Reeves v McEldowney

[2023] NZHC 2511

NOTE: ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980.

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2023-443-17

[2023] NZHC 2511

UNDER

the District Court Act 2016

IN THE MATTER

of an appeal against a decision of the Family Court at New Plymouth

BETWEEN

ST LEDGER MANNING REEVES AND JOHN CAMERON MIDDLETON

Appellants

AND

BRIAN RAYMOND MCELDOWNEY AND SHIRLEY MAVIS MCELDOWNEY

Respondents

Hearing:	4 September 2023
Appearances:	A S Butler KC for the Appellants K Pascoe for the Respondents
Judgment:	7 September 2023

JUDGMENT OF COOKE J

[1]    The appellants are the executors of the estate of Dawn Patricia Kennedy  (Mrs Kennedy). They appeal from the decision of the Family Court under the Law Reform (Testamentary Promises) Act 1949 (the Act) in which the Family Court ordered  that  Mr McEldowney  should  receive   the   sum   of   $300,000,   and   Mrs McEldowney the sum of $600,000, in addition to bequests they had received under Mrs Kennedy’s will.1 Under the will each received $100,000 plus interest from the date of the will 31 January 2013.

1      McEldowney v Reeves [2023] NZFC 519.

REEVES AND MIDDLETON v MCELDOWNEY [2023] NZHC 2511 [7 September 2023]

[2]At the time of Mrs Kennedy’s death her estate was substantial. It was worth

$6,174,714.18 before various bequests and estate expenses. She died without a family and the value of this estate is primarily to be used for the establishment of a scholarship fund known as the Duncan and Dawn Kennedy Scholarship Fund for the purpose of granting individual scholarships to any person to attending university or other tertiary education organisation to study engineering, particularly marine engineering. The scholarship fund is to last 20 years before the residue is them distributed to charities most closely resembling those identified by the will.

The facts

[3]    The McEldowneys met the Kennedys in the late 1990s. Mrs McEldowney was a community nurse with Presbyterian Support Services, caring for Mrs Kennedy’s father at that time. The Kennedys looked after Mrs Kennedy’s father in his later years. Following his death in 2001, aged 101, the friendship between the Kennedys and the McEldowneys endured and they would regularly see each other.

[4]    Mr and Mrs Kennedy  had  no  children,  and  neither  had  living  family.  Mrs Kennedy was an only child. She was dependent on, and cared for by others — initially this was her parents, then her husband, and then the McEldowneys. The Family Court Judge described her as being old-fashioned, child-like and dependent. She also had a very old-fashioned view on the roles of men and women.

[5]    In early 2012 Mr Kennedy became very ill with advanced cancer. The McEldowneys then took care of her. For example, they would take Mrs Kennedy to and from hospital to visit Duncan. This time was very difficult for Mrs Kennedy.

[6]    When Mr Kennedy returned home to die the McEldowneys supported them both. Shortly before his death Mr Kennedy spoke to the McEldowneys and asked them if they would take care of Mrs Kennedy when he died as she had no one. They promised that they would.

[7]    Mr Kennedy died on 8 March 2012. The McEldowneys arranged the funeral given that Mrs Kennedy was distraught and not capable of making the arrangements. They then organised for her to live with them immediately after this time, but after

approximately six weeks she returned to her own home at Courtenay Street, although she would come and stay the day with them for approximately the next three months.

[8]    Thereafter they generally took care of her. Mr McEldowney would do things like mowing the lawns and undertaking repairs, and Mrs McEldowney would take her to the doctor and the weekly grocery shopping. She would be with them most Saturdays for lunch and they were regularly speaking on the phone. Mrs McEldowney explains that Mrs Kennedy did not have a washing machine, and she ended up taking her washing home to wash. She would also spend Christmas and Easter with them. Mrs McEldowney described Mrs Kennedy as becoming “like a family member”. I accept that this is a fair characterisation.

