Lubke v Claridge - [2016] TASSC 44

[2016] TASSC 44

COURT: SUPREME COURT OF TASMANIA

CITATION: Lubke v Claridge [2016] TASSC 44

PARTIES:  LUBKE, Melissa
  v
  CLARIDGE, Brian

FILE NO:  869/2016
DELIVERED ON:  23 August 2016
DELIVERED AT:  Hobart
HEARING DATE:  4 August 2016
JUDGMENT OF:  Brett J

CATCHWORDS:

Succession – Construction and effect of testamentary dispositions – Construction generally – Ascertainment of testator's intention – Homemade will.

Aust Dig Succession [1170]

Succession – Construction and effect of testamentary dispositions – Construction generally – Principles or rules of construction – Generally.

Aust Dig Succession [1172]

Succession – Construction and effect of testamentary dispositions – Construction generally – Admissibility and use of extrinsic evidence in aid of construction – Generally.

Wills Act 2008 (Tas), ss 42, 46.
Re Horgan(deceased) [1969] 3 All ER 1570; Fell v Fell (1922) 31 CLR 269, applied.
Perrin v Morgan [1943] AC 399; In the Estate of Edith Lillian Rogers deceased [2006] EWHC 753 (Ch); In the Estate of Veldhuis [2007] SASC 420; In the Estate of Yearwood, deceased (1982) 30 SASR 169; Rea Costello (deceased) [2014] SASC 134, cited.
Aust Dig Succession [1204]

REPRESENTATION:

Counsel:
             Appellant:  C Groves
             Respondent:  In Person
Solicitors:
             Appellant:  Dobson, Mitchell and Allport
             Respondent:  In Person

Judgment Number: [2016] TASSC 44
Number of paragraphs: 32

Serial No 44/2016
File No 869/2016

MELISSA LUBKE v BRIAN ANDREW CLARIDGE

REASONS FOR JUDGMENT BRETT J

23 August 2016

This case concerns the will of Andrew John Lubke. Mr Lubke died on 4 January 2016. He is survived by his wife, the applicant, and their children.
Mr Lubke's will was executed by him on 14 May 2015. He prepared the will himself, by completing by hand a blank will form which was part of a will kit purchased by him from a post office. The will makes a small bequest and then leaves the residue of the estate to the applicant with provision for his children in the event that she did not survive him. The applicant executed a will in reciprocal terms, contemporaneously with the preparation and execution of Mr Lubke's will.
The issue in this case concerns the clause in the will which appoints an executor. I set out that clause as follows:

