Dally v Dowden
[2020] NZHC 2670
•12 October 2020
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2020-419-18
[2020] NZHC 2670
UNDER the Family Protection Act 1955 IN THE MATTER
of the estate of John Thomas Dally
BETWEEN
CASSANDRA DALLY
First plaintiff
VALMAY O’BRIEN
Second plaintiffAND
ANTHONY SIMON DOWDEN
First defendant
DONNA HARRIS
Second defendant
Hearing: 8 October 2020 Appearances:
S A McKenna and A Osama for the plaintiffs C M Earl for the first defendant
D M O’Neill for the second defendant
Judgment:
12 October 2020
JUDGMENT OF JAGOSE J
This judgment was delivered by me on 12 October 2020 at 3.00pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
C M Earl, Barrister, Hamilton
D M O’Neill, Barrister, Hamilton McKenna King, Hamilton
DALLY v DOWDEN [2020] NZHC 2670 [12 October 2020]
[1] John Dally died on 21 May 2019. His will left his estate to those he identified effectively as his children: half to the first defendant, and the other half divided in thirds; one each for the first defendant and the second defendant, and the last to be divided equally between his other three children (including the plaintiffs).
[2] Under s 4 of the Family Protection Act 1955, the plaintiffs now seek provision be made out of the estate for their proper maintenance and support. I mean no disrespect by referring to all family members by their first names.
Background
[3] John was married to Valerie Dally. They had five children: Cassandra (the first plaintiff), Valmay (the second plaintiff), Donna (the second defendant), Nigel (who takes no part in this proceeding), and Grant (who died in 1990). John and Valerie separated and divorced in the early to mid-1970s.
[4] John later remarried Naomi Dowden. Naomi had a son, Anthony (the first defendant), from a previous relationship. Anthony says the three of them made “a great family”. They lived initially on Auckland’s North Shore in properties jointly owned by Naomi and her mother. In the late 1980s, they moved to Coromandel to live in another property also jointly owned by Naomi and her mother. From its sale proceeds, a further property was acquired at Te Kouma, to which John’s name was added as proprietor. Naomi acquired her mother’s share on her death; John acquired Naomi’s share on her death. Anthony maintained a close relationship with John, even while living overseas.
[5] After their separation, John had no contact with any of his children with Valerie until the 1990s, when he responded to Donna’s provision of her phone number to his sister. Donna says they then struck up a close relationship.
[6] The only substantial asset of John’s estate is the Te Kouma property. It formally was valued at some $1.2 million in September 2019, affirmed by a comparable August 2020 real estate agency valuation, but is acknowledged also to require substantial structural works as may reduce its achievable sale price below $1 million unless the
work is undertaken. The property secures a $124,000 loan, used to repay John and Naomi’s debt to the ANZ Bank, otherwise maintained by Anthony.
[7]John’s will would dispose of his estate’s residue as follows:
To pay a one-half share … to my step-son [Anthony] in recognition of my having inherited his late mother’s half interest in our property at Te Kouma … as well as the balance of my late wife’s estate;
To divide the remaining half … in to [sic] one-third shares … with one such share for my said step-son [Anthony], and one such share for my daughter [Donna], such bequests being in recognition of the close relationship I have enjoyed with both during my life, the remaining one-third share between my other children [Valmay, Cassandra, and Nigel] as tenants in common ….
The law
[8]The Act:1
… permits a claim against an estate on the basis of family connection, irrespective of the intentions or attitude of the deceased. The statutory liability of the estate is a matter of social policy and arises out of a legislative judgment that those within the categories identified may have moral claims to provision which should displace any testamentary intention.
[9] If “adequate provision is not available from his … estate for the proper maintenance and support” of “all persons who might apply”, on application by any of them, I may make such provision for any or all of those persons as I think fit out of John’s estate.2
[10] The only people who might apply, and therefore for whom I may make provision, here are John’s children, and grandchildren living at his death.3 Only stepchildren “who were being maintained wholly or partly or were legally entitled to be maintained wholly or partly by the deceased immediately before his death” are entitled to claim.4 At the time of John’s death. Anthony was neither being maintained, nor legally entitled to be maintained, wholly or partly by John. Thus I cannot make provision for Anthony.5
