Harvey v Harvey
[2021] NZHC 3508
•17 December 2021
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2017-419-295
[2021] NZHC 3508
UNDER the Law Reform (Testamentary Promises) Act 1949 IN THE MATTER
of the estate of MARTIN LEONARD HARVEY
BETWEEN
BRETT LEONARD HARVEY
Plaintiff
AND
PAUL MARTIN HARVEY and CLARK
ROLAND HARVEY as executors of the estate of MARTIN LEONARD HARVEY
Defendants…/cont
Hearing: On the papers Counsel:
DRI Gay for Brett Harvey
SWM Piggin for Delwyn Sinclair P J Stevenson for Margaret Harvey
K A Badcock and LAL Badcock for Bryce Harvey A McMillan for Paul Harvey
S C Dench for the Executors of the Estate of Martin Harvey
Judgment:
17 December 2021
JUDGMENT (NO 2) OF GORDON J
This judgment was delivered by me
on 17 December 2021 at 2 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
HARVEY v HARVEY [2021] NZHC 3508 [17 December 2021]
CIV-2019-419-21
UNDER the Family Protection Act 1955
IN THEMATTER OF the estate of MARTIN LEONARD HARVEY
BETWEEN BRYCE CHARLES HARVEY
Plaintiff
AND PAUL MARTIN HARVEY and CLARK
ROLAND HARVEY as executors of the estate of MARTIN LEONARD HARVEY
Defendants
CIV-2019-419-68
IN THEMATTER OF the estate of MARTIN LEONARD HARVEY
BETWEEN DELWYN MARGARET SINCLAIR
First Plaintiff
ANDDELWYN MARGARET SINCLAIR and MARGARET CHRISTINE HARVEY as
trustees of the Maraetai Trust Second Plaintiffs
AND PAUL MARTIN HARVEY and CLARK
ROLAND HARVEY as executors of the estate of MARTIN LEONARD HARVEY
Defendants
CIV-2019-419-82
IN THEMATTER OF the estate of MARTIN LEONARD HARVEY
BETWEEN PAUL MARTIN HARVEY
Plaintiff (DISCONTINUED)
AND PAUL MARTIN HARVEY and CLARK
ROLAND HARVEY as executors of the estate of MARTIN LEONARD HARVEY
Defendants
…/cont
CIV-2020-419-158
UNDERthe Property (Relationships) Act 1976 and the Family Protection Act 1955
IN THE MATTER of the estate of MARTIN LEONARD HARVEY
BETWEEN MARGARET CHRISTINE HARVEY
Applicant
AND PAUL MARTIN HARVEY and CLARK
ROWLAND HARVEY as executors of the estate of MARTIN LEONARD HARVEY
Respondents
Solicitors:Allen Needham & Co Ltd, Morrinsville Le Pine & Co, Taupo
Badcock Law, Rotorua
Carson Fox Bradley, Auckland B Knowles, Auckland
Counsel:DRI Gay, Auckland SWM Piggin, Auckland P J Stevenson, Auckland A MacMillan, Albany
[1]This judgment concerns two matters that have arisen since my judgment in
Harvey v Harvey,1 on 14 September 2021 (substantive judgment).
[2] The substantive proceedings involved challenges to the probated Will (the Will) of the deceased, Martin Harvey, by four of his five adult children and his wife, Margaret Harvey. The orders I made in favour of Mrs Harvey are relevant for the purposes of this judgment. Those orders were:
(a)a relationship property adjustment in the sum of $879,250;
(b)a further relationship property adjustment relating to estate legal costs that had been charged to relationship property, in the sum of $90,492; and
(c)a Family Protection award of $100,000.
[3] The first issue is whether the amounts above are each to be charged rateably across the estate, including the Ohinewai Holdings Ltd (OHL) interests2 (which I found to be relationship property of Mr and Mrs Harvey), which are the subject of a specific bequest in cl 6 of the Will to Bryce3 (one of Mr and Mrs Harvey’s adult children), or whether Bryce receives the OHL interests free of the above amounts, which are all to be charged to the residuary estate.
[4] The parties filed written submissions and agreed to the Court giving judgment on the papers.
