Rule v Rule - [2017] NZHC 672

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-005837 [2017] NZHC 672

BETWEEN
DOUGLAS IAN RULE AND

ELIZABETH JANE BELCHER Plaintiffs

AND

LESLEY LOUISE RULE AND ANTHONY CHARLES ON BEHALF OF THE ESTATE OF MURIEL GWENDOLINE RULE

Defendants

Hearing: On the papers

Counsel

A C MacMillan for Plaintiffs
W Galvin for Lesley Rule
J D Turner for the estate

Judgment:

7 April 2017

JUDGMENT OF WHATA J

This judgment was delivered by me on 7 April 2017 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors: B Knowles, North Shore City
McVeagh Fleming, Albany

RULE v RULE [2017] NZHC 672 [7 April 2017]

[1] In my judgment of 20 December 2016,1 I found that Muriel Rule breached her moral duty to her son, Douglas Rule (Doug), and to her daughter, Elizabeth Jane Belcher (Jane), by providing a residual interest only in her share of the family home. I reserved leave to the parties to file submissions on relief and costs.

Position of parties

[2] I now have the submissions of the parties. Ms Galvin, for Lesley Louise

Rule (Louise), proposes the following remedy:

(a) Within six months of Louise attaining the age of 65, she will pay to the plaintiffs, Doug and Jane, 25 per cent each of the current value of their mother’s half-interest in the Rarere Road property;

(b) Louise will retain a life interest in the remaining 50 per cent of her

mother’s interest in the property; and

(c) Louise will retain the balance of the funds in the trust account of

McVeagh Fleming.

[3] Ms MacMillan, for Doug and Jane, endorses the comments I made at [41] of my judgment to the effect that the remedy for the breach will be achieved by vesting Muriel’s half-share in Doug and Jane, as tenants in common, when Louise reaches the age of 67 (five years from the date of judgment). Ms MacMillan also notes, however, that the will has a clause which gives the trustees the power to purchase a replacement home to be held on the same terms as apply to the present home. The plaintiffs wish for this clause to be removed so that if Louise wishes to sell the home within five years, then Muriel’s share vests in Doug and Jane at that point and they should all become jointly involved in the sale of the property as owners.

[4] On the question of costs:

(a) The defendants (the Estate) seek costs against Doug and Jane on the basis that Doug and Jane failed in their substantive proceedings against them;

(b)Doug and Jane consider that costs should lie where they fall, on the basis that:

(i) They pursued settlement throughout proceedings;

(ii)Awarding costs on the basis of the result of each claim would result in Doug and Jane paying costs to the estate, and Louise paying costs to them, which would not benefit anyone and reduce Louise’s share of the remaining funds;

(iii) The testamentary capacity…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Rule v Rule

Details

AGLC: Rule v Rule [2017] NZHC 672
Case: [2017] NZHC 672
Decision Date: 7 April 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Douglas Ian Rule and Elizabeth Jane Belcher (the plaintiffs) brought an action against Lesley Louise Rule and Anthony Charles on behalf of the estate of Muriel Gwendolyn Rule (the defendants). The plaintiffs sought relief for the alleged breach of moral duty by Muriel Rule, who left her share of the family home to Lesley Rule for life, with no provision for Douglas and Elizabeth. The defendants argued that the plaintiffs had not succeeded in proving the claims of undue influence and lack of testamentary capacity. The court was required to decide whether there was a breach of the testator's moral duty and what relief should be granted to the plaintiffs.

The court considered the appropriate remedy for the breach of moral duty. Lesley Rule proposed a remedy where she would pay the plaintiffs 25% each of the current value of their mother's half-interest in the Rarere Road property within six months of her attaining the age of 65 years. The court found this proposal to be an adequate discharge of Muriel Rule's moral duty to the plaintiffs. The court disagreed with the plaintiffs' counsel that the proposed outcome was unfair because it did not recognise the plaintiffs' contribution to the family and allocated any appreciation in capital value to Lesley Rule. The court noted that the distribution of approximately $296,974.00 in 2019 plainly recognised the plaintiffs' place in the family. The court also found that costs should lie where they fall, as the claims based on testamentary incapacity and undue influence, although not satisfying the requisite threshold criteria, were not meritless.

The court made the following orders: (a) within six months of Lesley Rule attaining the age of 65 years, she will pay to the plaintiffs 25 per cent each of the current value of their mother’s half-interest in the Rarere property; (b) Lesley Rule will retain a life interest in the remaining 50 per cent of her mother’s interest in the property; (c) Lesley Rule will retain the balance of the funds in the trust account of McVeagh Fleming; and (d) costs will lie where they fall.

Orders