Amundson v Raos
[2015] NZHC 2422
•5 October 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-000865 [2015] NZHC 2422
BETWEEN GEORGINA AMUNDSON, SAMUEL
JOSEPH PIVAC AND JONATHAN CHRISTOPHER RAOS
Applicants
AND
JONATHAN CHRISTOPHER RAOS Respondent
Hearing: 28 September 2015 Appearances:
Brian Stewart and Emily McKibbin for the Applicants
Kevin McDonald for the Respondent
Bill Patterson for the family members in supportJudgment:
5 October 2015
JUDGMENT OF MOORE J
This judgment was delivered by me on 5 October 2015 at 4:00pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
Date:
AMUNDSON & ORS v RAOS [2015] NZHC 2422 [5 October 2015]
Introduction
[1] On 21 August 2014 John Joseph McHugh (“Mr McHugh”) instructed his solicitors to prepare a new will. Acting on those instructions a draft was prepared and forwarded to Mr McHugh for his comments. On 30 January 2015 Mr McHugh died suddenly of a heart attack. He was aged 57. He never signed the will or any other will.
[2] This application is brought under s 14 of the Wills Act 2007 (“the Act”). It seeks an order declaring the draft will to be valid.1
[3] Although the parties consent to making the orders set out more fully later in this judgment, s 14 of the Act requires the Court to be satisfied that the document in question expresses the deceased person’s testamentary intentions before it may make an order declaring the document to be a valid will.
Background
[4] Mr McHugh had no children. He is survived by his long term partner, Jonathan Christopher Raos, his mother Kathleen Monica McHugh, five siblings and
16 nieces and nephews.
[5] His estate is considerable with net assets likely to be worth well in excess of
$5,300,000.These comprise the following: (a) cash;
(b) commercial and residential properties in Devonport, Auckland;
(c) a 100 per cent shareholding in McHugh Catering Limited (“McHugh Catering”) which owns the catering and function hire business known as “McHugh’s of Cheltenham”;
(d) two commercial properties in Devonport; and
[6] Mr McHugh instructed his solicitor of long standing, Mr Western, on two occasions to prepare a will. The first was on 13 September 2007. On Mr McHugh’s instructions Mr Western prepared a draft which he sent to Mr McHugh on 20
September 2007. He invited his comments. The document was incomplete because Mr Western did not have instructions as to whether Mr McHugh wished to buried or cremated. His instructions were also incomplete on the question of the disposal of the residue of the estate. The draft was never executed because Mr McHugh did not get back to Mr Western with instructions.
[7] The second occasion was on 21 August 2014. In the course of a telephone conversation in which Mr McHugh discussed the sale of McHugh’s Catering, he told Mr Western he wanted to revise the 2007 draft in the following ways:
(a) making greater provision for Mr Raos; and
(b) making changes to the executors; and
(c) directing he be cremated.
[8] Mr Western took notes of this conversation and recorded these revisions by marking up a copy of the 2007 draft will.
[9] On 27 August 2014, just four working days after receiving Mr McHugh’s
instructions, Mr Western amended the draft and emailed a copy to Mr McHugh.
[10] Under clause 1 of the draft will Mr McHugh revoked his previous wills. By clause 2, he appointed the applicants in the present matter as his executors and trustees. Under clause 4 he expressed the wish that his body be cremated and under clause 5 he granted certain powers to his trustees, the terms of which are not material to this application.
[11] Under clause 3, Mr McHugh disposed of his property in the following manner:
“I GIVE AND BEQUEATH all my property to Trustees UPON TRUST:-
(a) to pay all my debts funeral and testamentary expenses together with all duties payable in respect of my dutiable estate including my notional estate;
(b) To give to my partner JONATHAN CHRISTOPHER RAOS if he survives me for a period of 14 days all my personal chattels as defined in s 2 of the Administration Act 1969;
(c) to hold the residue to allow my said partner JONATHAN CHRISTOPHER RAOS the use and enjoyment of it and the net income arising from it during his lifetime;
(d) after the death of my said partner JONATHAN CHRISTOPHER RAOS (Distribution Date) to divide the residue then remaining, including any undistributed income, equally among such of my siblings, my nieces and my nephews who survive me.”