[9]    During this period Mrs McEldowney’s evidence is that Mrs Kennedy referred to her as her “heir apparent” and that this was “something she would say along with regularly telling my husband and I that we would be looked after”.

[10]   It was during this period that Mrs Kennedy changed her will. She had earlier made wills in 1960 and 2011 but made a new will on 21 September 2012, some six months after her husband had died. Her earlier wills involved her leaving all her property to Mr Kennedy. Under the new will the McEldowneys were bequeathed

$100,000 each, with a request that these bequests be adjusted to maintain their real value given the consumer price index increases. She also added bequests to other charities, and made provision for the establishment of the scholarship trust with the balance of her estate. When she made these changes the McEldowneys were also added as her attorneys, but only in relation to property. She then adjusted the bequests in a new will, being her final will, on 31 January 2013.

[11]   It may be questioned whether Mrs Kennedy knew the full extent of her wealth. At the time of her death only some of the money was invested in shares, with the majority of the wealth simply sitting in a bank account. But she apparently took care in identifying bequests in her 21 September 2012 and 31 January 2013 wills.

[12]   The McEldowneys continued to support Mrs Kennedy over the next years. In early 2019 Mrs Kennedy had a fall. The McEldowneys were contacted because she had their details pinned to the inside of her jacket. She then spent time living with the

McEldowneys while she recuperated. She returned to her own home but she was not managing there. It was at this stage there was discussion over whether Mrs Kennedy should leave her property at Courtenay Street and move into a smaller property. She did not take this well. A new unit was nevertheless found for her in Tukapa Street. Mr McEldowney then assisted in arranging for her property to be sold. For a period she owned both, with Mr McEldowney looking after both properties.

[13]   In July 2019 Mr McEldowney suggested to Mrs Kennedy that she sell her property. A real estate agent said it could be marketed between $290,000 and

$320,000. Mrs Kennedy was not  keen  on  the  real  estate  agent’s  fee,  however. Mr McEldowney then arranged a private sale to someone Mrs Kennedy knew, and he negotiated the sale for $330,000.

[14]   Mr McEldowney explains that at the sale Mrs Kennedy spoke about him taking over all her affairs. He said that at this time she wanted to revisit her will. His evidence is:

… she also wanted to revisit her Will as the two main areas was the set up on a Scholarship, something that Duncan had wanted, and she also wanted to make sure Shirley [Mrs McEldowney] and I were adequately catered for as we were all she had in the whole wide world.

[15]   It would appear that no steps were taken at this time either to change the will, or to change the powers of attorney.

[16]   Thereafter the support the McEldowneys provided to Mrs Kennedy increased. She became more dependent upon them as time went by.

[17]   In late October to early November 2019 the McEldowneys arranged for a visit to their sons in Australia. While they were away they arranged for their daughter, Joanne Baker, to look after Mrs Kennedy. She would call in almost daily and also have a daily phone call with her in their place. They had only been in Australia for a short period when they were contacted by their daughter to be told that Mrs Kennedy had fallen again.

[18]   After that second fall it was arranged that Mrs Kennedy would go into the Jean Sandel Rest Home. Mr McEldowney says in his evidence that she absolutely hated it

there. Mrs McEldowney would visit every day and spent a lot of time comforting her, and trying to calm her down. At that time she still owned the property at Tukapa Street. Mr McEldowney’s evidence is that around this time:

… Dawn [Mrs Kennedy] said to me that I should get the Tukapa Street property as I was the only one who did anything for her relating to the maintenance and upkeep of the properties.

[19]   It is apparent that Mrs Kennedy was not an easy patient of hospitals or rest home facilities. Mr McEldowney says that she used to accuse people of stealing things, and it is apparent that she was lost without the support of someone else to look after her, and could sometimes be unpleasant. The period of the Covid lockdown in early 2020 was extremely difficult for Mrs Kennedy as she was not allowed any visitors. When the McEldowneys were able to resume seeing her it was apparent that Mrs Kennedy was extremely upset. But they continued to support her as they had previously from this time.

