Atkinson v Samuels HC Auckland CIV 2006-404-7878
[2008] NZHC 2356
•30 May 2008
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2006-404-7878
UNDERThe Law Reform (Testamentary Promises) Act 1949
IN THE MATTER OF The estate of SIDNEY SAMUELS (also known as SYDNEY SAMUELS)
BETWEEN D T ATKINSON First Plaintiff
ANDA P ATKINSON Second Plaintiff
ANDJ L DAINTY Third Plaintiff
ANDD J SAMUELS Defendant
Hearing: 5, 6, and 7 May 2008
Appearances: G Brittain for the Plaintiffs
C M Riddell for the Defendants
Judgment: 30 May 2008
RESERVED JUDGMENT OF PRIESTLEY J
This judgment was delivered by me on 30 May2008 at 3.00 pm pursuant to Rule 540(4) of the High Court Rules.
Registrar/Deputy Registrar
Date: …………………………
Counsel/Solicitors:
G Brittain, P O Box 13 473, Tauranga
C M Riddell, P O Box 2217, Shortland Street, AucklandBuddle Bentley Tweed, P O Box 43, Whakatane
ATKINSON AND ORS V SAMUELS HC AK CIV 2006-404-7878 30 May 2008
The deceased, his will, and his estate
[1] Sydney Samuels died in Auckland in January 2006 aged 95. He had emigrated to New Zealand in the 1930s from Scotland. He was Jewish and had adhered to his faith and culture all his life. His father had been born in what is now Lithuania and emigrated to Britain.
[2] When Mr Samuels died he had been widowed for 42 years. He had no children. His will, dated 7 November 1990, left his entire net estate jointly to his nephew and niece, David Samuels and Doreen Spevack. Both beneficiaries live in Scotland and were the children of the deceased’s younger brother. David Samuels was appointed sole executor and trustee of the will.
[3] Mr Samuels’ estate was substantial. Its precise worth is problematic because the deceased’s St Heliers Bay home and a commercial property he owned in Glen Innes have not (there being no need) been valued. He had over $1m in the bank. Based on 2005 Quotable Value Limited valuations, the estate was worth at least
$3.04m, but it is probably nearer $4m.
[4] Mr Samuels’ assets included 8,055 shares in a private company, Glenholme Farms Limited (“Glenholme”). Those shares comprised 12.9% of the company’s total shareholding and have been valued at $595,980.
[5] Glenholme has, for many years, been the vehicle used by the Atkinson family, of which the plaintiffs are members, to run a family farm near Opotiki. The deceased’s shares are central to this proceeding. The plaintiffs contend that many years ago Mr Samuels promised to bequeath those shares to the plaintiffs, Donald Atkinson and Paul Atkinson. They say the deceased’s will failed to honour that promise.
[6] The third plaintiff, Mrs Jennifer Dainty, the only daughter of the Atkinson family, unlike her brothers, resided in Auckland. She had frequent contact with Mr Samuels and gave him much assistance, especially during his declining years. She
was aware of the promise about the shares and she too expected some bequest when
Mr Samuels died.
[7] Thus the three plaintiffs seek orders under the Law Reform (Testamentary
Promises) Act 1949. Donald Atkinson and Paul Atkinson seek an order vesting the
8,055 Glenholme shares in them. Jennifer Dainty originally sought provision of
$250,000, although at the hearing this was reduced to a claim for provision of
$50,000 - $200,000.
Background facts
[8] Mr Samuels’ life in New Zealand was intertwined with the Atkinson family at many levels for approximately 70 years. I have been assisted by focused affidavits from both sides which are free from acrimony. The relevant Atkinson family members were cross-examined. First was Mrs Leila Atkinson aged 88. Her late husband, Mr Donald Atkinson (senior), survived Mr Samuels by six months, and had been a friend of Mr Samuels since the 1930s. The three plaintiffs were then cross-examined. Helpful affidavits were filed by Mr David Samuels. Although he would have been available for cross-examination through a videolink from Scotland, counsel decided this would not be necessary.
[9] I was also assisted by evidence from Ms Orly Jacobson, the deceased’s great niece, who was called by the plaintiffs under subpoena. There was further evidence from Mr Grant Mitchell, a neighbour of the deceased’s in St Heliers Bay, whom the defendant called.
[10] Mr Donald Atkinson (senior) first met Sydney Samuels (who was variously known as Sammy or Uncle Sol) in Auckland before the outbreak of the Second World War. The Atkinson family at that stage lived in Onehunga. Donald Atkinson (senior) was a teenager when he first met Sammy. Donald had a brother, Trevor. His sister, Alice became a good friend of Sammy’s. Mrs Atkinson, then unmarried, also knew the Atkinson family.
[11] During the Second World War, Sammy and the two Atkinson brothers served in the army. Their unit was 24 Battalion of 2 NZEF. With that unit they served in both the Western Desert and Italy. Trevor Atkinson was killed at Cassino. Donald Atkinson and Sydney Samuels were both wounded. The latter carried unextractable shrapnel in his body until his death. His wounds presented periodic medical problems.
[12] I have no doubt whatsoever that the war experiences of these two men (both were privates) in an infantry battalion, particularly the death and destruction they would have encountered during the hard-fought Italian campaign as the New Zealand Division pushed its way up the Italian peninsula, would have affected both men for the rest of their lives and created between them a special bond.