[5] The second issue relates to interest on Mrs Harvey’s awards. In her amended statement of claim Mrs Harvey had simply sought “interest” in the prayer for relief for her two causes of action: under the Property (Relationships) Act 1976 (PRA) and Family Protection Act 1955 (FPA). In the substantive judgment I reserved the issue of interest giving Mrs Harvey leave to apply to amend her amended statement of
1 Harvey v Harvey [2021] NZHC 2405.
2 Under cl 6 of the Will, Bryce received all the shares in Ohinewai Holdings Ltd (OHL) and the amount in the OHL shareholder’s current account (together the OHL interests).
3 I will refer to Mr and Mrs Harvey’s children by their first names as I did in the substantive judgment to avoid confusion. No disrespect is intended by the use of first names.
claim.4 I also made timetable orders enabling the other parties to file notices of opposition should they wish to do so.5 Mrs Harvey filed an application for leave to amend her amended statement of claim together with a proposed second amended statement of claim. No opposition has been filed. There are no challenges to the amount of interest claimed, and Bryce (the only party who opposed Mrs Harvey’s claims in the substantive proceedings) specifically accepts the calculations provided by Mrs Harvey, namely total interest of $42,992.03. In the substantive judgment I indicated I would decide the issue of interest on the papers.6
[6] There is a separate and further issue in relation to interest and that is whether, along with the awards referred to in [2] above, the interest is to be charged rateably across the estate, including the OHL interests bequeathed to Bryce or whether Bryce receives his OHL legacy free of a deduction for interest, and the interest is charged to the residuary estate.
First issue – are the awards to be charged rateably across the estate?
[7] Counsel for Brett and Delwyn (two of Bryce’s siblings), Mr Gay and Mr Piggin, respectively have filed a joint memorandum. Their position is that the adjustment/amounts awarded to Mrs Harvey fall rateably on the estate. Mrs Harvey has not filed separate submissions but in her memorandum, Ms Stevenson, for Mrs Harvey, advises that Mrs Harvey concurs with the submissions made on behalf of Brett and Delwyn. Paul, another sibling, has not filed any submissions and the executors abide the decision of the Court.
[8] Bryce’s position is that he should receive the OHL interests in their entirety. In other words, those interests are exonerated from the relationship property and Family Protection awards in the substantive judgment.
[9] Given the dispute, the executors have not yet distributed the estate (to the extent that this issue impacts on distribution). As a consequence, the parties have referred the matter to the Court.
4 Harvey v Harvey, above n 1, at [363].
5 At [363].
6 At [364].
[10] Section 94 of the PRA, incidence of orders against personal representatives of spouse or partner, and s 7 of the FPA, incidence of payments ordered, are both relevant. The former provision, s 94 of the PRA provides in relevant part:
94 Incidence of orders against personal representative of spouse or partner
(1)This section applies when—
(a)proceedings are commenced after the death of one of the spouses or partners; and
(b)the court makes an order under this Act against the personal representative of the deceased spouse or partner.
(2)The incidence of any order made under this Act by the court against the personal representative of a deceased spouse or partner falls rateably upon such part of the estate of the deceased as consists of relationship property.
(3)However, the court may order that the incidence of the order—
(a)falls rateably on the whole estate of the deceased; or
(b)falls on any specified portion of the estate or on any specified property.
(4)Where the court makes any order under subsection (3),—
(a)the court has power to exonerate any part of the estate of the deceased from the incidence of the order made under this Act, after hearing such of the parties who may be affected by the exoneration as the court thinks necessary, and may for that purpose direct any personal representative to represent, or appoint any person to represent, any such party:
…
[11]Section 7 of the FPA provides:
7 Incidence of payments ordered
(1)The incidence of the payment or payments ordered shall, unless the court otherwise determines, fall rateably upon the whole estate of the deceased, or, in cases where the authority of the court does not extend or cannot directly or indirectly be made to extend to the whole estate, then to so much thereof as is subject to the authority of the court.
(2)The court shall have power to exonerate any part of the deceased’s estate from the incidence of any such order, after hearing such of the parties who may be affected by the exoneration as it thinks necessary, and may for that purpose direct any administrator to represent, or appoint any person to represent, any such party.
