PAYMENTS MADE TO LEGATEES

Timaru Herald, Volume CXLV, Issue 21086, 12 July 1938, Page 4

PAYMENTS MADE TO LEGATEES

SUIT FOR RECOVERY Will Was Revoked By Telegraph —Press Association CHRISTCHURCH. July 11 Tlie second legal action that has arisen out of the disposal of the £60.000 estate left by Miss Elizabeth Smith, who died in Christchurch on July 8, 1935, was opened before Mr Justice Northcroft in the Supreme Court today. It was an action by the Public Trustee, the present administrator of the estate, to recover a sum of £8450, which was paid out to various legatees by the Guardian Trust and Executors Co., of New Zealand, Ltd., the executors under a testamentary document, left by Miss Smith which was subsequently upset by the Court on the application of the next of kin. Mr H. F. O'Leary, K.C., and Mr T. P. Cleary appeared for the plaintiff, and Mr H. P. Richmond and Mr H. E. Barrowclough for tlie defendant. Mr O'Leary said that probate of the will under which the Guardian Trust was appointed executor, was granted on July 19. 1935. Some of Miss Smith's next-of-kin were not satisfied that when Miss Smith made the will on June 8. 1934. she was of testamentary capacity, and took action in Court. In December. 1936. said Mr O'Leary, judgment was given recalling the probate of tlie will on the grounds that the deceased was not of testamentary capacity when she made the will. As no other will could be found, the estate, therefore, became intestate, and devolved on the next of kin. the Public Trustee becoming administrator. By tlie will Miss Smith left some money to her next-of-kin, and considerable amounts to various institutions. By the time the will was upset the Guardian Trust had paid out to the legatees about £lO,OOO. Part of this was to next-of-kin, who remained beneficiaries in the intestacy, but the £B5OO, for which the Public Trustee now sued, was paid to the institutions which were no longer beneficiaries when the will was revoked. At the time of the making of the will, said Mr O'Leary, it was claimed that the Guardian Trust knew that Miss Smith was not of testamentary capacity, a protection order under the Aged and Infirm Persons Act having been obtained on December 14. 1933. by the defendant company. The will was not made until the following June. Documentary evidence on this would be submitted. Plaintiff's case, said Mr O'Leary, was (1) An allegation of maladministratio - against the defendant company, in that, knowing the will was in danger of being upset, the company paid out money to persons whom it knew would not be beneficiaries in the event of the revocation of the probate. To this the Guardian Trust pleaded bona fide administration. Under tlie existing grant, if the charge of maladministration was not upheld, a novel and important point arose regarding the responsibility of a trustee and executor under a will that was subsequently upset. Mental Capacity Amongst the affidavits read by Mr O'Leary were those of several business men, who said that in a year Miss Smith lost between £6OOO and £7OOO through selling good ...ares and buying others at the persuasian of share canvassers. In her later years, it was said she used to hoard in her home scraps of food picked up in the street, and all sorts of worthless articles. She used to roam the streets at night picking up things out of rubbish tins, and the gutters. Knowing her mental condition, said Mr O'Leary, it was obvious the will was not hers, but the will of the Guardian Trust. Summarising plaintiff's case, Mr O'Leary said it was submitted: (1> That the company knew the will was that of a person who had no testamentary capacity, and should not have acted on it; (2> That the company knew that testamentary claims were being made by next-of-kin; and that that was the very reason why the application was made for the Court order, and that the Court was not given all the information the company had; that the Court was, in fact, deceived; 13) That the company had a letter in December. 1936, intimating that an attack on the will was likely; (4) That the company had receiv-d no further letter by January 31, 1937, but should not, and could not have assumed that a decision one way or the other had been arrived at; (5) That' this was not the case of an executor who had no part in the preparation of the will, as the company’s officers had made the will, and had full knowledge of the circumstances, and should have been excessively cautious, vigilant, and candid, and that they could have no bona tides when they paid the legatees. Moving formally. for a non-suit, Mr Richmond said that in law the granting of probate to an executor was a judgment. and until revocation all acts that the executor might properly do as such were valid. On revocation.of the probate the grant was to be treated as voidable only, and not void from the beginning. On the facts also, said Mr Richmond, tlie defendants were entitled to a non-suit on the grounds that the documents showed that the defendant company honestly, though probably mlstakedly, relied on the protection of the order of the Court. Plaintiff said the company to obtain the order, deliberately deceived the Court by withholding that there was a

possibility of an action to upset the will, and that there were relatives of the testatrix overseas. The documents were drawn up, however, by the Christchurch solicitor of the company, and only approved by the company. The company and its solicitors seemed to have been at cross-purposes, but blundering did not affect the bona fides. His Honour reserved his decision on the application for a non-suit, and Mr Barrowclough continued the case for the defence.