Comins v Public Trust
[2021] NZHC 1172
•25 May 2021
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV 2020-485-405
[2021] NZHC 1172
IN THE MATTER OF Part 18 of the High Court Rules 2016 and the Trustee Act 1956 and the Declaratory Judgments Act 1908 BETWEEN
BRENDA JACQUELENE COMINS
Plaintiff
AND
THE PUBLIC TRUST
Defendant
Hearing: 22 March 2021 Counsel:
F E Geiringer for Plaintiff
M Freeman and G M Cairns for Defendant
Judgment:
25 May 2021
JUDGMENT OF MALLON J
Introduction
[1] Ian and Jacquelene Cameron, husband and wife, died ten days apart in May 2019. Their wills each contained an identical clause providing that, if the other had predeceased them, the trustee was to set-off a loan of $50,000 they had made to their daughter Brenda against her share of the estate. Because Ian died after Jacquelene, it was this clause in his will that applied.
[2] The daughter Brenda (the plaintiff) says that no set-off should be made under this clause because there was no such loan. She seeks a declaration that the clause is
COMINS v THE PUBLIC TRUST [2021] NZHC 1172 [25 May 2021]
ineffective and directing that Ian’s estate be distributed in accordance with the remaining provisions of the will.1
[3] The Public Trust (the defendant) is the executor and trustee under Ian’s will. The Public Trust considers that, on a proper assessment, the clause must be upheld on its terms and that it is therefore required to deduct $50,000 from Brenda’s share of the estate.
[4] Brenda’s sister, Sheryl, the only other beneficiary under the will, takes no position in the proceeding.2
The will
[5] Ian Cameron died on 27 May 2019. Probate was granted to Ian’s will dated 9 June 2016 with the Public Trust, as the executor named in the will, appointed as the administrator of his estate.
[6] The relevant part of the will, dealing with the residuary of the estate after payment of funeral expenses, debts, taxes and administration expenses, provided:
5. Joint Interest Free Loan to Brenda
5.1If my wife JACQUELENE dies before me, I direct my Trustee to set- off the amount owing in respect of our interest free loan of fifty thousand dollars ($50,000) to my daughter BRENDA JACQUELENE CAMERON against her share in my residuary estate. If BRENDA dies before me, the amount owed is to be set-off against the share of her children in my residuary estate.
5.2If the amount directed to be set-off exceeds the share in my residuary estate then that excess shall remain recoverable from BRENDA (or BRENDA’s estate) by my Trustee.
6. Gift of Residue
I GIVE my residuary estate to my wife JACQUELENE MARGARET CAMERON if she survives me by 30 days. If this gift fails THEN the following provisions for distribution shall apply instead.
7. Further Gift of Residue
1 Declaratory Judgments Act 1908, s 3; Trustee Act 1956, s 68; High Court Rules 2016, r 18.1(a).
2 She was served with the proceeding but did not take any formal steps. Affidavit evidence from the Public Trust states that she was consulted and was adamant it was a loan, but this is inadmissible hearsay evidence and is therefore disregarded by me.
I GIVE my residuary estate to my daughter BRENDA JACQUELENE CAMERON and my daughter SHERYL ANNE CAMERON equally if both are living at my death but if only one of them is living at my death then to that one.
[7] A statement accompanying the will, signed by Ian and dated 9 June 2016, set out Ian’s position on testamentary promises (he stated he had made no promise) and on the Property (Relationships) Act 1976 (he stated he was aware of the contracting out provisions). It also set out his position in relation to the Family Protection Act 1955. Under this heading he discussed why he had not made a gift over to his grandchildren in the event that his daughters predeceased him. In Sheryl’s case, this was because of Ian’s view about how Sheryl’s daughter, Georgia, had treated her mother. In Brenda’s case, this was because she “has no children and will not have any in the future”. He went on to state:
My wife and I have lent our daughter Brenda $50,000 as a joint interest free loan. Should both Jacquelene and I both [sic] predecease then this loan is to be set off against her share of my residuary estate. If Brenda predeceases me then this is to be repaid through her estate. Should the amount directed to be set-off exceeds [sic] the share Brenda is to receive then the excess is to be recoverable from Brenda or her estate.
