Moleta v Darlow
[2021] NZHC 2016
•5 August 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-000858 CIV-2019-404-001469
CIV-2020-404-002264 [2021] NZHC 2016
BETWEEN DELLISSE MOLETA
Plaintiff
AND
CHRISTOPHER DARLOW
First Defendant
JOLENE SCHOLLUM
Second DefendantLORRAINE MOLETA
Third Defendant
Hearing: 10–14 May 2021 Appearances:
PJ Kennelly for the Plaintiff
G Williams for the First Defendant PA Fuscic for the Second Defendant
GF Kelly and KH Lawrence for the Third Defendant
Judgment
5 August 2021
JUDGMENT OF HINTON J
This judgment was delivered by me on Thursday, 5 August 2021 at 1 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Kennelly Law, Orewa Grove Darlow & Partners
McVeagh Fleming, Auckland
Greg Kelly Law Limited, Wellington
MOLETA v DARLOW [2021] NZHC 2016 [5 August 2021]
[1] Mrs Moleta was a woman who loved her children, but she had very strong opinions and high expectations. In different ways her children have paid the price for that. This case follows her death, which occurred in the saddest of circumstances.
[2] Mrs Moleta’s last will named her daughter Dellisse Moleta as sole beneficiary and executor of her estate. Two of her other daughters, Jolene Schollum and Lorraine Moleta have made claims for further provision under the Family Protection Act 1955 (the FPA). Dellisse also then brought a claim alleging that the New Zealand properties owned by the estate are partly held on constructive trust for her.
[3] On 13 October 2020 Moore J removed Dellisse as executor and appointed Christopher Darlow in her place.1
The estate and Dellisse’s assets
[4] The total value of the estate is approximately NZ$5.4 million. At the date of death that was made up of three New Zealand properties worth approximately NZ$3.3 million (net of mortgage debt which is to be allowed for present purposes at approximately NZ$600,000) and three Australian properties worth approximately NZ$2.18 million (net of mortgage debt of approximately NZ$220,000). Those properties are:
(a)120 Norman Lesser Drive, St Johns; 1/97 Michaels Avenue, Ellerslie; and 21A Balfour Road, Parnell.
(b)2B Dent Street, Merewether, New South Wales (NSW); 24/187-189 Cleveland Street, Redfern, NSW; and 124 Miles Street, Menzies, Queensland.
[5] One of the New Zealand properties, Norman Lesser Drive, has since been sold for $2,121,000. The estate’s assets currently comprise the remaining five properties and approximately NZ$1.9 million cash.
1 Moleta v Moleta [2020] NZHC 2680.
[6] In addition, at the date of her death, Mrs Moleta owned six properties jointly with Dellisse, four in New Zealand and two in Australia. These properties are worth in total about NZ$4.6 million. The Australian properties are subject to a mortgage of approximately NZ$1.12 million. These properties passed to Dellisse by survivorship and do not form part of the estate. The total estimated value of Mrs Moleta’s half- share in the six properties is NZ$1.75 million, after the mortgage. Dellisse therefore benefited by survivorship by a total sum of approximately NZ$1.75 million and she now owns the six properties, altogether worth NZ$3.5 million net.
[7] At the date of Mrs Moleta’s death, Dellisse also owned in her sole name two additional properties in Australia. In an affidavit filed in the New South Wales Court, Dellisse said that these properties were worth about NZ$1.8 million. In that affidavit she also lists her liabilities and there seems to be no debt over these solely owned properties.
[8] I have detailed the assets set out above that are outside of the estate primarily because of Dellisse’s claim by way of constructive trust under which they become relevant.
Background
[9] Mrs Moleta is New Zealand-born. She was married to an Italian-born farmer, Salvatore Moleta, and they lived together on a farm in Takaka near Nelson. They had seven children: Lorraine and a twin brother who died at birth (b 1956); Adrian (b 1958), Michelle (b 1960), Dellisse (b 1961), Jolene (b 1963) and Leon (b 1964).
[10] In late 1971, Mrs and Mr Moleta separated and Mrs Moleta took four of the children to live in Nelson. Lorraine and Adrian stayed behind with their father in Takaka. Lorraine was 16, just finishing school and due to start work in Nelson early the next year. In fact, the day Mrs Moleta left the farm, Lorraine was sitting a School Certificate exam. Although Mrs Moleta took Leon with her, his father subsequently obtained a Court order for his custody. There were also significant issues over maintenance and support, Mrs Moleta having to obtain, by the sounds of things, a judgment summons order to enforce payment. She also had to fight hard to receive a share of the property as was standard for women prior to the Property (Relationships)
Act 1976. For all of these reasons, the separation was extremely bitter. Mrs Moleta wanted nothing to do with her ex-husband and never referred to him again as anything other than S Moleta.
[11] Mrs Moleta also held it against Lorraine and Leon that they had not come with her. She told Lorraine that she would never come to visit her, and she never did. She was obviously happy though for Lorraine to come to see her wherever she was living.
[12] In August 1973 Mrs Moleta, Michelle, Dellisse and Jolene moved from Nelson to live in Auckland.
[13] Mrs Moleta put a high store on education and on hard work. Once they were living in Auckland, she put all three girls through Diocesan School, and worked very long hours every day to fund that. They lived in a small rental flat and must have lived quite frugally as Mrs Moleta’s work was not high-paying. She had worked as a sole charge teacher before marrying but was working as a shop assistant at Farmers and as a hotel cleaner. Then she worked at the Van Camp chocolate factory as well as working as a kitchenhand, waitress and babysitter. This meant that the girls also had to be very highly organised and help out. Jolene says that after school she would iron her mother’s apron and clothes and make her dinner and a hot drink before her mother rushed off to her next job.
[14] In 1977 Michelle began studying law at the University of Auckland. After completing her degree she worked as a lawyer.
[15] In 1978 Mrs Moleta purchased the first property that she owned in her own name being in Inverary Avenue, Epsom. This was funded in part from whatever property settlement she finally received.
[16] In 1978 Dellisse went to the University of Otago to study for a Bachelor of Pharmacy.
