Kinney v Pardington
[2019] NZHC 317
•1 March 2019
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA
NGĀMOTU ROHE
CIV-2013-443-058
[2019] NZHC 317
UNDER the Family Protection Act 1955 IN THE MATTER
of the estate of KENNETH JOHN PARDINGTON (deceased)
BETWEEN
ERIN MAUREEN KINNEY
PlaintiffAND
MARGARET MYRTLE PARDINGTON, DAVID JOHN PARDINGTON AND KENNETH MARK PARDINGTON
Defendants
AND
DAVID JOHN PARDINGTON AND KENNETH MARK PARDINGTON
Interested Parties
Hearing: 15 and 16 August 2016
5 February 2018 (Discovery and Consolidation hearing) 27 August 2018 (Valuation hearing)
4 December 2018 (Final submissions hearing)
Counsel:
C T Gudsell QC and D E G Nielsen for Plaintiff K A McKenzie for Defendants
S W Hughes QC for Interested Parties
Judgment:
1 March 2019
RESERVED JUDGMENT OF CULL J
TABLE OF CONTENTS
Factual background 5
History of the proceedings 8
The present proceedings 12
Issues 18
The Will 20
KINNEY v PARDINGTON [2019] NZHC 317 [1 March 2019]
The value of the estate 21
The parties’ position at final hearing 28
The evidence 32
The relevant legal principles 45
The parent-child relationship 54
Application 68
Result 82
[1] An ex-nuptial daughter claims against the estate of her father, to remedy his breach of moral duty to her by failing to make adequate provision for her during his lifetime and in his will. He kept her existence from his wife and their children.
[2] Kenneth Pardington (the deceased) died at New Plymouth on 1 September 2011. He was married and had two sons from his marriage. By his will, he left his wife with a life interest in his half-share of the family home and the income from his residuary estate during her lifetime. On Mrs Pardington’s death, his residuary estate is divided equally between the deceased’s children.
[3] Erin Kinney (Erin) is the daughter of the deceased, but was unknown to Mrs Pardington and the two sons. She claims under the Family Protection Act 1955 (the Act) for such provision as the Court thinks fit, out of the estate of the deceased.
[4] In this case, the sons accept that, as a child of the deceased, Erin is a beneficiary under the deceased’s will and has a valid claim. The sole question in these proceedings is the quantum of the sum required to remedy the breach of the deceased’s moral duty. This has involved an inquiry into the value of the estate, which was ultimately agreed by the parties.
Factual background
[5] The deceased was married to his wife, Myrtle Pardington, for nearly 50 years. They had two children of their marriage, Kenneth and David. Mrs Pardington and her two sons are trustees and executors of the deceased’s will (together, the defendants). The two sons are separately represented in these proceedings as “interested parties”, being beneficiaries of their father’s estate.
[6] The deceased, during his lifetime, visited Whitianga where he had a berth at the Whitianga marina for his boat, which he took regularly fishing. During his visits
to Whitianga, he formed a relationship with Erin’s mother. Erin is the child of this relationship. The deceased’s relationship with Erin’s mother was not disclosed to Mrs Pardington or her sons.
[7] A paternity order dated 9 August 1993 established that the deceased was the father of Erin and he acknowledged Erin as his daughter, regularly paying child support as assessed by the child support agency.
History of the proceedings
[8] These proceedings were issued in February 2013. On a preliminary question of law, Toogood J found that property obtained by the widow through survivorship can in some circumstances form part of the deceased’s estate.1 Further, the Court held that although s 4(3) of the Property (Relationships) Act 1976 did not operate to retain jointly held assets, other provisions in that Act might well do so in some circumstances.2
[9] The parties had agreed with Toogood J that the case needed to be re-pleaded to ensure that the real controversy between the parties was properly before the Court,3 but contrary to the timetable imposed, Erin made an interlocutory application for particular discovery pending the commencement of a separate proceeding. That proceeding concerned an application to replace the executors with the Public Trustee, seek a declaration that jointly-owned assets were in fact relationship property, and require the executors to gather in the relationship property assets and hold them on the trusts set out in the deceased’s will. Pre-commencement discovery was refused by Associate Judge Sargisson, because she considered the proposed claims could be formulated without such disclosure.4
[10] Following further case management, Erin filed another interlocutory application to remove the executors. This application was dismissed, because it was
1 Kinney v Pardington [2014] NZHC 289, at [4] and [13].
2 At [4] and [14].
3 At [17].
4 Kinney v Pardington [2015] NZHC 725.
inappropriate to deal with the matter on an interlocutory basis and there had been no amendment to the underlying proceeding.5
[11] A further application was made in April 2016 to re-plead the claim for the appointment of the Public Trustee in place of the executors but the application has not been decided or bought on for hearing. Erin instructed fresh solicitors and counsel on 23 June 2016, who sought an adjournment to allow a comprehensive request for further information to be obtained and to enable a proper review of the issues in pleadings. The application for adjournment was dismissed.6 The matter came on for hearing before me on 15 and 16 August 2016.
