Koroheke v Te Whau
[2020] NZHC 863
•30 April 2020
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV 2019-419-000317
[2020] NZHC 863
IN THE MATTER OF the Estate of MONA DISHER BETWEEN
KATHLEEN KARARAINA KOROHEKE, MASSEY WILLIAM TE WHAU, PATSY TE WHAU, VIOLET LEVY and TE AROHA TE WHAU
Appellants
AND
NUNIA MICHELLE TE WHAU and KEVIN WERE
Respondents
Hearing: 11 March 2020 Appearances:
K A McDonald & G Watts for the Appellants R D Clark for the Respondents
Judgment:
30 April 2020
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 30 April 2020 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Gallie Miles, Te Awamutu Lewis Lawyers, Cambridge
R D Clark, Barrister, Hamilton
KOROHEKE v TE WHAU (the Estate of Mona Disher) [2020] NZHC 863 [30 April 2020]
TABLE OF CONTENTS
Introduction 1
Nature of appeal 6
Relevant background 11
The Te Whau family 12
Mona and Ngahina separate; Mona marries John Disher 16
Ngahina dies and leaves Otewa Road property to Massey 19
John Disher’s gifts and bequests to Mona’s family 21
Care for Mona after John Disher’s death 28
Mona’s death and her will 34
Mona’s memorandum of 10 July 2008 40
The Family Court decision 46
The appellants’ case on appeal 60
Case for the respondents 63
Relevant law 64
Discussion of appellants’ allegations 72
Did the Family Court wrongly take into account to the benefits received by Violet, Kathy and Massey under Mona’s husbands’ wills? 77
Did the Family Court make an error of law or fact about Mona’s ability to make claims under the Property (Relationships) Act? 85
Did the Family Court wrongly apply a subjective test in considering whether Mona was mistaken in her understanding of the benefits received from John Disher’s estate? 93
Did the Family Court wrongly take into account Mona’s claimed desire that the
Parihoro Road property not be sold? 96
Did the Family Court wrongly import a subjective view of Mona’s value system when assessing whether Mona had breached her moral duty to the appellants? 100
Did the Family Court fail to take into account, or give insufficient weight to, the benefits received by Nunia? 103
Did the Family Court fail to take into account the appellants’ need in the wider context of family recognition? 108
Did the Family Court fail to take into consideration the appellants’ financial
positions at the date of Mona’s death? 112
Did the Family Court fail to properly assess the scope of Mona’s moral duty and
fail to order provision adequate to ensure the discharge of that duty? 119
Has Mona discharged her moral duty to all of the appellants? 126
What is required to remedy the breach of Mona’s moral duty? 131
Result and orders 139
Costs 142
Introduction
[1] Kathleen Koroheke (Kathy), Violet Levy, Patricia Te Whau (Patsy), Te Aroha Te Whau (Aroha) and Massey Te Whau (the appellants), seek to set aside the decision of Judge S D Otene in the Family Court not to make provision under the Family Protection Act 1955 from the estate of their mother, Ramona Disher (Mona), for Kathy,
Violet and Massey but to make some provision for Patsy and Aroha.1
[2] Mona made no provision in her will for any of the five appellants on the basis that provision had already been made during her lifetime for them and her other children from the wills of her previous husbands and from other distributions.
[3] The appellants asked the Family Court to allocate 70 per cent of Mona’s estate, which was valued at $791,000, among them as the Family Court saw fit, with the remaining 30 per cent to go to their sister, Nunia Te Whau, who was Mona’s primary caregiver in the later years of her life and the primary beneficiary under Mona’s will.
[4] The Family Court held that Mona owed moral duties to all five appellants and, in the cases of Violet, Kathy and Massey, had satisfied those duties through benefits received from the estates of her two husbands. The Court held that Mona had breached her moral duties to Patsy and Aroha and ordered that provision be made for them based on the mid-point of the benefits received by Violet and Kathy, subject, in the case of Patsy, to adjustment for an amount paid to her by Mona’s second husband while he was alive.
[5] The appellants say the Family Court was wrong not to make any provision for Kathy, Violet and Massey and seek provision for them and increased provision for Patsy and Aroha.
Nature of appeal
[6] The appeal is pursuant to s 15 of the Family Protection Act. Section 15(1A) provides that the High Court Rules 2016 and ss 126 to 130 of the District Court Act 2016 apply to an appeal as if it were an appeal under s 124 of that Act.
1 Koroheke v Were [2019] NZFC 8820.
[7] Under ss 3 and 4 of the Family Protection Act, if a person dies and adequate provision is not available from his or her estate for the proper maintenance and support of the deceased’s children, the court may, at its discretion order, that provision be made out of the estate for all or any of those children. The appeal, therefore, is an appeal against the exercise of the Family Court’s discretion.
[8] As Thomas J noted in Paewai-Kohe v Paewai,2 with reference to the Court of Appeal’s decision in May v May,3 to succeed in an appeal against the exercise of a discretion, an appellant must show that the Judge acted on a wrong principle, failed to take into account some relevant matter, took account of some irrelevant matter, or was plainly wrong.
[9]O’Regan J said for the Court of Appeal in Henry v Henry:4
This Court made it clear in Little v Angus [1981] 1 NZLR 126 AT 127, what standard of review should be taken on appeal. It said the approach was that “on an appeal the Court will not substitute its discretion for that of the judge at first instance unless there be made out some reasonably plain ground upon which the first order should be varied.”
[10]That approach was reaffirmed by the Court of Appeal in Fisher v Kirby.5
Relevant background
[11] The following summary is drawn from the decision of the Family Court and from affidavits sworn by:
(a)The five appellants;
(b)Nunia;
(c)Tina Koroheke, who is Kathy’s daughter but, from the time she was a few months’ old, was brought up by Mona and Ngahina Massey
2 Paewai-Kohe v Paewai [2014] NZHC 3137 at [4]. The decision of Thomas J was subsequently upheld by the Court of Appeal in Paewai v Paewai-Kohe [2015] NZCA 437.
3 May v May (1982) NZFLR 165 (CA) at 170.
4 Henry v Henry [2007] NZCA 42, [2007] NZLFR 640 at [24].
5 Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463 at [124].
Te Whau (Ngahina), Mona’s first husband, and then by Mona and John Disher, Mona’s second husband; and
(d)Joan Teddy, who is a niece of Mona and whose father was Mona’s brother.
The Te Whau family
[12] Mona and Ngahina had 14 children during their marriage. Four of those children are deceased: Margaret Waaka, Ngaire Shaw, Lucy Paterson and William Te Whau. William died as an infant. Of the deceased children, only Margaret had any children – a daughter, Hope Liddington.
[13] The appellants are five of the surviving 10 children. The other surviving children are:
(a)Te Maimoa (Michael) Te Whau, Vera Johnson and Nunia. Michael has taken no part in the proceeding. Vera has written a letter, which is exhibited to one of Nunia’s affidavits, expressing her support for her mother’s wishes as set out in Mona’s will.
(b)Teresa Chapman and Beverley Rogers, who were legally adopted to other families at an early age and have no claim against Mona’s estate.6
[14] Initially, Mona, Ngahina and their older children lived in a small house in Otorohanga close to Te Keeti Marae. About the time that Nunia, the 10th born child, was born, they moved into a house at 88 Otewa Road, Otorohanga that Ngahina built on land he and Mona had purchased jointly.7
6 Under s 16(2) of the Adoption Act 1955, upon an adoption order being made an adopted child is deemed to be the child of the adopting parents and the natural parents are deemed to cease to be the parents of the child.
7 Because few birthdates were provided in evidence, there is some uncertainty as to the order of birth of the children. Nunia and Aroha both say in their affidavits that they are the 10th born child, although in the genogram appended to Judge Otene’s decision Aroha is the 8th child and Nunia the 9th. I infer that William, who died at birth, predated their births and that Aroha was the 9th born child and Nunia the 10th. That is consistent with Nunia’s evidence that she and Massey Jnr were much younger than the other siblings and were the only two children at home after the older siblings had left home.
[15] Aroha, the 9th born child, did not spend much of her childhood with the family. She was born with a cleft pallet and a missing left eardrum and spent most of the first 10 years of her life in the care of the Crippled Children’s Society in Auckland. She was then whāngai adopted to Mona’s brother and his wife for some years and, when she was about 16, was sent to live with a sister in Motueka.
