Talbot v Talbot
[2016] NZHC 2382
•6 October 2016
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CIV-2015-476-000037 [2016] NZHC 2382
UNDER the Family Protection Act 1955 BETWEEN
JILLIAN KATE TALBOT Plaintiff
AND
GRAHAM EDWIN LAWRENCE TALBOT (AS EXECUTOR FOR THE WILL OF EDWIN KELLAND TALBOT) First Defendant
AND
GRAHAM EDWIN LAWRENCE TALBOT (AS EXECUTOR FOR THE WILL OF PAMELA LISBETH TALBOT) Second Defendant
Hearing: 30 May 2016, 31 May 2016, 19 August 2016 Appearances:
E Horner and L D Tidey for Plaintiff
A J Shaw for First and Second DefendantsJ Ormsby and H T Shaw for GEL Talbot (in his personal capacity)
RLD Paul for R L Cashin
Judgment:
6 October 2016
JUDGMENT OF GENDALL J
TALBOT v TALBOT [2016] NZHC 2382 [6 October 2016]
Table of Contents
Para No
Introduction [1] Background [8] The parents’ wills and their estates [18] Jillian’s position [25] Graham’s position [27] Rachel’s position [32] Financial situation of Jillian [40] Financial situation of Graham [44] Financial situation of Rachel [48] The approach to Family Protection Act claims [49] Discussion [60] The parents’ testamentary intentions [62] Moral duty to provide proper maintenance and support [66] Moral duty to recognise Jillian as belonging to the family [77] Conclusion [83] Costs [85]
Introduction
[1] This proceeding arises from a claim made by the plaintiff, Jillian Kate Talbot (Jillian), for further provision under the Family Protection Act 1955 (the Act) from the estates of her late parents.
[2] For many years dating back to around 1905, four generations of the Talbot Family have farmed property at Taiko Road, Claremont, Timaru in South Canterbury. Jillian’s parents, Edwin Kelland Talbot (Edwin) who died on
16 November 2014 and Pamela Lisbeth Talbot (Pamela) who died on 11 May 2015, both farmed the family property at certain times leading up to their deaths.
[3] Jillian has a brother, Graham Edwin Lawrence Talbot (Graham) (who is the first and second defendant in this proceeding), and a sister Rachel Louise Cashin (Rachel). All three are the surviving children of Edwin and Pamela. Graham is the sole executor of both his parents’ estates pursuant to the provisions of their last wills.
[4] Both Edwin and Pamela left wills dated 5 November 2012. Under those wills, Jillian and her sister, Rachel, are to receive from the combined estates assets which amount to almost $1.1 million each. Graham’s share from his parents’ estates totals something in excess of $4 million and he has received other significant
benefits during his parents’ lifetimes to enable him to acquire an interest in Kingsborough Farm. It is these disparities, which perhaps in reality might be seen as the nub of Jillian’s complaint here, though her claim is largely framed in other terms.
[5] Graham opposes Jillian’s claim under the Act in his personal capacity as a beneficiary of the estates.
[6] Rachel supports Graham’s position entirely. She does not herself make any claim against the estates. She maintains that the provisions of her late parents’ wills are proper and fair and they should be upheld.
[7] In essence, Jillian’s claim under the Act, as expressed in her statement of
claim in this proceeding filed 7 August 2015, specifically seeks:
(a) A redistribution of [her parent’s] estates to discharge the deceased’s
moral duty to provide for [her] proper maintenance and support; or
(b) Such judgment as the Court sees fit to discharge the deceased’s
moral duty to provide for [her] proper maintenance and support.
(c) Costs of and incidental to this proceeding
Background
[8] As I have noted above, it has now seen four generations of members of the Talbot family farming properties in the area in question at Claremont, South Canterbury. Edwin, as I understand it, grew up on the family farm and after marrying Pamela she moved to the property. To repeat, Edwin and Pamela had three children, Rachel born on 4 January 1972, Graham born on 24 April 1974, and Jillian born in 17 October 1976. All children were brought up on the family farm which was known as the Kingsborough Farm (Kingsborough Farm) and, it seems, enjoyed excellent childhoods and had the benefit of a good education arranged by their parents.
[9] Graham left school at age 17 and commenced working with his father, Edwin, full time on the farm. He has remained working on the farm ever since, this being for about the last 25 years. Shortly after commencing work on the farm, Graham leased other land in the area from third parties to farm ewes and then in
November 1994 Edwin, Pamela and Graham joined in partnership to farm the livestock on the family farm.
[10] In about 1998 Graham, who had by then taken over livestock management at the family farm, purchased from his parents’ trust a smaller portion of land (known as “Doug’s Land”) for $265,000. The full purchase price was advanced to him by way of loan, interest free upon demand. The total $265,000 loan however was repaid by Graham in 2006.
