Coleman v Chalklen

[2016] NZHC 3178

IN THE HIGH COURT OF NEW ZEALAND

NAPIER REGISTRY

CIV- 2015-441-91

[2016] NZHC 3178

UNDER

the Declaratory Judgments Act 1908

IN THE MATTER OF

the estate of Dorothy Farrington

BETWEEN

ADRIAN JAMES COLEMAN

Applicant

AND

DAWN LOIS CHALKLEN & OTHERS

Respondents

Hearing:

16 May 2016

Counsel:

D J O’Connor and J C Heaphy for Applicant

M J Wenley and J F McDowell for Respondents

Judgment:

22 December 2016

JUDGMENT OF CLARK J

Introduction

[1]    The applicant is the sole surviving executor and trustee of the will of the late Dorothy Farrington. The applicant seeks a declaration as to the construction of a clause in the will bequeathing the residuary estate. Alternatively, a declaration is sought that the description of the residuary beneficiaries is void for uncertainty.

Facts

[2]    The will was executed on 21 December 1987. The testator died the following year on 12 June 1988. Probate was granted in common form on 7 November 1988.

[3]    The  testator  had  one  child, Maurice Farrington.    The will provided a life interest to Maurice who had a mental illness. The residue now in contention became

COLEMAN v CHALKLEN & OTHERS [2016] NZHC 3178 [22 December 2016]

available upon Maurice’s death on 27 May 2013, some 25 years after the will was made. A little more than $202,000 is held on behalf of the estate.

[4]The will contains only seven clauses. Clause 4(b) provides:

To pay the balance of my residuary estate to such of the children of my four nieces (all of whom currently reside in Perth) and Alan, son of my sister the said Mona Elma McKenzie, as shall survive me and shall attain or shall have attained the age of 20 years, as tenants in common in equal shares, according to their heads and not according to their families.

[5]    The words which I have italicised contain a mistake. It is common ground that the testator had only three nieces not four. Jonathan Heaphy, a solicitor employed by Luscombe Legal, the solicitors for the applicant, swore an affidavit in which it is accepted that:

the description of the group of beneficiaries in clause 4(b) of the will is incorrect because the testator did not have four nieces. The testator had three nieces.

[6]    Furthermore, of the testator’s three nieces, Mrs Dawn Chalklen is the only niece to reside in Perth along with her four children.

Issues

[7]    The originating application seeks from the Court a declaration that the words “such of the children of my four nieces” in cl 4(b) should be deleted and replaced with the words “such of the four children of my niece”. The result would be that instead of the description which I have italicised above the residuary beneficiaries would be described as “such of the four children of my niece (all of whom currently reside in Perth)…” In the alternative the originating application seeks a declaration that “a different interpretation should be given”. The application is not opposed.

[8]    Because the residuary beneficiaries are incorrectly described — there being no such class of relative as that described — it is not possible to give effect to cl 4(b) of the will dealing with the residuary estate.

[9]    The issue then is whether it is possible to identify the intention of the testator and give effect to that intention or must the clause be declared void for uncertainty?

Parties and evidence

[10]   The applicant, Mr Coleman, in addition to being the sole surviving trustee and executor of the will, is also the solicitor who prepared the will for Mrs Farrington. Mr Coleman is a solicitor of some 45 years experience. He swore an affidavit and was cross-examined.

[11]   Pursuant to orders made by Smith AJ in October 2015 a total of 17 parties was directed to be served with the proceeding. A timetable was set for the filing of affidavits by those parties should they wish to do so.

[12]   One affidavit was filed — by Mrs Chalklen. Mrs Chalklen also filed an appearance in order to reserve the rights of her four children in the event a step contrary to their rights was taken in the proceeding. Mrs Chalklen was cross-examined by video link from Perth.

[13]   Dennis McGregor, one of the parties upon whom the proceeding was directed to be served, subsequently filed a notice of intention to reserve rights but took no other formal step. Mr McDowell appeared for Mr McGregor and cross-examined Mrs Chalklen but he made no submissions either orally or in writing.

[14]   The only other document from any of the parties directed to be served is a letter from Raymond Murray, a nephew of the deceased. I return to this letter later in my judgment.