(3)The court shall have power at any time to fix a periodical payment or lump sum to be paid by any beneficiary in the estate of the deceased to represent, or in commutation of, such proportion of the sum ordered to be paid as falls upon the portion of the estate in which he is interested, and to exonerate that portion from further liability, and to direct in what manner the periodical payment shall be secured, and to whom the lump sum shall be paid, and in what manner it shall be invested for the benefit of the person to whom the commuted payment was payable.
…
Submissions
[12] Mr Gay and Mr Piggin submit the matter can be approached in the following ways in descending order:
(a)The substantive judgment means what it says and the statutory provisions, s 94 of the PRA and s 7 of the FPA operate so that the orders are to be satisfied rateably out of the whole estate; or
(b)If the judgment as drawn up does not express what was decided and intended, namely that each order in [2] above is to be satisfied out of the whole estate, a correction can be made by the Court under r 11.10(1)(b) of the High Court Rules 2016 (HCR), known as the “slip rule”; or
(c)Counsel, when providing the accountant Matthew Kemp’s table of permutation calculations ,which is annexed to the substantive judgment as schedule B (and which all counsel agreed with), failed to direct the Court’s attention to s 94 of the PRA and s 7 of the FPA in connection with chapter 3 of the schedule (final distribution calculations). The Court may recall the judgment under r 11.9 of the HCR.
[13] First, addressing the adjustment sum for relationship property and the adjustment for estate legal fees incorrectly paid out of the estate relationship property (items [2](a) and [2](b) above), Mr Gay and Mr Piggin refer to the orders in the
substantive judgment,7 and schedule A of the substantive judgment (relating to the adjustment sum of $879,250). They submit what is apparent from the orders and schedule A is that the OHL interests:
(a)are relationship property;
(b)form part of the relationship property pool;
(c)that Mrs Harvey is entitled to a one-half share in them; and
(d)that the executors are to account to Mrs Harvey for an equal one-half share of the relationship assets (including the OHL interests).
[14] Mr Gay and Mr Piggin emphasise in particular it was not a term of the orders referred to above that the OHL interests are exonerated from the PRA orders. They submit the opposite is the case.
[15] Accordingly, they submit the combined effect of s 94(2) of the PRA and [360] of the substantive judgment is that, the criteria in s 94(1) having been met, the incidence of the orders in [360] falls rateably on such part of the estate of the deceased as consists of relationship property (which includes the OHL interests). For the purposes of s 94(2) there is no distinction between relationship property and the estate assets because all of Mr Harvey’s estate, including his OHL interests, was found to be relationship property.
[16] They submit that the effect of s 94(2) will apply in the absence of the Court exercising its powers under s 94(3) and (4) to order otherwise and there was no such order otherwise.
[17] As to the default position, Mr Badcock, counsel for Bryce, acknowledges while it is technically correct to say that in the absence of orders pursuant to s 94(4) and s 7(2), the default position is that the orders fall rateably on the relationship property (for the PRA awards) or the whole estate (for the FPA award) the proposition applies
7 Harvey v Harvey, above n 1, at [360(a)]–[360(c)].
only if the Court makes no order as to the incidence of further provision.8 Mr Badcock submits that in this case the terms of the judgment constitute orders that displace that position.
[18] In that regard, Mr Badcock refers to an earlier paragraph in the substantive judgment,9 which refers to Mr Kemp’s table of calculations attached as Schedule B to the judgment showing the value of the bequest to Bryce as $874,052 (the OHL interests in their entirety) and the residue at $409,682. In other words, Mr Badcock submits that demonstrates that the OHL interests are exonerated from the PRA awards (and the FPA award to be discussed further below).
[19] As far as the adjustment sum of $90,492 for the estate’s payment of legal fees out of relationship property, Mr Gay and Mr Piggin note that unlike the primary adjustment sum of $879,250, the $90,492 adjustment may not appear to be the subject of orders of the kind referred to in [360] of the substantive judgment, in that the substantive judgment references the amount as a type of reimbursement rather than a share of an asset. But they submit that the relevant paragraph in the substantive judgment10 necessarily requires the $90,492 to be paid out of the estate relationship property. Accordingly, they submit that the $90,492 adjustment, as ordered in the substantive judgment, is no different in nature from the primary adjustment sum of
$879,250.