[12] Unlike the 2007 draft, the 2014 document disposed of Mr McHugh’s residuary estate. It is a complete document. In addition, Mr Western confirmed in his evidence it reflected Mr McHugh’s instructions as conveyed to him in their telephone conversation of 21 August 2014.
Jurisdiction and applicable principles
[13] The Act came into force on 1 November 2007. Section 14 has since been considered by this Court on numerous occasions.
[14] The section plainly applies in the present circumstances because the 2014 draft will purports to be a will but in a number of material respects it does not comply with the formalities required by s 11 of the Act.
[15] In order for the Court to exercise its jurisdiction under s 14 of the Act the following conditions must be satisfied:
(a) there must be a document2 which appears to be a will;
(i) does not comply with s 11 of the Act; and
(ii) came into existence in or out of New Zealand; and
(c) the Court is satisfied that the document expresses the deceased’s
testamentary intentions.
[16] Section 8(1) of the Act defines “will” in the following way:
“8 Meaning of will
(1) Will means a document that—
(a) is made by a natural person; and
(b) does any or all of the following:
(i) disposes of property to which the person is entitled when he or she dies; or
(ii) disposes of property to which the person's personal representative becomes entitled as personal representative after the person's death; or
(iii) appoints a testamentary guardian.”
[17] Section 11 of the Act sets out the requirements for a will to be valid. These are as follows:
“11 Requirements for validity of wills
(1) A will must be in writing.
(2) A will must be signed and witnessed as described in subsections (3) and (4).
(3) The will-maker must—
(a) sign the document; or
(b) direct another person to sign the document on his or her behalf in his or her presence.
(4) At least 2 witnesses must—
(a) be together in the will-maker's presence when the will-maker—
(i) complies with subsection (3); or
(ii) acknowledges that—
(A) he or she signed the document earlier and that the signature on the document is his or her own; or (B)
another person directed by him or her signed the document earlier on his or her behalf in his or her presence; and
(b)
each
sign
the document in the will-maker's
presence.”
[18] Section 14 permits this Court to make an order declaring a document to be a valid will if it is satisfied the document expresses the testamentary intentions of the deceased. In deciding whether to make such an order, the Court may consider the wording of the document, evidence as to the manner in which the document is signed and witnessed, evidence as to the testamentary intentions of the deceased and evidence of any statements the deceased may have made relevant to the issue.3
[19] Cogent evidence is required to demonstrate that the document in question expresses the deceased’s testamentary intentions. As McKenzie J said in Re Zhou (Deceased):4
“The task of the Court is to evaluate the relevant circumstances and reach a conclusion. … Because of the importance of a declaration that a will be declared valid, there must be cogent evidence to support any finding which is relied upon in determining that the Court is satisfied on the s 14(2) test.”
[20] McKenzie J commented on the utility of s 14 in Re Beaumont:5
“The power to validate a will given by s 14 of the Wills Act 2007 has been a most valuable and beneficial addition to the powers of the Court to ensure that the clearly expressed testamentary intentions of a deceased person are not frustrated by deficiencies in the formal requirements for execution.”
3 Wills Act 2007, s 14(3).
4 Re Zhou (Deceased) HC New Plymouth CIV-2010-443-21, 17 May 2010.
5 Re: Estate of Beaumont [2013] NZHC 2719, at [10].
[21] His Honour went on to say:6
“A fundamental principle underpinning the law governing rules is that great care must be taken in determining whether what is claimed to be an expression of a will-maker’s wishes is genuinely so. That care is necessary because a will operates only after its maker has died. The requirements as to the formalities of the execution of a will are a consequence of this fundamental principle. Under s 14(2), the enquiry which that principle requires is focused on the will-maker’s intentions, rather than on the formal steps taken to implement those intentions. That change of focus does not diminish the importance of the fundamental principle. In considering the s 14(2) question, great care must be taken in determining whether the draft will is genuinely an expression of the deceased’s intention.”
