New South Wales Supreme Court CITATION : Narsi v Bhindi; estate of Kalyanji [2008] NSWSC 1160 HEARING DATE(S) : 15/10/08 JUDGMENT DATE : 15 October 2008 JURISDICTION : Equity JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 15 October 2008 DECISION : See para 58 of judgment. CATCHWORDS : WILLS AND PROBATE – informal wills – testator did not sign in the presence of both witnesses – clear that document was intended to operate as a will and embodied the testamentary intentions of the deceased - WILLS AND PROBATE – rectification – clause distributing corpus was removed by testator in preparing a new will without legal advice – clear evidence that testator intended corpus to pass in the same proportions as income – clear evidence that testator intended to remove period postponing distributions of capital stipulated in previous wills – will rectified LEGISLATION CITED : Wills, Probate and Administration Act 1898 (NSW) Evidence Act 1995 (NSW) CASES CITED : Rawack v Spicer [2002] NSWSC 849 Ramesh Narsi & 1 Or PARTIES : v Dhanesh Bhindi & 6 Ors; the estate of Prabhudas Bhindi Kalyanji FILE NUMBER(S) : SC 118838/07 COUNSEL : Plaintiffs: M Lawson Defendants: J Xenos (sol'r) SOLICITORS : Plaintiffs: Redmond Hale Simpson Solicitors Defendants: Xenos Lawyers IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Wednesday, 15 October 2008 118838/07 Ramesh Narsi & 1 Or v Dhanesh Bhindi & 6 Ors; the estate of Prabhudas Bhindi Kalyanji JUDGMENT 1 HIS HONOUR: Mr Prabhudas Kalyanji Bhindi died on 12 September 2006 aged 83. The deceased left an estate valued for probate purposes of $3,635,650.95. He had seven children. In 2006 their ages ranged from about 34 to about 57. Between 1987 and 2004, the deceased made at least 13 wills. The last three were made in 1999, 2002 and 2004. The 2002 will has not been located although it is clear from unchallenged evidence from a Ms Proops that such a document existed. A signed copy of the 2004 will has not been produced, but again it is clear from Ms Proops' evidence that on 21 May 2004 the deceased made a will in terms of the unsigned document which has been produced. 2 The plaintiff seeks first a declaration that the document dated 9 February 2006 purporting to be the last will and testament of the deceased was intended by the deceased to constitute his will within the meaning of s 18A of the Wills, Probate and Administration Act 1898 (NSW), secondly, an order pursuant to s 29A of the Act rectifying the will to provide for the distribution of the corpus of the estate, and thirdly a grant of probate in solemn form of the document to be declared to be a will as rectified. 3 The facts are not in dispute. 4 All of the wills between 1987 and 2004 follow a similar pattern whilst varying considerably in detail as to the disposition of the estate. The pattern of the wills was that after appointing executors and trustees, the deceased provided that, "pending the date of distribution as hereinafter stated" income of the residuary estate was to be distributed to named children in specified proportions. 5 In some wills, provision was also made for a proportion of income of the estate to be paid to the "PK Bhindi Trust" or to charity. 6 The wills then provided that the date of final distribution was to be a certain period after the date of the testator's death, or such extension thereof, as the trustees might in their discretion decide upon, whereupon the residue of the estate was to be devised in the same proportion as income was distributed in the earlier clause. 7 The period for which distribution of the estate was to be delayed varied from will to will. In earlier wills it was as long as 25 years. In the 1999 and 2004 wills it was a period of ten years. The proportions of the income and corpus which each child was to receive varied from will to will. In some wills some children were omitted entirely. In the case of the first defendant, Dhanesh Bhindi, the proportion of the estate which he was to receive varied from will to will. 8 In the deceased's will of February 1987 he was not named as a beneficiary at all. Nor was he named as a beneficiary in a later 1987 will. In a will made in 1992 he was to receive 12½ percent of income and accordingly of capital at the date of final distribution. In 1993 his share was increased to 15 percent. In 1994 his share, together with that of one of his sisters, was increased to 25 percent. In the will made in 1995 his share was 23 percent. In a later will made in 1995 his share was 30 percent. In a will made in 1997 it was 20 percent and in a will made in 1999 it was 40 percent. In the 2004 will the income and capital of the estate was distributed as follows: Shobha: 15 percent Dhanesh: 5 percent Nirupa: 15 percent Malti: 15 percent Sujata: 15 percent Sulaksha: 15 percent Ajita: 5 percent 9 The remaining 15 per cent of income and corpus was left to the PK Bhindi Trust or such other charity as the trustees might decide upon. 10 The 2004 will named four persons as executors and trustees. One of those persons was Mr Ramesh Narsi and he is also named as an executor and trustee of the document signed on 9 February 2006 which is sought to be admitted to probate. 