[8] The Public Trust has provided draft financial statements for Ian’s estate that show total financial assets of $177,205. It advises that cl 5.2 of the will is unlikely to apply and the outcome would be an offset against Brenda’s share of the estate under cl 5.1, subject to the Court’s decision on Brenda’s declaratory relief claim.
Other wills
Ian
[9] Ian made an earlier will dated 11 February 2010. This will contained clauses identical to cl 5.1 and cl 5.2 of the 2016 will. The 2020 will differed from the 2016 will in that it made a gift of $20,000 to Ian’s granddaughter, Georgia. As with the 2016 will, the residuary estate was gifted equally to Brenda and Sheryl and, if only one of them was living when Ian died, then to that one. In contrast with the 2016 will, it also provided a gift over to the children of Brenda and Sheryl if the gift of the residuary estate to one or both of them did not take effect.
[10] The 2010 will also had an accompanying statement. This again referred to the Family Protection Act, testamentary promises and the Property (Relationships) Act. In contrast with the 2016 accompanying statement, it did not refer to the $50,000 loan and nor did it refer to whether Brenda had or would have children.
Jacquelene
[11] Jacquelene made a will dated 11 February 2010. This will made specific gifts of jewellery to Brenda, Sheryl and Georgia and gifts of the balance of Jacquelene’s jewellery and personal effects to Brenda and Sheryl equally. It also made a gift of
$20,000 to Georgia. As to the residuary estate and the loan of $50,000 it contained identical clauses to those in Ian’s 2010 will. An accompany statement was also in identical terms to the accompanying statement to Ian’s 2010 will.
[12] Jacquelene made a further will on 1 February 2016. This made gifts of jewellery and personal effects to Brenda and Sheryl. It contained identical provisions as to the residuary estate and the loan of $50,000 to those in Ian’s 2016 will. The accompanying statement was in identical terms as that accompanying her 2010 will. It therefore did not have the details about why there was no gift over to grandchildren, nor about the $50,000 loan, as was set out in the statement accompanying Ian’s 2016 will.
Brenda’s affidavit evidence
[13] Brenda filed an affidavit in support of her claim for declaratory relief. She said she had never received a loan of $50,000 but she had received a gift of that sum in 2003. She said she was recently separated and living with her parents when that gift was made. She had the same bank manager as her parents. Her parents decided to gift her $50,000 so that she could afford to buy her own house in Masterton, which she did.
[14] Brenda said they did not sign any paperwork concerning this money. She said the only time it was discussed was in 2011. At that time, she had a good job and was intending to refinance the borrowings on her house. She told her father that she could
afford to give him the money back if he wanted. She said her father told her not to do that because it was a gift.
[15] Brenda went on to explain that when she learned about the terms of the will she informed the Public Trust that there was no such loan. The Public Trust sought evidence to support her assertion that the advance was a gift. Brenda contacted her bank manager who could not remember any details about the purchase. She contacted her lawyers but was advised that the file relating to the 2003 purchase had been destroyed.
[16] Brenda was puzzled by the reference to her children in cl 5.1 of Ian’s 2016 will. At that time, she was 47 years old and had undergone a hysterectomy. Her husband had children, who were now in their 30s, but they had no connection with Ian. Her father knew she would not have children, as set out in the 2016 accompanying statement.
[17] Brenda provided some family history from her perspective. She said they did not have a happy family life and Ian was very controlling and domineering right up until he became very sick and ultimately died. Brenda had been estranged from Sheryl for about 30 years and they do not speak to each other. She provided examples illustrative of their estrangement. She did not know whether Sheryl received any payments from her parents over the years.