[17] Lorraine married in 1979 and then Michelle married a member of the Van Camp family in 1980. Mrs Moleta did not approve of Michelle’s marriage and
did not attend the wedding, despite having introduced Michelle to her husband. Jolene was the only one of the family who attended the wedding.
[18] In 1981 Jolene commenced study for a Bachelor of Arts at Auckland University, but withdrew after the end of the first year, to her mother’s disapproval. Jolene had met Peter, who was to become her husband, at around that time.
[19] In December 1981 Mrs Moleta purchased 120 Norman Lesser Drive, St Johns, and in February 1982 she sold Inverary Avenue. Norman Lesser Drive is the property that has been sold subsequent to her death. Mrs Moleta had been concerned that the girls had not liked the lack of space at Inverary Avenue and she bought Norman Lesser Drive with the expectation that they would be happy there and would want to continue living with her.
[20] To Mrs Moleta’s acute disapproval and disappointment, Jolene moved out of Norman Lesser Drive in June 1982 to live with Peter. Jolene was then aged about 19.
[21] Mrs Moleta set up and ran a café in Customs Street from 1982 until about 1984. Again, she worked very hard, running the café and doing the cooking all on her own. Jolene says that she and Peter helped paint the café and would come in on weekends to help serve customers.
[22] Dellisse completed her pharmacy degree and moved back to Auckland to live with her mother at the end of 1982. They lived together at Norman Lesser Drive until 1986, sharing just one room which had no kitchen. The rest of the house was rented out.
[23] From 1985 to 1988 Mrs Moleta worked as a relief teacher during the week and as a nurse aid at retirement homes in the weekends. Dellisse worked in a pharmacy and had another job at night to pay her mother board.
[24] In October 1986 Dellisse moved to Sydney to continue her work as a pharmacist. At the end of that year Jolene and Peter married. Dellisse and Lorraine
were overseas, but Adrian and Leon came up from Takaka to attend. Jolene says that their mother was apprehensive and only attended the reception.
[25] Around 1986/1987, Lorraine separated from her husband. Her mother wanted her to use her settlement money to invest in property. Lorraine did not agree as she had recently lost her job and had debts. Lorraine says this made her mother very angry and her mother refused to contact her for some time after that.
[26] On 4 January 1987, Mrs Moleta wrote her first will. In it, she left everything to Dellisse, except that in the event of a change in circumstances, such as divorce, either Michelle or Jolene could receive a portion of the estate agreeable to the co-executors, being Dellisse and John Jackson, the lawyer who drafted the will. Lorraine believes she was not included in this will as Mrs Moleta was still angry with her for not investing her money in property.
[27] In March 1988 Mrs Moleta purchased her first investment property, being 1/97 Michaels Avenue, Ellerslie, one of the properties that was still owned in her sole name when she died. Dellisse says she sent her mother money from Sydney during this period. There is no documentary evidence of this which is not surprising given how long ago it was. However, Mrs Moleta was writing letters to Lorraine and Jolene around this time in which she complained that Dellisse had poor financial management and was wasting her income. That does not necessarily rule out Dellisse having sent money. Mrs Moleta tended to criticise others of her children when writing to one, and sometimes criticised even the person to whom she was writing. As one counsel commented, Mrs Moleta was even-handed in her criticism. However in the overall picture I consider it unlikely Dellisse was sending money to her mother.
[28] That same year, in November, Mrs Moleta and Dellisse jointly purchased an investment property at 9 Maaka Place, St Johns, Auckland. Dellisse says she paid half the deposit from savings and took on equal liability for the mortgage.
[29] In August 1988 Adrian got married in Nelson. Jolene and Peter attended the wedding against Mrs Moleta’s wishes. This was the first time Jolene had seen her father in 17 years.
[30] In February 1989 Mrs Moleta moved to Sydney to live with Dellisse. My impression is she did that for two reasons. First, she was lonely living on her own. And secondly, she was concerned that Dellisse was not coping well on her own and needed support in Australia. She referred in correspondence to a head injury that Dellisse had suffered as a child which she considered had impacted on her.
[31] After her mother moved to Australia, Michelle took over management of her New Zealand properties and also the jointly owned Maaka Place.
[32] Dellisse says when her mother arrived in Sydney she worked at a series of low- paying jobs before starting a permanent accounts position for a company in North Sydney. It is unclear exactly when she started this role, but she remained in it for eight years. As Dellisse acknowledges Mrs Moleta was also receiving net rental income from the properties in New Zealand, including Maaka Place.
[33] In June 1989 Jolene and Peter had their first child, Aimee. Jolene says that after her mother moved to Australia she did not see her for a while as she was looking after Aimee. But they kept in touch by phone and exchanging letters. She says that her mother sent gifts and cards and loved to hear how Aimee was doing. Jolene says that later she visited her mother regularly in Sydney.
[34] Michelle and her husband also moved to Sydney in May 1991 and at that point Jolene took over management of the New Zealand rental properties. By that stage she was the only child in Auckland. Jolene said this involved dealing with various tenants, ensuring rent was always paid, dealing with her mother’s lawyers, dealing with contractors and emergencies, performing gardening and cleaning work and frequently calling and writing letters to her mother regarding the properties. Jolene did this, unpaid, for 10 years from 1991 to 2001 when Mrs Moleta hired a property manager.
[35] In September 1991 Leon was married. Mrs Moleta did not attend that wedding. Jolene attended and says her mother did not seem to disapprove on this occasion.
[36] In October 1994 Jolene was given power of attorney by her mother so that she could more efficiently manage the three properties. In that same month Scott, Jolene’s second child, was born.
[37] In April 1998 Adrian collapsed suddenly on the Takaka farm and died. He was 40 years old. About a year later Mrs Moleta suffered a pulmonary oedema, Dellisse says she nearly died and had to remain in Sydney Hospital for a month.
[38] Sometime in 2001, Jolene stopped managing the New Zealand properties and management was handed over to Sue Clarke. This was because of the amount of work required and the need to have someone constantly available to deal with the properties and tenants. Down to the date of her death it appears that Mrs Moleta continued to engage property managers for this purpose.
