Estate of O'Carroll
[2017] NZHC 1797
•1 August 2017
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CIV-2017-476-000005 [2017] NZHC 1797
UNDER Sections 14 and 31 Wills Act 2007 IN THE MATTER
of the Will of WINIFRED ISABELLA O'CARROLL
BETWEEN
ALISTAIR KENNETH MCCUTCHEON Applicant
Hearing: 24 July 2017 Appearances:
G M Brodie for Applicant and the children and grandchildren of the late William Ross McCutcheon and the late
Kenneth Leith McCutcheon
P A Bradford for the children and grandchildren of the late
Lena Mary RaeJudgment:
1 August 2017
JUDGMENT OF DUNNINGHAM J
Introduction
[1] The late Winifred O’Carroll died in Auckland on 28 April 2011, aged 101. She was survived by various nieces and nephews and grand-nieces and grand-nephews. She made a will on 22 September 2009. However, shortly before her death, she instructed her solicitor to prepare a new will. Before it was finalised and executed, Mrs O’Carroll died.
[2] In the circumstances, these proceedings deal with the following issues:
(a) whether the document prepared in April 2011 (altered to reflect her
solicitor’s file note of 20 April 2011), (“the unsigned 2011 will”),
ESTATE OF WINIFRED ISABELLA O’CARROLL [2017] NZHC 1797 [1 August 2017]
should be validated under the Wills Act 2007 and admitted to probate, or whether the will of the deceased dated 22 September 2009 (the
2009 will) should be admitted to probate? and
(b)regardless of whether the 2009 will or the unsigned 2011 will is admitted to probate, whether an alleged mistake in those documents should be rectified under s 31 of the Wills Act 2007?
Background
[3] While the late Mrs O’Carroll had been married, she never had children. She did, however, have two sisters and three brothers, three of whom had children. All her siblings predeceased her.
[4] Mrs O’Carroll’s sister, Lena Mary Rae, had three children. She had a daughter, Sara (but known as Sadie), who had seven children who all survived Mrs O’Carroll. Lena also had two sons, one of whom died without issue, and another son, William Kelvin Rae, who had eight children, seven of whom survived Mrs O’Carroll. William is a specific legatee in the 2009 will, but not the unsigned
2011 will.
[5] One of Mrs O’Carroll’s brothers, William Ross McCutcheon, had a daughter
and two grandchildren.
[6] Another brother, Kenneth Leith McCutcheon, had five children. They are: (a) Patricia Marlene McCutcheon, who is adopted;
(b) Shona Winifred Stoddart; (c) Keith Ross McCutcheon;
(d) Glynis Lynette Sullivan; and
(e) Alistair Kenneth James McCutcheon.
He also had 12 surviving grandchildren.
[7] The applicant, Alistair McCutcheon, is a surviving nephew, and is named as one of the executors and trustees in both the 2009 will and the unsigned 2011 will.
[8] The assets of Mrs O’Carroll’s estate primarily comprise cash deposits in the
bank, and loans to various family members, although one of these, a loan of
$180,000 to Katrina Glass, is contested.
The 2009 Will
[9] The last will executed by the late Mrs O’Carroll is her will dated
22 September 2009. It was prepared by her Auckland based solicitor, Mr Robert Burton, who had been acting for Mrs O’Carroll since September 1999.
[10] It seems that Mrs O’Carroll had firm views that the male descendents of the family should be preferred in any testamentary disposition. One of the ways this manifested itself was that in every will drafted for the late Mrs O’Carroll, from 1999 onwards, she had not made any provision for the children and grandchildren of her sister, Lena, apart from making a specific bequest in various iterations of her will to go to Lena’s son William Kelvin Rae.