Mona and Ngahina separate; Mona marries John Disher
[16] Mona and Ngahina separated in 1984. After their separation, Ngahina continued to live at 88 Otewa Road until his death in November 1996. As Ngahina’s health deteriorated in his later years, he was cared for by Nunia, who moved into his home for the purpose, and Kathy.
[17] Soon after her separation from Ngahina, Mona began a relationship with John Disher, and moved to live with him in a cottage on his farm, approximately 17 kilometres outside Otorohanga. She and John married in 1992. John had not been previously married and had no children. He and Mona did not have any children together. The day they married, they moved to a house at 20 Parihoro Road that John built on 8.7 hectares of land adjacent to the farm.
[18] As noted above, Tina was raised by Mona and John. Mona and John also cared for Aroha’s two children for a number of years when Aroha was unable to care for them.
Ngahina dies and leaves Otewa Road property to Massey
[19] When Ngahina died in 1996, he bequeathed his share in 88 Otewa Road to Massey and the balance of his residuary estate in equal shares to Michael, Nunia and Tina.8 In fact, because 88 Otewa Road was owned by Ngahina and Mona as joint tenants, Ngahina’s interest in the property had passed automatically to Mona as the surviving spouse upon Ngahina’s death. However, to respect Ngahina’s wishes, Mona transferred the whole property to Massey.
8 Judge Otene describes the residuary estate as being “relatively modest” (above n 1, at [9]), but there is no evidence as to its value. The submissions of counsel for the applicants before the Family Court stated that the only significant asset in Ngahina’s estate was his interest in 88 Otewa Road.
[20] Massey does not refer to 88 Otewa Road in his evidence. However, Nunia says Massey sold the property to John Disher so he could put the proceeds of sale towards the purchase of another property for him and his family. Nunia’s recollection, which is not challenged by any of the other siblings, says John paid Massey $40,000 for the property. Nunia also says Ngahina would have been devastated to think Massey had sold the house. Tina says Mona was very upset that Massey wanted to sell 88 Otewa Road and implies that this was the reason John decided to buy it from Massey.
John Disher’s gifts and bequests to Mona’s family
[21] Tina says that during his marriage to Mona, John was very generous to Mona’s family. He provided them with money, gifts of meat and helped them in other ways. Patsy acknowledges that John advanced her $10,000 to enable her to invest in a fish and chip shop business. The business did not perform well and the loan was not repaid.
[22] John Disher died in November 2006. His estate was worth approximately $3.3 million. In his will, John made the following bequests:
(a)The property at 20 Parihoro Road to Mona free of all encumbrances;
(b)Company shares to be shared equally by Kathy and Vera;
(c)NZ50 Index Funds to be shared equally by Tina’s three sons, Keanu, Reece and Dylen Parker;
(d)The property at 88 Otewa Road in equal shares to Violet and Ngaire;
(e)The residue of his estate divided as follows:
(i)1/6th share to Mona;
(ii)1/3rd share to Tina;
(iii)1/3rd share to Hope;
(iv)1/6th share to Lionel Parker, who was John Disher’s former employee and Tina’s husband but from whom Tina was separated.
[23] According to statements prepared by the estate’s solicitors in September 2007, the shares were worth $63,000 and the Otewa Road property was valued at $170,000.9
[24] Violet, who was living in Auckland at the time, and Ngaire had no wish to live at the Otewa Road property and arranged to sell it. Tina agreed to purchase it for
$140,000 through a family trust. Tina says Mona was very happy that the house was retained in the family.
[25] John Disher’s farm and other farm assets formed part of the residue of the estate, which was valued at $2,455,000. Because Hope and Lionel wished to realise their shares in the estate, the farm was sold and the proceeds distributed in accordance with John’s will. The advice of the estate’s accountants at the time was that the farming operation could not sustain the debt that would result from buying out any of the four residue beneficiaries’ interests. Nunia says Tina and Mona were devastated when Hope and Lionel wanted to sell the farm but there was nothing they could do. Tina does not refer to the sale of the farm in her affidavit.
[26]As a result of John Disher’s bequests:10
(a)Mona received the property at 20 Parihoro Road, then valued at
$613,300, plus $409,000 as her 1/6th share of the residuary estate;
(b)Kathy received $31,500;
(c)Vera received $31,500;
(d)Violet received $70,000;
9 All figures are rounded to the nearest $500.
10 There are discrepancies in the evidence about some of the sums realised. For the purposes of this judgment, I adopt the values found by Judge Otene which were not challenged on appeal.
(e)Ngaire received $70,000.
[27] Nunia says there was disagreement within the family over whether Mona should have contested John Disher’s will because it was believed Mona would have been entitled to a larger share in the estate if she had pursued her rights under the Property (Relationships) Act 1976. Nunia also says Mona elected not to challenge the will because if she had done so, that would have reduced the shares received by other family members.
Care for Mona after John Disher’s death
[28] After John Disher’s death, Tina and her three sons resided with Mona who missed John terribly – to the point that Mona carried John’s ashes with her in a kete. However, after eight months, Tina and her sons moved to Mount Maunganui. Nunia says Mona found it hard to live with the noise and routines of young children and asked Nunia and her husband, Pete, to move in with her. This they did in 2008, after a period of transition during which Nunia and Pete stayed weekends with Mona.
[29] From that point, Nunia became Mona’s principal caregiver until Mona’s death in September 2015. However, Kathy and Ngaire also used to look after their mother and take her out on errands and to the Otorohanga Club. So did Patsy for a period, particularly after her mother gave her $10,000 to buy a car. Patsy says the gift was made so Patsy could take Mona on errands and visits. Even though the purchase price for the car was only $4,000, Mona insisted that the balance of $6,000 be shared among Patsy’s three children.
[30] Violet, Massey and Aroha did not play significant roles in the care or life of their mother after John Disher died. Violet lived in the South Island and then in Auckland in the last years of Mona’s life. Because she was a Jehovah’s Witness, she did not attend family and other events at the marae, including her parents’ funerals. However, she kept in contact with Mona by letters and phone calls.
[31] Aroha says she was involved with “… the wrong crowd of people, gangs, alcohol, drugs and eventually prison” for a period of her life. She says Mona was not willing to help her because of her troublesome past, but says she tried to maintain
contact with Mona when her financial circumstances allowed. However, she acknowledges that she was unable to attend or was not invited to many family events. Massey says that because of family and commitments, his visits to his mother were less frequent than they had been when he used to live in the district as a young man.
[32] Nunia says her mother’s health, including her mental health, deteriorated over time. She says Mona had heart failure and progressive dementia and that she, Nunia, had to rely increasingly on specialist medical help and to limit some of the interactions of family members with their mother. Whether for these or other reasons, there were tensions among the siblings, particularly between Kathy and Nunia who sparred over the care arrangements for their mother and other family dynamics. Kathy and Patsy imply in their affidavits that Nunia was controlling access to and manipulating their mother for her own financial advantage. Nunia says Kathy and some of the other siblings did not understand the nature of Mona’s illness and visited their mother only when they wanted money and other support from her.
[33] It is apparent that these tensions persist and underlie the current proceeding. Nonetheless, the siblings agree that Mona remained very generous to her children and that no family visitors left without Mona insisting that they accept money, meat, fruit and vegetables, petrol or cigarettes or a combination of these things.
Mona’s death and her will
[34] Mona died on 14 September 2015. She left a will, which she had executed on 7 November 2008. She left with her will a memorandum dated 10 July 2008 to which she refers in her will as follows:
8.I have made no provision for some of my children in this my Will for the reasons stated in a Memorandum dated 10th July 2008 which I have already prepared and signed and which will be found with this my Will at my death.
[35]In her will, Mona:
(a)Appointed Nunia one of the executors and trustees of her will;
(b)Bequeathed the proceeds of a Sovereign Life insurance policy to her grandson, Phoenix Te Whau (son of Massey);
(c)Bequeathed another Sovereign Life insurance policy, if she still owned it at the date of her death, to her grandson, Clayton Koroheke (son of Kathy); and
(d)Gave the residue of the estate to a trust to be established for Nunia.
[36] In the event, both of the insurance policies had lapsed because the premium payments had not been maintained. As a consequence, neither of the bequests to Mona’s grandsons was effective.
[37]The only significant asset in the estate is 20 Parihoro Road which is valued at
$825,000. Offset against the value of that asset are liabilities of $34,000, being largely a debt owed to Tina. The residual value of the estate, therefore, is $791,000.
