The Farm and the Missing Water

Imagine leaving someone a farm but forgetting to leave them the right to use the water that helps it operate.

That was the situation facing the family of Ronald Norris.

Ronald owned a property known as Cocos, a farm situated on the Lachlan River in western New South Wales. Under his will, he intended the farm to pass to his nephew, Brian.

Like many rural properties, the farm depended on access to water. Water from the Lachlan River supported cropping and livestock operations and was a key part of the property's value and productivity.

Unfortunately, there was a problem.

The water access licence was a separate legal asset. It did not automatically transfer with the land, and Ronald's will made no mention of it.

As a result, an important question arose: would Brian inherit the water licence together with the farm, or would Ronald's share of the licence pass to different beneficiaries as part of the remainder of the estate?

Looking Beyond the Words of the Will

The executors of the estate asked the Supreme Court to rectify the will so that it reflected Ronald's true intentions.

The Court considered evidence from Ronald's solicitor and a family member. Both said that Ronald had intended the assets associated with each farm to pass together as a package.

There was also a significant piece of evidence in the solicitor's file. On a schedule of assets prepared when the will was being drafted, Brian's name appeared next to the water licence.

The solicitor acknowledged that the omission of the licence from the will was simply an oversight.

What the Court Decided

The Court found that the will failed to carry out Ronald's instructions.

The judge considered it unlikely that Ronald intended Brian to inherit the farm, livestock and crops, but not the water entitlement that helped make those assets productive and valuable.

The Court therefore ordered that the will be corrected so that the water licence would pass with the farm.

Although the application was brought outside the usual time limits, the Court allowed it to proceed because the estate had not yet been fully administered and the water licence had not been transferred.

The legal costs of the application were ordered to be paid from the estate.

Why This Case Matters

Most people do not own farms or water licences. However, the lesson from this case applies to everyone.

Assets that appear to belong together are not always owned or structured in the same way. A family business may operate from premises owned personally by a family member. Shares may be held separately from business assets. Valuable licences, permits or intellectual property rights may be owned independently of the assets they support.

Many people are also surprised to discover that some assets are owned by companies, trusts or self-managed superannuation funds rather than by the individual making the will.

A Simple Step That Can Avoid Costly Problems

When preparing or updating a will, it is important to identify exactly what you own and how each asset is held.

A thorough review with your solicitor can help ensure that your wishes are accurately recorded and that assets which are intended to go together are properly dealt with in the will.

Courts can sometimes correct mistakes, but doing so involves additional time, delay, legal expense and uncertainty.

A carefully prepared will is one of the best gifts you can leave your family. By getting the details right, you can help ensure that your wishes are carried out and spare your loved ones the burden of resolving avoidable disputes after you are gone.