[18] Brenda said that, by September 2018, Ian was diagnosed with cancer and was not expected to live for much longer. At that time Ian and Jacquelene were living in Waiouru. Jacquelene wanted to shift back to Masterton, where she had family and friends, before Ian died. However, they could not afford to buy a house in Masterton following the sale of their Waiouru property. At this time, Brenda was living in Te Awamutu with her husband but she still owned the Masterton property she had purchased in 2003. She was renting out the Masterton property at $360 a week to cover the mortgage payments.
[19] She agreed with her parents that they could shift into her Masterton property and live there for the rest of their lives. They were to pay $200 a month to cover the
rates and to make a one-off payment of $130,000. This sum was worked out on the basis of rent at the discounted rate of $250 a week over a ten year period. At this time Jacquelene was in her 70s but in good health. In coming to this arrangement, Brenda took into account that her parents were receiving $240,000 from the sale of the Waiouru house and had no other income except for superannuation. It also meant that Brenda’s mortgage would be mostly cleared and she would have enough money to cover the rates.
[20] There was no paperwork for this life tenancy arrangement. In October 2018 Ian and Jacquelene shifted into the house and Brenda received the lump sum payment of $130,000. Ian and Jacquelene died less than a year later. One month after their death, Brenda entered into a tenancy agreement with new tenants, for which the weekly rent was $420 a week.
[21] Brenda said that when she was preparing her own will in July 2018 she wanted to leave a gift of $10,000 to her parents. She provided to the Court a draft will from that time. That draft had large redactions and so the full contents of the draft were not made available to the Court. The draft as disclosed did not include any gift to her parents. It did provide for a life tenancy of the Masterton property. Apart from showing that at the date the draft will was prepared Brenda intended that her parents could live in the house until they died, the draft will does not otherwise assist with the issues in the proceeding.
Gift or a loan
[22] Brenda contends that the $50,000 she received from her parents in 2003 was a gift and not a loan. She contends that this means there is no amount owing under any loan for the Public Trust to set off under cl 5.1 of Ian’s will and, as a consequence, she is to receive an equal share of the residuary estate pursuant to cl 7 of Ian’s will.
[23] Brenda says that whether the gift was advanced as a loan is a question of fact as to the intention of the parties at the time of the gift. She submits that the presumption of advancement applies to the $50,000 because it was transferred inter
vivos from parents to their daughter.3 She says that there was no contemporaneous act or declaration by the donor to rebut this presumption that arose in 2003. She refers to the absence of any written record of the transfer and that no interest, payment or demand was ever made.
[24] The Public Trust contends that the $50,000 payment was a loan. It contends that the presumption of advancement does not apply to adult children,4 and that Brenda’s evidence of a conversation in 2011 is not sufficient evidence that a gift was intended by Ian and Jacquelene. It further says that the presumption of advancement is rebutted by the statements in the wills that show both Jacquelene and Ian regarded the payment as a loan.
[25] It may be thought to be obvious that Ian and Jacquelene did not intend the payment to be a gift because of what they said in their 2010 and 2016 wills and what Ian said in his 2016 accompanying statement. However, if the presumption of advancement applies, the traditional position is that the acts or declarations of a party are admissible both for and against the presumption if they take place before or substantially contemporaneously with the transaction, but if they take place subsequently, only against the party who made them.5
[26] Whether that traditional position remains appropriate in view of the law of evidence as it has now developed is questionable.6 Rather, the preferable approach may be to treat subsequent conduct as admissible with its probative weight a matter for the Court to assess.7 That seems to me to be the preferable approach given that in other areas of the law subsequent conduct can provide relevant evidence of a person’s intention at an earlier time. The Court will of course be alive to the possibility that a person may have meant something at one time and changed their mind later, but this can go to weight rather than admissibility.
3 Relying on Terry Schwass Company v Marsh [2017] NZHC 1382 at [16]-[21]; N v N [2010] NZFLR 161 at [47]; and Woolf v Kay [2018] NZHC 2191, [2019] 3 NZLR 93.
4 Relying on Nelson v Meier [2016] NZHC 787 at [56]-[58], followed in Erni v Brooky [2020] NZHC 3116 at [81]-[87].
5 Pettitt v Pettitt [1970] AC 777 at 824. See also Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters) at [12.5.5] and N v N, above n 3, at [47].