[22] There are various reasons why a person might have failed to sign their draft will before their death. The Court has been prepared to grant applications where there is evidence that the deceased overlooked or forgot to sign their will, thought they did not need to do anything further, or simply did not get around to signing their will prior to their death.7
[23] Given that the primary enquiry under s 14 is whether the document in question expresses the testamentary intentions of the deceased, the length of time between the giving of the instructions and the death of the testator is a factor which requires examination.
[24] A significant delay and ultimate failure by the deceased to sign their draft will is not necessarily fatal to an application under s 14. Applications have been granted in circumstances where the deceased’s draft will remained unsigned for five years and also three years.8
[25] In Re: Hickford (Deceased) there was a significant temporal gap between the creation of the document containing the instructions and the date of the death of the
testator. 9 In that case the document, as in the present case, was a draft unsigned will.
6 At [11].
7 Re: Hickford (Deceased) HC Napier CIV-2009-441-000369, 13 August 2009, p 49 at [9]; Gladwin & Ors v Public Trust & Ors HC Auckland CIV-2010-404-001666, 9 August 2011, p 20 at [22]; Tamapara v Byerley & Anor [2014] NZHC 1082, p 88 at [39]..
8 Re: Fraser (Deceased) HC Napier CIV-2011-441-700, 20 December 2011 at p 60.
9 In Re: Hickford (Deceased) above n 7.
McKenzie J considered three possibilities as to why the deceased did not sign the will, namely:10
(a) he had changed his mind about making a will; or (b) he overlooked or forgot about signing the will; or (c) he did not think he needed to do anything further.
[26] Of the three possibilities, his Honour stated:11
Clearly, the first possibility would mean that the document did not express his testamentary intentions. In my view, the second possibility might not meet the statutory test. I consider that the third possibility would meet the test. If the deceased thought that he had made an effective will and that the reason that the document was unsigned was a mistaken view that everything necessary had been done, the Court could be satisfied that the document did express the deceased’s testamentary intentions despite the lack of a signature.
[27] There is, of course, a fourth possibility which has relevance in this case and that is where the testator was so busy or distracted that he or she simply did not get around to executing the will.
[28] In Estate of Cornelius Allan J was faced with an application to declare a will valid where there had been a significant delay between the giving of the instructions and the death three years later. 12 Allan J found the deceased never got around to executing the will which had been prepared for him. He concluded it reflected the deceased’s testamentary intentions.
[29] The fact that an unsigned draft will exists is significant because it shows the deceased did not want intestacy law to dictate how their property was to be dealt
with following their death. It is noteworthy on this point that the vast majority of
10 At [9].
11 At [10].
12 Re: Cornelius HC Auckland CIV-2012-404-341, 28 March 2012.
applications are granted.13 In this regard, McKenzie J in Re: Campbell commented as follows:14
“The overwhelming preponderance of successful applications indicates that this Court has considered s 14 to be a remedial provision, and that where there is evidence of the deceased person’s testamentary intentions, it is better that those intentions be given effect, in preference to the disposition of property which would take effect under any previous will or on an intestacy. Generally, the existence of the document will, in itself, before its contents are considered, be an indication that the deceased person did not wish the disposition which would otherwise occur to take place. The preponderance of successful applications suggests that this Court recognise it as appropriate to give effect to the contents of the document in preference to the disposition, which the deceased person has, by the document shown a wish should not apply.”
Analysis: s 14 considerations
[30] There are four elements under s 14 of the Act which are required to be satisfied before the Court may declare a document to be a valid. I shall now consider each in turn.
(a) Is there a document which appears to be a will?15
[31] Plainly this element is met. The 2014 draft will is a document as defined by s 6 of the Act.16 It is a draft will and expresses itself to be such. It is in executable form.
(b) Does the document comply with s 11 of the Act?
[32] The draft will does not comply with the requirements of s 11 only because it is not signed and witnessed as required in s 11(3) and (4).17
(c) Was the document prepared in or outside New Zealand?18
[33] The evidence plainly shows that Mr Western prepared the document in
New Zealand.
