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[2011] ZAKZPHC 19
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Kelly NO and Others v Kelly and Others (4334/10) [2011] ZAKZPHC 19 (11 May 2011)
1
IN THE KWAZULU-NATAL HIGH COURT,
PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA
CASE NO: 4334/10
Heard on 6 May 2011
Order granted on 6 May 2011
Cost order granted on 9 May 2011
Reasons granted on 10 May 2011
In the matter between
Clive Ronald
Kelly N.O
........................................................................
1
st
Applicant
Derrick Collett
N.O
…...........................................................................
2
nd
Applicant
Louise Anne
Kelly N.O
….....................................................................
3
rd
Applicant
Brian Spencer
Kelly N.O
…..................................................................
4
th
Applicant
and
Garreth Cullen
Kelly
….....................................................................
1
st
Respondent
John William
Kelly
…......................................................................
2
nd
Respondent
Richard Cullen
Kelly
…....................................................................
3
rd
Respondent
Sean Kelly
….....................................................................................
4
th
Respondent
Cullen Kelly
…..................................................................................
5
th
Respondent
The Master of
the High Court (KZN)
…...........................................
6
th
Respondent
______________________________________________________________
JUDGMENT
______________________________________________________________
DHAYA PILLAY, J
Introduction
This
is an application for the rectification of the last will of Olga Amy
Cronje, the testatrix. The applicants are trustees of
the Olga Amy
Cronje Will Trust (the Olga Trust). The third and fourth applicants
(Louise and Brian)
1
who
are married to each other are also beneficiaries of the Olga Trust.
Brian, Garry (first respondent) and John (second respondent)
are
brothers whose mother, Dianna Constance Kelly, was the sister of the
testatrix. The third, fourth and fifth respondents are
Garry’s
major children. Garry and John are cited in the personal capacity
and on behalf of their minor children.
The Applicants’ Case
The evidence for the applicants is
that the testatrix requested her step-son, Willem Cronje (Cronje),
to replace her previous
will. Cronje is a chartered accountant and a
tax consultant. In terms of the testatrix’s first will, her
three nephew’s
namely Brian, Garry and John were to benefit
equally. It remained her wish that in her last will they should
share equally in
the residue of her estate. Cronje liaised between
the testatrix, her attorneys and, at her invitation her three
nephews, to prepare
the last will.
Garry had indicated that he wished
his one-third share to be bequeathed to the Panata Trust. John
requested that his one-third
share be bequeathed to him personally.
As for Brian, he had been in
financial difficulties at the time and feared that his creditors
might lay claim to his inheritance.
He instructed Ramsay L’Amy
Daly to prepare and forward to Cronje the trust deed of the Bonnie
Trust which would receive
his share of the inheritance. Besides
wishing to avoid his creditors, Brian and Louise have no children.
The Bonnie Trust was
therefore for the benefit of Brian and Louise
in the first instance. In addition, the trustees were empowered to
nominate any
one or more of the following as beneficiaries: children
born of the marriage between Brian and Louise; Garry or any of his
lawful
issue; John or any of his lawful issue.
Cronje expressed concerns that the
Bonnie Trust, being an
inter-vivos
trust, might not protect
Brian’s assets adequately. On his advice to Brian, Daly,
Philip Pencharz and the testatrix they
resolved that Brian’s
share would be bequeathed to a testamentary trust.
By these bequests, the last will was
to give effect to the testatrix’s intention of benefitting all
three nephews equally.
However, this intention was not captured in
the formulation of paragraph 4.2 of the last will. Michael Katz who
represented the
testatrix at the time did not draft her will;
another attorney from his firm, Pencharz, drafted the last will. He
is now late.
Pencharz simply extracted the beneficiaries nominated
in the Bonnie Trust deed and transposed them into the last will,
without
realising that the beneficiaries under the Bonnie Trust were
not identical to the beneficiaries under last will. Even though
Brian read the last will and, after it was signed, copied it to the
three nephews, no one noticed this error. The testatrix signed
the
last will believing that the three brothers acquired one-third of
the residue in her estate.