[13] On his return Mr Samuels married a Sydney jewess, Freda, in late 1945. The couple had good business skills. They developed and ran a successful furniture retailing business in Auckland and acquired a section in St Heliers Bay, on which they built their home. The deceased lived there until admitted to a rest home with Alzheimer’s in 2004. Donald Atkinson (senior) helped his friend find a builder for and helped lay the foundations of the Samuels home.
[14] Donald Atkinson moved to the Bay of Plenty. He acquired a rehabilitation farm (both men had benefited from rehabilitation loans). Donald and Leila Atkinson married in June 1946. Sammy and Freda were guests at their wedding.
[15] From that time the pattern developed of Sammy and Freda visiting the Atkinsons on their farm and spending their summer holidays there. Freda Samuels and Leila Atkinson became close friends. Sammy got to know other families in the district and, with Donald, would frequently visit the Opotiki RSA.
[16] The three Atkinson children, Jennifer Dainty, being the first, were born between 1948 and 1952. Sammy and Freda were unfortunately not able to have children. At an early stage they made it clear they would like to play a special role in the lives of the Atkinson children. They were called “Uncle Sol” and “Aunt Freda”. When the children from time to time travelled to Auckland to visit other
members of the Atkinson family, they would also visit the Samuels. At an early stage, both Sammy and Freda made statements to the effect that they would always look after the Atkinson children.
[17] In the late 1950s Freda Samuels was diagnosed with cancer. Her health deteriorated. She frequently visited the Atkinson farm where Leila Atkinson cared for her. During her last visit she was confined to her bed. She died in January 1964. Mr Samuels continued to visit the farm.
[18] In 1966 Donald Atkinson (senior) decided to expand his farming operation. His original farm had become uneconomic. A neighbouring farm was available for purchase. Despite borrowing, Donald Atkinson was approximately ₤4,000 short of what he needed. He approached Mr Samuels for a loan. The latter made it clear he would make the money available, but would only do so on the basis that he became a shareholder in the farming company with a financial stake in the farm. Thus, Glenholme Farms Limited was established, to which the original Atkinson farm, stock, and equipment were sold and which acquired the neighbouring property.
[19] From that point on to his death, Mr Samuels was a shareholder. He regularly attended shareholders’ meetings (which were semi-formal family meetings at the farmhouse, for which minutes were taken). Throughout the 1960s and 70s he visited the farm regularly and stayed in the Atkinson home. When there, he would enthusiastically participate in farm work. His friendship with Donald Atkinson (senior) and the family remained afoot.
[20] During the 1970s and 1980s the Atkinsons also extended hospitality to Mr Samuels’ Scottish family and friends who would visit. Such visitors included his older brother, Hymen, Australian relatives, and Scottish nieces.
[21] When Donald and Leila Atkinson travelled overseas in 1982, they stayed with members of the Samuels family in Scotland.
[22] From time to time Mr Samuels suffered from ill health. On one occasion he required surgery. He would usually travel to the farm for recuperation. If too ill to drive himself, Mrs Dainty and her husband transported him.
[23] A close and affectionate relationship existed between Mr Samuels and the three Atkinson children. His interest extended to their children as well.
[24] All three plaintiffs enjoyed, and I so find, a special relationship with Mr Samuels. This is hardly surprising given the frequency of contact between him and their parents which preceded their births. They regarded him as a father figure or third parent. As they become adult, he assisted them financially, but always on formal and commercial terms.
[25] Neither Paul nor Donald Atkinson, when they became adult, chose to work on or take over their father’s farm. They remained, however, involved in the farm’s structure. In 1973, when an opportunity arose for Glenholme to purchase another adjoining property, Donald Atkinson (junior) then aged 23 and recently graduated from Lincoln College, was the under-bidder at an auction. Mr Samuels would have been prepared to advance a second mortgage and had authorised Donald Atkinson (junior) to bid. He berated Donald afterwards for not having gone beyond the agreed figure because he would have been prepared to cover it.
[26] When Mrs Dainty and her husband acquired their first home in Auckland in
1972, Mr Samuels lent them $12,000 on an interest only basis. This was repaid some years later when the Daintys sold and moved. Financial assistance was also given to Paul Atkinson who, like his brother, farmed elsewhere. In the mid-1970s Mr Samuels lent Paul Atkinson approximately $5,000 to assist with the purchase of agricultural machinery. There was also a second mortgage advance for $50,000 in existence in the late 1990s. These loans, however, were all repaid before Mr Samuels’ death.
[27] Mr Samuels regularly attended Atkinson family weddings and birthdays. He was regarded as part of the Atkinson family. For his part, although the Atkinson family were not blood relatives, he regarded them as being the equivalent of family
members (and I so find). He travelled the considerable distance from Auckland to the Atkinson farm on a regular basis for over half a century. He would also visit the Atkinson holiday home on the shores of Lake Rotoiti, and the Dainty holiday home on the same lake.
[28] Physical contact between Mr Samuels and his Scottish family was not as frequent. I have no doubt, and again so find, that contact with his siblings and his nephews and nieces was important to him. New Zealand, however, was his home. There is force in Mr Brittain’s observation it was not until the 1970s that jet air travel and international phone calls became more accessible and helped shrink the distances.
