They are the exact equivalent of, are derived from and represent the very 196 shares of £10 each, paid to £6, that he gave by his will.