Dawson v Howard [1999] NSWSC 729

Dawson v Howard [1999] NSWSC 729

On the proper construction of the will, the whole net income of the residuary estate was to be used for the plaintiff's maintenance, support and benefit, supplemented by capital if necessary. The trustees had no warrant to apply less than the whole income and accumulate surplus as capital for remaindermen, because the will contained no accumulation clause and nothing indicating that less than all income was to be used for the plaintiff. However, the plaintiff was not entitled to receive the money outright; the trustees had a limited discretion as to the time and manner of applying it for his benefit, and they had not yet exercised that discretion.

Jurisdiction
Australia
Judgment Date
20 July 1999
Procedural Posture
Equity Proceedings Concerning Construction of a Will and Trustees' Application of Income / Judgment on Summons for Declarations and Orders
Outcome
Declaration 1(i) in the summons was made; the remaining orders were not made; remaining matters including costs were referred to a Master.
Legal Topics
['construction of Will' 'condition of Gift' 'gift of Income for Maintenance, Support and Benefit' "trustees' Discretion" 'accumulation of Income' 'disabled Beneficiary']
['succession' 'trusts and Estates' 'equity'] ['construction of Will' 'condition of Gift' 'gift of Income for Maintenance, Support and Benefit' "trustees' Discretion" 'accumulation of Income' 'disabled Beneficiary']

Case Brief

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Procedural Posture

Equity Proceedings Concerning Construction of a Will and Trustees' Application of Income / Judgment on Summons for Declarations and Orders

Legal Issues

  1. 1 ["Whether the testamentary direction to pay or apply net income in or towards the plaintiff's maintenance, support and benefit entitled the plaintiff to the whole income of the residuary estate." 'Whether the trustees had discretion to apply less than the whole income and accumulate the balance for capital or remaindermen.' "Whether income tax returns treating the whole income as the plaintiff's income showed an exercise of the trustees' discretion or established that accumulated income should be paid outright to the plaintiff."]

Ratio Decidendi

On the proper construction of the will, the whole net income of the residuary estate was to be used for the plaintiff's maintenance, support and benefit, supplemented by capital if necessary. The trustees had no warrant to apply less than the whole income and accumulate surplus as capital for remaindermen, because the will contained no accumulation clause and nothing indicating that less than all income was to be used for the plaintiff. However, the plaintiff was not entitled to receive the money outright; the trustees had a limited discretion as to the time and manner of applying it for his benefit, and they had not yet exercised that discretion.

Court Disposition

Declaration 1(i) in the summons was made; the remaining orders were not made; remaining matters including costs were referred to a Master.

Orders

  • ['Declaration 1(i) in the summons made.' 'The remaining orders were not made.' 'Those concerned for the plaintiff should formulate a scheme for application of the accumulated income and put it to the trustees.' 'If the trustees consider the scheme appropriate, they may pay the income in accordance with it; if...