Plaintiff v Defendant

I GIVE the whole of my estate whatsoever and wheresoever situated to my Trustee UPON TRUST to pay thereout such debts as I am legally required to pay, my testamentary, administrative and funeral expenses and all duties and taxes AND to stand possessed of the residue upon the following trusts:

(a) As to the net proceeds from the sale of the principal residential property owned by me at the date of my death for my brother FRANS SCHOENMAKERS should he survive me. Should he not survive me then for his wife WILHELMINA SCHOENMAKERS should she survive me. Should she also not survive me then the net proceeds shall fall into and form part of the remainder of the residue.

3 At the time he made his will, the deceased's principal residential property was a unit located in a retirement village in Lilydale at Unit 151 Tudor Village, 520 Maroondah Highway, Lilydale, Victoria ('the unit'). Approximately a year after signing his will, the deceased by his attorney under power, the plaintiff, sold the unit and moved into a nursing home. The deceased did not own a residential property at his death.

4 Pursuant to s 31(1) of the Wills Act 1997 ('the Act'), the defendant seeks an order rectifying cl 4(a) of the will to provide that he is entitled to receive the balance of the sale proceeds of the deceased's former principal residential property, the unit.

5 The defendant made an application for rectification of the will because he assumed that the sale of the unit was made at a time when the deceased still had capacity. The reason for this view is that in a letter from the plaintiff dated 5 March 2012 to the defendant he was informed that:

On 11 June 2010 acting under an Enduring Power of Attorney held for [the deceased], our Company sold [the unit] for $400 000 with the approval of your brother whose health required him to move into nursing home care.[1]

6 The deceased was born in the Netherlands on 8 September 1924. He moved to Australia with his wife in 1949. In 1957, he was joined in Australia by the defendant, who lived with him for six months before moving to South Australia. The defendant and his wife visited the deceased regularly, and the frequency of their visits increased after the deceased's wife died, and as the deceased's health deteriorated.

7 From July 2003 until April 2012, Ms Liesbeth Bennetts was employed as a Care Manager by DutchCare Ltd ('DutchCare'), a not-for-profit aged care provider. Her role was to assess the needs of elders living in the community, and then coordinate with health professionals and other services and care staff to ensure that they were provided with the care that they needed. Ms Bennetts was the Care Manager for the deceased throughout 2009. She visited the deceased about once a month.

8 In April 2009, Ms Bennetts became aware that the deceased did not have a current will or any powers of attorney in place. After discussing the matter with him, Ms Bennetts arranged for a solicitor from the plaintiff to come to his unit to take instructions on drafting a will and a power of attorney.

9 Ms Bennetts deposed that the deceased suffered from mild Parkinson's Disease, but that from her dealings with him around the time his will was executed, he appeared to have capacity to instruct solicitors and execute his will.

10 On 28 April 2009 solicitors from the plaintiff, Mr Ronald Andrew Monroe and Mr John Carrigan, came to the unit to meet with the deceased. Ms Bennetts and 'Jim' (a friend of the deceased) also attended the meeting. Ms Bennetts was required at the meeting to provide a Dutch-English translation. She deposed that although the deceased could speak both English and Dutch, in recent years he was more comfortable communicating in Dutch.

11 The deceased gave Mr Monroe the instructions for the drafting of his will. Mr Monroe recorded these instructions on a file note which reads:

TCFSL [Trust Company Fiduciary Services Limited] EXEC

PROCEEDS OF UNIT TO BRO FRANS IF HE HAS PREDECEASED THEN TO FRANS' WIFE WILHELMINA

BAL EQUALLY BETWEEN 2 SISTERS CORNELIA DIJKHUIS ... AND ENELINA STOKER ... & ONE BRO PIETER SCHOENMAKERS

G/O [gifts over] IN EACH CASE TO CHILDREN AT 18 ...

NB NO PROV. FOR 3RD SISTER ANNIE SHE IS WELL OFF IN HER OWN RIGHT.

