NSW Trustee and Guardian v Ritchie

EX TEMPORE Judgment 1In this matter the administrator of the estate of the late June Mullette seeks orders in relation to the administration of the estate. The parties joined as defendants to the summons are firstly Ms Deborah Ritchie to whom the residue of the estate passes under the will and who I understand is a half sister of the testatrix, and World Vision Australia which is a charitable organisation. 2The problem created by the will is by reason of clause 4(d) which is in the following terms: "All monies standing to the credit at the date of my death in my credit union account conducted at the Lands Department Credit Union together with any funds received from the State Authorities Superannuation Board to World Vision Enterprises of Australia of 5 Northcliffe Road Milsons Point to be used for Aboriginal Childrens Welfare and Education absolutely [sic]." 3The three problems are: (1)that at the date of death the testatrix did not have an account conducted in the name of the Lands Department Credit Union; (2)that there was in her estate no money identifiable as having been received from the State Authorities Superannuation Board, although the Board clearly held monies for her which were subsequently paid to her as a commuted superannuation lump sum amount (see page 19 of the exhibit to the affidavit of Mr Luke Williams of 23 March 2011); and (3)there is no charity known as World Vision Enterprises of Australia and the charity World Vision Australia did not have any premises at 5 Northcliffe Road Milsons Point. That address was the address of an entity called World Vision Enterprises of Australia Pty Ltd which was a company associated with Paramount Pictures Productions. An ASIC search, which is found at page 12 of the exhibit to the affidavit of Mr Luke Williams of 23 March 2011, records that company as having been deregistered in September 2010. 4Mr M Lawson of counsel, who appears for the administrator, submits that in light of the fact that the Lands Department Credit Union merged with Reliance Credit Union, it is appropriate to treat the monies in the Reliance Credit account as being the monies referred to as the "credit union account conducted at the Lands Department Credit Union" referred to in clause 4(d) of the will. There is evidence to which he points which shows that the Lands Department Credit Union was absorbed into Reliance Credit Union and indeed the account number with the Reliance Credit Union is the same as the account number with the Lands Department Credit Union. Mr Lawson submits that a gift does not adeem if the gift has changed in name or form only (but not in substance) between the time when the will was executed and the date of death. He refers to authority in support of this, namely, Re Clifford [1912] 1 Ch 29 ; McBride v Hudson (1962) 107 CLR 604 and Burns Philp Trust Co Ltd v Stott (1955) 72 WN (NSW) 322 . I accept his submissions and hold that the bequest has not been adeemed. 5In relation to the second issue, Mr Lawson submits that the funds from the State Authorities Superannuation Board have been treated in such a manner by the testatrix that it is no longer possible to identify any particular fund of money as being the same as the monies that were received from the Board. 6Mr Lawson draws my attention to a passage in Re Bythway (1911) 80 LJ Ch 246 where Joyce J said at 248: "It has often been said that the doctrine of ademption has more frequently than not frustrated the intention of the testator, and it is not without some satisfaction in my own mind that I see the way in which Mr Justice Fry dealt with the matter in the case of Morgan v Thomas, which is, no doubt, good law. I rather think that, when one comes to examine the cases, it always comes back merely to a question of construction, and I think Lord Lindley says in some case that what you have to ask yourself first is, 'What is it which is given?' You determine first what it is that is given by the will, and then you ask the question, 'Where is the thing that is given?' If the thing that is given does not exist, to that extent it is not given." This passage was cited by his Honour Young CJ in Equity (as his Honour then was) in Abernethy v Simpson [2007] NSWSC 186 and his Honour also cited with approval the following passages from Jarman on Wills , 8 th ed (1951) Sweet & Maxwell vol 2 at pages 1063 and 1073 (respectively): "Sometimes a testator describes personal property with reference to the source from which he derives it: as where he gives to A 'all the property to which I am or may be entitled under the will of X' ... . The general principle seems to be that so long as the property in question continues to exist in specie, or can clearly be traced into investments made by the testator and retained by him at his death, it will pass by the gift, but if it is sold and the proceeds are spent by the testator or mixed with his other property, the gift fails. ... But if the property is actually made over to the testator during his lifetime, the question is more difficult. If it were converted into money and mixed by him with his own property, the bequest would fail, but this result does not necessarily follow if the property is preserved by him in specie, or can otherwise be traced and distinguished from his other property." 