Where there’s a will there’s a relative

Most estate litigation involves family members in one way or another. This paper gives an update on two important recent cases in this area of the law.

Birt v The Public Trustee of Queensland [2013] QSC 13 was a solemn form probate case. McPherson v Byrne [2012] QSC 394 was a construction and rectification case.

Solemn form proceedings

Birt v The Public Trustee of Queensland [2013] QSC 13

Mrs Brooks died in 2010 aged 86 years old. She was survived by two daughters (Dale and Deborah, the plaintiffs) and a son Bill (the second defendant).

There were two wills. The latest will, made in September 2004 named The Public Trustee as executor and left her entire estate to Bill with a gift over to Deborah.

The prior will, made in 1990, appointed Dale as her executor and left her estate to her three children equally.

Dale and Deborah argued that the 2004 Will was not valid on the grounds of lack of testamentary capacity and undue influence by Bill.

The Public Trustee took no active role in the proceedings and was given leave to withdraw at the commencement of the hearing and return once judgment was delivered, to be heard on the form of the orders and as to costs.

Anne Lyons J summarised the issues in the case as follows:1

(a) Did Mrs Brooks comprehend the nature of the act of making a will and its effect?

(b) Did she understand the extent of the property which she was disposing by the will?

(c) Did she comprehend and appreciate the claims to which she ought to give effect when she made her will?

(d) Did she discriminate between those claims so that no disorder of mind should prevent her natural faculties and influence her in making her will; and

(e) Was she subject to undue influence at the time she executed her will?

Mrs Brooks had resided for a long time in her own home at Southport. Bill had returned to live with her in the family home after the breakup of his second marriage. He lived with her for a number of years. Bill admitted to having a drug problem and being a serious drinker. He also admitted that he “blows up” and that he is an “explosive character”. He did not work between 2003 and 2004, was in receipt of social security payments and did not pay any rent or board to his mother throughout that period.

There was “no love lost between Bill and his sisters”.

Mrs Brooks’ health had deteriorated in 2003 and 2004, primarily due to a number of strokes. Whilst she had a number of hospital admissions she continued living at home with Bill, who had become her carer for Centrelink purposes. She was also receiving considerable daily assistance from Blue Care.

Her mental functioning fluctuated significantly during this period: she had a number of Mini Mental State Examinations (“MMSE”) recording scores of 13/30, 13/28, 22/30, 14/30 and 16/30. There were also documented delusional episodes during hospital admissions in this period.

The estate was modest. Mrs Brooks only had her home and nothing else. Before her death she lived frugally off an aged pension and had a history of ongoing financial difficulties. These difficulties were exacerbated by Bill who was always short of money himself and he was reliant on his mother not only for accommodation and meals, but for financial assistance as well. This led to Mrs Brooks often not having enough money to manage.

In January 2004 Dale applied to GAAT for the appointment of a guardian and an administrator. She indicated on the form that she was prepared to be appointed to both those roles, but the application form also made it clear that the Public Trustee (“PTQ”) could also be appointed to this role. The PTQ was eventually appointed as administrator in relation to all financial matters in October 2004. No guardian was appointed.

The application to GAAT marked the beginning of increased hostility from Bill towards Dale. He became verbally abusive to her and would order her off her mother’s property and once even called the police. He threatened violence, assaulted her on one occasion and threatened to kill her. He also made abusive threats to other people including Dale’s children. Bill would tell his mother that Dale was “going to take all your money”. He also telephoned Deborah and told her that she should be careful of Dale as Dale was after the house and she should watch out. Her Honour found that Bill “had a great concern that Dale was taking over and that this caused him great distress”.

Bill told his mother and Blue Care that Dale had brought an application to remove him from his mother’s house. The Blue Care records indicated that Mrs Brooks was very anxious that Bill will be asked to leave and that Dale had instigated Court proceedings to remove him from the home. One note said “Client and carer very distressed.”

Of course, there was no evidence that Dale took any legal action to remove Bill from the house at any stage.

Her Honour found that Bill was verbally abusive and bullying to his mother (as well as to Dale and her daughters). He would bring his friends around and they would smoke drugs, drink alcohol and come into the house and take her food. She found that “the evidence indicates that not only was Bill convinced that he would be removed from his mother’s house if an administrator was appointed but he convinced his mother that he was about to be removed”.