[11] However, in preparing the first draft of her 2009 will, Mr Burton incorporated a residue clause which provided “To divide the ultimate surplus equally among my nieces and nephews and grandnieces and grandnephews as shall survive me and if more than one in equal shares”. This would have shared the residue of the estate with Lena Rae’s children and grandchildren. Again though, after discussing this with Mrs O’Carroll, her instructions were that “she wanted the nieces and nephews etc, only of her brothers William and Kenneth, and excluding any adopted children” (referring to Kenneth’s adopted child), to be the beneficiaries under her will.
[12] Mr Burton altered the residue clause with the intention of implementing that instruction. The will that was prepared and eventually signed, contains a residue clause which leaves the surplus:
equally among such of the nieces and nephews and grand-nieces and grand-nephews of my deceased brothers William McCutcheon and Kenneth McCutcheon as shall survive me and shall attain or shall have attained the age of twenty five (25) years but excluding any adopted children of my said brothers and if more than one in equal shares.
[13] As Mr Burton explains, in altering the residue clause in the way, it did not occur to him that he had failed to exclude the children and grandchildren of Lena Mary Rae, as instructed. Nevertheless, that will was signed and returned, and remained in his deeds system, as Mrs O’Carroll’s last formally executed will.
Events between September 2009 and April 2011
[14] In January 2011, Mr Burton received a letter from Dalziel Strauss, solicitors in Temuka, who knew and acted for Alistair McCutcheon. Dalziel Strauss became aware that certain unsolicited payments had been made by Mrs O’Carroll to family members, being $100,000 to Alistair McCutcheon, $100,000 to Ross McCutcheon, and $50,000 each to Shona McCutcheon and Glynis Sullivan.1
[15] Dalziel Strauss saw the potential for gift duty to be imposed if these were gifts rather than loans, and the firm wrote to Mr Burton on 21 February 2011, enclosing draft deeds of acknowledgment of debt, with a suggestion that these be signed and, if the intention was to ultimately gift these amounts, that this could be done through Mrs O’Carroll’s will by forgiving any debt owed.
[16] As a consequence of these issues being raised with Mr Burton, he visited Mrs O’Carroll with Alistair McCutcheon on 25 February 2011. At that meeting the appropriate documentation for these payments was discussed, and Mr Burton took instructions to make a new will.
[17] One of the key reasons for drafting the new will was to record the various advances made to family members and to set out the extent to which these loans were to be forgiven under the terms of Mrs O’Carroll’s will. At the same time, Mr Burton prepared revised deeds of acknowledgment of debt with amendments
which he had proposed and discussed with Mrs O’Carroll. This included equalising
1 Although the cheque to Glynis Sullivan in fact bounced.
the $250,000 recently received by the four family members so that they each received a loan of $62,500, and to provide that those amounts were forgiven in the will (which seemed to be the preference of the four family members who were to benefit from her generosity).
[18] Mr Burton explains that he visited Mrs O’Carroll on 13 April 2011, where the draft will was discussed at some length. Mrs O’Carroll expressed concern about the idea of equalising the gifts to Shona Stoddard, Glynis Sullivan, Keith McCutcheon and Alistair McCutcheon. Although the draft will contemplated that the total of
$250,000 advanced at that point would be divided equally between the four of them, Mr Burton’s notes record that Mrs O’Carroll still had in mind giving $100,000 to the two boys, saying the girls “didn’t need so much”. The will was not signed on that date. Mr Burton noted that he had left it with her for further consideration.
[19] Mr Burton reported his conversation to Alistair McCutcheon who still indicated that the money should be divided equally between the four of them.
[20] Mr Burton saw Mrs O’Carroll again on 20 April 2011. Again, his notes record that she was still “inclined to give the two boys $100,000 each, and the girls
$50,000 each” saying “If they didn’t want it then she would give the money somewhere else”. However, the file note goes on to record that she then “calmed down” but confirmed the will should reflect the unequal payments she proposed, with Mr Burton noting “This is what she wanted”. Mrs O’Carroll then signed the amended loan agreements which recorded that Ross and Alistair McCutcheon received $100,000 each while Shona McCutcheon and Glynis Sullivan received
$50,000 each. As a consequence, Mr Burton’s file note then records “I said that we now had to change the will a fraction to provide for these changed figures. She still needs to sign that.”