[11] Also, in 2006, Edwin and Pamela and their interests sold to Graham a one half share in Kingsborough Farm at a valuation figure of $1,551,000. Around this time as well, the interests of Edwin and Pamela in the farming partnership were also sold to Graham. I understand this sale was at a price of about $540,000, Graham paying effectively some $380,000 of this amount from his own resources with $160,000 approximately being a loan advanced by his parents to him.
[12] From about that time in 2006, Graham and his interests, who were farming Kingsborough Farm and some nearby land, progressively repaid to his parents from the loans an amount, I understand, to be $229,125. Gifts of parts of the loans were also made to Graham and his interests from Edwin and Pamela in 2007, 2008, 2009 and 2012. I understand these gifts amounted to about $412,000.
[13] According to Ms Horner, counsel for Jillian, this left a balance debt owing by
Graham and his interests to Pamela (and Edwin) when Pamela died of some
$886,875. This debt represented one of the assets in the estates of Edwin and Pamela and, as will become apparent later in this judgment, in their wills they gifted off a further amount of the loans to Graham, leaving a final balance of $400,000 for him to pay to the estates.
[14] Turning next to Rachel, she had also worked from time-to-time on the farm, until she undertook a veterinary science degree from Massey University and moved off the farm. After finishing her school studies Jillian, too, moved off the farm, undertaking other education opportunities.
[15] There is no question Edwin and Pamela wanted Graham, once he had shown an interest and started working full-time on the family farm, to acquire the entire farm on some basis that was reasonably achievable, so it could once again be retained in the Talbot family.
[16] Since the 1990’s, it seems clear from the evidence before me that Edwin and Pamela’s testamentary intentions were unwavering. One of their children was to take over the family farm to keep it in the Talbot family. This proved to be Graham who was ultimately the one to acquire and continue to farm the family farm. On their death Edwin and Pamela’s daughters, Rachel and Jillian, were to share equally in the remainder of their estates. It was always hoped this was to amount to a reasonably significant sum. Ultimately it was intended that this remainder was to include a cash contribution from Graham (in the form of some manageable debt repayment).
[17] At this point it is useful to note that, during their lifetime Edwin and Pamela also made additional gifts to Graham, Rachel and Jillian from their own resources. These occurred in September 2006 (in part from monies Graham paid to them in repayment of original loans to him) and continued in 2007 and beyond. By my rough calculations these gifts totalled something in the order of $112,500 each. They were made equally to Graham, Rachel and Jillian, and were additional to the farm debt reduction gifts made solely to Graham outlined at [12] above.
The parents’ wills and their estates
[18] For present purposes, the relevant parts of the wills of Edwin and Pamela read together, effectively provide first, for Graham to receive his parents’ remaining one half share of Kingsborough Farm (subject to a continuing life interest in favour of his surviving aunt) and secondly, for his remaining debt to his parents with regard to the original sale to him of the other one-half share of Kingsborough Farm and the partnership business to be forgiven, save for the amount of $400,000. Next, the family chattels are to be split equally between the three siblings and, finally, the residue of the estates is to be shared equally between Jillian and Rachel. This
residue is to include Graham’s $400,000 repayment of his debt, plus off-farm investments and other assets accumulated by Edwin and Pamela.
[19] So far as the assets of the combined estates of Edwin and Pamela are concerned, these more or less comprise:
(a) As a primary asset, a one half-share in Kingsborough Farm. This half- share, as I have noted, is subject to an unregistered life interest in favour of Mrs Louie Talbot, who is now 96 years of age and not living at the farm;
(b)A leasehold bach, a series of investments and monetary funds and household chattels;
(c) The $886.875.00 balance of the debt owed by Graham and entities associated with him as noted at [13] above (bearing in mind of course that a further $486,875 of this debt is gifted off to Graham pursuant to his parents’ wills, leaving a final net balance for him to pay to the estates of $400,000).
[20] There is some importance here in establishing the actual value of these estates. Initially, issues on this aspect arose regarding the valuation of the Kingsborough Farm half-share interest held by the estates which was to pass to Graham, and questions over improvements previously made by him to the farm. Additional valuations of this property were obtained subsequent to the earlier adjourned May 2016 hearing dates for this matter. Questions were raised as to whether or not the farm was capable of being subdivided, and what effect this might have on the valuations.
[21] Notwithstanding all these matters, from what I understand to be a position agreed between the parties concerning the value of the assets in the estates, three possible alternatives arose:
(a) The first alternative, which was made on the basis of the valuation of
Kingsborough Farm obtained by Graham, would result in:
(i)Graham receiving $4,000,208.33 or a 65.45 per cent share of the estates; and
(ii)Jillian and Rachel each receiving $1,056,002.67 or a 17.28 per cent share each of the estates.
(b)The second alternative, which was reached on the basis of valuation evidence obtained by Jillian, showed the following:
(i)Graham receiving $4,607,708.33 or a 68.57 per cent share of the estates; and
(ii)Jillian and Rachel each receiving $1,056,002.67 or a 15.71 per cent share each of the estates.