[39] Dellisse purchased a large pharmacy in Newcastle in 2000. It previously had five full-time employees. Being like her mother, and extremely hard-working and driven, Dellisse tried to run this pharmacy with only her mother’s help, to make it more profitable. Mrs Moleta was also still working very hard, although by this stage she was in her late 60s.
[40]In that same year Michelle was unfortunately diagnosed with breast cancer.
[41] In correspondence with her children in New Zealand, Mrs Moleta referred to Dellisse as working 24 hours a day, 365 days a year. Dellisse used that same expression even more regularly referring to herself. Even working that hard was not enough, however, to keep Dellisse out of trouble in management of the pharmacy and she most unfortunately faced charges in connection with it. It is fairly clear from Mrs Moleta’s letters that responding to those charges generated a huge amount of extra work and stress for Dellisse and Mrs Moleta. The end result, while unclear regarding the charges, was that Dellisse was de-listed as a pharmacist. While much was made of this by the plaintiffs as showing dishonesty on Dellisse’s part, my impression is there would more likely have been gross mismanagement largely brought about by short-staffing and overwork. The pharmacy was sold in 2004. All of this is relevant only insofar as I consider Dellisse likely incurred a significant loss from that business
overall. In one letter Mrs Moleta states that Dellisse’s debts had reached over
$2 million. It is hard to know what that relates to and I suspect it is exaggerated. Mrs Moleta generally told her daughters that money was short.
[42] Lorraine re-married in 2000. When this marriage subsequently started to break down and she was having a hard time, she says her mother wrote to her very frequently. Lorraine said her mother was very supportive and concerned for her wellbeing. That is certainly the impression I gain from their correspondence generally.
[43] Right from the time Mrs Moleta had moved away from Takaka, Lorraine had visited her mother every chance she got. She would take the train from Wellington to Auckland and back again at least twice a year over long weekends. She said in evidence that her mother was very important to her. Jolene, of course, also visited her mother regularly, having continued to live in Auckland. It seems that Mrs Moleta seldom went to Jolene’s house, which I suspect was probably the result of Mrs Moleta’s preference. Even after their mother moved to Sydney both Lorraine and Jolene went to Australia on a fairly regular basis to see her and Dellisse, and also to visit Michelle. Lorraine made something like 22 trips.
[44] Lorraine says whenever she visited her mother she would give her gifts and take her out for meals. Although Lorraine did not mention this in her written evidence, it emerged during the hearing that she did not receive gifts from her mother at all. In a letter dated 6 May 2002 Mrs Moleta asked Lorraine to stop giving her gifts, saying “Please never give me another gift. Of my 6 children you are the one who has given me the most gorgeous, exquisite cards and gifts. I haven’t forgotten the visits to me in Auckland when you arrived overladen with gifts, plus wine.”
[45] In 2002 Mrs Moleta purchased 21A Balfour Road, Parnell, in her own name, again a property that she still owned at her death.
[46]Also in 2002 Dellisse purchased two properties in Australia in her own name.
[47] Mrs Moleta signed a second will on 22 October 2002. John Jackson was the sole executor. The will provided that after debts, the estate was to go to Dellisse.
[48] Between 2002 and 2006, consistent with her strong emphasis on education, Mrs Moleta paid for Kristin School fees for Aimee, Jolene’s daughter. My impression is it was her idea for Aimee to go to Kristin. It seems these fees totalled something in the order of $63,000. Much was made about the exact amount, but I do not think anything particularly turns on that. Jolene says she and Peter also contributed to the school fees or total costs and that they were concerned about her mother taking this on. Jolene says Dellisse flew into a rage when she discovered that her mother was paying Aimee’s fees. Jolene produced letters where her mother said “don’t mention the dollars to Dellisse”, or “don’t thank me for the money” in reference to gifts she had made to Jolene’s children. It was fairly clear from Dellisse’s evidence that she was very strongly opposed to this expenditure. She considered it was “their” money that was being spent and that Mrs Moleta had no right to make any unilateral payments.
[49] After the pharmacy was sold in 2004, Dellisse did not take up other employment, but rather started attending courses and seminars on share trading. She would sit up very long hours at night trying to come to grips with online trading. Dellisse and her mother even travelled to Las Vegas twice for Dellisse to attend further courses on trading. In letters to Jolene, Mrs Moleta said that Dellisse had incurred course costs of between $20,000 and $80,000. She also referred to Dellisse making losses on share trading and how hard it was to pick up. Both Dellisse and her mother also regularly attended seminars on the property market.
[50] Bank statements show Mrs Moleta making monthly payments of $800 to Dellisse from 2005 to 2007, and monthly payments of $741 to her from 2009 to 2010. This is all after the end of Dellisse’s career as a pharmacist and is consistent with letters written by Mrs Moleta to Lorraine and Jolene where she says that Dellisse has no income and that she is financially supporting her.
[51] In October 2006 Salvatore Moleta died. He left his farm to the two sons, Adrian (presumably his share went to Adrian’s two children, as he predeceased Salvatore) and Leon; his house to Leon’s son; chattels and bank accounts to Lorraine, (she says this amounted to approximately $16,000); and $250 each to Jolene, Dellisse
and Michelle. His will stated, “the girls will be provided for by their mother Janette Diana Moleta”.
[52]In June 2009 Michelle sadly passed away from breast cancer.
[53] In 2009 and 2010 Mrs Moleta and Dellisse jointly purchased two more Auckland properties: 24/6B Remuera Road and 2M Alpers Avenue, Epsom.
[54] Shortly afterwards, in June 2011, they returned from Sydney to live in Auckland, residing at 2M Alpers Avenue, Epsom. It appears they did so because Mrs Moleta was not eligible for the Australian pension but was eligible for New Zealand superannuation. Mrs Molete would already have been in her late 70’s by this stage.
[55]In July 2011 Mrs Moleta and Dellisse sold Maaka Place.