[21] Mr Burton says he took these instructions to mean that he was to provide her with an amended will which ensured that the specific gifts to her two nieces and two nephews were to match up with the deeds of acknowledgment of debt she had signed.
[22] Mr Burton provided a report of his visit and instructions in a letter to Dalziel Strauss on 21 April 2011, noting that Mrs O’Carroll was adamant that the advances of $50,000 to each of the two nieces, and $100,000 to the two nephews were to remain, and that he was to amend the will to dovetail with the revised deeds of acknowledgment of debt. However, on Tuesday, 26 April 2011 Mrs O’Carroll suffered a fall and was admitted to hospital. She died two days later.
Should the unsigned will be validated under s 14 Wills Act 2017?
[23] The primary difference between the 2009 will and the unsigned 2011 will which is sought to be validated is that the record of specific bequests and loans differs between the two documents.
[24] In the 2009 will, the relevant clauses read as follows:
4.I GIVE AND BEQUEATH free of all duties absolutely: (a) To my niece SHONA STODDARD my desk;
(b) To pay the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) to each of ROSS McCUTCHEON and ALISTAIR KENNETH McCUTCHEON (being the two sons of my deceased brother KENNETH), as should survive me.
5.I GIFT AND FOREVER RELEASE any loan which may be owing to me at the date of my death by WENDY STODDARD.
6.I GIFT AND FOREVER RELEASE any loan which may be owing to me at the date of my death by MARK SULLIVAN.
[25] The residuary estate, after payment of debts, funeral expenses and the like, was to be distributed, first, by a payment of $20,000 to William Kelvin Rae and then the balance was intended to go to the descendents of William and Kenneth McCutcheon.
[26] In the unsigned 2011 will, the relevant clauses are as follows:
4I GIVE AND BEQUEATH free of all duties absolutely my desk to my niece SHONA STODDART
5.1 I ACKNOWLEDGE I have loaned prior to the date of this my will
SIXTY TWO THOUSAND FIVE HUNDRED DOLLARS
($62,500) each to SHONA WINIFRED STODDARD, GLENYS LYNETTE SULLIVAN, KEITH ROSS McCUTCHEON and ALISTAIR KENNETH McCUTCHEON.
5.2I GIFT AND FOREVER RELEASE such loans which may be owing as at the date of my death by the persons named in paragraph 5.1 herein.
6.1I ACKNOWLEDGE as at the date of this will the following loans are outstanding to me, namely: -
WENDY STODDART $40,000; KATRINA GLASS $180,000; MARK SULLIVAN $25,000.
6.2I GIFT AND FOREVER RELEASE to the following persons the following amounts, namely:
WENDY STODDART $40,000; KATRINA GLASS $40,000; MARK SULLIVAN $40,000.
[27] It is clear that there are material variations between the benefits the named persons were to receive under the 2009 will as opposed to the benefits received under the unsigned 2011 will. However, the directly affected parties take no issue with these changes and do not oppose the application.2 What I must determine is whether the requirements of the Wills Act 2007 are met, such as would warrant validating the unsigned 2011 will as a will.
[28] The matter is complicated by the fact that cl 5.1 in the unsigned 2011 will does not reflect the late Mrs O’Carroll’s wishes. It is clear from the solicitor’s file note of 20 April 2012, that the record of the loans at cl 5.1 of the unsigned will does not give effect to the will-maker’s instructions. Mrs O’Carroll had in fact advanced the money in unequal amounts, with the larger sums going to nephews, and she wanted her will to reflect that position as opposed to equalising the amounts, which had been promoted by other parties, including the recipients.