The 23 September 2004 will

Her Honour found that at the time she made her will on 23 September 2004, there were significant concerns about Mrs Brooks’ capacity to execute a will:

• She had experienced a number of strokes in 2003 and 2004;
• She had been hospitalised for two weeks in January 2004 due to concerns about her cognitive functioning. She was experiencing delusions during her stay in hospital;
• At the time of her appointment with the Public Trustee (to make the will) she had been diagnosed with dementia, was experiencing cognitive decline and was in the care of a geriatrician;
• There was also a record of her experiencing delusions in September 2004;
• Bill denied that his mother was confused at the time she made her will in September 2004 but did agree that “She was pretty angry at the time”;
• Her functioning at home had also been of such a concern that her daughter had initiated an application to GAAT for the appointment of both a guardian and an administrator. That application was still pending at the time she made her will in September 2004.

Because of those factors, PTQ officer insisted that a contemporaneous assessment of capacity be undertaken by her doctor. She also took the precaution of having a legal officer attend the appointment with Mrs Brooks. Ultimately, the officer considered that she could take Mrs Brooks’ instructions for the will.

The GP’s evidence

Dr Cargill saw Mrs Brooks on 23 September 2004 just before the making of the will. Mrs Brooks had been his patient for a number of years and he would see her about twice a month. She was usually accompanied by Bill.

Dr Cargill distinctly remembered that she was very “adamant” on that day about what she wanted. Bill was present with her at the consultation.

Dr Cargill’s notes recorded the following:

aware of self, address, assetts (sic) [house] 3 children, wants to make will today to leave house to William, and nil to others.

Adamant as wiiiiam (sic) has been carer, has also attended Dr Merson recently. dr Merson was ill yesterday and not there.

Dr Cargill formed the view that she had capacity to make a will and wrote a letter to the PTQ on 23 September 2004 in the following terms:

Patricia Brooks suffered a mild to moderate dementia. She has been seeing Dr Elizabeth Merson, the geriatrician, as well as myself. Today she seemed quite well. She was aware of self and place. She knew her main asset was her house. She also knew that her three children expected a share of this in her will. She expressed the very definite opinion that her daughters were to get nothing and the house was to be left to her son William. She was to see the Public Trustee today to make her will. I feel she has the basic elements of testamentary capacity. My understanding of the process, in that she knew who she was, her basic assets and the potential beneficiaries. It may be prudent to also get an opinion from Dr Merson.

The Blue Care Notes recorded on many occasions Mrs Brooks’ distress about the GAAT application, such as: being concerned about her son “being ordered to leave”; subsequently that she was very anxious about that prospect. The notes also recorded ongoing chest pains and confusion on the part of Mrs Brooks on many occasions, such as “Concerned re forgetfulness and ‘delusion’- seeing dead brother”. On 25 October 2004 the notes record that both Bill and Mrs Brooks were “extremely upset” about the GAAT hearing and record that there was a “long emotional discussion” about it. The notes also record that Bill was “Agitated and angry” about criticism of his care of his mother and that Mrs Brooks was also “upset‟ about seeing Bill upset.

The PTQ officer who took instructions for the will stated that Mrs Brooks was very definite in regards to her instructions and that at the time she had specifically noted that she was “very upset with her daughter Dale Brooks as she had assaulted her son”. She took a note of the actual words she had used in respect of her daughter as follows:

“I am just not giving her my house. No way is she getting my house. I will sell my home and not give it to her. My son is my carer. He does the cooking. I am on the old age pension. I love the home. My husband and I worked hard for it. I won’t give it to them. They are not getting my house. I will sell it privately, but my daughter and the whole lot of them are not having my house.”

Her Honour found that these words indicated that Mrs Brooks believed that Dale was about to take possession or ownership of her house.

