ANZ Trustees Ltd v Hamlet
[2010] VSC 207
•21 May 2010
| IN THE SUPREME COURT OF VICTORIA |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6407 of 2009
IN THE WILL AND ESTATE of DOROTHY MORGAN, deceased
and IN THE MATTER of section 31 of the Wills Act 1997 (Vic)
| ANZ TRUSTEES LIMITED (as executor of the Will of DOROTHY MORGAN, deceased) | Plaintiff |
| and | |
| STANLEY HAMLET and others (according to the schedule attached) | Defendants |
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JUDGE: | Pagone J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 11 May 2010 | |
DATE OF JUDGMENT: | 21 May 2010 | |
CASE MAY BE CITED AS: | ANZ Trustees Ltd v Stanley Hamlet & Ors | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 207 | |
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WILLS & PROBATE – Construction – Rectification – Section 31(1) Wills Act 1997 (Vic) – Determining testator’s intention – Inaccurate records kept by solicitor.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Boaden | Aitken Partners Pty Ltd |
| No appearance by the First and Second Defendants | ||
| For the Third and Fourth Defendants | Mr A Verspaandonk | Russo Pellicano Carlei Lawyers |
| For the Fifth to Tenth Defendants | Mr P Pascoe | DLA Phillips Fox |
| No appearance by the Twelfth Defendant |
HIS HONOUR:
This proceeding was commenced by ANZ Trustees Limited (“ANZ Trustees”) as an application for rectification of a Will pursuant to s 31 of the Wills Act 1997 (Vic) (“the Act”). The application was amended during the course of the hearing to seek orders for the construction of the paragraph of the Will which had been the subject of the application for rectification. It may be desirable that I begin with some observations about the nature of the application under s 31 of the Act and the desirability of the additional relief sought by the amendment.
Section 31 gives this Court the power to rectify the Will of a deceased person. Section 31(1) provides:
The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied that the will does not carry out the testator's intentions because—
(a) a clerical error was made; or(b) the will does not give effect to the testator's instructions.
The underlying policy of the provision is to ensure that a testator’s instructions be given effect to where the Will does not carry out the testator’s intentions for one of two specified reasons. The section is modelled on s 20 of the English Administration of Justice Act 1982 (UK) which came into force on 1 January 1983[1] because, without legislative power, the Court’s jurisdiction at common law to vary the terms of a Will was restricted to omitting words from probate if it was proved that they had been included by fraud or mistake.[2] Provisions to the effect of s 31(1) of the Act appear first to have been enacted in Australia in 1968 in the ACT[3] and in 1981 in Queensland.[4]
[1]Administration of Justice Act 1982 (UK) c 53, s 76(11).
[2]Re Horrocks, Taylor v Kershaw [1939] P 198; Re Morris, Lloyds Bank v Peake [1971] P 62; Re Phelan [1972] Fam 33; Re Reynette-James, Wightman v Reynette-James [1975] 3 All ER 1037.
[3]Wills Act 1968 (ACT) s 12A.
[4]Succession Act 1981 (Qld) s 33.
One commentator has described the power in such legislation as “obviating the need for an interpretation or construction of the document”,[5] however, the power in provisions such as s 31 of the Act does not remove the need for the proper construction of a Will and is not an optional alternative for the proper construction of the terms of a Will. Indeed, it is a condition precedent to the exercise of the power in s 31 that the Court be satisfied that the Will does not carry out the testator’s intentions and that this satisfaction be based on one of two specified reasons namely, either that a clerical error was made or that the Will does not give effect to the testator’s instructions. The existence of the second of these conditions requires the Will to be construed and to be found upon its proper construction not to give effect to the instructions of the testator.
[5]David M Haines, Construction of Wills in Australia (2007) [1.6].
