Gera v Moir
[2013] NZHC 3255
•6 December 2013
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2013-419-745 [2013] NZHC 3255
IN THE MATTER of the Property (Relationships) Act 1976 and the Family Protection Act 1955
AND IN THE MATTER of an appeal against a decision of the
Family Court at Hamilton
AND IN THE MATTER of the Estate of WILLIAM JOHN BERRY, late of Te Awamutu, Deceased
BETWEEN ELVA GLADYS GERA Appellant
ANDMICHAEL JOHN MOIR as Executor and Trustee in the Estate of WILLIAM JOHN BERRY
Respondent
Hearing: 2 December 2013
Appearances: D M O'Neill for Appellant
C W Grenfell for Respondent
C A Gelston for Beneficiaries
Judgment: 6 December 2013
JUDGMENT OF PETERS J
This judgment was delivered by Justice Peters on 6 December 2013 at 11.30 am pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date: ...................................
Solicitors: A J Nolan, Hamilton Edmonds Judd, Te Awamutu Legal Solutions, New Plymouth
Counsel: D M O’Neill, Hamilton
GERA v MOIR [2013] NZHC 3255 [6 December 2013]
Introduction
[1] This is an appeal against a decision of Judge R H Riddell in the Family Court at Hamilton.1
[2] The Judge declined the Appellant’s application pursuant to s 62(2) Property (Relationships) Act 1976 (“Act”) to extend time for choosing “option A” or “option B” under s 61 of the Act. I am satisfied that the appeal must be allowed, for the reasons set out below.
Background
[3] The deceased, Mr Berry, died on 21 January 2012, leaving a will dated
16 January 2012 (“will”). Probate of the will was granted on 17 February 2012. The
Respondent is the executor and trustee of the will.
[4] The Appellant contends that she was the de facto partner of the deceased for
32 years, having met him in 1978. She seeks to make an application under the Act for a division of relationship property but cannot do so in the absence of orders from the Court pursuant to ss 62(2) and 69 of the Act.
[5] The deceased made some provision for the Appellant in his will. Aside from that, however, the beneficiaries of the will are the deceased’s two adult children (“beneficiaries”). They dispute the Appellant’s contention that she was the de facto partner of the deceased and thus her standing to make a claim under the Act.
Part 8 of the Act
[6] Part 8 of the Act makes provision for the division of relationship property on the death of a spouse or partner. The survivor may choose to apply for a division of relationship property under the Act (“option A”) or may elect not to make such an
application but to receive such property as they may be due under the will or on the
1 EGG v WJB District Court Hamilton FAM-2012-072-155, 26 June 2013.
intestacy (“option B”).2 A choice, once made, is irrevocable subject to the Court’s
power to set that choice aside under s 69.3
[7] In a case such as the present, the survivor must make their choice no later than six months after the date on which probate is granted.4 A survivor who fails to make an election within the time allowed is treated as having chosen option B.5 That choice, too, may be set aside under s 69.6
[8] In this case, the Appellant’s time for making her election expired on 17 August
2012. She had signalled her intention to claim under the Act before then, but in fact did not make a formal election of option A until 20 September 2012, some four to five weeks out of time.
[9] On or about 20 September 2012, the Appellant commenced proceedings in the Family Court, seeking orders under the Act, the Law Reform (Testamentary Promises) Act 1949 (“Law Reform Act”) and the Family Protection Act 1955 (“Family Protection Act”). The ground for the claim under the Family Protection Act was largely the same as that under the Act, namely de facto partner of the deceased as at the date of death.
[10] On 21 November 2012, and having been informed the election was out of time, the Appellant made an application to extend time pursuant to s 62(2) of the Act. In an affidavit in support, the Appellant said that the beneficiaries had been on notice of her intention to claim under the Act since February 2012, that the parties had sought to agree a resolution over several months but had been unsuccessful, and that she herself had been unwell. I also infer from a chronology submitted with the affidavit that the Appellant’s legal advisors had not prepared the necessary documents in time. In her decision, the Judge referred to the possibility of a claim
against the solicitors in negligence.
