Estate of Morris

[2020] NZHC 3106

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-496

[2020] NZHC 3106

IN THE MATTER OF

the Trustee Act 1956

IN THE MATTER OF

the estate of SUSAN LEE MORRIS

BETWEEN

RACHEL CLAIRE MORRIS and TERRANCE BERNARD MORRIS

Applicants

Hearing:

23 November 2020

Counsel:

L H Pratley for applicants

J M McMillan, counsel for children

Judgment:

24 November 2020

JUDGMENT OF DOBSON J

The proceeding

[1]    This proceeding has been brought by way of originating application by the trustees in the estate of Susan Lee Morris (Susan) who died on 20 March 2016 within four days of making her last will.

[2]    Since the grant of probate to the trustees, her estate has been the subject of a claim under the Law Reform (Testamentary Promises) Act 1949. Following settlement negotiations and a judicial settlement conference in the Family Court at Hawera, the claim brought by Larissa Katya Morris (Larissa) was settled and the terms of that settlement, which involved varying the provisions in Susan’s will, have been the subject of a deed of family arrangement.

IN RE ESTATE OF MORRIS [2020] NZHC 3106 [24 November 2020]

[3]    The terms of the deed of family arrangement are subject to the trustees obtaining orders from the Court under ss 64A and 66 of the Trustee Act 1956 approving the terms of the deed and authorising the vesting of property in accordance with its terms.

The factual background

[4]    Susan was survived by three children who remained infants at the time the settlement was concluded, as well as two nephews (the children of Larissa), who also remained infants at the time of the settlement although at least the older of them will by now have become an adult.

[5]    Susan and Larissa were married to brothers. They had both contributed to properties in the small settlement of Kakaramea, south of Hawera, comprising five titles on which there are two houses. The two properties have addresses on different streets but share a rear or side boundary. Until her death, Susan lived in one of the properties with her three children and Larissa lived in the other with her two children.

[6]    Both properties were registered in Susan’s name alone. The terms of her will granted rights of occupancy to Larissa for the house that Larissa and her children had occupied, but Larissa brought her claim against the estate on the basis of contributions she had made. The properties are subject to a mortgage to the ANZ Bank which, since Susan’s death, Larissa has been paying.

[7]    One of the properties is assessed as requiring substantial refurbishment to render it fit for commercial renting or sale.

[8]    Since Susan’s death, her children have resided elsewhere with the trustees, with the children’s father exercising occasional visiting rights.

[9]    The trustees have deposed that they were mindful of the relatively modest size of Susan’s estate and mindful also of their responsibilities to the infant beneficiaries, being Susan’s children and her nephews. The infant beneficiaries have been separately represented by Ms Millan in both in the Family Court proceedings and the negotiation of a settlement, and in the present proceedings.

[10]   The resolution agreed is that the trustees are to sell both properties, with Larissa being given a first option to buy them on an “as is, where is” basis for $260,000, which is the value attributed to the properties by a valuer in March 2019. The deed of family arrangement is subject to Larissa being able to obtain mortgage finance, which I was advised she is confident of achieving. In the event that Larissa is unable to obtain mortgage finance, then the parties will review the appropriateness of the remaining provisions.

[11]   The deed of family arrangement contemplates that Larissa and her two children would remain occupying the South Road property, with each of her children having an interest in the real estate being held on trust for them by Larissa. Susan’s children would be paid out an amount recognised as reflecting their interest in the estate, (to be invested on their behalf by the trustees until they are adults) and a separate adult beneficiary will be paid out the cash legacy provided for in Susan’s will.

The merits

[12]   In supporting the application, Mr Pratley submitted that the question for the Court, given that in its supervisory jurisdiction it is to be mindful of minor beneficiaries who are unable to have consented on their own behalves, is “what might they do if they were adult beneficiaries”?1

[13]   Having heard Ms McMillan as well as Mr Pratley, I am satisfied that the answer in this case is that the variations to the terms of the will effected by the deed of family arrangement are changes that the infant beneficiaries would support and that the varied provisions do not substantively prejudice their interests. Given the modest size of the estate, the apparent strength of the claim, and the intermingled history of the two properties, the settlement is both pragmatic and justified.

Outcome

[14]   I am accordingly persuaded that the orders sought under the Trustee Act should be made, and I so order.

1      Re Greenwood [1988] 1 NZLR 197 at 211.

Costs

[15]   I am grateful to Ms McMillan for her involvement. I confirm that her costs ought to be provided for in the same manner as her appointment in the Family Court proceedings. There is no outstanding issue as to costs for Mr Pratley.

Dobson J

Solicitors:

Waikanae Law, Waikanae for applicants

Family Law Specialists, Porirua, counsel for children Govett Quilliam, New Plymouth for L K Morris