Evidence of surrounding circumstances establishes that Brian Claridge had been Mr and Mrs Lubke's accountant for several years. The accounting practice is in fact conducted by a company "Brian Claridge Accounting Pty Ltd". The company operates from premises at 442 Elizabeth Street, North Hobart. It is an Australian proprietary company limited by shares. The sole directors and shareholders of the company are Brian Frederick Claridge and Nelson Mary Claridge. A search of the relevant register reveals that there is no separate business name registered as "Brian Claridge Accounting".
Given the uncertainty surrounding the identity of the executor, having regard to these circumstances, a grant of probate has not yet been sought. Instead the applicant has now applied for the following orders:
"1A determination pursuant to r 90 of the Supreme Court Rules 2000 of whether or not upon the proper construction of the will of the late Andrew John Lubke dated 14 May 2015, the executor of the estate of Andrew John Lubke is the respondent.
2Alternatively, an order pursuant to s 42 of the Wills Act 2008 that the will of the late Andrew John Lubke dated 14 May 2015 be rectified by:
(a) Replacing the words 'Brian Claridge Accounting' with the words 'Brian Claridge, accountant'; and/or
(b) Inserting the words 'the directors at the date of my death of the company Brian Claridge Accounting Pty Ltd or the company which at that date succeeded to and carries on its practice' after the words 'then I appoint' appearing in clause 2,
due to a clerical error of the testator.
3In the further alternative, an order that administration of the estate of Andrew John Lubke with the will of Andrew John Lubke dated 14 May 2015 annexed, be granted to the applicant."
Mr Claridge has filed a notice of submission. Accordingly, the only evidence and submissions provided to the Court in this matter were from the applicant.
The applicant's primary position is that the will should be construed so that the appointment of the executor is of Mr Claridge personally.
The language of a will should be construed so as to give effect to the expressed intention of the testator. In Perrin v Morgan [1943] AC 399, Lord Simon LC said at 406:
"The fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case – what are the 'expressed intentions' of the testator."
In the first place, the intention of the testator will be discovered, if possible, by having regard to the ordinary meaning of the words used in the will, in the context of the entire document, without reference to rules or canons of construction or the surrounding circumstances. (See Williams on Wills, 6th ed, 439; Public Trustee of Queensland v Smith [2009] 1 Qd R 26 [31]). The approach to construction in the event that the testator's intention is not adequately revealed by examination of the ordinary meaning of the words in the will, is now dealt with by s 46 of the Wills Act 2008 which provides:
"46 Use of extrinsic evidence to clarify a will
(1) In proceedings to construe a will, evidence, including evidence of the testator's intention, is admissible to the extent that the language used in the will renders the will, or any part of the will —
(a) meaningless; or
(b) ambiguous on the face of the will; or
(c) ambiguous in the light of the surrounding circumstances.
(2) Evidence of a testator's intention is not admissible to establish any of the circumstances referred to in subsection (1)(c).
(3) Nothing in this section prevents evidence that is otherwise admissible at law from being admissible in proceedings to construe a will."
The principal purpose of this provision seems to be to overcome the general rule at common law that direct evidence of the testator's intention was not admissible except in particular circumstances, eg in the case of equivocation. Equivocation is the term used to describe a description in a will of a person, property or thing which is equally capable of applying to more than one subject. At common law, evidence was also admissible to establish surrounding circumstances from which the testator's meaning in respect of a word used in the will can be inferred (the "armchair principle"). For example, evidence of the testator's knowledge, including his knowledge of particular matters, and his habits, is admissible for the purpose of identification of a person referred to in the will, in the case of ambiguity. All of this evidence is still admissible, having regard to the provisions of s 46(3), but, in addition, direct evidence of the testator's intention can be admitted, provided that the preconditions of admissibility set out in the section are present.
The operation of s 46 permits examination of surrounding circumstances, with the exclusion of evidence of the testator's intention, in order to determine whether or not the language used in the will renders any part of the will ambiguous. If ambiguity within the meaning of the section appears upon such an examination, then evidence which includes direct evidence of the intention of the testator becomes admissible.
If the words “Brian Claridge Accounting” is not read “in the light of the surrounding circumstances”, then it is not possible to detect ambiguity. The testator’s intention, according to those words alone, was to appoint an accounting practice to be his executor. For a variety of reasons, such an appointment would not be effective. However, when considered in the light of the surrounding circumstances, I am satisfied that cl 2 of the will is ambiguous, at least in respect of the identity of the intended executor. The use of the words "Brian Claridge Accounting" in the context of the will, including, in particular, the use of the business address, and considered in the light of surrounding circumstances, which include the fact that Mr Claridge works as an accountant in a practice that is actually carried on by a corporation entitled "Brian Claridge Accounting Pty Ltd", establishes such ambiguity. The nature of the ambiguity is that it is unclear, having regard to these circumstances, whether the intention of the testator was to appoint as executor Mr Claridge in his individual capacity, a business entitled "Brian Claridge Accounting", which does not exist, or the company "Brian Claridge Accounting Pty Ltd", which is, of course, is a separate person.
