Murphy v Cassells HC Palmerston North CIV-2007-454-398
[2008] NZHC 2603
•30 September 2008
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV-2007-454-398
UNDER the Family Protection Act 1955
IN THE MATTER OF the Estate of Roslein Theresa Murphy of
Palmerston North, deceased
BETWEEN ROSEANNE THERESA MURPHY Plaintiff
ANDSUSAN MARY CASSELLS First Defendant
ANDTHE ROYAL NEW ZEALAND FOUNDATION OF THE BLIND (MANAWATU BRANCH), THE LEPROSY MISSION NEW ZEALAND (MANAWATU BRANCH), THE FRED HOLLOWS FOUNDATION OF NEW ZEALAND, THE AROHANUI HOSPICE (MANAWATU BRANCH), THE CHILD CANCER FOUNDATION (INC) (MANAWATU BRANCH), THE NEUROLOGICAL FOUNDATION OF NEW ZEALAND (MANAWATU BRANCH), THE SQUARE TRUST RESCUE HELICOPTER (MANAWATU BRANCH) and ST JOHN'S AMBULANCE (MANAWATU BRANCH)
Second Defendants
Hearing: 26 September 2008
Counsel: G A Paine for plaintiff
T Cleary for second defendants
Judgment: 30 September 2008
JUDGMENT OF DOBSON J
MURPHY V CASSELLS AND ORS HC PMN CIV-2007-454-398 30 September 2008
[1] This claim under the Family Protection Act 1955 (“the Act”) is brought by the plaintiff as the surviving child of the testatrix, who formerly lived in Palmerston North and died in November 2006, leaving an estate of some $670,000 which has grown to some $687,000 whilst awaiting the outcome of these proceedings.
[2] The plaintiff was born in 1954. She has been with a religious order in Australia since at least 1987, initially as a novice and then as a sister of the order. The plaintiff had a brother, Sheridan, who married and is survived by two daughters, Sheridan having died in 2000.
[3] The plaintiff acknowledges a substantial period of estrangement between her and her mother, which she attributes largely to her mother seeing her as siding with her father through the course of what was an extremely bitter and protracted divorce. A Will completed by the testatrix in 1987 justified a lesser provision for the plaintiff on account of a dispute about the plaintiff’s apparent refusal to allow the testatrix to occupy a house in Woodville that had been bequeathed to the plaintiff by her maternal grandmother. The explanation in that Will also referred to the plaintiff being in a religious order with the statement “…and as such will be supported by the Order throughout her life”.
[4] The estranged husband of the testatrix who was the plaintiff’s father, and her brother, Sheridan, having both died, in the last years of the testatrix’s life there was a substantial reconciliation between the plaintiff and her mother. The plaintiff travelled from Australia on numerous occasions to be with her mother and help her through ill health and residential re-location. The evidence of the plaintiff, which is not contested, is that mother and daughter were on positive terms again by the time the testatrix died, and that in the last visits the plaintiff made, there was a positive rapport. The plaintiff’s evidence is that she discussed her own future, including the prospect of her leaving the religious order that she has been with.
[5] The operative Will, completed in December 2005, provided specific bequests to the plaintiff, and to a friend of the testatrix, in the sum of $10,000 each, and thereafter the residue was to be held as to one half for the two granddaughters
(ie daughters of the son, Sheridan). The second half of the residue was to be paid in
14 shares, as follows:
a) Two shares to the Royal New Zealand Foundation of the Blind
(Manawatu Branch);
b) Two shares to the Leprosy Mission New Zealand (Manawatu Branch);
c) Two shares to the Fred Hollows Foundation of New Zealand;
d) Two shares to the Arohanui Hospice (Manawatu Branch)
e) Two shares to the Child Cancer Foundation (Inc) (Manawatu Branch)
f) Two shares to the Neurological Foundation of New Zealand
(Manawatu Branch)
g) One share to The Square Trust Rescue Helicopter (Manawatu Branch)
h) One share to the St Johns Ambulance (Manawatu Branch).
[6] The Palmerston North solicitor who prepared the Will exhibited to an affidavit the documents from his file relating to that Will. These included a file note dated 8 November (presumably 2005) which recorded a meeting with the testatrix the day before the note was made, recording he had discussed her Will with her at length. The note continued:
I expressed concern re the proposed gifts to her daughter and granddaughters in respect of FPA claims – we discussed the size of her estate. She was not happy with her daughter (she is apparently in some church order) – she bullies her.