[20]   On 26 August 2020 the McEldowneys received a phone  call  to  say  that Mrs Kennedy had  had  a  stroke.  Mrs  McEldowney  went  immediately  to  see  Mrs Kennedy. Her evidence is “I arrived to see Dawn [Mrs Kennedy]. She looked up at me. I embraced her and she passed in my arms.”

[21]   As indicated, Mrs Kennedy had no family. The McEldowneys arranged her funeral in accordance with her instructions and arranged for tidying up of her house.

Decision under appeal

[22]   The Family Court Judge found that two testamentary promises had been made. The first was that made to Mr McEldowney concerning the property at Tukapa Street. The value of this promise was the residential unit at Tukapa Street which was subsequently sold for $605,000, with the net proceeds of sale being $574,250.98.2 She also held that there was a testamentary promise by a promise to Mrs McEldowney by referring to her as her “heir apparent” which had an unknown value.3 After reviewing case law and the circumstances of the case, the Judge then held:4

2 At [73].

3 At [74].

4      At [92]–[100] (footnote added).

I find the bequests made by Dawn Kennedy in her last Will to be inadequate to properly compensate and recognise the value of the services rendered to her by Mr and Mrs McEldowney.

Dawn clearly held the McEldowney’s in high regard and valued their friendship and support. She recognised them as being important people to her and it is of significance that she had their contact details attached to her clothing in the event of an emergency. Their “value to her” is not determinative.

Mander J stated in Hill,5 while the deceased’s subjective assessment of adequate recompense is an important consideration, it can (and, in my view, should in these circumstances) make way for a more objective assessment when it is determined that the provision made for the claimant is not reasonable in the circumstances. This is the case here.

Both of the claimants have provided services beyond what would ordinarily be expected of the non-kin relationship they had with Dawn.

Whilst there are more than sufficient funds available to recompense each claimant for their services and work without encroaching on other beneficiaries, I must objectively assess the claims, so as not to provide some kind of windfall to the applicants purely because the estate is large.

I find that the bequests made to Mr and Mrs McEldowney in Dawn’s last Will did not adequately fulfil the testamentary promises made by Dawn. An additional payment is justified to each claimant.

I have reached the conclusion that the following amounts are fair recompense for each claimant for their services and work provided to the deceased.

Mr McEldowney shall receive the sum of $300,000 in addition to the bequest he has received.

Mrs McEldowney shall receive the sum of $600,000 in addition to the bequest she has received.

[23]   When combined with what they have already received this meant they received approximately $1.12 million of an estate with a value of approximately $6.1 million

— that is approximately 20 per cent of the value of the estate.

Test on appeal

[24]   There was a difference between the parties on the approach this Court should apply on appeal. In particular the appellants contended that this should not be treated as an appeal from an exercise of a discretion, but rather on the conventional approach described by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar.6 In

5      Hill v Waddingham [2019] NZHC 3505.

6      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].

Kacem v Bashier the Supreme Court described the differences between the two approaches in the following way:7

… the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment.8 In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong.9 The distinction between a general appeal and an appeal from a discretion is not altogether easy to describe in the abstract. But the fact that the case involves factual evaluation and a value judgment does not of itself mean the decision is discretionary. In any event, as the Court of Appeal correctly said, the assessment of what was in the best interests of the children in the present case did not involve an appeal from a discretionary decision. The decision of the High Court was a matter of assessment and judgment not discretion, and so was that of the Family Court.

[25]   The appellants went back to the decision of the Court of Appeal in Gartery v Smith where the Court of Appeal said that appeals under the Act allowed the appellate court to consider the question afresh as the interests of justice so demanded.10 The respondents relied on Dwight v Ross where Woodhouse J said that the High Court should only interfere with the assessment of quantum in testamentary promise appeals if there was an error of principle, a failure to take into account relevant matters or the taking into account of irrelevant matters, or the decision was plainly wrong.11

[26]   I do not consider that it is correct to describe the role of the Court in assessing quantum in a testamentary promise case as the exercise of a discretion. Rather it involves factual evaluation and the exercise of judgement. The ultimate test is reasonableness. But that does not make it discretionary. I also do not consider that there is a clear distinction between establishing an entitlement under s 3 of the Act and the question of quantum. There must have been a promise, the rendering of services, and a failure to make provision, and the amount received by the claimant must be reasonable. All questions are subject to the general right of appeal. An appellant must

7      Kacem v Bashier [2010] NZSC 112, [2011] 2 NZLR 1 at [32] (footnotes omitted).

8      Austin, Nichols & Co Inc v Stichting Lodestar, above n 6, at [16].

9      See May v May (1982) 1 NZFLR 165 (CA) at 170; and Blackstone v Blackstone [2008] NZCA 312, (2009) 19 PRNZ 40 at [8].

10     Gartery v Smith [1951] NZLR 105 (CA).

11     Dwight v Ross [2018] NZHC 1764 at [33].

still persuade the Court on appeal that the decision reached by the lower Court is wrong, but such an appellant is still entitled to the opinion of the appeal court in light of the relevant principles. I do not consider that it is necessary to go back to the approach as described by the Court of Appeal in Gartery, however.12 The more recent description by the Supreme Court in Austin, Nichols captures the position in the most accurate way.13

[27]   In any event, in the present case for the reasons I describe below the difference between the approach on appeal is not material. I have concluded that the Family Court adopted an approach that would have amounted to an error if the test in relation to an appeal from a discretion had applied.

Test for testamentary promises

[28]   Section 3 of the Act has prerequisites to the grant of relief. In order to obtain relief the following is required:

(a)The rendering of services to, or the performance of work for the deceased during the deceased’s lifetime.

(b)Express or implied promises by the deceased to reward the claimant for the services of work by making some testamentary provision for the claimant.

(c)A failure, or failure of an extent, to make testamentary provision or otherwise remunerate the claimant.

[29]   Once those prerequisites are established the Court can award such amount as may be reasonable having regard to all the circumstances.

[30]   There are a number of authorities on the appropriate approach under the Act. In Re Welch the provisions were considered by the Privy Council. Sir Robin Cooke said:14

12     Gartery v Smith, above n 10.

13     Austin, Nichols & Co Inc, above n 8.

14     Re Welch [1990] 3 NZLR 1 (PC) at 6.

Among the particular factors listed are the value of the services or work and the value of the testamentary provision promised (in 1961 the latter words were enacted in place of “the value of any real or personal property specified in the promise”). So it is plain, considering s 3(1) as a whole, that whenever a claim to relief is made out under it the criterion as to the relief to be granted is reasonableness. That is always the result at which the Court is to aim, no matter whether the award is of money or of specific property. If the deceased promised a certain sum or a certain property, that is a relevant consideration but not necessarily decisive. Their Lordships do not find this approach surprising. To give only one hypothetical example, if there were a promise of the whole estate prompted by gratitude, in perhaps an emotional moment, for a single act of rescue or kindness, it would not necessarily be reasonable to enforce that promise to the full.

[31]   In ascertaining what is reasonable the Court may consider the following matters:15

(a)The circumstances in which the promise was made and the services were rendered or the work was performed.

(b)The value of the services or work.

(c)The value of the testamentary provision promised.

(d)The amount of the estate.

(e)The nature and amounts of other claims on the estate.

[32]   In advancing the case for the appellants, Mr Butler KC argued the amount that was awarded could not be justified on the facts and circumstances of the case. He argued that it was well in excess of any reasonable remuneration based on a daily, weekly or yearly allowance for the time spent on the services provided, and that the amount awarded was disproportionate compared to the authorities. He argued that the judgment should be set aside, that an  award of  up to $70,000 could be  made to  Mrs McEldowney but that no award should be made to Mr McEldowney.