Her Honour made the following findings (at [75]):

• Mrs Brooks had a diagnosis of dementia and was experiencing a marked decrease in mental functioning at the time she executed her will on 23 September 2004. In a form completed on that date Dr Merson recorded an MMSE of 14/30.
• Bill had a significant drug and alcohol problem and was chronically short of money.
• Bill was financially dependent on Mrs Brooks and was reliant on her for accommodation and financial assistance.
• Bill was verbally abusive to Mrs Brooks.
• Bill had an intense dislike for his sister Dale and was abusive including physically abusive to her.
• This abuse escalated after the application to GAAT was made in January 2004 and became heightened after the hearing in May 2004.
• During 2004 Bill was convinced he would be removed from the house if an administrator was appointed.
• On 30 July 2004 Mrs Brooks was noted to be depressed and anxious, worried about the resumed GAAT hearing and constantly agitated about her money.
• Mrs Brooks was noted to be experiencing delusions on 28 September 2004 and on 9 October 2004 Dr Merson (her geriatrician) wrote to Dr Cargill noting her agitation, paranoia, hallucinations and delusions as well as her concern about money and bills.
• Mrs Brooks became convinced that Dale was about to get the house.
• In the week surrounding the execution of the September 2004 Will, Dr Merson considered that Mrs Brooks was impaired in her ability to think abstractly and displayed definite short term memory problems.
• On 10 September 2004 Mrs Brooks was observed by a Blue Care nurse to be distressed about making her will.

The law on Testamentary Capacity

Her Honour set out the well known test in relation to testamentary capacity as set out by Cockburn CJ, in Banks v Goodfellow2 , as follows:

It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.

She stated that it is clear that irrespective of the views of the person who took instructions for the will or indeed the medical opinions of treating doctors, it is for the Court to be satisfied that Mrs Brooks had testamentary capacity at the relevant time.

She set out the following principles relating to the courts’ approach to assessing capacity, as stated by Isaacs J in Bailey v Bailey3:

(1) The onus of proving that an instrument is the will of the alleged testator lies on the party propounding it; if this is not discharged the Court is bound to pronounce against the instrument.

(2) This onus means the burden of establishing the issue. It continues during the whole case and must be determined upon the balance of the whole evidence

(3) The proponent’s duty is, in the first place, discharged by establishing a prima facie case.

(4) A prima facie case is one which, having regard to the circumstances so far established by the proponent’s testimony, satisfies the Court judicially that the will propounded is the last will of a free and capable testator.

(5) A man may freely make his testament, how old soever he may be; for it is not the integrity of the body, but of the mind, that is requisite in testaments.

(6) The quantum of evidence sufficient to establish a testamentary paper must always depend upon the circumstances of each case, because the degree of vigilance to be exercised by the Court varies with the circumstances.

(7) As instances of such material circumstances may be mentioned: (a) the nature of the will itself regarded from the point of simplicity or complexity, or of its rational or irrational provisions, its exclusion or non-exclusion of beneficiaries; (b) the exclusion of persons naturally having a claim upon the testator; (c) extreme age, sickness, the fact of the drawer of the will or any person having motive and opportunity and exercising undue influence taking a substantial benefit.

(8) Once the proponent establishes a prima facie case of sound mind, memory and understanding with reference to the particular will, for capacity may be either absolute or relative, then the onus probandi lies upon the party impeaching the will to show that it ought not to be admitted to proof.

(9) To displace a prima facie case of capacity and due execution mere proof of serious illness is not sufficient: there must be clear evidence that undue influence was in fact exercised, or that the illness of the testator so affected his mental faculties as to make them unequal to the task of disposing of his property.

(10) The opinion of witnesses as to the testamentary capacity of the alleged testator is usually for various reasons of little weight on the direct issue.

(11) While, for instance, the opinions of the attesting witnesses that the testator was competent are not without some weight, the Court must judge from the facts they state and not from their opinions.

Her Honour also referred to the Court of Appeal’s judgement in Frizzo v Frizzo4.

In her Honour’s view the circumstances of the present case were such “that there was a very real doubt when Mrs Brooks presented at the PTQ to execute her will that she had testamentary capacity. Mrs Brooks had a diagnosis of dementia, was under the care of a geriatrician and had an application pending before GAAT for a substitute decision maker to be appointed due to concerns about her capacity.” (at [79]).

Whilst she found that the officer from PTQ “took all the appropriate precautions” before taking the instructions for the will, that did not alter the fact that there were real concerns surrounding the execution which her Honour considered were not ever displaced. Because of those serious concerns which existed at the time of the execution a doubt always remained about the validity of the 2004 Will. Therefore the onus was clearly on the propounders of the 2004 Will to satisfy the court that Mrs Brooks had capacity.