She felt alienated from her granddaughters and daughter in law.
I advised her of the likelihood of claims and the issue of “moral” duty. She was certain of her wishes and in my view fully understood the issues.
Legal principles
[7] The claim is brought pursuant to s 4 of the Family Protection Act 1955, which provides as follows:
(1)If any person (referred to in this Act as the “deceased”) dies, whether testate or intestate, and in terms of his or her will or as a result of his or her intestacy adequate provision is not available from his or her estate for the proper maintenance and support of the persons by whom or on whose behalf application may be made under this Act, the Court may, at its discretion on application so made, order that any provision the Court thinks fit be made out of the deceased's estate for all or any of those persons.
[8] Court of Appeal decisions provide guidance on the application of the section to such claims, including the following propositions:
a) The assessment of whether there has been a breach of moral duty giving rise to a claim under the section is to be determined at the date of the death of the testatrix, but the extent of what will be an adequate provision for the claimant can have regard to circumstances arising after that date: Henry v Henry [2007] NZFLR 640 at [59], [60].
b)The size of the estate and other moral claims on the bounty of the deceased are highly relevant to judging, by the standards of a wise and just testator, whether there has been a breach of moral duty: Williams v Aucutt [2000] 2 NZLR 479 at [35], Little v Angus [1981] 1 NZLR
126.
c) Notions of “maintenance and support” are a composite expression. “Maintenance” contemplates the specific financial requirements for day to day living. “Support” connotes a wider notion of “sustaining, providing comfort”: Williams v Aucutt (supra) at [52]. The wider notion may extend to recognition, in a financial way, of the claimant’s family relationship with the testatrix.
d) The Court intervenes to rectify a breach of the testatrix’s duty.
Changing social attitudes may affect the perception of the extent of
such duty. The Court intervenes only to the extent necessary to repair the breach so that a generous provision is not warranted and the Court is not authorised to re-write the Will merely because it was perceived to be unfair to a family member: Auckland City Mission v Brown [2002] 2 NZLR 650 at [33]-[36].
e) It is not inappropriate for charities who are beneficiaries to challenge the claim. This is particularly so where there is otherwise no testing of the claimant’s argument for greater provision. Such beneficiaries do not have to justify the share given to them and it is likely to be helpful to the Court to not have a one-sided argument: Auckland City Mission, [39]-[41].
[9] Here, provision of a $10,000 legacy to her only surviving child clearly constituted a breach of the testatrix’s moral duty. Mr Cleary for the charities accepted that that was so.
[10] The argument focused very much on how the extent of that duty is to be assessed. It was recognised by both the plaintiff and on behalf of the charities that any further provision for the plaintiff ought not to be at the expense of the one half of the residue being held in trust for the two granddaughters of the testatrix. The issue therefore is what part of the half of the residue destined for the charities needs to be diverted to the plaintiff, in order to remedy the breach of moral duty.
[11] The plaintiff’s position is that she intends to leave the religious order of which she has been a member for many years, and will do so with only a leaving gratuity of A$20,000. In her first affidavit, she stated that she would use money from her mother’s estate to make life easier for herself and “for some charitable purposes”. She deposes that she is committed to leaving her entire estate to her two nieces who are also the beneficiaries of the half of the testatrix’s estate that it is recognised should not be touched by the present claim.
[12] In her second affidavit sworn in May 2008, she deposed:
I have little doubt that in 12 months I will no longer be a Religious Sister. I also have little doubt that my Mother would not have wished me to be impecunious on (sic) the way that I will be and I believe fervently that she would have wished me to have received a greater share of her Estate than the Will provided for.
[13] Mr Paine argued in support of her claim that the appropriate step to remedy the breach of duty is, in effect, to reverse the position of the plaintiff and the charities so that she becomes entitled to the 50 percent of the residue presently going to the charities, subject to recognition of small bequests to each of those charities. This approach is justified on the basis that the Court should recognise the plaintiff will have a real need for day-to-day maintenance on leaving the religious order with only
$20,000. Mr Cleary questioned the extent of her other assets, referring to the house in Woodville that had been left to the plaintiff by her maternal grandmother. Although that was not covered in her affidavits, Mr Paine advised from the Bar that the plaintiff had left her father with a power of attorney enabling him to manage that property on her behalf whilst she was in Australia, and that by the time of his death, her father had mortgaged the property to meet his own financial obligations, and that the property has long since been sold, producing nothing for her.