[20] Mr Badcock for Bryce disagrees with that submission and notes that [320] refers to “the balance of the estate after the bequest to Bryce …”.
[21] As to the application of r 11.10(1)(b), Mr Gay and Mr Piggin submit that the adjustment sums were intended to be borne rateably across the whole estate, pursuant to s 94(2) of the PRA and if there is an ambiguity when the judgment is read as a whole, and it does not clearly express that result, then r 11.10(1)(b) permits a correction to the judgment. Rule 11.10 provides:
8 National Heart Foundation of New Zealand v Carroll (2009) 28 FRNZ 268 (HC) at [72].
9 Harvey v Harvey, above n 1, at [318].
10 At [320].
11.10 Correction of accidental slip or omission
(1) A judgment or order may be corrected by the court or the Registrar who made it, if it—
(a)…
(b)is drawn up so that it does not express what was decided and intended.
[22] Mr Gay and Mr Piggin submit that the references to the two adjustment sums at [318] and [320] can be considered to be an arithmetical error. They submit it is an arithmetical error in the sense that the figures referred to in [318] and [320] fail to show the rateable reduction in Bryce’s legacy before going on to consider the balance of the estate and/or the value of the residue for the purpose of considering the next issue in the substantive judgment, namely the Family Protection claim and award to Mrs Harvey.
[23] Mr Gay and Mr Piggin submit, of equal importance the requirements of s 94(4) (to exonerate any part of the estate from an order) were not met. They say there could accordingly be no order under s 94(3) exonerating Bryce’s OHL legacy from payment of the two adjustment sums in favour of Mrs Harvey. On this issue they submit first the power to exonerate cannot be exercised unless and until the Court hears, in the interests of justice, from the parties who may be affected by any proposed exoneration. Second, there was no application made by Bryce, nor any submissions made that sought to exonerate his OHL legacy. Third, an express order is required to displace the effects of s 94(2); and where the affected parties were not heard, there equally could not be any type of implied exoneration as contended for by Bryce. And finally, on this point, Mr Gay and Mr Piggin submit because there was no order for exoneration under s 94(3) and (4), the references in the judgment to the deduction of the whole amount of Bryce’s legacy without a rateable deduction, were in effect an arithmetical error or incorrect calculation. They submit this is a further ground which permits the judgment to be corrected under HCR 11.10(1)(b).
[24] On the issue of arithmetical error, Mr Badcock submits that the figures contained in the judgment were extracted from Mr Kemp’s calculations provided by counsel for Delwyn and agreed to by all counsel at the hearing. He submits that the schedule to the judgment containing Mr Kemp’s table of calculations had the clear
effect of Bryce receiving the OHL interests in their entirety if Mr Kemp’s scenario 2 was accepted by the Court (as it was). Mr Badcock submits that any purported arithmetical error cannot be considered an error in the judgment. But in any event he submits that the parties all agreed on a series of calculations and figures that should apply which would provide the outcome depending on which scenario the Court considered was the correct one.
[25] Mr Badcock therefore submits that rather than r 11.10 being available to Brett and Delwyn to correct the judgment, in fact that rule applies to the orders that Bryce seeks, allowing the Court to clarify any ambiguity in the judgment. Those orders are that:
(a)The incidence of the awards to Mrs Harvey under the PRA and FPA (plus adjustment sums and any interest awarded) are solely charged to and paid from the residue; or that
(b)The specific bequests to Bryce (i.e. the OHL interests) are exonerated from the incidence of the orders of the awards to Mrs Harvey under the PRA and FPA (including adjustment sums for any interest awarded).
[26] Mr Badcock submits the clarification Bryce seeks is clearly what the judgment intended. Conversely, he submits the clarification the other parties seek alters the effect and outcome of the judgment significantly, in a manner which does not accord with what was expressly decided.
[27] In terms of the Family Protection award of $100,000 (item [2](c) above), Mr Gay and Mr Piggin emphasise that the relevant paragraph in the judgment11 does not contain any order made under s 7(2) of the FPA that exonerates the OHL interests from payment of the $100,000 Family Protection award to Mrs Harvey. They make similar arguments in relation to their submission under s 94(2), alternatively submitting there was an arithmetical error in relation to the value of the residuary estate for the purpose of r 11.10; and the calculations and the amounts shown in [318] and [320] cannot operate as an implied exoneration.
