Barnard v Robertson

[2022] NZHC 469

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2020-454-53

[2022] NZHC 469

IN THE MATTER

of the Family Protection Act 1955

AND

IN THE MATTER

of the Estate of Margaret Isabel Barnard

BETWEEN

GRAEME WHATMAN BARNARD

Plaintiff

AND

CHRISTOPHER MARK ROBERTSON, ROGER THOMAS BARNARD and GRAEME WHATMAN BARNARD

Defendants

Hearing:	28 February 2022
Counsel:	T G A Manktelow and H Clode for Plaintiff J G A Day for C Robertson and G Barnard G A Paine for Trustees
Judgment:	15 March 2022

JUDGMENT OF SIMON FRANCE J

Introduction

[1]                  Mrs Margaret Barnard was survived by her three sons – Graeme, Roger and Timothy.1 Each was provided for in her will but a distinction was drawn between Graeme and the other two sons.  As at the date of the hearing the estate is valued at

$4.4 million.   The bulk of the value comes from a share portfolio worth almost

$3.2 million.

1      One son, Roger, has since died.

BARNARD v ROBERTSON [2022] NZHC 469 [15 March 2022]

[2]                  In this proceeding Graeme makes a claim for further provision under the Family Protection Act. He says assistance provided by him to his mother has not been properly recognised, and nor have his financial needs.

[3]The will can be considered in three parts:

(a)the residue consisted of Mrs Barnard’s house (now sold) and some jewellery. It is divided equally, and will give each son (or Roger’s estate) $290,000;

(b)a one-third share in Graeme’s house and land. This was acquired when in 2007 Mrs Barnard gave Graeme between $200,000 and $250,0002 to enable him to buy out his wife from whom he was separating, and meet some other debts. In the will Mrs Barnard gifts this one-third share back to Graeme, and makes a specific gift of $250,000 to each of the other two sons. In 2008 Mrs Barnard made a will with this structure included, and then repeated it unchanged in the operative 2013 will. The one-third share is now worth $386,000;

(c)the share portfolio is where the dissimilar treatment occurs. Its value is first reduced by $500,000 to meet the two $250,000 gifts. It is then divided into thirds, but whereas Roger and Timothy receive their shares absolutely, Graeme receives only a life interest in his share. On his death his one one-third is divided equally among the other two brothers (or their children if either predeceases Graeme).

[4]                  There is no direct evidence on the matter but for analysis purposes for the case, figures provided by Mr Day in his submissions and not contested by Mr Manktelow can be used. Using the Estate and Gift Duties Act formula, the life interest could be valued at $374,353. The expected tax-paid annual income is $26,000.

2      As with most matters the parties disagree on the quantum.

Mr Barnard’s circumstances (excluding benefits from will)

[5]                  Mr Barnard’s home is owned by a family trust of which he describes himself as the beneficiary. This trust owns two-thirds of the property. I apprehend from the evidence filed3 that his mother’s ownership of the other third was irrelevant on a day- to-day basis.

[6]Mr Barnard receives national superannuation of $847.66 per fortnight.

[7]                  Mr Barnard owns a share portfolio worth $160,000 which provides income of around $5,000 per annum. He has $20,000 in the bank. He owns three vehicles, one of which is worth $30,000, the other two of unstated value (but I infer less).

Mr Barnard’s claim

[8]                  Mr Barnard submits he has a special claim on his mother’s estate, calling in aid a passage from Goodman v Windeyer.4

One of the circumstances that must be considered in deciding upon the deserts of a claimant to a testator’s estate, and in determining whether proper maintenance has been provided, is the manner in which that claimant has conducted himself or herself in relation to the testator. If the claimant has contributed to building up the testator’s estate, or has helped him in other ways, that may give the claimant a special claim on the testator’s bounty.

[9]                  The essence of this claim is that Mr Barnard lived in the same city as his mother, whilst his two siblings lived some distance away and visited occasionally. This meant Mr Barnard did much to assist his mother.

[10]              The affidavits disclose a deep antipathy between the brothers which has manifested itself in claim and counterclaim that have descended to pettiness. There are numerous occasions where what the other says is doubted, denied or called a lie in circumstances where the deponent cannot really know. Claims of what is the real situation are buttressed by apparent comments by the deceased who is either being misquoted or played her sons against the other or perhaps, like many, just became a bit confused as she got older. For example, alleged statements by her that she seldom

3      There was no examination of witnesses.

4      Goodman v Windeyer (1980) 144 CLR 490 at 497 (emphasis added).

sees or hears from one or other of her sons. The Court cannot possibly resolve all these matters. There has been no oral evidence and anyway most do not merit resolution. A general narrative can, however, be given.