12 These instructions are repeated on the following page of the file note in similar form:

Proceeds of house to FRANS SCHOENMAKERS (comes once a year)

3 Rustic Ct. Highbury SA

G/O [gift over] wife WILHEMINA.

Balance of estate 2 sisters equally ... and 1 bro (Annie well off in her own right)

Substitution of issue at 18.

13 At the same meeting, the deceased gave instructions for Trust Company Fiduciary Services Limited ('TCFSL') to be appointed under an Enduring Power of Attorney (Financial). Mr Monroe recorded on the Estate Planning Fact Finder that the deceased 'suffers from mild Parkinson's Disease' but that he was 'satisfied that [the deceased] had testamentary capacity'.

14 Ms Bennetts recalls the instructions given by the deceased to Mr Monroe slightly differently. She deposed that:

[The deceased] advised the solicitors that he had one brother and three sisters in the Netherlands and one brother, the defendant, who lives with his wife Wilhelmina in South Australia.

[The deceased] advised the solicitors that he wanted the net proceeds from the sale of his property at Lilydale to go to the defendant. If the defendant were to predecease [the deceased] he wanted the proceeds to go to the defendant's wife Wilhelmina.

[The deceased] then instructed his solicitors that any residue (i.e. bank accounts and the like) was to be divided between two of his sisters and his one brother in the Netherlands. The third sister was not included in the will as [the deceased] said that she was financially well off and did not need to be left any money from him.

15 A draft of the will, along with the enduring power of attorney, was sent to the deceased under cover letter dated 12 May 2009. Clause 4 of this draft will provides:

I GIVE the whole of my estate whatsoever and wheresoever situated to my Trustee UPON TRUST to pay thereout such debts as I am legally required to pay, my testamentary, administrative and funeral expenses and all duties and taxes AND to stand possessed of the residue upon the following trusts:

(a) As to the net proceeds from the sale of the principal residential property owned by me at the date of my death for my brother FRANS SCHOENMAKERS should he survive me. Should he not survive me then for his wife WILHELMINA SCHOENMAKERS should she survive me. Should she also not survive me then the net proceeds shall fall into and form part of the remainder of the residue.

(b) As to the remainder of the residue I DIRECT that the same be divided into three (3) equal parts and distributed as follows:

(i) As to the one (1) of such parts for my sister CORNELIA DIJKHUIS should she survive me. Should she not survive me then for such her children as shall survive me and shall attain or shall have attained the age of eighteen (18) years and if more than one then in equal shares;

(ii) As to the one (1) of such parts for my sister ENELINA STOKER should she survive me. Should she not survive me then for such her children as shall survive me and shall attain or shall have attained the age of eighteen (18) years and if more than one then in equal shares; and

(iii) As to the one (1) of such parts for my sister PIETER SCHOENMAKERS should she survive me. Should she not survive me then for such her children as shall survive me and shall attain or shall have attained the age of eighteen (18) years and if more than one then in equal shares.

AND SHOULD the trusts of any part or parts fail my Trustee shall add such to the parts which shall not have failed in proportion to the original division.

16 On 10 June 2009, Mr Monroe had a telephone conversation with Ms Bennetts. The file note of this conversation records that the deceased:

... has read the docs, has understood them and is happy with them. I will let him know when I can get out to see [the deceased]. Probably next wk... [the deceased] will have trouble signing has Parkinsons [sic] disease.

17 Ms Bennetts deposed that she called Mr Monroe at the request of the deceased after he had read the documents to let him know the deceased was ready to sign them.

18 On the same day, Ms Bennetts e-mailed Mr Monroe informing him that:

I am Care Manager for [the deceased]. I visited him yesterday and he showed me the letter he received from you along with the draft of his will and power of attorney. He has read and understood these and has indicated that he is happy to go ahead with them. Please also inform me when an appointment is made to see him.

19 Mr Monroe and Ms Bennetts had further e-mail correspondence arranging for Mr Monroe to attend the home of the deceased on 18 June 2009 for the purpose of signing the will.

