Endean v Smith
[2020] NZHC 2365
•11 September 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-612531
[2020] NZHC 2365
UNDER Sections 60 and 61 of the Administration Act 1969 IN THE MATTER
of the Estate of GEORGE CLIFFORD SMITH
BETWEEN
WILLIAM ARTHUR ENDEAN
Applicant/Respondent
AND
JOCELYN LOIS SMITH
Caveator/Applicant
Hearing: 10 September 2020 Appearances:
W Andrews for Applicant/Respondent P Amaranathan for Caveator/Applicant
Judgment:
11 September 2020
JUDGMENT OF VENNING J
This judgment was delivered by me on 11 September 2020 at 2.15 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors:Dawsons, Auckland Rice Craig, Auckland
Counsel: W Andrews, Auckland
ENDEAN v SMITH [2020] NZHC 2365 [11 September 2020]
Introduction
[1] George Clifford Smith died on 9 August 2019 leaving a will dated 2 August 2019. William Endean, the named executor, made application for probate in common form on 29 August 2019. On 10 September 2019 Jocelyn Lois Smith, George Smith’s wife, lodged a caveat.
[2] On 30 June 2020 the Court made an order nisi for the grant of probate and directed that unless Mrs Smith showed cause why the order should not be made absolute probate of the will would be granted to Mr Endean.
[3] Mrs Smith has made an application for orders requiring Mr Endean to file an application for probate in solemn form and that the order nisi not be made absolute.
Factual background
[4] George Smith was 90 years old when he died. Jocelyn Smith is 81. They had been together 60 years. Jocelyn was in a de facto relationship with George Smith from 1959 and married him in April 1981. George and Jocelyn Smith had five children – Robyn Rankin, Jennifer Stronge, Warwick Smith, Alison Smith and Susan Widvey. They have 11 grandchildren.
[5] The principal residence the parties lived in was a property at 5 The Glebe, Cockle Bay, Auckland. At George’s death it was owned by Jocelyn and George as tenants in common in equal shares.
[6] Although the parties’ relationship was a long one, it appears from the evidence to have been a difficult one. They effectively lived their own lives from about 2014 even while still living together in The Glebe and in the months prior to George’s death they lived physically separate and apart.1
1 While in her second affidavit dated 1 September 2020, Jocelyn says she and George only physically separated in 2019, in her first affidavit of 11 August 2020, she describes their separate living arrangements from an earlier stage at [18] to [19].
The will
[7] In his last will made on 2 August 2019 George left his entire estate to the Fazakerly Trust. The beneficiaries of the Fazakerly Trust are the parties’ 11 grandchildren. Mr Endean is the sole trustee of the Fazakerly Trust.
Jocelyn Smith’s case
[8]Jocelyn Smith says that there are grounds for a full inquiry into:
(a)the circumstances of the 2nd August 2019 will and of a draft codicil to the will and associated file note by Mr Endean and whether, while the codicil was not executed, it expressed the final testamentary intentions of George; and
(b)whether George was subject to undue influence when signing the will or giving instructions in relation to it.
The executor’s position
[9] Ms Andrews submits that Jocelyn Smith should have sought validation of the unexecuted codicil under s 14 of the Wills Act 2007. As Jocelyn has failed to do so and as there is no basis to support the allegation of undue influence, there is no justification to require Mr Endean to apply for probate in solemn form. The order nisi should be made final.
