IN the ESTATE of IAN RICKMAN MILLER DECEASED No. SCPRB-01-95

[2002] SASC 358

IN THE ESTATE OF IAN RICKMAN MILLER DECEASED

[2002] SASC 358

Testamentary Causes Jurisdiction

1. MULLIGHAN J                 The applicant is one of three executors of the will of her late husband, Ian Rickman Miller (“Mr Miller”) who died on 1^st January 2001. She has made an application for rectification of the will prior to the issue of a grant of probate pursuant to s 25AA of the Wills Act 1936. I understand that the other executors support the application.

2. I heard this application on 26^th April 2002. At that time I had been given a detailed report about the application by the Registrar of Probates, Mr A Faunce‑de Laune which contained an extensive summary of relevant case law and the issues raised by the application. I found the report to be of considerable assistance. I made it available to Mr Roder, who appeared for the applicant, and Mr Crocker, who appeared for the guardian ad litem of the infant children of the applicant and Mr Miller, and intimated that I would not reach a decision until they had made such further submissions as they wished to provide in writing. I recently received submissions from both Mr Crocker and Mr Roder, the last in point of time on 21^st October 2002. I have considered them and now proceed to announce the order I propose to make and my reasons for doing so.

3. Mr Miller and the applicant were married and they have three children, Jacki Lee Miller, Angela Kaye Miller and Craig Richard Miller. The applicant and Mr Miller lived at 24 Coats Road, Ramco near Waikerie in South Australia until shortly before his death. He was the registered proprietor as a tenant in common of a number of rural properties at Waikerie and commercial properties in Adelaide.

4. The applicant and Mr Miller were the directors of two companies, Gana Pty Ltd, which is the trustee of the Ian Miller Family Trust and Rgana Pty Ltd (“Rgana”) which is the trustee of the Ian Miller Family Trust No 2. The other tenant in common of the rural properties is Rgana as trustee for the Ian Miller Family Trust No 2 with the exception of one property in which Mr Miller, Rgana and another company Argana Pty Ltd (“Argana”) were tenants in common.

5. On or about 8^th October 2000 Mr Miller instructed a land broker to transfer all his interests in the rural properties to Rgana. It was his intention that Rgana would become the sole registered proprietor of those properties in trust for the Ian Miller Family Trust No 2 with the exception of the one property which I have mentioned. He intended that Rgana and Argana would be owners of that property as tenants in common. Mr Miller wanted to take advantage of the stamp duty exception provided by s 71cc of the Stamp Duties Act 1923 which applies in certain circumstances to the transfer of land used wholly or mainly for primary production.

6. Subsequently Mr Miller was diagnosed as having a metastatic malignant melanoma and was admitted to the Waikerie Hospital. Whilst in hospital he instructed his solicitor to prepare a new will. In accordance with his instructions, a new will was prepared. The nature of the will may be summarised as providing for his family through personal bequests and devises to his wife and children or to the trustees of the Trusts. The beneficiaries of both of the Trusts were members of Mr Miller’s family, parents, future spouses and future grandchildren. It is unnecessary, for present purposes, to set out the various provisions of the will, except clause 6 which initially was as follows:

   “6I GIVE DEVISE AND BEQUEATH all of my right and title in any real estate or real property, which I own either on my own account or as tenant-in-common to RGANA PTY LTD as Trustee of the IAN MILLER FAMILY TRUST NO 2.”

7. I accept that at the time Mr Miller made the will and thereafter, he believed that all his interests in the rural land had already been transferred to Rgana following his instructions to the land broker. He believed that the only interests in land which he owned were his interests in the commercial properties. The broker had not transferred Mr Miller’s interest in the rural lands as instructed.

8. Mr Miller did not want his interests in the commercial properties to be transferred to Rgana. He wanted to leave his interests in the commercial properties to his youngest children Angela and Craig. He and the applicant had agreed that she would, in turn, leave her interests in other properties to the eldest child Jacki.

9. The solicitor visited Mr Miller at Calvary Hospital on 18^th December 2000. He told the solicitor that the land broker “had done the transfer of the balance of the land at Waikerie” referring to the transfer of his interests in the rural properties. He then instructed the solicitor to alter clause 6 of the will so that his interests in the commercial properties would be devised to Angela and Craig. The solicitor carried out those instructions so that clause 6 became:

   “6I GIVE DEVISE AND BEQUEATH all of my right and title in any real estate or real property, which I own either on my own account or as tenant-in-common to ANGELA FAYE MILLER AND CRAIG RICHARD MILLER IN EQUAL SHARES.”

