Estate of Clarke
[2023] NZHC 2936
•19 October 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-001541
[2023] NZHC 2936
UNDER Part 19 of the High Court Rules BETWEEN
of the will of Anne Loris Clarke
AND
of an application by JUDITH MARY
TURRELL as executor and trustee of the estate of ANNE LORIS CLARKE Applicant
Hearing: 19 October 2023 Appearances:
D Chambers KC and J L Beverwijk for Applicant
Judgment:
19 October 2022
ORAL JUDGMENT OF VENNING J
Solicitors: Bruce Dell Law, Auckland Counsel; D Chambers KC, Auckland
Re estate of ANNE LORIS CLARKE [2023] NZHC 2936 [19 October 2022]
[1] Judith Turrell applies to the Court as executor and trustee of the estate of Anne Loris Clarke for orders as to the correct interpretation of the will of Anne Loris Clarke (Mrs Clarke).
Background
[2] Mrs Clarke was married to Raymond James Clarke. They had two children, Ms Turrell and her brother, Jon Charles Clarke. On 8 November 2000 Mrs Clarke and Raymond Clarke made mirror wills.
[3] At the time the principal asset they owned was a property at 1159 Great South Road, Runciman (the Runciman property), which was held by them as tenants in common in equal shares. Their mirror wills provided that on their death the survivor was to have a life interest in their one-half share in the Runciman property and that on the death of the survivor the Runciman property (or the proceeds of sale thereof) were to be transferred to Jon and Judith “as shall survive” the author of the will and if more than one as tenants in common in equal shares.
[4]Raymond Clarke died on 8 May 2020.
[5]Jon Clarke survived his father Raymond but died on 27 December 2020.
[6] Mrs Clarke died on 19 June 2022. Judith Turrell is the sole executor of her mother’s will. Probate has been granted.
[7] As noted, cl 3 of Mrs Clarke’s will provided for the whole of her interest in the Runciman property to be given upon trust by life interest to Raymond. Clause 3 concluded by recording:
AND I DIRECT that on the death of my said husband the said residence or proceeds of the sale thereof or any unexpended portion thereof to be transferred to such of my children JON CHARLES CLARKE and JUDITH
MARY TURRELL as shall survive me and if more than one then as tenants in common in equal shares.
[8]The remaining provisions of the will then provided:
4. I GIVE DEVISE BEQUEATH AND APPOINT all the rest residue and remainder of my estate and property both real and personal of whatsoever nature and kind and wheresoever situate of or to which I may be seised possessed or entitled or of which I have power to dispose by this my Will unto my Trustees UPON TRUST to pay thereout all my just debts funeral graveyard and testamentary expenses and all death estate and other like duties payable under this my Will and in respect of my dutiable estate including all such duties payable on my death in respect of any property the subject of any gift or other disposition made by me during my lifetime and deemed to form part of my dutiable estate and to hold the net balance then remaining (hereinafter referred to as “my residuary estate”) UPON TRUST for my said husband absolutely PROVIDED THAT should my said husband predecease me than
I APPOINT my son JON CHARLES CLARKE of Bangkok, Banker and my daughter JUDITH MARY TURRELL of United States of America, Married Woman or the survivor of them executors and trustees of this my Will.
5. I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal upon such of my said children as shall survive me and if more than one as tenants in common in equal shares.
6. PROVIDED THAT should my said son JON CHARLES CLARKE predecease me then his half share of my estate is to be divided equally between such of his children ELIZABETH PRAEWA CLARKE and any children subsequent to the birth of the said ELIZABETH PRAEWA CLARKE as shall survive and if more than one as tenants in common in equal shares.
7. PROVIDED FURTHER THAT should my said daughter JUDITH
MARY TURRELL predecease me then I GIVE DEVISE AND BEQUEATH her share to my said son JON CHARLES CLARKE.
8. I WISH to record that I do not wish to make any provision for any children of my said son [JOHN] CHARLES CLARKE born prior to the birth of ELIZABETH PRAEWA CLARKE.
[9] As executed Mrs Clarke’s will is inconsistent and uncertain in two particular aspects identified by Ms Chambers KC: first, the Runciman property/whole estate uncertainty, and second, the survivorship uncertainty.