[11]              It appears each of the sons left home either in their late teens or around 20 years of age. Graeme remained in the district where his parents lived; the other two moved much further away. The parents ran a farm until the mid-1980s when all but 10 acres was leased out. They lived on that block of land until 2002 when it was sold. The couple built a home in the city and thereafter lived there. Mr Barnard died in 2007 and Mrs Barnard in June 2019. She was 93 years of age.

[12]              Graeme claims little contact from the other brothers in the later years of her life; they dispute that and challenge the extent Graeme assisted their mother, claiming instead she provided financial support to him with the purchase of groceries. It cannot be determined on the papers how much contact each had and how accurate their recollections are. It is the case that Graeme held a power of attorney and lived nearby. Common sense says that he would have assisted his mother more. There are affidavits filed on Graeme’s behalf from Mrs Barnard’s caregiver and by a friend of Graeme’s, both deposing in favour of his version. It is not possible to give them much weight. As for the friend, it is difficult to discern how much is personal knowledge and observation. As for the caregiver, there is fulsome support but a somewhat surprising error in recalling the length of time she worked with Mrs Barnard. A statement of “in the years I worked for her” cannot be so as it seems to have been employment limited to part of the last year of Mrs Barnard’s life. I do not suggest anything more than a misremembering.

[13]              One topic that does require expansion is how Mrs Barnard came to own one- third of Graeme’s property. The general circumstance is easy to describe. Mr Barnard separated from his wife and he wished to keep the property they were living in so bought his former wife out with assistance from his mother. The original arrangement was a loan of $150,000 (leading to a quarter share) and a mortgage which Mrs Barnard would guarantee. However, she seemingly decided it was better to just pay that off, which she did by giving Mr Barnard the money, and a quarter share became a third.

[14]              A notable aspect of the will is that Graeme’s children are treated differently from the children of the other brothers. There is no provision for Graeme’s interests to pass to his children if he predeceases. This is made explicit in the residue provision which provides that if either Tim or Roger predecease, their children may take, but Graeme is not included in this.

[15]              In evidence is a letter from the lawyer acting at the time who wrote to both Mrs Barnard and Graeme. It was in 2008, so just after the separation and loan arrangement and when seemingly new wills were being made. The lawyer wrote in February 2008:5

In the interim, we note you have both expressed the intention to make new Wills. We invite your instructions. We believe that in Graeme’s will be [he] ought to bequeath his 75% interest in the property to Margaret. It needs to be pondered how you choose to treat Graeme’s sons in your Wills. You have both exhibited reluctance to bequeath any of your estates to the boys. The presence of the Family Protection Act does impact on that choice, but we can discuss that aspect when you next visit.

[16]              The other related topic is why Mr Barnard received only a life interest in his third of the share portfolio compared to the absolute gift of a third each to the other two sons. There is no formal explanation from Mrs Barnard. It was an approach implemented in the 2008 will and carried over in 2013. The evidence does not allow me to draw conclusions as to the testator’s reasoning.

[17]              Roger and Timothy Barnard identify two related reasons – a desire on their mother’s part to protect Graeme from his own business failings, and from his former wife. On this latter aspect, while the couple separated in 2007, they never divorced until shortly after the testator’s death and seemingly Mrs Barnard was concerned to exclude the former wife from any possibility of access to her money.

[18]              Mr Barnard deposes he is unaware why he was given a life-interest, and his children excluded. He says he was never party to any agreement to exclude his children from taking his estate but does not appear directly to address the letter from the solicitor to that effect earlier cited. Mr Barnard also disputes that his companies were failing and says they were wound up as part of the settlement with his former

5      Emphasis added.

wife. He agrees his mother may have had concerns about his former wife having claims on his property (they being separated but not divorced).

[19]              By way of a final comment, I observe that a re-reading of the affidavit evidence suggests the parties have lost objectivity. This has led to speculation by one against the other, and unnecessary accusations.6 There is a general lack of discipline in the content and disputes over matters that cannot have any relevance to the present proceeding. I am reinforced in a view formed on the first reading that it is not possible for the Court fairly to resolve these on the papers, or form firm conclusions.

[20]              Mr Manktelow emphasised that the plaintiff’s claim relied significantly on the proposition that Mr Barnard had a special claim on the estate because of his contributions to it. It is necessary therefore to reach assessments on this.