11 In November or December 2005, Mr Narsi had a conversation with the deceased in which he said words to the effect: " Why are you making your beneficiaries wait 10 years before they receive the principal? Your daughter will be 70 before she gets any money. Is that what you really want? " The deceased replied: " It was to stop my children spending it the day after I'm gone. But I don't really want that, no ." Mr Narsi said, " Will you change that portion of your will ?" The deceased replied with words to the effect: " I will change that next time I update my will ." 12 The deceased's will of 2004 had been typed by a business called the St George Business Centre. It offers word processing, typing and secretarial services to the public. The 2004 will was signed by the deceased in the presence of persons employed in that business who witnessed that will. 13 On 9 February 2006, the deceased again attended at the offices of the St George Business Centre and presented Ms Proops with the 2004 will on which he had made a number of handwritten changes. The document he presented is not in evidence and I assume is not available, but the changes can be inferred from the differences between the 2004 will and the document which was typed by the St George Business Centre on 9 February 2006. 14 The document typed on 9 February 2006 is said to be the last will and testament of the deceased. Clause 1 provides for the revocations of former wills and testamentary dispositions. By clause 2, Mr Narsi, the deceased's son-in-law, and a Mr Singh of Suva are appointed executors and trustees of the will. Mr Singh died on 10 November 2007. Clause 3 provided: " I GIVE DEVISE AND BEQUEATH all my estate both real and personal of whatsoever nature and kind and wheresoever situate unto my trustees UPON TRUST to sell call in and convert the same into money with power in their absolute discretion to postpone for such time or times as they shall think fit the sale calling in and conversion of the whole or any part or parts thereof and after payment of my just debts funeral and testamentary expenses (including all estate and other duties payable in respect of my estate) (whether actual or notional) TO HOLD the same UPON TRUST : (a) Pending the date of distribution as hereinafter stated at their absolute discretion to pay out of income of the residuary estate to my children or the survivors or survivor of them for their use and benefit as follows: SHOBHA 17% DHANESH 5% NIRUPA 17% MALTI 17% SUJATA 17% SULAKSHA 17% AJITA 5% ... " 15 The remaining five percent was left to the PK Bhindi Trust or such other charity as the trustees might select. 16 The relevant differences between this part of clause 3(a) between the 2004 will and the 2006 document was as to the proportions of incomes the beneficiaries would receive. The proportion of income left to the PK Bhindi Trust or some other charity was reduced from 15 percent to five percent. That ten percent share was distributed equally between Shobha, Nirupa, Malti, Sujata and Sulaksha. The shares of Dhanesh and Ajita were unchanged. 17 The 2006 will then contained an authority to the trustees which was unchanged from the 2004 will authorising them to withhold income for the upkeep, maintenance, support and/or financial benefit or assistance of the deceased's children. It was then provided: " As at the date of final distribution however, as hereinafter stated any balance of such income not expended for their such benefit shall be paid over to them absolutely should my trustees so consider in their absolute discretion. " 18 It is clear from these words in the document that there was to be a "date of distribution" or "date of final distribution". Those words were in the 2004 and earlier wills. Clause 3(b) of the 2004 will had provided: " The date of final distribution shall be ten (10) years (or such extension thereof as to be decided by my trustees in their absolute discretion) after the date of my death when the residue of my estate will be devised in the same proportion as income distribution mentioned in (a) above. " 19 That clause was deleted in its entirety in the 2006 document. It can be inferred as one of the handwritten changes made by the deceased he struck out the clause. 20 It follows that the 2006 document expressed to be a will makes no provision for the disposition of the corpus of the residuary estate. The 2006 document confers various powers on the trustees by clause 4. Clause 5 provides: " I DIRECT that should there be a lapsed share of a beneficiary or beneficiaries herein or of residue of my estate so that there could be an intestacy as to that share such share shall be primarily applied in or towards the payment of debts funeral and testamentary expenses and pecuniary legacies ... and as to the balance of such share I GIVE DEVISE AND BEQUEATH the same to my said children or to survivors or survivor of them in equal shares absolutely. " 21 Mr Lawson of counsel who appears for the plaintiff submits that this clause shows that it was intended that the will contain provisions for the shares each beneficiary was to receive of the residue of the estate and, if anything, supports the claim for rectification. He also submits that, even if it provides for a gift over of the residue to the children in equal shares, that is not an answer to the claim for rectification to effect what he submits is the intestator's intention that the children should share the residue in the same proportions as they are entitled to income. 