McNeish v McArthur

JurisdictionNew Zealand
JudgeDoogue J
Judgment Date12 December 2019
Neutral Citation[2019] NZHC 3281
Docket NumberCIV-2018-409-000789
CourtHigh Court

UNDER Part 18 of the High Court Rules 2016

IN THE MATTER of the Estate of Ian James McArthur

Between
Daryl Warren McNeish and Joanne Marie McNeish
Plaintiffs
and
James McArthur
Defendant

Doogue J

CIV-2018-409-000789

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA

ŌTAUTAHI ROHE

Wills — validity of will — mutual wills — obligation to not deal with property contrary to the agreement — Wills Act 2007

Appearances:

D J Ballantyne and C J Cousins for the Plaintiffs

S D Campbell and J J Anson-Holland for the Defendant

JUDGMENT OF Doogue J
Introduction
1

Ian and Lorraine McArthur married in 1984. They had both been married before and had children to their previous partners.

2

This proceeding concerns the validity of Ian's will, dated 5 March 2013.

3

The plaintiffs, Daryl and Joanne McNeish (Lorraine's children), seek a declaration that Ian's will is in breach of mutual wills made by Ian and Lorraine on 18 December 2002. They therefore seek for Ian's estate (the Estate) to meet his obligations under that earlier (and now revoked) will. The defendant, James McArthur (Ian's son), is Ian's oldest son and the sole executor of the Estate. He has five siblings: Jennifer McArthur, Andrew McArthur, Joseph McArthur, John McArthur and Yvonne McArthur.

Background
4

Ian and Lorraine's first known wills are those signed and executed on 15 May 1994 (First Wills). The effect of the First Wills was that in the event of Ian's death, the Estate would pass to Lorraine and vice versa. But if either Ian or Lorraine was not survived by the other, their estate would pass in equal shares to their respective children. The First Wills were materially identical except for a provision in Lorraine's will stating that if she was not survived by Ian, her rocking chair, her grandmother's dishes and cake plates and her personal jewellery would all pass to her daughter Joanne McNeish before her residual estate was to be evenly distributed to her children and Ian's children.

5

In December 2002, Ian and Lorraine instructed their solicitors to prepare new wills for them. Two materially-identical wills were prepared leaving, amongst other things, their respective estates to the survivor of them or, in the event the other did not survive them, a one-half share of their estate to their respective children. On 18 December 2002, Lorraine executed a will to this effect (Lorraine's Will) and Ian did the same (Second Will).

6

In July 2003, Lorraine was diagnosed with metastatic ovarian cancer. As a result, sometime later in 2004 she and Ian decided to move from Reefton on the west coast of the South Island to Brisbane, Australia to be close to Lorraine's children and grandchildren. Lorraine and Ian gave Lorraine's son Daryl instructions to purchase a home for them in Brisbane and provided him with a significant sum of money as a deposit on any property he chose to purchase for them. They did this in the context of telling Lorraine's children that her condition was terminal and that she and Ian had signed identical wills (that is, Lorraine's Will and the Second Will) providing for their respective children. This occurred in October 2004.

7

Lorraine and Ian sold up and moved to Brisbane in January 2005. The couple lived there until Lorraine's death on 23 December 2005.

8

Lorraine died without revoking her will. Probate of Lorraine's Will was granted on 8 February 2006 and in accordance with that will, Ian was appointed executor of her estate. Lorraine's children did not contest the will relying on their belief that Ian would ultimately provide for them in the spirit of their mother's will.

9

Ian immediately demanded the deposit monies back from Daryl following Lorraine's death. As a result, the relationships between the families became strained and Lorraine's children had little to do with Ian between Lorraine's death and his.

10

Following Lorraine's death, Ian executed two further wills. The first, dated 5 September 2006 (Third Will), followed Ian's purchase of a property at 4 Dunns Avenue, Pines Beach, Christchurch (Pines Beach Property) on 8 June 2006. The Third Will left the Pines Beach Property to Ian's granddaughter, Angela McArthur, and to his step-grandson, Dylan McNeish. It also left Ian's residual Estate equally to his children and Lorraine's children. The second, dated 5 March 2013 (Fourth Will), appeared to follow two significant events: the Christchurch earthquake in 2011 which led to Ian moving to Blenheim and subsequently purchasing a property at 9A Turner Place, Blenheim (Blenheim Property) on 28 October 2011. The Fourth Will, which revoked any will before it, appointed Ian's son as executor of the Estate and left the Estate equally to Ian's children, or to his grandchildren in the event his children did not survive him.

