Ormsby v Van Selm
[2016] NZHC 228
•22 February 2016
NOTE: ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980, FOR FURTHER INFORMATION, PLEASE SEE LATION/RESTRICTIONS-ON-PUBLICATIONS
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2015-419-184 [2016] NZHC 228
UNDER The Family Protection Act 1955 BETWEEN
ALAN DE LISLE ORMSBY Appellant
AND
JAKE VAN SELM First Respondent
JACQUELINE ANN VAN SELM Second Respondent
JANINE ALEXANDRA ORMSBY Third Respondent
Hearing: 17 February 2016 (by way of teleconference) Counsel:
D M O’Neill for appellant
D Mayall for second respondent
G M Spry for third respondentJudgment:
22 February 2016
JUDGMENT OF KATZ J [Application for leave to appeal]
This judgment was delivered by me on 22 February 2016 at 2:00pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Koning Webster Lawyers, Papamoa Niemand Peebles Hoult, Hamilton Norris Ward McKinnon, Hamilton
ORMSBY v VAN SELM [2016] NZHC 228 [22 February 2016]
Introduction
[1] Alan Ormsby (“Alan”) is the son of the late Elizabeth Ormsby (“Mrs Ormsby”), who died in 2007. Alan seeks leave to appeal to the Court of Appeal against a decision I gave in the High Court at Auckland on 13 November
2015 regarding his mother’s estate (“Judgment”).1 The second and third respondents
(“Tia” and “Janine” respectively) are Mrs Ormsby’s two surviving daughters. They oppose their brother’s application for leave to appeal.2
[2] In her will Mrs Ormsby left Alan the family farm, comprising approximately
98 per cent of her estate. Tia and Janine brought a successful challenge under s 4 of the Family Protection Act 1955 in the Family Court, on the basis that the will did not provide for their proper maintenance and support.3 The Family Court Judge ordered that the farm be divided equally between Alan, Janine and Tia.
[3] Alan appealed to this Court on the issue of quantum only. He did not dispute that there had been an egregious breach of moral duty on the part of Mrs Ormsby. I allowed Alan’s appeal and decreased Janine and Tia’s shares in the family farm from
33 per cent to 30 per cent and 25 per cent respectively. Alan’s share of the estate was accordingly increased on appeal from 33 per cent to 45 per cent. In his view, however, the awards in favour of his sisters are still excessive and he seeks to have them reviewed by the Court of Appeal.
[4] At its heart, the issue raised by Alan’s application for leave to appeal is whether the Court of Appeal should consider whether the 30 per cent and 25 per cent shares in the farm property I awarded to Tia and Janine go beyond the minimum necessary to remedy Mrs Ormsby’s breach of moral duty to them.
Leave to appeal – legal principles
[5] The application for leave is made under s 15(3) of the Family Protection Act
1955 and s 67 of the Judicature Act 1908. The principles to be applied are well
1 Ormsby v Van Selm [2015] NZHC 2822.
2 The first respondent is the executor of the will. He abides the decision of the Court.
3 van Selm v van Selm [2015] NZFC 3242, [2015] NZFLR 693.
settled.4 The scarce time and resources of the Court of Appeal are not to be wasted,
and expenses for other parties incurred “without realistic hope of benefit”.5
[6] In Waller v Hider the Court of Appeal expressed the test for granting leave as follows:6
The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.…
Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.
[7] The threshold for leave to bring a second appeal is accordingly a high one. The questions raised must be sufficiently important to justify a court going into the matter for the third time, with the delays and further expense that such a course inevitably entails.
[8] In Fisher v Kirby the Court of Appeal held that “A broad judicial discretion is to be exercised in the particular circumstances of each case having regard to the factors identified in the authorities”7 and that “It is well settled and not in dispute that, on appeal, this Court will not substitute its discretion for that of the Judge at first instance unless some reasonably plain ground is made out to vary the order made”.8
[9] As any appeal would be an appeal from the exercise of a discretion, the Court of Appeal will only interfere with the quantum awarded in this Court if it is established that there was an error of law or principle, or this Court took into account
an irrelevant consideration, failed to take into account a relevant consideration, or
4 Refer Snee v Snee [2000] NZFLR 120, (1999) 13 PRNZ 609 (CA) and Waller v Hider [1998]
1 NZLR 412 (CA).
5 Snee v Snee, above n 4, at [16]-[22]; Morris v Templeton (2000) 14 PRNZ 397 (CA) at [5]-[6]..
6 Waller v Hider, above n 4, at 413.
7 Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463 at [120].
8 At [124].
made a decision that was plainly wrong.9 As Heath J observed in Williams v
Crotty:10
[54] The assessment of adequate provision in a case such as this is something on which different Judges could quite easily form different views. An appeal against the quantum of an award under the 1955 Act is an appeal against an exercise of discretion. Provided the sum awarded was within a range reasonably available to the Judge, it is inappropriate for this Court to interfere with his decisions.
Proposed grounds of appeal
[10] In this case the applicant relies on the “error of law” ground for challenging the exercise of this Court’s discretion. He submits that the following are questions of law arising out of the Judgment that are capable of bona fide and serious argument:
(a) Has the Court awarded more than is necessary to repair the breach of moral duty?
(b)Does the award do more than the minimum necessary to remedy the breach?
(c) Has the Court significantly rewritten the terms of the Will?
(d) Alternatively, have the decisions in Williams v Aucutt11 and Auckland
City Mission v Brown12 been correctly interpreted?
(e) Has the approach in Williams and Auckland City Mission been properly applied to an adult child in need of support and maintenance?
9 Moon v Carlin HC Auckland CIV-2010-404-5486, 23 February 2011 at [7]; Horne v Public
Trust HC Nelson CIV-2010-442-44, 4 May 2010 at [22]. Paewai-Kohe v Paewai [2014] NZHC
3137 at [4]-[5]; AC v RCT [2014] NZHC 2769 at [19]-[21]; Black v Black [2014] NZHC 1478, [2015] NZFLR 9 at [38]; Bones v Wright [2013] NZHC 1922 at [39]. Cf Burnage v Gleeson HC Whangarei CIV-2010-488-151, 27 August 2010 at [24]-[26].
10 Williams v Crotty HC Hamilton CIV-2005-419-1292, 2 December 2005.
11 Williams v Aucutt [2000] 2 NZLR 479 (CA).
12 Auckland City Mission v Brown [2002] 2 NZLR 650 (CA).
[11] The applicant accepts that there has been a clear and egregious breach of moral duty, but submits that the award is too generous and goes beyond the minimum necessary to remedy the breach. He submits that this Court has rewritten the will on “fairness” lines, rendering the deceased’s wishes nugatory. Further, the Judgment is said to be inconsistent with Court of Appeal authority which emphasise a less generous, or more conservative approach, and that it is of public importance
that the award be reassessed consistently with that authority.13
[12] Finally, the applicant submits that the appeal has significant financial implications for him, so as to justify the expense and delay of a further appeal. He says that the Judgment leaves him with over $1,000,000 less than what was originally bequeathed to him.
Discussion
[13] In assessing quantum the Judgment reviews the relevant authorities and summarises the key principles contained within them, especially as they relate to quantum.14 Those principles are then applied to the particular circumstances of the case and a decision reached as to the quantum of award necessary to remedy the breaches of moral duty to Janine and Tia.
[14] The reasons why there was an egregious breach of moral duty by Mrs Ormsby are fully set out in the Judgment and also in the judgment of the Family Court. I will not repeat them in detail here, save to say that it is difficult to imagine two more worthy claimants than Janine and Tia. The childhood endured by all of the children (and the older three daughters in particular) was appalling by any standards. This likely contributed to the suicide of two of the Ormsby daughters as adults, and the death, through drug overdose, of a third daughter.
[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
13 Citing Williams v Aucutt, above n11; Auckland City Mission v Brown, above n 12; Henry v
Henry [2007] NZCA 42, [2007] NZFLR 640; Fisher v Kirby, above n 7..
14 Ormsby v Van Selm, above n 1, at [30].
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.
[16] The sole proposed issue on appeal (albeit expressed in a number of different ways) is whether the quantum of redress provided to Janine and Tia exceeded the minimum necessary to remedy the accepted breach of moral duty. It is not contended that the Judgment sets out the law on how quantum should be assessed incorrectly. Rather, the issue is whether that law was applied to the facts correctly.
[17] For example, the applicant refers to [50] of the Judgment, where it is stated that “Any award in [Janine’s] favour should clearly be towards the generous rather than niggardly end of the scale”. It is submitted that the legal test requires a neutral award rather than either a generous or niggardly award, and that the Judgment is in error to the extent that it suggests that a generous award was appropriate.
[18] It is necessary, however, to view the comment referred to in its full context, which is as follows:
[50] Janine’s home base is now Waiheke Island. Her adult son lives nearby. Her current financial and personal situation is precarious. She has not returned to full health since having cancer. She does not own a home, but house sits for friends. She has no assets of any value. Frankly, it is hard to imagine a more worthy claimant than Janine. There are few examples (if any) in the case law of claimants who have a stronger claim to maintenance and support under the Act. Any award in her favour should clearly be towards the generous rather than niggardly end of the scale.
[Emphasis added]
[19] Possibly the last sentence could have been expressed more clearly. Viewed in context, however, it is reasonably apparent that what was being stated was that the minimum necessary required an award which is generous relative to awards given in other cases, because Janine is an exceptionally worthy claimant. It was not being suggested that her circumstances justified an award more generous than the minimum necessary required to redress the breach of moral duty. Rather, the breach of moral duty is so egregious in this case that an award more generous than that made in other cases (involving less egregious breaches) is necessary.
[20] Otherwise the applicants’ objections all relate to whether the quantum awarded was excessive, and whether this Court rewrote the will on “fairness” grounds or awarded more than the minimum required. The applicant suggests that it is of public importance that the Court of Appeal substitutes an award consistent with the “conservative approach” as applied in previous cases.