20 The will was signed on 18 June 2009. It was witnessed by Mr Monroe and Ms Donna Rae, Client Services Manager of the plaintiff. The file note made by Mr Monroe on that day states that '[the deceased] signed his will and EPA(FIN) today. Copies to be sent to him'. The copies of both documents were sent to the deceased under a cover letter dated 24 June 2009.

At no point at the meetings in April or June 2009 did the solicitors explain to [the deceased] that if he were to sell [the unit] the gift to the defendant would fail and the proceeds from the sale of [the unit] would fall into the residue of his estate to be divided between his three siblings in the Netherlands.

22 Counsel for the plaintiff objected to the admission of the evidence from Ms Bennetts in paragraph [21] on the grounds of relevance. In my view, the evidence is relevant. It is evidence of any explanation given, or not given, by the plaintiff to the deceased as to the effect of the provisions in his will. This is relevant because it helps explain what the deceased understood to be the effect of his instructions to the plaintiff in drafting his will.

23 Ms Bennetts deposed, on the basis of the conversations she had with the deceased, that the deceased intended, understood and believed that regardless of whether he owned the unit at the time of his death:

(a) the defendant would receive the net proceeds from the sale of the unit which he expressly wished to be the case;

(b) the gift to the defendant would not fail if the unit was sold prior to his death; and

(c) that the net proceeds from the sale of the unit would not go to his siblings in the Netherlands unless both the defendant and his wife predeceased him.

24 Counsel for the plaintiff objected to the admission of the evidence from Ms Bennetts in paragraph [23] on the grounds that Ms Bennetts cannot give evidence of what was in the deceased's mind. In my view, Ms Bennetts' evidence set out in paragraph [23] is relevant and admissible. It is not simply a statement of opinion as to what was in the deceased's mind at the relevant time. It is Ms Bennetts' informed view, based on the conversations she had with the deceased at the time, of the deceased's intention and understanding of what he wished to be included in his will. Ms Bennetts was the deceased's Care Manager, and was present at all of the meetings. She was the only person at those meetings able to communicate with the deceased in Dutch, a language that she said he was more comfortable with in his later years.

25 The defendant deposes that while the deceased did not discuss the contents of his will with him, he did make some remarks as to his testamentary intentions. However, the defendant's affidavit does not state when this conversation occurred. It places the conversation after the date of the deceased's will, that is, after June 2009:

My brother did not discuss with me the contents of his will. However, on one occasion after returning from the Netherlands for the last time, he said to me words to the effect that he had 'taken care of' our other siblings and that he had 'done what he wanted to do' and that [when] he passed the rest of his estate was to stay in Australia. He went on to say that he had changed his will making me a beneficiary. I did not understand what this meant, but when I asked him to explain he simply said 'you will find out when I cark it'.

26 By contract of sale dated 3 June 2010, the unit was sold for $400 000 with settlement on 11 June 2010. The unit was sold by the plaintiff acting under the deceased's enduring power of attorney dated 18 June 2009. The net proceeds of the sale were $268 940.63. Most of the proceeds from the sale went to the accommodation bond of $250 000 payable to DutchCare when the deceased moved into the nursing home.

28 On 5 March 2012, Ms Danielle Rath, an employee of the plaintiff, wrote to the defendant informing him that he had not inherited anything under the deceased's will. Addressing the failed gift in cl 4(a) of the will, Ms Rath wrote:

Pursuant to cl 4(a) of the will, [the deceased] intended for you to receive the net proceeds from the sale of his principal residential property owned by him at the date of his death. However, as [the deceased] did not own any residential property at the time of his death and did not alter his will following the sale of the Tudor Village unit, the gift referred to in cl 4(a) in your favour does not exist and it is considered to have failed because the former Tudor Village unit was disposed of during [the deceased's] lifetime.