[14] As to the extent of the plaintiff’s financial needs, Mr Cleary argued that the matter should be looked at on the basis of her position as at both the date of death, and the date of hearing. That position is that she has, for many years, been a member of a religious order, and that the Court can take judicial notice of the fact that the material requirements of religious sisters are cared for, to the extent that they are recognised. They are housed and fed and their modest material needs are provided for by the order of which they are a member. He further argued that there was no certainty that the plaintiff’s position (and therefore the extent of her needs) would change.
[15] Mr Cleary argued that the plaintiff should not have an extent of financial need recognised which depended on a change in lifestyle that arose as a matter of her own election some years after the testatrix had died. It is implicit in this argument that the plaintiff does have a substantially greater need for maintenance if she pursues her aspiration of leaving the religious order and living independently. Mr Cleary was inclined to suggest that the terms of her affidavits do not commit to
that course totally, and indeed it is a fair inference that when she might do that and the circumstances in which she does it are likely to be affected by the outcome of this claim.
[16] However, I see no reason to reject the genuineness of the plaintiff’s evidence that she has wished to leave her religious order and live independently, since a date before her mother’s death. She describes her discussions with her mother as including her “indecision as to whether or not I should leave the order”. At the time of those discussions, she had “come to a tentative conclusion that it would be best if I were to leave the order”. Her view on her future as at May this year is that expressed in [12] above.
[17] I propose to assess the extent of her needs on the basis of the expressed intention to live independently of the order. She will be a social worker, no doubt earning very modestly, and still devoting her life to improve the lot of others. Because of her situation with the order, she will leave it without having accumulated any substantial assets, and in particular without investing in a home for herself. It is realistic to assess her needs on the basis that no provision from her mother’s estate would be sufficient to enable her to acquire a property of her own, but rather, prudently invested, the income would generate a supplement to whatever she is able to earn as a social worker.
[18] The cases are clear that the terms of an order under the Act ought to disturb the terms of a challenged Will as little as possible. Because of the terms of this Will, and the agreed exclusion of the one half of the estate held in trust for the testatrix’s granddaughters, it makes little difference as to whether further provision for the plaintiff is made by way of a bequest of a specific sum which appears to be the least intrusive mode preferred in many cases, or by allocating to her a percentage of the half of the residue that would otherwise go to the charities. In this case, I prefer the latter approach in part because I have been asked by Mr Cleary to defer a determination on costs, pending the substantive outcome and, depending on the arguments advanced on costs, a proportional division between the claimant and the charities affords scope for greater flexibility in determining the true incidence of costs after the event.
[19] I consider that provision of one quarter of the total residue, namely half of the residue that was left to the charities in terms of the Will, is the minimum provision required to correct the breach of moral duty owed by the testatrix. In round terms, this would amount to a distribution to the plaintiff of a little more than $170,000, before any account is taken of costs. Unless supported by more than modest earnings as a social worker, that sum is unlikely to be sufficient to enable the plaintiff to buy a residential property because once committed to the purchase, she would be unlikely to be able to service a mortgage for the balance of the purchase price.
[20] Therefore, assuming its investment to produce an ongoing income, it would provide a modest supplement for living expenses, but could hardly be described as generous.
[21] Accordingly, I find that the claim of breach of duty is made out, and order that the first equal share of the residue is to be divided as to one half to the plaintiff, and the other half to the charities in the 14 shares provided for in clause 5.4.1 of the Will. That provision is in substitution for the $10,000 legacy, and so the plaintiff will have to give the estate credit for that sum.
[22] A specific issue between the plaintiff and the trustee of the estate was liability for a headstone for her mother. I was advised at the hearing that there was no longer a dispute over this, and that that liability is to be met by the estate.
[23] I invite Memoranda from counsel on the issue of costs, if they are not able to be agreed.
Dobson J
Solicitors:
Dallas Woods, Palmerston North for plaintiff
Grant O’Donnell, Palmerston North for first defendant
Jacobs Florentine, Palmerston North for second defendants
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