Horne v Public Trustee (in its Capacity as Representative of the Estate of Edward Howard Webster) HC Nelson CIV 2010-442-44

[2010] NZHC 1548

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2010-442-44

IN THE MATTER OF     the Property (Relationships) Act 1976

AND

IN THE MATTER OF     the Family Protection Act 1955

BETWEEN  SUZANNE JOAN HORNE AND EDWARD JOHN WEBSTER Appellants

ANDPUBLIC TRUSTEE (IN ITS CAPACITY AS REPRESENTATIVE OF THE ESTATE OF EDWARD HOWARD WEBSTER)

First Respondent

ANDPHYLLIS EDNA WEBSTER Second Respondent

Hearing:         21 June 2010

Appearances: P McRae for the appellants

G Allan for the respondents

Judgment:      2 September 2010

JUDGMENT OF MALLON J

[1]      Phyllis Webster is 80 years old.  Her husband of 27 years died in 2007.  On his death a retirement villa in their joint names, which had a value of approximately

$245,000, passed to her.  Other than the joint ownership of the villa, Mr Webster had savings in his name of approximately $25,000.  Mrs Webster had made substantially greater financial contributions than Mr Webster to their combined assets.

[2]      Mr Webster’s will provided that, after payment of funeral and administration expenses, his savings were to be divided equally between his two adult children and

one adult step-child from his first marriage.  He named Mrs Webster as the residual

HORNE AND WEBSTER V PUBLIC TRUSTEE (IN ITS CAPACITY AS REPRESENTATIVE OF THE ESTATE OF EDWARD HOWARD WEBSTER)  AND ANOR HC NEL CIV-2010-442-44  2 September 2010

beneficiary.  The savings accounts referred to in his will did not exist at the time of his death but, because it represented Mr Webster’s intent, Mrs Webster agreed that the $25,000 could be shared between the children.

[3]      Mr Webster’s two adult children (the applicants) claimed that Mr Webster’s will  had  not  made  “adequate  provision  ...  for  [their]  proper  maintenance  and support”  (s  4  of  the  Family  Protection  Act  1955).    To  pursue  that  claim  the applicants needed the trustee of Mr Webster’s estate to be granted leave to apply for orders for the division of the relationship property of Mr and Mrs Webster (ss 88(2) and 25(1)(a) of the Property (Relationships) Act 1976).  Leave was declined by the Family Court and that decision was upheld by the High Court on appeal.   The applicants now seek leave to appeal to the Court of Appeal.

[4]      The applicants accept that leave to appeal can be granted only if their appeal raises a question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.[1]

[1] Waller v Hider [1998] 1 NZLR 412 (CA).

[5]      As to the requirement for a question of law or fact capable of bona fide and serious argument, the applicants contend that the Family and High Courts were in error in not finding that their family protection claim was seriously arguable.  They say that the Courts set too high a threshold as to what qualified as “need” for which provision for maintenance and support ought to have been made.  They say that the High  Court  mixed  the  assessment  of  need  with  the  question  of  what  could  be allocated to the children in view of the size of the estate.  They say that the Family and High Court decisions failed to consider adequately or at all that a life interest or a charge against Mrs Webster’s estate could have been utilised so as to ensure proper provision for Mrs Webster and them.

[6]      As to the private importance of the question, the applicants say that because their family protection claims are seriously arguable, there will be serious injustice if leave to apply for orders for the division of the relationship property is not granted. They say that because there is serious injustice this must be a private interest of

sufficient importance to warrant a further appeal.  They further say that the appeal raises questions of general importance.  They say that the appeal would determine how the conflicting claims between a testator’s adult children and the testator’s subsequent spouse are to be balanced in a modest estate and whether life interests or related devices should be used in such circumstances.

[7]      The law as to what is meant by “proper maintenance and support” and how the Court is to approach a claim that “adequate provision” has not been made is well settled.  What can be difficult is the judgment the Court has to make on the facts.  In the present case the Family and High Court Judges made no error in approach and I am in agreement with them on the application to the facts.  I consider that the family protection claim is not seriously arguable.   I also consider that there is no private interest of sufficient importance to warrant a further appeal.   I also consider that there is no sufficient public interest to warrant a further appeal.  I turn to the specific points raised by the applicants.

[8]      First, I do not agree that the question of need is to be separated from the question of what should be allocated from the estate (as adequate provision) in view of its size and the competing claims on it.  The Courts have said on many occasions that the questions are interrelated.[2]

[2] See, for example, Clements v Clements [1995] NZFLR 544 (CA) at p547 citing Little v Angus

[1981] 1 NZLR 126 (CA) at p127 and Re Harrison (deceased) [1962] NZLR 6 at 13.

[9]      Secondly, I do not agree that the Family and High Court judgments here set too high a threshold for “need”.  As was said in these judgments, the applicants are adult, self-supportive and have no special needs out of the ordinary.  (I note that I would take no different view of this assessment even considering the further affidavit which has been filed in support of the application for leave.)   This assessment of their circumstances did not mean that they would have no family protection claim.  It was not therefore setting a “threshold” for such a claim.  In a larger estate with no competing claims, applicants in their position may have been able to establish a claim.  Here, this assessment of their circumstances was accurate and was relevant to whether,  in  the  context  of  the  size  of  the  estate  and  the  competing  claim  of

Mrs Webster,  the  provision  that  had  been  made  for  the  applicants  breached

Mr Webster’s “moral duty” to the applicants.

[10]     The applicants wish to assist their half-sister.  Mr Webster’s step-child is not a relative of Mr Webster and so cannot claim on his estate pursuant to the Family Protection Act.   Had she been able to claim, then her need for “maintenance and support” may have been greater than that of the applicants.  It may be that this could have been taken into account when considering the circumstances of the applicants. There was, however, no affidavit from the step-child.  Further, even if her position could have been considered when considering the applicants’ circumstances, I consider that no different outcome would have been reached.  Mr Webster’s primary duty was to his wife, for the reasons given by the Family Court and High Court Judges, and that duty meant in the circumstances that she was to have Mr Webster’s interest in the villa.

[11]     Thirdly, I do not agree that the Court ought to have created a life interest or charge  so  as  to  allow  a  greater  provision  to  be  made  for  the  applicants.    The applicants contend that the courts have sometimes recognised that a life interest is necessary.  However the assessments that are made when there are competing claims in respect of a modest estate are fact dependent.  Here I am in complete agreement with the reasons given by the High Court Judge for rejecting a life interest or a charge in this case, which were as follows:

Thirdly, Mrs Webster needs, and is entitled to, the security of a home or the cash equivalent to use as best suits her particular circumstances.  I agree with the Judge to shackle her with a life interest in a half share of the house would quite unfairly dictate her living circumstances for those last years of her life. She has a clear and obvious need for this money.   And as Mr Webster recognised he had a primary moral duty to her arising both from their 27 year marriage and because of her contribution to the property.

[12]     I therefore dismiss the application for leave to appeal.

Mallon J

Solicitors:

P McRae, Nelson, [email protected]

G Allan, Pitt and Moore, Nelson, [email protected]