As the last will manifestly fails to
give effect to the testatrix’s wishes, it falls to be
rectified. So submitted Mr Marais
SC for the applicants.
Respondents’ Case
The respondents (excluding the Master
of the High Court) resisted the application with three points
in
limine
and on the merits. The points
in limine
related to
the non-joinder of the executor, the non-appointment of curators
ad
litem
for Garry’s and John’s minor children, and the
locus standi
of the applicants. On the merits, they relied on
the literal interpretation of paragraph 4.2 of the last will as
encapsulating
the whole and true intention of the testatrix.
They alleged that the following facts
precipitated the redrawing of the will:
Brian’s financial
difficulties.
Brian’s loan from the
testatrix and his failure to repay it.
Brian lived rent free off the
testatrix.
As the applicants contended that the
reason for revising her will was to update it and ensure that it
satisfied all her nephews,
the respondents allege that this is a
material dispute of fact. These facts also counted against finding
that the last will did
not reflect the true intention of the
testatrix.
For the rest, the affidavit by their
single witness, John, is unhelpful, either because the allegations
are irrelevant or unsubstantiated.
Accordingly, they requested that
application be dismissed or adjourned for oral evidence.
Analysis
The clause in the last will that is
the subject of this application is the following:
“
4.2.
As to ⅓ (one-third) thereof upon a testamentary trust created
pursuant to this will, the main beneficiaries of which
shall be BRIAN
SPENCER KELLY and LOUISE ANNE KELLY and other beneficiaries shall be
any children born of the marriage between the
main beneficiaries,
GARETH CULLEN KELLY (or any of his lawful issue) and JOHN WILLIAM
KELLY (or any of his lawful issue)…”
Clause 8 in the Bonnie Trust from
which clause 4.2 was extracted reads as follows:
“
8.
BENEFICIARIES
The
trustees may at any time and from time to time before
termination of this trust by deed or deeds revocable or
irrevocable, nominate any one or more of the following persons
to be a beneficiary or beneficiaries hereunder, namely:
any
children born of the marriage between BRIAN SPENCER KELLY and
LOUISE ANNE KELLY
GARRETH
CULLEN KELLY or any of his lawful issue
JOHN
WILLIAM KELLY or any of his lawful issue”
Clause 4.2 is manifestly an
extraction from the Bonnie Trust. The similarity corroborates the
applicants. Cronje who interacted
personally with the testatrix has
no doubt that she did not intend to benefit John, Garry or their
children from Brian’s
one-third share because she testatrix
had made her intention clear to him. She instructed him to liaise
with her three nephews
direct to establish how they wished to
receive their inheritance. In the course of liaising with them
Cronje discussed how each
wanted to receive his one-third share. All
three therefore knew that they each would receive a one-third share
exclusively.
Cronje was therefore best placed to
testify as to the testatrix’s intentions. Daly, an attorney
for the Kelly family for
over 35 years corroborates Cronje. Daly
confirms unequivocally that John, and in particular Garry, knew full
well that it was
the testatrix’s intention to benefit each
nephew equally. They knew the purpose of the Bonnie Trust and later
the Olga
Trust. They also knew that it was not the intention that
they or their children would benefit in any way from Brian’s
share
whilst Brian and Louise survived.
Cronje and Daly, like the first and
second applicants (Clive and Derrick), have no personal interest in
the last will or in the
outcome of this litigation. Clive is also an
attorney. Their interest is to ensure as trustees of the Olga Trust
that the beneficiaries
are properly determined so that they do not
discriminate amongst the beneficiaries and risk being cited for
acting improperly
as trustees.