The present proceedings
[12]The matters agreed to by the parties are:
(a)Erin is the natural daughter of the deceased;
(b)Erin has a valid claim against the estate of the deceased under the Act;
(c)Erin is in necessitous circumstances; and
(d)the deceased’s sons are not in need.
[13] At the first hearing, the parties were not agreed on the value of the estate. The contest over the value of the estate arose out of the estate’s Administration Statement, which records loans owing from the estate to the K J Pardington Family Trust (the Family Trust) and the two sons. While the net value of the estate was initially the most contentious issue in this proceeding, following a valuation hearing the parties have reached agreement on the value to be placed on the estate.
[14]
Meanwhile, fresh proceedings have been issued on Erin’s behalf against the Family Trust (the Trust proceedings). The deceased settled the Family Trust on 18 September 1984. Although Erin was not living at the date of execution of the Trust,5 Kinney v Pardington [2016] NZHC 711.
6 Kinney v Pardington HC New Plymouth CIV-2013-443-58, 15 July 2016 (Ruling of Williams J) at [10]–[16].
she is both a discretionary beneficiary and a final beneficiary, being a child of the settler who was born before the date of distribution. Erin has not received any distribution or benefit from the Family Trust, which currently has no assets. At issue in the Trust proceedings are the estate’s liabilities to the Trust, with the quantum of the estate’s indebtedness to the Trust yet to be determined.
[15] On 15 February 2018, I refused an application of consolidation of those proceedings with this proceeding.7 There were additional parties joined to the Trust proceeding, who had not taken part in the prior Family Protection hearing and the matters in contention involved evidence relating to the acquisition and deposition of Trust property, outside the scope of this proceeding.
[16] Although the parties reached agreement on the net value of the estate, there was no agreement on the deduction for the estate administration costs. For Erin, Mr Gudsell QC asked that the Court make an award of the net value of the estate, with all issues as to estate administration costs and parties’ costs being reserved. For the interested parties, Ms Hughes QC asked the Court to make a final award, inclusive of any deduction for the estate administration costs.
[17] At the close of the last hearing, I advised the parties that I would deliver a decision determining the percentage award to Erin. The parties could then file their respective submissions on costs deductions from the $615,000.00 value of the estate, with the final decision to be reached on the papers.
Issues
[18] The issue for determination in this decision is what share of the estate should be awarded to Erin to remedy the breach of the deceased’s moral duty.
[19]In this decision, I will deal with:
(a)the provisions of the will;
(b)the value of the estate;
7 Kinney v Pardington [2018] NZHC 155.
(c)the parties’ positions;
(d)the evidence;
(e)the statutory provisions and relevant legal principles;
(f)a discussion of the facts and applicable law to this case; and
(g)the result.
The Will
[20]By his will dated 13 September 1989, the deceased:
(a)appointed as executors and trustees Myrtle Margaret Pardington, David John Pardington and Kenneth Mark Pardington;
(b)gave to his wife all personal chattels;
(c)gave his one-half interest in the house that was occupied as his principal residence at the date of his death to his trustees to hold on trust for sale, for his wife to live in the house as long as she wishes, to be sold only with her consent, for all rates and outgoings to be paid by his wife as the occupant and for the house to form part of his residuary estate once the trust ends;
(d)directed his trustees to hold the rest of his estate on trust to pay all debts and expenses, and to pay the income from the estate to his wife during her lifetime and thereafter; and
(e)divided his residuary estate equally amongst those of his children who survive him, with the children of any who do not survive him to take equally their parent’s share.
The value of the estate
[21] On 16 August 2016 I adjourned this proceeding part-heard to enable the trustees to provide valuations of the assets of the deceased’s estate and to clarify the
liabilities of $526,474.49.8 In particular, I expressed concern about the Deed of Assignment dated 20 December 2013, which recorded a loan of $131,680.00 owing by the estate to the interested parties, the sons of the deceased.9 This Deed of Assignment was entered into 10 months after the date when these proceedings commenced on 8 February 2013.