6 Pettit, above, at 184; John McGhee (ed) Snell’s Equity (34th ed, Sweet & Maxwell, 2019) at [25-013].
7 Snell’s Equity, above, at [25-013].
[27] Taking this approach to construing what was intended in 2003, I consider the following evidence is relevant:
(a)In 2003, Brenda was recently separated, was living with her parents, and needed financial assistance to buy a house;
(b)her parents were willing to provide assistance and to do so apparently without documenting the terms on which they were doing so;
(c)there is no evidence that repayments were ever sought from Brenda, even when she remarried and lived with her husband in another house while also retaining the Masterton house, and nor when they agreed to pay Brenda $130,000 to live in the Masterton house (a sum worked out on the basis of discounted rent and occupancy of ten years) – an arrangement which was also apparently not documented;
(d)in 2010, Ian and Jacquelene each described the money as a loan in their respective wills;
(e)in 2011, Brenda says she offered to pay the money back but she was told not to because it was gift;
(f)in 2016, Ian and Jaquelene each described the money as a loan in their respective wills and Ian repeated this in the statement accompanying his will;
(g)in 2018, Brenda was contemplating a gift to her parents of $10,000 when preparing her will, but has not produced a draft where such a gift was included and never finalised her will with any such gift; and
(h)in 2019, when her parents could not afford a house in Masterton, there is no evidence that the $50,000 payment played any part in the arrangement struck with her parents. This was even though the arrangement was potentially very financially advantageous to Brenda
because of the advanced years of her parents at that time and therefore the real prospect that they would not have another ten years to live.8
[28] In my view the above evidence supports a finding that the money in 2003 was a gift in the sense that each party understood there was no enforceable legal obligation to repay the sum to Ian and Jacquelene at any point during their lifetime. There is no need to resort to a presumption of advancement to reach this conclusion.9 Rather, I consider the facts show that Ian and Jacquelene wanted to help out their adult daughter in the circumstance she was facing at that time and chose to make the $50,000 available to her without requiring or expecting that she repay the sum during their lifetime.10
[29] In reaching this conclusion I give weight to the fact that B was in a difficult position in 2003 (separated and without her own place to live), no repayments were ever made, and it was not taken into account when the 2019 arrangements were made even though at that time the tables were reversed with Ian and Jacquelene needing money for a house in Masterton and Brenda being in a position to help. I consider the absence of documentation for the 2003 transfer provides only limited support that a gift was intended in that, if a loan involving repayment during Ian and Jacquelene’s lifetime was intended, it would be only a little more likely to be documented. These
8 Although the rent was discounted from the market rent, Brenda received the significant benefit of an upfront payment which covered most of her mortgage. This meant that Brenda would no longer have to pay interest to the bank on that mortgage. Through her solicitors, Sheryl advised the Public Trust that she regarded this transaction as voidable for undue influence. The Public Trust is not intending to challenge the transaction on the basis of legal advice.
9 As it is put in Equity and Trusts in New Zealand, above n 5, at [12.5.7], the “role of the presumption is, in situations where there is no evidence of the transferor’s intention, to apply what would most likely be a transferor’s intention in the prevailing circumstances”. Similarly, in Parlane v Parlane (2011) 3 NZTR 21-012 (HC) at [36]: “[t]he modern presumption of advancement is very weak; and like all presumptions, it is designed to infer a generally applicable interpretation to fill a gap by the absence of evidence … [t]hus, the starting point in any such inquiry will be a review of the facts…”. See also In re Pauling’s Settlement Trusts [1964] Ch 303 at 336: the presumption “merely mean[s], in our opinion, that in the absence of evidence, or if the evidence on each side be evenly balanced, in the first case equity will presume that the parent who puts property in a child’s name intends to make a gift” but the presumption “may be rebutted; [it] is in truth a convenient device in aid of decisions on facts often lost in obscurity, whether owing to the lapse of time or the death of the parties”.
