TD v Executors of the Estate of Mrs T

[2019] NZHC 2490

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,

11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000676

[2019] NZHC 2490

BETWEEN

TD

Appellant

AND

The Executors of the Estate of Mrs T First Respondent

O

Second Respondent

Hearing:

26 September 2019

Appearances:

V Crawshaw QC and M Orange for Appellant

No appearance for First Respondents (abide the decision of the Court)

G M Illingworth QC and P Stevenson for Second Respondent

Judgment:

4 October 2019

JUDGMENT OF LANG J

[on appeal against order striking out proceeding]

This judgment was delivered by me on 4 October 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

TD v O [2019] NZHC 2490 [4 October 2019]

[1]        Mrs T passed away on 15 November 2015. She left a will dated 16 October 2015, probate of which was granted to the first respondents on 9 February 2016.

[2]        The appellant, Ms TD, is Mrs T’s daughter. Mrs T was also survived by her son, Mr O who is the second respondent in this proceeding.

[3]        The principal asset in Mrs T’s estate is a house property situated at [Redacted]. The will provided that when this property was sold Mr O was to receive the sum of

$400,000 from the sale proceeds. The balance was then to be divided equally between Mr O and Ms TTD.

[4]        Ms TD was not satisfied with this provision in the will. She filed an application in the Family Court at Auckland seeking further provision from her mother’s estate under the Family Protection Act 1955 (the Act). Mr O then applied to strike the proceeding out on the basis that it could not succeed. In a decision delivered on [Redacted] Judge de Jong granted the application and struck out Ms TD’s claim.1   Ms TD appeals against the Judge’s decision.

The claim

[5]Section 4(1) of the Act provides as follows:

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.

…

[6]        As will be evident, the section provides the Court with the power to order that provision, or further provision, be made from an estate in favour of family members of a deceased person where the will fails to make adequate provision for their “proper maintenance and support”.

1      [Redacted].

[7]Clause 4.1 of Mrs T’s will provides as follows:

I direct that my Trustees hold my interest in the real property which, as at the date of this will, I own at [Redacted] (“my home”) on the basis set out in this section 4 of this will. If at the date of my death I do not own my home then paragraphs 4.2 and 4.5 of this section 4 shall not apply. If I have sold my home and purchased other real property then paragraph 4.6 shall apply to that property. If I have sold my home and invested the net proceeds of sale in assets other than real property then such assets shall form part of my residual estate and be dealt with under s 6 of this will.

[8]Clause 4.6 then provides:

On the sale of my home the net proceeds, after deduction of all associated costs and after reimbursing my Trustees for any amounts paid by them in relation to my home or otherwise owing to them under this will, shall be applied as follows:

(a)the first $400,000 shall be paid to my son [O] in consideration of his love and care for me over many years; and

(b)the balance shall be divided equally between, and paid to, my son [O] and my daughter [TD].

[9]The will also contained some bequests and legacies in favour of grandchildren.

[10]The house has not yet been sold but is estimated to have a value of more than

$2 million. The balance of the estate is worth approximately $122,000. As matters currently stand, Mr O stands to inherit approximately 53 per cent of the estate having a value of around $1.3 million whilst Ms TD will receive approximately 36 per cent of the estate having a value of at least $800,000. Those figures will obviously depend upon the price ultimately realised for the house.

[11]      Ms TD does not allege that her mother failed to provide her with adequate maintenance in terms of s 4. Rather, she says that in providing for Mr O to receive the first $400,000 from the sale proceeds of the house, Mrs T failed to provide her with adequate support. She asks the Court to remedy this breach of moral duty by making further provision for her under the estate.

[12]      Ms TD accepts that her mother was not bound to treat her two children equally. She also acknowledges she has lived overseas for virtually the whole of her adult life and was therefore unable to care for her mother to the extent that would have been

possible if she lived in New Zealand. She says, however, that when she made her will Mrs T did not know why Ms TD has chosen to leave New Zealand and live overseas. Ms TD contends that, had her mother been aware her reason for doing so, she would have made greater provision in her will for Ms TD’ support.