   The words in italics are in the handwriting of the solicitor and the typed words which they replace were crossed out. The will was then executed in the presence of two witnesses and the alteration was initialled by Mr Miller and the two witnesses on 18^th December 2000. As has been mentioned, the deceased died on 1^st January 2001.

10. After the death of Mr Miller, the solicitor discovered that the rural properties had not been transferred to Rgana. Consequently, the effect of the amendment to clause 6 of the will is to devise all of the interests of Mr Miller in the rural and commercial properties to Angela and Craig which does not accord with his express intention.

11. The order sought by the applicant is for rectification of clause 6 of the will so as to provide for the devise of Mr Miller’s interests in the rural properties to Rgana as trustee for the Ian Miller Family Trust No 2 and of his interest in the commercial properties to Angela and Craig.

12. The persons who would be adversely affected by such an order are Angela and Craig. They are both minors and cannot consent to the application. The Registrar of Probates made an order that the summons containing the application and the supporting affidavits and exhibits be served on Brian Leigh Carpenter, a practitioner of the Court, to the intent that service be accepted by him on their behalf and that he enter an appearance as their guardian ad litem. He did so and retained counsel, Mr Crocker, who made submissions at the hearing of the application to which I refer shortly.

13. Section 25AA of the Wills Act provides:

    “25AA.(1)If the Court is satisfied that a will does not accurately reflect the testamentary intentions of a deceased person, the Court may order that the will be rectified so as to give proper expression to those intentions.

    (2)   An application for an order under this section must not, except with the consent of the Court, be made more than six months after the grant of probate or letters of administration.

    (3) Nothing in this section affects the operation of section 29 of the Trustee Act 1936.”

14. I am satisfied that clause 6 of the will as altered and existing at the time of Mr Miller’s death does not accurately reflect his intentions with regard to the rural land. At no time did he intend that Angela and Craig inherit his interest in the rural land. At all relevant times it was his belief that his interest in that land had been transferred to Rgana, of which the applicant was a director, so that all of the family would benefit from the land through the Ian Miller Family Trust No 2.

15. Furthermore, it is clearly established that it was his intention that Angela and Craig inherit his interest in the commercial properties to be held as tenants-in-common with Gana as trustee for the Ian Miller Family Trust with respect to three of the properties and with Rgana as trustee for the Ian Miller Family  Trust with respect to the two other of such properties.

16. I accept that Mr Miller intended that Angela and Craig inherit only his interest in the commercial properties and not the rural properties at the time he executed the will, including the alterations to clause 6, and that he mistakenly believed that he had already divested himself of his interest in the rural properties for the benefit of all of his family through the Ian Miller Family Trust No 2.

17. This situation differs from the circumstances in other cases. In Mortensen & Eassie v State of New South Wales (unreported, NSW Court of Appeal, 12 December 1991), the New South Wales Court of Appeal had to consider whether to grant rectification of a will where the testatrix had left her estate to three adult children of friends well known to her, one of whom had died before her without her knowledge. The will was in such terms that the surviving children did not take his share. An application was made pursuant to s 29A of the Wills Probate and Administration Act 1898 (NSW) which is in terms similar to s 25AA. It was accepted that the testatrix had never applied her mind to the circumstance of the proposed beneficiary, or any of them for that matter, predeceasing her. The Court declined to grant rectification as the intention of the testatrix in the event of one or more of the beneficiaries predeceasing her was unknown even though the consequence was an intestacy of that portion of her estate which passed to the Crown, bona vacantia, and despite her expressed view that she had an aversion to governments, Sheller JA, with whom the other members of the Court agreed, observed that if the testatrix had considered the possibility of a beneficiary predeceasing her, she may have intended that one of the survivors take that share.

18. The same approach was taken by Hodgson J in Trimmer v Lax, Estate M.A. Fresen (unreported, Supreme Court of NSW, 9 May 1997). He concluded that an actual intention is required. It is not sufficient to establish what the deceased would have intended had she thought about the matter. However, such an intention was proved and rectification was granted.

19. The issue in the present case is whether Mr Miller had any testamentary intention with regard to his interest in the rural properties as he mistakenly believed that his interest in them was to be, or had been, transferred inter vivos. The time to determine his intention is at the time of execution of the will: Wesley v Wesley (1998) 71 SASR 1.

