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Trustee Act

Getting it wrong, making it right

There is significant scope for error when drafting deeds of trust.  While it is hoped that any errors will be picked up during the process of reviewing the deed and ensuring it meets the settlor’s wishes, this will not always be the case.

While the remedies are not without cost, where a compromising error is identified, and there is no available power of variation, an application can be made to the court for the erroneous portion of the deed to be amended (varied).

Consider for example an error whereby the trust must vest say on the death of the settlor and there are future generations of family that the settlor intended to benefit from the trust.

Provided the settlor’s intention can be evidenced to the satisfaction of the court (for example if the terms of the deed specify that the trust’s principal purpose was to be for the benefit of the settlor’s children and grandchildren) the error may be able to be remedied by applying to the court for rectification and variation by way of amendment in accordance with  s 64A of the Trustee Act (power of the court to authorise variations of trust).

Wills

The same sentiments apply in the context of drafting wills.  Where the error is contained in a will the mechanism for correction is in accordance with the Wills Act 2007, s 14 (issues as to validity) and 31 (correction of errors).  However, as always prevention is better than cure and in this regard the following from Re Bryce referred to in Haldane v Haldane is educational:

“[42] The corrections sought in the plaintiffs’ statement of claim are to be made. The orders sought will be granted. I do pause to note, however, that the existence of errors, in many recent wills that come before this Court, has previously drawn the ire of the Courts. In Re Bryce, Priestley J expressed his frustration thus:

[10] I must express some astonishment, however, that relatively simple errors of this nature appear to be so frequent and require judicial intervention. I suspect the problem lies with current equipment used to produce legal documents, the structure of law firms, and insufficient care and attention being paid by the responsible partner or solicitor at the time a will is executed.

[43] It is hard not to agree with those sentiments. Indeed, in the present case the mistakes were avoidable, arising out of duplication or transposing of part of an existing will, but failing to modify it to the requirements of a client.

Haldane v Haldane is also to be commended for its thorough and comprehensive review of the law relating to the correction of errors in wills.

References:

  • Renfree v Renfree [2013] NZHC 782
  • Re Bryce [2013] NZHC 2089
  • Haldane v Haldane [2015] NZHC 352

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