[56] Mrs Moleta signed a third will on 18 November 2011. This will was prepared by Mr Mellett of Quay Law who was also to be the executor. The will directed that the Michaels Avenue property be sold. Jolene, her children and Michelle’s children were each to receive $10,000 from the proceeds. After debts, funeral and testamentary costs were paid, the remainder of the estate was to go to Dellisse.
[57] On 10 August 2012 Mrs Moleta had a stroke. She was kept in Auckland Hospital for a month until, against the wishes of the medical team, but it seems consistent with the wishes of her mother, Dellisse removed her from the hospital and took her back to Alpers Avenue. The stroke had materially affected Mrs Moleta, including removing her ability to speak properly. Lorraine and Jolene had been regularly visiting their mother in hospital. They were opposed to her going back home and wanted to follow what the medical specialists recommended. In evidence, Lorraine acknowledged that her mother would not have wanted to go into a rest home and may have wanted to go back to Alpers Avenue.
[58] From late November 2012, Dellisse, she says with the backing of her mother, refused to allow any carers to come into the property, including an occupational
therapist and rehabilitation team. Dellisse also refused to allow Lorraine and Jolene to visit. (Mrs Moleta presumably was no longer able to make contact on her own, though it seems she was somehow still able to travel to Sydney from time to time with Dellisse.) Lorraine says she called and wrote emails to Dellisse but was always denied access. She says she travelled to Auckland to try to see her mother a number of times. On one occasion she made arrangements with Dellisse to visit her mother at Alpers Avenue, but they were not home when she arrived. Jolene and Lorraine’s inability to visit their mother unfortunately continued down to her death in July 2017. Lorraine said in her oral evidence that she loves Dellisse but she will never forgive her for this.
[59] In April 2014, Anton van Camp (Michelle’s son) texted Jolene advising that he had visited his grandmother and Dellisse, unannounced. He expressed concern about his grandmother’s wellbeing. He said she “couldn’t talk, just cried most of the time”. He was startled by the “level of care and Dee’s general demeanour”. Jolene said this made her deeply concerned and she contacted Age Concern who told her that she needed proof her mother was being ill-treated or not cared for correctly. Jolene said she had no way of gathering this information as she was completely shut out from seeing her mother by Dellisse.
[60] In September 2015 all of Mrs Moleta’s files from Jackson Russell were sent to Alpers Avenue.
[61] On 24 December 2015, 21A Balfour Road, Parnell, a property which had been purchased by Mrs Moleta in her sole name in 2002, and which had previously been mortgage-free, became subject to a mortgage to Kiwibank. This was probably to pay for minor foundation work on the Balfour Road property and to fund $170,000 of remediation work needed on one of Mrs Moleta and Dellisse’s jointly owned properties.
[62] In early October 2016, 120 Norman Lesser Drive, another property in Mrs Moleta’s sole name and which also had been previously mortgage-free, became subject to a mortgage to Kiwibank.
[63] On 4 March 2016 Hopetoun Legal contacted Jolene, notifying her that her enduring power of attorney for her mother had been revoked on 25 February 2016. This led to Jolene taking legal advice in May 2016. She contacted the Browns Bay Police Station expressing concern over her mother’s care and also spoke to the Citizens Advice Bureau and Age Concern again. In May 2016 Hopetoun Legal replied to Jolene’s lawyer’s letter saying they had sighted medical evidence of Mrs Moleta’s capacity but could not disclose that.
[64] Mrs Moleta wrote a final will dated 22 December 2016. This will was prepared by the firm Wilson McKay. It provides that Dellisse is to be sole executor and that the entire estate goes to her. Ms De La Mare, the lawyer acting at the firm, warned Dellisse and Mrs Moleta that omitting the other children and grandchildren from the will may result in those excluded making a successful claim under the Act. Ms De La Mare recorded in a file note that Mrs Moleta understood this and was undeterred. A medical report was prepared around the same time confirming that Mrs Moleta had testamentary capacity.
[65] On 11 July 2017 Mrs Moleta was admitted to Auckland Hospital. She weighed about 23 kilograms.
[66] Neither Lorraine nor Jolene were told by Dellisse that their mother was in hospital. Lorraine found out from their aunt and told Jolene. Jolene went to the hospital with Peter as soon as she could. They had not seen Mrs Moleta in nearly five years. Jolene and Dellisse barely left their mother’s side until she died three days later on 15 July 2016. Jolene was not there when her mother died and Lorraine was not able to get to Auckland in time.
[67] After Mrs Moleta’s death, between 19 July 2017 and December 2017, Mrs Moleta and Dellisse’s joint bank account received more than $45,000 in rent and
$16,000 in estate funds. Dellisse transferred $23,000 of this to other joint accounts. She also transferred $14,500 to her personal accounts, made cash withdrawals of approximately $9,300, and used funds from the joint account to pay approximately
$32,000 in legal costs to Wynn Williams (her previous counsel).
[68] The mortgages over the Balfour Road property and the Michaels Avenue property were refinanced in June 2020 to ASB. The precise sum owing under the mortgages is not known.
[69] In March 2018 Jolene commenced this proceeding in the Family Court and in July 2018 Lorraine joined her in the claim.
[70] On 8 May 2019 Dellisse issued the constructive trust proceeding which culminated in all proceedings being heard together in this Court.
Personal circumstances of Jolene and Lorraine
[71] Jolene is 58 years’ old. She is still married to Peter, who is also 58 years’ old. She works for New Zealand Post and her salary is approximately $53,703.36 per annum. She anticipates her job will be restructured or reduced at some point soon. Peter is a landscape gardener. He was earning approximately $32,709.89 per annum, but due to health issues has had to reduce his working hours. Peter and Jolene own a home in Torbay valued at $860,000. They had paid off the mortgage but have since taken out loans totalling $145,000 in order to pay their legal fees. They own minimal assets beyond the home: a 1996 Toyota Carib and a 2006 Mazda Demio, both of which have over 250,000 kilometres on the clock.
