What Happened
Between Bathurst and Cowra near Blayney is “Glengowan”, an Angus cattle stud that almost didn’t get to the intended beneficiary, the willmaker’s daughter.
When Charles Gordon died, he left his property “Glengowan” to his daughter, Sandra Retallack. A problem arose because Charles did not own the property, a company held legal title. However, Charles effectively controlled the company – he owned, so his executor had control of – 989 of the 990 shares in the company. Sandra already owned the other share.
Key Issue
The issue for the Court was whether the gift of “Glengowan” failed because Charles, the deceased, lacked legal title to the land, or whether the will could be construed so as to give effect to the testator’s clear intention despite the corporate ownership.
Decision
The court upheld the gift of “Glengowan” by declaring that the gift to be valid and effectual.
Construction of Testamentary Intention
The court noted the deceased’s clear purpose in making the gift, stating “The Testator’s intention is made pellucid” by the inclusion of clauses giving the power to “manipulate the assets of my estate” and that the gift was “not meant to necessarily represent equity in value but to secure her a viable grazing property being the property on which she has lived and has had the benefit for a number of years prior to my death”.
Further, the structure of the gift showed an intention that Sandra Retallack should receive the property without financial encumbrance as Charles “clearly wanted to ensure that Mrs Retallack received ‘Glengowan’ without any additional cost burden”.
The will said Glengowan was left to Sandra “free of any mortgage, charge or lien” and “for her own use and benefit absolutely”. As the Court observed: “It was as clear and unqualified a gift as one could expect.”
This decision illustrates that the courts will adopt a commonsense and purposive approach to construction where intention is clear.
However, the case also underscores that litigation should not be an estate‑planning strategy. If the Will had not had the extra clauses, or if the shareholding was more fragmented, there may have been a different result.
While a Will cannot directly dispose of company‑owned assets, this case confirms that the courts will, where possible, construe testamentary gifts to give effect to unmistakable intention. Yes, form matters — but intention, clearly expressed, can still prevail.
What Willmakers with Businesses Should Do
If you have business assets owned in companies and trusts you should get good advice about how to dispose of the estate you own directly and the estate you control. Do not leave it to chance. If you wish to ensure that your executor does not end up in court about your Will, contact Peter McNamara to ensure you get it right.
You can read the case here: Mark Gerard Ireland as Executor of the Estate of the late Charles Stuart Gordon v Sandra Jane Retallack & Ors [2011] NSWSC 846 (12 August 2011) and Ireland v Retallack; Retallack v Ireland [2012] NSWSC 1179 (5 October 2012)