[29] Mr Brodie candidly acknowledged that this issue was not identified until
Mr Burton made a further affidavit on 12 July 2017 which clarified that there was a
2 Although noting Katrina Glass does not accept the accuracy of the recorded loan amount.
contradiction between the will and her instructions as at 20 April 2011. It necessitated a further application not just to validate the unsigned will, but to amend it under s 31 of the Wills Act to reflect the testator’s intention. That meant the relief sought needed to be amended to include that the unsigned will be corrected under s 31 by:
(a) deleting cl 5.1 and substituting the following:
I ACKNOWLEDGE I have loaned prior to the date of this my will FIFTY THOUSAND DOLLARS ($50,000) each to SHONA WINIFRED STODDART and GLYNIS LYNETTE SULLIVAN, and ONE HUNDRED THOUSAND DOLLARS ($100,000) each to KEITH ROSS MCCUTCHEON and ALISTAIR KENNETH MCCUTCHEON.
[30] Given that issue was clearly disclosed in the affidavit evidence and has not materially altered the course of the proceedings, I consider it appropriate to allow the application to be amended in that way, and have considered the application on that basis.
Requirements of s 14 Wills Act 2007
[31] Section 14 Wills Act 2007 provides:
(1) This section applies to a document that - (a) appears to be a will; and
(b) does not comply with section 11; and
(c) came into existence in or out of New Zealand.
(2) The High Court may make an order declaring the document valid, if it is satisfied that the document expresses the deceased person’s testamentary intentions.
(3) The court may consider - (a) the document; and
(b) evidence on the signing and witnessing of the document;
and
(c) evidence on the deceased person’s testamentary intentions;
and
(d) evidence of statements made by the deceased person.
[32] The expression “will” is defined in section 8(1) of the 2007 Act:
(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.
Should the unsigned 2011 will be validated?
[33] In terms of the requirements of s 14, there is no doubt that the unsigned 2011 will prepared in March 2011 meets all the requirements of s 14(1), in that it is a document, it appears to be a will, it does not comply with s 11 (as it was never signed), and it came into existence in New Zealand. Where there is debate, is as to whether I can be satisfied that the document expresses the deceased person’s testamentary intentions.3
[34] There can be no doubt that the Wills Act 2007 is remedial in nature and is intended to ensure that the clear intentions of a testator are not defeated by technicalities and minor mistakes in the execution of a will.
[35] In this case, what was sought by the applicant was for the unsigned 2011 will to be validated as a will, but at the same time corrected to reflect the deceased’s clear intentions that the will reflect her instructions to forgive the unequal advances made to her two nieces and two nephews rather than, as they had suggested, to equalise the
amounts advanced and then forgiven in the will.
3 As required by s 14(3)(c).
[36] Mr Brodie suggested this could be dealt with by first validating the unsigned will as a will, and then amending the unsigned will by changing cl 5.1 to reflect her intention as recorded in the file note, and also as recorded in the amended deed of acknowledgement of debt which she signed on 20 April 2011.
[37] Mr Bradford accepted that the only beneficiary from the class of beneficiaries he represented who was affected by the s 14 application was William Kelvin Rae. He is a specific legatee under the 2009 will, receiving a sum of $20,000, as well as a residuary beneficiary but, in the unsigned 2011 will, he is simply a residuary beneficiary. Clearly he would benefit if the 2009 will was admitted to probate.
[38] Mr Bradford queried whether the draft will, even with the proposed correction sought by Mr Brodie, reflected the settled testamentary intentions of the deceased. He argued that the file notes could be read as suggesting there were further amendments to be made to the will and it is not clear that the deceased would have approved them. Even during the last meeting with Mr Burton, Mrs O’Carroll stated that she was still inclined to give the two boys $100,000 each and the girls
$50,000 each. Mr Burton recorded that she said “If they didn’t want it then she would give the money somewhere else”. While acknowledging that the file note went on to record that she “calmed down” and confirmed “that is what she wanted”, he suggested that there was nevertheless some ambiguity there.