11

The Fourth Will made no bequests to Lorraine's children. The only mention of either of Lorraine's children was in respect of any debt owed by Joanne to Ian at the time of his death, which was forgiven absolutely.

12

Ian died on or about 7 March 2018. In accordance with the Fourth Will, Ian's son was appointed executor of the Estate. Probate of the Fourth Will was granted on 16 May 2018.

13

Lorraine's children (Daryl in particular) expected that Ian would not have revoked the Second Will and that Daryl, along with Ian's son, would have been co-executors and the Estate administered in accordance with the terms of the Second Will.

Lorraine's children's claim
14

Lorraine's children claim that Lorraine's Will and the Second Will gave effect to an oral agreement between Ian and Lorraine that they would:

  • (a) leave their estates to the survivor of them and then equally as to one-half share between their respective children; and

  • (b) not revoke their wills so as to provide for their respective children.

15

Lorraine's children claim that Lorraine's Will and the Second Will are mutual wills. They say that given Lorraine did not revoke her will prior to her death, Ian's Fourth Will is in breach of his promise not to revoke the Second Will.

16

The foundation for their claim is an alleged promise made by Ian to Daryl in May 2006 where Ian stated, “I will honour your mother's wishes”. This, Lorraine's children claim, was a reference to the discussion that Ian and Lorraine had with them while they were visiting the couple in Reefton in October 2004.

Mutual wills — legal principles
17

Section 30 of the Wills Act 2007 has codified the equitable doctrine of mutual wills. However, Lorraine's Will and the Second Will were executed before the Wills Act 2007 came into force. 1 This case is therefore to be determined by applying the equitable doctrine of mutual wills as set out in Lewis v Cotton. 2 In that case, the Court of Appeal observed that while a will can always be revoked, where non-revocation has been contractually promised, the executors and trustees of any replacement will may be required to hold affected assets upon a constructive trust in terms of the revoked will. 3 The origin of this doctrine is in cases of joint wills, that is, a will signed by two testators. Such a document would ordinarily be read as two wills with the mutual intention that neither should be revoked. 4

18

The relevant promise for the purposes of the doctrine of mutual wills may be either to not revoke a will at any time whether secretly or openly, or to not revoke a will secretly during the other will maker's lifetime and to not revoke it at all after the other will maker's death. 5 However, the crux of the matter is not the non-revocation promise but rather the obligation to not deal with property contrary to the agreement or understanding. 6

19

The Court of Appeal in Lewis v Cotton held that the courts are “very slow” to find mutual wills simply because two parties have made corresponding or mirror wills. 7 More is needed to satisfy the doctrine. In Wilson v Saunders, Associate Judge Osborne (as he then was) summarised the requirements in respect of the doctrine of mutual wills as follows (footnotes omitted): 8

[8] … From Lewis v Cotton, and the authorities there referred to, the imposition of a constructive trust based on mutual wills has two fundamental requirements:

  • (a) There was an underlying consultation and coordination between two testators which resulted in an agreement or an arrangement as to how they would make their respective wills (which were then made). I will refer to this as the requirement for “corresponding wills”. Reference is sometimes made to “mirror wills” and, more ambiguously and confusingly, to “mutual wills”.

  • (b) There must have been a contract or mutual understanding (intended to bind each testator to a future cause of action) that neither testator would revoke the will provision or deal with the property in a manner inconsistent with the provisions of the corresponding wills.

[9] In addition to the above two requirements, there are requirements of proof and of evidence. The mutual understanding of the two testators:

  • (a) must be sufficiently certain in its terms that the Court can enforce the terms;

  • (b) may be oral or in writing and may be contained in the wills themselves or proved by extraneous evidence, and may be proved either by express agreement or by conduct, such that that the mutual understanding may be implied;

  • (c) does not require consideration in the usual sense;

  • (d) is not established by the mere fact that the testators made corresponding wills; and

  • (e) is to be established on the ordinary civil standard (balance of probabilities) but is to be scrutinised, as a claim over the property of a deceased person, with very great care.

20

Further, the Supreme Court of Victoria held in Flocas v Carlson that the mere fact two wills with corresponding obligations were entered into at the same time, prepared by the same lawyers and witnessed by the same people, is not,...

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1 cases
  • Mcneish v Mcarthur
    • New Zealand
    • High Court
    • 12 December 2019
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