RE ESTATE OF ANDREWS [2021] NZHC 3179

re estate of ANDREWS [2021] NZHC 3179 [29 November 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-1023[2021] NZHC 3179UNDER Section 140 of the Trusts Act 2019IN THE MATTER of the estate of ROBYN MARGARETANDREWSANDIN THE MATTER of an application by EVAN WILLIAMANDREWS, RICHARD JOHN ANDREWSand DAVID BRUCE BELLApplicantsHearing: 10 November 2021Appearances: A Sorrell and A Borchardt for the ApplicantsD M O'Neill for Stephen AndrewsB Carter for Evan and Richard Andrews in their personal capacityJudgment: 29 November 2021JUDGMENT OF GORDON JThis judgment was delivered by meon 29 November 2021 at 2 pm, pursuant tor 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors: Cambridge Law, CambridgeBell Associates, AucklandCounsel: D M O'Neill, HamiltonA Sorrell, AucklandB Carter, Auckland[1] This proceeding concerns the interpretation of a will of Robyn Andrews,executed on 22 March 2017 (the Will). In the Will, Mrs Andrews left the residue ofher estate to be divided equally between her three sons, Richard Andrews,Stephen Andrews and Evan Andrews,1 albeit in Stephen's case through a trust namedthe Andrews-Runnymede Trust (the Trust). The Will also provided that any loansMrs Andrews had made to each of the three sons and which were still outstandingshould be brought to account and charged against the share of each son in the residuaryestate.[2] The administration of the estate is largely completed. What remains is anaccounting as between the estate and beneficiaries. An accounting firm has beenengaged by the executors and trustees to calculate the amount due to the estate byRichard and Stephen (Evan has repaid his loan).[3] Stephen was bankrupted shortly before his mother signed the Will. He wasdischarged from bankruptcy three months before his mother died. He contends thatany debts provable in his bankruptcy cannot be brought into account in calculating theamount the Trust will receive as part of the residue because a bankrupt's debts areextinguished on discharge, whether proven in the bankruptcy or not.2 The executorsand trustees of Mrs Andrews' estate, Richard, Evan and David Bell, Mrs Andrews'former solicitor, take a different view. They say that the loans to Stephen and entitiesassociated with him are required to be brought into account.[4] The executors and trustees, as applicants, seek directions on the interpretationof the Will and, in particular, a direction framed as follows:Directions as to the interpretation of the will dated 22 March 2017 and inparticular whether bankruptcy of Stephen Robert Andrews ("Stephen") on15 March 2017 renders loans due by Stephen as at that date no longer correctlybrought to account in calculating the net amount due to him from the Estatepursuant to the will of Robyn Margaret Andrews dated 22 March 2017.[5] Alternatively, the applicants seek a correction of the Will by inserting thewords "irrespective of whether the capital or interest of any loans remain due in law1 I will refer to each of the sons by their first names to avoid confusion. I intend no disrespect bydoing so.2 Insolvency Act 2006, s 304.other than as a consequence of my gift or their repayment" in the relevant clause inthe Will.[6] Richard and Evan, in their personal capacities as beneficiaries of their mother'sestate, filed an appearance reserving their rights. I excused the appearance of theircounsel, Mr Carter.Background[7] A brief background is all that is necessary at this point. I will set out furthercontext if I get to the point where I am able to consider the relevant extrinsic evidence,which is at step two of the applicants' case.[8] As noted, Mrs Andrews executed the Will on 22 March 2017. Stephen wasbankrupted on 15 March 2017, seven days before Mrs Andrews executed the Will.The evidence for the applicants is that Mrs Andrews was not aware of the fact of thebankruptcy when she executed the Will. Mr Bell's evidence is that Mrs Andrews cameto see him on 26 April 2017. At that meeting she had with her a letter she had receivedfrom the Official Assignee dated 19 April 2017 and the Insolvency Detail Reportenclosed with the letter. Mrs Andrews is listed as a "potential creditor" in Stephen'sestate. The report records she has a security interest in the sum of $352,000.00.[9] Stephen was discharged from bankruptcy on 15 March 2020. Mrs Andrewsdied on 15 June 2020. The Will was admitted to probate on 21 August 2020.The lawWills Act 2007[10] The High Court has jurisdiction under ss 31 and 32 of the Wills Act 2007 (theAct) when there are interpretation issues with a will or a will does not reflect a will-maker's intentions.3 As the Court of Appeal noted in Wilson v Davidson, these twosections are based on common law jurisprudence regarding the interpretation and3 Wilson v Davidson [2017] NZCA 468 at [10].rectification of wills and earlier similar reforms in Australia and the United Kingdom.4Prior to the Act, the position in New Zealand was summarised in Re Jensen:5 The overriding objective is to give effect to the intentions of the testator.All canons of construction must be subservient to that end. The testator'sintentions are to be gleaned from an objective appraisal of the testamentarydocuments viewed as a whole but in cases of doubt the wording is to beinterpreted in the context of those facts which must have been in thecontemplation of the testator.