Applicable principles

[15]   Mr O’Connor, counsel for the applicant, provided a detailed overview of the legal principles relevant to the construction of testamentary provisions. Because of the course I propose to take it is unnecessary for me to analyse the authorities but I am grateful to Mr O’Connor for his references and their inclusion in a case book. Mr Wenley, counsel for the first respondent, accepted Mr O’Connor’s exposition of the legal principles but did not accept his application of the principles to this case.

[16]   The first point to note is that s 31 of the Wills Act 2007 permits the Court to correct a will in certain circumstances. Section 31 applies, however, only to the wills of persons who died on or after 1 November 2007 even if their will was executed before that date. Mrs Farrington died in June 1988. Consequently, if her will is to be corrected that cannot be achieved in reliance upon s 31.

[17]   Of the very many principles and rules of construction to aid the identification of a testator’s intent I need only be concerned with those that apply to the particular features of this will.

(a)Probate has been granted. The first objective of the will has been achieved namely that the testator’s son would have a life interest in his mother’s estate. What falls for determination now is the meaning of cl 4(b), the provision dealing with the residuary estate.

(b)Although the parties agree that the reference to the testator’s four nieces in cl 4(b) is in error and they agree that the testator had only three nieces the will is not uncertain, or in error, or ambiguous on its face. The error is known only as a result of external evidence.

[18]   This last feature raises an evidential concern. The principle is that words in a will must be given their ordinary meaning:1

If the testamentary language is unambiguous and discloses no obvious error, the Court must give effect to it as it stands.

[19]   The general rules of construction disallow extrinsic evidence unless the meaning of the words used by the will-maker is ambiguous.2 With regard to cl 4(b) there is no lack of clarity or ambiguity on the face of the words “such of my four nieces…” Nor do those words conflict with any other provision in the will. The words

1      Re Jensen [1992] 2 NZLR 506 (HC) at 507 cited in Micky Richardson and Lindsay Breach Nevill’s Law of Trusts, Wills and Administration (12th ed, LexisNexis, Wellington, 2016) at [16.2.2] and in John Earles and others Dobie’s Probate and Administration Practice (6th ed, LexisNexis, Wellington, 2014) at [7.3.3].

2      See for example Laws of New Zealand Wills at [167]; Nevill’s Law of Trusts, Wills and Administration, above n 1, and the authorities cited at [16.2.2].

are rendered unclear only because extrinsic evidence, not the will itself, reveals the words to be in error.

[20]   There are exceptions to the general exclusionary rule. The exception which is applicable in this case is known as the “armchair principle”. The armchair principle permits a court to ascertain all the facts known to the will-maker at the time he or she made the will.3

… the well-known armchair principle allows the Court by means of extrinsic evidence to be made aware of such facts and circumstances as were known to the testator at the time the will was made. Evidence is admissible to amplify the view which the testator had from his armchair but not in order to supply details of later events, happenings and relationships as might be thought to have some bearing on his testamentary intentions.

Analysis

[21]   Considering first what facts were known to Mrs Farrington in 1987 when she made her will, Mrs Farrington was aware that her niece Dawn Chalklen lived in Perth. She knew Dawn Chalklen had four children and that they all lived in Perth. The Chalklen children had enjoyed a close relationship with Mrs Farrington. Mrs Chalklen said in cross-examination “they were like her grandchildren”.

[22]   Mrs  Chalklen  deposed  to  having  had  a  close  relationship   with   her Aunt Dorothy (Mrs Farrington) since she was a child. She had spent holidays with Mrs Farrington and her husband as a child and spent some days of her honeymoon with them. Mrs Chalklen  continued  to  visit  Mrs  Farrington  until  1978  when  Mrs Chalklen  moved with her family to Perth.  Her eldest daughter, Verina,  was   16 years old at that time.

