Brand v Douglas
[2022] NZHC 1769
•22 July 2022
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2021-409-180
[2022] NZHC 1769
BETWEEN STEVEN PAUL BRAND
Plaintiff
AND
WINIFRED HELEN DOUGLAS and JOYCE INGRID SHARPLIN
Defendant
Hearing: 4 July 2022 Appearances:
M J Borcoski for Plaintiff S M Bevin for Defendant
Judgment:
22 July 2022
JUDGMENT OF DUNNINGHAM J
This judgment was delivered by me on 22 July 2022 at 11 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
BRAND v DOUGLAS [2022] NZHC 1769 [22 July 2022]
[1] Mr Clement Brand passed away on 17 July 2020. He had seven children, and a modest estate of little more than $120,000. In his will, he left his estate to be divided equally among his natural grandchildren living at his death and who attained 20 years of age.
[2] His son Steven, who has no children who will benefit from the will, claims against the estate under the Family Protection Act 1955 (FPA), saying the will failed to provide proper recognition of him as a child of the deceased.
The Family Protection Act 1955
[3] Section 4(1) of the FPA provides the Court with a discretionary power to make provision for a plaintiff from a deceased’s estate if the Court is satisfied that adequate provision has not been made from the estate for the plaintiff’s “proper maintenance and support”. There is no dispute that Steven, as a child of the deceased, has standing to bring such a claim.1
[4] The parties also agree that the basic principles applying to s 4(1) of the FPA are set out authoritatively in Little v Angus, where it was said:2
The inquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so, what is appropriate to remedy that breach. Only to that extent is the will to be disturbed. The size of the estate and any other moral claims on the deceased’s bounty are highly relevant. Changing social attitudes must have their influence on the existence and extent of moral duties. Whether there has been a breach of moral duty is customarily tested as at the date of the testator’s death; but in deciding how a breach should be remedied regard is had to later events.
[5] While the expression “moral duty” does not appear in s 4(1) of the FPA, it is held to be implicit in the inquiry that the section requires.3 In Williams v Aucutt, the Court of Appeal said:4
1 Family Protection Act 1955, s 3(1)(b).
2 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
3 Williams v Aucutt [2000] 2 NZLR 479 (CA) at [38].
4 At [52].
The test is whether adequate provision has been made for the proper maintenance and support of the claimant. “Support” is an additional and wider term than “maintenance”. … “Support” is used in its wider dictionary sense of “sustaining, providing comfort”. A child’s path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased. Just what provision will constitute proper support … is matter of judgment in all the circumstances of the particular case. … where there is no economic need it may also be met by a legacy of a moderate amount.
[6] The decision in Vincent v Lewis provides a summary of the key principles applying to claims under s 4(1) of the FPA:5
(a)The test is whether, objectively considered, there has been a breach of moral duty by [the testatrix/testator] judged by the standards of a wise and just testatrix.
(b)Moral duty is a composite expression which is not restricted to mere financial need but includes moral and ethical considerations.
(c)Whether there has been such a breach is to be assessed in all the circumstances of the case including changing social attitudes.
(d)The size of the estate and any other moral claims on the deceased’s bounty are relevant considerations.
(e)It is not sufficient merely to show unfairness. It must be shown in a broad sense that the applicant has need of maintenance and support.
(f)Mere disparity in the treatment of beneficiaries is not sufficient to establish a claim.
(g)If a breach of moral duty is established, it is not for the court to be generous with the testator’s property beyond ordering such provision as is sufficient to repair the breach.
(h)The court’s power does not extend to rewriting a will because of a perception it is unfair.
(i)Although the relationship of parent and child is important and carries with it a moral obligation reflected in the Family Protection Act, it is nevertheless an obligation largely defined by the relationship which actually exists between parent and child during their joint lives.
Bearing those principles in mind, I turn now to the circumstances in which the claim is made.
5 Vincent v Lewis [2006] NZFLR 812 (HC) at [81].
Background
[7] Mr Clement Brand had seven children, including Steven, the plaintiff, and Winifred Douglas (Win) and Joyce Brand, who are the defendants in this proceeding as executors of the estate. Steven, Win, Joyce and one other were the children of one marriage of Mr Brand. The other three children, one of whom was adopted, are from a previous marriage.
[8] Mr Brand’s marriage to the parties’ mother broke down in 1982 and they divorced in 1987. In due course, he met a new partner, Gertruda Berends (Truuce) whom the parties seemed to get on well with.
