Brain v Harwood - [2014] NZHC 1092

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2013-470-000572 [2014] NZHC 1092

IN THE MATTER the Family Protection Act 1955

BETWEEN

ALAN WESLEY BRAIN Appellant

AND

CLIVE HARWOOD First Respondent

DAVID CLIVE HARWOOD and ALAN WESLEY BRAIN as Executors of the Will of VIOLET MARY BRAIN

Second Respondent

Hearing: 4 February 2014

Appearances:

H Roose for the Appellant
G Brittain for the First Respondent
No appearance for the Second Respondents

Judgment:

22 May 2014

JUDGMENT OF GILBERT J

This judgment is delivered by me on 22 May 2014 at 3pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

BRAIN v HARWOOD [2014] NZHC 1092 [22 May 2014]

Introduction

[1] Alan Brain, appeals against the decision of Judge A E Somerville in the Family Court at Tauranga upholding the claim made by his older brother, Clive Harwood, for further provision from their mother’s estate under the Family Protection Act 1955.1 Mr Brain also appealed against the Judge’s decision to make further provision for one of his children, Jason Brain, but he abandoned this part of his appeal at the hearing.

[2] Violet Brain died on 26 April 2011, leaving an estate worth nearly $3 million as follows:

Farm land $2,250,000

Cash in solicitor’s trust account $670,000

Shares $14,600

Bonus Bonds $25,760

Total $2,960,360

[3] In her will dated 16 December 2002, Mrs Brain made specific bequests of

$40,000 to each of her seven grandchildren, being Mr Harwood’s three children and Mr Brain’s four children. She left items of jewellery and two other personal items to her only granddaughter, Mr Harwood’s daughter. She made a further specific bequest of $180,000 to Mr Harwood and she left the residue of her estate, including the farm, to Mr Brain.

[4] Mrs Brain set out her reasons for making disparate provision for her two sons in her will as follows:

I state that I have made an unequal distribution between my two sons as Clive Harwood disowned his family name over 20 years ago after severe disagreement with my late husband, and since then my other son has contributed to the care, maintenance and operation of the farm in a very significant fashion and I believe that the provisions I have made for Clive Harwood and his children are a just and loving reflection of my obligations.

1 CH v DCH [2013] NZFC 7619.

The facts

[5] Mr Harwood was born in 1939. He contracted polio in 1948 which left him with weak legs and poor lung capacity. Despite these setbacks, he worked on the farm in the early part of his life with an expectation, as the older son, that he would one day inherit it. He worked every day after school milking the cows and attending to other farm chores. He also worked on the farm without payment during school holidays carrying out such tasks as slashing and clearing drains, cross cutting blown gum trees and harrowing.

[6] When Mr Harwood was 15 or 16,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brain v Harwood

Details

AGLC: Brain v Harwood [2014] NZHC 1092
Case: [2014] NZHC 1092
Decision Date: 22 May 2014

