Rakich v Cox

[2015] NZHC 703

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-485-004638 [2015] NZHC 703

IN THE MATTER

of an application for a Grant of Probate in

Solemn form in the Estate of Walter John Andrew Rakich, also known as Walter Jack John Rakich

AND IN THE MATTER

of the Wills Act 2007

AND IN THE MATTER

of sections 339 and 343 of the Property
Law Act 2007

AND IN THE MATTER

of the Administration Act 1969

BETWEEN

JENNIFER GAY RAKICH Plaintiff

AND

DAVID JOHN GRAEME COX AND JOHN MATHEW RAKICH Defendants

Hearing:	(On the papers)
Judgment:	15 April 2015

JUDGMENT OF VENNING J

This judgment was delivered by me on 15 April 2015 at 12.30 pm, pursuant to Rule 11.5 of the High

Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Kumeu-Huapai Law Centre, Kumeu

Copy to:            M Kelly, Auckland

RAKICH v COX AND ANOR [2015] NZHC 703 [15 April 2015]

[1]      Walter Jack John Rakich (the deceased) died on or about 7 April 2014.  He was survived by five children, the plaintiff, Jennifer Gay Rakich, John Mathew Rakich,  Martha  Marjory  Rencher,  Mark Andrew  Rakich,  and  Andrea  Christine Rakich.

[2]      The deceased left two wills, the first made on or about 18 September 2000, amended by a codicil dated 20 March 2011 (the first will).  Under that first will and codicil the executors were John Mathew Rakich and Jennifer Gay Rakich.   The deceased’s  estate  was  to  be  divided,  after  funeral  and  other  expenses,  equally between his five children.

[3]      The deceased also made a later will on or about 15 November 2013 (the second will).  Under the second will the executors were John Mathew Rakich and a solicitor, Mr David Cox.  The deceased’s estate was to be divided, after funeral and other expenses, between Martha, Jennifer, Mark, Andrea and a trust for the benefit of John Rakich, again equally.

[4]      Issues arose between the family of the deceased concerning: (a)        the deceased’s estate;

(b)      John Mathew Rakich’s rights/occupation of the property where he and

the deceased had lived prior to the deceased’s death;  and

(c)       the testamentary capacity of the deceased at the time he made his second will.

[5]      Jennifer Rakich brought these proceedings against the named executors of the second will seeking a variety of orders, including:

(a)       an order appointing her as administrator of the estate of the deceased pursuant to the first will and codicil;

(b)an  order declaring that  the second  will  was  not  capable of being declared valid under the Wills Act 2007;

(c)       payment of occupation rental by John Mathew Rakich;

(d)an order requiring the defendants to prove or renounce probate of the second will and to produce the second will to the Court.

[6]      Statements of defence were filed by the second named defendant.  They put in issue the challenge to the deceased’s testamentary capacity when he made the second will.

[7]      However, following a meeting a written settlement agreement was concluded between the parties.  The parties accept that in practice there is very little difference between the two wills.  The issue is that John Mathew Rakich is a bankrupt and the second will vests the one/fifth interest otherwise due to him in a trust.  Mr Cox has filed a notice of appearance preserving his position.

[8]      The Official Assignee has confirmed that he will abide the decision of the

Court.

[9]      The  settlement  agreement  records  the  compromise  reached  between  the parties. They have agreed in principle to proceed as follows:

(a)       to seek probate of the first will;

(b)      to consent to the appointment of an independent executor Mr Mark

Nicholas Tolich of Messrs Corban Revell, Solicitors, West Auckland;

(c)       not to pursue any claim for occupation  rental  from John Mathew

Rakich;

(d)      that John Mathew Rakich will vacate the property;  and

(e)       the executors named in the wills will effectively renounce probate in favour of Mr Tolich.

Testamentary capacity

[10]     The first issue is there are two wills.  The plaintiff has challenged the validity of the second, most recent will on the basis of the deceased’s lack of testamentary capacity.  Although the parties have agreed to seek probate of the first will, as the Court recently confirmed in Estate: Watson,1 the parties cannot consent to making a will, no will.2   The Court must rule on the validity of the second will.  That was put in issue in these proceedings.