[9] Steven’s relationship with his father deteriorated after his parent’s separation with Steven explaining this was due to the “negative way that he treated my mother during the separation and matrimonial property division”. However, the relationship healed for a period of time starting in 1989 where they resumed visiting each other regularly. It then again deteriorated after about five years due to what Steven says was “the constant denigration of my siblings, their partners and their children” by Mr Brand.
[10] Steven met and married his wife Barbara and, in 1995, they purchased a 12 hectare horticultural property in West Eyreton. In 2005 he had an accident on the farm from which he could have lost his sight. He was surprised by his father contacting him to see if he was okay. That sparked the renewal of a relationship with him and his partner, Truuce. Steven says that these were good years and they had some of their happiest times together. During this time Steven would help his father with small building projects. However, Truuce’s health began to deteriorate, and the property she and Mr Brand were living in became too much to manage. When they decided they needed to downsize because they were not coping with it, Steven helped them look for, and purchase, a villa in a retirement village. In 2009, Steven lent his father $153,000, interest free, to help him buy the villa. The loan was to be repaid when either Mr Brand died, or the villa was sold.
[11] When his father moved into the villa, he gave Steven some power tools and other items left over from his work as a builder and Steven also bought some items off
him, like a drop saw. Steven says much of what he was given was of little value and he gave some of the power tools to his brother Keith, and nephew Ben. When Mr Brand and Truuce moved into the villa, Barbara and Steven also met some financial costs for household items, groceries and cleaning. By then (around early 2011) Win and Joyce had power of attorney for Mr Brand and Steven says he and Barbara only claimed back a three-month villa fee, totalling $1,097.55. They did not seek reimbursement of any other expense.
[12] However, once Mr Brand moved into the villa, Steven says he “reverted to his old ways” and began denigrating other family members. He also blamed Barbara for a burnt-out clutch on his car which Steven said was caused by his father’s own physical difficulties driving a manual car. Steven says his relationship with his father deteriorated when Truuce moved into another care facility. This left Mr Brand living by himself and his demeanour changed, which Steven attributed in part to Mr Brand’s developing dementia.
[13] By mid-2013 Mr Brand moved out of the villa and into more specialised care at Nurse Maude Hospital. The villa was then sold and the loan repaid. Mr Brand passed away on 17 July 2020.
[14] On his death, probate was obtained for Mr Brand’s will executed in 2006. The will named his daughters, Win and Joyce, as executors. The residue, after paying debts, funeral expenses and the like, was to be divided equally amongst his natural grandchildren living at his death who attained 20 years of age. Mr Brand had 21 grandchildren living at the date of his death and so each would receive a modest payment of less than $6,000 under the terms of the will.
[15] There is also evidence that a draft will was prepared around December 2010 which was never signed. It provided that the residue of Mr Brand’s estate was to be divided equally between Steven and Joyce, who were also appointed executors. Steven says that demonstrates that Mr Brand valued his relationship with him and recognised the support he had provided to him. The sisters say that by 2010, their father was easily manipulated. For example, he sold his brand new Toyota Camry car
to a taxi driver for well below its market value. By implication they say little if any weight should be placed on this evidence.
[16] Win explains that from her discussions with her father, he did not provide for his children in the 2006 will, because he knew that his children all owned their own homes, whereas the grandchildren did not. Joyce supports this explanation, saying her father felt he “could give the next generation a hand to start out”. Joyce said he told her he was aware it was becoming harder for the younger generation to get a start in life and therefore prioritised helping that generation.
The parties’ approach to the claim
[17] It will be readily apparent that the estate is small and the cost of litigation in respect of the estate can almost never be economic. For that reason, the executors have been pragmatic in their approach to defending the claim. Concerns about the content of the affidavit evidence, which might have required cross-examination, were resolved through discussion and consequent editing of the affidavits. The defendants also took no active part in the proceedings once the affidavits had been filed, save to file helpful submissions on the legal issues arising. I commend the parties for this.
Submissions for the plaintiff
[18] Ms Borcoski, counsel for Steven, identified the issues for the Court to determine as being:
(a)whether the will makes adequate provision for the proper support of Steven in order to discharge Ms Brand’s moral duty; and
(b)if Mr Brand has breached his moral duty to Steven, what is required to remedy the breach.
Has Mr Brand discharged his moral duty to Steven?