Having regard to s 46, the existence of this ambiguity renders admissible for the purpose of construing the will, extrinsic evidence which includes evidence of the testator's intention. In this case, the provisions of s 46(1) are adequate to encompass all of the extrinsic evidence which was presented during the hearing.
The pertinent extrinsic evidence available in this case comes from the affidavit of the applicant. I summarise her evidence as follows:
(a)She and Mr Lubke decided to make their wills prior to departure for an overseas trip in 2015. They purchased will kits from a post office a day or two before making the wills. They filled out the blank will forms together. There is no evidence that they obtained any legal or other advice concerning the preparation or content of either will.
(b)During the course of preparation of the wills, they discussed appointing Mr Claridge as executor in each will. Mr Claridge had been the applicant's accountant since 2006 and had also been used by Mr Lubke after their marriage in 2009. They both dealt with him on a regular basis in relation to their financial affairs. Mr Lubke had regularly commented to the applicant that "he liked Mr Claridge a lot as a person and professional". Mr Claridge had provided advice to Mr Lubke when Mr Lubke had acted as executor of the estates of his sister and mother.
(c)As a result of their discussion, the applicant and Mr Lubke met Mr Claridge on 14 May 2015 in the office at 442 Elizabeth Street. They asked him if he would be the executor of their wills. Mr Claridge agreed to this request.
(d)Paragraph 14 of the applicant's affidavit contains important evidence bearing on the question of how the words "Brian Claridge Accounting" came to be inserted in the space provided for the appointment of an executor. I set out that paragraph in full:
"I recall that when we came to write Mr Claridge's name as executor, Andrew suggested that we used the name 'Brian Claridge Accounting' so that I f something happened to Brian and he could not operate as our executor, our affairs would be handled by his successor who would have all our paperwork. I agreed, and Andrew and I each wrote 'Brian Claridge Accounting' as the name of our intended executor to complete our will before signing them."
The applicant's evidence is that to her knowledge, Mr Claridge is the only accountant who works in the practice. He is the only accountant she has seen there since her marriage to Mr Lubke. She had met another accountant, Mr Denis Laing, but had not seen him in the practice since 2012. I note that the company search discloses that Denis Keith Laing ceased to be a director of the company, "Brian Claridge Accounting Pty Ltd", on 6 June 2012.
There is no evidence that bears on the question of whether or not Mr Lubke appreciated that the accounting practice was in fact operated by a company, and, even if he did, whether he appreciated the legal consequences, in particular the separate corporate personality of the company. Mr Groves, who appeared for the applicant, very fairly provided me with the letterhead of the practice which clearly shows the title of the practice as "Brian Claridge Accounting Pty Ltd". It may well be that Mr Lubke had seen this letterhead at some point in time, given his previous history of dealings with the practice, but there is no other evidence that would support an inference that he was aware of the facts specified above.
The evidence set out above compels the conclusion that what Mr Lubke wanted to achieve was to have Mr Claridge act as his executor. However, the direct evidence of his intention, revealed in the conversation set out in par 14 of the affidavit, suggests that he intended to achieve this result by appointing, not Mr Claridge in his individual capacity, but the accounting practice which he referred to as "Brian Claridge Accounting". His intention in doing so was to provide for the contingency that if Mr Claridge, for some reason, was not able to act as executor, then Mr Claridge's successor, who I infer he believed to be the person who would take over the practice, would act in that capacity. I am satisfied on the evidence that this was the true intention of Mr Lubke, revealed by the words used by him in the will, viewed in the context of the extrinsic evidence set out above, and it is appropriate that the will be construed accordingly.
The next question which arises is whether it should be inferred that Mr Lubke intended to actually appoint the company, a separate legal personality, or alternatively whether his true intention was to appoint a firm, which he believed to be presently constituted by Mr Claridge in his individual capacity. Both are consistent with my conclusion that Mr Lubke's intention was to appoint as executor the entity which was the accounting practice. However, there is no actual evidence to suggest that he appreciated that that entity was in fact a company, or the legal nature of its personality.
There are a number of cases dealing with clauses that attempt to appoint firms of solicitors or their partners as the executor of a will. The seminal case seems to be the decision of a single judge of the Probate, Divorce and Admiralty Division of the English High Court. In Re Horgan(deceased) [1969] 3 All ER 1570, Latey J considered a will in which a firm of solicitors was nominated as executor. His Honour said at 1571:
"The central question is whether this is an effective appointment, or whether it is void for uncertainty. The law does not permit the appointment as executor of a partnership firm as such. Where a clause in a will is so phrased as to purport to do this, the court construes it as appointing the individual partners as executors: see In the Goods of Fernie (1849), 6 Notes of Cases 657. This case was decided 120 years ago, there is no other reported decision on the point and it has never been questioned."
His Honour went on to consider and provisionally approve appropriate wording for such an appointment which specified the appointment of the partners of a nominated firm, instead of reference to the firm itself, although he reached this conclusion "… with a good deal less than entire confidence in its correctness".