10 As it was put in Snell's Equity, above n 6, at [25-009] “The formal presumption of advancement applies to transfers from a father to his child. … The presumption can apply even where the child is no longer a minor, since the rationale of the presumption is no longer confined to cases where the parent has a duty to provide for the child. … Even aside from the formal presumption, the inference would be readily drawn that a gift or a contribution to the child’s maintenance was intended, even when the child was an adult. …”. In my view, the latter is the case here.
considerations collectively have more weight than what was said in the 2010 and 2016 wills and Ian’s 2016 accompanying statement because of the possibility that they reflect a misunderstanding or inaccuracy or a change of mind about the position in 2003.
[30] At best this meant there was a moral obligation on Brenda should her parents have been in need of the money and should she have been in a position to help them. As it was put by one commentator:11
In contemporary society, is it not likely that a parent buying a property in the name of a child, or providing some or all of the purchase money, is intending to make a gift? In these times of high property prices and restrictive criteria for mortgage lending, is it not the natural consideration of blood and affection which causes a parent to provide his or her adult child with the deposit with which to buy a house? It may well be that such a parent will expect the child, as a matter of moral obligation, to repay the money if she becomes a millionaire banker, but not if she is a public sector employee. This would hardly be enough to justify the inference of a resulting trust in favour of the parent.
[31] In my view, when the moral obligation to repay of this kind arises will depend on the circumstances. In some cases, the parents may expect repayment when their (adult) child is in a position to do so. Others may only expect it in the circumstances described by the commentator in this passage. Of course, other circumstances may show that a payment by a parent to help their adult purchase a property was intended as a loan – for example, documentation to that effect or evidence that repayments were sought and/or made.
[32] I conclude, on the basis of the evidence in this case, that Ian and Jacquelene gifted the $50,000 to Brenda and did not expect repayment during their lifetime.12 However, their 2010 and 2016 wills show that they did intend to account for the fact that Brenda had received this money when gifting their estate to their daughters. In effect, the gift of $50,000 was viewed by them as an advance on Brenda’s inheritance.
11 James Brightwell “Good riddance to the presumption of advancement?” (2010) 16(8) Trusts and Trustees 627 at 632. Cited with approval by Juliet Chevalier-Watts in “The Presumption of Advancement: Is it time to relegate this doctrine to the annals of history?” (2016-2017) 2(1) Lakehead LJ 15.
12 Brenda submits that any claim to enforce the alleged loan is time-barred by the Limitation Act 1950 and the Limitation Act 2010 because no demand was made within six years of the date the sum was advanced. It is not necessary to consider this submission because I have found that the
$50,000 was a gift.
There is nothing unusual about that. As a matter of fairness and common sense, if Brenda had received the benefit of a gift from them during their lifetime, Ian and Jacquelene could account for that when deciding how to divide their estate between their two daughters.
[33] Brenda suggests that Sheryl may have received a gift during their parents’ lifetime. There is no evidence of any such gift. Sheryl has chosen not to involve herself in Brenda’s litigation (as she was entitled to do) and so there is no admissible evidence one way or another from her. Regardless, it does not matter whether Sheryl received a gift or not. Ian and Jacquelene were entitled to decide that they wished to account for the fact that Brenda had received $50,000 from them during their lifetime when deciding how they wished to gift their residuary estate in their wills.
Meaning of cl 5
[34] Brenda submits that, because the $50,000 was a gift, there is no set-off to make under cl 5 because there is no amount owing to be set off. She submits that, on the plain meaning of the clause, it is only an amount under a loan that is to be deducted and, because there is no such loan, there is no amount to be deducted. The result, in her submission, is that she should share equally with her sister in the residuary estate.