The evidence established that Mrs Brooks understood the nature and extent of her estate. Her only real asset was her house and she knew this.

She also understood those who had a claim on her estate, namely her three children. However the Banks v Goodfellow test requires not only that she knows who might have a claim on her estate but a further requirement that no disorder of the mind shall poison her affections, pervert her sense of right or prevent the exercise of her natural faculties. There must be no insane delusion influencing her will in disposing of her property such that a disposal is made which would not have been made if her mind was sane.

Mrs Brooks was suffering from dementia and was indeed experiencing a severe cognitive decline. She was observably distressed about her will and her money, had recent delusions, short term memory problems, difficulty with abstract thinking and a recent MMSE of 14/30. Against that background, the evidence which caused her Honour to doubt her testamentary capacity was Mrs Brooks’ very firm view that Dale was about to “get” her property. She also noted Bill’s evidence that his mother was “angry” on the day she made her will.

It is clear that Mrs Brooks believed that her daughter was about to take over her property. She said to the PTQ officer “I am just not giving her my house. No way is she getting my house. I will sell my home and not give it to her.” Her Honour found that Mrs Brooks believed that Dale was about to take over ownership or at least possession of the house in some way. Significantly, Bill also believed this.

Her Honour found that when she executed the will Mrs Brooks was angry, confused, and distressed and that this was the result of her own vulnerable mental state due to her marked cognitive decline but also Bill’s distress and anger towards Dale.

She also thought it was significant that Mrs Brooks did not say to the PTQ officer “I am not leaving her my house” (that is in the future) but rather the word “giving” was used. That denoted confusion by Mrs Brooks about two things. First, what an administrator can actually do and second, what a will can actually achieve.

Ultimately, it was Mrs Brooks’ very fixed view (about not giving Dale the house) that led her Honour to a conclusion that Mrs Brooks did not possess testamentary capacity for the 2004 will. Mrs Brooks believed that Dale was about to get her property and this very fixed belief had poisoned her affections and perverted her sense of right such that it prevented the exercise of her natural faculties. This fixed view leads to the conclusion that Mrs Brooks’ mind had been poisoned against Dale.

Mrs Brooks was not in a position to actually comprehend and appreciate the claims to which she ought to give effect and she was not able to discriminate freely between those claims because she was under a significant misapprehension about the state of affairs which actually existed.

Mrs Brooks’ fixed and forceful view that she had to change her will to give it all to Bill meant that Mrs Brooks did not actually understand the true nature of a will and when a will took effect. Her solution to the dilemma she was in was to make a new will. She wanted to make a new will to avoid the possibility of Dale getting the house. She thought that by making her new will she was giving her property then and there to Bill thereby preventing Dale getting it. She wanted to make a will so Bill would “get” the house and prevent Dale from making decisions about it as administrator.

Accordingly her Honour found that Mrs Brooks was not acting in a considered and rational way when she made the will. Mrs Brooks was not able to comprehend the nature of the act of making a will and its effect nor was she able to fully discriminate between those who had a claim to her will.

Undue Influence

Her Honour considered a number of cases which set out the law in relation to undue influence, most recently in Nicholson v Knaggs5 as follows:

[110] In order to establish undue influence to vitiate a will it is not sufficient to establish merely a prima facie opportunity for its exercise. Late in the nineteenth century, the English Probate Courts confirmed that the presumption of undue influence which arises in courts of equity founded upon the relationship of the parties, was not open to be applied in probate matters. In Parfitt v Lawless the testator left the bulk of her estate to her live-in priest, who also served as her confessor. The Court held that functions undertaken by the priest and his position in the household were alone not enough to prove undue influence because “undue influence cannot be presumed”. There is thus no room for any presumption of undue influence in the application of the principle.

[111] It is for a party making the allegation of undue influence to demonstrate on the balance of probabilities that there has been such undue pressure which has been brought to bear that the will can be said to have been the product of this conduct.

[footnotes omitted]

Whilst her Honour found that Bill managed to convince his mother that Dale was taking over the house and removing him, she did not consider that there was any evidence that he convinced his mother to change her will so that she left her entire estate to him on her death. She said (at [98]):

There is no evidence that Bill wanted a particular result other than to remain in the house at that point in time. There is simply no evidence that Bill was the stimulus for Mrs Brooks to actually change her will. There is simply no evidence that he wanted that particular outcome.