22 Mr Xenos for the first defendant submits that the effect of the clause is the residue is left to the children in equal shares absolutely; that there is no intestacy as to residue; and that the evidence does not establish that the deceased intended the residue to be left in different proportions. 23 Clause 6 of the document confers additional powers on the trustees. The document is signed and dated by the deceased. The typed date of 2004 is amended to 2006. There is an execution clause in the usual form which states that the attesting witnesses witnessed the signature of the deceased at the same time the document was signed. The document is signed by Ms Proops and by a Dr Wimalaratne as attesting witnesses. 24 Whilst the document purports to have been signed by the testator in the presence of both witnesses, and whilst it states that the witnesses subscribed their names as attesting witness, in the sight and presence of each other, the evidence establishes that that was not the fact. According to Ms Proops the testator signed the document in her presence and she witnessed it. She says that another person was present at the time and she does not recall whether that person also signed the document at that time. 25 Other evidence establishes that the person who was present at the time when the document was provided by Ms Proops to the deceased, having been retyped by the St George Business Centre, was Mr Narsi. 26 It is clear from his evidence and that of Dr Wimalaratne's, that they took the document to Dr Wimalaratne's surgery, that the deceased signed it in Dr Wimalaratne's surgery and Dr Wimalaratne witnessed the deceased's signature. 27 According to Mr Narsi, the document was then taken back to Ms Proops' business premises. She was asked to witness the will and to initial the change to the date which had been picked up by Dr Wimalaratne as being the wrong typed date. 28 Mr Narsi deposes that Ms Proops then signed the last page of the document and initialled each of the other pages. 29 The plaintiff accepts that the document was not executed in the manner prescribed by s 7 of the Wills, Probate and Administration Act. However, the document purports to embody the testamentary intentions of the deceased and it is clear that the deceased intended the document to constitute his will. 30 Accordingly, pursuant to s 18A of the Wills, Probate and Administration Act, the document constitutes the deceased's will and I will so declare. Mr Xenos for the first defendant did not contend for the contrary. No other defendant appeared. 31 The question then is whether the will should be rectified. In an amended summons the plaintiff sought an order that the will be rectified by re-inserting the clause which had been clause 3(b) of the 2004 will. In other words, by providing for a date of final distribution of ten years after the deceased's death at which time the estate would be devised in the same proportions as the income distribution. 32 However, that was not the position contended for by counsel for the plaintiff and it is clear from Mr Narsi's evidence of his conversation with the deceased in November or December 2005, and from the fact that the deceased must have struck that clause out of the 2004 will when he had the document re-typed in 2006, that the deceased did not intend that distribution should be delayed for at least ten years. 33 The order sought by the plaintiff was that the will be rectified by inserting the following words "the final distribution of the capital falling into my residuary estate is to be devised in the same proportion as income distribution in 3(a) above." 34 Section 29A provides: " 29A Power of the Court to rectify wills (1) If the Court is satisfied that a will is so expressed that it fails to carry out the testator's intentions, it may order that the will be rectified so as to carry out the testator's intention. (2) An application for an order under this section shall not be made after the expiration of the period of 18 months after the death of the testator, except as provided by subsection (3). (3) The Court may grant leave to make an application for an order under this section after the expiration of the 18-month period if the Court is satisfied that sufficient cause is shown for the failure to make the application within that period. ... " 35 A claim for rectification was first made in an amended summons filed on 7 May 2008, which is more than 18 months after the deceased's death. The plaintiff had filed a notice of motion on 20 February 2008, before the expiration of the 18-month period, seeking leave to amend to include an order under s 29A rectifying the will in the terms set out earlier in these reasons. The order was sought purportedly pursuant to r 19.1 of the Uniform Civil Procedure Rules. On 28 April 2008, the Registrar, by consent, made an order as sought in the notice of motion. Only the first defendant had appeared. The Registrar did not purport to exercise power to grant leave pursuant to s 29A(3). 