Turner v Coombe

• Jurisdiction: New Zealand
• Judge: Whata J
• Judgment Date: 15 March 2018
• Neutral Citation: [2018] NZHC 315
• Court: High Court
• Docket Number: CIV-2016-419-265
• Date: 15 March 2018

Between

Muriel Gwendoline Turner

Plaintiff

and

Anthony Brian Coombe and Murray Kaid McLean

Defendants

[2018] NZHC 315

CIV-2016-419-265

IN THE HIGH COURT OF NEW ZEALAND

HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA

KIRIKIRIROA ROHE

Family, Trusts — challenge to a will on the basis it was inherently uncertain and/or unlawfully delegates responsibility for the establishment of the Trust to his executors — whether a clause was invalid for uncertainty and whether the delegation of trustee powers was unlawful and invalid — s61B Charitable Trusts Act 1957 (“CTA”) (inclusion of non-charitable and invalid purposes not to invalidate a trust)

Counsel:

W Patterson and L Dixon for Plaintiff

H McIntosh and K Lawrence for Defendants

V Bruton QC for parties served

H Carrad for Attorney-General

JUDGMENT OF Whata J

1 Clause 9 of Ian Alexander McClean's Will (the Will) left the residue of his estate to “The Ian McClean Trust” (the Trust) to be formed during his lifetime or by his trustees upon his death for the benefit of the local and wider community, and needy persons (including his nieces and nephews) in the Hauraki Plains/Hauraki/Coromandel area. Clause 9 also says the Trust may “also pay [his] sister's care and hospital bills.”

2 However, his sister, Muriel, and two of her children, Gillaine and Darren, now challenge the Will, claiming cl 9 is inherently uncertain and/or unlawfully delegates responsibility for the establishment of the Trust to his executors.

3 This judgment resolves this challenge.

Background

4 Ian McClean (Ian) died on 4 April 2013, leaving a Will, dated 28 February 2013. Probate for the Will was granted in May 2013. Under the Will, Ian made several specific legacies and bequests. The validity of those are not challenged.

5 Clause 9 of the Will, however, is challenged. It states:

I leave the residue of my estate both real and personal of whatever kind and wherever situated, after my testamentary and funeral expenses have been paid, unto my trustees upon trust to a Trust Fund called “The Ian McClean Trust” that will either be formed during my life or is to be formed by my trustees upon my death for the benefit of the local and wider community and needy persons (including my nieces and nephews) in the Hauraki Plains/Hauraki/Coromandel area. It shall have a Deed of Trust and be made up of a Board of Trustees. It may pay my sister's care and hospital bills. My two executors and my consultant John Dawson shall be founding Trust Board members and they may approach other appropriately qualified and/or experienced persons to become Trust Board members. They shall invest my estate's capital wisely and distribute each year's income to suitable successful applicants.

6 Mr Anthony Coombe and Mr Murray McLean are the executors under the Will. The residue estate included a large farm held by Ian in his name and a second large farm owned by McClean's Pampas Grass Limited (MPGL). The shareholding in this company and Ian's farm land were transferred to Mr Coombe and Mr McLean under the Will. The farming properties are now both owned by MPGL. The net value of the residue estate is estimated at about $6.9 million. 1

7 The Trust has not yet been established. Messrs Coombe and McLean state that it has always been their intention to establish the Trust, but explain their primary focus to date has been to modernise the farming properties at a cost of about $2.74 million.

The circumstances of the execution of the Will

8 There is scant evidence addressing the circumstances in which Ian's last Will was made. The solicitor who drafted the Will has passed away and did not leave any file notes that might assist. However, both executors, who were well known to Ian over many years, gave evidence that Ian wanted the farms to be used as a trainee farming operation for the benefit of young farmers in the Hauraki area. This is consistent with previous 2001 and 2012 editions of Ian's Will which specifically refer to this prospect. It appears the objects were widened at Mr Coombe's suggestion as an addition to, not a departure from the intention to apply the funds to farming training. Nevertheless, this specific object is not included in the Will 2 and there is some evidence Ian had turned his mind to his family's needs. Mr Coombe noted that in discussions about the Will during which he was present, “provision for his sister, nieces and nephews” as well as the “possibility of providing some help to Ian's sister … came up in conversation.” Mr McLean also says it was raised, but was not aware of the detail. Muriel states that shortly before Ian's death, she noticed a marked, more sympathetic attitude towards her and her children.