29 On 18 March 2012, the defendant sent an e-mail to Ms Rath complaining that the plaintiff had not advised the deceased to change his will once the unit had been sold. In his e-mail, the defendant said:

I as brother of [the deceased] knew that [the deceased] wanted the proceedings of his belongings to stay in Australia. I feel that when the necessity of selling [the unit] had to be sold in order to pay the accommodation bond to DutchCare for reasons that [the deceased] could not live in his unit due to his health. Donna Rae visited [the deceased] in Dutch Care and did not advice [sic] [the deceased] that through reasons necessary of selling the unit to pay the bond, his will as it stood then, was now not in existence.

30 After receiving the defendant's e-mail dated 18 March 2012, Mr Finck deposed that the plaintiff looked into the defendant's concerns. Mr Finck exhibits a file note by Ms Danielle Rath dated 23 March 2012. In the file note, Ms Rath states:

By e-mail dated 22/3/2012 sent to Donna I queried whether following the sale of the [unit] it was ever discussed with [the deceased] about amending his will. Her reply was that [the deceased] had dementia so they were not able to discuss making alterations to his will. This would explain why the terms of [the deceased's] will were never changed following the sale of the unit and hence why cl 4(a) of his will now fails. ...

In reviewing the file there was no formal evidence like a letter from his treating doctor to verify that [the deceased] did not have capacity and when his loss of capacity became effective. However e-mail communication between [the defendant] & Donna on 19/11/2010 reveal that the [deceased] had forgotten what he was told about the sale of the [unit] & where the money had gone and was finding it easier to speak in Dutch rather than English.

31 On 11 February 2013 the plaintiff received a letter from DutchCare concerning the deceased. The letter is from the Manager Residential Services East to Ms Victoria Northam of the plaintiff. The letter responds to a letter dated 30 January 2012,[2] and states that Ms Bennetts left DutchCare in April 2011 and was travelling around in her retirement.

32 The defendant's application was made by summons filed 27 February 2013, outside of the time limit imposed by s 31(2) of the Act. This section provides that a person must make an application within six months of the grant of probate, that is, by 18 July 2012. The period of time for making such an application can be extended under s 31(3) of the Act if the Court considers it necessary.

33 By letter dated 5 March 2012 to the defendant, the plaintiff recommended that the beneficiaries of the estate discuss the terms of the will with a view to perhaps agreeing to an outcome that allowed the gift in cl 4(a) of the will to proceed. Subsequent communications confirmed that the parties were unable to reach agreement, and on 16 October 2012 the defendant's solicitors informed the plaintiff that the defendant would make an application for rectification of the deceased's will. Due to delays primarily by the plaintiff, there appeared to be little progress on the application. The application was finally issued by the defendant on 18 February 2013. From reading the communications between the plaintiff and the defendant I am satisfied that the delay in making the application has been adequately explained.

34 The plaintiff submits that the time should not be extended on the basis that the application for rectification has no reasonable prospects of success. The defendant submits that the Court should extend the time for making the application if 'it is in the interests of justice to do so'. The defendant further submits if the Court takes the view that the requirements for rectification are made out, it is in the interests of justice to grant the extension. It is, therefore, first necessary to determine whether the requirements for rectification are made out on the facts.

35 Section 31(1) of the Act 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 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.

36 This section was introduced into Victoria in 1997, and replicates the wording of ss 20(1) and (2) of the Administration of Justice Act 1982 (UK).[3] The enactment of these provisions returned to this Court the jurisdiction to resolve mistakes made in the drafting of wills that had existed in the ecclestiastical courts, but was removed by the passage of the Wills Act 1837 (UK). In Guardhouse v Blackburn,[4]Sir J P Wilde described the reason for this limitation:

If the Court should allow itself to pass beyond proof that the contents of any such paper were read or otherwise made known to the testator, and suffer an inquiry by the oath of the attorney or others as to what the testator really wished or intended, the authenticity of the will would no longer repose on the ceremony of execution exacted by the statute, by would be set at large in the wide fields of parol conflict, and confided to the mercies of memory.[5]

In Re Morris,[6] Latey J catalogued the 'intellectual gymnastics, if not acrobatics' performed by courts attempting to avoid the often absurd consequences of this rule.

