Estate Orpen v Estate Atkinson and Others

• Jurisdiction: South Africa
• Judge: Steyn CJ, Beyers JA, Rumpff JA, Williamson JA and Trollip AJA
• Judgment Date: 30 September 1966
• Hearing Date: 30 August 1966
• Court: Appellate Division

Estate Orpen v Estate Atkinson and Others
1966 (4) SA 589 (A)

1966 (4) SA p589

Citation	1966 (4) SA 589 (A)
Court	Appellate Division
Judge	Steyn CJ, Beyers JA, Rumpff JA, Williamson JA and Trollip AJA
Heard	August 30, 1966
Judgment	September 30, 1966

Flynote : Sleutelwoorde

Will — Construction — Power of appointment — Donee B predeceasing testator — Power falls away — Daughter and survivor appointed usufructuaries — Daughter given power to appoint heirs to portions of residual capital — Daughter predeceasing testator — Daughter by will disposing of portion of residual capital — Invalidity of.

Headnote : Kopnota

Per TROLLIP, A.J.A., STEYN, C.J., RUMPFF, J.A., and WILLIAMSON, J.A., C concurring: If the donee of the power of appointment predeceases the testator the power of appointment falls away.

Under their joint will the testator and his surviving spouse had appointed the survivor and their only daughter usufructuaries of the income of the trust established by them. The will further provided, inter alia, that, on the death of the daughter, should she have no issue surviving, 20 per cent of the residual capital 'shall devolve on such D person or persons, or in such shares or portions as she may by last will and testament or other writing direct'. The daughter predeceased the testator leaving no issue. In her will she directed that the 20 per cent of the residual capital should be paid to her surviving spouse. The daughter's husband died shortly after her. An application by the executors of the estate of the daughter's late husband for the payment to them of the 20 per cent of the residual capital having been dismissed, in an appeal,

Held, that it was competent for the testators to have bequeathed a power E of appointment to their daughter.

Held, further, that such power attached to the bequest and the person to whom such power was given had to succeed to the property, or the limited interest in the property to which it attached, before the power could be exercised.

Held, therefore, as the daughter had never succeeded to the status of a usufructuary, that she was never seized of the power of appointment which she had purported to exercise in favour of her husband.

F Held, further, as the power of appointment was never the daughter's to enjoy, that the wishes of the testators were not a decisive, or, indeed, a relevant factor.

The decision in the Cape Provincial Division in Estate Orpen v Estate Atkinson and Others, 1966 (2) SA 639, confirmed. G

Case Information

Appeal from a decision in the Cape Provincial Division (CORBETT, J., and HALL, A.J.). The facts appear from the judgment of BEYERS, J.A., and as reported in 1966 (2) SA 639.

D. Meyerowitz, S.C. (with him J. van Z. Steyn), for the appellants: A H proper construction of the will reveals that the testators intended that the heirs to the 20 per cent should be persons appointed by Mrs. Orpen whether or not she survived the first-dying of the testators. In any event, the language of clause 14 (4) is at least capable of bearing the construction contended for and should be given that construction. See Cuming v Cuming, 1945 AD 201 at p. 213. As to whether in our common law or statute law there is any impediment to giving full effect to the testators' intention, when the wishes of a testator are ascertained, the Court is bound to give effect to them, unless it is prevented by some rule

1966 (4) SA p590

or law from doing so. See Robertson v Robertson's Executors, 1914 AD 503 at p. 507. There is no common law rule which prevents effect being given to the testators' wishes in this instance. A direction by a A testator that his heirs shall be those whom a third party appoints is well recognised in our law. See Westminster Bank v Zinn, N.O., 1938 AD 57; C.I.R v Lukin's Estate, 1956 (1) SA 617. In our law, a 'power of appointment' is no more than a direction by the testator as to how his heirs are to be determined and as such it confers no benefit on, nor vests any proprietary interest in, the person upon whose selection B the heirs are determined. See C.I.R v Lukin's Estate, supra; C.I.R v Smollan's Estate, 1955 (3) SA 266 at 273F; Nadaraja, Roman-Dutch Law of Fideicommissa (p. 78, note 78). There is no difference in principle between a direction by a testator that his heirs shall be those determined by a third party after his death, and a direction that his heirs shall be as determined by a third party before C his death. It is true, until the testator's death, the determination is ineffective, because the testator's will is not in operation. However, once it is in operation, it is merely necessary to determine and identify the testator's heirs according to his directions. There are English authorities which hold that a power of appointment D cannot be validly executed by a grantee who predeceased the grantor, apparently even if the testator specifically directs that his estate shall devolve upon the persons appointed by the grantee if he predeceases. See Jones v Southall (No. 2), (1862) 66 E.R. 12; In re Young, (1920) 2 Ch. D. 427; In re Baker, (1934) Weekly Notes 94 (C.A.); Jarman, 7th ed. vol. 2, p. 817. Bearing in mind the fundamental differences between our law and English law as to a 'power of E appointment', these authorities are of no assistance. See Westminster Bank v Zinn, N.O., supra. The rule laid down in the above-mentioned cases is so diametrically opposed to the principle of giving effect to the wishes of the testator that it must be attributed to the nature of a 'power of appointment' in English law. Accordingly there is no obstacle F in our common law to giving effect to the wishes of the testator. As regards statute law, it appears from CORBETT, J's., judgment that the ratio of his decision is that Mrs. Orpen's direction is null and void, because it is not legally possible to incorporate by reference the terms of another document not executed in accordance with the relevant statutory provisions. In this regard CORBETT, J., erred. Incorporation G by reference arises where the testator in his will refers to some other document and intends that its provisions should have testamentary efficacy as if it had been embodied in his will. The essence of the concept of incorporation by reference is that, without the reference, the testator's wishes have not been expressed in full and the reader is H directed to another document which contains his further testamentary wishes, e.g. 'I appoint X as my heir upon the condition set out in a memorandum which is in the possession of my bank manager'. This is not permissible as the other document would then have testamentary efficacy without the formalities prescribed by law having been fulfilled. See Moses v Abinader, 1951 (4) SA 537. In the instant case the testators have not embodied their testamentary wishes in any document but their will. By directing that their heirs should be determined in a particular manner by a third party they have set out their testamentary wishes in full. The determination

1966 (4) SA p591

of the heirs according to the wishes contained in their will is the consequence of their disposition but not part of their disposition. If CORBETT, J., were correct in his finding that this is a case of incorporation by reference, the same would necessarily follow in regard to all 'powers of appointment'. There is no distinction in this regard A between a direction by a testator that his heirs should be those whom A has selected prior to the testator's death and a direction that his heirs should be those whom A shall select after his death. It would then follow that no power of appointment can be valid in our law. Such a suggestion could not seriously be entertained. Not only has the B institution of a 'power of appointment' received the imprimatur of this Court, but it is also a method of testamentary disposition which must be contained in a large number of wills.

Graeme Duncan, Q.C. (with him D. O. Delahunt), for the respondents: Under clause 14 of the joint will there was a bequest to Mrs. Orpen of certain rights to income and of a conditional power of appointment, the C condition being her death without issue. Upon her death before the testator the bequest of income failed. See Marais v Leibrandt, 1 R. 231 at p. 234; Voet, 30.3.10.36. The bequest of the power of appointment...