13 Approximately 95 per cent.
14 Re: Campbell [2014] NZHC 1632 at [18].
15 Wills Act 2007, s 14(1)(a).
16 “Document” means any material on which there is writing (refer Rules Act 2007, s 6).
17 Refer Wills Act 2007, s 11(2).
18 Wills Act 2007, s 14(1)(c).
(d) Does the document express Mr McHugh’s testamentary intentions?
[34] The executors have brought the current application because they consider the
2014 draft will expresses Mr McHugh’s testamentary intentions. They have formed
this view for the following reasons:
(a) Mr McHugh provided Mr Western with clear instructions to amend the 2007 draft will on 21 August 2014, and the 2014 draft accurately reflects Mr McHugh’s instructions;
(b)Mr McHugh’s delay and ultimate failure to sign the 2014 draft does not indicate he did not agree with its contents. In support of that claim, the applicants point to the following:
(i) Mr McHugh was typically slow in signing documents.
(ii)Mr McHugh was highly stressed and busy over the period from when the 2014 draft will was prepared in August 2014 until his death;
(iii)Mr McHugh considered the 2014 draft will was in place irrespective of the fact it was unsigned.
[35] In addition there is evidence that Mr McHugh had reached an agreement with his parents that his estate property would ultimately be passed on to his nephews and nieces and the 2014 draft will reflects that intention.
[36] Furthermore, there is evidence that Mr McHugh was not enamoured of Mr Raos’ family and did not wish them to benefit from his estate assets. This is supported by evidence that Mr McHugh told some of his family members that his estate would be passed on to his siblings, nephews and nieces. The 2014 draft will reflects this intention.
[37] The 2014 draft will deals with Mr McHugh’s property in a manner consistent with an agreement which Mr McHugh and Mr Raos had previously executed contracting out of the Property (Relationships) Act 1976 (“the s 21 agreement).
[38] Finally, no evidence has been placed before me tending to indicate that the
2014 draft will did not reflect Mr McHugh’s intentions when it was prepared in August 2014 or that Mr McHugh had changed his mind regarding its contents after it had been prepared by Mr Western. There is no evidence that Mr McHugh made any comments or statements tending to contradict the intentions reflected in the contents of the 2014 draft will.
[39] I accept the evidence of Mr Western that the 2014 draft will accurately represents Mr McHugh’s testamentary intentions at the time the two spoke by telephone in August 2014 for the following reasons:
(a) no evidence has been advanced to the contrary;
(b)Mr Western prepared the 2014 draft will within four working days of his telephone conversation in August;
(c) Mr Western maintained a contemporaneous file note of Mr McHugh’s
instructions;
(d)Mr Western knew Mr McHugh very well having worked closely with him for over 25 years;
(e) it is inherently unlikely Mr McHugh would have instructed Mr Western to draft the will in these terms if his instructions were not truly reflective of his testamentary intentions; and
(f) Mr Western does not stand to receive any personal gain if the will is validated. He has no financial incentive to be anything other than entirely objective and professional.
[40] Having been satisfied that the 2014 draft will accurately reflects Mr McHugh’s testamentary intentions as at August 2014 when Mr McHugh instructed Mr Western to prepare his will, I next turn to the issue of whether the five month delay and ultimate failure to execute the will might indicate that Mr McHugh had changed his mind either in relation to making the will or in relation to the details of the testamentary dispositions it contains.
[41] Mr McHugh gave Mr Western instructions to prepare his will in August 2014. And yet five months later when he died he had still not executed it. A considerable body of evidence was placed before me designed to explain why it was that Mr McHugh delayed and ultimately failed to execute the 2014 draft will. This evidence was designed to demonstrate that despite the failure to sign the will, Mr McHugh’s testamentary intentions remained unchanged. Five factors have been advanced to support this proposition. These are as follows:
(a) While there is evidence that Mr McHugh was decisive and not one to change his mind or be unsure about matters, he was also a person who, according to Mr Western, tended not to complete the legal formalities of a decision once he had made it and was committed to it. In Mr Western’s experience it was not uncommon for there to be a delay between him sending documents to Mr McHugh and Mr McHugh making a time to meet with him to execute the documents. An example of this sort of delay occurred in relation to the execution of the s 21 agreement. Evidence of this character feature is also apparent from the evidence of other witnesses.
