Arnot v Arnot

These proceedings concern the interpretation of the will of the late Rosemary Nelia Arnot, who died in May 2016 at the age of 82.

The deceased spent most of her life in England and she was living at a nursing home in Southall, a suburb of London, when she died. She left property in Australia valued at approximately $1.4 million which was the subject of an Australian will made in November 2001.

The deceased’s Australian assets included two strata lots in an apartment building in Elizabeth Bay in Sydney. One strata lot represented a residential unit and the other a car space. The will contained a specific devise in favour of the first and second defendants, who are a niece and a nephew of the deceased. The devise clearly includes the residential unit. The question is whether the car parking space also forms part of the devise, or falls into residue.

The unit is lot 20 in the strata plan and the car parking space is lot 37. The deceased purchased the unit and the car parking space in 1975. Although on separate lots, they were purchased at the same time. The combined purchase price was $19,750. The deceased borrowed $15,000 from her parents in order to make the purchase; a mortgage was granted for this amount by the deceased over both lots. The mortgage remains on title although the deceased’s parents have long since died and there is presumably nothing owing under it.

Under the strata plan, lots 20 and 37 are independent pieces of property. There is nothing to stop a parking space being sold or let to a person who does not own or rent a residential unit in the building. After buying the unit, the deceased would rent it out (together, apparently, with the car parking space). The deceased ceased renting the unit out and obtained vacant possession (following Residential Tenancy Tribunal proceedings) in November 2000. The deceased apparently intended to use the unit herself. In the event, she did not make much use of it; but when she did come to Sydney and she stayed at the unit, she would borrow or hire a car (she did not have one of her own in Australia) and use the car parking space.

The deceased’s will is dated 6 November 2001. Clause 3 provides:

Clause 4 provides:

The balance of the will went on to provide for the Trust Fund to be shared between various members of the deceased’s family, her friends and charities.

The deceased made a codicil to the will in October 2004 which left clauses 3 and 4 unchanged but substituted the second defendant and the plaintiff as her executors. Because of the second defendant’s interest in the devise, these proceedings have been brought by the plaintiff on the estate’s behalf. The plaintiff, like the second defendant, is a nephew of the deceased.

At the date of the deceased’s death, her Australian assets consisted of the unit and the car space (valued at $530,000 and $70,000 respectively), monies on deposit totalling approximately $576,000 and shares in public companies totalling approximately $268,000.

The principles which apply to the construction of the deceased’s will are not in doubt. It is a question of determining the deceased’s intentions, as disclosed by the language of the will and interpreted in the light of objective circumstances as they existed when the will was made. In this case, there is a codicil which effectively re-published the will, so the relevant objective circumstances are those which existed as at the date of the codicil, namely October 2004: see, for example, Re Champion [1893] 1 Ch 101 at 115. There is no evidence of the deceased’s subjective intention, and the Succession Act 2006 (NSW), s 32, does not apply in any event because the will pre-dates 2008: Sch 1 Pt 2 cl 3(1).

In my opinion, on the proper construction of the deceased’s will, the devise in clause 3 includes the car parking space as well as the residential unit. I think there are a number of factors which support this conclusion.

First, there is the nature of the property in question. Although the car parking space has value in its own right, its value is considerably less than that of the unit. The value of the car parking space presumably derives, in the main, from the utility which it adds to the unit. There is nothing to suggest that there would be any demand for the parking space from persons who do not reside in the building as there might be in the Central Business District of Sydney.

Second, the deceased appears always to have herself treated ownership of the car parking space as ancillary to ownership of the unit. She purchased the car parking space at the time she purchased the unit. The car parking space was covered by the mortgage which she granted over the unit. The deceased apparently never let the car parking space out, or herself used it, except as ancillary to the residential unit.

Although the residential unit and the car parking space have separate lot numbers for the purpose of the strata plan, the language in the will is wider. The devise is not of lot 20 but of the deceased’s “share and interest in Flat 20”. The term “Flat 20” has no technical meaning which would limit it to lot 20 in the strata plan, and I think the language is wide enough to include a car parking space used in conjunction with the unit in question; this could be seen as part of the “share” or part of the “interest” of the deceased in “Flat 20”.

I think this is reinforced by the provision in clause 3 which deals with the possibility of “Flat 20” being sold. The will provides that if the deceased shall have entered into a contract to sell “Flat 20” or shall have sold it and not purchased a “replacement property”, her niece and nephew are to receive a sum equivalent to the net proceeds of sale of “Flat 20”. If the deceased had sold the unit and car parking space for a single figure but “Flat 20” did not include the car parking space, it would be necessary to carry out some sort of valuation exercise for the purpose of determining how much of the consideration related to the residential unit and how much related to the car parking space. This seems to me unlikely to have been intended.

Accordingly, I propose to make a declaration to the effect that the devise in clause 3 covers the car parking space as well as the residential unit.

Given the uncertainty created by the language of the will, it was reasonable for these proceedings to be brought. Costs of all parties should be paid out of the estate on an indemnity basis.

The orders of the Court are: