Ormsby v van Selm
[2016] NZCA 323
•11 July 2016 at 9.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA122/2016 [2016] NZCA 323 |
| BETWEEN | ALAN DE LISLE ORMSBY |
| AND | JAKE VAN SELM |
| AND | JACQUELINE ANN VAN SELM |
| AND | JANINE ALEXANDRA ORMSBY |
| Hearing: | 16 June 2016 |
Court: | Ellen France P, Randerson and Winkelmann JJ |
Counsel: | D M OʼNeill for Applicant |
Judgment: | 11 July 2016 at 9.30 am |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined.
BThe applicant must pay the second and third respondents costs for a standard application for leave on a band A basis and usual disbursements.
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REASONS OF THE COURT
(Given by Ellen France P)
A family protection claim
The applicant, Alan Ormsby (Alan), and the second and third respondents (Tia and Janine respectively) are the surviving children of the late Elizabeth Ormsby who died in 2007. Under her will, Mrs Ormsby left Alan the family farm. The farm was valued at the relevant time at $2,330,000 and comprised the bulk of her estate.[1] Janine and Tia brought a successful challenge under s 4 of the Family Protection Act 1955 in the Family Court on the grounds Mrs Ormsby’s will did not provide for their proper maintenance and support. Judge Riddell ordered that the will be altered so that the farm vested in Alan, Janine and Tia in equal shares.[2]
[1]The residue of the estate was in the order of $235,000.
[2]Van Selm v Van Selm [2015] NZFC 3242, [2015] NZFLR 693 [the Family Court judgment].
Alan appealed to the High Court on the issue of quantum. His appeal was allowed and Janine and Tia’s shares in the farm were reduced from 33 per cent to 30 per cent and 25 per cent respectively.[3] Alan unsuccessfully sought leave to appeal that decision from the High Court to this Court.[4] He now seeks leave to appeal from this Court.
[3]Ormsby v Van Selm [2015] NZHC 2822 [the High Court judgment].
[4]Ormsby v Van Selm [2016] NZHC 228 [the leave judgment].
The primary issue Alan seeks to raise in the proposed appeal is whether Katz J’s award went beyond the minimum necessary to remedy Mrs Ormsby’s breach of moral duty to Janine and Tia. In particular, Alan wishes to argue the Judge incorrectly assessed what was necessary by reference to where Janine and Tia lived and the reasonable costs of providing accommodation in those two geographical locations.
Janine and Tia oppose leave on the basis the proposed appeal does not meet the test for leave as set out in Waller v Hider.[5] Namely, that the appeal:[6]
(a)raises some question of law or fact capable of bona fide and serious argument; and
(b)involves some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.
Our evaluation
[5]Waller v Hider [1998] 1 NZLR 412 (CA). The first respondent, the executor of Mrs Ormsby’s will, abides the decision of the Court.
[6]At 413.
We do not consider the proposed appeal raises any question of law or fact capable of bona fide and serious argument. The Judge has applied the well‑established principles in assessing quantum. Katz J has not treated the costs of providing accommodation in the areas in which Janine and Tia lived as a proxy for considering what was necessary to remedy Mrs Ormsby’s breach of moral duty.
To explain this conclusion it is necessary to set out in some detail the approach taken by the Judge. The first point to note is that it was accepted in the High Court that this was an egregious breach of moral duty.[7] As Katz J said in declining leave to appeal, “it is difficult to imagine two more worthy claimants than Janine and Tia”.[8] As the Judge also said, “the childhood endured by all of the children (and the older three daughters in particular) was appalling by any standards”.[9] In the circumstances, Katz J observed:
[15] It is not surprising that Alan elected to largely wash his hands of further family involvement and move to Australia in his 20s, where he has lived ever since. What is perhaps surprising, however, is that despite their dire upbringing, Janine and Tia were dutiful daughters throughout their lives and assumed the burden of looking after their parents in their old age. Further, both daughters are not financially well off, with Janine being particularly impoverished.
[7]The High Court judgment, above n 3, at [49].
[8]The leave judgment, above n 4, at [14].
[9]At [14].
Accordingly, the only issue in the High Court was the quantum of the award necessary to remedy the breaches of moral duty. There is no dispute that the Judge set out the correct principles applicable to this question, citing from this Court’s decisions in Williams v Aucutt,[10] Auckland City Mission v Brown,[11] and Henry v Henry.[12]Relevantly for present purposes the Judge noted:[13]
(d)In cases of financial need, the amount necessary to remedy the failure to make adequate provision in the will, will be able to be determined with greater precision than in cases where the need is more of a moral kind.
(e)The size of the estate and any other moral claims on the deceased’s bounty are relevant factors.
(f)In assessing whether the deceased has made appropriate provision for the claimant’s proper maintenance and support, and what would be required to remedy a failure, the court should do no more than the minimum to redress a testator’s 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. Testators are 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 Act.
(g)The Court’s power does not extend to rewriting a will because of a perception that it is unfair. Nor is disparity in the treatment of beneficiaries sufficient, in itself, to establish a claim.
(h)Although awards should not be unduly generous, nor should they be unduly niggardly particularly where the estate is large and it is not necessary to endeavour to satisfy a number of deserving recipients from an inadequate estate.
[10]Williams v Aucutt [2000] 2 NZLR 479 (CA).
[11]Auckland City Mission v Brown [2002] 2 NZLR 650 (CA).
[12]Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.
[13]The High Court judgment, above n 3, at [30] (footnotes omitted).
The Judge then examined the approach taken in the Family Court. The Judge acknowledged that the tragic facts meant the temptation to rewrite the testator’s will was a strong one. Katz J considered the Family Court Judge had erred in this way. The focus, Katz J said, was on what was necessary to provide for a claimant’s proper maintenance and support, not what the Judge thinks would be “fair”.[14] Katz J also reminded herself that the task was to do “no more than the minimum to redress the breach of moral duty that has occurred”.[15]
[14]At [39].
[15]At [39].
Next, Katz J addressed what was required in the present case. Her Honour considered authorities dealing with awards to children on a family recognition basis. She saw Janine and Tia as having a very strong claim to an award on this basis but also considered there was a demonstrated financial need. The latter factor, in Katz J’s view, took this case “significantly beyond those cases where awards have been made on family recognition grounds alone, often in relation to children who have become estranged from their parent”.[16]
[16]At [49].
Katz J turned to Janine and Tia’s particular financial positions. Both were in financial need. The Judge saw Auckland City Mission v Brown and Fisher v Kirby[17] as providing “helpful guidance” in assessing what was necessary in this case.[18] Finally, before determining the amount of the award, Katz J reiterated that it was necessary to do no more than the minimum to redress the breach of moral duty.
[17]Auckland City Mission v Brown, above n 11; and Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463.
[18]The High Court judgment, above n 3, at [55].
As this description of the judgment illustrates, the Judge has directed herself in accordance with the correct principles.
The applicant submits that nonetheless Katz J placed too much stock on the submission from the second and third respondents that their maintenance and support necessitated an award in the region of $850,000. In particular, Mr O’Neill points to the passage in the judgment noting that such an award “would provide sufficient funds for a suitable (but far from extravagant) home in either Hamilton (Tia) or Waiheke Island (Janine) and a modest contingency fund”.[19] Katz J also said she hoped the awards would enable both Janine and Tia “to acquire suitable homes, debt free”.[20]
[19]At [56].
[20]At [58].
However, we do not see these comments as any more than observations of what the Judge saw as the minimum required to address the egregious breach of moral duty. In other words, the Judge has not approached the matter from the perspective of allowing geographical location determine what is necessary to redress the breach. Rather, that factor operated as a cross-check on the assessment. The approach adopted is consistent with that taken in this Court’s decision in Fisher v Kirby.[21] The estate in that case was some $3.7 million. The appeals and cross-appeals related to three of the testator’s children. An award of some $640,000 was seen as appropriate for one of the children who had few assets and ill health to enable him to obtain reasonable accommodation, and to provide the “appropriate” level of support “in the circumstances”.[22]
[21]Fisher v Kirby, above n 17.
[22]At [146].
It follows that this case is simply an illustration of the application of well‑settled principles to a case of a particularly egregious breach of moral duty. No question of law or fact capable of bona fide argument arises.
Result
For these reasons, the application for leave to appeal is declined. Costs should follow the event. There will be an order that the applicant pay the second and third respondents costs for a standard application for leave on a band A basis and usual disbursements.
Solicitors:
Koning Webster Lawyers, Papamoa for Applicant
Haigh Lyon, Auckland, for First Respondent
Niemand Peebles Hoult, Hamilton for Second Respondent
Norris Ward McKinnon, Hamilton for Third Respondent
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