STEPHEN BRADLEY LAUDER as executor of the will of ELAINE KATHLEEN RANKIN -v- LAUDER [2018] WASC 91 (28 March 2018)

1. The Application is supported by two affidavits sworn by the executor dated 7 August 2017 and 15 September 2017 respectively, and an affidavit sworn by Ms Helen Joyce Drury, sworn 10 August 2017. (Ms Drury is a solicitor who took instructions from Mrs Rankin, and prepared the Will.) The findings I make in the course of this judgment are drawn from the evidence in those affidavits.

1. Mrs Rankin died on 10 November 2016, at the age of 95 years. Her husband pre-deceased her and she had no children. The Estate is valued at just over $1.3 million.
2. By the Will, Mrs Rankin appointed her half-brother, Mr Stanley Lauder, as the executor of her estate, or, in the event that he renounced that role, she appointed her nephew, Mr Stephen Lauder, who is Mr Stanley Lauder's son. Mr Stanley Lauder renounced his appointment on 20 February 2017.
3. The executor obtained probate of the Will on 6 April 2017.
4. The Will was signed by Mrs Rankin, and by two witnesses in her presence and the presence of each other. There is no suggestion that the Will was not validly executed or that it is incomplete (save in so far as the deficiency identified in clause 3.7.2 is concerned).
5. In the Will, Mrs Rankin made a number of specific bequests. One of those (in clause 3.6 of the Will) was conditional on Mrs Rankin being the registered proprietor of land at 74 Millcrest Street, Scarborough at the date of her death. Mrs Rankin then provided for the distribution of the remainder of her estate (Residuary Estate) in the following terms:

3.7. As to the remainder of my estate to pay my funeral and testamentary expenses, taxation liabilities (if any), debts and all duties payable by reason of my death on the whole of my estate and to hold the balance UPON THE FOLLOWING TRUSTS;

3.7.1. if at the date of my death I am still the registered proprietor of the residential property situate and known as 74 Millcrest Street, Scarborough then, but not otherwise, I give the remainder of my estate as follows:

3.7.1.1. one undivided quarter share to my friend ALBERT EVERETT if he survives me;

3.7.1.2. one undivided quarter share to my brother KAY WOODS if he survives me; and

3.7.1.3. one undivided half share to my half brother STANLEY JAMES LAUDER; HOWEVER

3.7.2. if at the date of my death I am no longer the registered proprietor of the residential property situate and known as 74 Millcrest Street, Scarborough and thus clause 3.6 above is void, then, but not otherwise, I GIVE the remainder of my residuary estate as follows:

3.7.2.1. as to one undivided one twentieth share for my brother KAY WOODS if he survives but if he does not then for my half brother STANLEY JAMES LAUDER;

3.7.2.2. as to one undivided one twentieth share for my good friend ALBERT EVERETT if he survives me but if he does not then for my half brother STANLEY JAMES LAUDER; and

3.7.2.3. as to the remaining eight undivided one tenth shares for my half brother STANLEY JAMES LAUDER if he survives me but if he does not then for my nephew STEPHEN BRADLEY LAUDER and my niece SHARON KETURAH MOSS as tenants in common in equal shares.

1. At the date of her death, Mrs Rankin was not the registered proprietor of the property at 74 Millcrest Street, Scarborough.[2] Accordingly, clause 3.7.2 of the Will determines the distribution of the Residuary Estate.
2. Both Mr Kay Woods and Mr Albert Everett pre-deceased Mrs Rankin.[3] By clauses 3.7.2.1 and 3.7.2.2 of the Will, Mr Stanley Lauder is entitled to each of the one twentieth shares of the Residuary Estate which would otherwise have passed to Mr Kay Woods and Mr Albert Everett. Mr Stanley Lauder is also entitled to eight tenths of the Residuary Estate pursuant to clause 3.7.2.3 of the Will.
3. The sum of the distributions provided for in clause 3.7.2 of the Will amounts to nine tenths of the Residuary Estate. If the Will remains in its present terms, and is not rectified, there will be a partial intestacy of the Estate, as to a one tenth share of the Residuary Estate.