[38] Since June 2008, Mona leased out most of the property, except for 0.3 hectares containing the house and an orchard, to Waratah Farms for grazing, at a monthly rental of just under $600. Although the lease expired in 2018, the lease arrangement has continued on a monthly basis.
[39] It appears that the $409,000 that Mona had received from John Disher’s will had been spent or given away by the time of Mona’s death.
Mona’s memorandum of 10 July 2008
[40] In her memorandum, Mona acknowledged that her will favoured Nunia and stated that the reason for this was that most of her other children had been left significant sums by her late husband, John Disher, and that when John was alive, they had agreed that Mona’s estate would go primarily to Nunia and that John would provide for Mona’s other children. The memorandum also stated that three of Mona’s children did not benefit from John’s will and she had not left them anything because:
(a)Michael was doing well in his own right and had no need for financial support from Mona;
(b)Patsy had received financial benefit from John and Mona during their lifetimes and she had discussed with Patsy that she would not be inheriting anything in Mona’s will;
(c)Aroha was irresponsible with money and had had little to do with the family for many years.
[41] The memorandum makes no mention of Massey or his receipt of 88 Otewa Road after Ngahina’s death.
[42] Nunia says Mona called a family meeting in 2010 to discuss her will and to make sure the family were aware of her wishes. She says that at that meeting Mona explained that she had not contested John Disher’s will because she had decided “… to leave it as that would be their share.” Nunia says Mona told the family members she feared they would not look after her property and that any of them would sell it, and that the only one who understood the importance of keeping land was Nunia who had not benefitted from John’s will.
[43] Kathy acknowledges there was a family meeting in 2010 but denies there was any discussion of Mona’s will. She also says she had no idea what was in Mona’s will and had always believed from her discussions with her mother that Mona would divide everything equally among her children. Massey says he can recall that Mona’s will had been discussed at one of his visits to see her but says there was “nothing confirmed as far as I can recall.” Patsy acknowledges there were discussions with Mona about her will before she died and that she had “heard mention” that because of the money she had received from John, she would not inherit from Mona’s will. Violet and Aroha do not refer to any family meeting to discuss the will.
[44] Tina does not refer to the family meeting. However, she says she was present when Mona made her will, that Mona was very clear in the instructions and directions she gave for the will, and that she is certain Mona’s wishes are reflected in the will.
Tina also says it was Mona’s wish that 20 Parihoro Road should be left to Nunia and should not be sold, and she believes all family members knew of this. She says the claims being made for greater shares of Mona’s estate would mean 20 Parihoro Road would have to be sold and that would be the opposite of what Mona wanted.
[45] In bringing the current proceeding the appellants say Mona failed to discharge her moral duty to each of them by not providing for them in her will. Kathy and Violet say the bequests by John Disher were gifts by John that could not discharge Mona’s duty to them. Massey says he received nothing from either Mona’s will or John’s will. Patsy says the money she received from John and Mona did not discharge Mona’s moral duty to provide for her in Mona’s will. The appellants submit that 30 per cent of Mona’s estate should be distributed to Nunia, with the balance divided between the remaining applicants as the Court sees fit.
The Family Court decision
[46] In setting out the factual background, Judge Otene noted that the distribution of the estates of Ngahina and John Disher and associated events were relevant for two reasons:11
(a)They informed Mona’s decisions about her will; and
(b)The manner in which John Disher dealt with his estate had implications for the size of Mona’s estate.
[47] It is apparent from the rest of the judgment that the second observation was based on Judge Otene’s acceptance of Nunia’s evidence that Mona could have challenged John’s will and obtained a larger share of John’s estate if she had made a claim under the Property (Relationships) Act.
[48] After setting out the history of the family and the dispositions from the estates of Ngahina, John Disher and Mona, Judge Otene considered the differing accounts from the siblings and Tina about the rationale for Mona’s will. The Judge was satisfied
11 At [4].
that the rationale was as described by Nunia and Tina.12 That is, that Mona did not want 20 Parihoro Road to be sold and wanted it to go to Nunia, and considered that, with the exception of Michael, Aroha and Patsy, all of her other children had been adequately provided for in bequests from the estate of Ngahina and John. Judge Otene was also satisfied that, although Mona made no reference to Massey in her will, Mona had crafted the will taking into account that Massey had been provided for through his inheritance of the Otewa Road property.13
[49] Judge Otene made a number of factual findings which are largely reflected in the factual background above and with which none of the parties took issue. The most important of these findings were that:14
(a)From 2008 until Mona’s death, Nunia was primarily responsible for Mona’s care. Nunia, her husband and other family members also received a benefit from living in Mona’s home.
(b)After John’s death, Ngaire, Kathy, Patsy and Tina assisted Mona in varying degrees but had more limited roles than Nunia.
(c)In addition to tending to Mona’s physical needs, Nunia, Ngaire, Kathy, Patsy and Tina also tended to Mona’s spiritual and emotional care, including by taking her to family and social engagements.
[50] Judge Otene considered s 4 of the Family Protection Act and, with reference to the decision of the Court of Appeal in Williams v Aucutt15 and the synthesis of relevant principles set out in Vincent v Lewis,16 the test to be applied in assessing whether a claimant has received proper provision for proper maintenance and support. That is, whether Mona had a moral duty to the appellants and, if so, whether there had been a breach of that duty as judged by the standard of a wise and just testatrix.
12 At [19].
13 At [20].
14 At [24].
15 Williams v Aucutt [2000] 2 NZLR 479, [2000] NZFLR 532, (2000) 19 FRNZ 260 (CA) at [52].
16 Vincent v Lewis [2006] NZFLR 812, (2006) 25 FRNZ 714 (HC) at [81].
[51] Judge Otene said there appeared to be no argument that Mona had a moral obligation to Violet, Kathy, Patsy, Massey and Nunia.17 Judge Otene also considered that Mona owed a moral duty to Aroha notwithstanding the circumstances of Aroha’s upbringing and Aroha’s conduct as an adult.18 She proceeded, therefore, on the basis that Mona owed a moral duty to all five appellants.
[52] Judge Otene noted that each claimant advanced their case on the basis of financial need and familial recognition and made what she described as an “unsegregated assessment” rather than considering the two aspects of financial need and familial recognition separately.19
[53] Judge Otene considered the individual circumstances of each of the appellants, the benefits they had received from the estates of Ngahina (Massey) and John Disher (Violet and Kathy) and from inter vivos distributions by John and Mona (Patsy).
[54] With regard to the benefits that four of the appellants had each received, the Judge said that:
(a)The $70,000 Violet received from the sale of the Otewa Road property, which had been spent on a gift to her son, buying a vehicle and appliances for herself and on daily expenses, “was not inconsequential having regard to relativities.” The Judge observed that the sum would have been less had Mona sought to realise her relationship property interest in the estate and that Mona’s forbearance accrued financial benefit to Violet. The Judge also observed there was force in the submission that to make further provision for a child who had been adequately provided for but had not managed that provision well was to require a beneficiary to subsidise ill or unfortunate financial management.20
17 At [29].
18 At [31].
19 At [32].
20 At [39].
(b)The $31,500 Kathy received upon John’s death was not large having regard to the value of John Disher’s estate but “was not inconsequential in real terms.” The Judge said the observations as to the benefit of Mona’s forbearance to Violet were equally applicable to Kathy, but the observations as to the equity of a current beneficiary subsidising decisions that had exhausted an earlier provision were less applicable given the more modest amount Kathy received.21
(c)The Judge considered the sum of $10,000 Patsy received from John Disher in the 1980s “was not inconsequential when relativities are considered” but out of step with what was received by others other than Aroha. The Judge considered there was an element of quid pro quo in Mona’s gift of $4,000 for the purchase of a car and assessed that the gift of $6,000 to Patsy’s boys carried some recognition benefit but not significant financial benefit to Patsy;22
(d)The former family home that Massey had received was an asset of “considerable benefit”. She also said the observations she had made about the benefit of Mona’s forbearance to Violet, and about a current beneficiary subsidising decisions that had exhausted an earlier provision, were equally applicable to Massey.23
[55] With respect to Aroha, the Judge said Aroha’s relationship with her mother was of a different character from that of her siblings which the Judge considered was likely attributable to Aroha’s unfortunate start to her life because of ill health and Aroha’s life choices. Aroha and Michael had not received a distinct benefit like the other siblings but said there was a distinction between Mona’s treatment of Michael and Aroha. Mona considered Michael to be on a like footing with her other children, including with respect to her esteem and affection, but had no need for distinct provision. The memorandum of 10 July 2008 conveyed a pejorative view of Aroha.24
21 At [40].
22 At [41].
23 At [43].
24 At [42].
[56] Assessing and balancing these matters, the Judge determined that Mona was in breach of her moral duty to Patsy and Aroha but not to Violet, Kathy and Massey.25
[57] Judge Otene held that a wise and just testator would have assessed that provision should have been made in Mona’s will for Patsy and Aroha because:26
(a)Patsy was in financial need and the benefit she had received was unduly disproportionate to that of her siblings who had enjoyed a similar relationship with Mona; and
(b)Notwithstanding the different quality to the relationship between Mona and Aroha to that between Mona and her other children, there was a familial tie and financial need.