A number of cases have held that the statutory power to order rectification may be exercised out of an abundance of caution even if the clause which the testator actually executed on its proper construction means the same as the clause as rectified.[6] Judicial observations to this effect, however, have not overriden, nor could override, the requirements of the statute. It remains a precondition to the Court’s exercise of the power in s 31(1) that it be satisfied that the Will “does not carry out the testator’s intentions” before an order to rectify a Will may be made. In Spooner Hodgson J expressed the view that the New South Wales provision equivalent to s 31(1) of the Act should not be given a narrow construction;[7] a view which I fully endorse and respectfully adopt. In that case his Honour concluded that the terms of a codicil failed to carry out the testator’s intentions even if it, on its true construction, made the gift of the life tenancy of a house to a beneficiary (as was sought by the rectification). His Honour’s conclusion to that effect was based upon the view that it was “the testator’s intention to leave in the will subCL(i), which the codicil was expressed as deleting; and also because the codicil made it a matter of doubt as to what was its effect whereas, clearly, the deceased’s intention was to make a will which expressed with appropriate clarity what was to happen to her property”.[8] The particular circumstances of the terms of the Will considered in Spooner may have revealed textual uncertainty through the removal of a clause by the codicil. The result may have been something which the Court considered had not been intended by the testator but the proper construction of the Will still left it in a form that was not clear on its face. There may be other circumstances where the text of a Will, properly construed, may appear uncertain or confusing on its face to justify formal rectification to substitute words which will produce an unambiguous expression of a testator’s intention.
[6]Application of Spooner: Re Estate of Davis (Unreported, New South Wales Supreme Court, Hodgson J, 28 July 1995); Estate of Cross (Unreported, New South Wales Supreme Court, McLelland CJ in Eq, 9 May 1996); Rawack v Spicer [2002] NSWSC 849 (Unreported, Campbell J, 20 September 2002); Estate of Bray (Unreported, New South Wales Supreme Court, Powell J, 25 October 1991).
[7] Application of Spooner: Re Estate of Davis (Unreported, New South Wales Supreme Court, Hodgson J, 28 July 1995) 4.
[8]Ibid.
It may be, therefore, that there are circumstances when the power in s 31 of the Act can be exercised where the proper construction of the Will “means the same as the clause as rectified,”[9] but it is still necessary for a Court to be satisfied that the Will, as properly construed, “does not carry out the testator’s intentions” for one of the two reasons specified in the section. Whether or not a Court will be satisfied in those terms will depend upon the particular circumstances of the case and the particular Will in question but, in my view, it is not appropriate for a Court simply to assume that the power to order rectification “obviates the need for an interpretation or construction of the document”.[10] That does not mean that a party seeking rectification is always obliged to seek orders for the construction of the Will but it does mean that the statutory condition upon which the Court’s power depends must be satisfied. In some cases the error will be so apparent that the condition will easily be satisfied making it unnecessary to seek orders construing the Will. In other cases it may be prudent for orders to be sought concerning the proper construction of the Will if for no other reason than to ensure that the parties to the proceeding may rely upon (or be bound by) the construction given by the Court and by the formal orders and declarations of the Court.
[9]Rawack v Spicer [2002] NSWSC 849 (Unreported, Campbell J, 20 September 2002) [25].
[10]Cf David M Haines, Construction of Wills in Australia (2007) [1.6].
The relevant provision in this Will is found in clause 5 which deals with gifts of the residuary estate of Dorothy Morgan (deceased). Clause 5 provides:
My executors shall divide the balance of my estate into one or more equal parts to distribute as follows:
5.1Each of Joan and Stanley Hamlet, who survive me, will receive one equally divided section of one such part absolutely;
5.2 Each of the following who survive me, being:
(a) my niece Hilary Lopes;
(b) my nephew John Horn;
(c)my late husband’s nephews, Roger Morgan, Peter Morgan, Neal Morgan, John Hamlet, David Hamlet and Andrew Hamlet; and
(d) my late husband’s nieces, Rosemary Turnbull and Anne Collard;
will receive one such part per capita and absolutely;
5.3If any of the persons nominated in the preceding sub-clause 5.2 fail to survive me leaving a child or children, who:
(a)survives me; and
(b) had attained or lives to attain twenty-one (21) years of age;
then I give to such child or children, and if more than one then equally between them, that part of my estate which his, her or their parent would otherwise have taken under this clause.
