King v Wogandt: Re Beutel (deceased)

Jackson J

6 August 2014

This matter concerned the power of the Court to rectify or construe a testator’s valid, but imprecise will. Arising out of the division of Beutel’s (the “testator”) estate, the central issue in this case was the identity of the beneficiary to the late-testator’s home in Rosewood. The relevant facts of the case are as follows. Prior to his death, the testator had executed two wills within 9 days – the first made no explicit reference to the Rosewood property, and as such it was left to the residual beneficiaries – the respondent’s three children. [6]–[7]. In the second and final will, the testator, in cl 3a, directed that his home be given to “my late wife’s niece, JEANETTE KING.” [20]. It is unclear from this disposition to whom the property was bequeathed – though it referred to the testator’s step-daughter by name; the description was incorrect and the only “niece” was the respondent, the “late wife’s niece” by marriage. [47]–[48]. The testator died in 2003, and as of 2014 the respondent had yet to complete the administration of the estate. In light of this delay, and alleging that she was entitled to the proceeds from the sale of the Rosewood property, the respondent, the testator’s step-daughter, filed this application for an order that the respondent, the testator’s niece, show cause why she had failed to execute the will. The respondent, subsequently filed a cross-application seeking rectification of the will so that she is the named beneficiary under cl 3a, or alternatively that cl 3a, properly construed, names her as the beneficiary or fails for uncertainty. [1]

Cross-Application

The first question before the Court was, who was entitled to the Rosewood property? Upon considering the evidence before the Court, his Honour was unsatisfied with the respondent’s testimony regarding the events surrounding the testator’s execution of his final will and concluded that she had failed to establish that her name was accidently omitted as the beneficiary of the Rosewood property with the consequence that rectification, pursuant to s 31 was inappropriate. See [20]–[37]. Further, the Court held that “any doubt” regarding the intended beneficiary because of the inconsistency between the expressed relationship and the name, ought be “resolved in favour of the name,” [49], see [47]–[48], and thus that the applicant was the beneficiary identified in cl 3(a).

Show Cause Application

In then addressing the applicant’s “show-cause” application the Court reviewed the progress of the administration of the estate, concluding that the respondent had “delayed the resolution of the affairs of the estate” and had also improperly dealt with its assets. [62]. Given the evidence presented, his Honour concluded that the respondent had not “shown cause why she had not complied with the applicant’s request,” and thus ordered that subject to any order of costs, that the respondent pay the applicant the balance proceeds of sale of the Rosewood property as a legacy under cl 3(a). [63].

Allocation of Costs

His Honour then turned to the question of costs of the proceedings. The respondent submitted that the parties costs ought be paid out of the estate as a “testamentary expense” and that, as the testator “caused the problem” the Court ought exercise its discretion and order that the costs be paid out of the fund held to discharge the gift in cl 3a. [65], see also [68]–[69].

The costs of obtaining legal advice, including “the costs of any application to the Court as to the interpretation of [a] will may be [considered] ‘testamentary expenses”. [67]. In the instant matter, however, the Court was not entirely persuaded by the respondent’s submission, [70], as though there was a valid question regarding the construction of cl 3(a) the respondent had not confined her opposition to this question, nor had she addressed this issue promptly, and thereby “avoid[ed] undue delay, expense and technicality”. [70] For these reasons the Court concluded that though the estate ought bear some of the costs of the proceedings and, given that they related specifically and only to the gift in cl 3(a), these should be paid from the fund held to discharge that gift, see [31], the respondent ought be required to personally pay the balance of the applicant’s costs. [73]. Accordingly the Court ordered that $30,000 – being $15, 000 each of the applicant’s and respondent’s costs of the cross-application - be paid out of the proceeds of the sale of the Rosewood property; and that otherwise the respondent bear the costs of the matter, without further indemnity from the assets of the estate. [74].