Runciman property/whole estate uncertainty
[10] Clause 3 provides for a life interest to Raymond of Mrs Clarke’s half-share in the Runciman property and on his death it is to go to Jon Clarke and Ms Turrell as shall survive her, but cl 5 of the will purports to dispose of the whole of Mrs Clarke’s estate without any carve out of the Runciman property. The clauses are inconsistent with each other.
The survivorship uncertainty
[11] Under cl 5 of Mrs Clarke’s will the whole of her estate (including the Runciman property) would pass to Judith as the survivor of Mrs Clarke. However the reference in cl 5 to “as shall survive me” is itself contrary to cls 6 and 7 of the will which provide a gift over in the event of one of either Jon or Ms Turrell pre-deceasing Mrs Clarke (which has occurred).
[12] Counsel advises that the residuary estate, apart from the Runciman property, is comprised of bank accounts and miscellaneous chattels and assets.
Principles
[13] At common law there was no power to rectify a will in the absence of fraud or the mistaken insertion of words without the knowledge of the testator. However, the Court has for some time recognised an equitable jurisdiction to rectify wills: Re Jensen.1
[14] In 2007 Parliament enacted the Wills Act 2007 which applies to wills of persons who died after 1 November 2007. Section 31 provides:
31 Correction
(1)This section applies when the High Court is satisfied that a will does not carry out the will-maker’s intentions because it—
(a)contains a clerical error; or
(b)does not give effect to the will-maker’s instructions.
(2)The court may make an order correcting the will to carry out the will- maker’s intentions.
[15]Section 32 provides:
32 External evidence
(1)This section applies when words used in a will make the will, or part of it,—
(a)meaningless; or
1 Re Jensen [1992] 2 NZLR 506 (HC).
(b)ambiguous on its face; or
(c)uncertain on its face; or
(d)ambiguous in the light of the surrounding circumstances; or
(e)uncertain in the light of the surrounding circumstances.
(2)The High Court may use external evidence to interpret the words in the will that make the will or part meaningless, ambiguous, or uncertain.
(3)External evidence includes evidence of the will-maker’s testamentary intentions.
(4)The court may not use the will-maker’s testamentary intentions as surrounding circumstances under subsection (1)(d) or (e).
[16]The provisions were considered by the Court of Appeal in Wilson v Davidson
where the Court noted:2
[10] Sections 31 and 32 of the Wills Act 2007 (the Act) now apply when there are interpretation issues with a will or a will does not reflect a will- maker’s intentions. The jurisdiction to apply the sections is given to the High Court. These two sections are based on common law jurisprudence as to the interpretation and rectification of wills and earlier similar reforms in Australia and the United Kingdom. The legal position in New Zealand prior to the Act was summarised by Fisher J in his often quoted statement in Re Jensen:
The overriding objective is to give effect to the intentions of the testator. All canons of construction must be subservient to that end. The testator’s intentions are to be gleaned from an objective appraisal of the testamentary documents viewed as a whole but in cases of doubt the wording is to be interpreted in the context of those facts which must have been in the contemplation of the testator.
[11] As this passage indicates, prior to the passing of the Act, there was a willingness to interpret the provisions of a will against the factual context in which the will was drafted and executed. While the words of the will were central, evidence was admissible that could shed light on the view from the will-maker’s “armchair”. Consistent with this, the purpose of the reforms was to give primacy to the will-maker’s intentions. This was explained by the Hon Clayton Cosgrove MP in moving that the Wills Bill 2006 be read for the first time:
Wills are of practical day-to-day significance for all New Zealanders. A will is an instrument that expresses a person’s wishes after he or she dies, and enables that person to take care of his or her loved ones and property and assets. The proposed reforms will improve the legal framework for will-making. They will make the law easier for people to understand, and reduce the risk of a will-
2 Wilson v Davidson [2017] NZCA 468 (footnotes omitted).
maker’s wishes being defeated by a badly drafted or incorrectly executed will, and will also allow better effect to be given to a will- maker’s intentions.