[29] Nonetheless, there was ongoing contact. David Samuels’ father, Alexander, received regular letters from Mr and Mrs Samuels. In March 1963 Mr Samuels travelled to Scotland for David Samuels’ bar mitzvah. He also attended family weddings in Scotland in 1976 and 1982.
[30] David Samuels first visited his uncle in January 1990 for the Commonwealth Games in Auckland. He stayed with his uncle and attended a number of events. His visit seems to have marked the start of a significant family friendship between Mr Samuels and his nephew. He travelled to Scotland for David’s wedding in December 1992. Whilst the couple were on their honeymoon he remained in the Glasgow family home. David Samuels and his wife, Jemima, visited Mr Samuels with their daughter in January 1997. David Samuels paid a further surprise visit for
his uncle’s 90th birthday in November 2000. During the last two or three years of his
uncle’s life, David Samuels assumed responsibility for major decisions over his uncle’s care, including admission to a rest home. He was able to keep an eye on things with the assistance of Mr Samuels’ neighbour, Mr Mitchell, and Mrs Stephanie Markson, an outreach worker of the Auckland Hebrew Congregation.
Wills, promises, and services
[31] In March 1954 Sydney Samuels executed a will leaving everything to his wife. He appears not to have made a new will until 7 November 1990. He was thus
intestate for almost a quarter of a century after his wife’s death. The original of his
1954 will found its way into the hands of Mr D B Thomas, an Auckland solicitor, who prepared the 1990 will. The will has various pencilled notes and names on it (none being Atkinson family names) which are unexplained. Nothing hangs on those notes.
[32] Mr Thomas, who has been practising for 38 years, was Mr Samuels’ solicitor from the mid 1970s. He prepared the 1990 will but has not retained any notes or written instructions if there were any. Mr Thomas confirms that Mr Samuels wanted to benefit his nephew and niece because they were blood relatives even though he had little contact with them at that time. Mr Thomas has no recollection of Mr Samuels ever mentioning he had a financial interest in the Atkinson family farm. He had, over the years, acted for Mr Samuels in respect of a number of documented loans to the Atkinson family.
[33] Mr Samuels was very clear about his testamentary intentions. In October
1990, shortly before he signed his will, he wrote to his nephew, David, whom, it will be recalled, had visited him in Auckland earlier that year for the Commonwealth Games, in the following terms:
David I have been to my solicitor to change my will. I had left everything to Auntie Shlovie, now I have asked the solicitor to make a trust with everything going into you and Doreen and the girls. I have nominated you as trustee, so far it hasn’t been finalised but the will is covered, my shares in the farm are being valued. I know the family would like them cheaply but I am not interested as I have had no return in all the years I have had the shares. What happens afterwards it will be your problem (sic).
[34] In January 1991 Mr Samuels wrote to David requesting details of his bank account so that he could remit to him $27,000 each year “free of tax”. It appears this never occurred. On 1 April 1991 he wrote again to his Scottish family, this time a bereavement letter to his sister-in-law Rita (David Samuels’ mother) and his family on the occasion of his younger brother, Alexander’s, death. In that letter he said:
Recently I have made my will. Rita, and your children are named as my next of kin, so you can be sure that their future will be secure monetarywise.
[35] A letter written much later in January 2001 fleshes out in greater detail Mr Samuels’ approach to his shares in Glenholme which he had specifically mentioned in his October 1990 letter. He wrote to David Samuels in the wake of what appears to have been a happy and successful visit to Atkinson holiday homes on Lake Rotoiti:
... I had three nights on the farm and listened to Donald’s tails (sic) of woe, what a hard time he’s having. They are milking 400 cows and they have never so well off in their lifes (sic). I have heard this for years and I don’t even listen now. Donald got his start from the farm and he has made the best of his life and Paul also had the chance but his marriage was a disaster.
[36] After some generally laudatory remarks about Paul Atkinson and the commercial skills of Donald Atkinson (junior’s) wife, the letter went on:
... but I did enjoy my short stay on the farm. After all, I helped to buy the second farm and that has been my pleasure, as over the years Freda just loved the place and she and Leila got on very well and I would liked to have been more involved but to keep our friendship I kept out of things I did not like.
[37] As will be apparent, the Atkinson family was totally unaware of the terms of
Mr Samuels’ 1990 will. At a Glenholme shareholders’ meeting on 19 February
1992, fifteen months after the will was signed and at which Mr Samuels was present, there was a wide-ranging discussion on the future of the farm. Mr Donald Atkinson (senior) was about to turn 70. Retirement was discussed. Amongst other proposals canvassed was the purchase of Mr and Mrs Atkinsons’ shares by their three children and the need of the family generally to “address” their shareholding. The minutes of the meeting record the discussion which was wide-ranging. The only minuted contribution of Mr Samuels was to trace the history of the farm from a small dairy unit to its then current position as a large mixed farm.
[38] I consider this meeting to be significant. Mr Samuels would have been well aware of the provision he had made in his will relating to his shares. The shareholding in the farm’s future had been discussed, but he remained silent. The Atkinson family, for their part, as I shall find, had a clear expectation that Mr Samuels would leave his shares in Glenholme to the two Atkinson sons.
