When will a court consider family history and conduct to interpret a will-maker’s intention when gifts to beneficiaries are only vaguely identified?

Allan Bell died in March 2020.  He had never married and had no children but had in the past been in a de facto relationship with Helen Drayton, with whom he had remained friends.

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Helen’s granddaughter Chloe Middleton was close to both Allan and his sister Marie.

Allan’s estate included a number of NSW grazing properties he had inherited from various family members over the years.

His last will – made in August 2018 – granted legacies of $50,000 to 7 beneficiaries and made gifts of the grazing properties to three beneficiaries. The residue was left to three charities.

The gifts of grazing properties near Nimmitabel south of Cooma appeared in clause 4 as follows:

“(h)    To give Tom and Gail Lewis as joint tenants my real property known as the ‘Rock Flat block’ consisting of approximately * acres…;

(i)    To give Bill and Marie Hampson as joint tenants my real property known as the ‘Cottage Block’, consisting of approximately 1,088 acres…;

(j)    To give to Chloe and Phillip Middleton as joint tenants my real property known as ‘Caringa’, including the house block and approximately 1,288 acres…;”

Executor Julie Schofield – who had been Allan’s accountant for many years – transferred the ‘Caringa’ block to the Middletons but not the two contiguous blocks ‘Smithfield’ and ‘Berkery’s Block’ which she designated as part of the residue that was to go to charity.

Chloe and Phillip Middleton contended the two contiguous blocks were part of the gift and filed proceedings in the NSW Supreme Court for orders declaring the proper construction of the will included all three blocks.

In the alternative, they asked that the will be rectified to give effect to Allan’s intentions that all three blocks were to be part of the gift.

They abandoned the claim for rectification during the course of the proceedings once significant “extrinsic” evidence – i.e. other than the terms of the will itself – had been put before the court as indicative of what Allan had intended.

The executor argued such extrinsic evidence should be excluded because it was inadmissible given the absence of any ambiguity in the will.

Justice Stephen Robb concluded however that the terms of will were indeed ambiguous because the description ‘Caringa’ was capable of multiple interpretations and its meaning could not be derived solely from the will.

Expressed so as to ‘include’ the house block and approximately 1,288 acres – rather than to ‘consist of’ them like the gifts in clauses 4(h) and 4(i) – suggested in his honour’s view, that ‘Caringa’ might be meant to include additional parcels over and above the 1,288 acre homestead lot.

To determine the proper construction in the face of this ambiguity, Justice Robb noted he could consider extrinsic evidence but only to give effect to what Allan had meant from the words actually used, not from those that could be argued had been intended to have been used.

Extrinsic evidence could only be relied on to determine the true intention of a will maker by going beyond its contents, in claims for rectification. Chloe and Phillip were no longer pursuing such a claim and in the circumstances did not need to.

The court accepted that Allan had referred to all three blocks as ‘Caringa’ and didn’t see them as three distinct blocks. He had consistently referred to them as ‘Caringa’ or ‘the farm’ or the ‘Caringa partnership’ when discussing them with his livestock and estate agent William Boller and others.

He also noted that Boller had endorsed his valuation of only the house block at ‘Caringa’ – that the executor commissioned – as not encompassing the whole of what Allan had referred to as ‘Caringa’.

Less helpful in his honour’s view was the evidence of the solicitor who prepared the will over a number of months. He declined to accord weight to that testimony due to the absence of detailed file notes and a number of errors and omissions made throughout the will drafting process that were not documented or sufficiently explained.

His honour concluded that the broader meaning of ‘Caringa’ – referring to all three blocks – was the most probable meaning that Allan intended to convey for the gift to Chloe and Phillip. He ordered that the will should be construed in those terms.

Middleton v Schofield [2022] NSWSC 1454 Robb J, 27 October 2022 Read case