Christopher John De Lorenzo in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo v Vincent Joseph De Lorenzo in his personal capacity & in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo [2020] NSWSC 188 (6 March 2020)

Last Updated: 6 March 2020

Supreme Court New South Wales

Case Name:	Christopher John De Lorenzo in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo v Vincent Joseph De Lorenzo in his personal capacity & in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo
Medium Neutral Citation:	[2020] NSWSC 188
Hearing Date(s):	2 March 2020
Decision Date:	6 March 2020
Jurisdiction:	Equity - Commercial List
Before:	Hammerschlag J
Decision:	Summons dismissed
Catchwords:	SUCCESSION – WILL – CONSTRUCTION – construction of the following provision in the will of the deceased: I GIVE AND BEQUEATH to my children the said VINCENT JOSEPH DE LORENZO, CHRISTOPHER JOHN DE LORENZO and JO-ANN DE LORENZO as tenants in common in equal shares all shares in the companies De Lorenzo Hair & Cosmetic Research Pty Limited ACN 003 218 577, De Lorenzo Australia Pty Limited ACN 003 218 586 and Pavin Investments Pty Limited ACN 000 277 261 registered in my name at the date of my death AND I DECLARE if in the division of such shares in accordance with the terms of this Clause 10 [sic] of this my will the shares are not divisible by three (3) my daughter the said JO-ANN DE LORENZO is to receive more of such shares than my said sons so as to achieve the intent of this Clause. – the deceased owned two shares in the two first named companies – whether on the proper construction of the will the non-divisibility of two shares into three has the consequence that the daughter of the deceased takes all – HELD – on the proper construction of the will both parcels of shares are to go to the beneficiaries in equal proportions as tenants in common.
Cases Cited:	Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 Nullagine Investments Pty Ltd v Western Australia Club Inc [1993] HCA 45; (1993) 177 CLR 635
Category:	Principal judgment
Parties:	Christopher John De Lorenzo in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo - First Plaintiff Jo-Ann De Lorenzo in her capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo - Second Plaintiff Vincent Joseph De Lorenzo in his personal capacity & in his capacity as an executor of the Estate of the late Patricia Ellen De Lorenzo - First Defendant
Representation:	Counsel: I.R. Pike SC with J. Burnett - Plaintiffs T. Maltz - Defendant Solicitors: Allsop Glover Lawyers with Bowman & Mackenzie - Plaintiffs HWL Ebsworth Lawyers - Defendant
File Number(s):	2019/366509

JUDGMENT

1. HIS HONOUR: This is a dispute about construction of a will.
2. Mrs Patricia De Lorenzo (the Deceased) passed away on 17 March 2018. She made a will on 19 November 2014 (the Will). Probate was granted on 16 November 2018.
3. The Deceased held 2 ordinary shares in De Lorenzo Hair & Cosmetic Research Pty Limited and 2 ordinary shares De Lorenzo Australia Pty Limited (collectively, the Companies). The shares were registered in her name.
4. Clause 10 of the Will provides:

I GIVE AND BEQUEATH to my children the said VINCENT JOSEPH DE LORENZO, CHRISTOPHER JOHN DE LORENZO and JO-ANN DE LORENZO as tenants in common in equal shares all shares in the companies De Lorenzo Hair & Cosmetic Research Pty Limited ACN 003 218 577, De Lorenzo Australia Pty Limited ACN 003 218 586 and Pavin Investments Pty Limited ACN 000 277 261 registered in my name at the date of my death AND I DECLARE if in the division of such shares in accordance with the terms of this Clause 9 of this my will the shares are not divisible by three (3) my daughter the said JO-ANN DE LORENZO is to receive more of such shares than my said sons so as to achieve the intent of this Clause.

5. It is agreed that the reference to Clause 9 should be to Clause 10.
6. I will refer to the named beneficiaries by their first names, no disrespect intended. The Will appoints all three as executors.
7. Christopher and Jo-Ann move the Court for declarations that on the proper construction of the Will, the shares were bequeathed to Jo-Ann. They move for orders that the shares be transferred to her.
8. They argue that because “three into two won’t go”, Jo-Ann is to receive more of the shares than Vincent and Christopher. More, they argue, here means all.
9. The meaning of Clause 10 is to be derived from the words used by the testatrix. The words and sentences must be given a construction according to their plain meaning read in the context of the Will as a whole: Fell v Fell [1922] HCA 55; (1922) 31 CLR 268.
10. Clause 10 incorporates two concepts. First, there is a bequest of the shares to the three beneficiaries as tenants in common in equal shares. Second, there is machinery to deal with the case where the intended equal division cannot be achieved. If the contemplated division into one third interests is not possible and the number of shares is not divisible by three then Jo-Ann receives more shares but only to the minimum extent arithmetic will allow, maintaining as close an equilibrium as possible.
11. Tenancy in common is a concept well known to the law. It has an accepted meaning. It is a form of co-ownership where each owner has a distinct but undivided share in the whole in common with the others: Nullagine Investments Pty Ltd v Western Australia Club Inc [1993] HCA 45; (1993) 177 CLR 635, 643-5. It is not individual ownership of split up parts.
12. The plaintiffs’ construction is untenable for three reasons.
13. First, it requires the important words “tenants in common” to be ignored. It assumes, wrongly, that the primary bequest is one of individual parcels rather than of the whole in equal proportions.
14. Second, it misreads the words “in the division of such shares” as meaning division into shareholdings rather than into interests.
15. Third, it is inimical to the expressed desire “to achieve the intent of this Clause” which is to bring about an equal share of ownership of the shares by each beneficiary so far as is possible. On the plaintiffs’ construction, Vincent and Christopher are deprived of any ownership. I do not think that the testatrix can be fairly said to have had in mind a result where one takes all, if this can be avoided.
16. There is no inhibition, legal or practical, in the shares being owned by the beneficiaries as tenants in common in equal proportions. The division of the shares into parcels of shares is not required. The need for this would only arise if there was such an inhibition.
17. Additionally, ownership (whether joint or otherwise) of a company share is to be distinguished conceptually from registration of a shareholding in the share register. Registration is not necessary for transmission of ownership. But, in any event, it is not suggested that the shares cannot be registered in the joint names of the parties or that their interests cannot be as to one third each. In fact, there are provisions in the Articles of Associations of the Companies which envisage joint registration of shares.^[1]
18. The Summons is dismissed.
19. I will hear the parties on costs should this be necessary.
20. The Exhibit to be returned.

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^[1] Article 7(2) provides “Delivery of a certificate for a share to one of several joint holders is sufficient delivery to all such holders.” Article 14 provides “The joint holders of a share are jointly and severally liable to pay all calls in respect of the share.” Article 50 provides “In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy or by attorney, shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members.”