[22] Following that minute, a telephone conference was convened on 2 December 2016, in which the trustees were directed to provide all information regarding estate valuation to the Court to enable an appropriate determination to be made.10
[23] Since the hearing in August 2016, the Court received 10 substantive memoranda, many of which contained financial information and attachments, together with four further affidavits of K M Pardington, dated 21 September 2016; 3 November 2016; 8 December 2016; and 19 May 2017.
[24] On 27 April 2017, I convened a further telephone conference and recorded that it was evident there could be no agreement between Erin and the defendants as to the value of the estate.11 The obstacle to reaching agreement was the basis for the liabilities, deducted from the overall value of the assets, as set out in the defendants’ Administration Statement. I noted at the time that Erin challenged the defendants’ contention that the estate is worth $271,849.12, on the basis that deduction should not have been made for liabilities claimed as $80,970.00, $2,847.95 and an assignment of debt of $131,680.00.12
[25] The matter was set down again for a further half-day hearing on 27 August 2018 (the valuation hearing), for counsel to address the discrepancy in each of the parties’ assessment of the value of the estate. The parties filed further accounting evidence and affidavits from the interested parties in preparation for the hearing. At the conclusion of the hearing, the parties were able to agree on the net value of the
8 Kinney v Pardington HC New Plymouth CIV-2013-443-058, 16 August 2016 (Minute of Cull J) at [8].
9 At [1(b)].
10 Kinney v Pardington HC New Plymouth CIV-2013-443-058, 2 December 2016 (Minute of Cull
J) at [4].
11 Kinney v Pardington HC New Plymouth CIV-2013-443-058, 27 April 2017 (Minute of Cull J) at [3].
12 At [4].
estate of $615,000.00, without any deduction for costs. This was done through the co-operation of all parties, counsel and experts, who are to be commended for reaching this outcome.
[26] The estate’s Administration Statement records the capital account of the estate as at 20 August 2018 as follows:
Assets
| Govett Quilliam | Interest bearing trust account – as at 13/08/2018 | 1,589.03 | |
| House: 408 South Road, Omata | Half share as per valuation dated 15/08/2018 | 245,000.00 | |
| House: 1 Margaret Alice Close, New Plymouth | Half share as per valuation dated 15/08/2018 | 372,500.00 | |
| Whitianga Marina Berth | As per market appraisal dated 07/08/2018 | 250,000.00 | |
| Pardington Family Trust | Loan | 127,050.00 | 996,139.03 |
Less
| Pardington Family Trust | Loan Half share house loan | 40,763.00 275,640.37 |
| D J & K M Pardington | Loan (pursuant to Deed of Assignment dated 20/12/2013) | 131,680.00 |
| K M Pardington | Advances as per previous statement Advance for costs and disbursements owing as at 03/04/2017 Plus advance for costs to 31/05/2018 as above Advance for Tania Roberts Ltd fees | 62,861.64 4,017.71 21,933.95 2,516.88 |
| 91,330.18 |
| M M Pardington | Net income owed as | ||
| per previous statement | 376.54 | 405.19 | |
| Net income this | |||
| statement | 28.65 | ||
| Tania Roberts Limited | Fees owing | 4,266.50 | |
| Marina Berths | Valuation fee owing | 713.00 | |
| Telfer Young | Valuation fee owing | 805.00 | |
| Govett Quilliam | Costs and disbursements owing as at 13/08/2018 | 2,819.12 | 548,422.36 |
Capital account as at 20 August 2018 447,716.67
[27] As noted above, the deduction for estate administration costs will be the subject of further submissions, following the release of this judgment on the percentage award to Erin.
The parties’ position at final hearing
[28] Erin’s position is that the circumstances of this case are exceptional and the minimum necessary to make adequate provision for her is 80 per cent of the net value of the estate. Erin seeks an order to provide her with an immediate entitlement, whilst recognising Mrs Pardington’s life interests and that costs be reserved for further submission. Erin’s position is based on the agreed “net” value of the estate of $615,000.00, excluding estate administration costs.
[29] Mr Gudsell QC further submits that the Court should determine Erin’s family protection claim on the basis she has received no historical benefits from the Family Trust. While there is a potential for her to receive some entitlement, there is no certainty she will receive anything.
[30] The deceased’s sons acknowledge that their father has breached his moral duty to Erin. They say the net estate should be considered to be $515,066.20 (once
the estate administration costs are deducted) and that Erin should receive an award of 50 per cent of the estate, discounted to reflect Mrs Pardington’s life interest. On their calculation, Erin would receive a sum of $198,516.81, payment of which could be made within 30 days of judgment.
