Analysis
The claimant and the deceased, who both originated from New Zealand, were married. They lived in London from 2006-10 and in Dubai from 2010-15, returning to London before the deceased’s death in 2019.
In 2014, the claimant and the deceased created a discretionary trust under the laws of New Zealand, with New Zealand being the initial forum of administration (the trust). The beneficiaries included the claimant and the deceased, their future issue and organisations that were deemed to be charitable under New Zealand law. The trust was established to hold property intended to be purchased in New Zealand, but no purchases were made.
In 2015, while living in Dubai, the deceased made a will (the will), instructing her New Zealand lawyers that she was not domiciled in New Zealand for tax purposes. Clause 7(b)(i) of the will directed the claimant, as executor, to pay the deceased’s net residuary estate to the trust.
In 2016, the claimant and the deceased wound up the trust such that at the date of the deceased’s death the trust was defunct.
The defendant, who was born in 2016 after the trust was wound up, was the infant child of the claimant and the deceased, and was represented by her litigation friend.
The claimant made an application pursuant to s48 of the Administration of Justice Act 1985 seeking an order that the claimant be given permission to distribute the deceased’s estate on the basis that, as a matter of construction, the will settled the residuary estate on the trustees of the trust on the terms of the trust notwithstanding the trust was defunct.
Counsel for the claimant and counsel for the defendant had given opinions supporting this interpretation, viz, as a matter of English law, clause 7(b) of the will remained effective in that a separate trust was created on the deceased’s death incorporating the terms of the trust. Counsel from New Zealand indicated that the High Court of New Zealand would interpret clause 7(b) as meaning that the residue fell into a testamentary trust on the same terms as the trust.
Held:
Law to be applied to interpretation of the will is the law of the deceased’s domicile at the date of the will
The central issue in the proceedings was of interpretation, and in particular whether clause 7(b) of the will, from which it was clear that the deceased intended to give her residuary estate to the trustee(s) of the trust, could be construed to show an intention to create a trust on the same terms of the defunct trust: the issue did not concern the material or essential validity of the will.
Questions of interpretation are determined by the system of law intended by the testator. The law presumed the applicable system of law to be the domicile of the testator at the time the will was made, unless a contrary intention appeared from the will. The rule applied to immovable property (Philipson-Stow v IRC [1961] followed), as reinforced by s4 of the Wills Act 1963, which provides that the construction of a will shall not be altered by reason of any change in the testator’s domicile after execution (paras [32]-[39]).
Deceased’s domicile at the date of the making of the will was New Zealand
The question of domicile was a mixed question of law and fact. The deceased’s domicile of origin was New Zealand, where she grew up and was educated. Both the UK and Dubai were potential candidates for a later acquired domicile of choice if it could be shown, respectively, that the deceased lived there and intended to live there permanently or indefinitely.
Although the deceased had described the claimant and herself as non-domiciled in New Zealand for tax reasons, the deceased had married the claimant, who was born in New Zealand and was a New Zealand citizen. The deceased had lived in the UK and Dubai for the deceased’s work. The deceased’s right to live and work in the UK was granted by a sponsorship visa meaning that she did not have a permanent right to remain. The deceased retained and exercised a right to vote in New Zealand. The claimant’s evidence was that he and the deceased considered New Zealand their home and intended to return there.
Accordingly, the deceased had no intention to reside permanently in Dubai, where her only connection was time-limited employment. Although the deceased had purchased a family home in London in her name after the will was made, at the time the will was made she had not been resident in the UK for five years, and it could not be concluded that the deceased had the requisite intention to permanently or indefinitely remain in England (paras [40]-[53]).
New Zealand law to be applied
The court accepted the affidavit of a New Zealand lawyer as expert evidence that, although there is no New Zealand case law for the finding of a testamentary trust on the terms of an inter vivos trust where the testator has specifically referred to an identifiable trust in their last will, the New Zealand High Court would be guided by judicial support in Canada and the UK. Further, (as under English law) the New Zealand High Court would apply the three certainties required for a valid trust, and find them present (paras [73]-[76]).
Section 48(1)(b) AJA 1985 not made out and the claim would fail in its current form: court indicated it would exercise its discretion to permit amendments to claim form to seek appropriate declarations and make an order in those terms
Pursuant to s48 AJA 1985, in an appropriate case, the court may authorise action to be taken on a question of construction of a will or trust without hearing argument, if supported by the written opinion of a person with a ten-year High Court qualification. In this case, although remediable, there was no evidence of counsel’s standing for the purpose of s48, and the condition in s48(1)(b) was not met. The court was prepared to exercise its discretion to permit amendments to the claim form seeking declarations that New Zealand law is applicable to the construction of the will, and that the deceased’s estate is held on testamentary trust to be distributed in accordance with the directions set out in the will incorporating the terms of the trust and to make an order on that basis (paras [77]-[79]).
JUDGMENT MASTER CLARK: [1] This is an application (made by Part 8 claim) under s48 of the Administration of Justice Act 1985 (‘AJA 1985’) in respect of the will dated 15 February 2015 (‘the Will’) of Katherine Clarke. Parties [2] The claimant, James Clarke-Sullivan, is Katherine’s widower and the executor of the Will. The defendant, …Continue reading "Clarke-Sullivan v Clarke-Sullivan [2021] WTLR 109"