In contrast, the respondents made no
dent to the solid case for the applicants. To begin with they
conceded that the testatrix
wanted her three nephews to be equal
beneficiaries. They could not refute the following facts:
Cronje facilitated the preparation
and execution of the last will.
He did so in collaboration with
Brian, Garry, John, Brian’s attorney Daly and the testatrix’s
attorneys, namely
Katz and Percharz.
It was at Brian’s behest that
the Bonnie Trust was created, appointing Garry as the settlor, and
Garry, Paul and their
children as beneficiaries.
Cronje explained the need for the
testamentary trust to Brian, Daly, Pencharz and the testatrix.
Percharz made a mistake in
transposing the beneficiaries of the Bonnie Trust as beneficiaries
of the last will.
Brian had a close relationship with
the testatrix and was in fact closer to her than Garry and John.
Brian, Pencharz and Cronje
corroborate each other.
Instead of adducing evidence to
counter these undisputed material facts the respondents resorted to
unhelpful and unwholesome
tactics.
They made several bald allegations
including, that it was the express intention of the testatrix to
benefit Garry and John’s
children. They advanced no better
evidence as to when and how such intention was expressed outside of
paragraph 4.2 of the
last will.
They baldly denied many of the
applicants’ assertions without establishing genuine disputes
of fact. In denying that the
testatrix wished to benefit spouses of
her nephews, they baldly alleged without proving that she wanted
only members of the
Sherwell bloodline to benefit from her family’s
wealth. The absence of any expression of this intention in both
wills
denudes this assertion of any truth. Cronje and Brian also
reject it.
They made bald contradictory
assertions. For instance, they allege that the testatrix intended
to disinherit the spouses of
her nephews as evidenced by the
omission of the spouses from the first will. This assertion is not
born out in the last will,
in which the testatrix specifically
includes Louise and, which the respondents claim, is a true
reflection of the testatrix’s
intention. They fail to note
that in 1976, when the first will was signed, none of them were
married. If they genuinely believe
that the testatrix intended to
exclude Louise then they must also agree that because the last will
includes her, it does not
reflect what they believe was the
testatrix’s intention. They must concede that clause 4.2 is a
mistake, although for
different reasons.
They resorted to hearsay,
disparagement and sheer gossip to discredit the applicants and
their witnesses. For instance, for
no good reason, they mentioned
that the testatrix disliked Louise and had referred to her as a
“gold digger”; and
that one of the testatrix’s
(unnamed) step-sons had referred to the testatrix as “a
whore”. None of this
was either relevant or reliable.
Most importantly, they omitted to
adduce the evidence of Garry to admit or deny pertinent allegations
made about his knowledge
of the discussions that preceded the
execution of the last will, the circumstances in which he came to
be the settlor under
Brian’s Bonnie Trust, the alleged
intention of the testatrix to benefit his and John’s
children, and the loan that
he got from the testatrix. His silence
on these matters suggests that he has something to hide. His
embarrassment in challenging
the bequest to Brian when Brian
trusted him as settlor and beneficiary under the Bonnie Trust might
be something to hide. Furthermore,
openly attacking Brian might
jeopardise his benefits from the Bonnie or Olga Trusts. Having to
explain why his loan from the
testatrix does not whittle his own
inheritance but the loan to Brian does might also be uncomfortable
for him.
Regarding the alleged dispute of fact
about the reason for revising her will, there is no dispute about
Brian’s finances,
that he did not repay the testatrix the loan
or gift the testatrix gave him, or that he lived rent free with her.
None of this
gainsays Cronje’s evidence that the testatrix
asked him to replace her will. Given that it is common cause that
the testatrix
intended to benefit all three nephews equally, the
respondents are disingenuous in suggesting otherwise.
I
am satisfied that the applicants have discharged the onus of proving
that clause 4.2 of the last will does not record the intention
of
the testatrix and falls to be rectified.