Relevant legal principles
[10] The applicable provisions in the Administration Act are ss 60 and 61. Section 61 in particular provides as relevant:
61 Where a caveat lodged, court may grant order nisi
In every case where a caveat has been lodged and has neither lapsed nor been withdrawn, the following provisions shall apply:
(a)the court may, upon application on behalf of the person applying for administration, supported by affidavits upon which, if there had been no caveat, administration would have been granted, may make one or other of the following orders:
(i)in any case where the court is satisfied that the caveat has been or may have been lodged vexatiously or frivolously, an order for the discharge of the caveat or for security for costs; or
(ii)in any other case, an order nisi for the grant of administration to the person applying, which order nisi shall name a time and place for showing cause against the same, and the court may enlarge any such order from time to time:
…
(c)if before the day named in the order nisi or the day to which the order is enlarged the caveat is withdrawn, the order nisi may be made absolute at any time thereafter:
(d)in any case to which paragraph (c) does not apply, if on the day named in the order nisi, or on the day to which the order is enlarged, the caveator does not appear, the order nisi may be made absolute, upon an affidavit of service; but if the caveator appears, the hearing shall be conducted in the same manner as nearly as may be as in an ordinary action, and the court may order—
(i)that the order nisi be made absolute or discharged; or
(ii)that the application for administration be made in solemn form,—
and any order made under subparagraph (i) or subparagraph
(ii) may be with or without costs, as may be just, and, if the court so directs, those costs may be paid out of the estate:
(e)at any hearing under paragraph (d), the parties may, subject to the rules, verify their cases in whole or in part by affidavit, but so that the deponent in every such affidavit shall, on the application of the opposite party, be subject to be cross- examined by or on behalf of the opposite party orally in open court, and after cross-examination may be re-examined orally in open court by or on behalf of the party by whom the affidavit was filed:
…
[11] Ms Amaranathan submits a full inquiry is appropriate and the Court should direct an application for administration be made in solemn form because there is sufficient uncertainty regarding the status of the unsigned codicil (namely as to whether it is an effective testamentary disposition) and/or the issue of fraud or undue influence.
[12] Jocelyn Smith has sworn an affidavit as has her daughter Alison. Their affidavits detail the background to George and Jocelyn’s relationship and the circumstances leading to George’s hospitalisation in July 2019.
[13] As noted, Jocelyn Smith’s evidence discloses that for a number of years, she and the deceased effectively lived separate lives. She described him as “Victorian” in his ways. In late 2014 the Glebe property was transferred from a joint tenancy to a tenancy in common to reflect the position that they were effectively living separate lives.
[14] Alison also annexed a copy of a video she took of George on 1 August while he was in hospital in which he said his share of The Glebe was to go to Jocelyn. That video is relied on to support the validation of the codicil. There are some matters of concern about the video and the way the conversation was directed, but for the reasons that follow I leave those for another day.
[15] Mr Endean has filed an affidavit in which he has set out the circumstances relating to the execution of the will of 2 August 2019 and the circumstances surrounding the preparation of the unexecuted codicil, and the reason he did not have George Smith execute it on 6 August 2019. Mr Endean considers that George lacked testamentary capacity when he saw him on 6 August.
[16] One of the parties’ other daughters, Jennifer, has also sworn an affidavit in which she describes her contact with Mr Endean about the codicil. She also discussed her parents’ relationship.
[17] The leading authority in relation to the procedure on an application such as this is the Court of Appeal decision of van der Kaap v Wilson:2
[34] … On the return of an order nisi, the High Court usually decides whether the caveator has raised sufficient to show that a full enquiry should be made, see Re Nissenbaum [1939] NZLR 94 and Re Payne (1989) 2 PRNZ
432. For this reason the conventional course is for the caveator to provide such evidence as is readily available to support the caveat and for those propounding the will either to submit to a requirement to proceed in solemn form or alternatively to deny that the caveator has raised enough to prevent
2 van der Kaap v Wilson CA97/04, 14 June 2005.
the order nisi being made absolute. The High Court does not usually resolve genuinely disputed issues of fact under s 61.
[18] The onus is on the caveator to show why the order nisi should not be made absolute. To that end the caveator has to raise sufficient grounds to establish either that the order nisi should be discharged or that a full inquiry is appropriate. The threshold for satisfying the Court that there are grounds for a full inquiry is low.3
[19] Generally the inquiry on the return of an order nisi is into the circumstances surrounding the making of the particular will that is sought to be propounded. It is the validity of that will that the section is directed at. While the caveator raises a suggestion of undue influence, the principal argument for Jocelyn Smith is that the codicil should be confirmed under s 14 of the Wills Act. That issue will not be resolved by directing Mr Endean to make an application for probate in solemn form in relation to the will of 2 August. It is for Jocelyn Smith to pursue separate proceedings under s 14 of the Wills Act if she seeks to validate the codicil.