[23]   Mrs Chalklen also gave evidence of Verina, with  her  two  daughters  and Mrs Chalklen’s eldest son, visiting Mr Farrington in March 1988 when staying with their  maternal  grandmother  in  Havelock  North.   Havelock   North   is   where Mrs Farrington had always lived. This evidence is not relevant to what was known to Mrs Chalklen at the time she made her will in December 1987 but it was not

3      Re Beckbessinger [1993] 2 NZLR 362 (HC) at 367.

challenged and it  corroborates  evidence  of  the  close  relationship  of  the  Chalklen family with Mrs Farrington at the time she made her will only a few months earlier and what would have been known to Mrs Farrington at that time.

[24]   Mrs Chalklen’s testimony was that at no time prior to December 1987, nor since, did either of her two sisters reside in Perth, Western Australia. All of this information and these details were known to Mrs Farrington.

[25]   Her evidence is that the testator intended the beneficiaries under cl 4(b) to be Mrs Chalklen’s four children. Mrs Chalklen believes that the wording “my four nieces” was supposed to be “my niece’s four children who all currently reside in Perth”. Mrs Chalklen and her four children (two daughters and two sons) have all resided in Perth. The testator’s other two nieces did not reside in Perth nor did their children.

[26]   Mr O’Connor submitted that Mrs Chalklen’s credibility was at stake because of her failure, he said, to put Mr Porteous right when he asked for details of the other three nieces referred to in the will and their children. Mr Porteous was the solicitor in practice with Mr Coleman dealing with the Farrington estate after Mrs Farrington died. Mr O’Connor put to Mrs Chalklen that when she received an email request from Mr Porteous asking for those details she might have said: “you don’t need the contact details for them because there has been a mistake and that information is irrelevant”. Mrs Chalklen was adamant that she did do almost exactly that. Then it was put to Mrs Chalklen that she had allowed some 12 months to elapse before she got back to Mr Porteous and that it seemed strange that she did not get back to him sooner. Mrs Chalklen responded:

A. Because he wasn’t answering. He wasn’t answering my calls. He was either out of the office or away somewhere.

Q.It seems strange that if you knew that the intention of Mrs Farrington was  to  provide  to  your  children,  that  you  didn’t  go  back  to  Mr Porteous straightaway.

A.Well, I did. I did and I have several emails of, that I could, that I have that supports that.

[27]   I do not regard that exchange as diminishing Mrs Chalklen’s evidence about the closeness of the relationship between Mrs Farrington and Mrs Chalklen’s children. None of that evidence was impugned. Furthermore, from my review of the email exchanges between Mrs Chalklen and Mr Porteous up until the point when his practice came under investigation, it is clear that the delays were with Mr Porteous rather than Mrs Chalklen.

[28]   I accept Mrs Chalklen’s evidence. Her responses to quite intense cross- examination struck me as candid even to the point of readily conceding a point rather than attempting to excuse herself. For example, the  last time  Mrs  Chalklen saw Mrs Farrington was when Mrs Chalklen moved to Australia. When cross-examined by Mr O’Connor about whether a gap of nine years without contact would have been allowed to pass if the “relationship was as warm and loving” as Mrs Chalklen said it was, Mrs Chalklen’s response was a simple “no”.

[29]   As to that lack of contact between Mrs Chalklen and Mrs Farrington what is clear is that the relationship between Mrs Farrington and some of Mrs Chalklen’s children continued at least until just a few months before her death.

[30]   Mrs Chalklen’s evidence as to  the  contact  her  family  maintained  with  Mrs Farrington prior to December 1987 is relevant and establishes Mrs Farrington’s knowledge of Mrs Chalklen, her four children, and the fact they resided in Perth.

[31]   Mr Wenley submitted that the logical explanation for the mistake was that  Mr Coleman created the mistake when drafting the will from initial instructions. It is not necessary to identify the cause of the error. There is no dispute that cl 4(b) is in error and no dispute about the nature of the error. That said it is desirable that I refer to Mr Coleman’s testimony about the will-making process.

[32]   Mr Coleman’s evidence was that he believed Mrs Farrington intended to include in her will the  children  of  all  her  nieces  and  that  he  had  interpreted  Mrs Farrington’s instructions correctly. Mr Coleman was firm in his evidence. He said it was fixed in his mind that the phrase “all of whom currently reside in Perth” referred to nieces not to the children.