[31] Ms Hughes QC submits that the issues relating to proceedings over the Family Trust are separate from those proceedings and should be set to one side.
The evidence
[32] Erin filed two substantive affidavits in this proceeding, the first dated 11 August 2016, and the second dated 19 October 2018. In her first affidavit, she described the life she led with her mother and her interaction and involvement with the deceased.
[33] Erin’s mother owned a property in Whitianga, where she was raised. Erin records that she was a “difficult” child, known for bullying other children and struggling at school. She recalls her mother often screamed and shouted, and at times would “get physical” with her. She recalls her mother frequently drinking with friends and says she was cared for by her sister. During her childhood, Erin recalls being sexually abused by male associates of her mother.
[34] The deceased was named by Erin’s mother as her father. Following blood tests which established paternity, the deceased accepted he was the liable parent for child support purposes in respect of Erin. Although no details were available of the amount of child support payments, the testator paid child support for Erin.
[35] The deceased had intermittent contact with Erin and her sister. When his relationship with their mother ended, he continued to visit the family, specifically to see Erin and her sister. However, Erin recalls being forbidden from calling the deceased “Dad”, or approaching him in the streets of Whitianga or at the Cruising Club.
[36] From age six, Erin was placed intermittently in Child, Youth and Family Services (CYFS) care. On 9 July 2001, a CYFS social worker wrote to the deceased’s solicitor for Family Court proceedings, stating:
This young girl has many issues and if she were able to have contact with her father and establish a good relationship with him, this could have a huge impact on her life.
Could you please contact your client and discuss this with him as I feel his present lack of involvement is adding to the psychological distress of this delightful young girl.
[37] The deceased’s solicitor responded, emphasising the need to maintain full confidentiality “in this matter” and to direct all forms of communication through him on the deceased’s behalf. He wrote to CYFS in 2002 recording that the deceased:
… has certainly confirmed to me that he endeavours to maintain contact with Erin as much as he is able given the particular circumstances of this proceeding …
[38] The CYFS records show that social workers attempted to establish contact between Erin and the deceased, but this was mostly refused. The deceased was open to having limited contact with Erin, but in a way that would preserve the secrecy of their relationship.
[39] Of particular relevance is the family therapist’s report to the Child and Family team at Thames Hospital in August 2002. The therapist recorded his strong concerns about the effects of the deceased’s behaviour on Erin and described those as being abusive and degrading towards Erin, as follows:
At our meeting last week I chose to raise the difficult matter – the role and behaviour in that role of Erin’s biological father. I hold a strong opinion about this man. I believe that as Erin’s sense of herself and her place in the hearts of others grows, her acceptance of [her] father’s behaviour towards her may diminish. If it does not change, Erin will need to develop a story to cover the gap between the behaviour of a loving responsible father … and her own father who behaves differently. It is my view … that this man degrades the father daughter relationship. I even go further to suggest his behaviour towards Erin is actively abusive and degrading of Erin’s personhood.
[40] At the time of the hearing in August 2016, Erin was 26 years old. At that time, she rented a single room in a house in Ngaruawahia, relying on Government
support to pay her $100 per week rent and to support herself. She was on the job seekers’ benefit.
[41] Erin has a son named Troy who was six years old at the time of the initial hearing. Troy now lives with his father’s mother in Christchurch. Erin has access to Troy and is working at building more contact with him.
[42] Erin did not complete her education, leaving school at 14 years and has been diagnosed as having bipolar disorder. She also has PTSD, anxiety and depression. As at August 2016, Erin was taking steps to obtain ACC assistance to access services to assist her in dealing with the abuse she has suffered and in her recovery.
[43] In her second affidavit, Erin updated the Court on her present circumstances. She had moved to Te Awamutu where she was offered a casual contract job rearing dairy calves. While employed, Erin did not require support from Work and Income. However, her contract was to expire in November 2018, when she would need income support again. Her financial situation remains unstable.
[44] Erin is in a new relationship and lives with her partner on the farm. Her mental health has improved as a result of relocating to a stable home and having a routine of work. Despite these improvements, Erin remains mindful of managing her mental health as well as her financial and domestic circumstances. She still considers her future is uncertain and she needs support.
The relevant legal principles
[45] The approach to be taken to family protection claims at first instance is well- settled.13 The starting point is s 4 of the Family Protection Act, which provides:
4 Claims against estate of deceased person for maintenance
(1)If any person … dies, whether testate or intestate, and in terms of his or her will or as a result of his or her intestacy adequate provision is not available from his or her estate for the proper maintenance and support of the persons by whom or on whose behalf application may be made under this Act, the court may, at its discretion on
13 Williams v Aucutt [2000] 2 NZLR 479 (CA); Auckland City Mission v Brown [2002] 2 NZLR 650; and Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.
application so made, order that any provision the court thinks fit be
made out of the deceased’s estate for all or any of those persons.