36 No objection has been taken on behalf of the first defendant in respect of the time at which the application for an order for rectification has been made, but as the seventh defendant's interests are also affected I need to consider for myself whether sufficient cause has been shown for the failure to make the application within the 18-month period after the deceased's death. 37 Mr Lawson, who has appeared for the plaintiff since 2007, advises me, and I accept, that until the plaintiff disclosed to his legal advisers the evidence as to the terms of his conversation with the deceased in November or December 2005, set out earlier in these reasons, the plaintiff's legal advisers did not consider that there was a proper basis for seeking rectification. 38 The seventh defendant has been served with the amended summons and has not sought to appear. In the circumstances, I am satisfied that sufficient cause has been shown for the failure to make application within the 18-month period. An application under the section was foreshadowed by the notice of motion which was filed within the 18-month period. The further amendment made today better reflects the state of the evidence and no relevant prejudice arises as a result of that application being made now rather than in March this year. 39 In considering what is sufficient cause within the meaning of s 29A(3), the interests of the beneficiaries under the will cannot be ignored. It would not be just to the beneficiaries, considering them as a whole, for too strict a view to be taken as to what is a sufficient cause for the purpose of the section in the circumstances of this case. I will therefore grant leave under s 29A(3). 40 It was submitted by Mr Xenos, for the first defendant, that the deceased clearly wished to vary the terms of his previous will before it was accepted. He also submitted that it was inconceivable that the deceased would wish effectively to exclude the first defendant from participating in a distribution which was not at least equal to the distributions made to his children generally. 41 It was said from the bar table, but not contradicted by the plaintiff, that the first defendant had lived with the deceased as his carer from about 2000. However, I do not accept that it is inconceivable that the defendant should wish effectively to exclude the first defendant from participating in a distribution which was at least equal. By the 2004 will the deceased had done exactly that. 42 Moreover, the clear evidence in relation to the distribution of income in clause 3(a) of his 2006 will shows that he intended that the first defendant, as well as the seventh defendant, should not share equally in the income of the estate. It is therefore perfectly conceivable that he should intend that they not share at least equally in the capital. 43 The principal submission made for the first defendant was that the deceased clearly intended to exclude the whole of what had been clause 3(b) of the previous will, and that there was not clear and convincing proof that in so doing he intended only to delete the provision that distribution would not be made for at least ten years after his death. 44 Given that the clause which he intended to delete also provided for capital to be distributed in the same proportions as income, then, so it was submitted, it could be inferred that the deceased intended also to delete that latter provision. At least, it was submitted, there was not clear and convincing proof to the contrary. 45 In Rawack v Spicer [2002] NSWSC 849, Campbell J (as his Honour then was) set out at [21]-[31] the principles upon which the power to order rectification under s 29A should be exercised. Both parties accepted his Honour's judgment as an accurate statement of the law, as do I. The Court must be satisfied not only that the will is so expressed that it fails to carry out the testator's intentions, but it must also be satisfied what the testator intended concerning the part of the will to be rectified. 46 In the circumstances of the present case, for the plaintiff to be entitled to the order he seeks, the Court would have to be satisfied that the testator intended that the capital of the estate should be distributed in the same proportions as income. There must be clear proof of the testator's intention, but that does not mean that the standard of proof is anything other than the balance of probabilities having regard to the matters in s 140 of the Evidence Act 1995 (NSW). 47 Clause 5 of the will quoted earlier in these reasons is relevant in determining whether there is sufficiently clear proof of the testator's intentions. If the effect of that clause is that capital is to be distributed between the children equally, and if it could be inferred that the deceased understood that was the effect of the clause, or even if it could be inferred that that was the deceased's understanding, whether or not that was the true effect of the clause, then there would be a stronger reason to think that the deceased may have intended capital to be distributed differently than income. 