[13]      Ms TD says that, unknown to her mother, Mr O raped her when she was 13 years of age. In an affidavit filed in support of her substantive application she described how this happened on an occasion when she and her brother were staying with an aunt and uncle in [Redacted]. She says this incident changed her life, and she decided the only way she could deal with it was by putting as much distance as she could between herself, her brother and her father, who was also abusive towards her. She initially went to university in Dunedin and then, at the age of 21 years, emigrated to England. She has lived overseas ever since. Ms TD says she never told her mother why she left New Zealand because she was not prepared to add to her mother’s burdens by telling her what had happened.

The jurisdiction to strike out a proceeding

[14]Rule 193 of the Family Court Rules 2002 provides as follows:

193    Striking out pleading

(1)The court may order that all or part of an application or defence or other pleading be struck out if the pleading or part of it—

(a)      discloses no reasonable basis for the application or defence or other pleading; or

(b)      is likely to cause prejudice, embarrassment, or delay in the proceedings; or

(c)      is otherwise an abuse of the court’s process.

(2)An order under subclause (1) may be made by the court—

(a)      on its own initiative or on an interlocutory application for the purpose:

(b)      at any stage of the proceedings:

(c)      on any terms it thinks fit.

[15]      Rule 193 is worded slightly differently to r 15.1 of the High Court Rules 2016, the analogous provision that enables this Court to strike out a civil proceeding. Rule

15.1 relevantly provides:

15.1 Dismissing or staying all or part of proceeding

(1)The court may strike out all or part of a pleading if it—

(a)      discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or

(b)      is likely to cause prejudice or delay; or

(c)      is frivolous or vexatious; or

(d)  is otherwise an abuse of the process of the court.

…

[16]      As Katz J explained in Bean v Bean, the difference in wording between the two rules reflects the difference between the way in which civil proceedings are commenced in the two jurisdictions.2 The primary pleading in a civil proceeding commenced in the High Court is generally a statement of claim. This sets out the plaintiff’s claims in formally worded causes of action. Strike out proceedings in that jurisdiction therefore generally focus on whether the pleadings contained in the statement of claim give rise to a tenable cause of action. In the Family Court, however, the claim commences with an application that may be sparse in its wording. The grounds for the claim are generally to be found in the affidavits filed in support of the claim. Strike out applications in the Family Court are therefore likely to focus on whether the evidence contained in the affidavits is sufficient to disclose a reasonable basis for the claim rather than whether the formal pleadings disclose a tenable cause of action.

[17]      The threshold for such applications is, however, high in both jurisdictions. Counsel agree that the Judge in the present case correctly set out the legal principles to be applied in this context. He took these from the well-known decision of the Court

2      Bean v Bean [2019] NZHC 20 at [12].

of Appeal in Attorney-General v Prince & Gardner3 in the following passage of his decision:4

[16] …

(a)the strike out threshold is set deliberately high. The onus is on the applicant to show the cause of action is untenable and cannot succeed.5

(b)the Court should only invoke its power to strike out an application where it is satisfied it has the requisite evidential material.6

(c)the Court generally proceeds with strike out applications on the basis factual allegations contained in the pleadings of the opposing party are assumed to be true.

(d)if a claim depends on a question of law capable of decision on the material before the Court the Court should determine that question even though extensive argument may be necessary to resolve it.7

[17]      Whether there is a reasonable basis to Ms TD’s FPA claim is key to Mr O’s strike out application. The spotlight is on him to satisfy this Court on the balance of probabilities that Ms TD’s claim is untenable and cannot succeed.

[18]     The approach to be taken in an application to strike out a claim brought under the Family Protection Act has been refined slightly in two recent decisions of this Court. In Moffatt v Barrett, Associate Judge Bell dealt with an application to strike out several claims, one of which was a claim brought under the Act.8 He commenced his consideration of this aspect of the application with the following observations:

[51]      A cause of action under the Family Protection Act is an unlikely target for a striking out application. It is usually sufficient to plead the death of the deceased, the grant of administration, the relationship between the claimant and the deceased, the provisions of the will, the known assets and liabilities of the estate, the provision made for the claimant (if any), and that the deceased breached the duty to make adequate provision for proper maintenance and support.

3      Attorney-General v Prince & Gardner [1998] 1 NZLR 262 (CA) at 267.

4      [Redacted], above n 1.

5      R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978] 2 NZLR 289 (CA) at 294-295; Takaro Properties Ltd (in receivership) v Rowling [1978] 2 NZLR 314 (CA) at 316-317.

6      Gartside v Sheffield Young & Ellis [1983] NZLR 37 (CA) at 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641 (CA).