[39] This expectation was soundly based. I find as a fact that well before the 1990 will, probably as early as the 1970s, Mr Samuels had specifically promised he would leave his Glenholme shares to his old friend’s two sons, Donald and Paul Atkinson. There is uncontradicted and corroborated evidence to that effect.
[40] Mrs Leila Atkinson’s evidence was that during Mr Samuels’ many visits to the farm in the 1960s and 1970s after Freda’s death, she had a clear understanding from conversations which took place between her and her husband that Sammy would leave his Glenholme shares to Donald (junior) and Paul. Sammy shared her husband’s clear wish that the boys carry on the farm. Sammy explained to both Donald Atkinson (senior) and Mrs Atkinson that he wanted to strengthen his bond with the family, particularly with their children. He believed that keeping his interest in the farm would achieve that. He expressly told both Donald Atkinson (senior) and Leila Atkinson at various times that he would eventually leave his shares to the boys, Donald and Paul.
[41] Leila Atkinson was unshaken on her evidence during cross-examination. She was present at times with her husband when Sammy said this. Even when Freda was alive, before Sammy had acquired the shares, there had been comments that they would, as a couple, do something for the children. When asked whether it seemed unusual that such a meticulous man had not written anything down, Mrs Atkinson said that there was some comment about this from time to time, but that Sammy had said there was no need to do anything because he was leaving the shares to the boys.
[42] In the late 1960s Sammy erected a sign at the farm gate, which he had apparently commissioned, which read, “Glenholme Farms DJ Atkinson & Sons”.
[43] Once, whilst visiting the farm, Mr Samuels had an argument with Donald Atkinson (junior). The argument between the two was significant, categorised by Donald Atkinson as “the biggest argument I think I had in my adult life”. As the argument continued in the farm’s garage, Donald Atkinson asked Uncle Sol why everything he did was never good enough for his uncle. The argument concluded by Uncle Sol saying words to the effect that he got grumpy when he thought Donald could do better. He said everything he did was for the benefit of the boys and that
the shares in the farms were left to them. This cleared the air. There was never another argument between the two.
[44] There was also important corroborative evidence from Orly Jacobsen, Mr Samuels’ great niece and a first cousin once removed of David Samuel. She appeared under subpoena. She struck me as an impressive and truthful woman whose first recollection of her great uncle was when she came to New Zealand as an adult in 1994. She eventually settled in Auckland and on one occasion visited the Atkinson farm. Her evidence was that Uncle Sol described and regarded the Atkinson family like his own family. They were extremely close and were in effect his New Zealand family. He also described to his great niece his attachment to the farm which interested him and in which he had a financial interest. When asked by counsel whether Uncle Sol had ever commented on what he wanted to happen to his investment in the farm, Ms Jacobsen replied he had given her the impression that the farm was for the boys, Donald and Paul, and that he had always referred to the farm as being for the boys.
[45] A promise of a different and more problematic type was made in respect of the Atkinson daughter, Jennifer Dainty. Neither Donald Atkinson (senior) nor Sydney Samuels were of a generation which would have contemplated a daughter being involved in the running of the farm. There was uncontradicted evidence from Mrs Leila Atkinson that, from time to time, when Sammy was speaking of leaving the farm shares to the boys, he stated he would “do something else” for Jennifer. At some unspecified time, probably in the late 1960s, Sammy subscribed to 200 shares in a local radio station, Radio Bay of Plenty Limited. Despite subsequent restructuring, he refused to part with them. They are probably worth $1,000. In the
1980s he told Donald and Leila Atkinson he would leave his shares to Jennifer.
[46] Jennifer Dainty, for her part, was well aware of the fact, because her parents had told her, that Uncle Sol would be leaving his Glenholme shares to her brothers. She was also aware of discussion within the family that she might receive his radio company shares.
[47] Shortly after Sydney Samuels died in January 2006, the terms of his will became known to the Atkinson family. They were, in general terms, bewildered and distressed that their clear understanding of what Uncle Sol would do with his Glenholme shares had not occurred. Particularly distressed was Donald Atkinson (senior). He had been in ill health for sometime and had suffered two heart attacks. His discovery that a bequest of the shares had not occurred caused him and his wife much grief.
[48] The only shred of evidence to the contrary appears in David Samuels’ affidavit of 25 October 2007. Discussing his 1990 visit to New Zealand he refers to visits to the Atkinson farm and also to a small farm owned by Paul Atkinson and his then wife. David Samuels deposes that Donald Atkinson (senior) confided in him that the family had some concerns about possible claims by Paul’s wife and that a family trust might be set up. David Samuels has a recollection that Donald Atkinson (senior) mentioned to him “his understanding” that Uncle Sol’s shareholding in the farm would ultimately pass to Sol’s next of kin. There was no mention to David Samuels by anyone of the shareholding passing to the Atkinson family.
[49] Counsel chose not to cross-examine David Samuels on his recollection. Donald Atkinson (senior) is dead. I do not consider that David Samuels had any intention of misleading the Court. I take his recollection as he has deposed. However, I consider it highly improbable, and so find, that Donald Atkinson (senior), against the background of the evidence I have described, would have made a comment in precisely those terms to David Samuels. Such a comment would be totally inconsistent with the understandings of the entire Atkinson family. It would be inconsistent with Donald Atkinson (senior’s) grief and distress shortly before his own death when he became aware of the terms of Sydney Samuels’ will. And finally the statement would be inconsistent with subsequent clear understandings and impressions gained in the second half of the 1990s by Ms Jacobsen.
