Hutchinson & Anor v Bank of Scotland Plc  QSC 28.
In a Queensland Supreme Court decision earlier this year, the court was asked to interpret the effect of a home-made codicil which sought to vary the provision of a will dealing with a significant estate comprising internationally located assets. The deceased died on 8 September 2009 at the age of 93. Originally from Scotland, he migrated to Australia where he resided for 55 years before his death.
The deceased had worked as a marine engineer and by the time of his death, he had accumulated over $11m in assets including property held in Australia and the United Kingdom.
The deceased’s lawyers prepared a will dated 19 April 2006 but, without seeking any legal advice, the deceased drafted two supplementary documents which purported to alter the provisions of the will, each dated 23 May 2009 (codicils). In administering the estate, the executors applied to the court seeking various orders as to the effect the codicils had on the will.
Clause 1 of the will stated that it was to affect the property and affairs in Australia, the United Kingdom and every other part of the world. It also directed that the residue of the estate be held by the Bank of Scotland as trustee for the MacKenzie 21 Trust. The beneficiaries of this Trust are family members and a number of institutions in the UK.
The second codicil sought to alter the will and stated “Item 1 should state that my Australian assets and only my Australian assets be administered in Australia. All other assets outside of Australia to be administered by the Bank of Scotland in charge of the trust”.
The questions for the Court were to determine:
- the effect of the second codicil on the will, and
- the applicable law to govern the administration of the MacKenzie 21 Trust.
The Court decided that the second codicil should be interpreted as appointing the Bank of Scotland to administer the overseas assets during the period of administration, subject to the overall control of the executors. This interpretation was considered to avoid the ‘unnecessary double-handling’ and cost associated with the executors appointing persons other than the Bank of Scotland to deal with non-Australian assets during the period of administration when those assets would likely be transferred to the Bank of Scotland as trustee of the MacKenzie 21 Trust following the estate administration. It was considered that, had the deceased intended some more dramatic consequence to flow, rather than simply address the practical administration of his estate, then he would have sought and obtained legal advice about the matter. A question of construction Hutchinson & Anor v Bank of Scotland Plc  QSC 28.
In performing the second issue, the Court weighed the competing factors of the MacKenzie 21 Trust which suggested a closer connection to Scotland. In finding that Scottish law was the applicable law for the MacKenzie 21 Trust, relevant factors fact that the nominated trustee was the Bank of Scotland, all but one of the beneficiaries were in Scotland and the fact that distributions were expressed to be in pounds sterling, rather than Australian dollars. These factors outweighed the facts suggesting Australian law, such as a significant proportion of the assets being located in Australia and the deceased having being domiciled in Queensland.
Comment - This case serves as a timely reminder of the complications that can arise from an ambiguous document purporting to give effect to a willmaker’s intentions and the importance of ensuring that their wishes are clearly stated. It also reflects the desirability of incorporating changes in the will itself rather than executing an ancillary document, such as a codicil, to ensure all provisions are consistent and in context.