(c) The third alternative, which was based on a half-way point for the valuation of the Kingsborough Farm between the above figures put forward by Graham and by Jillian, gave the following figures:
(i)Graham receiving $4,303,958.33 or a 67.08 per cent share of the estates; and
(ii)Jillian and Rachel each receiving $1,056,002.66 or a 16.46 per cent share each of the estates.
[22] It will be noted that given the deduction (from the residuary estates) of additional legal costs incurred, in particular relating to the present litigation, the shares of Jillian and Rachel based on the current wills would be slightly under the
$1.1 million mark– that is at this point the sum of $1,056,002.66 in each case.
[23] So far as the value of Graham’s share in the estates is concerned, based on the existing wills he would receive something between $4.2 million and $4.6 million in
value and therefore between a 65.45 per cent share and a 68.57 per cent share of the estates.
[24] For present purposes, as I see it, there is little major percentage difference between the three alternatives. And it is of no real consequence in this case, given what will be the outcome of the plaintiff’s claim here, an outcome which will become apparent later in this judgment. That said, for present calculation purposes, I am prepared to take a mid-point of about 67 per cent of the estates to Graham, amounting to a figure of about $4.3 million to him, leaving a 16.5 per cent share of the estates for each of Jillian and Rachel.
Jillian’s position
[25] I turn now to Jillian’s essential position advanced in this case. This is her contention, that her parents, Edwin and Pamela have failed to meet their moral duties owed to her as required by the Act. Adequate provision, she says, has not been made for either her proper maintenance, or her proper support, in light of her financial position and what are her economic needs. In addition, she maintains her parents have failed to adequately recognise her position in the family as one of their three children.
[26] Jillian says a redistribution is required to remedy the breach. In all the circumstances where there are three siblings, Jillian contends that current societal attitudes demand a significantly more substantial distribution to her as a daughter from estates such as these than the 15-17% share currently provided by her parents’ wills.
Graham’s position
[27] In response, Graham contends that neither Edwin nor Pamela were in breach of their moral duty to provide proper maintenance and support for Jillian under s 4 of the Act.
[28] Graham says that, Jillian as an adult claimant is not in financial need. She is to receive close to $1.1 million from her parents’ estates, far more, he suggests, than
is necessary first, to provide for her economic needs and secondly, to properly recognise her as a member of the family. He contends that the Court of Appeal’s recent conservative approach to interfering with testamentary intentions remains the touchstone in cases such as this of adult beneficiaries who are not in financial need.
[29] Graham says Jillian’s attempt to adopt a comparative approach by comparing her entitlement with Graham’s is mistaken at law and is a distraction from the true test of whether the almost $1.1 million she will receive is sufficient to fulfil her parents’ moral duty to her.
[30] Graham maintains in turn that he has a strong moral claim. He says he worked his entire adult life on the family farm, and contributed significantly to the current value of his parents’ estates, both through physical labour and capital input.
[31] Jillian’s claim, Graham argues, is without merit. He suggests that the making of an award to her would open the floodgates to financially secure adult claimants re-writing their parents’ wills in cases simply of some claimed financial inequality.
Rachel’s position
[32] Rachel is not a named party to this proceeding. Nevertheless, as someone affected by possible outcome, and with a significant interest in this entire family matter, she appeared and was represented at the hearing.
[33] Rachel’s position, outlined by her counsel, Ms Paul, is that Edwin and Pamela acted in all respects properly in making their wills. Rachel maintains that her parents provided generously for she and for Jillian in their respective wills and particularly taking into account the need for what could be said to be the “proper maintenance” and “support” of each of the sisters, bearing in mind their respective financial positions. Rachel’s conclusion therefore is that there has been no breach of the moral obligation owed to Jillian or indeed to her by either parent here.
[34] Rachel confirms that she is making no claim under the Act against the estates herself. Before me she said she wished to make it perfectly clear that, if this Court does award Jillian any further provision from the estates, Rachel is herself not
seeking an equal or any other uplift of her entitlement, or indeed any increase whatsoever.
[35] Rachel, like her sister and brother, accepts that there is no issue here of any disentitling conduct on behalf of any of the three siblings. On the contrary, she says it is clear that, in the past, a close family unit existed, both in terms of relationships between the parents and the three children, and also the relationship between each of the siblings.
[36] In her evidence, Rachel acknowledges what she describes as Graham’s significant efforts for over 20 years in maintaining and running Kingsborough Farm and in caring for Edwin and Pamela, particularly in their later years. Rachel says that, once it was decided that Graham was to be the farmer on the family farm, her parents clearly expressed to the whole family their clear intentions. These were first, that Graham would inherit the farm and, secondly, that while Edwin and Pamela would provide for Rachel and Jillian, equality in dollar terms was not envisaged or intended.