2
As for the points
in limine,
the respondents’ shot-gun approach has caused them to miss
their targets. They abandoned the points
in limine
at the
outset or soon after Mr Marais commenced his argument. Although Mr
Stewart did not abandon the point about the non-joinder
of the
executor, he did not persist with it once the executor made it clear
that he would abide the decision of the court. However,
he did
insist that it was a valid objection.
In my opinion, all the points
in
limine
were not valid. As regards the non-joinder point, it was
the applicants as trustees who sought the guidance of the court in
managing
the Olga Trust responsibly. That the Olga Trust had to
receive the bequest from the executor is not disputed. Consequently,
it
is not the powers of the executor but of the trustees that is
affected by this application. Clause 4.2 of the last will implicates
the definition of the beneficiaries of the Olga Trust. The
non-joinder of the executor was therefore not material.
Costs
The applicants seek the costs of the
application from those opposing it. All respondents excluding the
Master opposed the application.
Given the distasteful quality of the
opposition, I reserved costs.
Furthermore, in challenging the
locus
standi
of the trustees it was not clear precisely whether the
respondent’s objection was to the trustees, their appointment
or
their powers. Mr Stewart cited about 12 cases to support this
objection when all it took to address his concerns, whatever they
might have been, was to produce the Letters of Authority issued to
the trustees. If the respondents had articulated their objection
clearly, the applicants and the court would have been spared the
unnecessary research.
Another concern is that the quality
of the defence on the merits also does not reflect favourably on the
respondents’ legal
representatives. They are sufficiently
experienced to know that bald denials do not create genuine disputes
of fact. They must
also know that disparagement and hearsay are
irrelevant or unreliable. They should have advised the respondents
accordingly and
omitted such material from the pleadings.
Consequently, the appropriate cost
order should be against those who developed the respondents’
case. From the papers it
is not certain to what extent all the
respondents participated and sanctioned their case. It is also not
clear whether the legal
representatives who were responsible for the
pleadings were instructed to present the respondents’ case in
this way. The
respondents and their legal representatives know best;
they can determine who should bear the applicants’ costs and
how
such costs should be apportioned amongst themselves.
Finally, this litigation signals a
loss far greater than the loss of a bigger slice of the testatrix’s
estate for the respondents.
Loss of love and mutual respect amongst
members of the Kelly family is hardly gratitude to the testatrix for
her generosity.
The parties should reflect on this before
perpetuating their animosity through further litigation.
In the circumstances I granted an
order in the following terms:
Clause
4.2.of the last will is rectified to read as follows:
As
to ⅓ (one-third) thereof upon a testamentary trust created
pursuant to this will, the main beneficiaries of which shall
be BRIAN
SPENCER KELLY and LOUISE ANNE KELLY
whom failing
and other
beneficiaries shall be any children born of the marriage between the
main beneficiaries,
whom failing, upon the remaining children of
my said late sister, Diana Constance Kelly;
…”
The remaining beneficiaries as
described in the last will have no vested or other right to claim or
demand any benefits under
the testamentary trust created in clause
4.2 of the last will, and that the Applicants (as trustees in the
Olga Trust) have an
unfettered discretion to distribute to the
beneficiaries the benefits of the Olga Trust.
The respondents shall pay the
applicants’ costs, jointly and severally, the one paying the
others to be absolved.
___________________
Dhaya
Pillay, J
Appearances
Counsel
for the Applicants: Mr J. Marais SC
Instructed
by : AHR Louw
Truter
James De Ridder Inc.
c/o
Geyser Du Toit Louw & Kitching Inc.
380
Jabu Ndlovu Street
Pietermaritzburg
Counsel
for Respondents: Mr M Stewart
Instructed
by: Foster Attorneys
c/o
Stowel & Co.
295
Pietermaritz Street
Pietermaritzburg
1
Consistently
with the pleadings, I refer to the individuals by their first names
for convenience and without intending any disrespect
or offence.
2
Henrques
v Giles
2010 (6) SA 51
SCA