[72] Lorraine is 65 years’ old. She does some contract work. Her tax returns for the years ending 2019 and 2020 show that her taxable income was between $16,000 and $20,000 per annum. As she is now eligible for superannuation, Lorraine says she expects her annual income to be approximately $32,000. She also owns a 2012 Suzuki Swift and has approximately $34,000 in her Kiwisaver account. Lorraine lives on the same property as her former husband (who has re-partnered), but in a separate residence. Although they are registered as joint tenants on the title, they have an oral agreement that Lorraine owns a share of close to 40 per cent, worth approximately
$580,000. She says she owes about $330,000 for the costs of funding this litigation, inclusive of interest of over $100,000.
The issues
Jurisdiction over Australian properties
[73] Up to the hearing Dellisse claimed this Court did not have jurisdiction to take any account of the Australian assets in the estate claim. Out of concern that the estate might be limited to just the New Zealand assets for purposes of this proceeding, coupled with the risk of the constructive trust claim, Lorraine issued proceedings in Australia as well as New Zealand. I gather considerable cost has been incurred in that exercise. That litigation has been stayed pending the outcome of this proceeding.
[74] At the outset of the hearing it was accepted by Mr Kennelly for Dellisse that as a matter of law I can properly take the Australian assets into account in determining the size of the estate, but I can make orders only in respect of the New Zealand assets. That was consistent with the defendants’ position.
[75] I consider Dellisse’s concession in this regard to be correct as a matter of law. As summarised by one of the leading authors on this subject:2
The existence of immoveable assets situated abroad may, if there are other assets in respect of which jurisdiction exists to make an award, be taken into account by the Court for the purpose of determining the provision that should be made for an applicant.
[76] This is reflected in caselaw where, for example, Heath J found in Public Trust v Relph “[i]n determining how to divide the estate, I take account of the money received by Andrew and Priscilla from the Swiss assets.”3 Similarly, in Courteney v Pratley, Cull J took account of the overseas assets when making an award under the FPA.4 Therefore, when assessing whether there has been a breach of moral duty under the FPA, and the appropriate amount required to remedy such a breach, I will take account of the properties held by the estate in Australia.
2 W M Patterson Law of Family Protection and Testamentary Promises (5th ed, LexisNexis NZ, Wellington, 2013) at 5.2.
3 Public Trust v Relph [2009] 2 NZLR 819 (HC), at [56].
4 Courteney v Pratley [2017] NZHC 1761, at [54] and [58].
Constructive trust claim
[77] The constructive trust proceeding is based on a claim that Dellisse had made contributions to the three New Zealand properties owned by the estate at the date of death that gave her an entitlement to those properties being held in trust for her as to 50 per cent. If successful, that would bring the value of the New Zealand-based estate down to approximately $1,600,000. That would impact on the FPA claims so this issue needs to be considered ahead of those claims.
Family Protection Act claims
[78] At the outset of the hearing, the question of whether Mrs Moleta had breached her duty to Lorraine and Jolene was strongly contested, as well as the quantum of any award. However, as a result in part of observations made by me in the course of the hearing, Mr Kennelly advised that Dellisse acknowledged I might consider it appropriate to make some award but it should not be greater than 10 per cent to each, that is each would receive approximately $540,000.
[79] For reasons which I will set out below, I consider there is no doubt that Mrs Moleta breached her duty to Lorraine and Jolene.
[80] In terms of the FPA proceeding, the most significant issue between the parties as I see it is the quantum of any award.
Costs
[81]The parties asked to be heard separately on costs.
Constructive trust
[82] Dellisse claims a beneficial half-interest arising by constructive trust in the three properties in New Zealand that are solely owned by Mrs Moleta. The relevant properties are:
(a)120 Norman Lesser Drive, St Johns purchased in 1981 and recently sold for $2,121,000;
(b)1/97 Michaels Avenue, Ellerslie (estimated value between $800,000 and $990,000) purchased in 1987; and
(c)21A Balfour Road, Parnell (estimated value between $890,000 and
$1,100,000) purchased in 2002.
[83] There is a question mark over mortgages. As noted earlier there was no debt over Balfour Road or Norman Lesser Drive and then new debt was raised over them in the last few years of Mrs Moleta’s life. It seems there was further reshuffling and possible increasing of debt over the properties owned by the estate while Dellisse was executor. Both the Michaels Avenue and Balfour Road properties are now subject to mortgages to the ASB. After taking over as executor, Mr Darlow requested information on these mortgages from ASB but that has not yet been provided. I am advised that the total debt is unlikely to exceed $600,000 as noted earlier, and the defendants have proceeded on that basis for purposes of the proceedings. By contrast, I note there is no debt over Dellisse’s solely owned properties and no suggestion of new debt raised over the joint properties.
Relevant law
[84] A constructive trust arises by operation of law where one person has made contributions to a property but is not registered as an owner on the title and it would be unconscionable for the registered owner to have full beneficial ownership of the property.5
[85] As established in Lankow v Rose, to succeed on a constructive trust claim the claimant must prove that:6
(a)they made a contribution, direct or indirect to the property in question;
(b)they had an expectation of an interest in the property;
(c)their expectation must be a reasonable one in the circumstances; and
5 Lankow v Rose [1995] 1 NZLR 277.
6 At 295.
(d)the registered owner should reasonably expect to yield the claimant an interest.
[86] Any contribution must have added material rather than cosmetic value to the property,7 and must have manifestly exceeded any benefits received by the claimant.8
Argument
[87] Mr Kennelly submits that Dellisse contributed to the three properties in a more than minor way. He says that this case is comparable to Lankow v Rose, where the Court held the actions of Ms Rose had assisted in the accumulation of assets. He submits that Dellisse and her mother acquired and managed their properties together, whether they were owned jointly or solely by Mrs Moleta and that Dellisse made financial contributions to her mother and to her properties.
[88] He submits Dellisse made further contributions by caring for Mrs Moleta after she had the stroke in 2012 until her death in 2017. Dellisse says it would have cost over $3 million if they had employed someone to care for her mother as she did.
[89] Mr Kennelly contends that Mrs Moleta and Dellisse had a common intention to acquire properties and because of this, Dellisse has a reasonable expectation of an interest in the properties owned solely by her mother.