[37] In addition, the provision from the estates for each of the two sisters of over
$1 million in cash and assets, according to Rachel, more than adequately fulfilled
their parents’ obligation to recognise the place of both sisters in the family.
[38] Rachel does note the obvious point that, if Jillian’s claim is successful, and an order is made that she is to be paid additional amounts from the residue of the estates, this may well, to some extent, reduce Rachel’s entitlement. And, alternatively, even if Jillian is unsuccessful in her present application, Rachel notes that the usual course is that the costs incurred by the trustees and executors of the estates in this present litigation will be met from the residue of the estates. Again, this is likely to reduce the amount available to Rachel as one of the residuary beneficiaries. Rachel’s position therefore is one simply seeking to preserve her entitlements under her parents’ wills without any redistribution (if it is to occur), or legal costs diminishing her entitlement.
[39] On that issue of preserving Rachel’s entitlement and not burdening her with additional legal costs, at this point it is useful to note one additional matter. Graham has also indicated he takes the position that, whatever the outcome here, Rachel’s present entitlement should not be prejudiced in any way because of the present claim brought by Jillian. Graham says, therefore that, if any orders are made by this Court for legal costs and/or additional entitlements to which Jillian may be entitled, the burden of those orders should not fall upon Rachel, whose share should remain untouched.
Financial situation of Jillian
[40] Jillian has three young children. As to her financial position, she says in
2015 she had approximately $310,000 in assets held in trust (in her own family trust, the J K Talbot Family Trust essentially comprising, as I understand it, Crayfishing Quota) shares in a company she operated valued informally in 2010 at $150,000 and Kiwisaver funds now worth $32,257.48. Jillian maintains that presently her total personal wealth however is less than $450,000 net. She owns no home or real property. She has lived with her partner, who is now her fiancé, and their children in a rented three bedroom house and Jillian says she has done so over the last six years.
[41] In terms of income, Jillian’s present earning potential is limited by her commitments as a mother of three young children. She is the owner of a company specialising in public relations consultancy, Reach Consultants Limited. This company, she said, made a loss of $9,238.91 for the year ending 31 March 2015 and it seems her average income recently has been in the order of about $1000.00 per month. Jillian maintains that this business income she is earning now is no longer sufficient to continue to fund the child care arrangements she had put in place for her three children, and this in turn has impacted on her ability to work. And in terms of her possible future earnings ability, in evidence, Jillian stated that her charge out rate when she was working as a consultant public relations specialist, ranged from $150 to $250 per hour.
[42] During cross-examination, Jillian acknowledged she and her family did have a comfortable lifestyle and she and her fiancé were able to afford travel and holidays.
At least once a year recently it seems, Jillian, her fiancé and their children holidayed in Australia, Fiji or other holiday destinations.
[43] There is also no doubt that Jillian’s fiancé, who is the father of their three children, has significant assets. Jillian confirmed in evidence that her fiancé pays the household expenses and supports the family, and that he has built up physical assets worth $4.5 million with no debt. She says however that while her fiancé is well off, they have entered into a binding relationship property (contracting out) agreement whereby his assets are said to remain his alone. This relationship property agreement, however, does have a sunset clause and was able to be reviewed, I think, from about 12 months ago. Ms Horner notes, however, that no alteration to the agreement has yet been made and there is also no obligation on Jillian’s fiancé pursuant to the agreement to agree to any variation in Jillian’s favour or otherwise.
Financial situation of Graham
[44] Graham has four children. In addition to his interest in the Kingsborough Farm property, Graham also owns and controls certain other blocks of farmland through various entities. Much of this other land, it seems was purchased using borrowed funds which are being serviced in part from income derived from Kingsborough Farm.
[45] According to Ms Horner, Graham owns, through various entities, some
455 hectares of land which he farms. The farmland provided to him in his parents’ wills, though not insubstantial, she says, comprises only around 22% of his total land holdings.
[46] The half share of the family farm purchased by Graham’s interests in 2006, according to Ms Horner, is now currently valued at $3.5 million and, although his other land interests it seems are heavily mortgaged, this half share has no registered mortgage.
[47] Graham contends however that through his own efforts in farming the family farm, initially with his parents from age 17 but then on his own, he has significantly
added to and improved the farm, the homestead and what were estate assets. This, he says, has substantially increased the value of these assets.
Financial situation of Rachel
[48] Rachel has two children. She is a veterinarian and apparently holds minimal shares in the veterinary practice in which she works. She and her husband are shareholders of a company and beneficiaries of a trust which own blocks of land comprising approximately 61 hectares with a farming operation run by the trustees of the trust. The net value of these interests, as I understand the position from indications provided in the evidence before me, is that Rachel and her husband’s interests, after taking into account current borrowings of approximately $1.6 million, would be in the order of about $1.5 million together.