[20] The will of 2 August is, subject to the issue of undue influence, on its face a valid will. There can be no serious challenge to George Smith’s testamentary capacity on 2 August. Indeed, Jocelyn Smith seeks to propound the codicil which was based on a discussion George Smith had on 1 August with Alison and her and which was only prepared as a document by Mr Endean on 6 August. Logically she must accept that George had testamentary capacity on 2 August.
[21] Ms Amaranathan confirmed that Mrs Smith accepted that George had testamentary capacity when he executed the will on 2 August. That concession was properly made. Mr Endean has confirmed that he had no concerns about George Smith’s capacity on 2 August. He recorded that in a contemporaneous file note. Further, Jocelyn has annexed copies of medical notes from Dr Doering on 24 May 2019 confirming George was mentally fully alert and orientated and also his discharge notes by Dr Hulme from 17 July 2019 which confirm that George was assessed as having capacity to make decisions around his personal care, welfare and finances.
3 Jurisich v Harris [2016] NZHC 525; O’Neil v O’Neil [2018] NZHC 1356; and Watt v Owston- Doyle [2015] NZHC 1292.
[22] Nor can there be any credible basis for suggesting that George was subject to undue influence when he made the will of 2 August. Jocelyn Smith’s case is that George was subjected to undue influence by his son-in-law Asbjorn (Susan’s husband) and Susan. Jocelyn and Alison both refer to the close relationship the deceased had with Asbjorn. However, neither Asbjorn nor Susan were named as beneficiaries in the will of 2 August. The sole beneficiaries of the will of 2 August are the beneficiaries of the Fazakerly Trust, who are the deceased’s and Jocelyn’s grandchildren. Asbjorn and Susan did not receive any personal benefit under the will of 2 August.
[23] While Jocelyn Smith raises an issue about the severance of the joint tenancy in The Glebe, the joint tenancy was severed in late 2014. At the time Jocelyn agreed to that without prejudice to her rights to relationship property. As a result, George obtained a property right. As the Court of Appeal observed in Christie v Foster where a joint tenancy is severed, and the registered proprietor of the legal title was not the alleged influencer and in fact gains a property right, there can be no challenge to the transaction on the grounds of undue influence during the testator’s lifetime. The focus must be on undue influence in relation to the will.4
[24] The evidence does not support the submission that at the time he made the 2 August will George was under undue influence. At the time the will of 2 August was made, George had independent legal advice from Mr Endean. George first saw Mr Endean on 9 July and saw him on later occasions during July.
[25] Also, George and Asbjorn had apparently had a parting of the ways well before 2 August. Mr Endean says that on 26 July George instructed him to remove Susan and Asbjorn as trustees of the Fazakerly Trust. At the time George was adamant he wanted to leave everything to his grandchildren. Mr Endean’s evidence is that George was sick of the fighting and drama in the family. Mr Endean replaced Asbjorn and Susan as trustee of the Fazakerly Trust on 26 July 2019. Prior to that George had also revoked a power of attorney in Asbjorn’s favour.
[26] Finally, I note that the 2 August will repeated the provisions from the earlier will of 27 September 2016 which had also left the entire estate to the Fazakerly Trust.
4 Christie v Foster [2019] NZCA 623 at [99], [105].
[27] The caveator fails to satisfy the onus on her that there is a genuine issue to be tried on the issue of undue influence in relation to the will of 2 August. The matters she has raised do not justify an order requiring a formal application for probate in solemn form.
[28] I do not overlook that Jocelyn has raised issues in relation to the general administration of the estate or the alleged actions of Asbjorn but those matters are not relevant to the issue of whether George was subject to undue influence when he made his will of 2 August. They can be taken up with the administrator or the appropriate authorities in due course if relevant.