[90] Dellisse also gave evidence that she and her mother had promised each other that they would leave all of their properties to the other on their death.
[91] Counsel for the defendants, and particularly the estate, submit that Dellisse’s evidence on her contributions is vague and insufficient to discharge her evidential onus. They say in particular she gives no detail as to how much money she allegedly contributed to the three properties. They say the purported value of the care Dellisse provided Mrs Moleta does not withstand scrutiny and of itself, the provision of care will not found a proprietary interest. Jolene says, based on Private Care NZ rates for “stay at home” nursing, care for their mother would have cost more in the order of
7 Vervoort v Forrest [2016] NZCA 375, at [75].
8 Lankow v Rose, above n 5, at 282.
$300,000 over the five-year period. One of the jointly owned properties could have been sold and Mrs Moleta’s half-share used to pay for that care. She did not have to go into a rest home.
[92] The defendants also submit that Dellisse does not provide sufficient evidence of her (or Mrs Moleta’s) expectation that she had an interest in the three New Zealand properties. There was no documentary evidence generated by either that fairly indicated Dellisse had any equitable interest in the properties.
[93] Counsel for the defendants submit that if there was an expectation that Dellisse and her mother had a half-interest in the property purchased between them regardless of title, then her mother’s estate would similarly be entitled to a half-interest in the two Sydney properties solely owned by Dellisse. Mr Williams for the estate submits that it is telling that at no time did Dellisse ever treat a share of these two properties as being held on constructive trust for her mother.
Discussion
[94] I accept that the Lankow v Rose principle could apply in a case such as this. Dellisse and her mother lived together in a very close relationship for many years, both worked very hard, and their finances were no doubt intermingled and co-dependent at least ultimately. However, for a number of reasons, I do not consider the claim meets the criteria.
[95] First, Dellisse has not met the evidential burden on her to show that she contributed to the three New Zealand properties owned by her mother in a more than minor way:
(a)The Norman Lesser Drive property was purchased while Dellisse was a student in Dunedin. Dellisse asserts she paid Mrs Moleta board when she moved back to Auckland to live in the house with her. A constructive trust claim cannot be grounded on this sort of contribution. Amongst other things, Dellisse would have needed to pay rent if she had lived elsewhere. Dellisse also says she paid for repairs on Norman Lesser Drive but while there is evidence of repairs being
conducted, again there is no documentary evidence that Dellisse paid for them. And that is most unlikely to fit in other than the “minor” category.
(b)The Michaels Avenue property similarly was purchased many years ago when Dellisse was already living in Sydney, prior to her mother joining her there. Dellisse claims she sent Mrs Moleta money while she was living in Sydney. I have already said I consider that unlikely to be the case.
(c)Balfour Road was purchased in 2002, not long after Mrs Moleta moved to Sydney. Dellisse says she helped her mother research the property market before purchase and helped pay the mortgage, general expenses and maintenance costs and attended to general property management. But again there is no documentary evidence in support. And again, I consider it unlikely Dellisse would have paid money towards her mother’s solely owned property.
[96] Dellisse makes the general submission that her income maintained or supported the jointly owned properties and also the three properties owned solely by Mrs Moleta, from 1995 onwards. Again, this is not sufficiently supported by documentary evidence but it also seems implausible. Dellisse herself gave evidence that Mrs Moleta was working in an office job in Sydney until at least 1996 and that her mother also had rental income. Also, in the extensive correspondence produced from 2004 onwards from Mrs Moleta to Lorraine and Jolene there was no hint of Dellisse providing any funding towards Mrs Moleta’s properties in New Zealand. There are also bank statements from Mrs Moleta’s sole accounts showing her making regular payments to Dellisse from 1998 to 2002, 2005 to 2007 and 2009 to 2010. These are supported by a number of letters written by Mrs Moleta to Lorraine and Jolene indicating that she was financially supporting Dellisse and complaining that Dellisse had no money.
[97] Dellisse also claimed she managed the properties owned by her mother. I find Dellisse could not have made this contribution between 1991 and 2001, given detailed
evidence adduced by Jolene of the work she did managing the New Zealand properties and at no charge. From 2001 until she died, Mrs Moleta engaged property managers to manage her New Zealand properties. Mr Kennelly submits that even with a property manager there was considerable additional work required to maintain the properties. I acknowledge Dellisse would have helped her mother, particularly after her stroke, by typing out emails for her and organising maintenance work on the properties. But this would have been relatively minor.
[98] I am not persuaded that Dellisse made contributions to the three properties owned by Mrs Moleta that would support a constructive trust claim. The inverse appears to be true. Also Mrs Moleta provided financial support to Dellisse through a number of difficult years. I would also expect that Mrs Moleta’s equity in Norman Lesser Drive was leveraged so that the jointly owned properties could be funded.
[99] Dellisse provided what I accept was exhaustive care for her mother for five years but there is no causal relationship between that care and the acquisition, preservation or enhancement of Mrs Moleta’s properties.9 The properties were purchased long before Mrs Moleta’s stroke. I accept this care went vastly beyond the ordinary type of effort a child would make for a parent in such circumstances, but I find that to be at least in part of Dellisse’s own making. She at least played a part in preventing her sisters from helping her provide care to their mother, or even visiting her, in the final years of Mrs Moleta’s life. It would be inequitable in such circumstances for Dellisse to be able to rely on the value of her care in her constructive trust proceeding. I also consider that the cost of Mrs Moleta’s care would have been much closer to Jolene’s estimate and could if necessary have been funded out of the sale of a joint property. I note also that there seem to have been mortgages raised on Mrs Moleta’s properties to fund expenditure on joint properties, at least in the last few years of her life. This would also offset some of the care contribution.
