“Probable intention”: Novel rectification case in ACT

Recently the Supreme Court in the ACT was called to determine a question of the interpretation of a Will and subsequent amendments made to the Will by the testator on the day he died.

In the Estate of Rummer [2017] ACTSC 277, the Plaintiff called upon the Court to determine the true construction of the dispositions Mr Rummer made in his Will.  Mr Rummer had made a Will dated 20 August 2015, and then amended the Will on 5 December 2015 by hand, and signed those amendments.  He died later that day, aged 66 years.

Relevantly, the terms of the Will gave his superannuation interests to his half-sister (or $45,000.00 if his estate didn’t receive any superannuation entitlements upon his death), his friend a sum of $25,000 and the rest and residue to his friend Judith (the Defendant in the proceedings).

Subsequently, Mr Rummer then dictated some amendments to his nominated Executor (the Plaintiff) who was sitting at his bedside.  Handwritten amendments were made to change the terms of the Will as follows:

  • delete the gift to his friend of $25,000;
  • give “most of the rest and residue” of his estate to the Defendant; and
  • inserting the words after the gift of residue to the Defendant of “and amounts as directed to my Executor to my friends Pat … and Peter…”

Mr Rummer had signed these handwritten amendments in the presence of a Registered Nurse.  These amendments then constituted a “Codicil” to the original Will.

The Plaintiff sought an order that the residue clause should be amended to give HALF of the residue to the Defendant and the other half equally to Pat and Peter. The Plaintiff contended that it was from the conversations that she had had with Mr Rummer, that Mr Rummer meant to give the Defendant only half of the residue of his estate and that the other half was meant to be divided between Pat and Peter.

In order to resolve the matter, the Court needed to consider the proper construction of the words “most of the rest and residue” and “amounts as directed to my executor“.

The Court found that the Defendant should receive the rest and residue of the estate in full after payment of two monetary gifts to Pat and Peter of $35,000.00 each.  The Court also found that the gift to Pat and Peter of “amounts as directed” failed for uncertainty.

In setting our a summary of the findings, the Court said:

“…I have concluded that on the proper construction of the Will, the testator did not intend the defendant to only receive half of the residue of the estate.  Rather, the testator intended the defendant to receive the residue of the estate.  Additionally, the testator intended to gift two further amounts of equal value to Messrs Italiano and Clack, with the result that the defendant would only receive ‘most’ of what had previously been ‘the residue’.” (para 20)

“Regrettably, I have also concluded  that the stated gifts to Messrs Italiano and Clack do fail for uncertainty as to amount…” (para 21)

“However, the testator’s expressed intention was at least that Messrs Italiano and Clack would each receive a sum of money.  The testator clearly did not appreciate the legal effect of the words he had dictated on his death bed, nor did he know what the ultimate net proceeds of his primary asset would be.” (para 22)

“In such circumstances, I am satisfied that the power under s12A(2) of the Act is enlivened, so that the Court can, in the exercise of its discretion, give effect to the probable intention of the testator to give monetary gifts to two of his two friends.”  (para 23)

“Having invited and received further submissions from the parties on the question of the application of s12A(2) of the Act, on the evidence before the Court, I have determined that this is a case where it is appropriate to exercise the Court’s discretion to rectify the Will to give effect to the testator’s probable intention, with the result that Messrs Italiano and Clack will receive a gift in the amount of $35,000.00 each.” (para 24)

What was interesting about the case was the journey the Court made to finding it’s way to the ultimate destination and, of course, the uniqueness of the Court’s discretion being exercised in determining the “probable intention” of Mr Rummer when he made the two gifts to his friends.  I’ve set out below a summary of, what I felt were, the interesting and noteworthy parts of the journey.

Evidence of Intention and the meaning of “most

The Court was careful to consider evidence in light of the challenging circumstances of the Plaintiff receiving the instructions, as she did, to amend the Will at the direction of Mr Rummer.

The Court considered the intentions of Mr Rummer’s changes with reference to an email sent by Mr Rummer to his former solicitor as to some “minor changes” and then with reference to the notes of the Plaintiff that she had made near to the time of taking the instructions from Mr Rummer alongside that of her affidavit material.

