Paewai v Paewai-Kohe
[2015] NZCA 437
•11 September 2015 at 2.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA331/2015 [2015] NZCA 437 |
| BETWEEN | API TERINA PAEWAI HUIARANGI PAEWAI SMITH ENA PAEWAI KAREEVE MOANA WITEHIRA, KAMILLA MARIANA WITEHIRA AND KAYLA IVY EMMA WITEHIRA AS SUCCESSORS TO KARA IVY PAEWAI WITEHIRA (DECEASED) MANAHI MONTROSE PAEWAI NOEL MEHA PAEWAI |
| AND | ALMA RUTH PAEWAI-KOHE ORA GOING-RICHARDSON AND DUNCAN RICHARDSON |
| Hearing: | 7 September 2015 |
Court: | Harrison, French and Cooper JJ |
Counsel: | T Molloy for Applicants |
Judgment: | 11 September 2015 at 2.30 pm |
JUDGMENT OF THE COURT
AThe application for leave to appeal is dismissed.
BThe respondents are entitled to costs calculated for a standard application for leave to appeal on a band A basis with usual disbursements.
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REASONS OF THE COURT
(Given by Cooper J)
The applicants, all of them children or grandchildren of Hineapa Paewai (deceased), seek leave to appeal to this Court under s 67(2) of the Judicature Act 1908 and s 15(3) of the Family Protection Act 1955 (the Act) against a judgment of Thomas J.[1]
[1]Paewai-Kohe v Paewai [2014] NZHC 3137 [High Court judgment].
Thomas J had allowed an appeal against a Family Court decision granting the respondents’ substantive application under s 4 of the Act.[2] She subsequently refused an application for leave to appeal to this Court.[3]
[2]Paewai v Going-Richardson [2014] NZFC 6250 [Family Court judgment].
[3]Paewai v Paewai-Kohe [2015] NZHC 1007.
Api Paewai, Huiarangi Paewai Smith, Ena Paewai, Manahi Paewai and Noel Paewai are five of the deceased’s children. Nitama and Kara Witehira were also children of the deceased, and are themselves now deceased. The fourth applicants, Kareeve, Kamilla and Kayla are the children of Kara Witehira, and so they are the deceased’s grandchildren. Alma Paewai-Kohe was the eighth of the deceased’s children and the second respondents are the executors of Mrs Paewai’s will.
Mrs Paewai died on 29 October 2009. She made her last will on 4 July 2008, when she was 82 years old. Under the will, her estate was to be divided as follows:[4]
[4]High Court judgment, above n 1, at [9].
(a)The family home at 7 Hillside Crescent, Mount Eden, Auckland, was left to Alma together with one half of the land at the address on which the dwelling was erected.
(b)Following subdivision, the other half of the land was to be sold.
(c)The proceeds of sale – net of costs of subdivision and sale – were to be divided between Ena (Auckland), Kara (Manurewa), Noel (Auckland), Huiarangi (Gold Coast), Api (Auckland) and Manahi (New South Wales) in the following proportions:
(i)Ena and Manahi were to receive 10% each;
(ii)Noel, Huiarangi and Api were to receive 20% each; and
(iii)Kara was to receive 20% on trust for her maintenance and welfare during her lifetime and then the balance to her three children: Kareeve, Kayla and Kamillia.
(d)Alma was to retain the chattels during Nitama’s lifetime.
(e)After Nitama’s death the chattels were to be distributed between the children in accordance with a list Mrs Paewai left with the will.
(f)Any residue of the estate was to be divided between the children in equal shares.
At the time of the High Court hearing, the major asset in the estate was the property at 7 Hillside Crescent. It was valued at between $2.5 and $2.8 million. When the will was made, Nitama was still alive. He had Down Syndrome, requiring constant care. Mrs Paewai included in her will a statement that:
… In making this gift I am taking into account the assistance [Alma] has given to me and my son Nitama and that she will continue to provide a home for Nitama during his lifetime.
The effect of the will was to leave 64 per cent of the estate’s value to Alma, 3.6 per cent to Ena and Manahi and 7.2 per cent to the remaining children.
Family Court judgment
In the Family Court, Judge McHardy determined that by making her will in these terms Mrs Paewai had breached the moral duty she owed her children. His conclusion was based on the disparity of the bequests to Alma compared with those to the other children and grandchildren. The Judge also identified an apparent failure to take into account the likelihood that Nitama would not survive Mrs Paewai very long, and that Alma was unlikely to have to care for him over a long period.
The Judge considered Mrs Paewai should also have taken into account that by postponing distribution until both she and Nitama were dead, equal division would have been appropriate for the purposes of s 4 of the Act.[5] He considered Mrs Paewai had assumed some of her children were in a better financial position than they were. Overall, there was nothing in the circumstances justifying a wise and just testator in the position of the deceased distributing her estate in “such an unequal fashion”.[6]
[5]Family Court judgment, above n 2, at [50].
[6]At [55].
The Judge ordered that the Hillside Crescent property be sold, and that the net proceeds of sale be divided equally between the siblings, with Kara’s children taking her share in equal amounts.