48 A clause in the same terms as clause 5 was included in each of the deceased's wills from 1992. In my view, the clause is not apt to deal with the capital of the estate in the absence of any clause disposing of the capital. 49 In terms, it deals with a lapsed share of a beneficiary or beneficiaries or a lapsed share of residue and provides for such share, or balance thereof after the payment of debts from that share, to be given to the children or the survivors of them in equal shares absolutely. 50 The clause assumes that the residue of the estate has been given in particular shares to named beneficiaries as, of course, was entirely appropriate in the case of the earlier wills where such provision was made. 51 I do not think it can be inferred that the deceased formed a view that clause 5 would dispose of the residue of the estate between the children equally. Indeed, given his evident decision to delete the clause delaying the time for distribution, it would not make sense for him to intend to leave the capital to the children equally, and to provide for unequal distributions of income for the comparatively short time before distribution should take effect. 52 There is no rational explanation as to why the deceased might intend that the residue should pass on an intestacy. The clear inference in my view is that his deletion of the entirety of what was previously clause 3(b) was solely due to his intention to delete the provision for the deferral of the date of distribution. 53 In each of the previous wills, he had expressed and given effect to his intention that capital should be distributed in the same proportion as income was to be distributed. 54 There are two minor qualifications to that, but neither affects the position. One is that in some wills, provision was made for payment of income for a period of years to a person whom the deceased called his house-girl. The second is that in some earlier wills, a life estate was given to one daughter of a particular property in Hurstville. Neither of those matters affects the position. 55 There is no evidence that the deceased expressed any intention to any person that he no longer intended that capital should be distributed in the same proportions as income. Had he had any such different intention it could be expected that he would have given effect to it by an express provision in the will. 56 The last will was not professionally drawn. In my view, it contains a clear mistake having regard to the proper construction of clause 5. Whilst clear proof is still required as to the testator's actual intentions, this is not a case in which the Court is asked to rectify a will which is apparently complete and which has been prepared by a solicitor, or, indeed, after the testator has obtained legal advice in relation to the document. 57 The fact that the testator wrote the will at the offices of the St George Business Centre and that he told Dr Wimalaratne that he was aware of what he was doing does not mean that he appreciated that by deleting previous clause 3(b) he was deleting the critical clause disposing of the capital of the estate. I think there is clear proof that he did not understand that was the effect of the deletion of the clause, and his previously expressed intention that capital should be distributed in the same proportions as income continued. 58 For these reasons I make the following orders and declarations: 1. declare that the document dated 9 February 2006 and purporting to be the "last will and testament" of the late Prabhudas Kalyanji Bhindi was intended by the deceased to constitute his will within the meaning of s 18(A) of the Wills, Probate and Administration Act 1898 (NSW); 2. grant leave pursuant to s 29A(3) for the plaintiff to apply for an order under that section after the expiration of the period of 18 months after the death of the deceased; 3. order pursuant to s 29A(1) that the last will and testament of the late Prabhudas Kalyanji Bhindi, being the document dated 9 February 2006, the subject of declaration (1), be rectified by inserting the following words at the end of para 3(a): " The final distribution of the capital falling into my residual estate is to be devised in the same proportion as income distribution in 3(a) above. "; 4. order that probate of the last will and testament of the deceased, being the document the subject of declaration (1) as rectified, be granted to Ramesh Narsi of 11 Glenfern Place, Gymea, New South Wales; 5. the application be remitted to the Registrar to complete the grant; 6. order that the plaintiff's costs of the proceedings be paid out of the estate on the indemnity basis and that the first defendant's costs be paid out of the estate on the party and party basis; 7. the exhibits may be returned after 28 days. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.