In respect of considering the inconsistency of the evidence, the Court said:

“To the extent that the paragraph elevates the gifts under consideration to ‘significant gifts’, the statement is inconsistent with what the testator indicated to his solicitor as a desire to make minor changes to his will.  It is also inconsistent with the plaintiff’s recollection, recorded in the notes she made at a time much closer to when the words were actually spoken, where he merely spoke of leaving ‘sums of money’.” (para 52)

“The 2017 Affidavit [of the Plaintiff] was made more than a year after the events the Plaintiff purports to recollect, in circumstances where the probate proceedings had been commenced and in particular where the defendant’s solicitors had previously communicated to the plaintiff’s then solicitor, in correspondence dated 16 September 2016 (contained in the Solicitor’s file), their view that the gifts to Messrs Clack and Italiano failed for uncertainty.” (para 53)

“The plaintiff was was cross-examined and appeared to struggle to provide answers that were responsive to the questions asked of her.  However, the difficulty in giving evidence about the plainly emotionally draining experience of taking instructions from a close friend in his dying moments is not lost on this Court.” (para 56)

“That difficulty must also increase when the plaintiff has had time to form her own opinions about the meaning of what she heard, influenced by subsequent legal proceedings and advice, and she is then required to recollect the words and actions of the testator before she formed those opinions.  Although I find that the plaintiff was doing her best, the plaintiff’s evidence in the witness box must be seen through that prism.” (para 57)

The Court also scrutinized the records of Mr Rummer’s Solicitor:

“The Solicitor’s File was incomplete in what might be said to be significant respects.  First, the plaintiff confirmed under cross-examination that she had seen the complete file, that the papers she had seen were almost double those received by her current solicitor, and that a lien over some of the papers had been exercised by the former solicitors.” (para 67)

“Second, the Solicitor’s File includes correspondence between the current solicitors and the office of the previous solicitors dated the date before the hearing, confirming that none of the file notes of Mr Lucas had been provided, and further refusing to provide the file notes without Mr Lucas ‘interpreting’ them first.  That is a matter that out to have been address well prior to the hearing and by way of subpoena if necessary.” (para 68)

“Finally, there is a noticeable lack of any records (even any record of a response to the testator’s email of 15 September 2015) from was a critical time period between 17 September 2015 and 4 December 2015.  It is highly unlikely that a solicitor knowingly acting for a very sick man who wanted to make changes to his will would do nothing in response to that email.” (para 70)

In considering the meaning of the word “most”, the Court said:

“First, the express words of the Codicil dictated by the testator are “most” of the residue.  The ordinary meaning of that word is ‘in the greatest quantity, amount, measure, degree, or number’ (Macquarie Dictionary, 7th ed).  It denotes a quantity greater than ‘more’. The plain meaning of the word is not half.” (para 75)

“Second, reading the Codicil and Will as a whole, the word ‘most’ must be read in the context of other express words, which refer to gifts to Messrs Italiano and Clack in the nature of an amount, determined by reference to a matter external to the Will.  They do not refer to Messrs Italiano and Clack receiving a percentrage share of the residue either expressly or impliedly.” (para 76)

“Third, the language used in the Will enables the discernment of the apparent general scheme of the Will.  It carves out an amount for the testator’s only apparent relative, with a contingency depending on whether she received his superannuation death benefit, and provides for two gifts to his old ‘mates’ to use the language of the testator (in paragraph [21] of the 2017 Affidavit), with his close female friend, the defendant, receiving the residue.” (para 77)

“The word ‘most’, in my view, reflects the non-legal thinking of a dying man that he needed to replace the word ‘ALL’ in the Will (that had been drafted by a solicitor) with a different word, as he was now allocating some of the money that would previously have formed part of the residue to two other people.” (para 78)

Construction of “amounts as directed to my executor

In considering the construction of the phrase “amounts as directed to my executor”, the Court said:

“…although I am satisfied that the testator intended to give an equal monetary sum to each of Mr Italiano and Mr Clack, I am not satisfied on the balance of probabilities that at the time the Codicil was drafted, his intention was to gift Messrs Italiano and Clack a quarter each of the residue of his estate.” (para 87)

“Again, the express words of the Codicil do not state that intention, nor can it be implied.  The context of the Codicil and the word ‘most’ are also contrary to that construction, and the scheme of the Will does not produce that construction.” (para 88)