[46] The obligation on the deceased person to make “adequate provision ... for the proper maintenance and support” of persons entitled to claim under the Act has been described as the deceased’s “moral duty”. The Court of Appeal has reconfirmed that although this expression is not mentioned in s 4, it is “too deeply embedded to be open to judicial reconsideration now.”14
[47] Under s 3(1), the children of the deceased are persons entitled to claim under the Act.
[48] In Williams v Aucutt,15 the Court of Appeal reconfirmed the cardinal principles governing claims under the Act as stated in Little v Angus:16
The principles and practice which our Courts follow in Family Protection cases are well settled. The inquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so, what is appropriate to remedy that breach. Only to that extent is the will to be disturbed. The size of the estate and any other moral claims on the deceased’s bounty are highly relevant. Changing social attitudes must have their influence on the existence and extent of moral duties.
[49] In Williams, the Court of Appeal remedied the breach of moral duty by awarding an additional $50,000 to one of the deceased’s daughters from an estate worth $920,000. Although the daughter had already been bequeathed several specified family possessions and shares (together worth a market value of $50,000), the Court held this was insufficient to discharge the deceased’s duty to provide for her daughter.
[50] The summary of principles governing claims under the Act are helpfully set out in Vincent v Lewis,17 to which both parties referred. Randerson J summarised them as follows:18
14 Re Z (deceased) [1979] 2 NZLR 495 (CA) at 506.
15 Williams v Aucutt, above n 13, at [35].
16 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
17 Vincent v Lewis [2006] NZFLR 812 (HC).
18 At [81].
(a)the 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 testatrix;
(b)moral duty is a composite expression which is not restricted to mere financial need but includes moral and ethical considerations;
(c)whether there has been such a breach is to be assessed in all the circumstances of the case including changing social attitudes;
(d)the size of the estate and any other moral claims on the deceased’s
bounty are relevant considerations;
(e)it is not sufficient merely to show unfairness; it must be shown in a broad sense that the applicant has need of maintenance and support;
(f)mere disparity in the treatment of beneficiaries is not sufficient to establish a claim;
(g)if a breach of moral duty is established, it is not for the court to be generous with the testator’s property beyond ordering such provision as is sufficient to repair the breach;
(h)the court’s power does not extend to rewriting a will because of a perception it is unfair; and
(i)although the relationship of parent and child is important and carries with it a moral obligation reflected in the Family Protection Act, it is nevertheless an obligation largely defined by the relationship which actually exists between parent and child during their joint lives.
[51] More recently, Gendall and Whata JJ elaborated in Black v Black that the inquiry into the content of the moral duty, and any breach and requisite remedy, involves an evaluation of a number of factors, including:19
(a)the nature of the relationship of the testator and the claimant;
(b)the financial need of the claimant;
(c)recognition of familial connection and belonging;
(d)inter vivos contributions, if any;
(e)entitling and disentitling conduct;
(f)repair of parental abuse and neglect; and
(g)the size of the estate.
[52] One final consideration which has affected the quantum of claims in some cases is where there has been estrangement between the parent and the child.20
[53]All of these factors involve an assessment of the parent-child relationship.
The parent-child relationship
[54] In Flathaug v Weaver, the Court of Appeal reinforced the primacy of the relationship of parent and child and the moral obligation attaching to it.21 The Court said:22
The relationship of parent and child has primacy in our society. The moral obligation which attaches to it is embedded in our value system and underpinned by the law. The Family Protection Act recognises that a parent’s obligation to provide for both the emotional and material needs of his or her children is an ongoing one. Though founded on natural or assumed
19 Black v Black [2014] NZHC 1478 at [48].
20 See, for example, Shannon v Bowering HC Rotorua CP33/97, 21 August 2000; Re Ward [1964] NZLR 929 (SC); and Re Upton HC Wellington CP169/94, 28 September 1995.
21 Flathaug v Weaver [2003] NZFLR 730 (CA).
22 At [32].
parenthood, it is, however, an obligation which is largely defined by the relationship which exists between parent and child during their joint lives.
[55] There, the ex-nuptial daughter of the testator learned of her biological father’s identity when she was aged 24. Following that, the claimant developed a close and affectionate relationship with the testator and they visited one another several times before he died. The claimant, aged 47, had been born and brought up in England by her mother and the mother’s husband as their child. The testator left his entire estate to a family trust, the beneficiaries of which were his two sons and their children.