(b)In the latter part of 2014 Mr McHugh was stressed and, no doubt, distracted by a number of major events which were occurring in his life and which would have been individually stressful. In combination it is inevitable that Mr McHugh was both very stressed and distracted. The signing of his will was thus a relatively low priority. These stressors are listed below:
(i)In the middle of 2014 Mr McHugh’s father was diagnosed with terminal cancer. He died on 30 December 2014, exactly a month before Mr McHugh, himself, died. Mr McHugh had a very close relationship with his father who had been his business partner for 35 years. He was Mr McHugh’s mentor and a close friend and the evidence is overwhelming that Mr McHugh was very stressed, to the point of being utterly devastated, by his father’s deterioration and ultimate death.
(ii)In April 2014 Mr McHugh and Mr Raos embarked on extensive landscaping and renovation works to their home in Devonport. This work ran considerably over time and over budget. In fact, Mr McHugh was so exercised by these complications that he had difficulty talking to others about the project which was not completed for some months after his death.
(iii)In the same telephone call which Mr Western had with Mr McHugh concerning the drafting of a new will, Mr McHugh disclosed his concerns about the performance of McHugh’s Catering and the potential sale of the business. It seems that the business was not performing as well as it had been and Mr McHugh was becoming tired of working seven days a week running it. Furthermore, some of the offers which Mr McHugh had received for the business were a good deal less than he expected. According to one witness he was devastated that his life’s work might be sold for what he considered was relatively a modest sum.
(iv)Towards the end of 2014, Mr McHugh was involved in a dispute with a senior employee. The evidence is that Mr McHugh found this very upsetting and unpleasant. He prided himself on leading a collegial team of staff and the dispute introduced an element of unpleasantness which was
inconsistent with the way Mr McHugh related to the balance of his staff. To one witness he was reported as saying he had never been treated so badly. He said he was unable to eat or sleep and was being driven “crazy”.
(v)Mr McHugh was experiencing difficulties with some of the tenants in his commercial premises. One had apparently unilaterally decided to take a rent holiday and Mr McHugh was required to engage his lawyers.
[42] I am satisfied that these factors more than adequately explain why it was that Mr McHugh was distracted to the point that the execution of the 2014 draft will assumed a low priority in the context of the other pressing issues swirling around in his busy life at the end of 2014 and the first weeks of 2015.
[43] Furthermore, that he delayed and ultimately failed to sign the 2014 draft will does not indicate he disagreed with the contents. In fact, there is evidence he spoke about this to some of the witnesses. For example, at a lunch shortly after his father’s death, Mr McHugh told several witnesses that he had put his will in place. In fact, it would appear from this evidence that Mr McHugh believed at this time, just weeks before he died, that his affairs were in order.
[44] I am also satisfied that the 2014 draft will reflected Mr McHugh’s arrangement with his parents that his estate property would pass to his siblings, nieces and nephews. The 2014 draft will reflects this. For example, in February
2009, Mr McHugh engaged Mr Western to provide him with advice regarding the potential purchase of Mr McHugh’s parents’ 28 per cent shareholding in McHugh’s Catering. The instructions were never completed largely, it seems, because Mr McHugh did not advance matters. However, this intention is reflected in the evidence of other witnesses including Mr McHugh’s mother who stated that Mr McHugh’s offer to purchase his parents’ shares at what she thought was under value, was agreed on the understanding that Mr McHugh’s property would be left to the family. This evidence is also supported by Mr McHugh’s cousin who confirmed Mr McHugh advised her that the purchase of the shares at such modest level
recognised the arrangement that the properties would revert to Mr McHugh’s
brothers and sisters or to their children following his death.