[11] Where the wording of the will is not meaningless, ambiguous or uncertain, thecourt will give effect to the plain meaning, even if the will-maker may have had adifferent subjective intention.6 If a will-maker has formed a testamentary intentionbased on a mistake of fact, there is no power to rectify the will.7[12] This Court's first task is, therefore, to construe the words of the Will and itsinternal context. If there is ambiguity or uncertainty in the words of the Will, or if thewords are meaningless, the Court may move to s 32 of the Act.[13] Under the common law, while the words of the Will were central, evidence wasadmissible that could shed light on the view from the will-maker's "armchair".8Section 32 of the Act is a statutory reflection of the armchair principle.9 Section 32provides:32 External evidence(1) This section applies when words used in a will make the will, or partof it,—(a) meaningless; or(b) ambiguous on its face; or(c) uncertain on its face; or(d) ambiguous in the light of the surrounding circumstances; or4 At [10].5 Re Jensen [1992] 2 NZLR 506 (HC) at 510.6 Sutton v Public Trust [2015] NZHC 1844 at [35]–[41].7 Re McMillan HC Invercargill CP No 7/00, 5 April 2001 at [16].8 Perrin v Morgan [1943] AC 399 (PC) at 420 per Lord Romer; and Re Beckbessinger [1993]2 NZLR 362 (HC) at 367.9 Wilson v Davidson, above n 3, at [12], citing Law Commission Succession Law Wills Reforms(NZLC MP 2, 1996) at [235].(e) uncertain in the light of the surrounding circumstances.(2) The High Court may use external evidence to interpret the words inthe will that make the will or part meaningless, ambiguous, oruncertain.(3) External evidence includes evidence of the will-maker's testamentaryintentions.(4) The court may not use the will-maker's testamentary intentions assurrounding circumstances under subsection (1)(d) or (e).[14] In discussing s 32, the Court of Appeal in Wilson v Davidson said:10 Under s 32 external evidence of background circumstances can be used tointerpret words in the will that make the will or part of it meaningless,ambiguous or uncertain. But s 32 goes further than the rules applying to theinterpretation of contracts. The ordinary principles of contractual constructionprohibit the admission of evidence as to a contracting party's actual intentions,and prior to the Act, this was also the approach to wills. Section 32(3)explicitly goes further in permitting evidence of the will-maker's testamentaryintentions to be considered. However, evidence of a will-maker's wish tobenefit a person is not evidence of surrounding circumstances for the purposesof identifying uncertainty or ambiguity under s 32(1)(d) and (e). It isadmissible, rather, as evidence to assist in interpreting a will already found tobe uncertain or ambiguous.(citations omitted)[15] As is apparent from s 32 and the above quoted extract, before a Court mayresort to extrinsic evidence of the will-maker's testamentary intentions, a will mustfirst be found to be meaningless, uncertain or ambiguous.[16] Section 31 of the Act now gives the High Court the power to correct errors ina will if the Court is satisfied that the will does not carry out the will-maker'sintentions. Section 31 provides:31 Correction(1) This section applies when the High Court is satisfied that a will doesnot carry out the will-maker's intentions because it—(a) contains a clerical error; or(b) does not give effect to the will-maker's instructions.10 Wilson v Davidson, above n 3, at [18].(2) The court may make an order correcting the will to carry out the will-maker's intentions.[17] Generally s 31 applies when the words of a will, even applying s 32, cannoteffect a remedy that reflects the will-maker's intentions.11 In discussing s 31, the Courtof Appeal in Wilson v Davidson said:12[33] There is an overlap in s 31(1)(a) and (b) of the Act. A clerical errorthat a party seeks to correct will generally, as well as being an error, not giveeffect to the will-maker's intentions, and thus the correction of clerical errorswill generally be available on the grounds set out in both s 31(1)(a) and (b).However not every failure to give effect to the will-maker's instructions willbe a clerical error in the sense of a mistake made in copying or writing out adocument. (citation omitted).[18] In this case, the applicants' position is that the relevant provision is s 31(1)(b),if it is necessary for the Court to rectify the Will.Insolvency Act 2006[19] The case for Stephen rests on s 304(1) of the Insolvency Act 2006. It provides:304 Debts from which bankrupt is released on discharge(1) On discharge, the bankrupt is released from all debts provable in thebankruptcy except those listed in subsection (2).[20] Subsection (2) is not relevant for present purposes.[21] Section 231 defines "provable debt" as follows:231 Meaning of provable debt(1) A provable debt is a debt or liability that a creditor of the bankruptmay prove in the bankruptcy.