This case is a very practical example of how the present state of the law on probate undue influence makes it virtually impossible to succeed.

Accordingly, the Court pronounced against the force and validity of the will of the deceased dated 23 September 2004, in solemn form of law.

Construction and rectification of wills

McPherson v Byrne [2012] QSC 394

May McPherson died on 12 December 2009 leaving her last will dated 10 November 1995. She had two children, Donald (who predeceased her) and the applicant Graham.

The first respondents were her executors. The second respondents were the children of Donald.

The will was a fairly straight forward one. Clauses 4 and 5 provided:

4. I GIVE my shares in May McPherson Nominees Pty Ltd ACN 010 000 567 to my son DONALD BRUCE McPHERSON.

5. I GIVE the rest and residue of my estate to such of GRAHAM ROSS McPHERSON and the said DONALD BRUCE McPHERSON as shall survive me and if more than one in equal shares as tenants in common.

S33N of the Succession Act

Section 33N of the Succession Act 1981 (the Act) is an anti-lapse provision. It provides that where a testator leaves a gift to a child who predeceases the testator but which child leaves children of their own (the testator’s grandchildren), then the grandchildren take the gift that the deceased parent would have taken. The rule is subject to a contrary intention appearing in the will.

Graham applied for orders that clauses 4 and 5 of the will express a contrary intention for the purposes of s33N. If his contention was right, it would mean that:

1. With respect to clause 4 of the will, the gift of the shares in May McPherson Nominees Pty Ltd fails and the shares fell into residue;

2. With respect to clause 5 of the will, the residue, instead of being shared between Graham as to one half and the grandchildren (being Don’s children) sharing the other half between them, the entire residuary estate would go to Graham.

The first respondents did not oppose the application so far as clause 5 (the residue) was concerned, but submitted that, on the proper construction of the will, the second respondents are entitled to the gift of the shares in clause 4 of the will. The second respondents (the grandchildren) supported the first respondents’ position on clause 4 of the will, but their approach to the construction of clauses 4 and 5 of the will depended on whether the evidence of the solicitor who took instructions for the will, Mr Rudz, was admissible for the purpose of the construction of the will.

The grandchildren cross applied for rectification of the will pursuant to s33 of the Act. They said that the will did not carry out the deceased’s intentions because the deceased actually intended that if either of her children predeceased her, that their gift would be left to their respective children. They said that this was May’s express instructions to her solicitor. They proposed that the will be rectified by deleting the words as “shall survive me and if more than one in equal shares as tenants in common” from the end of clause 5. The cross-application was opposed by the applicant.

Construction of the will

Mullins J referred to the longstanding principles applicable to the construction of a will usefully summarised by Isaacs J in Fell v Fell (1922) 31 CLR 268, 273-276.

Her Honour confirmed that those principles have been supplemented (and modified in some respects) by Division 5 of Part 2 of the Act. The circumstances in which extrinsic evidence may be used to interpret the will are now found in s 33C of the Act:

33C Use of evidence to interpret a will

(1) In a proceeding to interpret a will, evidence, including evidence of the testator‘s intention, is admissible to help in the interpretation of the language used in the will if the language makes the will or part of it—

(a) meaningless; or

(b) ambiguous on the face of the will; or

(c) ambiguous in the light of surrounding circumstances.

(2) However, evidence of the testator‘s intention is not admissible to establish any of the circumstances mentioned in subsection (1)(c).

(3) This section does not prevent the admission of evidence that would otherwise be admissible in a proceeding to interpret a will.

Her Honour cited with approval Atkinson J’s summary of the effect of s 33C of the Act in Public Trustee of Queensland v Smith [2009] 1 Qd R 26 at [24]-[26] where it was said that, in addition to the circumstances provided for in s 33C(1) in which extrinsic evidence may be used to interpret the will, s 33C preserved the existing rules governing recourse to extrinsic evidence which are referred to as the armchair principle, the equivocation exception and the equitable presumption rule.