11 Harvey v Harvey, above n 1, at [361].
[28] In response, Mr Badcock submits there is no requirement in s 7 of the FPA (or s 94 of the PRA) that a party apply for exoneration. He submits it is open to the Court to make orders without an application having been made.12 He submits although the Court did not make a specific order, it is within the Court’s jurisdiction to now order that the OHL interests not be reduced to meet the awards made to Mrs Harvey. As far as hearing from all other parties who may be affected, Mr Badcock submits first the statutory provisions only require the Court to hear from such parties “as it thinks necessary” (s 7(2)) and “as the Court thinks necessary” (s 94(4)). But in any event, all parties have now been given the opportunity to be heard.
[29] Mr Badcock acknowledges that Bryce accepts he is seeking an exoneration of the OHL interests from the incidence of the awards. However, Mr Badcock says Bryce alternatively seeks orders that the incidence of the awards to Mrs Harvey under both the PRA and FPA are solely charged and paid from the residue. Mr Badcock submits if the Court is not minded to accept the Court has jurisdiction to exonerate the OHL interests pursuant to s 94(4) and s 7(2), in any event:
(a)s 94(3) provides that orders may fall on “any specified portion of the estate or on any specified property”; and
(b)s 7(1) provides that orders fall rateably upon the whole estate “unless the Court determines otherwise”.
[30] Mr Badcock submits that the above provisions confer a separate (but related) authority to the exoneration provisions and they do not require the Court to hear from such parties who may be affected, as the Court considers necessary.
[31] On the issue of recall, Mr Gay and Mr Piggin submit that if the Court does not accept the first two jurisdictional possibilities they promote, then resort should be had to the recall jurisdiction in r 11.9 of the HCR. They rely on the second ground in Horowhenua County v Nash,13 where counsel have failed to direct the Court’s attention to a legislative provision. Under this third conceptual possibility, Mr Gay and
12 Brosnahan v Meo [2021] NZHC 543.
13 Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at [633].
Mr Piggin rely on submissions made under previous headings. They say they apply equally to recall under r 11.9. They submit:
(a)The terms of the orders in the judgment, particularly in relation to the PRA orders conflict with the distribution/deduction calculations, which they submit incorrectly refer to Bryce receiving the full value of his legacy; and
(b)The distribution calculations in Mr Kemp’s table cannot implicitly operate as exoneration because s 94 of the PRA and s 7 of the FPA first require an order for exoneration.
[32] They also submit that any attempt by Bryce to apply for or plead exoneration at this time is outside the scope of the recall jurisdiction:
(a)The power to recall does not extend to a challenge to any substantive findings of fact and law in the judgment;
(b)Recall does not permit the putting forward of further arguments, which could have been raised at the earlier hearing but were not;
(c)The threshold for recall is high; and
(d)Recall has been refused for relief not sought in the proceeding. 14
[33] As far as the failure by counsel to direct the Court’s attention to s 94 of the PRA and s 7 of the FPA, Mr Gay and Mr Piggin submit the following is relevant as to whether the Court should exercise the recall jurisdiction:
(a)No counsel brought to the Court’s attention the default legislative position under s 94 of the PRA and s 7 of the FPA in relation to the final chapter in Mr Kemp’s table which sets out the final distribution
14 Ashe v Tauranga Marina Society HC Tauranga, CP 134/88, 19 December 1990 at 5.
calculations. Upon application of the two statutory provisions, Bryce would not receive the full amount of his OHL legacy;
(b)That particular obligation on all counsel, arising from this aspect of Mr Kemp’s permutation calculations, can be contrasted with the general position. They submit generally there would be no requirement for counsel to make submissions concerning the rateable incidence provisions, because s 94(2) of the PRA and s 7(2) of the FPA would apply by default; and
(c)The failure on the part of counsel to direct the Court’s attention to the relevant statutory provisions was very fact specific and limited and arises only in relation to Mr Kemp’s final calculations, which erroneously show that Bryce would receive the full amount of his OHL legacy without any statutory deduction. The failure in that very specific aspect was a failure by all counsel, including counsel for Bryce, after all parties put forward or accepted Mr Kemp’s permutation calculation.