37 The relevant legal principles for an application under s 31 of the Act were considered by Whelan J in Re Provost:[7]

It seems to me that the legal principles applicable here are the following:

1. Before the power of rectification can be exercised the Court must be satisfied that the will was so expressed that it failed to carry out the testatrix's intentions, and also what it was that the testatrix did intend concerning the part of the will which is to be rectified.
2. What must be shown is what the testatrix's actual intention was, not what her intention probably would have been had she thought about the matter.
3. Although the standard of proof is on the balance of probabilities, clear and convincing proof is required.
4. It is not sufficient for rectification to establish that the testatrix would not have wished for an intestacy, or would not have wanted her property to go in a way that, in the events which have happened a particular clause results in the property going.
5. If there is not evidence to show what the testatrix's intention was in the event of certain things happening, the Court cannot rectify the will.[8]

38 In the New South Wales Supreme Court decision of Rawack v Spicer,[9] Campbell J considered when the power of rectification can be exercised:

Before the power of rectification can be exercised, the court must be satisfied both that the will was so expressed that it fails to carry out the testator's intentions, and also what it was that the testator intended concerning the part of the will which is to be rectified. Even if the court is satisfied that a testator would not have wanted his property to go in the way that, in the events which have happened, a particular clause results in the property going, the court can rectify the will only if it is satisfied about what the testator actually intended to happen to his property in that particular event. [10]

His Honour then quoted from the unreported decision of Trimmer v Lax,[11] where Hodgson J said:

It is not enough for the Court to have the opinion that, if the deceased had considered the possibility, she probably would have provided in favour of [a named beneficiary]. What is required is an actual intention, which has miscarried.[12]

His Honour further quoted from the unreported decision of Young J in Re Estate of Max Frederick Dippert:[13]

... What one must look for is an error which has occurred in the transcription of the will or where one can see what the intention of the testator was but the words used have not fulfilled the intention. What one cannot do is look at unforeseen circumstances and speculate what the testator might have done in those circumstances and then supply words to meet those circumstances.[14]

Campbell J also noted that the intention of he testator should be assessed at the time of the making of the will.[15]

39 Rawack v Spicer[16] was cited, with approval, by Barrett J in Long v Long.[17] His Honour then said:

The important point is that the court must be satisfied, according to the balance of probabilities, as to not only a negative proposition (that the testatrix did not intend the will to be in the form it eventually took) but also a positive proposition (that the testatrix intended the will to be in the form for which the plaintiff contends). This is the effect of the statute and, as Sheller JA observed in Mortensen v State of New South Wales (unreported, NSWCA, 12 December 1991), the court's task is to give effect to the language of the section without paying 'over much regard to the principles evolved by equity as part of the doctrine of rectification'.[18]

40 The plaintiff submits that there is no evidence of a clerical error and no evidence that the will did not give effect to the deceased's instructions. The plaintiff further submits that there is no evidence of what the deceased intended if the unit was sold during his lifetime and, as such, the will cannot be rectified. In particular, the plaintiff submitted that in this case, the will prepared by Mr Monroe accorded 'exactly' with the deceased's instructions and gave effect to the deceased's intentions.

41 In support of the application for rectification, the defendant submits that it is 'abundantly clear' that the will does not accord with the instructions of the deceased. The defendant submits that the deceased intended and clearly advised that the proceeds of sale of the unit were to go to the defendant, and that Mr Monroe failed to prepare the will in accordance with these instructions.

42 The evidence of the deceased's instructions concerning any benefit to be given to the defendant and his wife is, in my view, clear.[19] His instructions as recorded by Mr Monroe were that he wanted the 'proceeds of unit' or 'proceeds of house' to pass to the defendant and, if the defendant predeceased the deceased, the proceeds would pass to the defendant's wife. Ms Bennetts' evidence confirms that the deceased 'wanted the net proceeds from the sale' of the unit to 'go to the defendant' and if the defendant predeceased him, then to the defendant's wife. He wanted the sale proceeds from his unit to pass to the defendant. There are no instructions from the deceased that the gift of the sale proceeds was to be tied to the unit 'being owned by me at the date of my death'. The drafting of cl 4(a) of the will restricts the gift to the defendant to those circumstances and, for this reason, it fails to set out the deceased's instructions in relation to the gift to the defendant.