7      Gartside above n 5, at 45. See also Peerless Bakery Ltd v Watts [1955] NZLR 339 (CA); R Lucas, above n 5; Takaro Properties above n 5.

8      Moffatt v Barrett HC Auckland CIV 2010-404-7116, 12 September 2011.

[52]      Grant’s statement of claim has all these elements. It is not to be struck out for inadequate pleading. The application to strike out this cause of action can only be considered on the basis that it is untenable in that Grant has no prospect of being able to obtain an award under the Family Protection Act.

[19]     The Associate Judge then went on to consider the application based on his assessment of the chances of the claim succeeding on the plaintiff’s “best case”.9 This analysis ultimately led the Associate Judge to conclude that, “on his best case, Grant [the plaintiff] cannot hope to obtain an order for further provision from his mother’s estate under the Family Protection Act”.10 The claim was accordingly struck out.

[20]     In Bean v Bean Katz J adopted the same approach.11 She described this as extrapolating the plaintiff’s “best case” from the substantive application and supporting affidavit, and then applying the relevant legal principles to that case.12 I propose to take the same approach in the present case because I consider it enables a principled decision to be made as to whether Ms TD’s claim for further provision from her mother’s estate has a reasonable basis.

The Judge’s decision

[21]     Judge de Jong took broadly the same approach. After referring to the principles set out above at [17], the Judge observed that he needed to proceed on the basis that Ms TD’s allegation that Mr O raped her must be assumed to be true, and that Mrs T had no knowledge of this before she died.13

[22]     The Judge noted that Ms TD did not claim her mother had failed to make adequate provision for her maintenance. Rather, she advanced her claim solely on the basis that her mother had failed to provide adequately for her support. The Judge then cited the following passage from the leading judgment in this area, the decision of the Court of Appeal in Williams v Aucutt:14

“[Support is] an additional and wider term than “maintenance”. … Support is used in its wider dictionary sense of “sustaining, providing comfort”. A

9      At [60]-[68].

10 At [68].

11     Bean v Bean, above n 2.

12 At [15].

13 [Redacted] above n 1, at [19].

14     Williams v Aucutt [2000] 2 NZLR 479 (CA) at [52].

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.”

[23]The Judge then concluded:15

[23]      The difficulty for Ms TD is that even if the rape allegation is proved at the substantive hearing, and the mother is found to have breached her moral duty, I find that an assessment of what provision is necessary to repair the breach will not result in any change to the mother’s will. This is because Ms TD’s claim is a support based claim only.

[24]      The fact there is a disparity in what each sibling is entitled to under the will, or that the disparity is “unfair”, are not adequate reasons for rewriting the will. Under the will Ms TD is entitled to around 36.6% share of her mother’s estate. This is outside the 10% to 25% common “guideline” for support claims and within an acceptable range for support claims.

[25]      In those circumstances I am satisfied on the balance of probabilities that Ms TD’s FPA claim is untenable and cannot succeed. For this reason her claim will be struck out.

Decision

[24]   As both counsel agree, the appeal is to be determined by applying the principles confirmed by the Court of Appeal in Austin, Nichols & Co Inc v Stichting Lodestar.16 Ms TD is entitled to this Court’s assessment as to whether the Judge’s decision was correct. The onus is on her, however, to establish why the decision is incorrect.

[25]   In order to assess whether the claim should be struck out under r 193 it is necessary to focus on whether there was a reasonable basis for Mrs T’s claim that her mother breached her duty under the Act to provide her with proper support. If there was, the claim would need to proceed to trial. The issue of remedy would be a matter to be determined in that forum.

[26]   I therefore do not agree with the Judge’s observation that, even if Mrs T was found to have breached her moral duty, the assessment of what provision was necessary to repair the breach would not result in any change to the will.17 If no remedy was required there could be no breach of duty because Mrs T would already

15     [Redacted, above n 1.

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

17 At [23], set out above at [23].

have made sufficient provision in her will for her daughter. I do not consider this to be a material error, however, because the Judge obviously considered the provision Mrs T had already made for her daughter satisfied any claim for support Ms TD might advance. The issue for present purposes is therefore whether the Judge’s conclusion was correct, and there is no reasonable basis for Ms TD’s claim.