1. The executor says that clause 3.7.2 contains a clerical error or alternatively that it does not give effect to Mrs Rankin's testamentary intentions in that she intended, by that clause, to dispose of the entirety of the Residuary Estate (whereas clause 3.7.2 presently gives rise to a partial intestacy).
2. On 7 August 2017, Mr Stanley Lauder's attorney, who has an enduring power of attorney in relation to Mr Lauder, advised that Mr Stanley Lauder intended to abide by the Court's decision in this Application (which had, by then, been foreshadowed but not commenced).[4] A copy of the originating summons, together with the affidavits in support, was served on Mr Stanley Lauder's attorney once the Application was made.[5] No appearance has been entered on behalf of Mr Stanley Lauder in the Application.
3. On 7 November 2017, Master Sanderson made an order dispensing with the requirements of the Court's Consolidated Practice Directions for the executor to give notice of the Application to those persons whose interests might be prejudiced, or to any person who might be prejudiced, by the rectification sought by the executor, and to put any comments of any such person before the Court on affidavit.

1. Subsection 50(2) of the Act requires that an application for an order for rectification of a will under that section be made within six months after the death of the testator. The Application was filed on 17 August 2017.
2. Subsection 50(3) of the Act provides that the Court may extend the period of time for making an application, even if the original period has expired, but not if the final distribution of the estate has been made. A final distribution of the Estate has not yet been made.[6]
3. The Court has a wide discretion to grant an extension of time under s 50(3) of the Act. That discretion must to be exercised judicially. It is neither necessary nor appropriate to attempt to formulate any, or any exhaustive, list of the factors which might be relevant to the exercise of that discretion. The prospects of an application will clearly be relevant to determining whether, in the interests of justice, an extension should be granted.[7] The length of the delay in bringing the application, and the question of prejudice to any beneficiary or third party, will also be relevant. The sixmonth time limit for rectification applications under the Act no doubt reflects both the desirability of the expeditious administration of deceased estates, and the fact that a rectification application may be made even after the grant of probate. Once the grant of probate is issued, it can be produced to third parties as evidence of how they should transmit a testator's property. The longer the delay in seeking rectification of a will, if it is required, the greater the potential for prejudice to beneficiaries or third parties who may have acted on the will in the form which was the subject of the grant. For that reason, to recall the grant after a substantial period would be a serious step to take,[8] and no doubt the question of prejudice to beneficiaries or third parties would loom large in any application for an extension in such a case.
4. This case does not involve a substantial delay. The Application was brought approximately three months out of time. The delay has been adequately explained by the executor. There was a delay in obtaining the grant of probate, largely because that required a decision as to whether Mr Stanley Lauder would renounce his position as the executor named in the Will. Once probate was granted, there was another, albeit short, delay before the executor's solicitors were able to obtain an affidavit from Ms Drury to support the Application. The prospects of the Application are obviously strong. No question of prejudice to any beneficiary or third party has been raised, nor does it appear at all likely in the circumstances. An extension of the time for making the Application will be granted.

3. Why an order for rectification is warranted in this case

1. As s 50(1) of the Act makes clear, the Court may only rectify a will if it is satisfied that the will does not carry out the testator's intentions either because a clerical error was made, or because the will does not give effect to the testator's instructions. As Pagone J explained in ANZ Trustees Ltd v Hamlet, a case concerning the Victorian equivalent of s 50(1), the Court's power to rectify is not to be used as an alternative to properly construing a will, the meaning of which is unclear. Rather, it is a precondition to the rectification of a will that the Court concludes that, on its proper construction, the will does not carry out the testator's intentions.[9]
2. The task for the Court, therefore, is to first ascertain what the meaning of the will is, on its proper construction, and then to ascertain the testator's intentions at the time of making the will.[10] Rectification will be permitted if the former does not conform with the latter.
3. If there is no evidence to show what a testator's actual intention was, at the time of making their will, the Court cannot rectify the will.[11] Consequently, it will not be sufficient to show what the testator's intention probably would have been had they thought about the matter.[12]
4. In determining the testator's intention at the time of making the will, the standard of proof is the balance of probabilities. However, it has been said that 'clear and convincing proof'[13] of the testator's intention will be required because the proper execution of a will raises a presumption that a testator knew and approved of its contents.[14] It will therefore not be sufficient to establish only that a testator would not have wished for an intestacy to result, or would not have wanted their property to be distributed as a particular clause directs.[15]
5. In determining a testator's actual intention, the evidence of a legal practitioner who received the testator's instructions will necessarily carry great weight in determining what a testator's instructions were, and will often, if not always, be determinative of a testator's intentions.[16]