[58] In deciding what provision would be sufficient to remedy the breach so as to make adequate provision for the proper maintenance and support of Patsy and Aroha,
Judge Otene took into account that:27
(a)The act of ensuring that specific children received a distinct benefit as opposed to the magnitude of that benefit was the greater signal of familial obligation and ties given Mona’s value system; and
(b)The benefits received by Mona’s other children, who were also of modest means and had not taken on the role of caregiver, ranged from
$31,500 to $70,000, with a midpoint of $50,750.
[59] Accordingly, the Judge ordered the estate to pay Patsy $40,750, taking into account the $10,000 already received, and Aroha $50,750, and dismissed the claims of Violet, Kathy and Massey.28
25 At [44].
26 At [45].
27 At [46].
28 At [47].
The appellants’ case on appeal
[60] In their notice of appeal and in the submissions of their counsel, Ms McDonald, the appellants challenge Judge Otene’s findings that:
(a)Mona had properly discharged her moral duty to Violet, Kathy and Massey through the benefits they received in relation to the estates of Ngahina and John Disher; and
(b)The breach of Mona’s moral duty to Patsy and Aroha could be adequately remedied by requiring provision from the estate of amounts based on the average or midpoint of the benefits received by Violet, Kathy and Massey.
[61]In particular, the appellants say:
(a)The Family Court erred in taking into account, or gave inappropriate weight to, the benefits received by Violet, Kathy and Massey in relation to the estates of Ngahina and John Disher. They also say the Family Court made errors of law or fact:
(i)About Mona’s ability to make claims under the Property (Relationships) Act and the impact that Mona’s forbearance in relation to such claims had on Mona’s estate;
(ii)In considering whether Mona was mistaken about the benefits received by Violet, Kathy and Massey.
(b)The Family Court erred in taking into account or gave undue weight to Mona’s claimed desire that the Parihoro Road property not be sold. They also say the Family Court erred in importing a subjective view of Mona’s value system into its assessment of whether Mona had breached her moral duty to the appellants.
(c)The Family Court was wrong about or gave insufficient weight to the benefits received by Nunia.
(d)The Family Court failed to take into account the appellants’ need for support in the context of wider familial recognition.
(e)The Family Court failed to take into consideration or give sufficient weight to the appellants’ financial circumstances at the date of Mona’s death.
[62] More generally, the appellants say the Family Court failed to make a proper assessment of the scope of Mona’s moral duty to them and failed to order appropriate provision from Mona’s estate to ensure the discharge of that duty. The allegations of inappropriate weight being given to the various considerations set out above are considered in the context of this more general allegation.
Case for the respondents
[63] The respondents seek to uphold the Family Court decision which they say was in accordance with established law. They do not challenge the Family Court’s findings that Mona owed a moral duty to all five appellants and that Mona breached that duty with respect to Patsy and Aroha. Nor do the respondents challenge the amounts ordered to be paid to remedy the breaches of Mona’s moral duty to Patsy and Aroha.
Relevant law
[64] It is well-established that in determining whether a testator has made proper provision for the proper maintenance and support of a claimant in terms of s 4 of the Family Protection Act, the question to be determined is whether the testator owed a moral duty to the claimant and, if so, whether that moral duty was breached having regard to what a wise and just testator would have done.
[65]Cooke J said in Re Z (deceased):29
29 Re Z (deceased) [1979] 2 NZLR 495 (CA) at 506.
The concept of moral duty, what the wise and just testator would have done, is elementary in the administration of the Family Protection Act in New Zealand. It is too deeply embedded to be open to judicial reconsideration now. One of its advantages is flexibility in that it enables full allowance to be made for the size of the testator's estate. It applies in deciding both whether there should be any order at all and the extent of an order.
[66]On how that duty is to be assessed, Cooke J said in Little v Angus:30
The inquiry is as to whether there has been a breach of moral duty as judged by the standard 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.
[67]The test to be applied was stated by Richardson P in Williams v Aucutt:31
… 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. It may take the form of lifetime gifts or a bequest of family possessions precious to its members and often part of the family history. And where there is no economic need it may also be met by a legacy of a moderate amount. On the other hand, where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for the family member.
[68]In that case, Blanchard J also stated:32
It is not for the Court to be generous with the testator’s property beyond ordering such provision as is sufficient to repair any breach of moral duty. Beyond that point, the testator’s wishes should prevail even if the individual Judge might, sitting in the testator’s armchair, have seen the matter differently.
… the Court’s power does not extend to rewriting a will because of a
30 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
31 At [52].
32 At [70].
perception that it is unfair. Testators remain at liberty to do what they like with their assets and to treat their children differently or to benefit others once they have made such provisions as are necessary to discharge their moral duty to those entitled to bring claims under the Family Protection Act.
[69] In Vincent v Lewis, Randerson J, summarised the relevant principles as follows:33
(a)The test is whether, objectively considered, there has been a breach of moral duty … 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.
(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.
[70] In her decision, Judge Otene cited the passages from Williams v Aucutt and Vincent v Lewis set out above and considered the nature of Mona’s moral duty to each claimant.
33 Above n 16, at [81].
[71] Section 11 of the Family Protection Act provides that the Court may have regard to the deceased’s reasons for making the dispositions made by his or her will, or for not making any provision or any further provision, as the case may be, for any person. As discussed, Judge Otene had regard to Mona’s reasons as set out in her will and her memorandum of 10 July 2008 as well as the evidence of her intentions in the affidavits of her children.
Discussion of appellants’ allegations
[72] There is no challenge to the Family Court’s finding that Mona owed a moral duty to all five appellants as well as to Nunia and Mona’s two other children, Michael and Vera, who do not contest Mona’s will. The essence of the appellants’ case is that they say Judge Otene erred in finding that:
(a)Mona had discharged her duty to Violet, Kathy and Massey through the benefits those children received from the estates of Ngahina and John Disher; and
(b)The breach of Mona’s moral duty to Patsy and Aroha could be adequately remedied by provision based on the mid-point between the benefits received by Violet and Kathy, adjusted, in Patsy’s case, for the amount of the unrepaid loan from John Disher.
[73] As Richardson P noted in Williams v Aucutt,34 following the decision of Salmond J in Re Allen (deceased),35 it is common in family protection cases to speak of two classes of cases of estate. The first is where, owing to the smallness of the estate and the nature of the testamentary dispositions, the applicant is competing with others, who also have a moral claim. The second is where, owing to the largeness of the estate or the nature of the testamentary dispositions, the applicant is not complaining of an unjust distribution of an inadequate funds among those with a moral claim but of a failure of the testator to make a provision sufficient for the proper maintenance of the claimant out of the abundance of the testator’s resources.
34 Above n 15, at [40].
35 Re Allen (deceased [1922] NZLR 218.
[74] Ms McDonald submits that because of the size of the estate and the competing number of claims, Mona’s estate falls into the first class. Without placing the estate in one or other of the classes, Judge Otene said the estate was not large when considered in the light of the number of competing moral claims and the acceptance of the appellants that Nunia has a greater claim.36 I am satisfied that Mona’s estate falls within the first class of estate described by Salmond J.
[75] This has a bearing on the scope for remedying any breach of Mona’s moral duty. As Salmond J noted in Re Allen,37 all the Court can do in such cases is to see that the available means of the testator are justly divided among the persons who have moral claims in due proportion to the relative urgency of those claims. Or as Thomas J said in Paewai-Kohe,38 where counsel for the estate had submitted that even an equal division of the entire estate among all siblings would still not constitute proper maintenance and support, the issue is not the maintenance and support that a claimant may require for the rest of his or her life. The issue is what is proper in the context of the appellants’ competing moral claims, given their respective financial need, as well as the size of the estate, the appellants’ relationships with the testator and the testator’s wishes.