(2) A creditor's claim form is the document that a creditor submits to theAssignee for the purpose of proving the debt.(3) A debt is proved when it is admitted by the Assignee.11 Wilson v Davidson, above n 3, at [32].12 At [33].[22] Section 232 in turn provides:232 What debts are provable debts(1) A provable debt is a debt or liability that the bankrupt owes—(a) at the time of adjudication; or(b) after adjudication but before discharge, by reason of anobligation incurred by the bankrupt before adjudication.(2) A fine, penalty, sentence of reparation, or other order for the paymentof money that has been made following any conviction or order madeunder section 106 of the Sentencing Act 2002—(a) is not a provable debt; and(b) is not discharged when the bankrupt is discharged frombankruptcy.Applicants' position[23] The applicants advance their case on three alternative bases:(a) The plain meaning of the Will can be ascertained from the relevantwords in the Will and its internal context. The proper construction ofthe words of the Will does not require the executors and trustees to takeStephen's bankruptcy into account. In other words, the loansMrs Andrews made to Stephen and to entities associated with him arerequired to be accounted for;(b) If there is any ambiguity or uncertainty, the Court may consider therelevant factual matrix to ascertain the intention of the testatrix unders 32 of the Act. They say the extrinsic evidence supports theirinterpretation that Stephen's bankruptcy is not required to be taken intoaccount; and(c) If Mrs Andrews' intention, evidenced from the extrinsic evidence, isnot expressed in the words of the Will, the Will should be correctedunder s 31 of the Act by the addition of the words referred to in [5]above.Stephen's position[24] Stephen says:(a) First, Mrs Andrews knew Stephen was bankrupt and took no steps toupdate her Will;(b) She had established a trust to protect Stephen's inheritance fromcreditors, yet the estate is attempting to secure repayment of the loansas a creditor; and(c) The loans referred to in the Will no longer exist by virtue of Stephen'sdischarge from bankruptcy.What is the plain meaning of the Will?[25] I first set out the relevant provisions of the Will.Clause 3[26] Richard, Evan and David Bell, are appointed the executors and trustees of theWill.Clauses 4 and 5[27] Specific items and sums of money are given to identified individuals (notincluding her three sons) and organisations.Clause 6[28] This clause contains directions regarding Mrs Andrews' pet dog and cat.Clause 7[29] Remaining personal and household items are given to the trustees to divideamong Richard, Evan and Stephen as the trustees see fit.Clause 8[30] I set out this clause in full:8. At the date of this will, I am owed these loans by my sons or entitiesassociated with them:(a) Richard: a loan to R & J Andrews Livestock Limited on thesecurity of a registered second mortgage of the Onewheroproperty, the principal balance of this loan as at 28 February2017 being $115,000.00;(b) Stephen:(i) a loan to NZNet Internet Services Limited ("NZNet")(part of which was originally lent to BoltarDevelopments Limited), originally on the security ofa debenture or general security in respect of the assetsof that company, the principal balance of this loan asat 21 July 2012 being $340,534.09;(ii) a loan to the Stephen Andrews Family Trust,originally on the security of a registered secondmortgage of Unit C 1, 5 Douglas Alexander Parade,Albany, the principal balance of this loan as at 16 July2012 being $66,132.13;(iii) a loan to Stephen of $25,000.00 in or about 2009;(iv) a loan to Stephen of $8,000.00 on or about 12 October2011.(c) Evan: a loan to The Takatu Trust on the security of anunregistered second mortgage of the Rakino Avenue, Manly,Whangaparaoa property, the principal balance of this loan asat 28 February 2017 being $8,940.00.Clause 9[31] I also set this clause out in full:I direct my trustees to conduct an examination with suitable professionalassistance of loan documents and other records to establish as far asreasonably possible the amount outstanding (including unpaid interest, ifpayable) under each loan to Richard, Stephen or Evan or entities associatedwith each of them. However in the case of Stephen, the amount outstandingmust include (and is deemed to include for the purpose of this will) allprofessional costs I have incurred over the years in respect of loan defaultsand management, including but not limited to those of McDonald Vague,Victoria Toon and my own solicitors which I estimate to total about$100,000.00.Clauses 10 and 11[32] Richard, in cl 10 and Evan in cl 11 are gifted the loans referred to in cl 8 andany other loans not repaid. The loans are then to be taken into account in determiningtheir share of the residue. I set out cl 10, for Richard, in full:I give to Richard, if he is living at my death, the loans described against hisname in clause 8 and any other loans which I have made to him or entitiesassociated with him in my lifetime and which have not been repaid at mydeath. If Richard dies before me, his executors or administrators will have thebenefit of this gift. I direct my trustees to bring into account, and to chargeagainst the share of Richard in my residuary estate, the amount outstandingincluding unpaid interest, if payable, under each such loan. If Richard diesbefore me, the share of his children in my residuary estate must be similarlycharged.