The approach to Family Protection Act claims
[49] I now turn to the approach the Court is required to take in considering claims such as the present one under s 4 of the Act. Section 4 provides:
4 Claims against estate of deceased person for maintenance
(1) If any person (referred to in this Act as the deceased) dies, whether testate or intestate, and in terms of his or her will or as a result of his or her intestacy adequate provision is not available from his or her estate for the proper maintenance and support of the persons by whom or on whose behalf application may be made under this Act, the court may, at its discretion on application so made, order that any provision the court thinks fit be made out of the deceased's estate for all or any of those persons.
…
[50] The broad concept of a breach of moral duty on the part of a will-maker, to a point encapsulated in the provisions of s 4 of the Act, has developed over the years. It is addressed in the leading Court of Appeal decision in 2000, Williams v Aucutt.1
The approach taken there has been adopted by the Court of Appeal in later decisions relating to claims by adult children in decisions such as Auckland City Mission v
Brown2 and Henry v Henry.3
1 Williams v Aucutt [2000] 2 NZLR 479 (CA).
2 Auckland City Mission v Brown [2002] NZLR 650.
[51] From Williams v Aucutt, comments of Blanchard J at [68] and [70], often quoted in subsequent decisions of this and other Courts, are important here.
[68] In the last few decades an expansive view appears to have been taken of the power of the Court to refashion the will of a deceased in order to fulfil what has been regarded as his or her moral duty. This trend has not met with universal approval…It is to be remembered that the Court is not authorised to rewrite a will merely because it may be perceived as being unfair to a family member, and it is not for a beneficiary to have to justify the share which has been given. Rather, it is for a claimant to establish that he or she has not received adequate provision for proper maintenance and support.
…
[70] It is not for the Court to be generous with the testator's property beyond ordering such provision as is sufficient to repair any 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. As I have said, the Court's power does not extend to rewriting a will because of a perception that it is unfair. Testators remain 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 Family Protection Act.
[52] And recently, Katz J In Ormsby v Van Selm, helpfully provided a summary of principles as to the interpretation and application of the Act.4 Referring to those leading authorities of Williams v Aucutt,5 Auckland City Mission v Brown,6 and Henry v Henry,7 Her Honour outlined:8
(a) “Proper maintenance and support” requires a broad approach that includes the need to recognise the child as a valued member of the family and other social and ethical factors. “Support” is a wider term than “maintenance” and is used in its wider dictionary sense of “sustaining, providing comfort”. A child’s path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased.9
(b) “Proper” denotes something different from “adequate” and the
amount of an award is accordingly not to be measured solely by the
3 Henry v Henry [2007] NZCA 42.
4 Ormsby v Van Selm [2015] NZHC 2822 at [30].
5 Williams v Aucutt – above n 1.
6 Auckland City Mission v Brown – above n 2.
7 Henry v Henry – above n 3.
8 Ormsby v Van Selm , above n 4, at [30].
9 Williams v Aucutt, above n 5, at [52].
need of maintenance which would be so if the court were concerned merely with adequacy.10
(c) Assessing what provision will constitute proper support is a matter of judgment in all the circumstances of the particular case. Where there is no economic need it may be met by a legacy of a moderate amount. On the other hand where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for a family member.11
(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.12
(e) The size of the estate and any other moral claims on the deceased’s
bounty are relevant factors.13
(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.14
(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.15
(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.16
[53] It is useful here by way of illustration to consider the outcomes reached in just a few cases of not entirely dissimilar claims by adult children under the Act. I
10 Fisher v Kirby [2012] NZCA 310 at [111], citing Williams v Aucutt, above n 5, at [38] and Bosch v Perpetual Trustees Company Ltd [1938 AC 463 (PC) at 479.
11 Williams v Aucutt, above n 5, at [52].
12 Henry v Henry, above n 7, at [58].
13 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
14 Williams v Aucutt, above n 5, at [70].
15 Re Leonard [1985] 2 NZLR 88 (CA) at 92; Williams v Aucutt, above n 5, Henry v Henry, above n 7, at [55] and [58].
16 Fisher v Kirby, above n 10, at [120].
do so by way of example only, as each case obviously is different and outcomes must turn on their own particular circumstances.
[54] In Williams v Aucutt, a dispute arose between two daughters. Their mother had an estate of $920,000. One daughter, Christine, received assets from the estate worth $870,000; the other, Susan, assets worth only $50,000. The mother gave a clear and well substantiated reason for the difference. Christine was financially much worse off than Susan. Indeed, Susan and her husband together were wealthier than the mother herself. The trial judge however held that the mother was in “serious breach of moral duty” because she had not realised the “position of Susan in the
overall life of the deceased and the contribution that she made in that respect.”17 The
judge awarded Susan $230,000 or 25% of the estate.