[12] Section 32 can be seen as a statutory reflection of the armchair principle. …
[13]Prior to the modernising statutes over the last 50 years in the United Kingdom and Australia, there was no statutory power to rectify a will. The traditional position was that a Court could not rectify a will. However, that common law position was increasingly doubted and criticised. The position was settled when the United Kingdom and Australia enacted sections that gave the courts the power to correct errors in a will. Section 31 of the Act now gives the New Zealand High Court this power.
[17] In McLean v Public Trust the Court of Appeal approved the following principles of interpretation relating to wills:3
[21] The Judge identified the following principles of interpretation relating to wills: [McLean v Public Trust [2018] NZHC 3268]
“(a)The fundamental principle is to give effect to the intention of the will maker as expressed in the words of the will. [Nicky Richardson (ed) Wills and Succession — Construction of Wills (online ed, LexisNexis) at [6.6] citing Re Prescott (1997) 15 FRNZ 352].
(b)The intention is collected from the whole will and not merely the particular provision in dispute, together with such evidence as the rules allow. [At [6.6] citing Crumpe v Crumpe [1900] AC 127 (HL); Re Macandrew's Will Trusts [1964] Ch 704; and Re Green (deceased) [1975] 1 NZLR 475 (SC). See also Bethell v Bethell [2014] NZCA 442, [2015] NZAR 1620 at [35]].
(c)When using similar words to those which have been interpreted by the courts in previous decisions, drafters and will-makers are presumed to have those decisions in mind. [Tanner v New Zealand Guardian Trust Co Ltd [1992] 3 NZLR 74 (CA) at 77]. Similar words should produce similar results unless the context requires otherwise. [At 77].
(d)Where it is doubtful whether a gift is vested or contingent (contingent meaning subject to a condition precedent) the courts favour the former construction. [Andrew Alston (ed) Alston and Garrow: Laws of Wills and Administration (5th ed, Butterworths, Wellington, 1984) at
381. See also Re Sutcliffe [1982] 2 NZLR 330 (HC) at 342; Re Lushington (deceased) [1964] NZLR 161 (CA) at 171—172; and Commissioner of Taxes v Johnson [1946] NZLR 446 (SC)
3 McLean v Public Trust [2019] NZCA 449.
at 448]. Early vesting is favoured to avoid the uncertainty of gifts being left in suspense.
(e)The established rule for the guidance of the court in construing devises of real estate is that they are held to be vested unless a condition precedent is expressed with reasonable clearness. [At 381. See for example, Tanner v New Zealand Guardian Trust Co Ltd].
(f)An interest can vest in a beneficiary on a will-maker's death but be postponed in possession, meaning that the beneficiary's right to possess and enjoy the gift is postponed. [Browne v Moody [1936] AC 635 (PC) at 645—646; and Re Wood (Deceased) [1924] NZLR 529 (SC) at 530—531].
(g)The most common situation in which this arises is where a life interest is ‘let in’ for the benefit of another person. [Browne v Moody, at 645—646; Re Wood (Deceased) at 530— 531; Acland v Friedlander [1924] NZLR 446 (SC) at 447; and Tanner v New Zealand Guardian Trust Co Ltd, , at 76— 77]. The interest in possession is postponed until the expiry of the life interest.
(h)The mere postponement of distribution for the convenience of the estate or to enable an interposed life interest to be enjoyed has never by itself been held to exclude vesting of the capital at the date of the will maker's death. [Browne v Moody, at 644—64].”
Discussion
[18] Mrs Clarke’s will is ambiguous or uncertain as counsel has identified. Section 32 enables the Court, in the course of interpreting an ambiguous or uncertain will, to have resort to external evidence, including as to Mrs Clarke’s intention. As counsel acknowledges the relevant external evidence in this case is limited. It is effectively limited to the terms of Raymond’s mirror will and Ms Turrell’s evidence.
[19] Ms Chambers submits the identical wills support the interpretation that it was intended the surviving spouse should be permitted to remain in the Runciman property but that upon the death of the spouse that “ringfenced” interest in the property was to pass to the surviving children.
[20] Ms Turrell’s evidence as to Mrs Clarke’s testamentary intention is consistent with that interpretation. It is that the Runciman property was to go first to her father, Raymond, and then to her and her brother after both parents had passed.
