Trustees Executors Limited v Poppe
[2024] NZHC 2346
•21 August 2024
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-485-000788
[2024] NZHC 2346
IN THE MATTER OF the Estate of ANNE PAISLEY RYAN UNDER
Rule 27.6 of the High Court Rules 2016
BETWEEN
TRUSTEES EXECUTORS LIMITED
Applicant
AND
BEATRICE MARY POPPE
First Respondent
WINIFRED EDITH RYAN
Second Respondent
Hearing: On the papers Appearances:
T Donnelly for the Applicant
M Ward-Johnson for the First Respondent C Knowles for the Second Respondent
Judgment:
21 August 2024
JUDGMENT OF WALKER J
This judgment was delivered by me on 21 August 2024 at 12 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
TRUSTEES EXECUTORS LIMITED v POPPE [2024] NZHC 2346 [21 August 2024]
[1] Anne Paisley Ryan (the deceased) died on 13 November 2021. She is survived by her sisters, Winifred Edith Ryan (Edith) and Beatrice Mary Poppe (Beatrice).
[2] The deceased left two wills. The last Will dated 17 April 2019 (2019 Will) appointed Edith and Beatrice as executors. The 2019 Will replaced an earlier will dated 4 April 2016 (2016 Will).
[3]Beatrice and Edith are the primary beneficiaries of the estate.
[4] The terms of the 2019 Will provide for specific distributions to named persons (subject to survivorship). The 2019 Will also provides that a property at 67 Para Street, Miramar, Wellington, go to Edith. Personal belongings, jewellery and the money in bank accounts, term deposits and investments are to be distributed to Edith and Beatrice in equal shares. It provides for half the residue of the estate to go to the Wellington City Mission and half to the Sisters of Compassion, Wellington, with the instruction that “the money to be used for food for the needy”.
[5] There are few material differences between the 2019 Will and the 2016 Will save in respect of the property at 67 Para Street. Under the terms of the 2016 Will, that property was to pass to both Edith and Beatrice.
[6] Beatrice expressed concerns about the deceased’s capacity and Edith’s influence over the deceased when she made the 2019 Will. They (as executors) did not agree whether the 2016 Will or 2019 Will should be propounded. They agreed to renounce as executors and for Trustees Executors Limited (TEL) to be the administrator under letters of administration with will annexed.
[7] TEL formed the view that the deceased had testamentary capacity at the time of the 2019 Will’s execution. That belief was based on evidence of the deceased’s solicitor who deposed that the deceased understood the nature and effect of making her Will along with the nature and extent of her property. Further, that she provided clear instructions as to the estate’s distribution and was still capable of living independently and managing her own affairs at the time of signing the 2019 Will. TEL additionally relied on the fact that two months after the creation of
the 2019 Will, the deceased had sufficient capacity to execute an enduring power of attorney in which she appointed both Beatrice and Edith as attorney. Both sisters accepted this appointment as evidenced by their signature on the relevant documentation.
[8] The deceased was not certified as lacking capacity to manage her own affairs in relation to property until 24 February 2020 following a diagnosis of dementia. At that time the enduring powers of attorney were invoked. This was some 10 months after the deceased signed her 2019 Will.
[9] TEL agreed to be appointed. It filed these substantive proceedings seeking (by way of a statement of claim) a grant of letters of administration with will annexed in solemn form in respect of the 2019 Will. The parties have confirmed that all relevant recipients or beneficiaries with respect to each Will were served with the proceedings. None have taken any steps.
[10] TEL sought in the alternative a grant for letters of administration with will annexed in common form in respect of the 2016 Will in the event that the Court is not satisfied that the 2019 Will is valid.
[11] Beatrice filed a statement of defence to the statement of claim. She disputed that the deceased had testamentary capacity when she made the 2019 Will and asserted that the deceased was unduly influenced by Edith at that time.
[12] Beatrice and Edith reached a proposed compromise recorded in a settlement agreement executed by them and TEL dated 27 June 2024.
[13] They depose that all other beneficiaries named in the 2019 Will have been advised of the proposed compromise.
[14] Edith and Beatrice subsequently jointly applied under r 27.8 of the High Court Rules 2016 (HCR) for compromise of the application for probate in solemn form. TEL filed an affidavit in support. This rule provides that the Court may treat the application
as an application in common form and determine the issue of capacity on affidavit evidence.