[21] In my view, however, the questions posed by the applicant are not questions of public importance. Indeed it is questionable whether most or all of them are legal questions, rather than simply challenges to the exercise of this Court’s discretion in a more general sense.
[22] The modern approach to Family Protection claims is well settled and was set out fully in the Judgment.15 It is well established that the Court should do no more than is necessary in the circumstance of the case to redress a testator’s breach of moral duty (sometimes referred to as “the conservative approach”). The Court cannot rewrite a will because of a perception that it is unfair.16 Awards should not be unduly generous or unduly niggardly.17
[23] There is no need for further elaboration or clarification of these principles by the Court of Appeal. The law is clear. Culminating in the 2007 case of Henry, there has been extensive judicial consideration of the legal principles that are to apply in relation to claims under the Family Protection Act.
[24] Application of the law to the facts of each particular case will, on the other hand, always involve a degree of judicial discretion and can be a difficult exercise. The “magnitude of the breach and the level of provision appropriate to remedy it are inextricably linked. The latter should be proportionate to the former”.18 In this case the awards of 30 per cent and 25 per cent were undoubtedly significant but not, in my view, out of line with previous High Court and Court of Appeal authority relating
to claims involving impecunious claimants where there has been a particularly
15 At [30].
16 Williams v Aucutt, above n 11, at [70]; Auckland City Mission v Brown, above n 12, at [36],
Henry v Henry, above n 13, at [55] and [58].
17 Fisher v Kirby, above n 7, at [120].
18 National Heart Foundation of New Zealand v Carroll (2009) 28 FRNZ 268 (HC) at [49];
Little v Angus [1981] 1 NZLR 126 (CA) at 127.
egregious moral breach and the claimants are in financial need. The awards were commensurate with other comparable claims in cases where the conservative approach has been followed. For example, in Auckland City Mission v Brown and Fisher v Kirby the claimants were awarded approximately $870,000 and $650,000 respectively to provide each of them with a freehold home in the place they lived and a contingency fund.
[25] Significant awards were justified because of the exceptional circumstances of the case (as more fully set out in the Judgment). The quantum of the awards were benchmarked against the costs of providing reasonable accommodation and, possibly, a small contingency fund. Although the awards depart significantly from the will, the breach of moral duty was so egregious that such a departure was
necessary to provide for the minimum necessary to remedy the breach.19 It is clear
from Auckland City Mission v Brown and other cases that there may be occasions when a remedy inevitably invites a significant disturbance to the testator ’s wishes. As this Court observed in Fowler v Fowler: 20
It is trite law that in exercising jurisdiction pursuant to the Family Protection Act 1955 the Court ought to do that which is necessary to remedy the moral breach and no more, and that the Act does not give a judicial fiat for the rewriting of Wills. This is, however, an unusual case. The nature of the Will, judged against the steps necessary to repair the moral breach, result in a fairly significant rewriting of the Will. This is unavoidable.
Those comments are equally apt in this case.
[26] In my view none of the questions raised (as set out at [10] above) are questions of law capable of bona fide and serious argument involving public or private interest sufficient to outweigh the cost and delay of a further appeal. There is no need to clarify the law in this area and indeed no suggestion that the law as set out in the Judgment has been mis-stated in any respect. Rather, the applicant is essentially seeking to have the Court of Appeal substitute its discretion as to the
appropriate quantum of an award for the discretion of this Court.
19 Fowler v Fowler HC Auckland M1805/91, 5 April 1993 at 7.
20 Fowler v Fowler & Ors (High Court, Auckland, M1805/91, 15 April 1993, Anderson J) at page 7.
[27] The issues have been addressed carefully and comprehensively in both the Family Court and then in this Court, on appeal. While the appeal from the Family Court was allowed, both Courts accepted that there was a serious breach of moral duty and provided significant and relatively similar levels of redress (albeit there was a downwards adjustment in this Court).
[28] As for the applicant’s submissions in relation to the financial impact of the Judgment on him ($1,000,000 less than what he was bequeathed), in my view they are somewhat over-stated. While the impact of the Judgment is not insignificant, the applicant does not dispute that there was an egregious breach of moral duty. As noted at [42] of the Judgement, he accepted that an award of up to 40 per cent of the estate to his sisters could be justified. Janine and Tia were ultimately awarded 55 per cent of the estate in the Judgment. The relevant difference is accordingly 15 per cent of the estate. There was no realistic prospect (as Alan accepted in both the Family Court and this Court) of Alan ever receiving what he was bequeathed, given the clear breach of moral duty to his sisters.
[29] Mrs Ormsby died in 2007. Litigation involving various estate issues has been ongoing for seven years. The interests of finality also weigh heavily against granting leave to appeal.
Result
[30] The application for leave to appeal to the Court of Appeal is dismissed.
[31] My preliminary view is that the respondents are entitled to costs on a 2B scale basis, given their successful opposition to the leave application. If costs cannot be agreed based on that indication, then leave is reserved to file memoranda. Any memorandum from the respondents is to be filed by 11 March 2016, with any
response from the applicant to be filed by 18 March 2016.
Katz J
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