The Court called into discussion the notes that the Plaintiff had made shortly after the discussions she had with the testator at the time of making the amendments.  The Court acknowledged that the words used by the testator did not permit the plaintiff to use her discretion as to the amount to be given to Pat and Peter (para 94) and that there was no proven intention of the testator as to what amount was to be given to them, other than to say that the amounts were to be equal (para 98-99).  The Court found that the submission by the Plaintiff that the testator said words that meant a quarter of the residue to each of Pat and Peter “were premised entirely on the plaintiff’s construction of ‘most’, in order to give certainty to the words “what’s left after Rita and Judith’.” (para 99)

As such, the Court found that the gifts to Pat and Peter failed for uncertainty.

“Probable intention” under section 12A(2) of the Wills (Amendment Act) 1991 

In light of this uncertainty and subsequent failure, the Court considered the application of section 12A(2) of the Act that enables the Court to rectify a Will so as to give effect to the probable intention of the testator in certain circumstances.

This was the first time the section came under consideration for the Court, with neither the parties or the Court having the benefit of any previous judicial consideration of the section.

The Court went back to the Explanatory Memorandum of the Wills (Amendment) Bill 1991 (ACT) to consider the intention of the section and quoted the relevant explanation:

“New subsection 12A(2) provides that a court may also order the will to be rectified where the provisions of the will, if applied according to their tenor, would fail to accord with the probable intention of the testator.  However, before making such an order, the court will need to be satisfied that there were – prior to, or after the time of execution of the will by the testator – circumstances or events which lead to that failure.  The circumstances or events are matters which the testator had no knowledge of, or did not anticipate, or which the testator, while knowing of, or anticipating, them, did not appreciate their effect on the provision of his or her will.  They may also be circumstances or events which occurred at the time or, or after, the testator’s death.  An order by the court under this subsection may only be made if the court is satisfied that it is desirable in all the circumstances to do so.”

As the Court point out in the judgement, the Parliamentary debate that ensued when considering the Bill acknowledge the revolutionary change that was afforded by the new legislation (para 108).

In considering the background of the explanatory note, the Court said:

“It is also worth bearing in mind, when considering the proper application of the section, Parliament’s clear intention that this is beneficiary or remedial legislation, and as such is to be given ‘a fair, large and liberal interpretation’ rather than one, which is ‘literal or technical’, although a construction should not be given that is ‘unreasonable or unnatural’: IW v City of Perth & Ors (1997) 191 CLR 1 at 12.” (para 112)

The Court deemed that the section was enlivened and it was appropriate to apply the section in this case.  The Court then needed to determine what the testator’s “probable intention” was. In doing so, the Court considered the commentary afforded by CJ Rowland in “The Construction or Rectification of Wills – Part II” (1993) 1 Australian Property Law Journal 193, at 208:

“The following sources are available to find the intentions of the testator” the will itself, and whatever extrinsic evidence is available and admissible.  Where the testator either did not consider, or did not deal with, the situation which has arisen, the court, in deciding what the testator would have wanted, should consider the will itself and whatever extrinsic evidence is available and admissible.  Using its own criteria of reasonableness and justice and its own experience as a guide, the court should infer what the testator would probably have wanted.  If the court cannot decide on a balance of probabilities what the testator would have wanted, the provisions would not give a remedy.  It is hoped that in applying its own standards of reasonableness and justice, the court should not strive to give effect to incomplete expressions of intention which are capricious or cruel; the court could decline to do so on the basis that it would not be [in the interests of justice]. …

“[While the will] may be read in the light of admissible evidence, the text of the will must itself provide at least some slight indication of probable intention – the trend of intention; it must provide a ‘peg’ from which the court’s solution can hang.  It would not be enough that the testator’s actual or probable intentions are known exclusively from external sources.”

The Court agreed (para 116).

Using the evidence as to Mr Rummer’s comments held within the Plaintiff’s notes as to what he hoped Peter and Pat might use the money for, and the amount of the previous gift that Mr Rummer had made to his other friend in the first instance (i.e. the $25,000), the Court determined that Mr Rummer’s probable intention was to gift an amount of $35,000.00 to each of Pat and Peter.

You can read the interesting case here.

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