[21]              The first phase of this claim is contributions by Mr Barnard to the farm. These are said to be while living at home, then by doing shearing with his father to avoid the need to hire shearers, working on weekends once he had left home and assisting his father once the farm was reduced to a 10 acre plot. His brothers dispute this on several fronts. First, it is said all the sons, as is usually the case with farms, worked on the farm when living at home. Second, the subsequent contribution by Graeme is contested, although the extent to which the brothers could have personal knowledge is limited. That said, Timothy says he was living on the farm for four years after Graeme left and he denies the claimed weekend assistance by Graeme over that period.

[22]              The evidence does not satisfy me that Graeme has contributed to the estate through this endeavour in a way that merits special recognition. His parents owned the farm when the children were born and during the period when the full farm was still run by their father, it is probable all sons contributed. The level of contribution will have varied depending on circumstances, but to the extent his is a claim of building up the asset or doing something significant, I am far from satisfied that is the case. Such assistance as was given once the farm reduced to 10 acres is more easily seen as a contribution to his parents’ life than any building up of the estate.

6      Out of fairness I observe my clear sense that the respondent brothers initiated this development and continued to fuel it.

[23]              The second aspect of the proposition that there is a special claim on his mother’s estate focuses on her time as a widow when Graeme was the only sibling living proximate to his mother. To the extent it is relevant, I accept the other brothers kept in regular contact and visited. However, Graeme was the person immediately available.

[24]              The evidence paints a picture of a dutiful son who has helped out, probably increasingly so as his mother aged. His mother lived in the house which she and her husband built on leaving the farm. In the year before her death at aged 93 there was a short period in a rest home before she returned to her own home.7 She had a carer for the last months. There is confusion over the exact period but it seems in the order of nine months. For the rest of the time Mrs Barnard lived independently. In her 80s she lost the ability to drive herself. The picture is one where objectively a proximate son with whom she had a good relationship would provide assistance, and I am satisfied that happened.

[25]              Without wanting to belittle that assistance, the evidence does not establish, or even claim as I read it, a particularly out-of-the ordinary level.  It does not seem   Mrs Barnard had great needs until near the end, and otherwise there was assistance with shopping and no doubt other things, and some house and section maintenance. My assessment is it would have been a consistent level of help, as needed, which probably increased near the end but which was not generally beyond what would usually be done by a loving child. As said at the start of the paragraph, that is not to downplay that it was nevertheless assistance and support that was given.

The law

[26]              The law is well settled, and my view of the case means a lengthy re-statement is not required. Graeme is an adult male in his late 60s who is making a claim for better provision from his mother’s estate. The will acknowledges him as a child and makes provision for him, but differentiates between him and his brothers.

7      Mrs Barnard’s last two weeks or so were in a retirement village.

[27]              In his text, Patterson traces the history of the Court’s approach to claims by adult children. The proposition identified is that significant resistance to such claims has given way to a greater willingness to treat such claims on their own merits, albeit with what is said to be a re-emphasis in Williams v Aucutt that the task is to assess the discharge of moral duties, and is not rewriting the will to correct perceived unfairness.8

[28]              At the risk of an unduly long quote, the concluding passage by Patterson, understood as it must be as concluding a sustained consideration of the relevant case law, is helpful, and relevant to this case:9

As New Zealand has progressively moved (at least for some parts of the population) towards greater affluence with greater emphasis on ownership of a family home coupled with the increasing uncertainties of life so far as retirement and provision of adequate health care is concerned, it is not surprising that the courts would regard the provision of both housing and capital reserves as appropriate. Naturally this will not apply in every case. A family of five children could not, perhaps, expect the same level of support from their parents as could an only child and the competing moral claims will, as always, have a significant bearing on the ultimate decision. It is now clear that adult children cannot expect that, if they are not treated equally in the wills of their parents, the court, under the Family Protection Act 1955, will put the matter right. While in Re Hale, it was accepted, on the facts, that equality might well have been the proper result but for the special circumstances that existed in that case, in Little v Angus, where the competing claimants were a son and a daughter, it was not contended that there should be equality of division. The High Court of Australia in Cooper v Dungan has expressly rejected any suggestion that an equal distribution is automatically to apply. Gibbs J stated generally:

If the Judge had exercised his power on the basis that equality of treatment between the three children of the testatrix was the proper standard to apply, he would have fallen into error; on the other hand, there was no error of principle if what he meant was that an equal division of the estate would give the respondent no more than, in all the circumstances, was sufficient to provide for her proper maintenance, having regard to the value of the estate and to the respective claims of her two brothers; see Blore v Lang.