[19] Ms Borcoski notes that the enquiry into whether there has been a breach of moral duty permits a broad range of factors to be considered.6 First and foremost, she says provision in a will recognises the plaintiff belongs to the family and has been an important part in the overall life of the deceased.7 While Steven was Mr Brand’s son, the will does not recognise his status as such. He has received nothing under the will. In contrast, while none of Steven’s other siblings have been expressly provided for in the will, they have been indirectly recognised through their children receiving an inheritance. In effect, Ms Borcoski says, Steven is the only living child who has been disinherited, solely because he has no children. At the very least, Mr Brand had a duty to recognise that Steven belonged to his family and had been an important part of his life.8 While their relationship had not been without difficulties, she submits they had also shared periods where they had a close relationship, particularly in the period from 2005 through to 2009.
[20] Ms Borcoski says Steven’s personal and financial contribution to his father is also a factor to be taken into account. When deciding whether a deceased has discharged his or her moral duty to a claimant the Court can consider whether the claimant has “contributed to building up the testator’s estate, or has helped him in other ways”.9 She points out that Steven says his assistance to his father and Truuce by providing an interest free loan to them, meant he sacrificed approximately $12,000 per annum in potential interest on the loan amount. That contribution endured for the period from mid-2009 to 2013 when the villa was sold and the loan repaid. Steven also assisted his father in other ways, including making payments to assist with the transition into the retirement villa.
[21] Thirdly, Ms Borcoski says the nature and closeness of Steven’s relationship with his father is relevant to determining the extent of Mr Brand’s moral duty. While acknowledging that, during Mr Brand’s lifetime, Steven and his father went through
6 See Bill Patterson Law of Family Protection and Testamentary Promises (5th ed, LexisNexis, Wellington, 2021) at ch 4.
7 Williams v Aucutt, above n 3, at [52].
8 Howarth v Howarth [2021] NZHC 2521 at [148].
9 Goodman v Windeyer (1980) 144 CLR 490 at 497, followed in Brosnahan v Meo [2021] NZHC 79 at [62].
periods of being estranged, Steven says those periods came about through the actions of Mr Brand and the way he treated Steven’s mother or denigrated other family members. Steven also notes he was not the only person who had difficult times with his father. For example, Mr Brand did not speak to one of his own sisters for about 40 years and Joyce, too, noted her father “has had periods of estrangement from a lot of people”. Ms Borcoski submits that the periods of estrangement therefore do not diminish the moral duty owed to Steven and, in any event, estrangement which is not brought about by the claimant should not affect the deceased’s moral duty.10
[22] Ms Borcoski acknowledges the size of the estate is an important factor in assessing Mr Brand’s moral duty and here the estate is modest. However, she points out that Steven is not competing with any other superior moral claims, such as a surviving spouse or partner of the deceased. Furthermore, none of Mr Brand’s other children have made a claim, no doubt because they have been recognised indirectly through the provision for their children under the will. This is also not a case where the estate comprises an indivisible asset such as a family home, which someone with a superior moral claim should occupy. Mr Brand’s assets comprise a sum of money which is readily divisible.
[23] For all these reasons, Ms Borcoski submits that Mr Brand could, and should, have made some provision for Steven from his estate.
What is required to repair the breach of moral duty to Steven?
[24] Ms Borcoski does not suggest what amount might be required to repair a breach of moral duty. She refers to Williams v Aucutt, where the claimant daughter ultimately received $100,000 which was approximately 10 per cent of her mother’s estate.11 She also cites Howarth v Howarth, where Brewer J concluded that an appropriate award was $60,000 for each of the disinherited children, saying he had “considered the case law which suggests that where there is no pressing economic need … awards are generally between 10 and 20 per cent of the estate.12 However, she also notes that, in Scott v Garnham, the High Court warned of the dangers of using
10 Crosswell v Jenkins (1985) 3 NZFLR 570 (HC) at 575.
11 Williams v Aucutt, above n 3.
12 Howarth v Howarth, above n 8, at [151].
10 per cent as a starting point.13 Instead, the Court found the inquiry should focus on what is required to repair the breach of moral duty and that would be determined on the facts of the specific case.14
Discussion
Was there a breach of moral duty?
[25] I accept the will failed to recognise the father/son relationship between Mr Brand and Steven. It made no provision for Steven whatsoever. I also accept it did not recognise Steven’s financial and other contributions to his father before his death, which contributed to an increase in the value of the estate. Put another way, if Mr Brand had had to borrow funds at a commercial interest rate to fund the purchase of the villa, his financial position would have been poorer on his death.
[26] I am also satisfied this is not a case where gifts made during Mr Brand’s lifetime explained the failure to recognise his son in his will. The gifts of tools and building paraphernalia given to Steven when his father moved into the villa were not of significant value and were simply the kind of gift a parent would make to their child in those circumstances, when they are seeking to downsize in later life.