ANZ Trustees, and the third and fourth defendants, contended that the proper construction of this clause requires that the residuary estate be divided into five parts with one part to be distributed to each of the five categories of beneficiaries found in each of the five sub-clauses of clause 5, namely (1) Joan and Stanley Hamlet (clause 5.1), (2) Hilary Lopes (clause 5.2(a)), (3) John Horn (clause 5.2(b)), (4) Roger Morgan, Peter Morgan, Neal Morgan, John Hamlet, David Hamlet and Andrew Hamlet (clause 5.2(c)), and (5) Rosemary Turnbull and Anne Collard (clause 5.2(d)). Another construction suggested by counsel for ANZ Trustees was that the residual estate was to be divided into the same number of parts as the number of sub-clauses (which, on one view might be two rather than five: (1) sub-clause 5.1 and (2) sub-clause 5.2). An alternative construction supported by the fifth to tenth defendants was that the nominated beneficiaries (being twelve in total) should each receive an equal part of the residuary estate except for Joan and Stanley Hamlet who would be treated as one. On that view the residuary estate would be divided into eleven parts and each of the persons nominated would receive one part (treating Joan and Stanley Hamlet as one). On that view the separation of the beneficiaries between the clauses is seen only as a grouping of the beneficiaries by reference to their relationship to the deceased without providing any foundation for determining the number of parts into which the residuary estate is to be divided. Joan and Stanley Hamlet were the sister and brother-in-law of the deceased’s husband and each of the beneficiaries named in clause 5.2 are the nieces and nephews of the deceased or of her late husband.
There is nothing in the separate listing of the beneficiaries in the two clauses and four sub-clauses to indicate that any one beneficiary (except Joan and Stanley Hamlet) was to receive any greater or lesser share of the residuary estate beyond one equal share of sufficient parts for each nominated beneficiary to receive a part. Indeed, the specific reference to “per capita” in clause 5.2 indicates that within each of the sub-divisions in clause 5.2 each beneficiary was to receive an equal share. The language of clause 5 may have some difficulty but is not without a sensible construction. Various possibilities may be suggested but it seems to me that the words have a sensible and clear meaning and operation. The opening words of clause 5 (before any grouping of the beneficiaries is made) directs the executors to divide the balance of the deceased’s estate into equal parts. One of those parts is to be shared equally between the clause 5.1 beneficiaries. Each of the clause 5.2 beneficiaries is to receive “one such part per capita”. On this view the residuary estate is to be divided into eleven parts and one of those parts is to be given to the clause 5.1 beneficiaries and each of the other ten parts is to be given to one of the nominated beneficiaries individually and absolutely. The difference in treatment between Joan and Stanley Hamlet on the one hand (the clause 5.1 beneficiaries), and the nieces and nephews on the other (the clause 5.2 beneficiaries), may simply be explained by the gifts to Joan and Stanley Hamlet of the deceased’s residential property and personal chattels by clause 4. The reason for putting Joan and Stanley Hamlet in a sub-clause separate from the nieces and nephews is simply that Joan and Stanley Hamlet are not to receive an individual whole part but are to share one part jointly whilst the clause 5.2 beneficiaries are to receive one part “per capita”.
ANZ Trustees maintained that such a construction of the Will does not carry out the testator’s intentions because it maintained that the testator’s instructions had been that the residuary estate was to be divided into five parts with each category of beneficiary receiving one fifth. On that view the deceased’s niece and nephew would each receive 20% of the residuary estate whilst the others would have to share 20% amongst those within the same class. Thus, for example, the deceased’s husband’s nephews would each receive 3.33% (one sixth of 20%) and her late husband’s nieces would each receive 10% (half of 20%). There is nothing in the Will which provides any explanation for such a construction which might otherwise be thought to be a curious division of the residuary at least as between the nieces and the nephews of the deceased on her husband’s side.