2 Property (Relationships) Act 1976, s 61(1).
3 Ibid, s 67.
4 Ibid, s 62(1)(b).
5 Ibid, s 68.6 Ibid, s 68(2).
[11] The provisions of the Act of principal relevance to this appeal are s 62(2), which confers power on the Court to extend time for making a choice under s 61, and s 69(1) which confers power on the Court to set aside a choice of option A or option B. The Court is precluded from extending time or setting aside a choice if the estate in question has been finally distributed, but that does not arise in this case.
[12] Section 62 provides:
62 Time limit for making choice
(1) A surviving spouse or partner who wishes to choose option A or option B must make that choice within the following time limits:
...
(b) in any other case, the choice must be made no later than 6 months after administration of the estate of the deceased spouse or partner is granted in New Zealand.
(2) Regardless of subsection (1), but subject to subsection (4), the Court may extend the time for making that choice after hearing—
(a) the applicant; and
(b) any other persons who the Court considers should be heard. (3) The Court’s power under this section extends to cases where the time
for making the choice has already expired, including cases where it expired before the commencement, on 1 February 2002, of the Property (Relationships) Amendment Act 2001.
(4) The Court may not grant an extension of time under subsection (2) unless the application for the extension is made before the final distribution of the estate of the deceased spouse or partner.
[13] Section 69 provides:
69 Chosen option may be set aside
(1) If a surviving spouse or partner has chosen option A or option B, the Court, on application by that spouse or partner, may set that choice aside.
(2) The Court may set aside a choice of option only if—
(a) it is satisfied that any of the following apply:
(i) that the choice of option was not freely made:
(ii) that the surviving spouse or partner did not fully understand the effect and implications of the choice:
(iii) that since the choice of option was made, the surviving spouse or partner has become aware of information relevant to the making of a choice of option:
(iv) that since the choice of option was made, a person (other than the surviving spouse or partner) has made an application under the Law Reform (Testamentary Promises) Act 1949 or the Family Protection Act 1955 in respect of the estate of the deceased spouse or partner; and
(b) having regard to all the circumstances, it is satisfied that it would be unjust to enforce the choice of option.
(3) In deciding whether or not to set aside a choice of option, the Court must have regard to the following matters:
(a) the circumstances in which the choice of option was made: (b) the length of time since the choice was made:
(c) any other matters that the Court considers relevant.
[14] An applicant under s 69(2) must first satisfy the Court as to one of the grounds in s 69(2)(a) and as to s 69(2)(b). If an applicant does so, the Court is required to decide whether or not to set aside the choice having regard to the matters in s 69(3).
Family Court Judgment
[15] The Judge treated the Appellant’s application as one to set aside under s 69. It is apparent from the judgment that the Judge was satisfied that s 69(2) was met. That is because the principal focus of the judgment was on s 69(3), and whether the Judge ought to exercise her discretion to set aside.7 The matters the Judge considered under s 69(3) were:8
(a) The length of delay – the Judge considered the four to five week delay minimal.
7 EGG v WJB, above n 1 at [15] onwards.
(b)The adequacy of the explanation of delay – the Judge referred to two reasons, being that the Appellant was unwell and that she had been provided incorrect legal advice. The Judge noted that the error of a solicitor cannot be visited on a client but recorded also that beneficiaries should not be prejudiced by lack of attention to a statute.
(c) The merits of the case – the Judge referred to affidavits demonstrating at least a friendship of many years’ standing between the Applicant and deceased. The Judge quite correctly said that the question of whether it was more than a friendship would be an important issue in the proceeding. I note that there was no evidence before the Court from the solicitor who took the deceased’s instructions in respect of the will.
(d)Prejudice to the beneficiaries – the Judge recorded the beneficiaries were “deeply concerned” about the lack of finality in the proceedings. The principal asset of the estate is a farm and the Judge stated that decisions were required to be made about its operation. It is not apparent from the judgment which decisions about the operation of the farm might be delayed if the application were granted. Also, the distribution of the estate was inevitably to be in limbo for some time given the other proceedings on foot.
[16] Having considered all of these matters, the Judge said:9
[25] Up to this point, I would have thought that natural justice would demand that the application to set aside the option should be granted. However, I have to take into account two matters. ...