[50] I turn now to services. I will deal with the required nexus between a promise and services in a subsequent section of this judgment. It is convenient, however, to now describe briefly the services rendered to Mr Samuels by the Atkinson family,
which were extensive. I do not intend to itemise these in detail. A generalised description will suffice.
[51] The services extended to Mr Samuels by the Atkinson family as a group include companionship, family life, and affection which went well beyond the bonds of friendship. As a childless couple, Sammy and Freda became a special aunt and uncle. The consequence of this special relationship was that all three Atkinson children came to regard Uncle Sol as an extra parent. The Atkinson family became Sammy’s New Zealand family, a particular benefit to him during those decades when he was far removed geographically and logistically from his blood relatives in Scotland. This family component of services was of particular value given that Sammy and Freda were childless. The value of family was augmented again as a result of Mr Samuels’ widowhood. Support was given to Freda and subsequently to Mr Samuels during times of illness and convalescence.
[52] Although Mr Samuels lived in Auckland, the farm became part of his life. He was able to play a part in its operations, both in a hands-on and a financial sense. The symbolic significance of the farm to him, quite apart from his shareholding, is evidenced by a small loan of $1,250 being monies he advanced to Glenholme to build a barn. He insisted that sum remain as a debt in the company’s balance sheet, being carried forward from year to year. The farm, and indeed the Atkinson holiday homes, were available to him for visits and holidays. Those visits included visits by his overseas family and friends.
[53] Birthday parties and weddings were included in services. Jennifer Dainty organised 80th and 90th birthday celebrations for Uncle Sol in Auckland. For the latter, Mr and Mrs Atkinson (senior) provided some financial assistance.
[54] Mr Donald Atkinson (junior), while he was qualified as a valuer, performed annual valuation work for over twenty years at no cost, (although the work would have been reasonably routine), for Mr Samuels who was required each year to renew insurances on his business.
[55] During the 1990s and up to Mr Samuels’ death, despite a clear reconnection between him and his Scottish family, services from the Atkinsons increased and became more focused as his health declined. Mrs Dainty, in particular, provided and prepared meals, visited regularly, and cleaned and tidied his home, especially in the wake of surgery when he suffered from a prolapsed intestine. She would take him shopping. She would take him for his medical appointments. She would, on occasions, collect him when he had forgetfully wandered from his St Heliers Bay home to his premises in Glen Innes.
[56] The Atkinson sons visited Mr Samuels when they were in Auckland. Donald Atkinson (junior) would take him to lunch or breakfast. At Rotoiti they took him trout fishing. In the 1970s when Donald was living in Whangarei, he and his wife would take him to ballet and musicals. On occasions Donald Atkinson did work in Uncle Sol’s garden. Paul too found on his visits to Auckland his Uncle Sol would always have jobs waiting for him in his house and garden. Holidays at the farm, at the Rotoiti homes, and at Paul Atkinson’s home, during the period when Uncle Sol suffered from Alzheimer’s disease, were demanding, but took place.
[57] To his credit, David Samuels, although he clearly would have limited first- hand knowledge of these services extending over half a century, does not, and indeed cannot dispute what took place. Rather, his stance has been to describe blood relationships as “always paramount” for his uncle. He also deposed, although on what basis is unclear, that he does not believe Donald Atkinson (senior) would have supported the claim by his children. He describes his uncle as generous by nature but a shrewd businessman.
The law
[58] Section 3(1) of the Law Reform (Testamentary Promises) Act 1949 provides:
Estate of deceased person liable to remunerate persons for work done under promise of testamentary provision
Where in the administration of the estate of any deceased person a claim is made against the estate founded upon the rendering of services to or the performance of work for the deceased in his
lifetime, and the claimant proves an express or implied promise by the deceased to reward him for the services or work by making some testamentary provision for the claimant, whether or not the provision was to be of a specified amount or was to relate to specified real or personal property, then, subject to the provisions of this Act, the claim shall, to the extent to which the deceased has failed to make that testamentary provision or otherwise remunerate the claimant (whether or not a claim for such remuneration could have been enforced in the lifetime of the deceased), be enforceable against the personal representatives of the deceased in the same manner and to the same extent as if the promise of the deceased were a promise for payment by the deceased in his lifetime of such amount as may be reasonable, having regard to all the circumstances of the case, including in particular the circumstances in which the promise was made and the services were rendered or the work was performed, the value of the services or work, the value of the testamentary provision promised, the amount of the estate, and the nature and amounts of the claims of other persons in respect of the estate, whether as creditors, beneficiaries, wife, husband, civil union partner, children, next-of-kin, or otherwise.
[59] This provision, in terms of s 3(2)(a), applies whether the services or work were rendered or performed before or after the making of the promise.