[76] However, as emphasised by O’Regan J in Henry v Henry,39 the principle is the same in both classes of case: the amount by which the will is disturbed should be no more than is necessary to make adequate provision for the maintenance and support of the claimant.
Did the Family Court wrongly take into account to the benefits received by Violet, Kathy and Massey under Mona’s husbands’ wills?
[77] Ms McDonald submits that the Family Court should not have taken into account the benefits received under the wills of Ngahina and John Disher when considering whether Mona had discharged her moral duty to Violet, Kathy and Massey. She says the benefits were gifts by Ngahina and John and were not relevant
36 At [37].
37 Above n 34, at 221.
38 Above n 2, at [93].
39 Above n 4, at [56].
to whether Mona had satisfied her moral duty to provide maintenance and support to those appellants.
[78] Richardson P stated in the extract from Williams v Aucutt set out at [67] above that proper support is a matter of judgment in the circumstances of the particular case and may take the form of lifetime gifts. It follows that inter vivos dispositions can be taken into account when considering whether a testator has discharged his or her moral duty. Section 11 of the Family Protection Act, which refers to “any further provision” for any person, confirms that provisions made before death may be taken into account.
[79] It is clear from Mona’s memorandum of 10 July 2008 that she regarded the benefits Violet and Kathy received from the bequests in John Disher’s will as meeting her testamentary obligations to those children. The memorandum says explicitly that she and John had agreed that her estate would go primarily to Nunia and that John would provide for her other children. In accordance with s 11 of the Act, Judge Otene was entitled to have regard to those intentions, which are also supported by the evidence.
[80] While the evidence on the point is not extensive, it appears Mona had few assets when she began her relationship with John Disher. She had spent the preceding many years raising a large family while Ngahina had worked in the Railways workshop. Nunia says Ngahina spent his career working for the Railways and did not have sufficient finances to set up his own carpentry business. Massey’s half share in the Otewa Road property was the only asset of significance in his estate. I infer, therefore, that Mona’s half share in the property was the only asset of significance that she owned before she began her relationship with John.
[81] Mona gave that asset to Massey following Ngahina’s death. It follows that any assets that Mona had to give to her other children from that point onwards would have been acquired while she was with John Disher. In that situation, it is logical that John would help Mona to support those children – as he did with gifts when they visited when he was alive, and through his will. There is no evidence to explain the bequests to Violet, Ngaire, Kathy and Vera other than the fact that they were Mona’s children. As Judge Otene noted, each of these children took a benefit from property to which
Mona had had claim to or influence over.40 It was also to their advantage that the bequests were made directly to them through John Disher’s will rather than their having to wait until Mona’s death.
[82] In the circumstances of Mona’s family, I consider it would be artificial and inconsistent with Mona’s express wishes to exclude the benefits received under John’s will when considering whether Mona had discharged her moral duty to her children. I am satisfied, therefore, that it was appropriate to take those benefits into account.
[83] I also agree with Judge Otene that Mona must have crafted her will with the gift of the Otewa Road property to Massey in mind. Following Ngahina’s death, Massey was the only one of the then nine children in a family of modest means to receive the most significant asset that his parents had owned when they were together and which they continued to own once they had separated. In those circumstances, it is most unlikely Mona would not have not taken Massey’s receipt of the Otewa Road property into account when preparing her will.
[84] I am satisfied, therefore, that the benefit of the Otewa Road property was properly taken into account when assessing whether Mona had satisfied her moral duty to Massey, particularly when Mona gifted the whole of the property to him once the legal consequences of the survivorship rule became apparent.
Did the Family Court make an error of law or fact about Mona’s ability to make claims under the Property (Relationships) Act?
[85] Ms McDonald says that Judge Otene was wrong to have assumed that Mona could have made a greater claim against John Disher’s estate under the Property (Relationships) Act. She also says there was no evidence to support the Judge’s assumption that Mona could have made a relationship property claim against Ngahina’s estate and no evidence as to whether or not Mona received any payment for receiving Ngahina’s half share in the Otewa Road property.
40 At [20].
[86] Ms McDonald submits that the facts are sufficient to establish that Mona could not have claimed a half share in John’s Disher’s farm and says that, as a consequence, Mona’s rights under the Act would have given her less than she received under John’s will, so there was no element of forbearance by Mona in relation to the benefits Violet and Kathy received under John’s will. Ms McDonald’s submissions are based on the premise that Mona and John never lived on John’s farm, which remained John’s separate property, and evidence that John and Mona moved into the Parihoro Road property when they married.
[87] Ms McDonald’s premise is not consistent with Nunia’s evidence that Mona and John lived together “in John’s house” for a number of years before they married and before they moved into the Parihoro Road property or Tina’s evidence that when Mona and John “became a couple” they moved to a small cottage on the farm where John Disher had lived for a number of years. There is no evidence to the contrary on this point.
[88] It is reasonable to conclude, therefore, that Mona lived on John’s farm for a number of years between 1984, when Mona and Ngahina separated, and 1992 when Mona and John married, before they moved to 20 Parihoro Road. Whether or not that would have been a sufficient basis for Mona to have asserted a claim to more of John’s estate under the Property (Relationships) Act after John’s death in 2006 is not straightforward given the definitions of “relationship property” and “separate property” under that Act and the discretion given to the Court in an application under that Act to treat as “relationship property” property that would otherwise fall within the definition of “separate property”.41 I do not have sufficient evidence to make findings on that question. I also do not accept that the question can be determined on the basis that Mona failed to elect to make an application for a division of relationship property under the Property (Relationships) Act as Ms McDonald suggests.
[89] Whatever the legal position may have been, Nunia’s evidence, which was not challenged by the appellants, is that Mona and her family understood that Mona could have made a greater claim. Whether or not that understanding was correct as a matter
41 See s 9(4) of the Property (Relationships) Act 1976.
of law, the understanding shaped Mona’s perceptions of her entitlements and her forbearance in not pursuing what she understood to be her entitlements. When Judge Otene referred to Mona’s forbearance in deciding whether Mona had discharged her moral duty to her children, she was referring more to those perceptions than to Mona’s strict legal entitlements. As such, Mona’s forbearance was one of the moral and ethical considerations that could properly be taken into account when determining the scope of Mona’s duty to make provision for her children, having regard to the words of Richardson J in Williams v Aucutt set out at [67] above. It follows that Judge Otene made no error in taking Mona’s forbearance into account.
[90] Whether or not there was any accounting between Ngahina and Mona over 88 Otewa Road at the time of their separation, the whole of the property passed to Mona at Ngahina’s death. Therefore, Judge Otene was entitled to take the whole of the transfer into account when considering whether Mona had satisfied her moral duty to Massey.
[91] Ms McDonald is correct that there was no evidence that Mona had foregone a right to make a relationship property claim to a greater share of Ngahina’s estate. Moreover, since 88 Otewa Road had already passed to Mona by survivorship and was the only significant asset in the estate, there would have been no point in Mona making such a claim. To that extent, Judge Otene was in error when she said her observations as to the benefit of Mona’s forbearance that accrued to Violet were equally applicable to Massey.
[92] However, I do not consider that error to be significant. Judge Otene assessed that the transfer of 88 Otewa Road was of considerable benefit to Massey irrespective of any consideration of Mona’s forbearance. I am satisfied that Judge Otene’s cross reference to that forbearance did not have significant bearing on Judge Otene’s conclusion that Mona had satisfied her moral duty to Massey.
Did the Family Court wrongly apply a subjective test in considering whether Mona was mistaken in her understanding of the benefits received from John Disher’s estate?
[93] Whether Judge Otene undertook a subjective or objective assessment and whether Mona was mistaken in her understanding of the significance of the benefits
received are not central to Judge Otene’s decision. The Judge said, after discussing the benefits received under John Disher’s will and the benefit Massey received from the Otewa Road property:42
Whether those benefits were sufficient discharge of any moral duty owned [sic] by Mona to those children is a separate matter …
[94] When Judge Otene concluded that it was not a matter of Mona being mistaken about the benefits received but about Mona reaching a different judgment as to the significance of those benefits, the Judge was not reaching any conclusion about whether those benefits were a sufficient discharge of Mona’s moral duty. Rather, the Judge was responding to the appellants’ assertion that Mona had been mistaken in her understanding. The Judge considered the sufficiency of those benefits in meeting Mona’s moral duty in subsequent paragraphs of her judgment. Her findings that the benefits to Violet and Kathy were “not inconsequential” and the benefit to Massey was “considerable” were Judge Otene’s own assessment of the evidence and were not based on Mona’s understanding of those benefits.