[21] The effect of Raymond’s will and the operation of cl 3 is to give one quarter of the Runciman property to Jon’s estate and one quarter to Judith. That share of the Runciman property has been disposed of and dealt with. The external evidence such as it is supports an outcome whereby Mrs Clarke’s half share of the Runciman property is also disposed of in accordance with cl 3 of her will rather than under cl 5 of the will. I accept that the wills appear to have made a distinction between the Runciman property in cl 3 and any other property which was to be dealt with under cl 5. The wording of cl 4 as Ms Chambers notes, also tends to support that submission as well.
[22] Next I note the possibility of cl 3 being read as a life interest with a gift over with the life interest to Raymond failing is answered by the commentary in Nevill’s Law of Trusts, Wills and Administration:4
If the period of postponement fails in any case because, for example, an intended life tenant predeceases the willmaker, then the class gift is accelerated so that it becomes an immediate gift with the crucial class-closing time at the will-maker’s death. [Citing Sprackling v Ranier (1761) Dick 344.]
[23] Counsel also referred to the principle from Lassence v Tierney,5 that if there is an absolute gift to a legatee and trusts are engrafted on to that interest which fail, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary beneficiary. That also supports the above result.
[24] In my judgment the preferable interpretation of cl 3 and cl 5 is that upon Raymond’s death a specific gift of Mrs Clarke’s half interest in the Runciman property passes to the children as survived her, their interest being absolute, and as Raymond pre-deceased Mrs Clarke, the gift is accelerated and goes to the survivor, Judith Turrell. Both Raymond and Mrs Clarke intended that the Runciman property would be treated differently to the balance of their estates. Because Raymond predeceased Mrs Clarke the residue of the estate, (apart from the Runciman property), but including any other real estate, was to be distributed to Ms Turrell under cl 5 as the only surviving child, subject possibly to the issue of cl 6 to which I will refer shortly.
4 Lindsay Breach (ed) Nevill’s Law of Trusts, Wills and Administration (14th ed, LexisNexis, 2023, Wellington).
5 Lassence v Tierney [1843]-60] All ER Rep 47.
[25] For the above reasons I accept Ms Chambers’ submission the most likely interpretation that accords with Mrs Clarke’s intention is that the principal residence was to be a specific gift under cl 3 and the residue of the estate would pass under cl 5.
[26] As Ms Chambers submits if Mrs Clarke’s intention, evidenced from the external evidence as discussed above, is not expressed in the words of the will, the will should be corrected under s 31. She seeks a correction to cl 5 so that it reads “the whole of the residue”.
The survivorship uncertainty
[27] That leads to the issue of the survivorship uncertainty. Clauses 5, 6 and 7 are contradictory, particularly the wording in cl 5 “as shall survive me”, because cls 6 and 7 expressly deal with the situation of one of the children not surviving Mrs Clarke. Again, I agree there has been an error in relation to the will. It is ambiguous and internally inconsistent. It cannot have been Mrs Clarke’s intention to have such an inconsistent will. The will as drafted does not reflect her intentions and requires correction.
[28] Reading the entire will as a whole, and to give effect as far as possible to cls 6 and 7 and with reference to the plain meaning of the words Mrs Clarke has made specific provision for a gift over in the event that either Jon or Judith did predecease her. As Ms Chambers acknowledges there is a reasonable inference that in the event of Jon’s death Mrs Clarke intended the identified grandchildren, Jon’s children, in those circumstances were to take his share in the residue (other than the Runciman property) of the estate.
[29] I agree the wording of cl 5 requires correction to remove the reference to “as shall survive me” which would then give effect to the remaining cls 6, 7 and 8 of the will which would otherwise be rendered otiose.
Result/orders
[30] I make an order under s 31 of the Wills Act correcting the will of Mrs Clarke so that cl 5 reads:
5. I GIVE DEVISE AND BEQUEATH the whole of the residue of my estate both real and personal upon such of my said children as tenants-in- common in equal shares.
[31]The costs of this application are to be met out of the estate.
[32] I reserve leave in the event there are any issues in relation to implementation of the above order that may arise.
Venning J
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