[56] The Court of Appeal held that the testator’s moral duty to his daughter arose from the relationship built up between father and daughter following disclosure that the testator was her father.23 The Court found the disclosure would have been an emotional blow to the daughter and was itself a legitimate consideration in evaluating the existence and extent of the moral duty.24 The Court of Appeal adjusted the High Court’s award from approximately 16 per cent of the estate to seven per cent of the estate, because insufficient weight had been given to the limited nature of the relationship between the testator and the claimant daughter, who had had a happy upbringing with her mother and the mother’s husband.25 The Court considered the testator’s decision to play no part in the claimant’s upbringing was not one of neglect, but one of “enlightened forbearance”.26
[57] In making the award, the Court also took into account the effect of the testator leaving his entire estate to a family trust, which excluded his daughter as a beneficiary. The exclusive rights of the sons to benefit from the family trust was, in the Court’s view, equivalent to testamentary provision:27
We see no reason why, in a proper case, an entitlement to benefit under a Trust, even of a fully discretionary nature, should not be taken into account in assessing a testator’s duty to make provision. In this case, the only beneficiaries of the Trust are John and Nils [the two sons] and their children. It would be wholly unrealistic not to have regard to their exclusive rights to benefit from the Trust. By leaving his entire estate to the Trust, the testator plainly saw it as the means by which he would provide for his children and
23 Flathaug, above n 21, at [34].
24 At [34].
25 At [41].
26 At [33].
27 At [36].
grandchildren. In our view, for the purpose of assessing their competing claims, that may be regarded as equivalent to direct testamentary provision.
[58] There are numerous other cases involving testators neglecting their parental role by failing to provide for their children financially and/or morally and emotionally. Counsel referred to the following cases, illustrating the range of awards in circumstances where no testamentary provision was made for a child of the testator.
[59] In Shannon v Bowering, the deceased fathered a son whom he never acknowledged.28 The deceased left his estate principally to his sister and three nieces. In determining an award, Potter J referred to the existing case law before making an award of $200,000 out of an estate valued at $300,000, approximately 66 per cent. Potter J observed that the deceased denied paternity of his son and failed to establish a relationship with him, despite living within close proximity. The son was denied a relationship with his father, which could have improved his unhappy childhood.
[60] Re Galletly, whilst an older case, reinforced the principle that first degree ties of blood merit primary consideration under the Act.29 In that case, the deceased had left his entire estate of £1,000 to his unmarried sister. The Court recognised the paramount interests of two illegitimate children of the deceased by awarding them 90 per cent of the estate. The Court also recognised that the moral claim of the deceased’s sister, who was the sole beneficiary under the will, deserved recognition, but found that her claim must be subordinated to the claims of the two illegitimate children. She received 10 per cent of the estate.
[61] A similar approach was taken by Greig J in Rothnie v Public Trust Office, where the claimant was the son of parents who had separated when he was 11.30 His childhood had been marked by violence and neglect from the deceased and there had been little or no contact after separation. Of an estate of $312,000 that was left to the three siblings of the deceased, only one of whom survived him, the Court awarded
28 Shannon v Bowering, above n 20.
29 Re Galletly [1946] 48 GLR 417 (SC).
30 Rothnie v Public Trust Office HC Wellington CP203/95, 22 September 1997.
$250,000 to the claimant (80 per cent), $10,000 to a granddaughter and the residue to the surviving sister of the deceased.
[62]In Re Upton, the Court confirmed an agreement by the parties for the sum of
$85,000 (approximately 72 per cent) to be granted to the deceased’s daughter from an estate of $117,000 which had been left in its entirety to the de facto partner of the deceased.31 The deceased acknowledged paternity during his lifetime and made child support payments to the mother, but did not associate with his daughter.
[63] In Ormsby v Van Selm, the claimant children were successful in their claim that the deceased breached her moral duty in leaving 93.5 per cent of the estate to her son and just 3.2 per cent to each of her daughters.32 The children all suffered hardship living with their parents, and their upbringing was described as “bleak”.33 Despite this, the deceased’s daughters remained dutiful until her death. The claimants were both in precarious financial positions. On appeal, the Court provided that 30 per cent and 25 per cent be left to each claimant, and the remaining 45 per cent of the estate was left to the deceased’s son.34
[64] Where a testator has failed to recognise members of his or her family, the Courts have had regard to the circumstances of estrangement between a claimant and the testator. While recognising that estrangement between a parent and child may in some cases be considered a factor that limits the extent of relief,35 the Courts have had regard to whether the estrangement was of the deceased’s making.