[34] They submit on the other hand the onus and obligation is quite different for Bryce who wishes to have “his entitlement” under the Will exonerated from being rateable to meet any Court order. They submit a proposal by a party for exoneration ought to be included in an application and prayer for relief, before the close of pleadings, or at the very latest, if the Court is prepared to consider the issue, raised before the close of the case of a party seeking exoneration, and certainly before judgment is delivered.
[35] Mr Badcock submits that the alleged failure by counsel to draw the Court’s attention to the two statutory provisions concerned, is irrelevant given the judgment effectively dealt with this issue on the basis of the calculations provided by Mr Kemp, which had the effect of Bryce receiving the OHL interests in their entirety.
Discussion
[36] As already noted, schedule B to the substantive judgment is a table prepared by accountant, Matthew Kemp, an expert witness called by Delwyn. A further copy
is annexed as Schedule A to this judgment. In the substantive judgment I referred to Mr Kemp’s table as follows:
[316] It was apparent to counsel and the Court at the hearing that a number of “scenarios” were possible depending upon my decision on the various claims. With the agreement of all counsel, the Court received a chart prepared by Mr Kemp which adopted a structure reflecting the order in which it was proposed to the Court that I should consider the claims. I have followed that order in this judgment. A copy of Mr Kemp’s chart, which runs across three pages, is annexed as Schedule B. As is apparent the first part of the chart, “chapter 1”, relates to the steps in determining the claims by Brett, Delwyn and Bryce. The second part, “chapter 2” sets out the steps that follow in determining Mrs Harvey’s relationship property claim. The final part, “chapter 3” sets out the steps for final distribution.
[317] There are eight alternatives or permutations each setting out in monetary terms the outcome for the particular permutation. In this judgment I have found in favour of Brett and Delwyn. The debt for each of them is not required to be repaid. I have found against Bryce. For Mrs Harvey I have found in her favour on each of the items she claims as relationship property. As a consequence, Mr Kemp’s permutation number 2, which is the second horizontal line on the chart, applies. That is subject to an adjustment in the final part of the chart, chapter 3, for legal fees paid by the estate, which I will address in the next part of this judgment. It is also necessary to make a minor adjustment in column 2 to the amount of Delwyn’s debt. There is a typographical error in the chart. The amount in the chart is stated to be
$918,654. The correct amount is $918,694. I will not amend the chart but will make the necessary $40 adjustment in my paragraph below.
[37] Because of the need to make a correction to a mathematical error in Mr Kemp’s table in relation to the amount of Delwyn’s debt (as referred to in [317]) it was necessary to set out the (corrected) numbers in Mr Kemp’s table. I did so in [318] which reads in relevant part as follows:
[318] Subject to the adjustment for legal fees, the position in summary is as follows:
…
(e)The balance of the estate after equalising is $1,283,734 (column 12);
(f)The value of the bequest to Bryce in Will 9 is $874,052 (column 13); and
(g)The balance of the estate, which will form the residue after the deduction of the bequest to Bryce is $409,682 (column 14).
[38] In other words, the purpose of s 318 was to correct errors in Mr Kemp’s table. As is apparent from the terms of the substantive judgment, it was no more than that.
[39] It is clear that s 94(2) of the PRA and s 7(1) of the FPA are default provisions which will apply if the Court makes no order to apportion the incidence of the orders.15
[40] I do not accept the submission on behalf of Bryce that the schedule attached to the substantive judgment and the references in my judgment to the amounts in that schedule has impliedly exonerated the OHL interests from any charge. That argument elevates the figures in the schedule and the references thereto in the substantive judgment above the actual orders made at [360] of the substantive judgment, and the absence of any orders exonerating the OHL interests.
[41] Further, before the close of his case, Bryce made no application to exonerate the OHL interests from any charge and did not raise the issue until after the judgment was delivered. Contrasted with that position are the submissions made by Mrs Harvey throughout the proceeding that the OHL shares and interests were relationship property and she was entitled to half of those OHL shares and interests. I found accordingly.16 Additionally, two of the siblings, Paul and Clark, did not have an opportunity to be heard on this issue. Bryce’s position as to exoneration is beyond jurisdiction, both in terms of r 11.10 (the slip rule) and r 11.9 for recall.