[15] The parties cannot consent to prefer one Will over another. The Court must be satisfied as to the validity of the Will and as to the testator’s capacity when the Will was made.1
[16] The joint application reflects the compromise reached between Edith and Beatrice by which Beatrice abandons the claims made in her statement of defence. The joint application seeks orders:
(a)Directing that the current substantive proceedings be treated as an application under r 27.4 of the High Court Rules 2016 and that the evidence on the application be given by affidavit.
(b)Declaring that the deceased had testamentary capacity to make a valid will on 17 April 2019.
(c)Granting letters of administration with will annexed of the deceased’s Will dated 17 April 2019 to TEL.
(d)Amending clauses in the Will as recorded in Attachment A of the application.
(e)Approving an agreed distribution between Beatrice and Edith of:
(i)The net sale proceeds of the deceased’s house at 67 Para Street, Miramar, Wellington in equal shares under clause 12 of the deceased’s Will as amended.
(ii)The deceased’s contents and effects, artworks, paintings, and sculptures made by New Zealand artists and personal
1 Wills Act 2007, s 14.
belongings and jewellery under clauses 13 and 14 of the deceased’s Will.
[17] Attachment A of the application suggests the following amendments to the deceased’s Will:
(a)Deleting clause 4.2
(b)Deleting clause 12 and replacing it with the following:
I direct that my house at 67 Para Street, Miramar, Wellington be sold and the net sale proceeds be distributed in equal shares between my sisters Winifred Edith Ryan and Beatrice Mary Poppe.
(c)Deleting clause 24 and replacing it with the following:
I give to each of Wellington City Mission and Sisters of Compassion, Wellington, $5,000.
[18] Clause 24 provides a distribution to the residual beneficiaries (Wellington City Mission and Sisters of Compassion, Wellington). They would otherwise not benefit on account of there being no residue available. It otherwise does not alter any specific gift.
Testamentary capacity
[19] The legal principles applying to testamentary capacity are well settled.3 The onus must be discharged on the balance of probabilities. To establish capacity, it must be demonstrated that the maker of the Will had sufficient understanding:
(a)That he or she was making a will and the effect of doing so.
(b)As to the extent of the property disposed of.
2 Clause 4 relates to a bequest to a beneficiary (only) if they survive the deceased. The deceased survived the beneficiary therefore this clause is no longer applicable.
3 Bishop v O’Dea CA 120/99, 20 October 1999.
(c)As to the moral claims to which he or she ought to give effect when making testamentary dispositions.
[20] In October 2019, the deceased was living alone and managing her own self-care. She was diagnosed with dementia on 24 February 2020. A review of medical notes provided record that the deceased had mild cognitive impairment in November 2018, but otherwise there is no medical evidence she lacked testamentary capacity when the 2019 Will was made.
[21]Kevin Smith, the deceased’s solicitor, swore an affidavit dated
14 October 2022. He deposed that the deceased gave clear instructions in a handwritten draft and made various amendments, which she discussed along with the terms of the Will on a number of occasions. In his view the deceased was lucid and clearly understood what she was doing. He deposed that he had no concerns with her understanding of her wishes with respect to her 2019 Will.
[22] In the light of that evidence and the medical notes, I am satisfied that the deceased had testamentary capacity.
[23] It is unnecessary to discuss the prior claim of undue influence as that has been abandoned.
Proposed compromise
[24] All interested parties have been served with notice of the joint application reflecting the proposed compromise. No interested party has objected. TEL advises that, except for any claim under the Law Reform (Testamentary Promises) Act 1949 by an individual not served with the proceedings, there are no other known eligible claimants against the estate.
Variation / amendment of the Will
[25] I was not initially satisfied by the original application that this Court has the jurisdiction to amend the terms of the 2019 Will. I therefore sought further
submissions from the parties on this issue. The parties, including TEL, filed those submissions on 13 August 2024.
They jointly submit that the jurisdiction is either:
(a)the inherent jurisdiction of this Court; or
(b)sections 122, 124 and 125 of the Trusts Act 2019 (Trusts Act).
[27] In the alternative, the parties request that the Court approve the agreement reached by the beneficiaries through the mechanism of a “blessing order” under s 133 of the Trusts Act.
[28]I am not satisfied that the Court should rely on inherent jurisdiction.
[29]Section 4B of the Administration Act 1969 provides:
4B Application of Trusts Act 2019
(1)The duties incidental to the office of an administrator under this Act are taken to be express trusts for the purposes of the Trusts Act 2019.
(2)The Trusts Act 2019 applies, with any necessary modifications, to those trusts.