The proper approach is still that adopted by the Court of Appeal in Mudford v Mudford. This is a consideration of the claim of each child on an individual basis, albeit on perhaps a more generous scale than might have been applicable at the time that Mudford v Mudford was decided.

8      Bill Patterson Law of Family Protection and Testamentary Promises (5th ed, LexisNexis, Wellington, 2021) at [9.1]–[9.76]. See also Williams v Aucutt [2000] 2 NZLR 479 (CA).

9      At [9.8] (footnotes omitted).

Assessment

[29]              There can be no dispute that Mrs Barnard owed Graeme a moral duty, and that the will recognises this. The issue is whether that duty has been discharged by a proper provision in all the circumstances pertaining at the time of her death. To recap what was provided:

(a)a one-third share in Mr Barnard’s home, meaning he is the sole owner of a property valued around $1.1 million;

(b)a share of the residue which will yield almost $300,000 in cash; and

(c)a life interest in a share portfolio which provides a present income of

$26,000 after tax.

[30]Mr Barnard otherwise has national superannuation and a share portfolio worth

$160,000 and yielding an income of around $5,000 per annum.

[31]              Focusing solely on financial need at the time of her death, I consider it can be said  there  was  a  need.  This  is,  of  course,  a  case-specific  assessment.  While Mr Barnard has assets worth around $1 million, he is a not uncommon asset sound but cash poor applicant. His income to meet all outgoings on a house, and his living expenses, was national superannuation plus $5,000.

[32]              Looking at  other  circumstances  that  feed  into  what  would  be  proper,  Mr Barnard had been a dutiful son who had provided comfort and assistance to his mother since she was widowed, and probably to an increasing extent as she became frail. There were competing claims on the testator’s estate, namely two sons each with family and one who was suffering from cancer which led to his death last year. And Mrs Barnard had assisted Graeme in his lifetime in a way not provided to the other sons. This assistance was offset by the testator taking a share in Mr Barnard’s house but it enabled him at around the age of 54 to have a mortgage-free home.

[33]              These were all matters a wise and just testator would need to have regard to in making proper provision.

[34]Two conclusions stand out to me –

(a)the will is unfair to Graeme in how it treats him differently from his brothers as regards the share portfolio; but

(b)proper provision has been made.

[35]              To explain the unfairness conclusion, the assistance given to Graeme at the time of his separation has been offset by the specific $250,000 gifts to the other two sons. At any point in time since the will was structured this way, this mechanism might have favoured one side or the other. Mrs Barnard lived to a good age, and so the figures presently favour Graeme but the mechanism deals with the topic of help during Graeme’s life. As for the other dispositions, it is, as always, a matter for the testator, subject to discharging moral duties, but objectively it seems to me unfair to have given one-third of the share portfolio to each of the other sons, currently valued at approximately $900,000 each, plus half each of Graeme’s share on his death. Conversely Graeme receives only the income from his third. There is nothing in the evidence that explains this mechanism or suggests it is fair. Hence my conclusion.

[36]              The question, however, is whether proper provision has been made. Looking at the matter from the viewpoint of the size of the estate, and accepting Mr Day’s assessment of the capital value of the life interest, Mr Barnard receives somewhere around 20–25 per cent of the estate at today’s value. It is far from not giving proper recognition to his membership of the family.

[37]              Looking at his circumstances, I accept the one-third share in the house makes little difference on a day-to-day basis. It does, however, give him full ownership of a valuable asset should he wish to downsize. Further, concerning his lack of income situation, there is now both the annual income from the share portfolio and a capital sum which can provide income, or be used as extra money to assist living. Taken with his own shares and other assets, it means Mr Barnard has around half a million dollars available to him in addition to superannuation and the share portfolio income. He also now fully owns a substantial property. It cannot be said, in my view, that the testator has failed to meet his needs in either a narrow financial sense or the wider sense

required of a wise and just testator. His brothers have been more favoured without, as I read the evidence, any real basis to support that approach; but he has been properly provided for in the sense of the testator meeting her moral duties.

Conclusion

[38]              The claim under the Family Protection Act is dismissed on the basis that the testator has not breached her moral duty to the plaintiff.

[39]Costs memoranda may follow if required.

Simon France J

Solicitors:

Innes Dean, Palmerston North for Plaintiff

North Law, Kerikeri for C Robertson and G Barnard Shona Cumming Law, Dunedin for Trustees