Interpreting Wills: construction, domicile, and the Administration of Justice Act 1985
The recent judgment in Clarke-Sullivan v Clarke-Sullivan [2021] EWHC 4 (Ch) highlights the potential challenges when interpreting Wills.
This article provides an overview of that case in the context of:
- Applications under s.48 Administration of Justice Act 1985.
- The difference between "material / essential validity" and interpretation cases.
- The importance of domicile when interpreting Wills.
Background
The case concerned the estate of a New Zealand national who died in February 2019 ("the Deceased"). The Deceased was survived by her husband and their young daughter.
In December 2014, the Deceased and her husband executed a deed creating a family trust ("the Trust"). The trustees were the Deceased, her husband, and New Zealand Trustee Services Limited. The Trust was discretionary and the beneficiaries included the Deceased, her husband, their children, grandchildren and remoter issue. The beneficiaries also included charitable organisations under New Zealand law. The Deceased's daughter was the default beneficiary of the Trust.
In February 2015, the Deceased made a Will under which her residuary estate passed to the trustee of the [...] Trust created by deed dated 27 December 2014 for the Trust's general purposes.
In March 2016, the Deceased and her husband executed a winding up deed in relation to the Trust.
The estate
The Deceased's estate in England consisted of a property valued over £1.7 million as well as cash and shares. The Deceased also owned property jointly with her husband in Switzerland, Germany and New Zealand.
In July 2019, probate was obtained in respect of the Deceased's property in England and the grant of probate states that she was domiciled in New Zealand.
The proceedings
The application was made by the Deceased's husband as executor under s.48 of the Administration of Justice Act 1985. This section allows the court to authorise personal representatives or trustees to take action in reliance on counsel's opinion.
The central legal question underpinning the application concerned whether the gift of the Deceased's residuary estate to the Trust failed in light of the fact that the Trust had been wound up prior to her death. If it did, then it would be necessary to determine the correct way to administer the residuary estate.
Conclusions
Administration of Justice Act 1985
The court emphasised that applications under s.48 should be reserved to only the clearest of cases. Where complex issues of construction and interpretation arise, it is unlikely that a s.48 application will be appropriate.
Material / essential validity v interpretation
Master Clark also concluded that this was a case of interpretation rather than "material / essential validity".
Material or essential validity concerns the nature of a bequest and whether that gift can be legally carried out. The argument put forward was that this case concerned "material or essential validity". As such, the court should apply the law of where the assets in the estate were situated in respect of immoveable assets and the law of the country of domicile in respect of moveable assets. Consequently, the court was invited to apply English law to the Deceased's property in England, and New Zealand law in respect of her moveable assets elsewhere.
However, Master Clark determined that the issue was in fact whether the Will could be construed widely enough to show that the Deceased intended to create a gift of her residuary estate on the terms of the original Trust.
Domicile and interpretation
Accordingly, the correct approach was to interpret the Will by applying the law of the Deceased's domicile at the date the Will was made. Master Clark noted that questions of construction or interpretation are governed by the system of law intended by the Will maker. Usually this was presumed to be the law of a person's domicile at the time the Will was made subject to contrary intention in the Will itself.
The court concluded that the Deceased's domicile remained New Zealand and, on considering advice from New Zealand counsel which took into account what the position would have been under other common law jurisdictions, Master Clark found that the residuary estate would be deemed to have been settled on the original terms of the Trust.
Summary
This case is a reminder to practitioners of the purpose of applications under s.48 Administration of Justice Act 1985 and when these are appropriate.
It is also a helpful summary of the differences between material / essential validity and interpretation cases as well as the correct approach in determining the system of laws to apply when interpreting a Will.
This article has been prepared for information purposes only and is not a substitute for legal advice. If you have any questions relating to this case or how to interpret a Will, please contact solicitor William Coon.