[29] As noted, the other basis Jocelyn relies on to support the application for probate in solemn form is that the codicil might be validated under s 14 of the Wills Act.
[30] The relationship between an application under s 14 of the Wills Act and the order nisi procedure under ss 60 and 61 of the Administration Act is not entirely straightforward. In the case of Owston-Doyle Whata J dealt with both an application for validation of a will and an application for probate in solemn form.5 The Judge criticised the approach taken in that case of joining the application under s 14 of the Wills Act with an application for probate in solemn form. While in that case he made both an order under s 14 and also an order in solemn form, he noted that the appropriate process was for an originating application under Part 19 addressing s 14 and then, assuming the s 14 application resolved all disputed matters, for an application in common form to be made.
[31] Whata J was able to deal with the matter in the way he did as he had the application under s 14 of the Wills Act before him. That is not the situation in this case. Jocelyn Smith’s application under the Wills Act has not yet been filed.
[32] In my judgment, the correct procedure in the current case before the Court is for Jocelyn Smith to advance her argument that the codicil document is a valid will by
5 Watt v Owston-Doyle [2015] NZHC 1292.
pursuing her proposed application under s 14 of the Wills Act.6 That should not, however, hold up the grant of probate to an otherwise, on the face of it, valid will, namely the will made by George Smith on 2 August 2019.
[33] Ms Amaranathan’s suggestion that Mrs Smith would consent to a two-step process whereby:
(a)first she would apply under s 14 of the Wills Act to validate the codicil; and
(b) second, the application for probate in solemn form be heard is, with respect, illogical.
[34] If the application under s 14 to validate the codicil is unsuccessful, there would be no need for an application for probate in solemn form. If the application was successful, the codicil would apply to the will of 2 August and amend it. Again, there would be no need for an application for probate in solemn form. In both cases the will of 2 August will be a valid will document.
[35] In terms of s 61 of the Administration Act the caveator has not satisfied the onus on her to prevent the order nisi being made absolute or to require an application for administration in solemn form in relation to the will of 2 August 2019. The will was made at a time when George had testamentary capacity. There is no basis to the suggestion it was made while George was under undue influence. The matter should not be further delayed while Mrs Smith pursues the application under the Wills Act. Caveats against probate should be dealt with expeditiously. (I note that s 60(2) contemplates that a caveat will only be sustained for a year).
[36] If Jocelyn Smith pursues the application under s 14 of the Wills Act and is ultimately successful in that proceeding, then the grant of probate to Mr Endean could be recalled under r 27.34. Where administration has been granted in common form
6 I make no comment on the merits of the proposed s 14, Wills Act application as it will be considered by the Court on another occasion other than to observe it is not a straightforward application given the evidence currently before the Court.
and a subsequent will (in this case codicil) is confirmed as a valid subsequent document the Court retains jurisdiction under s 5 of the Administration Act and r 27.34 to recall the grant made in common form.7
[37] I note that the codicil is limited in its effect. Mr Endean remains executor. If the Court were to determine that the codicil was a valid document the Court could make an order recalling the grant under r 27.34(2)(b)(ii), (iii) or (iv). In that situation, if the Court held the codicil to be a valid document, I would expect Mr Endean would make the application for recall or at least consent to the application so that there would be no need for Jocelyn to bring proceedings under r 27.34(3) in relation to proving the codicil. Further, in Re Hall the Court confirmed that an application for an order recalling a grant of administration and for a new grant of administration may be made in the one application.8
Result
[38] However, for the above reasons the caveat is discharged and the order nisi in relation to the will of 2 August 2019 is made absolute. Orders accordingly.
Costs
[39] The executor is to have costs on these proceedings against Mrs Smith, but limited to costs on a 2B basis together with disbursements.
Venning J
7 Kelsey v Taniora [2018] NZHC 1727.
8 Re Hall HC Dunedin CIV-2005-412-879, 23 April 2007.
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