It was common ground that the effect of Public Trustee of Queensland v Jacob [2007] 2 Qd R 165 determines the construction of clause 5 of Mrs McPherson‘s will. In Jacob the gift of residue was to five named children of the deceased qualified by the words “as shall survive me for a period of thirty (30) days and if more than one in equal shares”. It was held that the words “if more than one in equal shares” cannot be surplusage and must amount to a contrary intention for the purpose of excluding the operation of the then anti-lapse equivalent to s33N. Mullins J respectfully adopted the analysis of the authorities undertaken by White J in Jacob and applied that decision to conclude that the words that qualify the gift in clause 5 of Mrs McPherson’s will amounted to a contrary intention for the purpose of s33N(3) of the will in relation to the gift of the residue in clause 5.

She went on to find that, applying the rules of construction as set out above, the first step in construing clause 4 of Mrs McPherson‘s will is to construe the plain meaning of the words in the context of the will as a whole.

The relevant scheme of the will here is that there is the gift of the shares in clause 4 and the remainder of the estate is given under clause 5.

Her Honour found no difficulty whatsoever with the plain meaning of the words that have been used in clause 4. It contained a straight gift of the shares to Donald which lapsed, because of Donald‘s death. There is no gift over in clause 4 itself, but the circumstance of Donald‘s predeceasing Mrs McPherson may be accommodated by the application of s 33N of the Act. It was here that the applicant and the respondents’ contentions differed.

The applicant submitted that s33N(2) does not apply, as there was a contrary intention in the will. The applicant pointed to the contrary intention expressed in clause 5 and submitted that Mrs McPherson must have intended that also to apply to clause 4, when the will was read as a whole.

The applicant therefore submitted that Mrs McPherson has shown a general intention by clause 5 of her will not to benefit the issue of either the applicant or Donald and that qualification should not be confined to the gift in clause 5, but should extend to the gift in clause 4 of the will.

The respondents contended that it does not follow from the fact that clause 5 expresses a contrary intention for the purpose of s 33N(3) of the Act, it should be determined that clause 4, in the absence of the same qualifying words, should be read as being subject to the same qualifying words. The respondents submitted that there is nothing in clause 4 or the rest of the will that demonstrates a contrary intention. It was submitted that there is a basic difference between the respective gifts in clauses 4 and 5 that explained why the qualifying words to clause 5 could not safely be implied into clause 4: in that the gift in clause 4 is to one named beneficiary, whereas the gift in clause 5 is to two named beneficiaries.

Reference was made to other cases where qualifying words in one clause were not implied into another clause in the same will where the gift was to the same class of beneficiary: see Re Macaudo [1993] 2 Qd R 269 where Derrington J said at 273:

… it cannot be said that because substitution is expressed in respect of one gift it must necessarily be intended to apply to a totally different gift, for it is quite reasonable that a testator may have diverging intentions in respect of the two gifts.

Mullins J held that the plain meaning of the words in clause 4 of the will read in conjunction with the anti-lapse provision of s 33N of the Act meant that the gift under clause 4 passed to the issue of Donald as he predeceased Mrs McPherson. She found that having regard to the scheme of the will and reading the will as a whole, there was no warrant for altering the effect of clause 4 by importing into it the qualifying words from clause 5. They are two separate gifts which the will has dealt with in separate clauses with different words.

As an alternative approach, the second respondents suggested that if there were an ambiguity on the face of the will in relation to the construction of clause 4, then extrinsic evidence would be admissible to construe clause 4 pursuant to s 33C(1)(b) of the will. However, Mullins J found that the threshold requirement of ambiguity was not met, because of the plain meaning of the words in clause 4. Extrinsic evidence as to the instructions of Mrs McPherson for her will was therefore not admissible on the construction of clause 4.

The applicant therefore failed on the construction that he contended for clause 4.

Applying Jacob, her Honour held that clause 5 of the will should be construed in the circumstances of Donald‘s pre-deceasing Mrs McPherson as giving the applicant the entitlement to the whole of the residue of Mrs McPherson‘s estate.

It was therefore necessary to consider the second respondents’ cross-application for the rectification of clause 5 of the will.

Mrs McPherson’s instructions

The evidence of Mr Rudz, the solicitor who took Mrs McPherson‘s instructions in respect of the will, whilst inadmissible on the construction of the will, was admissible on the rectification application.