[95] For these reasons, I am satisfied that Judge Otene made no error sufficient to call into question her consideration of Mona’s understanding of the benefits received.
Did the Family Court wrongly take into account Mona’s claimed desire that the Parihoro Road property not be sold?
[96] The appellants do not challenge the Judge Otene’s acceptance of the evidence of Tina and Nunia as to Mona’s desire that the Parihoro Road property not be sold. They also accept that Mona’s attachment to land and her desire that the Parihoro Road property not be sold were relevant factors to be taken into account. Ms McDonald submits, however, that Judge Otene gave this factor undue weight, particularly since Mona did not refer to this consideration in her memorandum of 10 July 2008.
[97] Ms McDonald submits that this last factor supports the position that the possible sale of the Parihoro Road property was not of significant concern to Mona. Ms McDonald also says that if Mona wished the Parihoro Road property retained, she could have achieved that by other means, for example through the use of a trust.
42 At [20].
[98] I am satisfied Judge Otene had ample evidence upon which to conclude that Mona did not want the Parihoro Road property to be sold and that it was important to Mona that the property stay with Nunia, even though this was not made explicit in Mona’s memorandum of 10 July 2008. First, there is the evidence of Nunia and Tina, which the appellants do not contest, that Mona did not want the Parihoro Road property sold. Secondly, there is Nunia’s evidence that Mona said explicitly at the family meeting in 2010 that one reason she was leaving the property to Nunia was that she was concerned that other family members would sell the property if it was left to them. While Kathy denies there was any discussion of Mona’s will at that meeting, Patsy’s recollections, albeit expressed vaguely, corroborate Nunia’s account. Thirdly, there is the fact that whenever one of the family moved to sell the Otewa Road property, someone close to Mona took steps to ensure it stayed within the family. I accept they did this because they knew Mona wanted family property retained in the family.
[99] Accordingly, Judge Otene made no error in taking into account Mona’s desire that the Parihoro Road property not be sold. I assess the weight given to that consideration below.
Did the Family Court wrongly import a subjective view of Mona’s value system when assessing whether Mona had breached her moral duty to the appellants?
[100] This aspect of the appellants’ challenge concerns paragraph [33] of the judgment where Judge Otene stated:
The evidence reveals something of Mona’s life experiences and the principles that drove her. Those are factors, though not exhaustive, that as a matter of the human condition combine into a value system that informs an individual’s decisions. Whilst Mona’s testamentary decisions must be judged from the perspective of a wise and just testatrix, it is logical that if her value system on objective assessment has foundation and is not wildly offensive to modern day mores, her decisions arising by virtue of [that] value system would more readily align with the decisions of a wise and just testatrix.
[101] I acknowledge that the drafting of the paragraph is somewhat complex. I am satisfied, however, that in substance the Judge is saying is that, while Mona’s dispositions are to be considered from the perspective of a wise and just testator, the assessment of whether they were sufficient to satisfy Mona’s moral duty to her
children must take into account all the circumstances of the case, which include Mona’s own perspectives and value system. That is consistent with the passage from Williams v Aucutt set out at [67] above where Richmond P said that moral and ethical considerations are to be taken into account in determining the scope of the moral duty and what constitutes proper support is a matter of judgment in all the circumstances of the particular case. It is also consistent with the second and third of the principles in Vincent v Lewis set out at [69] above where Randerson J held that moral duty is not limited to financial need but includes moral and ethical considerations, and that the assessment of whether there has been a breach of moral duty is to be assessed in all the circumstances of the case, including changing social attitudes.
[102] I do not consider, therefore, that the Judge wrongly imported a subjective assessment into the consideration of the scope of Mona’s moral duty. I accept, however, that the paragraph and those that follow are relevant to whether Judge Otene properly considered whether Mona had discharged her moral duty to her children. That issue is discussed below.
Did the Family Court fail to take into account, or give insufficient weight to, the benefits received by Nunia?
[103] The appellants say Judge Otene failed to take adequately into consideration benefits Nunia received from Mona while she was alive. These include free accommodation in Mona’s home for seven to eight years as well as Kathy’s uncontradicted evidence that John Disher paid Nunia’s costs in obtaining a law degree and various other financial assistance that Kathy says Nunia received from Mona and John. Ms McDonald submits that the Court should draw an adverse inference from the fact that the executors and Nunia have not provided evidence to show what happened to the $409,000 that Mona received from her share of the residue of John Disher’s estate.
[104] As recorded at [49] above, Judge Otene did take account of the fact that Nunia and her family received a benefit by living rent free at Parihoro Road for seven years while they looked after Mona. As to the other asserted benefits, and leaving aside the obvious hearsay quality to that evidence which, unlike the evidence of Mona’s generosity to the family in terms of meat, petrol and other gifts is not supported by the
evidence of other siblings, the appellants’ contentions on this point are misdirected. That is particularly so in relation to the adverse inference Ms McDonald invites the Court to draw with regard to Mona’s share of the balance of John Disher’s estate.
[105] Blanchard J made clear in Williams v Aucutt43 that a beneficiary is not required to justify the share bequeathed to him or her; it is for the appellants to establish that they have not received adequate provision for their proper maintenance and support. Thomas J noted in Paewai-Kohe44 that, notwithstanding that position, the Court should consider the testator’s wishes and the evidence of them. There can be no doubt that Judge Otene did precisely that.
[106] The appellants’ contention that the Judge failed to give adequate weight to the benefits Nunia received appears to be based on an assumption that the Court should weigh the merits of Nunai’s claim to a share of Mona’s estate with those of the appellants and then allocate the estate as the Court considers just. That, however, is the approach that the Court of Appeal has said should not be followed in its guidance that a will should be disturbed only to the extent necessary to repair the breach of moral duty to a claimant.45
[107] It follows that the appellants’ contention that the Family Court failed to give adequate consideration to the benefits received by Nunia cannot succeed.
Did the Family Court fail to take into account the appellants’ need in the wider context of family recognition?
[108] Judge Otene undertook what she called an “unsegregated assessment” of the appellants’ needs. The Judge used that term after noting that, following Williams v Aucutt, maintenance claims based on financial need had sometimes been treated differently from support claims based on family recognition. She also noted that it had been judicially emphasised that the expression (maintenance and support) is composite without the need to assess the two aspects separately.46 In other words, the use of the
43 Above n 15, at [68].
44 Above n 2, at [66].
45 Williams v Aucutt above n 15 at [68] and Auckland City Mission v Brown [2002] 2 NZLR 650 (CA) at [36], both citing Little v Angus, above n 30, at 127; Henry v Henry, above n 4, at [55].
46 At [32].
term “unsegregated” was simply a reference back to what Richmond P called the “composite expression” of “maintenance and support”.
[109] Ms McDonald submits that in undertaking her unsegregated assessment of the appellants’ situation, Judge Otene failed to have regard to Kathy’s need for maintenance and support in the wider context; that is, Kathy’s contribution to and role in the life of her mother. I do not accept that submission. At [24] of her judgment, Judge Otene refers specifically to the role of Kathy, as well as those of Ngaire, Patsy and Tina, in assisting Mona and in tending to Mona’s spiritual and emotional care. While Judge Otene does not assess Kathy’s role to have been greater than that of the others, that is probably because the evidence on the roles of the siblings was not consistent.
[110] In any event, I am satisfied that in her assessment, Judge Otene considered each of the appellants’ needs for family recognition. In particular, the Judge noted that in fashioning her will and in taking into account the inter vivos and testamentary dispositions from Ngahina and John Disher, Mona ensured that each of her children, except for Michael and Aroha, had or would receive “some specific and distinct financial benefit over and above those of her general largesse”.47 It is these elements of specificity and distinctness, considered in the context of Mona’s respect for whakapapa, frugality and the value Mona placed on principled deed rather than material recognition, and the constraints imposed by the size of Mona’s estate, which the Judge considered satisfied the need for family recognition in the cases of Violet, Kathy and Massey.
[111] By contrast, the absence of the receipt of any distinct benefit for Aroha, together with Aroha’s financial need, were the reasons the Judge held that Mona was in breach of her moral duty to Aroha.48 And while Patsy had received a distinct benefit, the Judge considered it “unduly disproportionate” to those of her siblings, which was why the Judge ordered that further provision be made for Patsy.49
47 At [35].
48 At [42].
49 At [45].
Did the Family Court fail to take into consideration the appellants’ financial positions at the date of Mona’s death?