[60] There is no dispute between counsel as to the relevant principles and authorities. I was referred to the Court of Appeal decisions of Thwaites v Keruse (1993) 11 FRNZ 19; Byrne v Bishop (2001) 20 FRNZ 609; and Powell v Public Trustee [2003] 1 NZLR 381. I was referred to Re Archer [1990] 3 NZLR 737; Jones v Public Trustee [1962] NZLR 363; Re Collier (deceased); Collier v Taylor (1998)
17 FRNZ 474; Humphrey v New Zealand Guardian Trust [2004] NZFLR 179; and Rennie v Hamilton [2004] NZFLR 270. I was also referred to the Privy Council decision Re Welch [1990] 3 NZLR 1. I have, of course, considered those authorities and counsel’s submissions on them.
[61] Certain relevant principles emerge. First, qualifying work or services must exceed the normal expectations of family life or social interaction. Companionship, affection, and emotional support, provided they extend beyond the norm expected of a relative, neighbour or friend, will qualify. (See Burn v Bishop [6]; Thwaites v Keruse at 23.)
[62] There must be a nexus between the services and the promise, it being immaterial (s 3(2)) which first occurred. I note the services or work need not be attributable to a claimant alone. An indication to a parent to make testamentary provision for that parent’s child as a reward for services rendered by the parent qualifies. The summation of Blanchard J delivering the Court of Appeal’s decision in Byrne v Bishop is instructive in these areas:
[9] As s 3(1) speaks in terms of “the rendering of services to or the performance of work for” the deceased and a “promise” by the deceased to reward the services or work by making a testamentary provision, it is clear that some nexus or linkage is required between the services and the promise (in whatever sequence they occur). But s 3(1) does not say that the services or work must come from or be done by the claimant. The section therefore covers a situation in which the claimant is not the person to whom the promise is made; in which, for example, the deceased indicates to a parent an intention of making a testamentary provision for that person’s child as a reward for something done or to be done for the deceased by the parent. This is not surprising. It would be a very natural reaction of persons whose caring nature led them to render services or perform work “beyond the call of duty” to respond to an announcement by the recipient of a desire to provide a testamentary reward by saying “Don’t do it for me; if you feel you must do something, do it for my child”. The Act would enable a claim by the child even, we think, where the parent was aware of the promise during the lifetime of the promisor but the child was not.
[10] The motive of the person rendering the services or doing the work is of little importance. In truth, it can really be of no importance where the promise is to reward things done for the promisor in the past (Jones v Public Trustee at p 375). The requirement that there must have been a “promise” to reward the claimant is directed to the purpose of the promisor’s provision rather than the motivation of the promisee and it is sufficient that the promise be in part only as a reward for services; family ties and other considerations may also have influenced the making of the promise (Leach and Booth v The Perpetual Trustees Estate and Agency Company of NZ Ltd
20/3/90, CA48/88). It would be repugnant if the fact that the services or work were performed out of a generous spirit and not for mercenary reasons
or in the hope of reward should count against claimants by way of depriving them of a claim or devaluing it.
[63] Services which include provision of help, support, and provision of assistance and food to the elderly are classic and well recognised examples of qualifying services. (Re Archer; Powell v Public Trustee).
[64] The facts of some cases suggest that there is often a reciprocal benefit between the party who makes the promise and the party rendering the work or services. Where such reciprocity exists (frequently in companionship and support
cases) the court needs to balance the reciprocal benefits involved. In the event of there being a shortfall in benefits flowing from the promise maker, then an award is appropriate to redress the balance. (Powell v Public Trustee [31]; Byrne v Bishop [11]).
[65] Finally, the quantum of an award must not exceed what is reasonable recompense for the services or work performed for a deceased. The balancing exercise must also include, as the Privy Council recognised in Re Welch, other legitimate claims on the estate.
It is not to be doubted that, for instance, where there have been meritorious services and considerable sacrifice on the part of a claimant and the property promised has been a central feature in the services or the life of the claimant, the natural order under the Act may be one vesting the property in the claimant, provided that this does no injustice to any others with meritorious claims against the estate. Jones v Public Trustee [1962] NZLR 363 was such a case. On the other hand, despite a promise of a specific property, either the limited value of the claimant's services by comparison or other circumstances of the case may result in a lesser or different award, as in Public Trustee v Bick [1973] 1 NZLR 301 and Re Townley [1982] 2 NZLR
87.
[at 6 per Sir Robin Cooke]
[66] Byrne v Bishop is also authority for the proposition that where services are provided by more than one member of the family, the value of individual members’ services should not be considered in isolation, but in the context of services provided by the family as a whole (Byrne v Bishop [43], approving the approach taken at first instance by Nicholson J).
Discussion
[67] Mr Brittain, with strong support from the evidence, submitted that applying the law to the facts must inevitably lead to an award. The services, particularly the family support, being given for more than fifty years by the Atkinson family to Mr Samuels and his wife went far beyond what one would expect from mere friends. There had been a promise of the Glenholme shares at a relatively early stage of the Atkinson family’s involvement with Mr Samuels. The services and support outlined earlier in this judgment were ongoing. Specific and focused assistance from Mrs Dainty, in particular, and from the others, continued in Mr Samuels’ declining years
and well beyond his 1990 will. There was a clear nexus between the promise (to bequeath the shares and make provisions for Jennifer Dainty) and those services being rendered by the entire Atkinson family. In counsel’s submission, the value of those services, although non-monetary, far exceeded the valuation of the shares. There is no imbalance attributable to reciprocal benefits to the Atkinson children. There had been financial assistance provided to the farm, but this was formal and recognised in the shareholding and the $1,250 debt. Other loans made to Paul Atkinson and Jennifer Dainty have been properly recorded. All have been repaid, and were not on any significantly advantageous terms.