[39] Furthermore, the earlier file note of 13 April 2011 made reference to gifts to go to the local church and to the Pohutukawa Coast Historical Society. While there was some evidence that these were intended to be inter vivos gifts, the phrase used in the file note which said “she wanted to leave money/things” to these entities, could be read as suggesting these gifts were to go in the will. For this reason, he submitted that the “safest and surest course would be to admit the 2009 will to probate and simply consider the other request as to the correction of cl 7(c) of that will separately”.
[40] Having reviewed the evidence of Mr Burton, I am satisfied that the unsigned will represented the concluded testamentary intentions of Mrs O’Carroll, except for the record of the funds advanced to the nieces and nephews.
[41] It is clear that the will was discussed at both the meeting of 13 April and
20 April and, aside from expressing the view that she intended to give $100,000 to the two nephews and only $50,000 to the two nieces, nothing else was sought to be changed.
[42] The notes relating to the gift of $5,000 for the local church and $1,000 for the local historical society were entered under the separate heading in the file note from the notes which appeared under a heading “Re: will”. In relation to the gifts, Mr Burton recorded an instruction to write letters to these entities to which she could attach a cheque. Mr Burton then records, on 21 April 2011, that he had typed letters “re legacies” to the historical society and the local church. Despite the use of the word “legacies”, this action is consistent with the gifts of money being intended to be made during her lifetime, by sending cheques under cover of a letter, and not incorporated in her will.
[43] For these reasons, I am satisfied that the unsigned 2011 will reflected Mrs O’Carroll’s settled testamentary intention, save for cl 5.1, and should be validated under s 14 of the Wills Act 2007.
[44] That only leaves the issue of whether there is jurisdiction to change cl 5.1 using the power of correction in s 31 of the Wills Act 2007. Section 31 provides:
(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.
[45] In my view, this change can be made under s 31(1)(b) because cl 5.1, as
currently drafted, does not give effect to the will maker’s instructions. Although on
25 February 2011, she was prepared to entertain rearranging the money she had already given to the two nieces and nephews to achieve equality, she then reverted to a view she had expressed previously, that she wanted the two nephews to have
$100,000 each and the two nieces a smaller amount of $50,000 each. That view was
consistently expressed to Mr Burton in the two meetings she had with him before she died. I consider therefore, there is an error in cl 5.1 because it does not give effect to her instructions. It can be cured through s 31 of the Wills Act 2007 by directing the deletion of cl 5.1 and substituting:
I ACKNOWLEDGE I have loaned prior to the date of this my will, FIFTY THOUSAND DOLLARS ($50,000) each to SHONA WINIFRED STODDART and GLYNIS LYNETTE SULLIVAN, and ONE HUNDRED THOUSAND DOLLARS ($100,000) each to KEITH ROSS MCCUTCHEON and ALISTAIR KENNETH MCCUTCHEON.
The alleged mistake
[46] Both the September 2009 will and the unsigned 2011 will are considered to contain a drafting error. As Mr Burton explains, the deceased’s instructions to him were that the residue of the estate was to go to the children and grandchildren of her two brothers, William and Kenneth McCutcheon. The error has arisen through the process of redrafting the will.
[47] The first draft of the 2009 will provided for the residue to go to all of Mrs O’Carroll’s nieces and nephews when she only wanted her brothers’ children to be residuary beneficiaries. The clause was modified to bring in the names of William and Keith, while leaving the description of nieces and nephews and grandnieces and grandnephews in the will. Nobody at the time appreciated that by referring to the nieces and nephews and grandnieces and grandnephews of William and Keith McCutcheon, the children and grandchildren of Lena Rae were left within the class of residuary beneficiaries. The same wording was then used in cl 7(b) of the unsigned 2011 will, which replicated, and did not reconsider, this clause.