[55] Christine was dissatisfied with this altered provision and took the matter to the Court of Appeal. The Court held in that particular circumstance, that the provision the testatrix had made in her will for Susan was so small that it led to a “justifiable sense of exclusion from participation in the family estate” and therefore
it “might not amount to proper support for a family member.”18 It is important to
note however that the Court of Appeal did not see fit to make an equal distribution to Susan. Instead, an amount of $100,000, or just over 10% of the estate was awarded to her.
[56] In Ormsby v Van Selm,19 the plaintiffs as daughters of the deceased, Mrs Ormsby, were only nominally provided for in their mother’s will. By contrast, their brother and the only son of the family was left the family farm, worth $2.59 million (93.5 per cent of the estate). The two daughters each received only $91,489 (or 3.2 per cent of the estate each). At trial, the Family Court Judge held that the testatrix had breached her moral duty to provide proper maintenance and support. The Judge concluded that equal distribution of the farm was required to remedy this
obligation.
17 Williams v Aucutt, above n 5, at [25].
18 At [52].
19 Ormsby v Van Selm, above n 4, at [19].
[57] On appeal to the High Court, the son conceded that there had been a breach of moral duty, but argued that the Family Court Judge was incorrect in the assessment of the quantum of relief awarded. An issue here concerned one of the plaintiffs Janine, who, when she was born, was placed in an orphanage. After later being taken back to the family farm, it is accepted that Mrs Ormsby showed little or no maternal affection towards her. Mrs Ormsby worked as a nurse and was often absent from the family. Mr Ormsby, the father, was a compulsive gambler who fathered eight children out of wedlock. Growing up, Janine was in charge of running the household despite her traumatic upbringing. It was under these circumstances that the Court held it proper for the estate to be distributed in a more equal manner. Katz J in this Court allowed the appeal and awarded Janine 30 per cent of the estate and the other plaintiff 25 per cent.
[58] The final case I intend to mention is the 2012 decision of this Court in Ashworth v Lambie. The facts in Ashworth v Lambie to a certain extent have some similarities to those prevailing in the current proceeding.20 In Ashworth v Lambie, the deceased had two daughters and one son. The testator and his wife whilst alive, had arranged for the gradual transfer of a family farm and farming assets to their son. Under the testator’s will his remaining assets totalling about $900,000 were split equally between the three siblings. The son had worked his entire adult life on the farm, leaving school aged 17 years. He contributed significantly to improvements
on the farm. Despite the son effectively acquiring the farm property worth about
$10 million, compared to the daughters’ $300,000, the Court rejected the daughters’ claims. The decision gave weight to the clear intention of the parents during their lives for the farm to pass to the son and recognised that the $300,000 received under the testator’s will by each of the financially stable adult daughters was an adequate provision under the Act.
[59] In summary, as the law stands, unequal distribution of a deceased’s estate is not in itself sufficient to warrant disturbing a testamentary disposition. The question whether a testator is in breach of their moral duty must be determined in light of all the prevailing circumstances and against the social attitudes of the day. While
“proper maintenance and support” requires a broad interpretive approach, the Court’s
20 Ashworth v Lambie [2012] NZHC 1110.
power does not extend to rewriting the will. As Katz J noted in Ormsby v Van Selm
at [39]:
The focus must be not on what the Judge thinks would be “fair”, but rather on what provision is necessary for a claimant’s proper maintenance and support, taking into account both their financial position and their entitlement to be recognised as a member of the family. Further, the Court is required to do no more than the minimum to redress the breach of moral duty that has occurred.
Discussion
[60] In assessing whether Jillian has a legitimate claim here under the Act, I will adopt the usual two step inquiry outlined in the earlier authorities. First, I consider whether Jillian’s parents have fulfilled their obligation to provide proper maintenance and support to her, given her financial position and economic needs. And secondly, I need to ask whether Edwin and Pamela have fulfilled their moral obligation to recognise Jillian as belonging to the family as a significant member and being an important part of their overall lives.
[61] But before doing this it is useful here to add one or two comments about the testamentary intentions exhibited by the parents, on which I heard considerable argument from counsel at the hearing of this matter.
The parents’ testamentary intentions
[62] From all the evidence before me, at the outset I need to say that I am satisfied that Edwin and Pamela’s testamentary intentions were made clear for some considerable time prior to their deaths. These intentions were for Graham (as the only one of their children who had shown interest in continuing himself to farm Kingsborough Farm) to acquire the family farm and for Edwin and Pamela’s two daughters to share equally in the remainder of their estates. This remainder was to include a specified cash contribution from Graham (in the form of partial debt repayment).
[63] I am satisfied that over the years considerable thought was given as to how to provide appropriately for the daughters (consciously and proactively building up off- farm assets) while ensuring Edwin and Pamela’s paramount intention of securing the
family farm for Graham to continue the Talbot farming legacy was achieved. The evidence before me shows that the parents also at times met with the family to explain their testamentary intentions (which necessarily meant that overall there was no possibility that all three siblings could be treated equally) and the reasons for those intentions.