[30]Sections 122, 124 and 125 of the Trusts Act 2019 provide:
122 Variation or resettlement of trust by unanimous consent of beneficiaries
(1)A trustee may do either of the following on being required to do so by all of the beneficiaries who together hold all of the beneficial interest in the trust property, if the conditions set out in subsection (2) are satisfied:
(a)vary the terms of the trust:
(b)consent to the resettlement of the trust.
(2)The conditions for an action in subsection (1) are that—
(a)every beneficiary consents to requiring the variation or resettlement; and
(b)the trustee receives a request to vary the terms of the trust or resettle the trust from or on behalf of each beneficiary; and
(c)if any of the beneficiaries is a beneficiary described in section 124(2), the court has made an order under section 124 approving the variation of terms or resettlement on behalf of that beneficiary; and
(d)the trustee has agreed to the proposal.
(3)In this section and in sections 124 and 125, variation includes a change to the scope or nature of the powers of the trustee.
…
124 Power of court to approve termination, variation, or resettlement of trust
(1)The court may, on behalf of any of the beneficiaries described in subsection (2) who has an interest in the property of a trust, approve the termination, variation, or resettlement of the trust.
(2)The beneficiaries are—
(a)a beneficiary who lacks capacity:
(b)a person who may acquire a beneficial interest at a future date or on the happening of a future event or on becoming a member of a certain class of persons:
(c)a future person who may acquire a beneficial interest.
(3)An application for an order of approval may be made by—
(a)the trustees or any one of them:
(b)any person with a beneficial interest in the trust property.
(4)On an application for an order of approval, the court must take into account each of the following factors:
(a)the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
(b)the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
(c)the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
(5)The court must not make an order of approval if its effect would be to reduce or remove any vested interest in the trust property.
(6)An order of approval binds the person on whose behalf it is made and takes effect without any further step.
…
125 Power of court to waive requirement of consent to termination, variation, or resettlement of trust
(1)The court may waive the requirement that a beneficiary consent to the termination of a trust under section 121 or the variation or resettlement of a trust under section 122.
(2)An application for an order of waiver of consent may be made by—
(a)the trustees or any one of them:
(b)any person with a beneficial interest in the trust property.
(3)On an application for an order of waiver of consent, the court must take into account each of the following factors:
(a)the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
(b)the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
(c)the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
(4)The court must not make an order of waiver of consent if its effect would be to reduce or remove any vested interest in the trust property.
(5)An order of waiver of consent binds the person on whose behalf it is made and takes effect without any further step.
[31] The further submissions, to the extent necessary, vary the orders sought in the joint application. I accept that the following factors point toward approving the variation of the terms of the 2019 Will under the Trusts Act:
(a)The primary beneficiaries under the 2019 Will have consented.
(b)Edith, whose interest in the deceased’s Wellington property is affected under the 2019 Will, expressly consents.
(c)All other interested parties have been served with the proceeding and have taken no steps.
(d)The settlement agreement between the parties, including TEL (being the entity to be granted letters of administration), is analogous to a deed of family arrangement.
(e)That deed of family arrangement (settlement agreement) does not reduce or remove any vested interest in the Trust property within the meaning of s 125(4) of the Trusts Act.
[32] Having considered those factors and the principles set out in Ruby v Ruby and Gavin v Gavin, I am satisfied that the provisions relied on through the amended application support the Court’s jurisdiction to grant the application.4
[33]Accordingly, I make the following orders:
(a)Directing that the current substantive proceedings be treated as an application under r 27.4 of the High Court Rules 2016 and that the evidence on the application be given by affidavit.
(b)Declaring that the deceased had testamentary capacity to make a valid Will on 17 April 2019.
(c)Granting letters of administration with will annexed of the deceased’s Will dated 17 April 2019 to TEL.
(d)Following the grant of letters of administration with will annexed as per (c), granting the amended application to vary clauses in the Will under the Trusts Act 2019, as recorded in Attachment A to the application.
(e)Approving an agreed distribution between the first and second respondents of:
4 Ruby v Ruby [2022] NZHC 282; Gavin v Gavin [2021] NZHC 550.
(i)the net sale proceeds of the deceased’s house at 67 Para Street, Miramar, Wellington in equal shares under clause 12 of the deceased’s Will (following amendment referred to in (d) above); and
(ii)the deceased’s contents and effects, artworks, paintings, and sculptures made by New Zealand artists and personal belongings and jewellery under clauses 13 and 14 of the deceased’s Will.
[34]I make no order for costs.
............................................................
Walker J