[68] Mr Brittain submits that the promise in respect of the shares should be enforced by an award of them, and that Mrs Dainty for her part should receive an award of a range between $50,000 - $200,000.
[69] Ms Riddell did not attempt to attack the strength of the plaintiffs’ case with irresponsible or untenable arguments. Her submissions were impressive and did not go beyond the bounds of the relevant law and established facts.
[70] Her first submission was that the services provided by the Atkinson family over a lifetime of mutual friendship were of benefit to both the Atkinson family and to the deceased. Her second submission was that if a promise were to be found, it was unrelated to the services in question.
[71] Referring to s 3(1), counsel submitted that I must weigh the strength of competing moral claims and that, as blood relatives with whom Mr Samuels had an extended and valued relationship, the Court should not collapse or diminish the entitlements under the will of David Samuels and Doreen Spevack.
[72] Although accepting that Court of Appeal authorities justified a large and liberal interpretation of work and services, counsel reiterated that the relationship between the Atkinson family and Sammy was of benefit and value to both sides. It was clear on the evidence, submitted by counsel, that Mr Samuels was not reliant on the plaintiffs. He was a successful and shrewd businessman in his own right. The
closeness and frequency of the relationship between Mr Samuels and the Atkinson children had inevitably diminished as they had become adult.
[73] Furthermore there had been additional benefits to the Atkinson family, such as the loans, the provision of capital to expand the farm, and the offer of mortgage finance. These benefits had a convenience factor attaching to them since the Atkinson family had an assured and friendly lender available. The reciprocal benefits, submitted counsel, brought matters into equipoise.
[74] In counsel’s submission, if a promise relating to the Glenholme shares were made, it was strange, and a matter of weight, that Mr Samuels never referred to it or, unlike other transactions with the family, documented it. This, submitted counsel, is inconsistent with what the evidence said about his habits and character. It was very clear, from October 1990, what Sydney Samuels wanted to happen to the shares. It was equally clear that he took his shareholding seriously and wanted to retain it throughout his life. This was not a case where a deceased had failed to turn his mind to his testamentary obligations. His testamentary intention was clear and inconsistent with the promises alleged by the plaintiffs.
[75] The services which the Atkinson family performed for the deceased were unlinked to any verbal promises. So far as the Atkinson children were concerned, what they did for their Uncle Sol was not linked to any thought of reward but was more akin to an obligation they felt towards a father.
[76] With this submission there is, as Mr Brittain observed, a flaw. The nexus between promises and a service must be objectively determined and the focus must be on the promisor (the deceased) rather than the promisee. Services are frequently performed out of a sense of obligation or charity with no expectation of a reward. Nonetheless, if those services are linked to a promise, the motivation of the promisee is largely irrelevant (see Byrne v Bishop [10]). The Court of Appeal put it thus:
It would be repugnant if the fact that the services or work were performed out of a generous spirit and not for mercenary reasons or in the hope of reward should count against claimants by way of depriving them of a claim or devaluing it.
[77] On the issue of quantum, Ms Riddell submitted that, if there were a nexus established between a promise and the services rendered by Mrs Dainty, then an appropriate award would be in the region of $50,000. In her submission, however, an award of the shares to Donald Atkinson and Paul Atkinson would far exceed the value of the services rendered on an analysis of awards in various cases.
[78] Counsel stressed that the timing of the ₤4,000 provision of capital to the Atkinson family was critical. Without that advance the farm would not have been able to expand. For 40 years Mr Samuels had received no commercial return on the money by way of dividend or otherwise. The value of the majority shareholding in Glenholme is now conservatively $4.6m, in respect of which the Samuels’ shareholding had been a crucial building block.
Decision
[79] I am satisfied on the evidence I have heard, well beyond the balance of probabilities, that Mr Samuels promised he would leave his Glenholme shareholding to the sons of his friend, Donald Atkinson (senior). The friendship between the two men had been cemented on the battlefields of the Western Desert and Italy. It was a friendship which survived the War and which both men valued. For both Mr Samuels and his wife, the friendship was an important one. It became even more important when the Atkinson children arrived and both families agreed to a special relationship. That relationship was of great significance to both Mr Samuels and his wife because of their inability to have children. After Freda Samuels’ death, the relationship became even more important for a man widowed and childless, whose blood family, with whom he had, of necessity, little contact for over twenty years, was on the other side of the world.
[80] Donald Atkinson (senior’s) farming operation and his farm were similarly valued by Mr Samuels. It was a place where he could holiday. He enjoyed participating in farm work. It was a place to which he brought family and friends. He visited frequently. He convalesced there.
[81] The promise of the shares was, in my judgment, linked to these services. As a shrewd businessman, who documented all his transactions, he was not prepared either to quit his shareholding or to write-off (or even have repaid to him) the small loan advanced to Glenholme to construct the barn. But his hope was that the farm would stay in the Atkinson family, being run by the next generation. He had promised to facilitate that with a promise to leave his shares to the two sons.
