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Words – choose what you mean

In blended family situations lawyers are often asked to draft a Will which gives the “new partner” the right to reside in the house for life.   Often the widowed partner is on a limited income and has little funds to cover the cost of repairs and may be struggling to pay rates.  If the Will stipulates that the right to live in the house is “on condition” that outgoings are paid as they fall due and that the partner must keep the home in repair, what happens if the partner fails to do so?  In a recent case of Nomchong v Vey-Cox [2019] NSWSC 1072 the Will specified that a daughter could live in the home “on condition that” she pay the rates, insure the property and keep it in good repair.  The Judge held that those words, in the context of the way in which the Will was written, were not a “condition subsequent” and did not mean that the daughter forfeited her right to live in the home if she failed to do so.  However, he did say that the Will created a “personal equitable obligation” meaning that the Trustee would have to threaten or commence legal proceedings for equitable compensation or specific performance to enforce the obligation.  A not very satisfactory result for all concerned.  The case also contains an interesting discussion about the level of repair required since the Will in question required the home to be kept in “good repair” which the Judge held required “some form of renewal”  and not just maintenance. Finally the case also considered whether the Trustee was obliged to use the funds set aside in the Will to pay for the maintenance.  The Will said that the Trustees could use the funds to “defray” any “costs incurred in or associated with the trusts” in the Will.   On a construction of the wording of this Will, it was held that there was no obligation to do so but they could do so if they wished.  The case is therefore a timely reminder to be very careful to draft clauses with enforceability in mind and to consider the wishes of the Testator.  The Testator’s over riding purpose, for example, may be to ensure that the partner has a place to live in for life and so expressing this purpose in the Will may assist the partner resist an argument that the right to live in the property has been lost.

See Nomchong v Vey-Cox [2019] NSWSC 1072 (21 August 2019).

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