[33] Clause 11 for Evan is in identical terms.Clause 12[34] The advances and interest payable ascribed to Stephen or associated entitiesare similarly given to the Trust of which Stephen and his children are the primarydiscretionary beneficiaries. Clause 12 then continues in a similar way to cls 10 and 11for Richard and Evan. I set out cl 12 in full:I give to the trustees for the time being of the Andrews-Runnymede Trust, afamily trust under which the primary beneficiaries are Stephen and hischildren in the discretion of its trustees, and which I refer to in this will as the"Andrews-Runnymede Trust", the loans described against Stephen's name inclause 8 and any other loans which I have made to Stephen or entitiesassociated with him in my lifetime and which have not been repaid at mydeath. I direct my trustees to bring into account, and to charge against theshare of the Andrews-Runnymede Trust in my residuary estate, the amountoutstanding including unpaid interest, if payable, under each such loan and theprofessional costs described in clause 9.Clause 13[35] Clause 13 explains why Mrs Andrews established the Trust. It states:I declare that I established the Andrews-Runnymede Trust for the betterprotection of what otherwise would have been the "inheritance" of Stephenpersonally, or of his children if he is not living at my death. In the case of anybusiness failure or marriage or relationship breakdown or other adversecircumstances. I further declare that my concern about business failure hasproven correct as NZNet was put into liquidation in 2011 and I believe that itsliquidators or creditors may attempt to recover money from Stephen on mydeath in the belief that he has a personal inheritance from my estate.Clause 14[36] There is a reference to the Andrews-Douglas Trust established byMrs Andrews for her grandchildren's education. The trust no longer existed at thedate of Mrs Andrews' death.Clause 15[37] This clause contains a declaration that the Will was prepared free frominfluence from Richard and Evan. It reads:I declare that the provisions of this will are intended by me (and myself alonewithout influence from Richard or Evan) to reflect my wish to benefit Richard,Stephen and Evan equally and fairly as among them having regard to theirdifferent personal circumstances.Clause 18[38] Clause 18 is the operative clause. It reads as follows:I give all the rest of my real and personal property of whatever kind orwherever situated, including any property in respect of which I may have apower of appointment, to my trustees upon trust to pay my debts, funeral,testamentary and memorial expenses and all estate and other duties, whereverpayable, in respect both my actual and my notional estate and to divide thebalance ("my residuary estate") equally among RIchard [sic] of the first part,Evan of the second part, and the trustees for the time being of the Andrews-Runnymede Trust of the third part for those trustees to hold upon the trustscontained in the trust deed pertaining that trust as in addition to the property,if any, already subject to those trusts.Submissions[39] Mr Sorrell, for the applicants, submits that the Will, read as a whole, providesfor the residue to be distributed after deduction of relevant inter vivos advances. ForStephen, account is also to be taken of the professional costs Mrs Andrews incurred,in ascertaining the share for the Trust, as the receiving trust. Mr Sorrell submits thatonly by this means would Mrs Andrews' objective of adjusting for inequality in intervivos advances be achieved. The applicants make a distinction between "debt"involving legal enforceability and advances or loans made. They say the Will reflectsan accounting exercise focused on advances plus specified items (i.e. costs incurredby Mrs Andrews in relation to Stephen).[40] The argument Mr O'Neill makes for Stephen is a simple one. He says, byvirtue of s 304 of the Insolvency Act, as at 15 March 2020, the date of Stephen'sdischarge from bankruptcy, he was released from all debts provable in the bankruptcy.In other words, Mr O'Neill submits the loans to Stephen and the entities associatedwith him referred to in the Will no longer existed as at 15 March 2020. Mr O'Neillemphasises the principle that if the testamentary language is unambiguous anddiscloses no obvious error, the Court must give effect to the words of the Will as itstands.13 Mr O'Neill submits the words in the Will regarding the loans said to be dueby Stephen or his entities are not unambiguous or uncertain, nor are they meaningless.On discharge from bankruptcy Stephen did not owe any provable debt, which includedloans said to be payable to his mother and consequently his mother's estate.