[82] In the same time period he also promised to do something for Jennifer Dainty of a different nature. The specificity of this promise was not spelled out in the same way as the Glenholme shares. The promise in respect of the Radio Bay of Plenty Limited shares was not repeated as frequently, and was certainly not comparable. Nonetheless, for the same reasons that led to his promise in respect of the Glenholme shares, there was a promise to make some provision for the Atkinson family’s daughter.
[83] In the wake of those promises, all three plaintiffs and their aging parents continued to render the services which I have outlined. Being the only member of the Atkinson family in Auckland, Mrs Dainty rendered many more services to Mr Samuels than her brothers, who lived in different parts of the North Island, were able to render. She did not render those services (anymore than her brothers did) in the expectation of some reward or because a promise had been made which would ultimately benefit her family. She was aware of the promise. But the services continued unabated.
[84] It is very clear from the narration of facts that the services, rendered as they were not to a family member but to a very close family friend, went well beyond what one might normally expect of a mere friend.
[85] For reasons we shall never know, Mr Samuels resiled from his promise in
1990. Ms Riddell is right that his testamentary intention was very clear. He had no intention of bequeathing the Glenholme shares to the two Atkinson sons. Nor did he intend to make any provision for Jennifer Dainty. Prophetically perhaps, when writing to David Samuels about his proposed will in October 1990, he said that “what happens afterwards will be your problem”. The problem is this proceeding.
[86] Mr Samuels continued to benefit from everything which, collectively and individually, the Atkinson family had to offer. He never gave an indication that he would resile from his promise. Probably what motivated him was the greater weighting which he gave to his blood relations at a time when he was able to see them more frequently and when David Samuels established contact with him in
1990. Riding with that was perhaps some mild irritation that he never received any commercial return from his shareholding, an approach which overlooks the many joys and benefits which his participation in the farming operation and in Atkinson family life gave him and would continue to give him.
[87] The difficult area here, requiring careful judgment on my part, is the issue of quantum. Part of the balancing exercise must weigh the interest of David Samuels and his sister against the clear testamentary intention. This estate, however, is a large one. On extremely conservative valuations, its assets amount to just over $3m but almost certainly the figure will be closer to $4m. The value of the shares, just under $600,000, is less than 20% of the value of the estate on the most conservative estimate and is more likely to be 15% of its value.
[88] I am satisfied that Mr Samuels regarded his Glenholme shareholding as being a tangible expression, not only of the various benefits which flowed to him (and previously to his wife) of being able to visit and retreat to the farm, but also of his special relationship with the Atkinson family and all that they had to offer him. Out of friendship, Mr Atkinson (senior’s) expansion plans in 1966 gave Mr Samuels an opportunity to invest in the farm and the family in a tangible way. That reflected the value to him of his involvement with and, indeed incorporation into, the family and their farm. The promise he made, in my judgment, reflects fairly and accurately what those many services were worth to him and how he wished to reward them.
[89] As it turned out, neither Donald Atkinson (junior) nor Paul Atkinson would step into their father’s shoes as operators and managers of the farm. Nor did Mrs Dainty.
[90] Mrs Dainty’s services over the years in Auckland and at her Rotoiti home, particularly during his declining years, were, in my judgment, a reflection of the
position Mr Samuels occupied in her family and were also causally linked to his promise to do something for Jennifer in addition to the promise he made to reward her brothers.
[91] Although the value of the shares will, on a quantum assessment, exceed the value of the services performed individually by each or all of the plaintiffs, their valuation does not, in my judgment, exceed the value of the many services rendered collectively by the Atkinson family to Mr Samuels and his widow from the end of the Second World War to his death in 2006.
[92] I conclude, for all these reasons, that a just and appropriate award under s 3(1) of the Law Reform (Testamentary Promises) Act 1949 is an order that the deceased’s shares in Glenholme Farms Limited should vest in each of the three plaintiffs as tenants in common in equal shares. They are to have equal and individual holdings, not a joint holding.
[93] This result does not extend to the $1,250 loan to Glenholme by the deceased. That sum is repayable.
Result
[94] This Court therefore orders, pursuant to s 3 of the Law Reform (Testamentary Promises) Act 1949, that the shares owned by the deceased, Sydney Samuels, in Glenholme Farms Limited at the date of his death shall all vest in Donald Trevor Atkinson, Alexander Paul Atkinson, and Jennifer Louise Dainty as tenants in common in equal shares.
Costs
[95] It is perhaps regrettable that this proceeding did not settle and had to go to trial. Counsel inform me that there was an unsuccessful settlement conference before an Associate Judge. During the course of the hearing I asked counsel to
revisit the possibility of a settlement. It is not for me to speculate why a settlement along the lines of this judgment could not be achieved.
[96] I have not heard counsel on costs. The plaintiffs have sought costs in their statement of claim. The plaintiffs, having succeeded, are entitled to costs.
[97] Costs will clearly come out of the estate. Ms Riddell submitted there was no conflict between the role of Mr David Samuels as executor and his status as a residuary beneficiary.
[98] I invite counsel to use their best endeavours to resolve costs. If this cannot be achieved, then I direct counsel for the plaintiffs is to file a short memorandum containing submissions on costs within 20 working days of this judgment being delivered, and the defendant a memorandum in reply within 15 working days thereafter. I shall then, unless counsel request a hearing, determine costs on the papers in chambers.
...........................................… Priestley J
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