[45] As noted earlier, the 2014 draft will is also consistent with Mr McHugh’s
intentions as recorded in the s 21 agreement. This agreement was concluded on
13 September 2007. Under the agreement Mr McHugh and Mr Raos agreed on what property would remain their separate property under the Property (Relationships) Act
1976. The agreement listed Mr McHugh’s separate property as including his shares in McHugh’s Catering, any current account, shareholders loan or other debt owing to Mr McHugh by McHugh’s Catering and the properties situated at 30 Victoria Road and 4 King Edward Parade, Devonport; a property at Cheltenham Road, Devonport and the home at King Edward Parade, Devonport. Mr Raos’ sole piece of separate property was at 5-38 Cheltenham Road, Devonport. This property was subsequently sold.
[46] Plainly, Mr McHugh’s intention in completing this agreement some 17 or so years into his relationship with Mr Raos reflects his intention that the couple maintain their personal property separately.
Conclusion
[47] I am amply satisfied, for the reasons fully discussed above, that the 2014 draft will expresses Mr McHugh’s testamentary intentions. These were first reflected in the 2007 document, the omissions which were filled when Mr McHugh reviewed his instructions to Mr Western to prepare a fresh will. I am satisfied that the 2014 draft will reflects Mr McHugh’s testamentary intentions and were accurately recorded at the time by Mr Western and incorporated in the document sent to Mr McHugh.
[48] I am also amply satisfied that Mr McHugh’s failure to execute the document despite the fact it had been forwarded to him five months earlier, is fully explained by the various stressors which were operating in Mr McHugh’s life during that period. The evidence reveals that Mr McHugh believed that although he had not signed the will his testamentary affairs were settled. This conclusion is further supported by the evidence which indicates that Mr McHugh was a talented and
gifted businessman who knew what he wanted but once he made up his mind he tended not to be punctual in attending to the formalities. Given that his death was totally unexpected there was no apparent necessity or urgency on his part to formalise the arrangements around his will.
Decision
[49] I am satisfied that all the elements in terms of s 14 are met and I make an order under s 14 of the Act declaring the 2014 draft will to be the valid will of Mr McHugh.
Other matters
Probate
[50] The parties have asked that in the event an order validating the 2014 draft will is made, the Court orders the grant of probate over the validated will to the executors, Georgina Mary Amundson (by her attorney Elizabeth Kate Priest), Samuel Joseph Pivac and Jonathan Christopher Raos.
[51] A similar application was granted by Venning J in Re: Cross.19 In the circumstances I am satisfied it is appropriate that there be an order directing probate in common form of the 2014 draft will to issue to the named executors. Counsel are invited to file the appropriate form of order and probate.
Settlement approval for minor beneficiaries
[52] The parties also seek the approval of the Court for the settlement on behalf of those beneficiaries who are minors. Counsel rely on the inherent jurisdiction of the Court, as described in Chapman v Chapman20 and the statutory power set out in s 64A of the Trustees Act 1956. These powers allow the Court to consent to the variation of a trust if satisfied that the beneficiaries will not suffer a detriment as a result. In reaching this conclusion, I am entitled to consider both financial and
broader moral considerations.
19 Re: Cross [2015] NZHC 692.
20 Chapman v Chapman [1954] AC 429.
[53] In all the circumstances I am satisfied that the proposed variation does not cause a detriment to the minor beneficiaries. Under the will, their interest does not arise until after the death of Mr Raos. By allowing the variation their interest will crystallise earlier, allowing it to be of more practical benefit even if it results in a financially reduced share. I further consider that the reduction is likely to be offset by the right to income which will accrue between now and the death of Mr Raos. There are also moral benefits arise through preventing ongoing litigation and allowing the parties a “clean-break” where, unfortunately, there has been a breakdown in the relationship between Mr Raos and Mr McHugh’s siblings and their families. In these circumstances, I am satisfied that the beneficiaries will not suffer a material detriment and the orders sought should be made.
[54] I thus grant the application and approve the variation contained in the deed of settlement.
[55] Leave is reserved for any party to seek such further orders or directions as may be necessary to give effect to this decision.
Moore J
Solicitors:
Simpson Western, Auckland
Kevin McDonald & Associates, Auckland
Patterson Hopkins, Auckland
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