The clear evidence of Mr Caraher, the solicitor who took instructions from the deceased at the time of making her Will, was that the deceased’s instructions were precisely that the estate be divided into five parts and that the beneficiaries in each category should share one of those parts between them. Mr Caraher was admitted to practice as a barrister and solicitor in 1966 and practiced in that capacity until his retirement in 2006. He was employed by ANZ Trustees from about 1995 in a role which included assisting clients with their financial affairs and to arrange for the preparation of Wills for them. Mr Caraher did not himself draft the Will but took instructions from the deceased for others to draft (a practice which some might think undesirable and likely to produce a mismatch between a testator’s intentions and their expression). Mr Caraher had many conversations with the deceased before the Will was executed and had a clear and unmistakable note on page 12 of a document labelled “Will Planner” about the instructions which he said he could recall to have received on 29 March 2004 and which he said that he could recall were subsequently confirmed in a telephone conversation on 26 April 2004. The note on page 12 of the Will Planner undoubtedly records Mr Caraher’s statement of the deceased’s instructions that, amongst other things, the residue of her estate was to be divided into five parts and that one part was to be given to Stan and Joan Hamlet, one part to Hilary Lopes, one part to John Horn, one part equally to be shared between the deceased’s husband’s nephews, and one part was to be shared equally amongst her husband’s nieces.
The instructions recorded on page 12 of the Will Planner were not the instructions initially given to Mr Caraher by the deceased. The date of the creation of the record on page 12 is problematic (for reasons which I shall explain) and it is doubtful that the deceased saw a note of those instructions when she informed Mr Caraher that the draft Will which had been sent to her accorded with her wishes. On 11 March 2004 the deceased had telephoned Mr Caraher to say that she had been considering altering the distribution of her estate from that which had previously been made in an earlier Will. Mr Caraher’s recollection of the instructions on 11 March 2004 was that Stan and Joan Hamlet were to be given her residential unit and its contents and that the residue of the estate was to be divided between the ten nephews and nieces. On 29 March 2004 Mr Caraher spoke again to the deceased and was then informed that she had further considered the instructions she had given him regarding the distribution of her estate and that she had then decided on a different pattern of distribution. Her instructions of 29 March 2004 were that Stan and Joan Hamlet were still to receive her unit and its contents but that all ten nephews and nieces, as well as Joan and Stan Hamlet, were to be given a share in the residue of the estate. Mr Caraher’s contemporaneous diary note of that conversation recorded the instructions as follows:
Rang Dorothy 29/3/04
(1)Amend clause 4 of draft Will to include her unit at 39 Gladesville Boulevard to Stan & Joan (as well as the contents).
(2) Include all ten nephews and nieces (as well as Stan & Joan) in clause 5, to share the residue of the estate.
There is nothing in the instructions, as recorded in the contemporaneous diary note, which suggests a division of the residuary estate into five parts. Instructions to the same effect as those given on 29 March were confirmed in a subsequent telephone conversation on 26 April 2004 which were recorded by Mr Caraher in a contemporaneous diary note concerning the residue as follows:
Confirmed Joan & Stan share equally with all the other nephews and nieces, so this is a [sic] fair a distribution as she could possibly arrive at. If she leaves any of them out – there will be repercussions amongst the wider family.
There is, again, nothing in this diary note to suggest a division of the residuary estate into five parts. It was these instructions which Mr Caraher maintained were nonetheless recorded in the Will Planner as Mr Caraher understood them. On page 12 of the Will Planner, Mr Caraher recorded the instructions in that place as follows:
Instructions per telephone conversation of 29 March 2004 (as confirmed by telephone conversation of 26/4/04)
1.Stan & Joan Hamlet to receive her property at Unit 14, 39 Gladesville Boulevard and all personal chattels – to be retained or distributed as per her wishes to be made known to them.