The proper construction of clause 3.7.2 of the Will

1. In this case, there is no doubt about the meaning of the words used in clause 3.7.2 of the Will. The Residuary Estate is to be distributed by giving one undivided one twentieth share to Mr Stanley Lauder (Mr Kay Woods having predeceased Mrs Rankin), another undivided one twentieth share to Mr Stanley Lauder (Mr Albert Everett having predeceased Mrs Rankin) and eight undivided one tenth shares to Mr Stanley Lauder, who survived Mrs Rankin. The result is that a one tenth share of the Residuary Estate remains, and there is a partial intestacy to that extent.
2. The presence of the word 'remaining' in clause 3.7.2.3 is, in my view, indicative, on its face, of a clear intention on Mrs Rankin's part that Mr Stanley Lauder was to receive the remainder of the Residuary Estate after the first two shares, as described in clauses 3.7.2.1 and 3.7.2.2, were distributed. However, what is not clear, on the face of the words used, is whether the error lies in describing the shares in the Residuary Estate which are to be distributed under clauses 3.7.2.1 and 3.7.2.2 as 'one twentieth' shares, rather than 'one tenth' shares, or whether the error lies in the use of the reference to 'eight' undivided one tenth shares, rather than 'nine' undivided one tenth shares, in clause 3.7.2.3. While it makes little practical difference in this case, because each of the distributions under clauses 3.7.2.1, 3.7.2.2 and 3.7.2.3 is a distribution to Mr Stanley Lauder, the preferable course in the circumstances is nevertheless to proceed to ascertain Mrs Rankin's intention, rather than to proceed on the basis of a clerical error.
3. I turn, then, to the evidence as to Mrs Rankin's intention. The available evidence of Mrs Rankin's intention at the time of making the Will is set out in the affidavit of Ms Drury.
4. In about September 2005, Mrs Rankin instructed Ms Drury to prepare the Will.[17] Ms Drury met with Mrs Rankin on two lengthy occasions at Ms Drury's office. Ms Drury has a clear recollection of Mrs Rankin and of those meetings. Ms Drury also searched what is available of her file in relation to the preparation of Mrs Rankin's will among her firm's computer records (the actual file having been destroyed in 2015), to identify any further information which might be available.
5. Ms Drury deposed that she discussed with Mrs Rankin her wishes and intentions regarding the distribution of her entire estate.[18] Ms Drury's evidence was that

at the time the Deceased gave me her instructions regarding preparation of the Will it was the Deceased's instructions and intention to dispose of the whole of her residuary estate under whichever of clauses 3.7.1 or 3.7.2 applied at the date of her death. This is evidenced by the Deceased stating in clauses 3.7.1 and 3.7.2 of the Will that she gives the 'remainder of her residuary estate'.[19]

1. The apparent error in the Will was in fact identified, and brought to Ms Drury's attention, in October 2013. However by that time, Mrs Rankin no longer had capacity to make a will.[20]
2. When the error was drawn to her attention, Ms Drury retrieved her file in relation to the Will, perused the handwritten notes she made at the time of taking Mrs Rankin's instructions, and wrote to Mr Stanley Lauder (who was then Mrs Rankin's attorney) to advise him of the information she had which could shed light on Mrs Rankin's intentions. In that letter, Ms Drury noted that she discussed a number of potential proportional divisions of the Residuary Estate with Mrs Rankin.[21] Ms Drury's practice was to suggest a potential proportional division, to note it down, and if her client was not satisfied with that division to repeat the process until the client was content with the proposed division.[22] In Mrs Rankin's case, Ms Drury's notes showed notations of '1/4 and 3/4', '1/10 and '9/10', and '1/5 and 4/5', but there was nothing expressly written in Ms Drury's file notes to say which option Mrs Rankin instructed her to put into the Will.[23] Ms Drury deposed that in each case:

the lower fractions were the possible portion of the residuary estate ... to be divided equally between Albert Everett and Kay Woods and the larger fractions were the portion of the residuary estate to be left to Stanley Lauder.[24]

during each attendance with me the Deceased emphasised that she wanted her half brother Stanley James Lauder (Stanley) to be the major and primary beneficiary of her estate, but at the same time she wanted to give something to her good friend Albert Everett (Albert) and her brother Kay Woods (Kay).[25]