[41] Mr O'Neill submits that it must follow if a loan or debt does not exist, then itcannot be collected or taken into account in the calculation or division of the residuaryestate.Discussion[42] The Will refers to "loans". The opening words of cl 8 are "At the date of thiswill, I am owed these loans by my sons or entities associated with them." Then incl 12 there is a direction to the executors and trustees to bring into account and to"charge against the share of the Andrews-Runnymede Trust in my residuary estate "theamount outstanding including unpaid interest if payable under each such loan and theprofessional costs described in clause 9".[43] The use of the word "loans" might suggest that the amounts said to be owingunder cl 8 and any future amounts owing by Stephen were extinguished on hisdischarge from bankruptcy. Not only is there the use of the word "loans" but cl 12also refers to "the amount outstanding". Again those words are particular. OnMr O'Neill's argument there was no amount outstanding under the loans to Stephen13 Coleman v Chalklen [2016] NZHC 3178 at [18], citing Re Jensen, above n 5, at 507.on his discharge from bankruptcy. On their face, and read on their own, apart fromthe rest of the Will, the words of cls 8 and 12 are not uncertain or ambiguous and couldbe said to support the case for Stephen.[44] However, the words of a will must be read in the context of the will as a whole.It is necessary to consider the words of cl 15 as part of the internal context of the Will.I have set out that clause already, but repeat it here for ease of reference:I declare that the provisions of this will are intended by me (and myself alonewithout influence from Richard or Evan) to reflect my wish to benefit Richard,Stephen and Evan equally and fairly as among them having regard to theirdifferent personal circumstances.[45] Clause 15 makes it clear that the provisions of the Will are intended to reflectMrs Andrews' wish to benefit Richard, Evan and Stephen equally and fairly. Only byreading the words "loans" and "amount outstanding" as a proxy for inter vivos gifts(and not as debts legally due) will the three sons benefit equally and fairly. I considerit follows that in the accounting exercise the amounts of loans or advances to Stephenand/or his entities are to be taken into account in calculating the Trust's share of theresidue.[46] If the advances/loans made to Stephen and his entities are not taken intoaccount, Stephen will benefit in an unequal way, contrary to what is expressly said incl 15. Evan has paid back his loan which, as at the date of the Will, was $8,940.00.Richard will have his share of the residue adjusted by the balance of his loan which,at the date of the Will, was $115,000.00. If there is no accounting for the loans toStephen and his interests and they are not taken into account, there will be noaccounting for the sum of $439,666.00 provided by way of loans during his mother'slifetime. Clause 15 makes it clear that the provisions of the Will were to even thingsup between the three sons by taking into account inter vivos distributions by way ofloans. In other words, cls 8, 9 and 12, when read in the context of cl 15, contain adistribution formula by way of an accounting exercise. They do not refer to a "legallyenforceable" debt.[47] Clause 9 also provides some support for the interpretation of "amountoutstanding" as reflecting an accounting exercise rather than an amount outstandingthat is legally enforceable. That is because Mrs Andrews brings into account forStephen, as part of the "amount outstanding", costs that Mrs Andrews had incurred.Those costs, as expressed in cl 9, are clearly not legally enforceable debts owed byStephen.[48] I accept that on a plain reading of the Will in the context of the Will as a whole,the loans made by Mrs Andrews to Stephen and his interests are to be taken intoaccount in calculating the net amount due to the Trust from his mother's estate. Inother words, Stephen's discharge from bankruptcy on 15 March 2020, which meansStephen no longer owes any debts that were provable in his bankruptcy, is irrelevanton a plain reading of the words of the Will in their internal context.Interpretation involving extrinsic evidence (s 32)[49] In the event that I am wrong in my conclusion above and the wording of cl 15makes the words in cls 8, 9 and 12 uncertain or ambiguous as to whether the loans toStephen and entities associated with him are to be taken into account in calculating theTrust's entitlement from the residuary estate, I turn to the relevant extrinsic evidenceto consider whether that illuminates Mrs Andrews' testamentary intention.[50] The evidence for the applicants is provided by way of three affidavits fromMr Bell who was involved in the drafting of the Will. Mr Bell is an experiencedsolicitor who, prior to setting up his sole practice in April 1993, was a partner invarious law firms engaged primarily in commercial, corporate, banking andinsolvency law. When he commenced sole practice, Mr Bell continued his commerciallaw practice with some property law work and began to develop a practice in trustsand estate planning. He has been an executor and trustee of many deceased estatesover the years.[51] Mr Bell became Mrs Andrews' solicitor on 14 November 2007. At that timeshe had four prior Wills, one with a codicil. Mr Bell prepared a fifth Will forMrs Andrews as well as the final Will.