1 Wood-Luxford v Wood [2013] NZSC 153, [2014] 1 NZLR 451 at [22].
2 Family Protection Act 1955, s 4(1) and (3).
3 Section 3(1)(b) and (c).
4 Section 3(1)(d), and see also s 2 (definition of “stepchild”).
5 See Wood-Luxford v Wood, above n 1, at [33] (per Glazebrook J, dissenting in result).
[11]Under the Act:6
The onus is on the claimant to prove that the deceased was in breach of his or her moral duty, as at the date of death, by failing to make adequate provision for the claimant’s proper maintenance and support.7
… [T]he test is whether, objectively considered, there has been a breach of moral duty by the deceased judged by the standards of a wise and just testator or testatrix.8 “Moral duty” is a composite expression which is not restricted to mere financial need but includes moral and ethical considerations.9 “Proper” also means something different to “adequate”, and the amount to be provided is not to be measured solely by the need for maintenance which would be the case if the Court were concerned solely with adequacy.10
There are three leading decisions … in relation to whether a testator or testatrix has breached a moral duty to his or her adult children. They are Williams v Aucutt,11 Auckland City Mission v Brown,12 and Henry v Henry.13 The latter two decisions affirmed the approach set out in Williams v Aucutt…:14
… 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’. In using the composite expression, and requiring ‘proper’ maintenance and support, the legislation recognises that a broader approach is required and the authorities referred to establish that moral and ethical considerations are to be taken into account in determining the scope of the duty. ‘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 in this latter respect is a matter of judgment in all the circumstances of the particular case. It may take the form of lifetime gifts or a bequest of family possessions precious to its members and often part of the family history. And where there is no economic need it may also be met by a legacy of a moderate amount. On the other hand, where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for a family member.
(Emphasis added.)
6 Talbot v Talbot [2017] NZCA 507, [2018] NZFLR 128 at [39]–[44].
7 Williams v Aucutt [2000] 2 NZLR 479 (CA) at [68].
8 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
9 Vincent v Lewis [2006] NZFLR 812 (HC) at [81(b)].
10 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 (PC) at 476 and 478.
11 Williams v Aucutt, above n 7.
12 Auckland City Mission v Brown [2002] 2 NZLR 650 (CA).
13 Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.
14 Williams v Aucutt, above n 7, at [52].
The assessment required involves several interrelated factors, including the merits of the claim, the applicant’s circumstances as at the date of death, past relations between the testator and the applicant, the size of the estate, and the strength of other claims.15 Mere unfairness is not sufficient to warrant disturbing a testamentary disposition16 and there is no presumption of equality between the children of a deceased.17
Where a breach of moral duty is established, the courts should do no more than is necessary to repair the breach by making adequate provision for the applicant’s proper maintenance and support.18 Beyond that, the deceased’s testamentary intentions should be honoured, even if the individual judge dealing with the application might have seen the matters differently.19
Discussion
[12] For reasons that are unclear to me, the plaintiffs’ evidence all has been filed in reply. No evidence is forthcoming from Valerie.
[13] Cassandra, identifying herself as a ‘managing director’ (but without further explanation), contends for her own “close relationship” with John, as evidenced by his and Naomi’s practical advice and assistance when she acquired her first property at the age of 18 and their attendance at her 21st birthday when they gave her a horse float as a gift, and John’s attendance at her wedding (to which he made a financial contribution) and regular visits to the house she renovated with her husband. Cassandra says John inspected any car she bought before its purchase and she often turned to him for advice. She acknowledges John lent her $10,000 in March 2013, which she says she repaid in full. But she adds:
We all suffered because of our father abandoning us. I was an infant at the time and it has had negative consequences on me my whole life. I left school early to work and help at home, so I have no education to speak of which limits my job opportunities. I do not own any house or property: we had to sell our house in 2008. We are renting a property so that I can care for our mother and children.
[14] Valmay – a preschool caregiver, “well into [her] sixties, and still working full time”, with a mortgage on a small family bach in Warkworth – says she wanted nothing to do with John:
15 See In re Harrison (Deceased), Thomson v Harrison [1962] NZLR 6 (SC/CA) at 13; Williams v Aucutt, above n 7, at [39]; Ormsby v Van Selm [2015] NZHC 2822 at [30].
16 Vincent v Lewis, above n 9, at [81(e)]; Williams v Aucutt, above n 7, at [70].
17 Williams v Aucutt, above n 7, at [70]; Re Phelps CA277/93, 2 November 1994 at 5.
18 Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463 at [119].
19 Williams v Aucutt, above n 7, at [70].
I always begrudged the fact he left us in a position where I had to leave school and get a job to support my family’s finances. This gave my younger siblings opportunities which would not otherwise have been possible …. However, it created a lot of hardship in my life and deprived me of the opportunities I would have had if he had not left us.
[15] Otherwise the plaintiffs’ evidence is of their perceptions of John’s involvement with their mother and siblings, or them with each other. Even if I was minded or needed to do so, given how the evidence has unfolded, I cannot resolve those differences.
[16] For the plaintiffs, Scott McKenna focused on John’s alleged “abandonment of the family when the plaintiffs were respectively a young child and a teenager”. He emphasised that required John “to accord recognition to his own family” in his will.20
[17] The focus on the reasons or effects of John’s departure from the family does not advance the ‘moral duty’ to which attention is drawn under the 1955 Act. The moral duty instead is “as at the date of death”,21 in making adequate testamentary provision for his children. What is not evidenced is any need for the children’s ‘proper maintenance and support’, for which the provision made by John’s will is contended inadequate. I am not told anything at all about John’s grandchildren living at his death.