1. Ms Drury also recollected that Mrs Rankin instructed her that if Mr Woods or Mr Everett died before her, she wanted their share to be given to Mr Stanley Lauder (and not to Mr Wood's and Mr Everett's estates).[26] Ms Drury deposed that Mrs Rankin was 'adamant in her instructions to me that if both of Albert and Kay died before her then Stanley was to receive all of her residuary estate'.[27]
2. Ms Drury deposed that based on her long-standing practice of noting possible proportional divisions of an estate, and her recollection of her conversations with Mrs Rankin, she believed that a typographical mistake was made in the Will, and that clauses 3.7.2.1 and 3.7.2.2 should have referred to a one tenth share of the Residuary Estate, and that the error 'likely occurred in a miscalculation of the fraction that each of Albert and Kay would receive when dividing a one fifth share between them'.[28]
3. The latter evidence was of Ms Drury's own view reached by piecing together the limited information available to her as to what she thinks is likely to have been Mrs Rankin's intention, rather than her recollection of what was Mrs Rankin's actual intention as conveyed to her. With respect, to suggest that what occurred can be described as a typographical error rather strains the concept of a 'typographical' error, in that it assumes that the drafter wrote the words 'one twentieth share' on two occasions, even though the words 'one tenth share' were what was intended. To my mind, an equally likely scenario is that Mrs Rankin intended that each of Mr Kay Woods and Mr Albert Everett would receive a one twentieth share in the Residuary Estate provided they survived her (and if they predeceased her, then each of those shares would pass to Stanley Lauder instead) and that an arithmetical error was made when, in referring to the total of the remaining one tenth shares, the word 'eight' was written, instead of 'nine'. However, neither of those possibilities concerns the evidence of Mrs Rankin's actual intention.
4. It is unnecessary to resolve this aspect of the question of Mrs Rankin's intention, for two reasons. First, the evidence clearly supports the conclusion, and I find, that Mrs Rankin's intention was to dispose of the entire Residuary Estate through the distributions in clause 3.7.2 (if it applied), and that the remainder of the Residuary Estate (after the distributions to Mr Kay Woods and Mr Albert Everett) should go to Mr Stanley Lauder. Secondly, it was clearly Mrs Rankin's intention that in the event that Mr Kay Woods and Mr Albert Everett both predeceased Mrs Rankin, but Mr Stanley Lauder survived her, then the entirety of the Residuary Estate would go to Mr Stanley Lauder.
5. That being the case, it is apparent that the Will does not give effect to Mrs Rankin's intentions. Under the Will as it stands, there is a partial intestacy as to one undivided one tenth share in the Residuary Estate, whereas it was clearly Mrs Rankin's intention that if Mr Kay Woods and Mr Albert Everett both predeceased her, all of the Residuary Estate should pass to Mr Stanley Lauder.

4. The orders which should be made, including as to costs

1. The executor seeks that the Court makes the following order by way of rectification of the Will:

that the Will of the Deceased be rectified pursuant to section 50(1) of the Wills Act 1970 by inserting a new clause after clause 3.7.2.2 of the Will as follows:

3.7.2.2A as to one undivided one tenth share for my half brother STANLEY JAMES LAUDER if:

(a) he survives me; and

(b) KAY WOODS and ALBERT EVERETT do not survive me.

1. The insertion of a clause in those terms will ensure that the Will gives effect to Mrs Rankin's intentions in a way which most closely corresponds with the extent of the evidence as to what those intentions actually were, and without the need to grapple with the question whether Mrs Rankin intended to give a larger percentage (that is, a one tenth share) of the Residuary Estate to each of Mr Kay Woods and Mr Albert Everett, had they survived her.
2. The executor submits that the costs of this Application be paid out of the Residuary Estate because the Application was necessary to correct a clear error in the Will and because it is the residuary beneficiary who will ultimately benefit from the rectification of the Will.[29]
3. The costs order sought by the executor should be made, for three reasons. First, O 66 r 9(2) of the Rules of the Supreme Court 1971 (WA) sets out the general rule that where a person is a party to proceedings in the capacity of a trustee they will unless the Court orders otherwise, on the grounds that the trustee has acted unreasonably, or for their own benefit be entitled to the costs of those proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee. Secondly, the usual order in rectification proceedings such as this is that the costs of the parties be paid out of the estate, on the basis that the litigation has been necessary as a result of the conduct, or fault, of the testator.[30] Thirdly, there is no question in this case of any conduct on the part of the executor which would disentitle him from recovering his costs of the Application from the Estate.[31]
4. The following orders, which are based on, and consistent with, the orders sought in the Application, will be made:
   1. Pursuant to s 50(3) of the Wills Act 1970 (WA), the time for the making of this application be extended to 17 August 2017.
   2. Pursuant to s 50(1) of the Wills Act 1970 (WA), the Will of the late Elaine Kathleen Rankin of 41 Bristol Avenue, Bicton, Western Australia, be rectified by inserting the following clause after clause 3.7.2.2 of the Will:

3.7.2.2A as to one undivided one tenth share for my half brother STANLEY JAMES LAUDER if:

(b) KAY WOODS and ALBERT EVERETT do not survive me.

1. A certified copy of these orders be attached to the Grant of Probate and the plaintiff produce the original of Grant Number PRO/1491/2017 for that purpose.
2. The costs of this application be paid out of the residuary of the estate of the late Elaine Kathleen Rankin.
3. The final orders which I now make are those set out in [44]. The orders will take effect at 4.00 pm on the day of publication of these reasons.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Mrs Rankin was also known as Eline Kathleen Rankin. In these reasons, I adopt the spelling which Mrs Rankin used in the Will.

[2] Affidavit of Stephen Bradley Lauder sworn 7 August 2017 [14], Annexure SBL-4.

[3] Affidavit of Stephen Bradley Lauder sworn 7 August 2017 [16] and [18], Annexure SBL-5 and SBL-6.

[4] Affidavit of Stephen Bradley Lauder sworn 7 August 2017 [32], Annexure SBL-8.

[5] Affidavit of Stephen Bradley Lauder sworn 15 September 2017 [1].

[6] Affidavit of Stephen Bradley Lauder sworn 7 August 2017 [13].

[7] Re Schoenmakers [2013] VSC 556 [34] (McMillan J).

[8] Re Swain [2008] NSWSC 1343 [19] (Young CJ in Eq).

[9] ANZ Trustees Ltd v Hamlet [2010] VSC 207 [2] (Pagone J).

[10] Re Prevost [2004] VSC 537 [17] (Whelan J); Rawack v Spicer [2002] NSWSC 849 [26] - [27]; Re Dippert [2001] NSWSC 167 [18]; Trimmer v Lax (Unreported, NSWSC, 9 May 1997) 6 (Hodgson J).

[11] Re Prevost [2004] VSC 537 [17] (Whelan J) citing Re Dippert [2001] NSWSC 167 [18].

[12] Re Prevost [2004] VSC 537 [17]; ANZ Trustees Ltd v Hamlet [2010] VSC 207 [14] (Pagone J).

[13] Re Prevost [2004] VSC 537 [17] (Whelan J) citing Trimmer v Lax (Unreported, NSWSC, 9 May 1997) 6 (Hodgson J); ANZ Trustees Ltd v Hamlet [2010] VSC 207 [14] (Pagone J).

[14] Palethorpe v Public Trustee of Queensland [2011] QSC 335 [22] (Philippides J); see also Public Trustee v McLean [2009] WASC 158 [12] (Jenkins J).

[15] Re Prevost [2004] VSC 537 [17] (Whelan J) citing Rawack v Spicer [2002] NSWSC 849 [26]; Trimmer v Lax (Unreported, NSWSC, 9 May 1997) 6 (Hodgson J).

[16] ANZ Trustees Ltd v Hamlet [2010] VSC 207 [14] (Pagone J); see also Vescio v Bannister [2010] NSWSC 1274 [15] (Barrett J).

[17] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.1].

[18] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.2], [4.12].

[19] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.7].

[20] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.8].

[21] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.9].

[22] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.10].

[23] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.9].

[24] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.9].

[25] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.12].

[26] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.14] - [4.15].

[27] Affidavit of Helen Joyce Drury sworn 10 August 2017 [4.16].

[28] Affidavit of Helen Joyce Drury sworn 10 August 2017 [6].

[30] Kerr v Kerr (No 2) [2016] SASC 24 [3] - [4] (Gray J).

[31] Cf ANZ Trustees Ltd v Hamlet [2010] VSC 207 (Pagone J) [19]; Re Schoenmakers [No 2] [2013] VSC 658 [24] - [25] (McMillan J).