Subsequent Australian cases have found real difficulty with attempts to follow his Honour's suggested wording. For example, an appointment which fails to include words indicating how the choice is to be made between alternative executors will generally be considered void for uncertainty. (See In the Estate of Veldhuis [2007] SASC 420.) In the Estate of Yearwood, deceased (1982) 30 SASR 169, an appointment of the partners of a firm or their successors in a case where the firm had effectively disintegrated by dissolution, and the relevant constituent members were no longer identifiable as such, failed as an effective appointment of an executor.
In this case, if it was Mr Lubke's intention to appoint the accounting practice, believing it to be a firm, then the firm he was intending to appoint does not exist and, in any event, the business is not conducted nor constituted by Mr Claridge. The entity which conducts the business is, in fact, another person, the company.
In the Estate of Edith Lillian Rogers deceased [2006] EWHC 753 (Ch), a decision of Lightman J in the Chancery Division of the English High Court, his Honour considered a clause in a will which purported to appoint "… the partners at the date of my death in the firm of …". The problem faced by the court in that case was that the firm was, in fact, a limited liability partnership, analogous for practical purposes, with the Australian proprietary company in this case. There does not seem to have been any evidence that the testator consciously appreciated this fact or its significance. In respect of this point, his Honour said, at [13]:
"For testators adopting a clause in the terms of clause 2 of the Will the legal distinction between a solicitors' partnership and a solicitors' (confusingly named) limited liability partnership and between a profit sharing partner in a solicitors' partnership and a profit sharing member of a limited liability partnership is likely totally to escape them, unless given a lesson in the law which they may well not follow. Even if they do grasp the distinction, they are likely to regard it as a distinction without any relevant difference for their purposes. The profit sharing members of the limited liability partnership will be viewed (as they are for practical purposes) as partners in the solicitors' business."
His Honour took the view that the true construction of the will required probate to be granted to those individuals who were profit sharing members of the limited liability partnership. The office held by such individuals is roughly analogous to a director of the company in this case, who also practices as an accountant in the business.
Of course, the important distinction between that case and this is that the will in Rogers specifically referred to the individuals by reference to their role in the entity, rather than purporting to appoint the entity itself. If the appointment had been of an entity which is a firm, then in accordance with the authority of Re Horgan, and because a firm has no separate legal personality, the law would regard the appointment as being the appointment of the individual partners. However, Mr Lubke's intention was to appoint the entity, whatever that might be, that operated the practice. In actual fact, whether he was aware of it or not, that entity was a separate person, the company. These observations are not sufficient to dispel the uncertainty as to Mr Lubke's intention, inherent in the wording, viewed in the light of surrounding circumstances. If he had been aware of the existence and role of the company and appreciated the legal significance, he may well have worded the clause differently. On the other hand, the appointment of the company may have suited his purposes. Finally, even if he was aware of the corporate personality that carried on the practice, he may well have intended to appoint individuals by reference to their offices within the company, for example as practicing directors or shareholders.
It follows, therefore, that even with the assistance of extrinsic evidence, including evidence as to the direct intention of the testator, there is still ambiguity in the appointment in the sense that there are alternative possibilities which are consistent with the words used by the testator informed by the extrinsic evidence and the context.
If a court cannot determine the true intention of the testator in these circumstances, then the effect of the relevant provision will fail for uncertainty. However the task of a court of construction is to discover the testator's real meaning, and give the will effect, if that is possible. To assist this task, the law has developed principles of interpretation which are, in effect, presumptions that can be relied upon as aids to discover the intention of the testator. In Fell v Fell (1922) 31 CLR 269 at 275, Isaacs J set out certain of these principles of interpretation which he considered to be "incontestable". At 275, he referred to one such principle, taken from the words of Lord Brougham LC in Langston v Langston (1834) 2 Cl & F 243:
"(8) 'There are two modes of reading an instrument: where the one destroys and the other preserves, it is the rule of law, and of equity, following the law in this respect (for it is a rule of common sense …), that you should rather lean towards that construction which preserves, than towards that which destroys. Ut res magis valeat quam pereat is a rule of common law and common sense; and much the same principle ought surely to be adopted where the question is, not between two rival constructions of the same words appearing in the same instrument, but where the question is on so ready an instrument as that you may either take it verbally and literally, as it is, or with a somewhat larger and more liberal construction, and by so supplying words as to read it in the way in which you have every reason to believe that the maker of it intended it should stand; and thus again, according to the rule ut res magis valeat quam pereat, to supply, if you can safely and easily do it, that which he per incuriam omitted, and that which instead of destroying preserves the instrument; which, instead of putting an end to the instrument and defeating the intention of the maker of it, tends rather to keep alive and continue and give effect to that intention' (Lord Brougham LC in Langston v Langston)."