[18] Accepting John had a moral duty to his children (and grandchildren living at his death), I have no sense of either Cassandra’s or Valmay’s circumstances at the date of his death, such that the provision he made for them may be said improper or inadequate (and thus in breach of the duty). Mr McKenna only notes Cassandra’s and Valmay’s circumstances, as I have outlined them at [13] and [14] above, as justifying such provision, saying “[Cassandra’s] financial situation is worse than the other [beneficiaries]”. That may well be the case, but Cassandra’s evidence is “we had to sell our house in 2008”. There is no necessary connection between that sale, or Valmay’s continued fulltime work “well into [her] sixties”, and any alleged breach of moral duty by John.
20 Williams v Aucutt, above n 7, at [52].
21 Talbot v Talbot, above n 6, at [39].
[19] Anthony’s and Donna’s claims on the estate, however, are strong. John restored half (or three-sixths) of his estate, as derived from his second wife, to Anthony, her son (his stepson). John then provided each Anthony and Donna with one- sixth each of his estate in express acknowledgment of their close relationships. These are gifts made for explicit rational reasons, without any pejorative grounds for their distinction from the residue.
[20] John left the last one-sixth of his estate to the remaining three children as tenants in common, including the two plaintiffs. There is no presumption of equality between children, so comparisons with Donna are irrelevant. The three-way gift recognises the plaintiffs belong to John’s family and are an important part of his overall life.
[21] The estate is modest. I cannot identify how its division as specified may constitute a breach of John’s moral duty to make provision for his children. There is no suggestion the division effectively is exclusionary of the plaintiffs.
[22] Without establishing a breach of the moral duty, the plaintiffs have no foundation to obtain my resettlement of the estate’s presents. They have not met their onus of proof. I will dismiss their claim.
Evidentiary objections
[23] The plaintiffs object to the affidavit of Adrianne Janice Steele sworn 15 September 2020 as inadmissible hearsay.22 Although I have not needed to consider the affidavit’s content, nonetheless I must address the objection.23
[24] Ms Steele provided John with support in his home from the time of his discharge from hospital in late 2018 until his death some six months later. She recounts her discussions with John about his children: “[f]rom the way John spoke, I assumed and thought that Anthony and Donna were his only children”.
22 Evidence Act 2006, ss 17–18.
23 High Court Rules 2016, r 9.5(2).
[25] But – on a regular Wednesday outing at the end of her shift, when Ms Steele would take John in her own time for a drive and coffee before returning him home – John asked her about her relationship with her family. On her positive response:
It was then that John informed me that he had three other children but there was no contact and it was not a good relationship with them because of money and that was all he was going to say about that and he never mentioned them again. That particular conversation lasted all of about three minutes.
[26] For the plaintiffs, Amin Osama accepted John was by reason of his death “unavailable as a witness” for the purposes of s 18 of the Evidence Act 2006, but argued the circumstances of John’s unwellness – as recently hospitalised and shortly to die – rendered his contended vague statements unreliable.
[27] Section 18(1) provides reasonable assurance of the statements’ reliability is to be assessed from “the circumstances of the statement”. I cut Mr Osama’s submissions short, to reinforce it is a threshold consideration: if met, the fact-finder may consider the statement and draw conclusions as to its weight.24 The ‘circumstances’ are contextual, rather than substantive.25 They go to the statements’ making, rather than to the truth of their content.
[28] In context, I find nothing in the circumstances to diminish reasonable assurance of the statements’ reliability. They are recounted by John’s caregiver, who clearly had established some rapport with him, as divergent from her prior comprehension. There is no suggestion either John was incapable of accounting for or motivated to misrepresent his perceptions, or Ms Steele’s record of their expression is inaccurate.
[29] John’s hearsay statements recorded in Ms Steele’s affidavit are admissible. However, had I to consider them, I would have accorded them limited weight as not materially advancing determination of the issue if he failed to make adequate provision for the plaintiffs’ proper maintenance and support. At best, the statements affirm John’s perception of grounds to distinguish between Anthony and Donna on the one hand, and Cassandra, Valmay and Nigel on the other. It remained for the plaintiffs to
24 Adams v R [2012] NZCA 386 at [22], citing Richard Mahoney and others The Evidence Act 2006: Act & Analysis (2nd ed, Brookers, Wellington, 2010) at [EV18.02].
25 K (CA322/2014) v R [2014] NZCA 393 at [16]–[17], applied at [20]–[23].
establish at least the latter provision was in breach of John’s moral duty to them, as making inadequate provision for their proper maintenance and support.
Result
[30]The plaintiffs’ claim is dismissed.
Costs
[31] As the successful parties, Anthony and Donna presumptively are entitled to obtain a contribution to their legal expenses from Cassandra and Valmay.26 However
– given the family context to the litigation, now resolved, and the undesirability it be fanned back into life by any dispute as to costs’ liability or payment – my preliminary view is costs should lie where they fell: that is, be borne by the party incurring them.
[32] If that is not accepted by the parties, or they cannot otherwise agree, I reserve costs for determination on short memoranda of no more than five pages – annexing a single-page table setting out any contended allowable steps, time allocation, and daily recovery rate – to be filed and served by the defendants within ten working days of the date of this judgment, with any response and reply to be filed within five working day intervals after service.
—Jagose J
26 High Court Rules 2016, r 14.2(1)(a).
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