CaseChat Overview and Summary

Alan Wesley Brain appeals against the decision of Judge A E Somerville in the Family Court at Tauranga upholding the claim made by his older brother, Clive Harwood, for further provision from their mother’s estate under the Family Protection Act 1955. Mr Brain also appealed against the Judge’s decision to make further provision for one of his children, Jason Brain, but he abandoned this part of his appeal at the hearing. Violet Brain died on 26 April 2011, leaving an estate worth nearly $3 million. In her will, she made specific bequests to her seven grandchildren and a further specific bequest of $180,000 to Mr Harwood, leaving the residue of her estate, including the farm, to Mr Brain. Mrs Brain set out her reasons for making disparate provision for her two sons in her will as follows: she had made an unequal distribution between her two sons because Clive Harwood had disowned his family name over 20 years ago after severe disagreement with her late husband, and since then her other son had contributed to the care, maintenance and operation of the farm in a very significant fashion and she believed that the provisions she had made for Clive Harwood and his children were a just and loving reflection of her obligations. The Judge referred to the Court of Appeal’s decision in Little v Angus which confirms that the question of whether there has been a breach of moral duty is to be judged by the standards of a wise and just testator. Applying this test, the Judge found that Mrs Brain breached her moral duty to make adequate provision in her will for Mr Harwood’s maintenance and support. The Judge considered that there were three principal reasons leading to Mrs Brain’s breach of duty. First, Mrs Brain failed to take adequate account of the fact that Mr Harwood made a significant contribution to the value of estate through his work on the farm in difficult circumstances and the improvements he made to it in the expectation that he would inherit it. Second, she wrongly took into account as disentitling conduct the fact that Mr Harwood changed his name following the rift with his father. Third, by making a specific bequest in a will prepared 10 years before her death, she failed to recognise that inflation would erode the value of the provision she intended to make for Mr Harwood. The Judge calculated that at the time the will was made, the bequest represented 13 per cent of the value of her estate and that at the time of Mrs Brain’s death, an equivalent provision would have amounted to just under $380,000. The Judge recognised that there is no presumption of equality between children. She referred to the Court of Appeal’s decision in Williams v Aucutt noting that the question of whether adequate provision has been made for the proper maintenance and support of a claimant extends beyond the economic needs of that claimant and that the Court should neither be unduly generous nor unduly niggardly in remedying a breach of moral duty. The Judge considered that the estate was large enough to enable further provision to be made for Mr Harwood and the other claimant, Jason Brain. The Judge awarded Mr Harwood $700,000 from the estate, inclusive of the $180,000 bequest and costs. Mr Brain alleges that the Judge made various procedural and substantive errors in determining that Mrs Brain breached her moral duty. To the extent that there was a breach of moral duty, he alleges that the Judge erred in the exercise of her discretion by making an excessive award. The Court cannot make an award under s 4 of the Family Protection Act unless it is satisfied that the testator or testatrix breached his or her moral duty. This threshold issue requires an assessment of fact and degree. As is usual with claims pursued under this Act, the Family Court made its determination based on the affidavit evidence. Cross examination was limited to one narrow issue. It follows that this Court is as well placed as the Family Court was in determining whether or not there was a breach of moral duty. I consider that an appeal on this issue should be approached on the basis set out by the Supreme Court in Austin, Nichols, namely that although the appellant has the burden of showing that the Judge’s assessment was wrong, the Court is required to form its own view based on the evidence. By contrast, the assessment of the appropriate award to remedy a breach of moral duty involves the exercise of a discretion, as is clear from the wording of s 4 of the Act. To succeed with an appeal against the level of an award, the appellant must show that the Judge acted on a wrong principle, took into account irrelevant considerations, overlooked relevant considerations, or was plainly wrong. For the reasons I have given, I am not persuaded that the Judge made any error in her assessment that Mrs Brain breached the moral duty that she owed to Mr Harwood by not making adequate provision for his maintenance and support. It is clear from her will that she was strongly influenced by the disagreement between Mr Harwood and his father and the fact that he had changed his name. A wise and just testatrix would not have been so influenced, particularly given the background circumstances. Mr Roose submits that the Judge erred in fixing the amount of the award in one or more of the following respects: failing to take adequate account of the matters advanced by Mr Brain; taking into account an irrelevant factor, namely the effect of inflation; placing too much weight on Mr Harwood’s contributions; and the award was plainly wrong in that it was “far too high”. There is no need to repeat what has already been said. It is sufficient to note that the Judge took all relevant background circumstances into account in determining not only whether there had been a breach of moral duty, but also the quantum of the award needed to remedy that breach. I accept Mr Roose’s submission that awards under the Family Protection Act do not follow as a matter of course merely because a testatrix has failed to index a specific bequest to inflation. The critical issue is whether the particular provision, irrespective of whether it has been indexed to inflation, is sufficient to discharge the testatrix’s moral duty to make adequate provision for the maintenance and support of the claimant, assessed at the time of death. The Judge concluded that Mrs Brain did not make adequate provision for Mr Harwood in all of the circumstances and therefore breached her moral duty. This was partly explained by the reasons outlined in Mrs Brain’s will. However, the Judge considered that the inadequate provision was also explained by Mrs Brain’s failure to take into account the effect of inflation. Mrs Brain was over 90 years old when she made her will and she may not have foreseen that she would live another 10 years and that the provision she intended to make for Mr Harwood would be materially eroded by inflation. The Judge made no error in this part of her reasoning. Her assessment of quantum was not based on inflation. She merely observed that it was likely that Mrs Brain herself intended to make greater provision for Mr Harwood despite the factors which she wrongly took into account as amounting to disentitling conduct. Mr Roose’s final submission is that the award is far too high and therefore plainly wrong. He calculates that the provision made by Mrs Brain in her will was equivalent to 13 per cent of the value of her estate at that time. Mr Roose further calculates that a

Orders