As is pointed out by the learned authors of Hardingham, Neave and Ford, Wills and Intestacy in Australia and New Zealand, 2^nd ed, (1989), Law Book Co, these principles do not permit the court to act on the basis of mere speculation, nor to overcome the clear words of the will. However, in this case, it seems to me that the statutory principle is of assistance in discovering the true meaning of the testator. His clear words, and the surrounding extrinsic evidence, point strongly towards the fact that his primary intention was to have Mr Claridge, in his individual capacity, acting as his executor. For this reason, it is unlikely that he would have intended to appoint a separate person, the company, if he had appreciated its existence. The complexity introduced by the fact that he attempted to achieve not only the appointment of Mr Claridge, but, in effect, a succession plan by the appointment of an entity must be acknowledged. However it seems to me that I can safely assume that his real intention was to effectively appoint an executor. If the clause is struck down for uncertainty, then the result will not be an intestacy because the devolution of beneficial interests in the real and personal estate of the testator will still be in accordance with the provisions of his will. However the important part of the document which appoints an executor of the testator's choice, will be "destroyed".
As I have already demonstrated, the remaining ambiguity presents a choice between competing constructions; a firm comprised of natural persons or the company. An appointment of the company may well fail (In the Will of Docker (1976) 12 ALR 52), as will an appointment which is uncertain. On the other hand, a construction which appoints a firm can be further construed as the appointment of the natural persons who, it can be inferred, the testator believed would constitute the firm now or in the future. (See Re Horgan (above)). Such a construction would result in the appointment of Mr Claridge, and if he is unable to or does not accept the appointment, any other accountant succeeding him in respect of the operation of the accounting practice. This construction is clearly in accordance with the stated intention of the testator. It is a construction which is encompassed by the words of the will, which makes no reference to the appointment of a company, and which preserves the appointment, rather than destroys it. There are still aspects of uncertainty which attend such a construction, but they relate to the operation of the appointment in the event that Mr Claridge is not available to accept the appointment. However, this was not an appointment which provided for alternatives without any indication as to choice between those alternatives. It is clear enough that the testator intended that in the first instance Mr Claridge would be appointed as executor with his successors being appointed in the event that he was not available to accept the appointment. Accordingly, the problem that the court faced in Yearwood does not apply in this case. In this case, there has been an effective appointment of an executor, and that is of Mr Claridge. It is not necessary to consider the validity or effectiveness of the contingent appointment of his successor.
This approach is consistent with the approach taken in other comparable cases. I have already mentioned the approach of Lightman J in Rogers. In Veldhuis, Debelle J, determined that an appointment of a named solicitor or a partner of his firm, was void for uncertainty, because it was an appointment in the alternative with no additional words of limitation. His Honour then considered the application of the rectification power contained in the South Australian legislation, which is more liberal than the current Tasmanian version, in that it permits rectification generally to enable a will to accord with the testator's intention. His Honour drafted the clause to read:
"Mr Lempens or if Mr Lempens is unable to act as executor (a named partner) of [the firm of solicitors] be executor and trustee of the will."
A similar approach was taken by Grey J in Rea Costello (deceased) [2014] SASC 134, although in that case his Honour simply appointed the nominated solicitor as the executor, because that solicitor was available, was the intended preference of the testator and there was no need to be concerned with the contingent alternatives. Although the results in these cases were pursuant to a power of rectification, they are useful to demonstrate the approach taken to the ascertainment of the testator's intention.
The power of rectification provided by s 42 of the Wills Act, which was relied upon by the applicant in the alternative, is, in my view, not available in this case. A precondition of the exercise of the power of rectification is that the Court be satisfied that the will does not carry out the intentions of the testator because of a clerical error (s 42(1)(a)) or the failure of the will to give effect to the instructions of the testator (s 42(1)(b)). To the extent that an error was made by Mr Lubke, I would be satisfied that it did not result from a clerical error. (See the discussion of the meaning of that term by the High Court in Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381 per Fullagar J at 406). Further, as he prepared his own will, there are no instructions, and hence the second basis for rectification set out in s 42(1)(b) is not relevant to this case (see Vescio v Bannister [2010] NSWSC 1274 at [12]).
Having regard to the above, I construe cl 2 of the will as follows. The will appoints as executor Brian Claridge and, if Brian Claridge is unable or unwilling to act as executor, his successor as a practising director of the company Brian Claridge Accounting Pty Ltd. As indicated above, there may well be difficulties with the validity of the alternative appointment or with its effectiveness if circumstances required its consideration. However, I am told that Mr Claridge will accept the appointment as executor and, accordingly, it seems to me that this construction will adequately deal with the appointment of an executor in terms of an application to grant probate. In those circumstances, it is unnecessary to address the orders sought in pars 2 or 3 of the application.
I will hear counsel as to any consequential matters arising from this determination.