[35] The Public Trust submits that, if the Court finds the sum was a gift, there is a mistake in the will. The mistake is one of fact and not one of drafting. On the words of the will and the accompanying statement, Ian has described the $50,000 as a loan when, on the correct interpretation of the nature of that transaction, it was a gift. The Public Trust submits that the Court’s approach when faced with a mistake of fact is to adopt “robust interpretative techniques” to identify the testator’s overall intention.13
[36] The Public Trust does not seek to rely on s 31 of the Wills Act 2007. That section enables a Court to rectify a will that does not carry out the will-maker’s intentions because it contains a clerical error or does not give effect to the will-maker’s instructions. The Public Trust says that, if the loan was in fact a gift, it would be artificial to treat cl 5 as a clerical error. Further, according to the Public Trust’s
13 As discussed in McMillan v McMillan HC Invercargill CP7/00, 5 April 2001 at [8].
records, Ian instructed the Public Trust that this was a loan. The error does not therefore arise because of a failure to give effect to the will-maker’s intentions.
[37] The Public Trust submits that s 32 of the Wills Act is potentially relevant. It accepts that the will is not meaningless, nor ambiguous or uncertain on its face in terms of s 32(1)(a), (b) and (c). It suggests that ambiguity or uncertainty arises in light of the surrounding circumstances in terms of s 32(1)(d) and (e). It submits that a robust interpretation of the will is that Ian intended the $50,000 that Brenda received in 2003 to be set off against her share of the estate in order to ensure that his two daughters were treated equally.
[38] I agree with the Public Trust that s 32(1)(d) or (e) applies. This is because, on its face, cl 5 refers to an interest-free loan of $50,000. The surrounding circumstances when the will was made show that there was no interest-free loan of $50,000. This uncertainty or ambiguity means that external evidence may be used to interpret those words.14 This includes evidence of the testator’s testamentary intentions.15
[39]The surrounding circumstances show that:
(a)Ian and Jacquelene provided Brenda with $50,000 in 2003 so that she could buy a house.
(b)When the will was made they had never charged, nor received, any interest on the $50,000 paid to Brenda.
(c)When they made the will they had never asked Brenda to repay some or all of the $50,000 nor had Brenda returned some or any of that sum.
(d)Ian’s instructions to the Public Trust, as recorded in their computer records, were:
14 Section 32(2).
15 Section 32(4) means that evidence of a testator’s intentions cannot be used to find an ambiguity or uncertainty under s 32(1)(d) or (e). But, if the surrounding circumstances (not including evidence of a testator’s intentions) find an ambiguity or uncertainty, then evidence of a testator’s intentions is admissible to interpret the will under s 32(3).
Testator and his wife have lent their daughter Brenda $50,000 and on the death of the survivor of them would like the amount not paid back to be taken into account as part of Brenda’s share. Interest free and repayable on demand. No documentation. … Joint interest free loan to Brenda $50K interest free and repayable on demand – as per wife’s
… as they wish them to be the same
(e)The 2016 statement to accompany the will also referred to the $50,000 as an interest-free loan that Ian wished to be set off against Brenda’s share of the estate.
[40] When interpreting a will, the objective is to give effect to the intentions of the testator.16 Interpreting the words of the will in light of the surrounding circumstances, it is clear that Ian was referring to the $50,000 that Brenda had received from him and Jacquelene in 2003. It is also clear that he intended this sum to be set off against her share of the residuary estate unless and to the extent that she had repaid any of it.
[41] Brenda submits that this is speculation because we do not know what Ian would have said had he been advised that the $50,000 was legally a gift rather than a loan. I disagree. There is no evidence that Ian ever took legal advice about the legal effect of the payment he and his wife made to Brenda or was concerned about its legal effect. So far as there is evidence of his subjective understanding, it is that he regarded it as an interest-free loan that Brenda was not required to repay during his lifetime. Ian made his intentions abundantly clear about what was to happen on his death because Brenda had received this money – it was to be accounted for in the division of his residuary estate between his two daughters and this had been his view since at least 2010. This explains why he did not accept Brenda’s offer to pay it back in 2011 (he had already decided that it was to be accounted for in his will). It is a safe inference that his intentions about this would be the same regardless of whether the $50,000 was properly construed as a loan or a gift.