[112] In Little v Angus, Cooke J said that whether there has been a breach of moral duty is customarily tested as at the date of the testator’s death, but that regard is had to later events when deciding how a breach is to be remedied.50
[113] There is no doubt that Judge Otene considered the appellants’ individual financial circumstances at the time of the hearing and there is no suggestion that those circumstances were appreciably different from those at the time of Mona’s death. With regard to those circumstances, Judge Otene said:
(a)Violet’s means were very limited with little prospect of improving and she lived on her New Zealand Superannuation payments in Housing New Zealand rental accommodation;51
(b)Kathy was financially secure with her own home and assets worth of the order of $484,000, even though she and her husband were retired and had health issues;52
(c)Massey had a secure job with an annual income of $63,000 but with no assets other than a car worth $11,000 and debts of $35,000 and lived in rental accommodation and had child support obligations;53
(d)Patsy was of modest means but with the potential to get worse because of health issues; she was undergoing treatment for cancer and received Australian social security payments;54
(e)Aroha was of limited financial means with little prospect of improving, she lived in Housing New Zealand rental accommodation and received New Zealand superannuation and a medical benefit.55
50 Above n 30, at 127.
51 At [39].
52 At [40].
53 At [43].
54 At [41].
55 At [42].
[114] The Judge also considered the benefits that each of the appellants had received and their adequacy in terms of satisfying Mona’s moral duty to the appellants as summarised at [54] above. However, except by implication, the Judge did not assess whether each of the appellants had a continuing need for maintenance and support, irrespective of those benefits, as at the date of Mona’s death.
[115] It is implicit in her decision that Judge Otene considered that Kathy has no financial need given her moderately secure financial position and that her need for support in terms of family recognition had been adequately met by the $31,500 she received from John Disher’s estate. It appears that the Judge also considered that Massey has no urgent financial need given his current stable employment. It is also implicit in the Judge’s decision that she considered Patsy and Aroha have both a financial need and a need for support in terms of family recognition. However, there is no assessment of the financial needs of Violet, and in her case and in that of Massey, there is a strong sense that the Judge considered that whatever their financial needs, they have already been adequately provided for in the benefits they received under the wills of John Disher and Ngahina and if they still have financial needs, that is the consequence of their own poor financial management.
[116] I agree with Ms McDonald that there is no evidence to suggest there has been any financial mismanagement on the part of either Violet or Massey. There was nothing inappropriate in Violet using the money she received from the sale of the Otewa Road property to buy her child a gift and a car and appliances for herself. There is no evidence to explain why Massey no longer has the benefit of the $40,000 he obtained from selling the Otewa Road property to John Disher. But Massey received that money over 20 years ago and it is not appropriate to conclude that just because he no longer has any assets that must have been because of poor financial management on his part. That does mean that his receipt of the benefit of the Otewa Road property should not be taken into account. However, receipt of that benefit does not exclude Massey from consideration of whether Mona still owed him a moral duty at the time of her death.
[117] Having carefully analysed her decision, I am satisfied that the Judge did not undertake a proper assessment of the appellants’ financial needs when considering
whether Mona had made proper provision for their maintenance and support. While the Judge recorded the financial positions of the appellants and, at least with respect to Violet, Patsy and Aroha, accepted by implication they were in financial need, the Judge not undertake an assessment of the extent to which those needs could be met, having regard to the size of the estate and the appellants’ relationships with Mona and Mona’s wishes as discussed by Thomas J in Paewai-Kohe.56 While the Court of Appeal has emphasised that a Court need not expressly find a need for maintenance and support,57 where, as here, claims are advanced on the basis of financial need there must be some consideration of the adequacy of the appellants’ financial circumstances and the extent to which they may be alleviated by provision, albeit limited, from the estate.
[118] I accept, therefore, the appellants’ submission that Judge Otene did not properly take into consideration the appellants’ financial position as at the date of Mona’s death.
Did the Family Court fail to properly assess the scope of Mona’s moral duty and fail to order provision adequate to ensure the discharge of that duty?
[119] The common thread to the appellants’ specific contentions and the burden of their allegations of inappropriate weight being given to various considerations, is the more general contention the Family Court failed properly to assess the scope of Mona’s moral duty and failed to order provision adequate to ensure the discharge of that duty because the Court considered some things to be more important than others. In particular, they say that Judge Otene prioritised giving effect to Mona’s intentions that the Parihoro Road property should not be sold and kept in Nunia’s hands over ensuring that Mona had discharged her moral duty to the rest of her family.
[120] I consider this submission to be well-founded. The evident focus of Judge Otene’s decision was on understanding and respecting Mona’s attachment to land generally and to the Parihoro Road property in particular, and to assessing whether the benefits Mona’s children received from the estates of Ngahina and John Disher adequately discharged Mona’s moral duty. Thus, the Judge:
56 Above n 2, at [93].
57 Williams v Aucutt, above n 15 at [52].
(a)Noted Tina’s evidence that Parihoro Road was the “family place” and that Mona never wanted it sold or subdivided;58
(b)Found that the premium Mona put on retaining Parihoro Road was consistent with the significance she placed on retaining property for its whanau importance;59
(c)Took account of the life experiences and principles that drove Mona and Mona’s value system;60
(d)Found that Mona respected interests greater than her own, including acceptance of an obligation to and by her whakapapa;61
(e)Took account of Mona’s forbearance in not pursuing a relationship property claim to John Disher’s estate;62 and
(f)Noted the discernible logic to the way Mona fashioned her will63 and the value she placed on principled deed ahead of material acquisition.64
[121] All of this discussion is about Mona and her perspectives and were the prelude to the Judge’s consideration of whether the benefits received from Ngahina and John Disher were an adequate discharge of Mona’s moral duty having regard to Mona’s value system. There is limited discussion in the judgment about the extent of the appellants’ need for maintenance and support in the absence of those benefits and no discussion at all about whether the Parihoro Road property might need to be sold in order to meet those needs. I accept, therefore, that the Judge gave greater priority to ensuring respect for Mona’s will than to assessing whether Mona had made adequate provision for the appellants in discharge of the moral duty the Judge had held that Mona owed to them for their proper maintenance and support.
58 At [17].
59 At [19].
60 At [33].
61 At [35](a).
62 At [35](a).
63 At [35](b).
64 At [35](c).
[122] I consider this to be more than an issue of weight. It is an error of law. While the Court of Appeal has emphasised that a will is to be disturbed only to the extent necessary to repair any breach of moral duty, it is clear from the test set out in Williams v Aucutt that the primary inquiry must be whether adequate provision has been made for a claimant’s proper maintenance and support. Blanchard J made clear in the extract set out at [68] above that a testator is at liberty to do as they wish with their assets “once they have made such provisions as are necessary to discharge their moral duty”. While a testator’s intentions are clearly part of the circumstances of the case to be taken into account, they cannot be the driving consideration in that primary inquiry.
[123] I recognise there are situations where a Court will be reluctant to consider directing an outcome that may require the sale of land, particularly land held in a whanau context. Ms McDonald referred me to two decisions in that regard, which, I note, were not referred to Judge Otene. In Re Ham,65 Richardson J said it was accepted that when dealing with Māori families the Court must pay regard to the strong attachment of Māori to land and to closely held and deep feelings within the family in that respect and upheld a High Court decision where the Court declined to order sale of family land. In Re Stubbing (deceased),66 Eichelbaum J also took account of Māori custom, as he referred to it, but held that in the circumstances of that decision, once a case for relief had been made out it could not be overridden by competing claims based on custom.
[124] However, the circumstances of the present case are very different from those in Re Ham and Re Stubbing. Those cases involved land that had been in, and farmed by, the families concerned for many years. In Re Stubbing, there was also a complex whanau history relating to the inheritance of the land. By contrast, while Mona and Tina have occupied the Parihoro property since 1992, and Nunia and her family lived there between 2008 and 2015, the property was never the family home of the appellants while they were growing up. Since Nunia is now in her 50s, she would have been in her 20s and an adult when Mona and John moved into the property in 1992. While the property may have been the “family place” in the eyes of Mona and
65 Re Ham (deceased) (1990) 6 FRNZ 158 (CA) at 162.
66 Re Stubbing (deceased) [1990] 1 NZLR 428 (HC) at 437.
Tina, it clearly is not seen that way by many of Mona’s children. Moreover, the bulk of the land has been leased out for grazing since John’s death in 2006.