[33]   Ms Pascoe argued that it was not appropriate to seek to value the contribution of the McEldowneys by way of an hourly, weekly or yearly allowance because their

15     Powell v Public Trustee [2003] 1 NZLR 381 (CA) at [10].

contribution was of a non-tangible kind. Section 3 of the Act gave the Court a broad discretion to assess what quantum was reasonable in the circumstances, and there was no identifiable error in the Family Court’s approach, so the appeal should be dismissed.

Assessment

[34]   I agree with Ms Pascoe that it is not appropriate to seek to value the contribution of the McEldowneys in this case on a time costing basis. Neither do I consider their evidence can be criticised for a lack of detail. Their contribution to Mrs Kennedy’s life was not only tangible. She had no family and was very reliant on others. She could  also be a difficult  person.  What  the McEldowneys  provided  Mrs Kennedy was love and support. It is very difficult for them to provide details of the  time  spent  doing  so.   The   McEldowneys   treated   her   as   if   she   were Mrs McEldowney’s own mother over an eight–10 year period. Previous authorities recognise that this kind of tangible contribution should not be assessed on a time costing basis.16

[35]   It is also important that that contribution be assessed from the perspective of Mrs Kennedy.17 For her the McEldowneys’ contribution to her last years would have been substantial precisely because she was so dependent on them.

[36]   It is also significant that there is no competing claims by any family members, and that the estate is a significant one. The bulk of the estate goes to a charitable purpose — a scholarship fund for those studying engineering, particularly marine engineering. There is no real evidence on where this sizeable estate came from, or even what Mr  Duncan  Kennedy  did  as  an  occupation.  The  relevant  executor, Mr Reeves is now  not  in  a  position  to  give  evidence.  But  one  can  infer  that Mr Kennedy may have been a marine engineer. It is apparent that the scholarship fund was something that he wanted. But this is not a strong competing moral claim to the estate. In those circumstances the Court can exercise a degree of generosity in valuing the McEldowneys’ contribution to the last years of Mrs Kennedy’s life.

16     Samuels v Atkinson [2009] NZCA 556, [2010] NZFLR 980 at [98]; and Byrne v Bishop [2001] 3 NZLR 780, (2001) 20 FRNZ 609 (CA) at [51].

17     Samuels v Atkinson, above n 16, at [95].

[37]   There are nevertheless difficulties with the amount that the Family Court has reached by way of quantum. It is not clear how the Court reached the figure awarded. Whilst the ultimate question is simply one of reasonableness, that reasonableness needs to be supported by reasons, with reasoning explaining how the Court has reached the quantum awarded. A Court cannot simply pluck a figure from the air. Whilst the Family Court Judge carefully analysed the authorities, and the circumstances of the case, her conclusion on quantum is reached in the paragraphs I have quoted above. These do not really explain how the amounts awarded have been reached.

[38]   I consider that the starting point here should be what Mrs Kennedy promised. I accept that Mrs Kennedy’s statement that Mr McEldowney should get the Tukapa Street property given his contributions is a promise meeting the requirements of s 3 of the Act. The Family Court Judge also correctly identified that the value of the promise could be assessed in the net sale value of the property, being $574,250.98.

[39]   I have greater difficulty accepting that Mrs Kennedy’s other statement — that Mrs McEldowney was her “heir” — involved a further testamentary promise. It is not an “express or implied promise by the deceased to reward [her] for the services or work by making some testamentary provision for the claimant” in accordance with s 3 of the Act. It does not identify a particular bequest, or indicate that it is in return for what Mrs McEldowney was doing for Mrs Kennedy. It could only be treated as a testamentary promise as  a promise that Mrs McEldowney inherit  the entirety of  Mrs Kennedy’s estate. But it is clear that this was never promised, or otherwise intended. Mrs Kennedy had said to Mr Kennedy when she was considering amending her will that her husband had wanted to establish the scholarship fund, for example.

