In our update Do as You Wish, Just Be Clear, we reported on a case where the administrator of a deceased’s estate sought directions from the Court as to the interpretation of a homemade will.
The Court has been approached again in the case of Graham v Klenk (2017) WASC 342 where two co-executors of a will sought directions from the Court as to whether 512 cattle were included as “plant and machinery” on a farm, among other questions.
The deceased, Gerhard Frey, operated a cattle farm in East Munglinup, some 600km south-east of Perth. When he died, Mr Frey left other substantial assets, including 512 cattle with a value of over $236,000. The net value of Mr Frey’s estate was in excess of $3.5 million.
By clause 5 of his will, Mr Frey gave his cousin property in East Munglinup where he ran the cattle farm, “including all plant and machinery thereon or any interest…in the said real and personal property”.
The interpretation of clause 5 troubled the executors so they sought directions from the Supreme Court pursuant to s 45 of the Administration Act 1903 (WA). The executors’ questions to the Court were as follows:
1. Did Mr Frey’s testamentary gift to his cousin under clause 5 of his will include:
- the deceased’s cattle (or, as it were, the proceeds from their sale) that were situated on the property at the date of death;
- money standing to the credit of an overdraft account at the date of death;
- money recovered from Landmark for pre-paid but undelivered fertiliser; and
- money found by Mr Frey’s cousin at the property after the date of death?
2. If the answer is no, do the four assets form part of the residuary estate?
The executors’ position was that “all plant and machinery” did not include the four assets. Therefore, the four assets were not included in the gift and fell into the residuary estate. The cousin’s position was that the reference to “real and personal property” was a reference to the farm as a working farm and therefore the gift included the four assets.
Master Sanderson held that on the proper construction of the will, clause 5 did not gift the four assets.
In making this finding, the Master decided the words “plant and machinery” clearly did not extend to the farming business as a whole as to do so would extend beyond their plain and natural meaning. Furthermore, the Master noted there was no mention of the cattle or the farming business in any part of the will and so there was nothing to suggest that Mr Frey intended to give his cousin a “working farm”.
It might seem odd that Mr Frey gave his cousin his cattle farm and the plant and machinery needed to work his cattle farm, but not the actual cattle or the business. Nevertheless, the court held that this was the effect of Mr Frey’s will.
This case illustrates that your will needs to be clearly and properly drafted in order to ensure that your wishes can be swiftly carried out. Without such clarity, your executors may need to apply for directions from the Court, which can be a long and expensive process for the loved ones you leave behind.
The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.