9 Brendan also enjoyed a close relationship with Ian and cared for him shortly before his passing. He remembers talking to Ian about the family, including their whereabouts, shortly before Ian's death. Darren was in Thames and his mother and Gillaine were in Auckland at that time.

10 Beyond these general observations, the evidence of the circumstances of the drafting and execution of the Will was of little, if any, value. Indeed, some of it is speculative. To illustrate, Mr Coombe believed that Ian did not want to leave more substantial provision for Gillaine and Darren because they were adopted. In fact, Brendan, who received substantial benefits under the Will, was adopted, while Darren was Muriel's only biological child.

Other provisions under the Will

11 Ian never married, but he had a long-time partner, Raewyn Ann McLiver. Her children are beneficiaries of specific bequests of $50,000 each. These are not challenged. Specific bequests are also made to Muriel's children, Gillaine, Darren and Brendan of $10,000 each. He also left his properties at Onemana together with his residential property to Brendan. There are also relatively small bequests to specified clubs, organisations, and other persons.

Muriel and her children

12 Muriel, the plaintiff, is Ian's only sibling. She recalls Ian had become upset when she was left the family house by their mother. Recognising this she sold the home to him for a price fixed by him. She has several medical conditions including type 2 diabetes, chronic hepatitis C with cirrhosis of the liver, Paget's disease, hypertension and osteoarithtis. Brendan is a successful restaurateur, Darren is a lecturer in hospitality and Gillaine is a nurse.

13 Darren and Gillaine, the parties served, like Brendan, have fond memories of Ian, including times spent with him on the family farm with their grandmother. They continued to see him at family occasions, but not as much as when their grandmother was alive.

Issues

14 Muriel, Darren and Gillaine raise two key issues:

• (a) Is cl 9 invalid for uncertainty?

• (b) Is the delegation of trustee powers at cl 9 unlawful and invalid?

15 Darren and Gillaine also sought costs in advance. I reserved my position on this issue, tentatively indicating that I considered the claim has some merit. I address this separately below at [62].

16 The executors and the Attorney-General maintain the “non-delegation” principle is simply a subset of the inquiry into certainty. I agree, the two issues appear to be two sides of the same legal problem. I nevertheless propose to address both issues separately. The answers to these questions will then dictate the scope, if any, of intervention by this Court.

Rules of interpretation

17 It is necessary first to identify the rules of interpretation in this context. Helpfully, the Court of Appeal in Wilson v Davidson recently identified the proper approach: 3

[10] Sections 31 and 32 of the Wills Act 2007 (the Act) now apply when there are interpretation issues with a will or a will does not reflect a will-maker's intentions. The jurisdiction to apply the sections is given to the High Court. These two sections are based on common law jurisprudence as to the interpretation and rectification of wills and earlier similar reforms in Australia and the United Kingdom. The legal position in New Zealand prior to the Act was summarised by Fisher J in his often quoted statement in Re Jensen:

“The overriding objective is to give effect to the intentions of the testator. All canons of construction must be subservient to that end. The testator's intentions are to be gleaned from an objective appraisal of the testamentary documents viewed as a whole but in cases of doubt the wording is to be interpreted in the context of those facts which must have been in the contemplation of the testator.”

[11] As this passage indicates, prior to the passing of the Act, there was a willingness to interpret the provisions of a will against the factual context in which the will was drafted and executed. While the words of the will were central, evidence was admissible that could shed light on the view from the will-maker's “armchair”. Consistent with this, the purpose of the reforms was to give primacy to the will-maker's intentions. This was explained by the Hon Clayton Cosgrove MP in moving that the Wills Bill 2006 be read for the first time:

“Wills are of practical day-to-day significance for all New Zealanders. A will is an instrument that expresses a person's wishes after he or she dies, and enables that person to take care of his or her loved ones and property and assets. The proposed reforms will improve the legal framework for will-making. They will make the law easier for people to understand, and reduce the risk of a will-maker's wishes being defeated by a badly drafted or incorrectly executed will, and will also allow better effect to be given to a will-maker's intentions.”

18 The Court also noted:

[18] Section 32 imposes rules as to the admissibility of extrinsic evidence when construing...