20. The present case is exceptional. Mr Miller was diagnosed with terminal cancer in November 2000. He had already decided to transfer his interest in the rural properties by October 2000 when he instructed the land broker. Death approached quickly. He resolved to deal with his estate partly by inter vivos transfer and partly by will. His intentions were made clear because of his impending death. As his death approached, it would have made no difference to him how his intentions were achieved, whether his interests in the rural property passed by his will or by inter vivos transfer would be of no significance as in either event no stamp duty would be payable. At no time did he intend that all of his interests in real property should be inherited by Angela and Craig. It is clear that clause 6 of his will, as altered, did not accord with his intentions. There should be rectification to provide that clause 6 relates only to the commercial properties.

21. What then of his interests in the rural properties? I accept that in exercising the discretion under s 25AA, the Court is not bound by the limitations of the jurisdiction of the old Court of Probate to rectify wills which did not extend to the insertion of words: Tristram & Coote’s Probate Practice, 26^th Ed at 71; Williams and Mortimer, (Probate) 16^th Ed at 166. In the exercise of that jurisdiction words or figures could be omitted where clerical errors had been made: Morrell v Morrell (1882) 7 PD 68 and Re Morris: Lloyds Bank Ltd v Peake (1971) P.62. Section 25AA altered the common law. The will may be altered if it does not accurately reflect the intention of the testator. Furthermore the Court is not confined to the ambit of the equitable doctrine of rectification traditionally associated with the law of contracts. As Sheller JA observed in Mortensen at 6:

    “Indeed I think it may be productive of error in a particular case when determining whether an order should be made under s29A to pay over much regard to the principles evolved by equity as part of the doctrine of rectification. Primarily the Court is concerned with the meaning of the language of the section.”

    Young J accepted this observation in Huszar (Re Estate of) [1999] NSWSC 388 when he said at par 11:

    “It has been assumed in these sort of cases that one applies the same sort of test as one would apply in respect of a suit for rectification of a document in equity. This may be overstating the position because in Mortensen v State of New South  Wales - 12 December 1991, unreported, Sheller JA in the Court of Appeal said that it might be productive of error in a particular case ‘to pay over much regard to the principles evolved by equity as part of the doctrine of rectification’. However, where the Court can see what I call ‘the ordinary rectification test’ is satisfied it will be much more comfortable than it might otherwise be, especially in an ex parte case.”

22. There is no reason why beneficiaries who have mistakenly been excluded may not be included in order to accurately reflect the testamentary intentions of the testator: In the Estate of Francis Lloyd Quick (unreported, S5460, Supreme Court of SA, Williams J, 12 February 1996) is an example. In that case an intended beneficiary had been excluded from the will by mistake. In Wesley additional beneficiaries were added to accord with the intention of the testator. In Davies re Estate of Rose [1999] NSWSC 365 rectification was granted to include assets which had been mistakenly omitted from the will.

23. It follows that a grant of rectification of the will of Mr Miller may be made to include a devise of his interests in the rural properties to Rgana only if to do so accords with his testamentary intention at the time he made his will. Section 25AA is clear in its terms. It refers to “testamentary intentions”. If Mr Miller had known that his interests in these properties had not been transferred to Rgana by the time he signed his will, he would have taken appropriate steps to ensure that his intention in that regard would be carried through. He could have included such a provision in the will or he could have required the memorandum of transfer to be produced for his urgent execution. I have no doubt that he would have taken one of these courses. However, I am satisfied that he did not apply his mind to either of them because he was not aware that the transfer had not been affected. It follows that he did not have any testamentary intention regarding his interest in the rural properties. The discretion under s 25AA does not apply.

24. By clause 8 of the will, Mr Miller left the rest and residue of his estate to the applicant. As there is no devise of the interests of Mr Miller in the rural properties, such interests will pass to her as part of the residue of his estate. If she sees fit, she may transfer those interests to Rgana as intended by Mr Miller and obtain the same stamp duty advantage.

25. I exercise the discretion pursuant to s 25AA and order that the will of Mr Miller be rectified by deleting clause 6 of the will and inserting in lieu thereof the following:

    “6I GIVE DEVISE AND BEQUEATH the whole of my estate and interest in the land comprised in certificate of title volume 5085 folio 412, volume 5046 folio 324, volume 5297 folio 391, volume 5358 folio 57 and volume 5358 folio 93 to my children Angela Kaye Miller and Craig Richard Miller as tenants in common in equal shares.”

26. I shall hear the parties on the question of costs.