[42] The position is, as advanced on behalf of Brett and Delwyn, in their first conceptual possibility. In the absence of an order in the substantive judgment exonerating the OHL interests, the default positions in s 94(2) of the PRA and s 7(1) of the FPA apply so that the value of the bequest to Bryce of the OHL interests bears rateably with the whole estate, payment of the PRA adjustment sums of $879,250 and
$90,492 and the FPA order of $100,000.
[43] Therefore, it is not necessary to consider the second and third conceptual possibilities advanced on behalf of Brett and Delwyn, namely the application of the slip rule, r 11.10, or the Court’s jurisdiction under r 11.9 to recall the judgment.
15 National Heart Foundation of NZ v Carroll, above n 8, at [72].
16 Harvey v Harvey, above n 1, at [360(A)] and Schedule A.
Issue two - interest
[44] First, in the absence of any opposition, I grant leave to Mrs Harvey to file the second amended statement of claim pleading the interest sought. As noted in [5] above, there is no opposition to the claim for interest.
[45]Mrs Harvey seeks interest on three sums:
(a)the adjustment sum for her relationship property claim ($879,250);
(b)a further relationship property adjustment sum ($90,492) regarding estate legal fees charged to the relationship property; and
(c)in relation to the Family Protection award ($100,000).
[46] For the adjustment relating to legal fees, Mrs Harvey adopts as the start date for her calculation the separate date on which each of the 27 invoices was paid. For the other two sums, Mrs Harvey calculates interest from the date of death, 6 April 2016, up to the date on which the balancing amounts are paid. Mrs Harvey provides a schedule of calculations for each of the three categories of interest claimed. The total amount of interest sought is $42,992.03.
[47] I accept that the Court has jurisdiction to order payment of interest for the PRA claim pursuant to s 33 of the PRA. An award of interest from the date of death is consistent with the position in Johnson v Johnson17, where the husband was ordered to pay interest on money to his wife from the date on which the money was placed in his sole control. The order was directly as a result of the husband depriving his wife of the benefit of money she should have been able to enjoy.
[48] The FPA does not refer to the award of interest in s 5, but nor is such an award excluded and the terms of s 5 as to the making of any order under the Act provides for a broad discretion. While in general terms a legacy does not carry entitlement to income, that will not apply if there is a contrary position, such as when the Court orders
17 Johnson v Johnson [2016] NZFLR 634 at [23].
that interest is payable.18 I accept that in this case Mrs Harvey has had to deal with the consequences of the breach of Mr Harvey’s moral duty owed to her and his failure to make adequate provision for her since the date of his death, now over five years ago. In such circumstances, and where the claim for interest has not been opposed by any party to the Family Protection claim, I accept that interest may be payable from the date of death.
[49] For the above reasons, I make an order that interest in the sum of $42,992.03 is payable to Mrs Harvey (as a global sum) on the three categories of awards: the relationship property award; the relationship property adjustment sum arising from estate legal costs being charged to relationship property; and on the Family Protection award.
[50] Finally, there is the issue of whether the interest of $42,992.03, which I have awarded to Mrs Harvey, is to be charged rateably across the estate including the OHL interests. There is no reason to make a distinction between the three underlying awards/adjustment sums and the interest on those sums. I make an order that the OHL interests bequeathed to Bryce bear, rateably with the whole estate, payment of the interest awards of $42,992.03.
Result
[51]In summary:
(a)The amounts awarded to Mrs Harvey in the substantive judgment are to be charged rateably across the estate of Mr Harvey. In other words, the OHL interests bequeathed to Bryce are not exonerated from the awards to Mrs Harvey;
(b)Mrs Harvey has leave to amend her amended statement of claim to properly plead interest sought;
(c)I award interest in the sum of $42,992.03 to Mrs Harvey; and
18 Jeremy Johnson and James Anson-Holland (eds) Wills and Succession (NZ) (online ed, Lexis Nexis) at 12.13.1.
(d)The interest in (c) above is to be charged rateably across the estate of Mr Harvey. In other words the OHL interests bequeathed to Bryce are not exonerated from payment of the interest awarded.
Gordon J
SCHEDULE A
2