[65] In Crosswell v Jenkins, Hardie Boys J held that, where the parties’ estrangement is of the deceased’s making, the need and moral duty to provide for a child by testamentary acknowledgement are compelling:36
What the deceased has failed to do in his lifetime to accord recognition to his own family he ought to do in his will.
31 Re Upton, above n 20.
32 Van Selm v Van Selm [2015] NZFLR 693.
33 Ormsby v Van Selm [2015] NZHC 2822 at [13] and [17].
34 At [60].
35 See, for example, Re Ward, above n 20.
36 Crosswell v Jenkins and Hall-Jones (1985) 3 NZFLR 570 (HC) at 575.
[66] There, the three claimant children of the deceased received nothing under the deceased’s will. The deceased denied they were his children, despite the undisputed fact that he was married to their mother at the time of conception, they had entitlement under the Status of Children Act 1969, and the birth certificates were prima facie evidence of paternity by virtue of that Act. The Court made an award to each of the claimant children, despite the small estate, to give them appropriate recognition as members of the deceased’s family.
[67] In a more recent case, where a testator had lost contact with his young children following an acrimonious divorce from their mother, the Court made a significant award to the children.37 In Moon v Carlin, the central question for the Court was whether the primary responsibility for the estrangement between the testator and his children rested with the testator. Both the Family Court and the High Court concluded that the testator had the prime responsibility for the estrangement. Since he separated from the children’s mother, the testator had not provided any emotional, familial or financial assistance to the children. Each of the children deposed that they suffered psychological problems as a result. The High Court canvassed many examples where the Courts have had to consider estrangement and make awards where responsibility for contact with their children has rested with the testator.38 The testator had left his children legacies of $25,000 each, from his estate worth $773,300. The High Court confirmed the Family Court’s award of 75 per cent of the deceased’s assets to the four children jointly.
Application
[68] As the principles in Vincent v Lewis demonstrate, the objective test of whether there has been a breach of moral duty is not restricted to mere financial need but includes moral and ethical considerations.39 The moral obligation in a relationship of a parent and child is important and is defined by the relationship which actually exists between parent and child during their joint lives.40
37 Moon v Carlin HC Auckland CIV-2010-404-5486, 23 February 2011.
38 At [29].
39 Vincent, above n 17, at [81].
40 Flathaug, above n 21, at [32].
[69] As stated frequently in family protection cases, each case will turn on its own facts. From an early age of six years, Erin had been placed in CYFS care. The CYFS social worker had urged that the deceased have more contact with Erin, as this could have a significant impact on her life and relieve the psychological distress from his lack of involvement. There are a number of factors which render Erin’s claim particularly poignant and disturbing; the deceased:
(a)initially denied paternity;
(b)turned a blind eye to the abuse suffered by Erin;
(c)kept secret and confidential his relationship with Erin’s mother and placed a requirement on Erin to ignore him in public;
(d)failed to recognise Erin and her family;
(e)was aware of Erin’s mental fragility;
(f)paid child support, meeting his statutory obligations but did not provide any further support; and
(g)failed to respond to the requests for his assistance in Erin’s life, when asked by the authorities.
[70] The focus of the courts in these circumstances is to assess what a wise and just testator should do. I consider the Court of Appeal’s confirmation of the primacy of the parent-child relationship in our society in Flathaug is of particular relevance here.
[71] The circumstances of the claimant daughter in Flathaug can be contrasted with Erin’s position in the present case. Erin was detrimentally affected by the absence of her father. Although he paid child support to Erin’s mother as a liable parent, as the CYFS reports and family therapist recorded, Erin’s childhood was a deprived one in many respects. She yearned for and needed the input of her father, but the contact, although acknowledged by the deceased as one he would continue to
maintain, remained minimal, with adverse psychological consequences to Erin. The family therapist described the deceased’s behaviour as degrading the father/daughter relationship and was abusive in the circumstances.
[72] In Flathaug, the claimant daughter was excluded as a beneficiary under the family trust, where her father had made provision for his sons and their children. In Erin’s case, she was a discretionary beneficiary under the family trust, but has received no benefits from that trust. Although parallel trust proceedings have been issued on behalf of Erin, they are separate proceedings and applying the Court’s approach in Flathaug, this Court should determine Erin’s family protection claim on the basis that she has received no benefit or provision from the Family Trust.
[73] As noted, the Court must expressly find a need for proper maintenance and support, based on financial as well as moral and ethical considerations. The Court of Appeal expressed the test in Williams v Aucutt as follows:41
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.