[27] I do not consider that the periods of estrangement warranted the failure to make any provision for Steven in Mr Brand’s will. Mr Brand’s behaviour was the cause of the estrangement and there were equally periods where Steven and his father got on very well and where Steven assisted his father with social and practical support.
[28] I accept though, as Ms Bevin, for the defendants, points out, that the extent to which the claimant and other beneficiaries are in need will be relevant to whether there has been a breach of moral duty, and it is not to be assumed that simply because a claimant has been a dutiful child of the deceased that they should be ordered some provision or further provision.15 Where the estate is small and any provision made by the Court in favour of the claimant is at the expense of some other person or persons
13 Scott v Garnham [2021] NZHC 592 at [39].
14 At [32] and [39].
15 Williams v Aucutt, above n 3, at [69].
to whom the testator owed a moral duty of support, the Court will need to see that the estate is justly divided between the persons who have moral claims upon the testator in due proportion to the “relative urgency” of those claims.16
[29] However, in the present case, there is no evidence that Mr Brand owed a superior moral duty to his grandchildren for their maintenance and support over and above that he owed to his own children. His relationship with them was no more or less than the usual familial affection that a grandfather might feel for his grandchildren. While there is evidence that some of the grandchildren have particular disadvantages – for example, Win has an adult son who is significantly disabled and – requires 24-hour care, and other grandchildren have student loans or dependants, nothing suggests that their own parents would not be able to provide for them. There is no evidence of a particular relationship Mr Brand had with a grandchild which gave rise to a particular obligation or expectation to make direct provision for that grandchild.17
[30] I am satisfied, therefore, that there was a breach of moral duty to Steven by Mr Brand making no provision for him in the will.
What award is required to remedy the breach of moral duty?
[31] Had the will been a conventional will, leaving the estate equally to the children living at his death (or if predeceased, to their children), each sibling would have received a modest award of around $17,000. In the absence of any special circumstances which suggest Steven has greater need for maintenance and support, I consider that figure must represent the upper limit of any potential award. However, my task is not to determine what share Steven should have received if he had been treated equally with his siblings, rather it is to determine what amount, if any, is required to remedy the breach of moral duty. In that regard, I note that none of the other siblings are seeking provision from the estate, presumably being satisfied that the distributions to their children indirectly recognise their father’s moral duty to them and so I do not have to consider a direct competing claim.
16 Re Allan (deceased) [1922] NZLR 218 (SC) at 221.
17 Gore v Gallaway CA99/00, 12 March 2001; and Mulholland v McFadzean FC Wellington FAM-2007-032-783, 2 June 2009.
[32]In settling on an amount, I take into account:
(a)Steven has no need for maintenance, as he and his wife are comfortably off.
(b)Steven has contributed materially to the value of the estate by extending an interest free loan to his father for the period 2009-2013.
(c)There are no circumstances which disentitle Steven to recognition. While his relationship with his father had periods of estrangement, they were responses to his father’s own difficult behaviour.
(d)There is no stronger competing moral claim. There is no surviving spouse or partner, and there are no competing claims from eligible family members.
[33] I also take into account the fact the estate is modest and Mr Brand clearly intended to give his grandchildren an amount which was sufficient to materially assist them. Furthermore, an award which significantly affected the amount going to the grandchildren would adversely impact on how the other siblings viewed the appropriateness of the will. In my view, Mr Brand’s desire to assist his grandchildren should be respected and any award should not significantly impact on his desire to benefit his grandchildren.
[34] In all the circumstances, I consider an award of $6,000 remedies the testator’s breach of moral duty to Steven. It recognises the father and son relationship in circumstances where he has no financial need, and is one of seven siblings, so there could never have been an expectation that he would receive a large share of a very modest estate.
Result
[35] I award the sum of $6,000 to the plaintiff from the estate of the late Clement Brand.
Costs
[36] I am conscious of the toll such litigation takes on the means of a modest estate. Clearly the defendants’ costs are costs of the estate and will be met from it.
[37] Steven has been successful in his claim in that he has a received a modest award from the estate.
[38] However, the defendants have not actively defended the claim but taken a relatively neutral position. Furthermore, given the number of affected parties and the obligations on the executors, this is not a matter which the executors could have resolved out of Court.
[39] In the circumstances, there is a basis for ordering that costs lie where they fall, or that something less than scale costs on a 2B basis are awarded to the plaintiff.
[40] I encourage the parties to agree on costs given the limited means of the estate. If the parties cannot agree on costs, I reserve leave to file memoranda.
Solicitors:
Saunders Robinson Brown, Christchurch Cavell Leitch, Christchurch
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