[42] I agree with the Public Trust that the case is similar to Wilson v Davidson.17 In that case the testator made a bequest of “my house unit at Chatsford to Robert Rutter”.
16 Re Jensen [1992] 2 NZLR 506 at 510. As set out in this case, all canons of construction are subservient to this end. The court can, in appropriate cases, modify words which have in fact been used so long as this stems from a proper construction of the testamentary documents as a whole.
17 Wilson v Davidson [2017] NZCA 468.
In fact the testator did not own a unit at Chatsford. Rather, as is common in New Zealand retirement villages, she had an occupation right that was personal to her and could not be transferred. Her estate was entitled to a termination payment for the value of her interest in the unit. This was a sum of close to $300,000. The Court of Appeal held that, in light of the known objective facts, the bequest could be given a meaning different from that indicated on the face of the bequest. It concluded that the intention must have been to give all the benefits of the unit to Mr Rutter. This meant he was to receive the approximate $300,000.
[43] Brenda submits that the case is distinguishable because there is no evidence of what Ian would have done if he had known that the $50,000 was not a loan. While it is correct that in Wilson v Davidson there was evidence that the testator understood that she could not transfer the unit and that her estate would receive a substantial sum of money, there is no requirement for such evidence. The overriding objective is to interpret the will to give effect to the testator’s intention if the words are broad enough to accommodate this.18 The kind of evidence that can establish the testator’s intention is not confined in the way Brenda’s submission contends.
[44] I consider the words of cl 5 can be interpreted to give effect to Ian’s intention when he made his 2016 will. The “loan” referred to in cl 5.1 is the gift he and Jacquelene made to Brenda in 2003. As Brenda has not returned any of the gift to Jacquelene or Ian, the full amount is to be deducted from her share of the residuary estate. The fact that cl 5.2 would not have been enforceable (because the $50,000 was a gift and not a loan) is neither here nor there. It simply means that cl 5.2 is unenforceable.19 I agree that this outcome better gives effect to Ian’s intention than does Brenda’s submission that gives neither cl 5.1 nor cl 5.2 any effect because of the mistake made in the will about whether the $50,000 was a loan or a gift.
[45] Brenda submits a cautious approach to the actual expression in the 2016 will is appropriate. This is because the alleged loan clauses appear to reflect a Public Trust precedent rather than being tailored to the will-maker’s knowledge of Brenda. Brenda
18 At [34]. If they are not, then s 31 enables the will to be rectified when there is clear evidence of the testator’s intention.
19 The size of the estate means that it is unlikely to apply in any event.
refers to the fact that Ian knew in 2016 that Brenda did not have any children and would not be having any children in the future because she had by then had a hysterectomy.
[46] I do not accept this submission. The reference to Brenda’s children in cl 5.1 of the 2016 will is explained by the fact that it is simply a copy of the clause from the 2010 will. It is clear from Ian’s instructions to the Public Trust and from his 2016 accompanying statement that he knew Brenda would not have children. This suggests that the Public Trust overlooked amending that clause in the 2016 will despite Ian’s instructions, as recorded in the Public Trust’s computer records, that “Brenda has no and will not have any children”. Further, Ian must have either overlooked the reference to Brenda’s children in cl 5.1 or decided it did not matter. There is nothing about this point that suggests Ian did not intend for the $50,000 to be deducted from Brenda’s share of the estate irrespective of its legal nature as a loan or a gift.
[47] Lastly, Brenda submits that cl 5 conflicts with cl 7 and, as cl 7 is the later clause, it prevails.20 The clauses are not in conflict. The testator’s intention, on a proper construction of the will and the surrounding circumstances, is that cl 7 is subject to cl 5.
Result
[48] The plaintiff’s claim is dismissed. I did not receive submissions on costs. If there is any issue about this, the parties have leave to file brief submissions within two weeks of the date of this judgment confined to the issue(s) in dispute.
Mallon J
20 Nicky Richardson and Lindsay Breach Wills and Succession (NZ) Other Principles of Construction of Wills, (online ed, LexisNexis) at [6.9].
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