Eade v Hogg & Ors

In construing a will, the court must identify the testator’s intention from the words used, read in their documentary and factual context. A provision may be ambiguous in the light of surrounding circumstances even if it appears clear in isolation. Where ambiguity is established, extrinsic evidence of intention may be admitted under Administration of Justice Act 1982, s 21. A will may alternatively be rectified under s 20 where it fails to give effect to the testator’s intention because of a clerical error or failure to understand instructions. A professionally executed will carries a strong evidential presumption, but convincing evidence may displace it.

The claimant sought construction or rectification of a will made by Michael Nodes. The will gave trustees power to appoint shares in a company to his widow and the claimant, stating that their existing holdings and the appointed shares should amount to 26% of the issued share capital, using the word “both”. The claimant contended that the clause meant 26% each, as under the deceased’s earlier will, and that the apparent discretion to appoint shares was also erroneous. The principal issues were whether the clause was ambiguous, whether extrinsic evidence could be admitted, and whether any error resulted from a clerical mistake or failure to understand instructions.

1. Construction. The clause was ambiguous on its face and in the light of the surrounding circumstances. The word “both” could mean either one combined entitlement or an entitlement for each beneficiary. The earlier will, the parties’ existing shareholdings, the absence of a letter of wishes explaining a substantial new discretion, and the wider circumstances supported the latter interpretation.
2. Applying Marley v Rawlings [2015] AC 129, the court adopted a contextual and non-literal approach. The admissible extrinsic evidence under Administration of Justice Act 1982, s 21 included the will file, witness evidence and contemporaneous correspondence. That evidence established that each of the widow and the claimant was intended to receive sufficient shares to reach 26%, giving 52% between them.
3. The deceased did not intend to confer an unfettered discretion on the trustees as to whether or how many shares to appoint. The court rejected the drafter’s account that the deceased had deliberately reduced the beneficiaries’ entitlements to preserve control for the trustees and charity.
4. Rectification. Alternatively, the requirements of s 20 were satisfied. The transcription of “each” as “both” was a clerical error. The insertion of a discretionary power resulted from the drafter’s failure to understand the deceased’s instructions. The court was satisfied on the balance of probabilities by convincing evidence sufficient to overcome the strong presumption that a formally executed will records the testator’s intentions.
5. The clause was therefore construed as permitting appointments sufficient to bring each beneficiary’s shareholding to 26%. The same result was available by rectification.