2.Residue of estate into five parts
· 1 part to Stan & Joan
· 1 part to Hilary Lopes (niece)
· 1 part to John Horn (nephew)
· 1 part equally between husband’s nephews, Roger, Peter & Neal Morgan & John, David & Andrew Hamlet
· 1 part equally to husband’s nieces Rosemary Turnbull and Anne Collard
The Will Planner was later sent to the deceased who signed and dated it on 10 February 2005.
The evidence of Mr Caraher was that the instructions he received, before preparation of the last draft of the Will, were those recorded on page 12 of the Will Planner. Those instructions were described as having been conveyed in two telephone conversations he had with the deceased on 29 March and 26 April 2004 respectively. Neither contemporaneous note of either conversation, however, recorded the instructions in the terms described on page 12 of the Will Planner. The instructions as recorded on page 12 of the Will Planner were obviously written after the last of the conversations (on or after 9 July 2004) in which the deceased provided instructions, and there is no other evidence of any awareness of the deceased that her instructions were that the residue was to be divided into five parts in the way recorded on page 12 of the Will Planner. Mr Caraher may have understood the instructions in the way he recorded them on or after 9 July 2004 in the Will Planner but it is not the way he recorded them in the contemporaneous notes taken at the time of the conversation in which the instructions were conveyed and I have grave doubt about whether they accurately reflect her instructions. A draft Will was prepared soon after 29 March and sent to the deceased on 7 April 2004. That draft is relevantly in the terms of the Will as executed. On subsequent occasions Mr Caraher spoke with the deceased to ask whether she was happy with the draft but had no conversation with her in which he drew her attention to the division of the residuary estate into five parts. Indeed, the draft in the deceased’s possession did not do so. The draft she had (and which she accepted as expressing her instructions) did not say that the residue of the estate was to be divided into five parts. She was later asked to sign the Will Planner and did so, but beyond that there is no evidence of an awareness on the part of the deceased that her instructions had been received by Mr Caraher as recorded on page 12 unless I am to infer that the testator read page 12 of the Will Planner and understood that the Will as drafted in March/April gave effect to the instructions as ANZ Trustees contended for in these proceedings. In contrast there are the terms of the Will and the two contemporaneous diary notes of Mr Caraher which do not make reference to the division of the residue into five parts.
Mr Caraher deposed in an affidavit prepared for these proceedings that the note on page 12 of the Will Planner was prepared on 9 July 2004. In paragraph 23 of his affidavit he deposed to a telephone conversation with the deceased in which she had told him that she had finally resolved upon how her Will was to distribute her estate. Mr Caraher then deposed that page 12 “is the note of those instructions which” he wrote after that telephone conversation. He was called to give additional evidence about another note but was asked in cross examination about the date of preparation of the note on page 12. In cross examination he said that he had been in error when saying that the page 12 note was prepared on 9 July 2004 but that once he had had the opportunity of looking through some of the paperwork that subsequently arrived he was able to say to the best of his recollection that the note on page 12 of the Will Planner was written on 26 April 2004 and not 9 July 2004. That evidence, however, cannot be correct and I am unable to accept it. It is clear from the photocopy of the Will Planner that the note of instructions on page 12 was not prepared until at least 9 July 2004. There are a number of annotations in the Will Planner which make that clear. On page 6, for example, the Will Planner was amended with a note that the amended instructions appearing on that page were confirmed on 9 July 2004. On page 7 there is an additional annotation by Mr Caraher noting the change of instructions on page 12. On page 10 there is a note in Mr Caraher’s handwriting stating that instructions which originally appeared on that page had been amended “as per instructions of 9/7/04 (see page 12)”. The original exhibit, which was only tendered towards the end of the hearing, shows that the notes on pages 6, 7, 10 and 12 were written by Mr Caraher at about the same time and in the same coloured pen. That colour was different from the colour used to record previous instructions when the Will Planner was first prepared. Mr Caraher’s evidence that he was mistaken about page 12 having been prepared on 9 July 2004 was a conclusion he appeared to draw upon a consideration of materials in the file but it is a conclusion which is inconsistent with the statements throughout the Will Planner.