[74] More recently, the Court of Appeal in Henry v Henry restated the principle to be applied in the assessment of the amount by which the will is disturbed to remedy the breach of duty: an award should be no more than is necessary to make adequate provision for the maintenance and support of the claimant.42 Reinforcing the test in Williams, the Court restated that this principle is to apply whether the claimant’s case is based on financial need or on a broader need for support, or both.43 The Court said further that this “conservative approach” requires the Court to make the assessment
41 Williams v Aucutt, above n 13, at [52].
42 Henry, above n 13, at [54].
43 At [56].
of what is required on a basis which focusses on what is necessary to make adequate provision, but to do no more than that.44
[75] The determination of an award under the Act is an exercise of judicial discretion, to be undertaken on the facts of each case. I record that Counsel referred to numerous cases where awards were given for breaches of the deceased’s moral duty. However, I consider many of these cases are not relevant to the present situation because they involve normal parent-child relationships that were loving and healthy,45 or where the child had received significant support during the parent’s lifetime,46 or where relationships deteriorated only towards the end of the parent’s life but were otherwise normal.47 The circumstances in those cases differ markedly from this and are not comparable to the relationship between Erin and the deceased in this case.
[76] As the parties all acknowledge, there has been a clear breach of moral duty by the deceased in respect of his daughter, Erin. The deceased’s sons have properly accepted from the outset that adequate provision must be made for Erin, and that is reflected in the matters agreed to by the parties at [12], and their offer to Erin of a 50 per cent share of the estate. They are both comfortable financially and have had the benefit of inter vivos provision to them by the deceased from the Trust. By comparison, Erin is in necessitous circumstances. She still has an uncertain financial position; has regularly been in receipt of an unemployment benefit, and has struggled with mental health issues, exacerbated by the circumstances of her childhood and youth.
[77] I have given consideration to the awards in other similar cases, which are a guide only to the exercise of judicial discretion in any individual case. The following two cases, however, are of particular relevance. In Shannon v Bowering, the deceased never acknowledged his son and Potter J made an award of 66 per cent
44 At [58].
45 Rippey v Hunt [2014] NZHC 1694; Rule v Rule [2016] NZHC 3160 (and where awards were subsequently made in Rule v Rule [2017] NZHC 672); and Talbot v Talbot [2017] NZCA 507, [2018] NZFLR 128.
46 Rippey v Hunt, above n 45.
47 Courteney v Pratley [2017] NZHC 1761; and Smart v Webster [2017] NZFC 7264.
of the estate.48 In Re Upton, the Court approved an award of 72 per cent of the estate where the deceased acknowledged paternity and paid child support, although he did not associate with his daughter during his lifetime.49
[78] In this case, the lack of the acknowledgement by the deceased towards Erin was a significant failure, particularly as the deceased knew of Erin’s psychological stress and confirmed to CYFS social workers that he was endeavouring to maintain contact with Erin. Even allowing that the deceased paid child support to Erin’s mother once paternity was established, he made no gifts or distributions from the Family Trust to Erin in his lifetime and no testamentary provision in his will, keeping Erin’s existence a secret from his family.
[79] I have reached the inescapable conclusion that Erin’s claim for maintenance and support in this case is both one of financial need, as well as a broader need for support, emotional and filial.
[80] I have balanced the competing interests of the deceased’s widow and the two sons of the marriage. Mrs Pardington has a life tenancy in the deceased’s share of the family home and receives income from the residue of his estate for her lifetime. In contrast to Erin’s circumstances and financial position, the two sons are not in financial need and have been acknowledged by the testator, both during his lifetime and in his will. In this assessment, I also take into consideration that Erin has received no historical benefits from the Family Trust, under which she was the testator’s natural child and a discretionary beneficiary.
[81] I consider that the minimum necessary to make adequate provision for Erin to remedy the breach of the testator’s moral duty is 70 per cent of the value of the deceased’s estate.
Result
[82]The plaintiff succeeds in her claim against the deceased’s estate for breach of
his moral duty. The plaintiff is awarded 70 per cent of the value of the estate, subject
48 Shannon v Bowering, above n 20.
49 Re Upton, above n 20.
to a further determination on the deduction of costs from the agreed value of the estate of $615,000.00.
[83] Counsel are to now file memoranda on the deduction of costs. Counsel for the plaintiff are to file memoranda within 14 days of this decision. The interested parties are to file their response within a further 14 days.
Cull J
Solicitors:
Nielsen Law, Hamilton
Govett Quilliam, New Plymouth Quin Law, New Plymouth
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