[52] The first Will was dated 3 November 1987. It was prepared by the Public Trustand the Public Trustee was the executor and trustee. At that time, at least some of thesons were minors. The first Will provided for equal division of the estate among allthree sons.[53] The second Will is dated 17 October 1995. It was prepared by Roger Donnell,solicitor. Richard, Stephen and Evan were the executors and the trustees and all threewere equal beneficiaries (or their children in substitution). A codicil to this Will isdated 20 February 1998. The codicil was prepared by Roger Donnell and there wasno material change to the Will.[54] The third Will is dated 2 November 2001. It was prepared byMichael McClatchy, solicitor. Richard, Stephen and Evan were the executors andtrustees. There was an option to Stephen to purchase Mrs Andrews' home at fairmarket value. Otherwise the three sons were equal beneficiaries (or their respectivechildren in substitution).[55] Mrs Andrews' fourth Will is dated 13 March 2003. It was also prepared byMr McClatchy. Richard, Stephen and Evan continued as the executors and trusteesand equal beneficiaries (or their respective children in substitution). The option toStephen to purchase Mrs Andrews' home also remained. For the first time, theprincipal amounts of two inter vivos advances made by Mrs Andrews to Richard andEvan and to Stephen's two companies (NZNet Internet Services Ltd and/or BoltarDevelopments Ltd) and/or the Stephen Andrews Family Trust were recorded. Thoseamounts were to be given to the relevant son but were to be brought into account anddeducted from the equal share of that son in the residue of the estate.[56] Mrs Andrews' fifth Will is dated 28 July 2008. It was prepared by Mr Bell.Mr Bell's notes of a meeting with Mrs Andrews on 1 April 2008 record "A lot ofproblems with money re Stephen".[57] On 28 April 2008, Mrs Andrews and Mr Bell met and she briefed Mr Bell onthe monies advanced previously by her to Stephen and his associated entities and herincreasing concern about Stephen's financial affairs.[58] Mrs Andrews met Mr Bell again on 22 May 2008. Mrs Andrews updatedMr Bell about changes to Stephen's group of companies and instructed him to reviewher securities, to write to Stephen's lawyer that all communications were to be betweenStephen's lawyer and Mr Bell and in writing. She also asked Mr Bell to review her2003 Will to ensure that the indebtedness of Stephen and his associated entities wouldbe deducted from his "inheritance". Mrs Andrews told Mr Bell that she was stillreceiving interest payments regularly on that indebtedness but not the agreed monthlyreport and that Mr Bell should arrange for those reports to resume and to be sent tohim.[59] Mr Bell wrote to Mrs Andrews by letter dated 27 May 2008 about the 2003Will. The focus of the letter was on rearranging Mrs Andrews' affairs in relation toStephen. Mrs Andrews and Mr Bell then met on 23 June 2008. Mrs Andrewsinstructed him to make a number of significant changes to her 2003 Will in relation toStephen. They included removing him as an executor, trustee and beneficiary and theestablishment of an inheritance trust (the Andrews-Runnymede Trust) with Stephenand his children but not his wife as discretionary beneficiaries. The option to Stephento purchase Mrs Andrews home upon her death was also to be removed from the newWill.[60] Mr Bell sent Mrs Andrews a draft Will, Trust Deed and Memorandum ofGuidance to the trustees of the Trust under cover of a letter dated 11 July 2008.Mrs Andrews and Mr Bell met again on 21 July 2008 to discuss the draft Will. Bythat stage, the interest on money loaned to Stephen and his associated entities was notbeing paid and Mrs Andrews was not receiving the financial report she had required.Included amongst Mrs Andrews' instructions that day were that "at the end of the dayout of Stephen's inheritance". (The file note is clearly in shorthand form).[61] On 28 July 2008, Mrs Andrews signed the fifth Will. The executors andtrustees were Richard, Evan and Mr Bell, but not Stephen. Stephen did not have theoption to purchase Mrs Andrews' home. The loans made to Richard, Stephen andEvan or entities associated with each of them were updated. The Trust, having beenestablished on that same day, the loans made to Stephen and/or his associated entitieswere to be given to the Trust and brought into account and charged against its equalshare of the residuary estate. This was instead of Stephen who was no longer aresiduary beneficiary of the estate. Evan and Richard remained as residuarybeneficiaries with the same loan treatment as the Trust (i.e., as in the previous Will).[62] Clause 10 contains a statement as to the reason for the substitution of the Trustfor Stephen (similar to cl 13 of the Will under consideration in this proceeding).