[64] I am satisfied too from the evidence before the Court that Edwin and Pamela took advice specific to their testamentary intentions over the course of a decade at least. Their wishes it seems were generally constant throughout that time. They understood the value of their assets and I do not think it can be disputed that they carefully considered the provision for each child under their wills. Importantly too, the evidence shows clearly that they made proactive choices to grow off-farm assets for the benefit of their daughters, and they did so with the benefit of professional advice.
[65] My conclusions on these matters are clear. Notwithstanding this, I need now to deal with a number of allegations Jillian effectively made before me around what she says is the legitimacy of Edwin and Pamela’s testamentary intentions. These allegations are to the effect that her parents were not properly advised when making their wills, that they had no understanding of their estate values and they did not properly consider the impact of their intended dispositions on their children. In my view however, these allegations are unfounded for reasons I have outlined above, and I dismiss them. The evidence before me here is also such that I am satisfied these contentions are:
(a) inconsistent with the evidence that Pamela especially was acutely aware of the details of family finances and their investments;
(b)unfounded, particularly on the basis of the evidence before me of Mr Richard Walton and Mr Brian Maxwell (long-serving family solicitor and accountant respectively) who rejected such claims; and
(c) in any event a distraction from the actual test to be considered under s
4 of the Act.
Moral duty to provide proper maintenance and support
[66] The extent of a deceased’s moral duty under the Act is to be assessed at the time of her or his death. In considering those duties owed by parents to their children, the size of the estates of the parents and the existence of any other moral claims are relevant.
[67] Turning now to assess Jillian’s financial position here, it is difficult to conclude that she is in any real financial or economic need. On the evidence before me I am satisfied that Jillian is herself in a financially stable position and has an established ability to support herself if necessary. Further, she and the family on her own acknowledgment are financially supported entirely by her fiancé and her personal expenses she says are negligible. There can be no question that Jillian’s fiancé is extremely well off and this no doubt has a considerable benefit for the family generally.
[68] An email from Jillian to her mother dated 30 May 2013 which is before the Court includes an acknowledgment from her that she has $500,000 in “physical cash and assets” personally, was “saving a lot of money” and paying no household expenses. In addition, other email correspondence which is before the Court does shed some light on her financial position and the relatively expensive lifestyle she was leading (discussing overseas holidays, taking nannies on family trips, discussing multi-million dollar home purchases and the like) and her view that she no longer needed to continue working in paid employment.
[69] But, leaving on one side the matters I have noted above, even if it was to be accepted that Jillian currently has real financial need, it is also hard to see how in the circumstances prevailing in this case, an inheritance of over $1 million is insufficient to adequately provide for her proper maintenance and support.
[70] On these aspects, Ms Horner for Jillian referred specifically in her submissions before me to the decision in Auckland City Mission v Brown. There the Court of Appeal on the facts prevailing in that case held:21
We consider a wise and just testator would have ensured that they had the means to acquire a more substantial house for their family debt free, and to clear the loan, together with a sum to supplement their business income and provide a reasonable substantial contingency fund.
[71] Clearly, these comments from the Court of Appeal must relate to the situation before it and are specific to the individual circumstance of that case. Nevertheless, they are usefully considered here. In Auckland City Mission v Brown, the testator had assets of $4.5 million. However, due to the distaste the deceased had towards the husband of the daughter, he made generous provision for his grandchildren but not his daughter. The testator left $1 million to his grandchildren, but only $190,000 to his daughter. The matter was amplified it seems because, due to various changes in the assets held by the deceased, the daughter’s inheritance was reduced to only
$30,000. The rest of the estate was to be donated to charity. It is under these circumstances that the Court of Appeal held that the daughter was entitled to a distribution equal to an amount that allowed her to acquire a debt free house.
[72] Even if we might take that Court of Appeal decision at face value and consider the present case in light of the comments made by that Court, it is also hard to argue here that the almost $1.1 million which Jillian will be receiving is insufficient to provide her with a comfortable life. Although it is not entirely necessary to do so, I simply remark by way of example, that if an earmarked contribution from the $1.0 million plus present inheritance Jillian is to receive of (say) $500,000 was made, with a similar contribution from her fiancé’s assets, this could purchase a $1 million debt-free home for the family. This would leave from the balance something over $500,000 for investment to provide Jillian with an ongoing income.
[73] In endeavouring to take another tack before me, Jillian further submitted that, in any event, her parents had always practiced equal treatment between the siblings and something closer to equality was appropriate here. As an example, in 2006, Jillian noted a distribution of $265,000 was split evenly between the siblings, equating to exactly $88,333.33 each. She saw it as significant that her parents’ solicitor also noted on his file in respect of this distribution, “split fund– absolutely equal handed.”