It is clear from the Will Planner that it was amended some time after 9 July 2004 and that the amendments to the Will Planner (including page 12) were made some time after instructions were given by the deceased. Mr Caraher did speak to the deceased on 9 July 2004 and made a diary note of the conversation. That diary note, however, does not record her instructions in the terms set out on page 12 of the Will Planner. At that stage the deceased had not seen the Will Planner (it obviously having been prepared some time after 9 July 2004). Mr Caraher’s note of 9 July 2004 concerning the Will simply said that “she is happy with the last draft. I to [sic] send it to her for signing at the local ANZ Bank”. The draft which had previously been sent to her by Mr Caraher had been sent to her on 7 April 2004. That draft said nothing about a division of the residuary estate into five parts as subsequently recorded in Mr Caraher’s note on page 12 of the Will Planner. The only change to the draft Will of March/April 2004 made after 9 July 2004 was to remove the directions about the disposal of the body. There is no evidence of any discussion with the testator that would reveal her understanding of the terms of clause 5 in the terms of the note on page 12 which was only subsequently created.
The power to rectify a Will conferred by s 31(1) of the Act arises where a Court is satisfied that the Will does not carry out the testator’s intention because either a clerical error was made or the Will does not give effect to the testator’s instructions. I am not satisfied either that a clerical error was made or that the Will does not give effect to her instructions. The evidence of the legal practitioner receiving a testator’s instructions will necessarily carry great weight in determining what were a testator’s instructions and will often, if not always, be determinative. It is, however, essential that the Court be satisfied that the Will does not give effect to the testator’s instructions and in forming that view “clear and convincing proof” is required.[11] In Re Estate of Prevost[12] Whelan J summarised the applicable principles by saying:
[11]Rawack v Spicer [2002] NSWSC 849 (Unreported, Campbell J, 20 September 2002) [31]; Re Estate of Prevost [2004] VSC 537 (Unreported, Whelan J, 22 December 2004).
[12][2004] VSC 537 (Unreported, Whelan J, 22 December 2004) [17].
It seems to me that the legal principles applicable here are the following:
1. Before the power of rectification can be exercised the Court must be satisfied that the will was so expressed that it failed to carry out the testatrix’s intentions, and also what it was that the testatrix did intend concerning the part of the will which is to be rectified.
2. What must be shown is what the testatrix’s actual intention was, not what her intention probably would have been had she thought about the matter.
3. Although the standard of proof is on the balance of probabilities, clear and convincing proof is required.
4. It is not sufficient for rectification to establish that the testatrix would not have wished for an intestacy, or would not have wanted her property to go in a way that, in the events which have happened a particular clause results in the property going.
5. If there is no evidence to show what the testatrix’s intention was in the event of certain things happening, the Court cannot rectify the will. (footnotes omitted)[13]
It may be a rare case in which the evidence of the person receiving a testator’s instructions will not be accepted as sufficient proof of what the testator intended or of the instructions given by the testator, but this case is one of them. The diary notes made by Mr Caraher contemporaneously with his receipt of the instructions do not record the instructions when received in the terms subsequently set out on page 12 of the Will Planner. Nor are they reflected in the terms of the Will which was sent to the deceased for her approval and which she approved. The testator did, however, see the draft sent to her on 7 April 2004 and (with an exception not relevant here expect to confirm that she read it) approved of its terms.
[13]Ibid.