[63] I turn next to the context, starting on 2 October 2012, for the preparation of thefinal Will. Mrs Andrews and her son Evan met Mr Bell on that day. Prior to themeeting Mrs Andrews had appointed a receiver and manager to Stephen's company,NZNet Internet Services Ltd (NZNet). The receiver was Victoria Toon, an insolvencypractitioner. NZNet had been placed into voluntary liquidation. Mrs Andrews hadreceived around only $9,000 back from funds she had paid in, advanced to the receiverfor her fees and expenses to carry out the receivership and none of the principal moneyadvanced by her to Stephen, his companies or his family trust, nor interest accrued onthose monies over the previous four or more years.[64] The purpose of the meeting was to "review and fine-tune" the 2008 Will andto "shore up against a family protection claim by Stephen". Mrs Andrews did notwant to establish another trust for herself and her assets but agreed to prepare asummary of her financial losses relating to Stephen and his associated entities. Thefile note of the meeting also records "Victoria surprised Stephen not being bankrupted.IRD chasing him".[65] There are various other communications in 2013 and 2014. One of those, aletter dated 4 September 2013 from Mr Bell to Mrs Andrews states:" your current will (providing, among other things, for equal distributionof your residuary estate among your sons or, in the case of Stephen, theAndrews-Runnymede Trust, but bringing into account monies alreadyadvance [sic]. [66] There are then further communications in early 2017. Mrs Andrews met withMr Bell on 27 February 2017. The file note records: "Stephen a "de facto bankrupt"".The file note also records that Stephen was "gold-digging". Mr Bell advisedMrs Andrews that a forensic accountant should be engaged to calculate the exactamount owed by Stephen to her as he would challenge her will. Mr Bell's letter of28 February 2017 on the following day contains the following:You explained to me the most recent developments in your medical conditionand your primary concerns to provide from your deceased estate for all threesons to be treated equally with flexibility for education and other appropriatewelfare assistance for your grandchildren. You wish this to be done in a waywhich recognises the financial assistance each son has received from you overthe years, Stephen having received significantly more financial assistance thanEvan and Richard. The affairs of your estate should be administeredindependently of your family as far as possible. You are most concerned thatStephen and his wife may seek to claim a greater than equal share in totalitywithout full recognition of the assistance you have provided to him.[67] Mrs Andrews met Mr Bell again on 1 March 2017. Of particular relevance,Mr Bell's file note of that date contains the following:Robyn very concerned to do whatever can be done so Stephen, Evan andRichard are treated equally taking into account $ received already. And nomore or less than that. She especially does not want Stephen to receive more(given signs that he will attempt to do so).(underlining in original)[68] A file note of an attendance by Mr Bell on Mrs Andrews on 15 March 2017containing notes for a Will, contains the following:Stephen: not bankrupted. Limitation period for liquidators? A reason noinheritance to Stephen. Other creditors too. They all waiting for Stephen toreceive inheritance?[69] A further file note of 20 March 2017, when Mrs Andrews met Mr Bell todiscuss the draft Will, concludes with the following:Long discussion again about her legal responsibilities to all her sons. She feelsStephen has had more benefit ($) than her other sons over the years.[70] Mr Bell's final file note regarding the Will, on the same day that it was signed,namely 22 March 2017, contains the following:As she explained (again), she is very concerned to treat all 3 sons (& theirchildren) equally.[71] There is reference to a forthcoming trip to visit Evan's family in Australia. Thefile note of 22 March 2017 states that:On her return she will Make arrangements for the "forensic consulting" toestablish the actual $ owing for Stephen's loans and associated professionalcosts she has incurred over the years. Robyn does not want Richard andEvan to have to deal with this "forensic accounting" [72] On 26 April 2017, a month after the execution of the Will, Mrs Andrews metMr Bell and showed him a letter that she had received from the Official Assignee dated19 April 2017 advising that Stephen had been bankrupted. Mr Bell's file note includesthe following:I said it does not affect her will negatively and the wills [sic] should not bechanged. We will file the OA letter on file in Deeds.I explained the effect of bankruptcy.I said she could do nothing about this. Just leave it.[73] Mr O'Neill submits the Court cannot correct the Will without clear evidenceof the Will-maker's intention. He submits it must be her subjective intention, basedon information she had at the time she gave instructions for the Will.[74] In my view Mr Bell's file notes, taken overall and particularly the notes of1 March 2017 and 22 March 2017, make Mrs Andrews' intention clear. She wishedto treat her sons equally, having regard to sums they had already received from her byway of loans. This is conceptually different from debts legally due. I consider takinginto account monies already received by Stephen and associated entities through loansin calculating his entitlement (or the Trust's entitlement) under the Will is inaccordance with Mrs Andrews' intention that her three sons be treated equally.