[74] While during their lifetimes Edwin and Pamela may have had a practice of even-handedness as far as was possible, this still did not prevent them gifting off to Graham alone part of the farm debt he owed to them. There is also no doubt, as I have indicated above, that their testamentary intent was clear that the farm was to be inherited by Graham to retain it in the Talbot family with the residue of the estate to Jillian and Rachel. What Jillian is asking this Court to do is to rewrite what I see as the unambiguous intent of Edwin and Pamela’s wills in order to provide for something approaching a more equal distribution of the estates. The courts have often stressed the importance of respecting a deceased’s liberty to organise their affairs. Beyond what is required to fulfil a deceased’s moral obligation to provide for proper maintenance and support under the Act, this Court cannot disturb Edwin and Pamela’s clear testamentary intent simply on “unfairness” or “unequal sharing” grounds.
[75] Before me, Jillian also contended that her relationship with her parents was a strong one, with regular contact by telephone, email, text and frequent visits. This is not disputed. By way of example, she said that as a child and teenager, Jillian played her part in the family, working on the farm. Clearly, there is nothing to suggest that this family was other than a “close knit” and supportive family unit and all three siblings were dutiful children.
[76] I need to say at this point, however, that this is not a case of a claimant who has no assets and is in ill health like Fisher v Kirby.22 In that case, the claimant, who was seen as entirely impecunious with no assets and also was subject to ill health, was awarded sufficient to obtain reasonable accommodation and to provide appropriate support. The issue in the case before me is whether the over $1 million inheritance Jillian is to receive from the relatively large estates, bearing in mind her financial position, and the lack of what I see as any real economic need, is sufficient to fulfil her parents’ moral obligation to provide proper maintenance and support for
her. The answer, in my view, must be yes.
Moral duty to recognise Jillian as belonging to the family
[77] This question as to whether Jillian’s parents fulfilled their moral obligation to make provision for her in recognition of her position in the family is a matter of fact and degree. Williams v Aucutt generally held, as Katz J noted in principle (c) outlined at [52] above which I usefully repeat here:
Where there is no economic need [proper support] may be met by a legacy of a moderate amount. On the other hand where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for a family member.
[78] In terms of the parents’ moral duty to Jillian, there has been evidence led that throughout, Pamela, was particularly aware of the need to maximise the off-farm assets which were to be passed to her daughters alone and not to Graham. Pamela was widely regarded as a canny and clever investor and she worked hard to maintain this. The repayments to his parents Graham made off the farm debt over the years, it seems, were in large measure invested and it is effectively these investments that now pass to the daughters.
[79] As I have already noted, a number of meetings also took place between all family members over the years to discuss what the parents proposed. Clearly, it does seem that Edwin and Pamela were mindful of the position of their daughters throughout and the moral duty they owed to all members of the family. Their paramount intention was always to ensure that the farm property remained in the family and was viable. With Graham working, supporting and improving the farm from an early age, the parents thought it proper for the farm to be left with him.
[80] As already noted, the Court of Appeal in Williams v Aucutt23 ultimately awarded the claimant an increase to 10% of the total estate in recognition of the claimant’s belonging as a member of the family. In the present case I am satisfied that Edwin and Pamela did not fail to meet their moral duty to Jillian in recognising her as a family member. Under their wills they left all of their respective estates to immediate family members. No provision was made for others or indeed for
charities. And Jillian and Rachel were both recognised in equal measure with inheritances each totalling nearly $1.1 million, or just over 16% of the total estates.
[81] I conclude therefore that, in making their wills as they did, neither Edwin nor
Pamela breached their moral duty to recognise Jillian as belonging to the family.
[82] Finally, for completeness, I need to say also that I reject the implicit request made in Jillian’s submissions that I should look at the comparative values received overall by each of the siblings here from their parents as a critical factor in the present claim. In my view this must be seen generally as a distraction from what is the proper legal question before me, which is whether Edwin and Pamela breached their moral duty to Jillian. Also, given my conclusion that Edwin and Pamela, bearing in mind the ultimate size of their respective estates, did make proper provision for the adequate support and maintenance of Jillian, it is not open to this Court to effectively alter the terms of those wills in an endeavour to balance lifetime provisions which have benefitted Graham against the testamentary provisions made for Jillian.
Conclusion
[83] For all the reasons outlined above I am not persuaded by Jillian that there has been any breach of moral duty on the part of her parents Edwin and Pamela towards her.
[84] Jillian’s present application therefore must fail and is dismissed.
Costs
[85] As to costs, Ms Horner, counsel for Jillian, in particular requested that these be reserved and, if necessary, be the subject of further submissions.
[86] Costs are therefore reserved.
[87] In the event that counsel are unable to agree between themselves on the issue of costs, then they may file memoranda (sequentially) and in the absence of any
party indicating they wish to be heard further on the question of costs, I will decide that issue based upon the material then before the Court.
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Gendall J
Solicitors:
Mahony Burrowes Horner, Wellington. Wynn Williams, Christchurch.
Diana Shirtcliff, Barrister & Solicitor, Christchurch.
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