[48] Mr Burton deposes that a more appropriate description of the class would have been to describe the members as “the children and grandchildren” of William and Kenneth McCutcheon, as that would have reflected the deceased’s intentions. He also notes that, because Mrs O’Carroll suffered from macular degeneration and glaucoma, she had limited reading ability, and her understanding of the wills would generally have been very reliant upon the explanations which she was given.
[49] Because the children and grandchildren of the late Lena Mary Rae are directed affected by the application to rectify the alleged mistake, whether in the
2009 will or the 2011 will, Mr Bradford was appointed as counsel to represent those children and grandchildren.
[50] At a pre-trial conference, having been made aware of the modest size of the estate and the difficulty in contacting all of the children and grandchildren of Lena Mary Rae, I confirmed it was not necessary for Mr Bradford to make contact with all of them, but to obtain such instructions that he could from those that he could make contact with and then to assist the Court by advancing such arguments as were available to support those parties’ claims.
[51] As it transpired, Mr Bradford was able to contact almost all of the beneficiaries he represented and those he spoke to acknowledged that a mistake had been made and they did not oppose the application to amend the alleged error in the
2009 will or the unsigned will. However, as he had not been able to contact all the beneficiaries, he was not in a position to consent to the application. That said, he acknowledged it was a factual matter which turned on whether Mr Burton’s affidavit satisfied me that the drafting of the will contained a mistake of the type envisaged by s 31 Wills Act 2007.
[52] I am satisfied that Mr Burton has cogently explained how the relevant clause was drafted, which meant it inadvertently encompassed all of the deceased’s nieces and nephews, and grand-nieces and grand-nephews, when it was intended to be limited to the children and grandchildren of William and Kenneth McCutcheon.
[53] Accordingly, I hold it is appropriate that cl 7(b) of the unsigned 2011 will is amended so that the words “nieces and nephews and grand-nieces and grand-nephews” is replaced by the words “children and grandchildren”.
Outcome
[54] For the reasons set out above, I make the following orders:
(a) The draft will in the name of Winifred Isabella O’Carroll, which is document forty two at page one hundred and four of the bundle of exhibits to the affidavit of Robert John Burton sworn on
16 December 2016 (the Unsigned Will), is declared to be the valid last will and testament of the deceased and which may be admitted to probate.
(b)The Unsigned Will is amended by deleting cl 5.1 and substituting the following:
I ACKNOWLEDGE I have loaned prior to the date of this my will FIFTY THOUSAND DOLLARS ($50,000) each to SHONA WINIFRED STODDART and GLYNIS LYNETTE SULLIVAN, and ONE HUNDRED THOUSAND DOLLARS ($100,000) each to KEITH ROSS MCCUTCHEON and ALISTAIR KENNETH MCCUTCHEON.
(c) The Unsigned Will is amended by deleting cl 7(b) and substituting the following clause:
TO divide the ultimate surplus equally between my nephew WILLIAM KELVIN RAE and such of the children and grandchildren of my deceased brothers WILLIAM MCCUTCHEON and KENNETH MCCUTCHEON as shall survive me and shall attain or shall have attained the age of TWENTY FIVE (25) years but excluding any adopted children of my said brothers and if more than one in equal
shares.
Costs
[55] Mr Bradford sought that his costs should not be borne by the estate but instead out of public funds, saying this is not a case that has been occasioned due to the direct actions of the estate but instead has been forced upon them by what they see as an unintentional error made by the deceased’s solicitor.
[56] I accept that the costs of involving Mr Bradford in this application were not occasioned by the parties themselves, but rather because the applicants could not locate all members of the class of beneficiaries he represented and so had sought the appointment of counsel to represent them. However, I see both the attendances of Mr Brodie and of Mr Bradford as being necessarily incurred in the administration of the estate. They are costs that I direct to be awarded from the estate rather than from public funds.
Solicitors:
Dalziel Strauss, Temuka
Russell Moon & Fail Lawyers, Ashburton
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