[11]     Rule 27.5 appears to apply.  It provides:

27.5   Restrictions if possibly invalid will exists

(1)      This rule applies if the applicant—

(a)       knows of a will later than the will that the application is about; and

(b)      has reason to believe that the later will is invalid.

…

(3)      The applicant may make an application under rule 27.4 containing proof that—

(a)       the  applicant  has  given  the  executor  named  in  the  will written or electronic notice of the applicant's intention to apply; and

(b)       the executor has not applied for a grant within 1 month after service of the notice; and

(c)       a caveat has not been lodged against a grant within 1 month after service of the notice.

(4)      The court—

(a)      may direct the applicant to apply for an order under section

53 of the Administration Act 1969; and

(b)       must defer dealing with the application under rule 27.4 until the application under section 53 has been determined.

[12]     The plaintiff pleads that the defendant executors of the second will have been given notice of her intention to apply for probate of the first will, and that the

1      Estate: Watson [2014] NZHC 874.

2      In the Goods of Watts (1837) 1 Curt. 594 at 595, and Re Young [1968] NZLR 1178 at 1179.

executors of the second will have not applied for a grant within one month of service of the notice.

[13]     Further, in the present case there is evidence as to the lack of testamentary capacity by the deceased at the time that the second will was made.   A full and detailed report from Dr Jane Casey, a consultant psychiatrist and psychogeriatrician, dated 3 February 2014 confirms that while the deceased knew what a will was, and knew that he had made a will, he had no understanding of the nature and extent of his estate, nor how his estate would be disposed of.   In Dr Casey’s opinion the deceased  did  not  demonstrate  testamentary  capacity.     Importantly  Dr  Casey examined the deceased on 29 December 2013 for over 90 minutes and then again on

30 January 2014 for 40 minutes.  The second will was dated 15 November 2013, just some six weeks prior to the first examination by Dr Casey.  Dr Casey also confirmed that in her opinion the deceased was mentally incapable because he was not wholly competent to manage his own affairs in relation to his property.  At the time he was suffering from dementia.

[14]     Dr Casey’s opinion is supported by the deceased’s local doctor, Dr Ferguson,

although he defers to Dr Casey.

[15]     In light of that evidence, which is not challenged for present purposes, I am prepared to infer that at the time the second will was executed the deceased lacked testamentary capacity so that the second will is not a valid will.

[16]     That then leaves the application for grant of probate of the first will.

[17]     Rule 27.25(2) applies given that pursuant to the agreement the executors of the first will have renounced probate of the will.   In such a case r 27.25(4) also applies.  The Court may grant letters of administration with a will annexed to the person entitled to them according to the priority in r 27.26.  As all parties entitled under r 27.26 consent to the appointment of Mark Nicholas Tolich as administrator then r 27.27(2) would apply to permit Mr Tolich to apply for grant of letters of administration with will annexed.

[18]     Rule 27.8 referring to compromises is also relevant:

(1)      This rule applies if an application under rule 27.6 is the subject of a compromise, whether or not a statement of defence has been filed.

[19]     Pursuant to r 27.8(2) the Court may direct the application be treated as an application under r 27.4 and that evidence on the application be given by affidavit.

Result/further directions

[20]     To advance matters I make the following orders/directions:

(a)      declaring that the deceased lacked testamentary capacity to make a valid will on 15 November 2013.  The will document executed on that date is not a valid will;

(b)directing that the current proceedings be  treated as an  application under r 27.4 and that the evidence on the application be given by affidavit;

(c)       that subject to:

(i)Mr  Mark  Nicholas  Tolich  of Auckland,  Solicitor,  filing  an affidavit seeking a grant to him of letters of administration with the first will and codicil annexed;  and

(ii)      Jennifer Gay Rakich, John Mathew Rakich, and David John

Graeme Cox filing renunciation of probate;  and

(iii)Martha Marjory Rencher, Mark Andrew Rakich and Andrea Christine Rakich filing a consent  to  the grant  of letters  of administration with will annexed to Mark Nicholas Tolich of Auckland, Solicitor,

a grant of probate issue in relation to the first will and codicil;

(d)      Reserving leave to seek any further directions or orders that may be

necessary to give effect to the above.

Venning J