High Court judgment
Thomas J held the Family Court Judge erred in law by adopting a presumption of equal sharing amongst the children.[7]
[7]High Court judgment, above n 1, at [78] and [83].
However Thomas J agreed with the Family Court Judge that there had been a breach of moral duty judged by the standards of a wise and just testator. She considered all of the applicants had demonstrated financial need and they were all entitled to support to a greater extent than provided for in the will. She also held the distinction made in the will, between Ena and Manahi and the other siblings, was a breach of Mrs Paewai’s obligation, and reflected a misunderstanding of the respective financial positions of the siblings.
Thomas J nevertheless held Mrs Paewai had good reason for considering Alma was entitled to a much greater share of the estate than her siblings. That situation should continue, except to the extent necessary to repair the breach of moral duty. As she put it:[8]
The issue is not however the maintenance and support a child might require for the rest of his or her life. Rather the issue is what is proper in the context of the claimants’ competing moral claims, given their respective financial need, as well as the size of the estate, the claimant’s relationships with Mrs Paewai, and her wishes.
[8]At [93].
Balancing the various factors, the Judge concluded Alma should receive 40 per cent of the estate, with the remaining 60 per cent divided equally between the siblings with one share divided equally between Kara’s children.[9]
Application for leave to appeal
[9]At [95].
The applicants seek leave to appeal on the grounds that:
(a)The High Court Judge erred in law in finding that equal treatment of children was not an appropriate starting point for assessment of proper provision under s 4 of the Act.
(b)The High Court Judge failed properly to consider the relevant consideration that Mrs Paewai had laboured under material mistakes of fact when preparing her will.
(c)The High Court Judge’s finding on appropriate provision for the applicants was plainly wrong.
The test to be applied in deciding whether or not to grant leave for a second appeal under s 67 of the Judicature Act was set out by this Court in Waller v Hider:[10]
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 …
[10]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
The Court also said:[11]
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.
[11]At 413.
As to the first ground of the application, we accept Thomas J erred in holding that the Family Court made an error of law in adopting the principle of equal division between siblings as an appropriate starting point. For present purposes however that does not matter, because we do not accept there was any relevant error in the way Thomas J proceeded to evaluate the relevant issues for the purpose of reaching her own decision as to the appropriate division among the beneficiaries of the property in the estate. On the contrary, her reasoning was clearly based on and applied relevant decisions of this Court.[12]
[12]Thomas J referred to Little v Angus [1981] 1 NZLR 126 (CA); Williams v Aucutt [2000] 2 NZLR 479 (CA); Auckland City Mission v Brown [2002] 2 NZLR 650 (CA) and Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.
Thomas J held that in the circumstances of this case equal treatment was inappropriate. There was ample justification for her conclusion Alma was entitled to a much greater share of the estate than her siblings. There was no error of law in the reasoning she expressed.
Among the matters Thomas J referred to were:
(a)Mrs Paewai had lived at the Hillside Road property with Nitama and Alma and Alma’s husband, Ora Kohe. Mrs Paewai and Nitama were primarily cared for on a day-to-day basis by Alma and her husband.
(b)Nitama died in November 2012, three years after Mrs Paewai. He had always lived at home, being cared for by the family and for the last 11 years by Alma and her husband.
(c)A note given by Mrs Paewai to her solicitor, apparently written against the possibility the will would be challenged, recorded that Alma had lived in the property and paid all associated outgoings including Mrs Paewai’s personal expenses for the previous 10 years.
(d)A diary note in which Mrs Paewai recorded Alma and her husband “helped me and my Down Syndrome 57 year old son, Nitama, in every way”.
(e)Another entry in the diary, dated 20 February 2008 said:
I have made my will, and when I pass away, I will leave my home and contents to Alma and Ora. They have been very loving and so helpful to both my son Nitama, and me. She has been so helpful, showers both of us. Her husband showers Nitama too, in fact I couldn’t live on my own without them.
These were all relevant considerations justifying special provision for Alma under the will. Consequently, the first ground on which the application for leave is advanced cannot be sustained.
The same is true of the second and third grounds. It cannot be said Thomas J failed to consider mistakes of fact made by Mrs Paewai when preparing her will. The judgment itself shows that is incorrect. For example, the Judge said:
[84] It is clear that there were some misunderstandings by Mrs Paewai of the financial position of each of her children. This is most clearly demonstrated by Mrs Paewai’s belief as to Ena’s wealth in possessing two houses. …
She also noted that Manahi was, like Ena, not in the healthy financial position that Mrs Paewai had assumed.[13]
[13]At [88].
Nor do we accept the proposition that the High Court Judge’s finding on appropriate provision for the applicants was plainly wrong. On the contrary, it was properly reasoned on the facts of the case.
In summary, we are satisfied the applicants have not identified questions of law or fact such as would justify granting leave for a second appeal.
Result
The application for leave to appeal is dismissed.
The respondents are entitled to costs calculated for a standard application for leave to appeal on a band A basis with usual disbursements.
Solicitors:
Spencer Legal, Auckland for Applicants
Haigh Lyon, Auckland for First Respondent
Webb Ross McNab Kilpatrick Ltd, Whangarei for Second Respondents
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