The Will Planner, including page 12, was sent to the deceased but I am not satisfied that she turned her mind to the effect of the description on page 12 of the Will Planner as producing the construction for which ANZ Trustees contended in these proceedings. A description in the Will Planner (if the deceased had read it) of the residue of the estate being divided “into five parts” may, to a lay person, mean no more than that five separate parts of a written document would deal with the residue of the estate rather than that the economic value of the residue would be divided into five equal shares for distribution of one share to each category of beneficiary. The description on page 12 of the Will Planner (if the deceased had read it) of “1 part” to each to the different categories of relatives might, to a lay person, mean no more than that each part of the document would convey something to each person within the category rather than that the distribution to those in each category would be restricted on one fifth of the whole. There is no evidence that Mr Caraher satisfied himself that his record of the instructions as reflected in either the Will or in the Will Planner accorded with those intended by the deceased and thought by her to have been communicated to him. There is no suggestion that Mr Caraher sought to satisfy himself that he had accurately understood or given effect to the deceased’s instructions or that she was satisfied that her instructions were properly reflected in the draft sent to her for her approval. Had he done so he might have turned his mind to the Will’s failure to divide the residue of the estate into five parts as recorded on page 12 of the Will Planner.
It was submitted that instructions to the effect recorded on page 12 of the Will Planner were conveyed by Mr Caraher to the person drafting the Will. That circumstance, even if established, would not necessarily decide the case in favour of ANZ Trustees because the deceased was asked whether she was satisfied with the terms of the draft which had been sent to her on 7 April 2004 and was not told of the instructions which he conveyed to the person given the task of drafting. However, it is unlikely (or at very least I am not satisfied that there is a secure foundation to conclude) that the instructions as recorded on page 12 of the Will Planner were those conveyed to the person drafting the Will. Page 12 of the Will Planner was produced after 9 July 2004 and the draft Will had already been produced and was already in the deceased’s possession. In contrast to what appears on page 12 of the Will Planner, Mr Caraher’s diary notes of the contemporaneous discussions with the deceased record her concerns for a more general, equitable and equal distribution between the persons who were to benefit. To this circumstance may also be added (if it were necessary) the unexplained difference in treatment (on the view of the instructions propounded by ANZ Trustees) as between the nieces and nephews of the deceased’s husband. It is true that the deceased had at one point felt that some of her relatives had been less supportive of her in her later years, but the final instructions given by her and recorded contemporaneously by Mr Caraher in a diary note was that she wanted her sister in-law and brother in-law to “share equally with all the other nephews & nieces” and commented that this was as “fair a distribution as she could possibly arrive at” feeling that if she left “any of them out [of the will], there will be repercussions amongst the wider family”. These considerations support a view that her instructions were for an equal treatment of the beneficiaries named and is consistent with what I consider to be the more natural reading of the Will with Stan and Joan Hamlet being treated as one unit for equal benefit with the nieces and nephews. Her sister in-law and brother in-law had the additional benefit in clause 4 of a gift of the deceased’s residential unit and its contents. The instructions given by the deceased on 29 March 2004 were that her brother in-law and sister in-law were to share in the residue of the estate with all ten nephews and nieces. Mr Caraher’s record of the instructions he received on 26 April 2004 confirmed that they were to “share equally” with all the other nephews and nieces. This, in my view, is consistent with the terms of the Will by which they receive one eleventh share of the residue of the estate and the fact that Stanley and Joan Hamlet were to share their distribution jointly (rather than each to receive the same share as each of the other beneficiaries) is explicable by the fact that they also received the separate gift under clause 4 of the apartment and its contents.