[125] For these reasons, I do not accept that this a situation where retention of the land in the family can be given precedence over ensuring that Mona’s moral duty to her children has been discharged. In addition, while the Judge, and counsel before me on appeal, appear to have assumed that the land would have to be sold if Mona’s will was disturbed to any significant effect, that approach presupposes a particular outcome before a determination had been made about the extent of the provision necessary to remedy any breach of Mona’s moral duty.
Has Mona discharged her moral duty to all of the appellants?
[126] Because I have held that the Judge did not properly take into consideration the appellants’ financial needs when assessing whether adequate provision had been made for their maintenance and support and made an error of law in assessing the scope of Mona’s moral duty, I must now consider whether Mona has discharged that duty and, if not, how the breach of that duty is to be remedied.
[127] As to the first point, I accept that Aroha, Patsy, and Violet have a clear financial need. They are all beneficiaries who have few assets and no savings. Judge Otene found that the circumstances of Violet and Aroha have little prospect of improving and Patsy’s have the potential to become more straitened because of health difficulties. Their circumstances would all be alleviated appreciably, even by relatively modest provision from Mona’s estate.
[128] While Massey’s financial circumstances are more secure because he has a steady income, they are still modest. He has few assets and has child support obligations. His circumstances would also be alleviated appreciably, even by relatively modest provision from Mona’s estate. He received an asset of considerable benefit from Ngahina’s estate but that was over 20 years ago and that cannot be taken as fully discharging Mona’s moral duty to him at the time of her death.
[129] Kathy’s financial circumstances are better than those of her siblings. However, there is force in Ms McDonald’s submission that Kathy’s role in her mother’s life,
which was more extensive than Violet’s, warrants greater recognition by way of maintenance and support than the $31,500 she received from John Disher’s estate.
[130] I conclude, therefore, that Mona has not made adequate provision in her estate for the proper maintenance and support of any of the five appellants.
What is required to remedy the breach of Mona’s moral duty?
[131] The appellants submit I should follow the approach in Paewai-Kohe where the family home had been left to one child in the expectation that half the land on which the home was situated could be subdivided off and sold and the proceeds used to provide for the other six appellants. In that decision, Thomas J ordered that the entire estate should be divided 40 per cent to the principal beneficiary and 60 per cent to be shared by the other six appellants. The appellants say that a 70/30 division is more appropriate in this case, however, because the principal beneficiary in Paewai-Kohe, who had been the primary caregiver to the mother and to a disabled sibling, had made a greater contribution than Nunia to the expenses of the family home.
[132] There are significant differences between the circumstances in this case and those in Paewai-Kohe. In particular, in Paewai-Kohe:
(a)All involved accepted that the testatrix’s will could not be given effect because subdivision of the land was not feasible so the Judge was called upon to come up with a different arrangement from that in the will;
(b)All of the relevant appellants for provision from the testatrix’s estate were represented in the proceeding; and
(c)While there was scope for differing assessments to be reached as to the level of need of the various appellants and of the extent to which some of the appellants had received inter vivos assistance, the appellants asked the Court to treat them all equally.
[133]Those circumstances are not present in this case.
[134] As the Court of Appeal has emphasised, a Court must disturb a will only to the extent necessary to remedy the breach of a testator’s moral duty. As to what is appropriate in the circumstances of this case, I consider that regard must be had to the following:
(a)Mona has eight surviving children who could claim a share in her estate;
(b)The estate, while not insignificant, is not large enough to provide more than a modest amount to any claimant;
(c)A number of appellants have already received benefits during Mona’s lifetime and under the wills of Ngahina and John Disher;
(d)Mona’s will and her memorandum of 10 July 2008 made it clear she wanted her estate, in particular, 20 Parihoro Road, to go to Nunia.
[135] With these considerations in mind, I calculate the provision for the appellants through the following steps:
(a)I take as a notional starting point, the appellants’ proposal that 30 per cent of the estate should go to Nunia given their acceptance that she should receive a larger share of Mona’s estate and Mona’s clear wishes in that respect. That leaves 70 per cent or $553,000 of Mona’s estate available for the consideration in providing maintenance and support for the rest of the family. (For the purposes of this exercise, I round the value of the estate to $790,000).
(b)I assume an equal division of the notional 70 percent among the seven children other than Nunia who could make a claim for provision from Mona’s estate. That is consistent with the Court of Appeal’s confirmation in Paewai v Paewai-Kohe that equal treatment is an appropriate starting point when dividing an estate among appellants.67
67 Paewai v Paewai-Kohe (CA), above n 2, at [17].
This takes account of the interests of Michael and Vera who could also have made claims for maintenance and support from Mona’s estate. As a result, each child has a notional share of 10 per cent of the estate or
$79,000 per child. The notional shares of Michael and Vera revert to the estate in order to disturb Mona’s will only to the extent necessary to remedy the breach of Mona’s moral duty to the appellants.
(c)I then adjust the individual notional shares for the five appellants to take into account benefits already received as well as the nature of the claimant’s relationship with Mona. Any reductions in share revert to the estate in order to disturb Mona’s will only to the extent necessary to remedy the breach of Mona’s moral duty to the appellants.
[136] Accordingly, I consider that provision should be made for the maintenance and support of each of the appellants as follows:
(a)Aroha: $75,000 because she is in need of financial support, she has received no benefit to date, and she has had the least support from Mona during her childhood and her adulthood, but she also had the least engagement of the children with her mother in Mona’s later years;
(b)Patsy: $70,000 because she is in need of financial support and played an active role in the life and care of her mother in Mona’s later years until she moved to Australia, but received the benefit of $10,000 advanced by John Disher;
(c)Kathy: $40,000 because she played a more significant role in the care of her mother in Mona’s later years than the other appellants, but she is not in financial need and has already received the benefit of $31,500 from John Disher’s estate;
(d)Violet: $20,000 because she is in need of financial support but has received the benefit of $70,000 from John Disher’s estate and did not
play a significant role in the life and care of her mother in Mona’s later years;
(e)Massey: $15,000 because he is not in as much financial need as Aroha, Patsy and Violet, he received the considerable benefit of the Otewa Road property, which is worth a great deal more in today’s terms than it was when he sold it to John Disher, and because he played limited role in the life and care of his mother in Mona’s later years.
[137]The net result of the above decisions is that the estate must pay a total of
$220,000 to meet the above provisions but will retain the balance of $560,000 which will pass to Nunia. I do not know whether it will be possible for the estate or Nunia to raise finance to enable these provisions to be made without selling the Parihoro Road property, bearing in mind that Mona received the property unencumbered from John Disher’s estate, or whether they will need to sell the property. That is for Nunia and the estate to consider.
[138] I am conscious, however, that if sale of the Parihoro Road property is required, market conditions in the light of the Covid-19 emergency may mean that it is not possible to achieve a sale price of $850,000, which is the basis on which the above provisions were calculated. If it is necessary to sell the property and a net price of
$850,000 is not achieved, the above provisions will need to be scaled accordingly.
Result and orders
[139] For the reasons set out above, I set aside the decision of Judge Otene in the Family Court and make the following findings:
(a)Mona Disher had a moral duty to make provision from her estate for the proper maintenance and support of each of the appellants;
(b)Notwithstanding benefits that some of the appellants received during Mona’s lifetime and from the wills of Mona’s husbands, Ngahina Te Whau and John Disher, Mona’s will still did not make adequate provision for the proper maintenance and support of the appellants.
[140] In order to remedy the breach of moral duty to the appellants I order that provision be made from Mona Disher’s estate in the following amounts:
(a)Aroha Te Whau: $75,000;
(b)Patricia Te Whau: $70,000;
(c)Kathleen Koroheke: $40,000;
(d)Violet Levy: $20,000;
(e)Massey Te Whau: $15,000.
[141] The above orders are based on the parties’ acceptance that Mona’s estate has a value of approximately $790,000. If it is necessary to sell the property at 20 Parihoro Road in order to satisfy these orders and to meet the costs of this proceeding and that sale, less all debts and expenses payable by the estate, realises less than $790,000.00, the provisions to be made to the appellants shall be scaled according to the percentage that the value of the estate as realised represents to the sum of
$790,000.
Costs
[142] While the appellants have succeeded, the result is much less than they claimed. In my assessment, the appellants had unrealistic expectations about what they could secure from their mother’s estate, having regard to well-established principles applicable to family protection claims. For these reasons, I consider that costs should lie where they fall. However, if the appellants wish to seek costs, I reserve leave for them to apply.
G J van Bohemen J
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