[75] Mr O'Neill submits Mrs Andrews and Mr Bell were operating under a mistakeof fact and law (i.e. that discharge from bankruptcy did not extinguish debts) and thatthe evidence does not go so far as to show that Mrs Andrews considered the possibilityof bankruptcy and intended to disregard the legal effect of a bankruptcy (if it were tooccur) when it came time to calculate and divide the residuary estate. Mr O'Neillsubmits there is no evidence to show Mrs Andrews intended the debts to remain owingto her or to the estate following Stephen's discharge from bankruptcy. He saysMrs Andrews did not contemplate the legal effect of the discharge from bankruptcywhen she gave instructions for her Will. He submits it is too great an inference to drawand that Mrs Andrews intended the advances to remain chargeable against Stephen's(i.e. the Trust's) share of the estate despite his bankruptcy.[76] I do not accept Mr O'Neill's submissions. I have accepted that the words"loans" and "amount outstanding" in the Will were used as a distribution formula,rather than in the sense of debts "legally due". Interpreted in that way, the bankruptcydoes not affect the Will as Mr Bell explained to Mrs Andrews, and as set out in his filenote of 26 April 2017.[77] In conclusion, the external evidence of Mrs Andrews' testamentary intentionsmake it clear that the inter vivos loans to Stephen (and entities associated with him)were to be taken into account. Stephen's discharge from bankruptcy has no effect.The amounts referred to in cls 8 and 9 of the Will are to be taken into account by theexecutors in calculating the Trust's share in the residue.Correction of Will (s 31)[78] Given my decision that the application for directions as to the interpretationboth without and with the application of external evidence succeeds, then it is notstrictly necessary to consider the application for correction. However, I do so, briefly.[79] As the Court of Appeal in Wilson v Davidson noted, there is an overlap ins 31(1)(a) and (b) of the Act.14 The Court of Appeal stated that a clerical error that aparty seeks to correct will generally, as well as being an error, not give effect to thewill-maker's intentions. Accordingly, the correction of clerical errors will generallybe available on the grounds set out in both s 31(1)(a) and (b).15 But not every failureto give effect to the will-maker's instructions will be a clerical error in the sense of amistake made in copying or writing out a document.16[80] In that case the Court considered that if s 31 were to apply, the relevantsubsection was s 31(b). The Court then asked itself whether the clause underconsideration gave effect to the Will-maker's instruction. The Court continued:14 Wilson v Davidson, above n 3, at [33].15 At [33].16 At [33].[34] For the reasons that we have already set out, it does not, but the wordsthat were used are sufficiently broad to accommodate the interpretationadvanced by Ms Davidson. Had the words been incapable of bearing thatmeaning, we would have rectified the Will under s 31 in light of the clearevidence as to Ms Dillon's intention.. [81] I follow the same approach in this case. The words used in the Will bear theinterpretation advanced by the applicants. If I had found the words used were notcapable of bearing that meaning, I would have rectified the Will, under s 31, givenwhat I consider was Mrs Andrews' intention. I would have ordered rectification byinserting the words: "irrespective of whether the capital or interest of any loans remaindue in law other than as a consequence of my gift or their repayment" in clause 9 ofthe Will at the end of and as an extension of the first sentence of cl 9.Direction[82] I make a direction in the following terms:(a) Loans expressed in the Will of Robyn Andrews dated 22 March 2017(the Will) to be due by Stephen and/or entities associated with him arecorrectly brought to account (together with costs incurred byMrs Andrews in respect of loan defaults and management) incalculating the net amount due to him (i.e. to the Andrews-RunnymedeTrust) from the estate notwithstanding Stephen's discharge frombankruptcy on 15 March 2020. Stephen's bankruptcy and laterdischarge from bankruptcy have no effect on the terms of the Will.Costs[83] Costs are reserved. In the event that the parties can agree costs, a jointmemorandum is to be filed within 20 working days of the date of this judgment. Inthe event that costs cannot be agreed, the applicants are to file and serve theirmemorandum within five working days of the date for the joint memorandum.Stephen is to file and serve his memorandum within five working days of the date ofservice of the applicants' memorandum.[84] Costs memoranda should not exceed five pages, excluding any attachments.The applicants included submissions on costs in their submissions for the hearing. Ifthe applicants wish to expand on those submissions, they may do so in accordancewith the timetable above.___________________________________Gordon J