Mr Caraher gave oral evidence in-chief about the process by which he conveyed the deceased’s instructions to those preparing the Will at ANZ Trustees. His evidence was that on 29 March 2004 he had a copy of an earlier draft Will recording the deceased’s instructions before she changed her instructions on 29 March. His recollection was that he wrote the amended instructions on the back of one of the pages of the earlier draft Will for ease and convenience to show the person drafting what needed to be changed. The Will executed by the deceased was that prepared after Mr Caraher made the annotations to the earlier draft. It appears to have been sent to the deceased by letter dated 7 April 2004 but the written instructions of Mr Caraher on the back of one of the pages of the earlier draft is no longer in existence. All that remains of that process is a “post it” note in Mr Caraher’s handwriting dated 29/3 addressed to “Val” stating that Mrs Morgan had “a couple of changes to the draft” and directing attention to amendments on the file copy. The draft produced thereafter would seem an inept way to give effect to a division into five parts if the drafter had received a note in the terms subsequently recorded on page 12 of the Will Planner. It is unfortunate (to say the least) that ANZ Trustees’ processes did not extend to keeping the very document upon which the draft was produced (especially in view of the process of drafting adopted which had the drafting of a person’s final wishes in life being done by a person who had not had the benefit of hearing the instructions directly from the person whose final wishes were to be expressed). Strictly speaking, the existence of the note might not have altered my conclusion since the deceased’s attention was not drawn to the Will to ensure that the construction propounded by ANZ Trustees was that which accorded with the deceased’s instructions and because the deceased was asked to approve the draft she was given, but it might have supported the view that such a construction had been communicated to the person drafting.
The final matter for me to consider is who should pay the costs of the application and the basis upon which those costs should be paid. ANZ Trustees, understandably and quite properly, does not seek its costs. It has failed on all aspects of the application and should properly pay the costs of all defendants on the usual basis.
It is strictly unnecessary for me to say anything about what costs I would have ordered had I acceded to the application for rectification or taken a different view about the construction of the Will, but it may be desirable for me to express my views on that hypothesis in case the matter becomes relevant hereafter. In my view ANZ Trustees should pay the costs of the defendants even if it had succeeded in its claim for rectification or in its amended claim for construction of the terms of the Will. The construction contended for by ANZ Trustees, and the rectification which it sought, were matters on which the Court should have the benefit of a controverter and to have tested by those with an interest in the outcome. Furthermore, the evidence of Mr Caraher concerning the date of creation of the statement of his instructions appearing on page 12 of the Will Planner was an important matter properly to be tested. The defendants appearing at the trial had a real and substantial interest in testing the construction propounded by ANZ Trustees and, even if they had failed, and ANZ Trustees had succeeded, I would have awarded costs against ANZ Trustees on the basis that it was the drafting for which it was responsible (and by a process which it adopted) that made the proceedings necessary and made the presence of controverters desirable and appropriate.
Accordingly I make the following orders:
(a) That on the proper construction of paragraph 5 of the Will dated 10 February 2005 the residue of the estate held on trust be divided into such number of parts, namely eleven equal parts, and be distributed:
(i) as to one part to Joan and Stanley Hamlet jointly to be divided equally between them absolutely; and
(ii) as to one part to each of Hilary Lopes, John Horn, Roger Morgan, Peter Morgan, Neal Morgan, John Hamlet, David Hamlet, Andrew Hamlet, Rosemary Turnbull and Anne Collard per capita and absolutely.
(b) The costs of and incidental to the proceeding, including any reserved costs, of the defendants be paid by the plaintiff.
SCHEDULE OF PARTIES
| No. 6407 of 2009 | |
| BETWEEN: | |
| ANZ TRUSTEES LIMITED (as Executor of the Will of DOROTHY MORGAN, DECEASED) | Plaintiff |
| - and - | |
| STANLEY HAMLET | Firstnamed Defendant |
| JOAN HAMLET | Secondnamed Defendant |
| HILARY LOPES | Thirdnamed Defendant |
| JOHN HORN | Fourthnamed Defendant |
| ROGER MORGAN | Fifthnamed Defendant |
| PETER MORGAN | Sixthnamed Defendant |
| NEAL MORGAN | Seventhnamed Defendant |
| JOHN HAMLET | Eighthnamed Defendant |
| DAVID HAMLET | Ninthnamed Defendant |
| ANDREW HAMLET | Tenthnamed Defendant |
| ROSEMARY TURNBULL | Eleventhnamed Defendant |
| ANNE HAMLET | Twelfthnamed Defendant |
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