Mr Rudz spent an hour taking instructions from Mrs McPherson at their initial meeting. Mrs McPherson had been referred to Mr Rudz by one of the first respondents, Mr Noel Smith, who had seen Mr Rudz in 1994 on behalf of Donald in a dispute between Donald and the applicant related to the family business. After the initial meeting with Mrs McPherson, Donald and Mr Smith joined Mrs McPherson and Mr Rudz for about 15 minutes to discuss the family business and the associated entities.

Mr Rudz’ diary note of his initial attendance on Mrs McPherson included the following note:

Leave my estate to Graham & Don if they predecease then their children

Mr Rudz recalled that Mrs McPherson said words to the effect that Graham had done “alright for himself” both professionally and financially and she wanted Don to have control of the family business and its controlling entities free of any restrictions or interference from Graham. Hence the shares to Donald.

Mr Rudz also recalled that Mrs McPherson instructed him that the remainder of her estate was to be bequeathed to her sons equally, but if either of them predeceased her, to their children. She specifically instructed him that her will was to contain no reference to any grandchildren, because she did not want them drawn into the difficulties which existed between the applicant and Donald. Mrs McPherson said words to the effect that she did not want Graham to read the will as if Don‘s children were preferred to him.

At the time that Mr Rudz took Mrs McPherson‘s instructions, he was aware of the anti-lapse provision then in s 33 of the Act which then provided in similar terms to the current s33N.

Mr Rudz recalled explaining to Mrs McPherson, in lay terms, how the anti-lapse provision under the Act operated. At that time Mr Rudz understood that the effect of s33 of the Act was that the anti-lapse provision applied, even if the words that he ultimately used in clause 5 of the will “as shall survive me and if both in equal shares as tenants in common” were included, on the basis that phrase did not express a contrary intention for the purpose of s33 of the Act.

Mr Rudz obtained instructions from Mrs McPherson to proceed in the manner that he suggested which was to let s 33 of the Act speak for itself, so that grandchildren would not be mentioned in the will.

At a second meeting with Mrs McPherson to discuss the terms of her will Mr Rudz used a flowchart he had drawn of the business and associated entities for the purpose of explaining to Mrs McPherson how the terms of the will gave effect to her instructions. Mr Rudz recalled that at this second meeting Mrs McPherson provided instructions that confirmed she wanted to leave her shares in MMN to Don, and she wanted her shares in MMN to pass to Don‘s children if he predeceased her. She also instructed that Graham and Don were to share in the residue equally, but if either of them did not survive her, the children of the deceased son were to take their father‘s share.

Mr Rudz then prepared the final version of the will in the terms that were executed. He intentionally drafted the will without naming substitutionary beneficiaries in clauses 4 and 5, because he believed that s33 of the Act would operate as an anti-lapse provision, if necessary, in respect of the gifts under each of the clauses. It should be noted that prior to Jacob, that was the commonly held view of the law, including by The Public Trustee.

Based on Mr Rudz’ evidence, her Honour concluded that, in relation to the gift to Donald under clause 5 of the will, Mrs McPherson intended to benefit the second respondents if Donald predeceased her. The explanation for the terms of the will not dealing expressly with that gift over to Donald‘s children is that Mrs McPherson accepted and acted on Mr Rudz‘ advice as to his understanding of the effect of s33 of the Act in the terms as it then stood when she gave her instructions and when she signed her will.

Rectification of the will

Mullins J set out the history of the law of rectification of wills in Queensland.

Before statutory reform, there was only a very limited jurisdiction to rectify a will by deleting provisions which could be shown to have been made by mistake, as explained in Re Allen [1988] 1 Qd R 1, 3.

The first reform in Queensland was the insertion in the Act, as enacted in 1981, of s 31(1), which provided:

As from the commencement of this Act the court shall have the same jurisdiction to insert in the probate copy of a will material which was accidentally or inadvertently omitted from the will when it was made as it has hitherto exercised to omit from the probate copy of a will material which was accidentally or inadvertently inserted in the will when it was made.

In 2006 s31 was replaced by the current s33 which provides:

33 Court may rectify a will

(1) The court may make an order to rectify a will to carry out the intentions of the testator if the court is satisfied that the will does not carry out the testator‘s intentions because—

(a) a clerical error was made; or

(b) the will does not give effect to the testator‘s instructions.

(2) An application for an order to rectify a will may only be made within 6 months after the date of death of the testator.