[40]   I accept, however, that the associated comment that the McEldowneys would be “looked after” can be considered to be part of the testamentary promise. But it is less specific than the statement made about the Tukapa Street property and does not extend the extent of the property promised.

[41]   For these reasons I consider that the testamentary promise related to the net value of the Tukapa Street property.

[42]   It is also significant that Mrs Kennedy changed her will in late 2012 to recognise the contribution by the McEldowneys and then updated the bequest in her final will of January 2013. She made provision for them in the amount of $100,000 each, which was to be inflation adjusted. These are significant bequests. It is true the McEldowneys’  contribution  later  increased,  and  became  more   important   to Mrs Kennedy. But she apparently thought that this was fair compensation of their contribution at the time that she changed her will.

[43]   It is relevant to consider the relative value of that promise at the time. This was a combined bequest of $200,000 in late 2012/early 2013. She was at that point living at Courtenay Street. The property at Courtenay Street was sold some six to seven years later for $330,000. So it seems likely that her earlier bequest of $200,000 may have come close to the value of her property at the time. So her subsequent promise that Mr McEldowney should get the smaller Tukapa Street property can be seen as broadly proportionate. This may also have been the property that she felt she had the discretion to leave to the McEldowneys. There were some other charitable bequests, but the rest of her wealth was to be used for the purposes of the scholarship fund that her husband had wanted.

[44]   Given these factors I consider that the net value of the sale of the Tukapa Street property would appear to be an appropriate starting point for assessing the reasonable amount.

[45]   There are other relevant considerations. I accept Mr Butler’s point that whilst the  McEldowneys’  contribution  was  significant,  particularly  in  the   eyes   of Mrs Kennedy, it did not involve significant personal sacrifice of the kind arising in other cases where a claimant foregoes other employment or activities to make the contribution. I also accept there would have been a degree of reciprocity in the relationship between the McEldowneys and Mrs Kennedy. Having said that, particularly in the later years, the McEldowneys were looking after Mrs Kennedy as much because of a sense of duty, and I do not think their contribution in this respect should be underestimated. Mrs McEldowney’s ability to calm Mrs Kennedy down was also no doubt of assistance to the institutions that needed to care for Mrs Kennedy.

[46]   I consider it artificial to analyse this case in terms of separate contributions by Mr and Mrs McEldowney. It is true that the will addressed bequests to them separately. But their contribution was a joint contribution. They did different things in providing that contribution — Mr McEldowney tended to attend to more tangible matters, and Mrs McEldowney the intangible ones. When they were unavailable because of a trip to Australia they arranged for their daughter to take over their role. I do not consider it realistic to analyse these contributions separately.

[47]   Given the above factors it is very difficult to justify the Family Court Judge’s award leading to a total recovery of $1.12 million, being approximately twice the value of the property that was promised. There will be circumstances in which the Court will award more than what is promised. The ultimate test is reasonableness, and what the testator promises may underestimate the value of the contribution. But here the amount awarded is well in excess of the promise that Mrs Kennedy made, and cannot be justified by any particular line of analysis.

[48]   I also consider it to be of assistance to take into account awards under the Family Protection Act 1955 in the circumstances of this case given the McEldowneys acted as if Mrs Kennedy was family. The children of a testator who have not been provided for can make claims under that Act, with a starting point of 10 per cent of the estate sometimes adopted.18 So if Mrs McEldowney had been Mrs Kennedy’s daughter she might be entitled to 10 per cent of the estate. That would represent approximately $600,000. Whilst such a child might have argued for a greater percentage under that Act  given  the  contribution,  Mrs  McEldowney  was  not  Mrs Kennedy’s daughter, even though she cared for her as if she was over the last eight–10 years of her life. To award the McEldowneys approximately 20 per cent of the value of the estate when they are not family members is not proportionate with claims under that Act.