[100] In any event, I also find that Dellisse had no reasonable expectation of an interest in the three properties solely owned by her mother. Such an expectation is contrary to the clear arrangements she and her mother made where each was registered
9 Lankow v Rose, above n 5, at 282; Vervoot v Forrest, above n 7, at [47]
as the sole owner of some properties and in joint ownership of others. It seems from Dellisse’s own evidence that their expectation was not that they considered themselves equal owners, but rather they agreed each to leave everything to the other on their death. There can be no question that Mrs Moleta (and Dellisse) both being intelligent and educated property investors understood the significance of the legal titles. It seems clear to me that specific decisions were made on each occasion. So for example, Mrs Moleta bought Michaels Avenue in her sole name in March 1988. That same year she and Dellisse jointly purchased Maaka Place. In 2002, Mrs Moleta purchased Balfour Road in her sole name and about that time, Dellisse purchased the two Sydney properties in her sole name. Then in 2009/2010 two further properties were jointly purchased in New Zealand. The interspersing of the types of ownership very strongly suggests to me that it was considered and agreed.
[101] Importantly, if Dellisse and her mother had an expectation of equal ownership on a Lankow v Rose footing, and particularly on the footing advanced by Dellisse that they acquired and managed their properties together whether owned jointly or solely, that would not apply just to properties solely owned by Mrs Moleta. It would logically apply across the board to all the properties they owned, regardless of title, including the properties solely owned by Dellisse. No concession is made in this regard by Dellisse, which strongly undermines her argument.
[102] The fact that Dellisse acquired Mrs Moleta’s half-interest in six properties by survivorship is also clearly relevant to any question of reasonable expectation.
[103] In all of these circumstances I see no basis on which equity would intervene to alter the registered ownership of the properties held by the estate in New Zealand.
[104] Finally, I note that the defendants obviously considered it significant that until she made the constructive trust claim, Dellisse consistently referred to the three properties at issue as belonging to the estate. That was simply a lack of understanding as to her possible equitable claim. But in the end, I agree she was right. The properties do belong to the estate.
[105]The constructive trust claim fails.
Family Protection Act
[106] Jolene and Lorraine both make claims against the estate under the FPA. They claim that their mother breached her moral duty to provide them with “proper maintenance and support”.10
Relevant law
[107] The principles relating to an FPA claim were summarised by the Court of Appeal in a frequently cited passage from Little v Angus:11
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. Whether there has been a breach of moral duty is customarily tested as at the date of the testator’s death; but in deciding how a breach should be remedied regard is had to later events.
(emphasis added)
[108] In Williams v Aucutt, the Court of Appeal stated that “support” is a wider term than “maintenance” and includes recognising belonging to the family and having been an important part of the overall life of the deceased.12 “Maintenance” refers to whether the claimant has adequate provision from their own resources.13
[109] Whata and Gendall JJ in TB v JB drew on decisions from the Court of Appeal and outlined a number of factors relevant to the evaluation of whether a breach occurred and the requisite remedy, including:14
(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;
10 Family Protection Act 1955, s 4(1).
11 Little v Angus [1981] 1 NZLR 126, at 127.
12 Williams v Aucutt [2000] 2 NZLR 479, at [52].
13 Auckland City Mission v Brown [2002] 2 NZLR 650, at [35].
14 TB v JB [2014] NZHC 1478, at [48].
(e)Entitling and disentitling conduct;
(f)Repair of parental abuse and neglect; and
(g)The size of the estate.
[110] In addition to these statements of principle, I have to keep firmly in mind that an award to a claimant should be no more than necessary to remedy the failure. This applies whether a claimant is in financial need or has a broader need for support or both.15 A proceeding such as this is not an opportunity simply to rewrite a will.
Breach of duty
[111] Applying the above principles I am satisfied that the total exclusion of Jolene and Lorraine from Mrs Moleta’s will was a breach of her moral duty to provide them with maintenance and support. As noted earlier, without making any actual concession, Mr Kennelly acknowledged during the hearing that I might consider there was a breach.
[112] Lorraine is in need of maintenance. She is single, with minimal savings and her income has reduced significantly. With superannuation she now has an income of approximately $32,000 per annum. She owns only part of the property she lives in. Her share is of modest value and she has had to borrow large amounts of money to fund this litigation. Lorraine also suffers from depression which I consider needs to be taken into account.
[113] Mrs Moleta also breached her moral duty to provide support to Lorraine. After Lorraine stayed in Takaka with her father as a teenager, Mrs Moleta never visited Lorraine. Lorraine did not receive any financial support at all from her mother from the age of 15. In my view Mrs Moleta saw herself as having no financial obligation at all to those children who stayed behind in Takaka. That has been demonstrated as a reasonable approach towards the boys, but not for Lorraine. Lorraine frequently travelled to visit her mother including over 20 trips to Sydney when Mrs Moleta lived there. They corresponded often through letters and phone calls until Mrs Moleta’s stroke when Lorraine was cut out. In the letters, it is clear that Lorraine was an
15 Henry v Henry [2007] NZCA 42, at [56].
important presence in Mrs Moleta’s life and vice versa and they had a close relationship. An award under the FPA is necessary to recognise Lorraine’s belonging in the family and important place in her mother’s life.
[114] Jolene is less in need of maintenance than Lorraine. However, she is approaching retirement age and has only a modest salary. Her assets are also modest by Auckland standards. Her husband’s income has recently been reduced and she worries her salary may decrease too.
[115] Jolene received gifts from Mrs Moleta at birthdays and Christmas and particularly after her children were born. Mrs Moleta paid Aimee’s private school fees and provided the children with generous gifts. It is clear Mrs Moleta was a proud grandmother of both Aimee and Scott. Jolene had a close relationship with her mother until she also was cut out completely. She helped her mother as much as she could throughout her life, particularly with the management of her properties. The failure to make provision for maintenance and support of Jolene in her will was a breach of Mrs Moleta’s moral duty.
Quantum of awards
[116] The next issue is quantum of the award required to remedy the breach of moral duty. As previously stated the estate is worth approximately $5.4 million. Lorraine and Jolene both say they should receive awards of $1.35 million, or approximately 25 per cent of the estate each.
[117] First, I consider that Jolene and Lorraine should receive equal awards from the estate. That is what they seek and it is fair in the circumstances given that Lorraine received a small provision from her father’s estate whereas Jolene received next to nothing; Lorraine received no financial help from her mother from the age of 15 compared to Jolene whose family received gifts and material assistance directed to education and Lorraine is in greater need of maintenance and support than Jolene, but on the other hand lives in a more affordable area.