I thought it strange that four nieces should all live in Perth but it was possible. It would be impossible that all the children could live in Perth.

[33]   Mr Coleman remained firm in his view that the words in cl 4(b) applied to the nieces not to the children but he agreed that “Mrs Farrington would know that she had one niece who lived in  Perth  with  four  children”.  The  will  had  been  sent  to Mrs Farrington to read at home but Mr Coleman could not say whether Mrs Farrington had in fact read it. When she came to his offices to sign the will he did not read it to her and she did not read it in his presence. Mr Coleman conceded he did not know whether Mrs Farrington had read the will properly or not.

[34]   As Mr Wenley submitted it is not tenable to suggest that Mrs Farrington intended the disposition to mean “the children of my three nieces” given the description “all of whom currently reside in Perth”. Mr Wenley is correct to submit that moral duty does not arise. This is not a family protection claim. Mrs Farrington was entitled to take the long view,  that is, how her relationship had been with      Mrs Chalklen’s children in the past. The incontrovertible fact is that Mrs Chalklen was the only niece of the testator who resided with her children in Perth at the date the will was signed and the testator knew that.

[35]   An alternative construction put forward namely, “such of the children of my three nieces as shall survive …” relegates into non-existence the key and distinctive description, “all of whom currently reside in Perth”. To read cl 4(b) as though that precise, qualifying description does not exist is manifestly contrary to the testator’s intention and contrary to principle. The words “all of whom currently reside in Perth” may not be ignored:4

… if words of description are fairly to be regarded as words of restriction then they will not be rejected.

[36]   It was suggested at times during the hearing that because the testator had not travelled she may have simply said “Perth” when she meant “Australia”. That is an extravagant proposition. It requires the Court to accept, in the face of evidence to the

4      Nevill’s Law of Trusts, Wills and Administration, above n 1, at [16.2.3(b)].

contrary, that Mrs Farrington  was  in  some  way  mentally  enfeebled.  Yet  twice Mr Coleman’s evidence was that Mrs Farrington had her wits about her.

[37]   I am of the clear view that the description of the residuary beneficiaries in    cl 4(b) is partly true and partly false and that with the aid of admissible extrinsic evidence the persons intended by the testator to be the residuary beneficiaries can be identified. The rule, falsa demonstration non nocet cum de corpora constat,5 applies so that the inclusion of the false part – the reference to four nieces – does not vitiate the gift but is simply rejected.6

[38]   Finally, I regard it as relevant that no evidence in support of a different or contrary construction was adduced notwithstanding 17 interested parties were served with the proceedings. I referred at the outset to a letter filed by Raymond Murray, one of the interested parties. Mr Murray is Mrs Farrington’s nephew. He explained that he knew Mrs Farrington well and was one of the people who could have made a partial claim. It is not relevant to recount all that he wrote except that he knew Mrs Chalklen from his childhood and was present on several occasions when “Aunty Tot” talked about Dawn Chalklen and her family and held them in “very high regard with love and affection”.

Result

[39]The application is granted.

[40]   The words in cl 4(b) “such of the children of my four nieces” are deleted and replaced with the words “such of the four children of my niece” so that cl 4(b) will now read:

“To pay the balance of my residuary estate to such of the four children of my niece (all of whom currently reside in Perth)…”

[41]   A sealed copy of the rectification order is to be permanently annexed to the grant of probate.

5      A misdescription will not vitiate the document if the thing is described with certainty.

6      Nevill’s Law of Trusts, Wills and Administration, above n 1, at [16.2.3(b)].

[42]   The Official Trustee in Bankruptcy (OT) has communicated to the High Court his interest in the proceeding. I direct that a copy of the judgment be sent to the OT.

Costs

[43]   My preliminary view is that the reasonable costs incurred by the applicant in bringing the application, and by Mrs Chalklen and the applicant being represented at the proceeding, should be paid out of the share of the residue available to the four children of Mrs Chalklen. If parties take a different view brief memoranda should be filed by 20 February 2017.

Karen Clark J

Solicitors:

Luscombe Legal, Hastings for Applicant

Willis Toomey Robinson Scannell Hardy, Napier for Respondents