(3) However, the court may, at any time, extend the time for making an application under subsection (2) if—

(a) the court considers it appropriate; and

(b) the final distribution of the estate has not been made.

(4) If the court makes an order to rectify a will, the court may direct that a certified copy of the order be attached to the will.

(5) If the court gives a direction under subsection (4), the court must hold the will until the certified copy is attached to it.

According to its terms, s33 is a much broader rectification power than had previously existed. The Succession Amendment Act 2006 implemented recommendations of the National Committee for Uniform Succession Laws regarding the law of wills (QLRC MP29) as modified by the departures from the model legislation recommended by the Queensland Law Reform Commission which are found in QLRC Report 52. These reports confirm that the intention of the reform that is reflected by the words of s 33(1) of the Act was to confer a broader rectification power than had previously in Queensland, although it remains a power that is subject to the limits prescribed by s 33(1) of the Act.

Her Honour warned that the authorities on the rectification power that was displaced by s 33 of the Act must be viewed in the light of the broader rectification power that is now conferred by s 33 of the Act. This had also been noted by Atkinson J in Smith at [46].

Her Honour said that before the court may exercise the rectification power conferred by s 33(1), as it was not a case of clerical error, the court must be satisfied:

(a) that the will does not carry out Mrs McPherson‘s intentions; and

(b) the reason that the will does not carry out her intentions is because the terms of the will do not give effect to her instructions.

The applicant relied on the summary of principles applicable to the exercise of the power to rectify a will set out by Philippides J in Palethorpe v Public Trustee of Queensland [2011] QSC 335 at [22], and in particular that the inquiry which is relevant is ascertaining the testator‘s intention as to whether the words should or should not appear in the will, relying on Hinds v Collins [2006] 1 Qd R 514, 516. The applicant contended that, even if the court were satisfied on the basis of Mr Rudz‘ evidence that Mrs McPherson may have believed that clause 5 of the will operated in a way that enabled the anti-lapse provision to apply, that is not a circumstance which enables the court to rectify the will, as Mrs McPherson approved the words in her will which included all the words that are in clause 5 and clause 5 therefore gave effect to her instructions.

The second respondents submitted that they were able to discharge the heavy burden of showing that there is clear and convincing proof of Mrs McPherson‘s actual intention which was not reflected by the terms of clause 5 of the will, as executed. They submitted that what is required of the court by s 33(1) of the Act is to ascertain Mrs McPherson‘s instructions in order to make findings about her intentions, construe the will as executed and compare its effect with those instructions: Vescio v Bannister [2010] NSWSC 1274 at [14]. They therefore submitted that the summary of principles in Palethorpe, to the extent they do not reflect the wording of s 33(1) of the Act, should not be applied.

Mullins J said (at [51]):

The approach required by s 33(1) of the Act in considering whether there is power to rectify the will is different to that which applied prior to the enactment of s 33(1) in the form in which it currently stands. The applicant‘s submissions have failed to embrace that difference, whereas the second respondents‘ submissions do reflect the requirements of s 33(1).

On the basis of Mr Rudz‘ evidence, her Honour was satisfied that the second respondents had discharged the burden of showing that Mrs McPherson’s instructions for clause 5 of the will were that, if a son predeceased her, she wanted that son’s issue to take the son’s share, and that clause 5 does not carry out Mrs McPherson‘s intentions, because clause 5 does not give effect to her instructions. Even though the words used in clause 5 of the will were approved literally by Mrs McPherson when she signed the will, it was on the basis of the advice given to her by Mr Rudz as to the application of the anti-lapse provision which advice proved to be mistaken. At that time Mrs McPherson believed clause 5 would implement her instructions to benefit the issue of any son who predeceased her.

Her Honour went on to say that the fact that clause 5 of the will was drafted in that manner as a result of Mr Rudz‘ advice that was proved incorrect is not a reason to refuse rectification of the will. It was therefore appropriate to exercise the power conferred by s 33(1) of the Act to rectify clause 5 of the will, so that it carried out Mrs McPherson‘s intentions.

 

Caite Brewer

 

Footnotes

1. At [7]

2. (1870) LR 5 QB 549 at 565

3. (1924) 34 CLR 558.

4. [2011] QCA 308

5. [2010] 1 WLR 2020