[118] Mr Kelly, counsel for Lorraine, submits, referring to Williams v Aucutt, that where a child is not in financial need (which he says Lorraine is) and the estate has
sufficient assets, claimants may receive awards between 12.5 and 20 per cent.16 He says that the Court has a wide discretion and may make larger awards.17 He submits that percentages are a useful barometer for the adequacy of the award.
[119] Mr Kelly submits an award of $1.35 million, or 25 per cent of the estate, is appropriate taking account of Lorraine’s need for support as a result of her warm and loving relationship with Mrs Moleta, and her financial need as she goes into retirement with few assets and limited income.
[120] He submits an award of $1.35 million is similar to the awards given to adult children with financial needs in Auckland City Mission v Brown and Carson v Lane.18
[121] I note that in Carson the estate was larger, so as a percentage the awards were lower, as is customary. Where the estate is substantial, as this one is, it tends to be the dollar figure that drives the award more. In Brown, the claimant daughter was awarded
$850,000 in 2002 or just under 20 per cent of her father’s estate worth about
$4.6 million, and although each of four children were awarded $1.25 million in Carson, that was only just over seven per cent of the estate each, as the estate was so large ($17 million).
[122] Mr Fuscic, counsel for Jolene, submits that having regard to the magnitude of the breach, Jolene’s circumstances, the circumstances of Lorraine and Dellisse, and the size of the estate, the sum of $1.35 million is an appropriate level of provision to remedy the breach.
[123] As noted earlier, Mr Kennelly submits that an award of no more than 10 per cent is warranted. This submission appears to be grounded in the allegation that neither Jolene nor Lorraine had the relationship with their mother that they claim they had. He submits that there are elements of estrangement for both daughters and they took no steps to help care for their mother after the stroke. He says that if Mrs Moleta had valued her relationship with Jolene or Lorraine, she would have made
16 Williams v Aucutt, above n 12, at [47].
17 Moon v Carlin HC Auckland CIV-2010-404-5486, 23 February 2011 at [40].
18 Auckland City Mission v Brown, above n 13; Carson v Lane [2019] NZHC 3259.
provision for them in her will. Specifically, he says that if Mrs Moleta had valued her relationship with Lorraine, she would have visited her.
[124] Mr Kennelly submits that Jolene already received substantial benefits from her mother throughout her life, such as Mrs Moleta paying for Aimee’s private school fees. Mrs Moleta also paid Jolene’s own private school fees so that Jolene could better herself. (I note that Lorraine did not have the opportunity to attend a private school.)
[125] Mr Kennelly says that Lorraine turned down the opportunity to invest in property with her mother and in turn, turned down the opportunity to financially benefit. He says Jolene also did not use the opportunity to further herself by finishing her university degree.
[126] There is no doubt that Mrs Moleta had an extremely close relationship with Dellisse and clearly wished to leave her estate to Dellisse. That is a common theme of her wills for some time, give or take some relatively small bequests. (I think it is clear as well, at least as time went by, that Dellisse would have been very opposed to her mother leaving anything to her sisters.) Both Mrs Moleta and Dellisse had worked very hard to acquire properties and been jointly driven by that pursuit. It is true, as Mr Kennelly submits, that the other children had not shared that interest or drive. However, beyond that I reject his submissions.
[127] I consider there is the clearest breach of moral duty to Jolene and Lorraine. Lorraine in particular is not at all well-off heading into retirement. Neither of them has savings in any real sense. They have both been very loyal and loving daughters and done all they could to help their mother. Jolene’s contribution to managing the properties would have been considerable. Lorraine’s unreciprocated efforts to visit and help her mother with cards and gifts was also a considerable factor. I reject the argument that either of them had done anything whatsoever to deserve the estrangement that occurred from 2012 to 2017, and I consider there was no estrangement before that time. In fact over a large number of years Jolene and Lorraine had successfully done all they could to maintain and cherish the relationship. The fact they were unable to see their mother for five years was very cruel. As I have
said already, I consider Mrs Moleta’s relationship with both Lorraine and Jolene was important to all three of them.
[128] There is nothing to be gained by my making a finding as to what led to Mrs Moleta being secluded, except to say I am satisfied it was nothing to do with Jolene or Lorraine and I am satisfied that Dellisse had to have played a material part.
[129] I conclude that a just award would be the sum of $950,000 each, which represents just under 18 per cent of the estate to each. This amount will recognise Lorraine and Jolene’s rightful place in their mother’s family, but also is no more than reasonably required to ensure they can live comfortable but not luxurious lives. They will have enough to rehouse themselves on their own if they need to and to modestly augment their incomes. I consider the awards are also reasonably consistent with Brown and Carson as to quantum in particular, if not conservative compared to those cases.
[130] In fixing this amount I have taken Lorraine and Jolene’s asset position as exclusive of the costs they have incurred in this litigation. Mr Kelly submitted I could properly take these costs into account, without citing any authority in support. In my view, at least as a general rule, the costs incurred should be addressed in a separate costs application. Otherwise, there is double-counting.
[131] I note that this is not a case where I need to be concerned about the financial impact on Dellisse of the awards. The estate is substantial and Dellisse will receive the balance of it as well as the benefit of full ownership of the jointly owned properties and of course has her own additional assets.
[132] I am sure Mr Darlow will see to it that proper arrangements are made for payment. As much as reasonably possible should be paid immediately to reduce the impact of interest.
Conclusion
[133]The constructive trust claim is dismissed.
[134] Mrs Moleta breached her moral duty to support and maintain the second and third defendants.
[135] To remedy the breach, I order that Mrs Moleta’s final will of 22 December 2016 be varied to provide the second and third defendants $950,000 each from the estate.
[136] Costs are reserved. The defendants are to file submissions within three weeks and the plaintiff within a further two weeks. The defendants may file reply submissions within a further two-week period. No submission is to be longer than five pages.
Hinton J
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