[49]I also accept Mr Butler’s submission that an award uplifting her entitlement to

$1.12 million is inconsistent with the comparable authorities. Each case turns on its own circumstances so there is some difficulty with comparison. But the pattern of

18     Chambers v Chambers [2016] NZHC 583 at [114]–[115]; Cartwright v Joseph [2018] NZHC 2383 at [33]–[34]; and Brosnahan v Meo [2021] NZHC 79.

existing awards is relevant,19 and in this case the award is in excess of that pattern. The closest case appears to be Hill v Waddingham.20 Here the estate was valued at

$5.7 to $6.4 million. The deceased’s only family was an estranged son. The plaintiff had been in a 34-year enduring friendship providing both a close personal relationship and considerable farming assistance. She also took care of the deceased when he moved into a rest home. He otherwise would have been a very lonely man. She was bequeathed $100,000. The Court awarded her a further $350,000.

[50]   In Hill the plaintiff obtained more reciprocal benefits than the McEldowneys. Moreover here their contribution was by both of the McEldowneys, and then also their daughter when they were not there to help. There is also not a competing family member, although in that case it was only from an estranged son. On the other hand, the contribution was over a longer period of time and involved more tangible contributions and a greater degree of sacrifice providing the services. It seems to me that the present case is disproportionate given the outcome in that case, and to the other authorities referred to by counsel.

[51]   Finally, although it is not possible to value the McEldowneys’ contribution on a time costing basis I do think it is relevant to see the award in light of the period of time over which they made their contribution. As Mr Butler pointed out, the award of the Family Court would represent $130,000 per annum over the course of eight-and- a-half years. As he submitted, that is a very high amount for them to receive tax-free.

[52]   For these reasons I conclude that the amount awarded by the Family Court is plainly excessive. I consider that the reasonable amount should be the net value of the property promised, that is $574,250.98. In all the circumstances I consider that would be a reasonable sum for them to receive precisely because it was promised. It represents approximately 10 per cent of Mrs Kennedy’s estate. Even that is a generous award, but I consider they went above and beyond the expectations that could have been placed upon them as friends and that this higher award is justified. This amount is more consistent with previous awards, and is proportionate with awards under the Family Protection Act.

19     Humphrey v New Zealand Guardian Trust [2004] NZFLR 179 at [65] (HC); and Samuels v Atkinson, above n 16, at [54].

20     Hill v Waddingham, above n 5.

Conclusion

[53]   For these reasons the appeal is allowed. The amount awarded by the Family Court is set aside. The amount to be awarded is $574,250.98, plus any interest earned on this sum since it was received by the estate, less the amounts already received by the McEldowneys under the bequests under the will. This amount is awarded to the McEldowneys jointly. Leave is reserved if there is any issue in relation to quantification.

[54]   In relation to costs, and following the principle articulated by the Court of Appeal in Loosley v Powell, I consider that the McEldowneys’ reasonable legal expenditure should be met by the estate for the proceedings before the Family Court and that no award of costs is necessary in the Family Court.21 In relation to this appeal, the appropriate position on costs may depend on whether an offer were made to the McEldowneys to resolve the proceedings. If any amount offered by the executors is less than the award then I consider that the McEldowneys reasonable legal expenditure for this appeal should be met by the estate. If an offer was made that is close to, or in excess of the amount awarded, then the appropriate outcome may be that the McEldowneys’ legal expenditure is not met by the estate but there be no award of costs against them on the appeal. If costs cannot be agreed I will receive memoranda (of no more than five pages plus a schedule for each party). Memoranda should be filed within 20 working days of this judgment.

Cooke J

Solicitors:

Connect Legal Taranaki, New Plymouth for the Appellants Nicholsons Lawyers, New Plymouth for the Respondents

21     Loosley v Powell [2018] NZCA 73.