7Having regard to the authorities mentioned, I accept the submission from Mr Lawson that the proceeds received from the State Authorities Superannuation Board have become so mixed with other funds that that the monies obtained from the State Authorities Superannuation Board can no longer be identified. Accordingly, it follows that the bequest has been adeemed. 8In relation to the third matter, which is the reference to World Vision Enterprises of Australia, I think it is clear from the evidence that the testatrix had an involvement with World Vision previously, and that her instructions in relation to the will (see page 8 of the exhibit to the affidavit of Mr Luke Williams of 23 March 2011) were that World Vision was to be the recipient of the bequest. What appears to have occurred is that the instructions given by the testatrix to the draftsman of the will have not been fulfilled, I infer because the draftsman of the will has sought to ascertain the full name of "World Vision" and located and inserted the name of a totally different entity that the testatrix had no intention of benefiting. Accordingly, this brings the matter within s 27(1) of the Succession Act 2006 (NSW) which provides: "(1) The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied 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." 9My first reaction to the matter is that what has occurred could be described as a clerical error but it is not necessary to decide what the ambit of that phrase means, given that it is clear that the will does not give effect to the testator's instructions. It is clear, in my view, that the testatrix did not intend to make any bequest to a private company connected with a commercial organisation as opposed to a charitable organisation with which she did have a connection and had previously supported. Accordingly, I think it is a case, subject to one qualification which I will come to shortly, where rectification should be granted. 10The qualification is that the Succession Act requires an application for rectification to be made to the Court within twelve months after the date of the death of the testator. Although there is some doubt as to the precise date of the testatrix's death, even treating the date of death as 22 February 2010, the application is outside the time specified. However, s 27(3) of the Succession Act permits the Court at any time to extend the time provided first that the Court considers it necessary and secondly that final distribution has not been made. Final distribution has not been made in this estate so the latter requirement is met. In my view rectification is required to give effect to the wishes of the testatrix and is therefore necessary. Each of the defendants has consented to the orders that are sought by the plaintiff in the summons. Accordingly, I infer that they have no objection to the Court exercising its jurisdiction to extend the time for the application to be made, and accept that it is necessary for the will to be rectified. 11There is a further matter which is the precise form of the bequest to World Vision Australia. Mr Lawson, in his helpful written submissions, draws attention to the fact that at page 10 of the exhibit to the affidavit of Mr Luke Williams of 23 March 2011 which is the letter from World Vision Australia of 16 April 2010, the charity indicates it is able to apply the funds from Ms Mullette's funds to the "Linking Hands" projects which focus on "assisting indigenous families and communities in Australia". This is not precisely the same words used as "to be used for Aboriginal Childrens Welfare and Education absolutely" contained in the will. I accept, however, that there is an obvious intention of a charitable bequest. Section 10 of the Charitable Trusts Act 1993 (NSW) provides that a general charitable intention is to be presumed unless there is evidence to the contrary in the instrument establishing the charitable trust. There is no evidence against the presumption of charitable intention and I find that the bequest to World Vision was given with charitable intention and that the trust property can be applied cy pres by World Vision Australia applying the funds to the "Linking Hands" projects. 12The defendants consent to the orders. I am satisfied it is appropriate for these orders to be made. 13I make orders in accordance with paragraphs one, two (as amended), three (as amended) and six of the amended summons. I make declarations in accordance with paragraphs four and five of the amended summons. 14I note that formal consent was received from both defendants as well as signed copies of the orders sought. I have amended the orders in view of the precise terminology used by World Vision Australia but I think that falls within what has been agreed to by the defendants and creates no difficulty.