[17] The first matter the Judge took into account was her “preliminary view” that the relationship between the deceased and Appellant was “unlikely” to have reached the threshold required by s 2D of the Act. The Judge said that:10
[27] Certainly they have had a long friendship but the criteria for a de facto relationship under [s 2D], requires an examination of a lot of factors
9 Ibid, at [25].
and if [the Appellant] is unable to reach that threshold and persuade the Court that there was a de facto relationship then that aspect of her claim will fail and she will be left with still a claim before the Court.
[18] The claim to which the Judge referred, being the second matter of which she took account, was the Appellant’s claim pursuant to the Law Reform Act. The Judge said there would be little prejudice to the Appellant if her application was declined as she could pursue her claim under the Law Reform Act, whereas if the application were granted the period of time for hearing the claim would increase, as would the parties’ costs. The Judge did not refer to the Appellant’s claim under the Family Protection Act. The Judge declined the application accordingly.
Appeal
[19] The appeal proceeds by way of rehearing. As I have said, I am satisfied the Judge considered she had jurisdiction under s 69(2) but that she declined the application in the exercise of discretion pursuant to s 69(3). Given that, it is for the Appellant to establish that the Judge erred in law, took into account irrelevant matters, failed to take into account relevant matters or was plainly wrong.11
[20] The points raised on appeal are:
(a) the application before the Court was an application for leave to extend time under s 62 of the Act to elect option A or option B under the Act;
(b)the Family Court Judge decided the matter under s 69 of the Act in that she declined to set the option aside; and
(c) the Family Court Judge made a final decision which defeated the
Appellant’s claims under the Act and the Family Protection Act 1955.
[21] Counsel for the Appellant contends that the Judge erred in considering s 69 and submits that the Judge was required to consider the application pursuant to
s 62(2).
11 May v May (1982) 1 NZFLR 165; (1982) 5 MPC 92.
[22] I consider the Judge was correct to treat the matter as an application pursuant to s 69. There would be no point in granting an extension of time in which to make a choice under s 62(2) unless the prevailing option B had first been set aside. I am satisfied that, if a choice of option has been made or imposed, that choice must first be set aside under s 69 before the Court grants an extension of time for making a (fresh) choice under s 62(2). If I am wrong in that, it is inevitable that the Court would have regard to the matters set out in s 69 when considering whether to extend time under s 62.
[23] Nor do I accept the submission that the Appellant’s rights under the Family Protection Act had necessarily “been determined”. I accept, however, that if the Applicant were to succeed on that claim in would necessitate a finding that she had been in a de facto relationship with the deceased. So that issue was still to be at large, whether the application to set aside were granted or not.
[24] I accept the Appellant’s submission, however, that the reasons the Judge gave for departing from the view she expressed in [25] of her decision were insufficient.
[25] First, as the Judge recognised, it is difficult if not impossible to form a view on the merits of a proceeding on the basis of affidavit evidence alone. I am satisfied that the Judge gave undue weight to the dispute as to the nature of the relationship. The Appellant’s account of the relationship in her affidavit was different from the beneficiaries’ account but that is not uncommon.
[26] Secondly, a claim under the Law Reform Act or against a solicitor in negligence is different in kind and remedy to a claim under the Act. They are not equivalent. The important point about the proceedings already on foot was that the distribution of the estate was already being delayed and additional proceedings under the Act were not likely to increase cost, delay or evidence to any material extent. I am satisfied that the existence of other claims, existing or potential, was not a matter which counted against the application in this case.
Result
[27] I allow this appeal.
[28] Pursuant to s 69(1) of the Act I set aside the Appellant’s choice of option B.
[29] Pursuant to s 62(2) of the Act I extend the Appellant’s time to make a choice pursuant to s 61(1) of the Act by two weeks from the date of this judgment. In the absence of the Appellant making such a choice, she will be treated as having chosen option B, pursuant to s 68(1) of the Act.
[30] The Appellant having succeeded is entitled to costs on a 2B basis with disbursements as fixed by the Registrar.
..................................................................
M Peters J
2