Conclusion On Rectification Of Clause 4(a) Of The Will

43 In my view, the defendant is entitled to orders extending the time for making this application pursuant to s 31(3) of the Act and rectification of the will of the deceased dated 18 June 2009, pursuant to s 31(1) of the Act, to the effect that notwithstanding the sale of the deceased's principal place of residence, the defendant is entitled to receive that part of the estate of the deceased that represents the net proceeds of the sale of the unit.

44 As stated, the defendant made application for rectification of the deceased's will because he assumed that the sale of the unit was made at a time when the deceased still had capacity.[20]

45 If the defendant's application for rectification had been unsuccessful, it would have become necessary to consider whether the principles of ademption applied to cl 4(a) of the will. This was because the affidavit material filed by the plaintiff in the application for rectification of the will showed that in February 2010 the plaintiff, as attorney for the deceased, entered into an agreement for the deceased to move into nursing home care on a permanent basis at DutchCare and that by June 2010 the plaintiff, as attorney for the deceased, entered into and settled a contract for the sale of the unit. This evidence raised the issue of the capacity of the deceased at the time of the sale of the unit.

46 The Court requested the parties to provide submissions on this issue. Further submissions were filed by the parties and the plaintiff filed a further affidavit of Noel Patrick Finck affirmed 6 September 2013. Mr Finck's further affidavit and the submissions addressed the issue of whether the deceased had capacity when the sale of the unit occurred in June 2010.

47 Because I have concluded that cl 4(a) of the will should be rectified, it is unnecessary to consider the application of ademption principles and the exceptions to those principles.

48 The defendant has succeeded in the application for rectification of the will. He is entitled to receive the remaining proceeds from the sale of the unit held by the deceased at the date of his death.

49 I will hear the parties as to the appropriate form of orders and costs.

[3] See Law Reform Committee, House of Commons, Interpretation of Wills (1973); Law Reform Committee, Victorian Legislative Assembly, Reforming the Law of Wills (1994) 37.1-37.11; Victoria, Parliamentary Debates, Victoria Legislative Assembly, 9 October 1997, 433 (J Wade, Attorney-General).

[6] [1970] 1 All ER 1057.

[7] [2004] VSC 537 (22 December 2004).

[9] [2002] NSWSC 849 (20 September 2002).

[10] Ibid [26], citing Brian William Mortensen v State of New South Wales (New South Wales Court of Appeal, 12 December 1991, unreported) and Re Estate of Max Frederick Dippert [2001] NSWSC 167 (Young J, 20 March 2001, unreported).

[11] (Hodgson J, 9 May 1997, unreported).

[12] Rawack v Spicer [2002] NSWSC 849 (20 September 2002) [26], citing Trimmer v Lax (Hodgson J, 9 May 1997, unreported, 12).

[13] [2001] NSWSC 167 (Young J, 20 March 2001, unreported).

[14] Rawack v Spicer [2002] NSWSC 849 (20 September 2002) [26], citing Re Estate of Max Frederick Dippert [2001] NSWSC 167 (Young J, 20 March 2001, unreported, [17]).

[15] Rawack v Spicer [2002] NSWSC 849 (20 September 2002) [27], citing Estate of Mina Spinks, Application of Mortensen and Eassie (Needham J, 22 August 1990, unreported); Wesley v Welsey [1998] SASC 7054; (1998) 71 SASR 1, 5-6. See also Bryan William Mortensen and Elizabeth Gedge Eassie v State of New South Wales (NSWCA, 12 December 1991 unreported, 5).

[16] Rawack v Spicer [2002] NSWSC 849 (20 September 2002).

[17] [2004] NSWSC 1002 (29 October 2004).

[19] See above [11]-[12], [14].

[20] See above [5].