[27]   In Little v Angus, the Court of Appeal summarised the approach to be taken in this area as follows:18

The inquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so, what is appropriate to remedy that breach. Only to that extent is the will to be disturbed. The size of the estate and any other moral claims on the deceased’s bounty are highly relevant. Changing social attitudes must have their influence on the existence and extent of moral duties. Whether there has been a breach of moral duty is customarily tested as at the date of the testator’s death; but in deciding how a breach should be remedied regard is had to later events.

[28]   As Katz J pointed out in Bean v Bean,19 the phrase “moral duty” does not appear in s 4, but it is now recognised as “too deeply embedded in the administration of the Family Protection Act to be open to judicial reconsideration”.20

[29]   The passage cited by the Judge from Williams v Aucutt21 was taken from the judgment of Richardson P. It appears in the following paragraph of the judgment, which contains a useful summary of the concept of support in the present context:

The test is whether adequate provision has been made for the proper maintenance and support of the claimant. Support is an additional and wider term than maintenance. In using the composite expression, and requiring “proper” maintenance and support, the legislation recognise that a broader approach is required … Support is used in its wider dictionary sense of “sustaining, providing comfort”. A child’s path through life is supported not simply by a 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. Just what provision will constitute proper support … is a matter of judgment in all the circumstances of the particular case. It may take the form of lifetime gifts or a bequest of family possessions precious to its members and often part of the family history. And where there is no economic need it may also be met by a legacy of a moderate amount. On the other hand where the estate comprises the accumulation of

18     Little v Angus [1981] 1 NZLR 126 (CA) at 127.

19     Bean v Bean, above n 2, at [19].

20     Re Z (deceased) [1979] 2 NZLR 495 (CA) at 506.

21 Set out above at [22].

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.

(Emphasis added)

[30]   In Henry v Henry, the Court of Appeal explained the seemingly conservative approach adopted in Williams v Aucutt as follows:22

The conservative approach requires that the Judge makes the assessment of what is required on a basis which focuses on what is necessary to make adequate provision, but … no more than that. Broader questions of desirability or greater awards or the Judge’s view of fairness should not come into play.

[31]   As both counsel accept, the awards made in cases where a claimant has based a claim solely on the failure to provide adequate support have been relatively modest. In this context Blanchard J made the following observations in Williams v Aucutt:

[69] We are not concerned in this appeal with a claimant’s need for proper maintenance. It is conceded that there is none. The claim is for proper support in the form of recognition both of membership of the family of the deceased and of contributions by way of assistance to and support of the deceased. Such a claim is one capable of being brought under the Act. In part it seeks support from the estate in return for support which has been rendered, albeit without any promise of return such as would fall within the Law Reform (Testamentary Promises) Act 1949. The question remains, however, whether a need for proper support is made out in the particular circumstances. It is not to be assumed that merely because a claimant, no matter what his or her personal substance, has been a dutiful child of the deceased, it will necessarily be appropriate to order some provision or further provision. In some cases a mere acknowledgement of the relationship may be the most that can be expected. And in others the competing claims on the testator of a surviving spouse or of less fortunately placed siblings may negate any moral duty towards a wealthy claimant.

The claimant in Williams v Aucutt received the sum of $100,000, which represented approximately ten per cent of the value of the estate.

[32]   Mr Illingworth points out on Mr O’s behalf that, in other cases where the plaintiff’s claim is based solely on a claim for support, the awards have typically amounted to between three and 15 per cent of the value of the estate.23 These provide

22 Henry v Henry [2007] NZCA 42, [2007] NZFLR 640 at [58].

23 See for example Silbery v Silbery-Dee [2008] NZFLR 191; Brady v Goudie HC Hamilton CIV 2009-419-469, 20 August 2009; Clarke v Goulding [2017] NZHC 1326, [2017] NZFLR 493; Fitzgerald v Mills [2018] NZHC 2480.

no more than a comparative yardstick, however, because of the widely variable circumstances of cases in this area. For that reason an evaluative approach is required.24

[33]   In the present case, even assuming the rape allegation is true, the extent to which Ms TD’s claim based on support could be recognised would need to take into account several factors. The first is that Mrs T was not the person who perpetrated the abuse and it did not occur within the family home. The fact that it was perpetrated by another family member is not fatal to her daughter’s claim because the courts have been prepared to make further provision for a claimant to recognise sexual abuse perpetrated by a person other than the testator.

[34]   In Joan v Mary, for example, the applicant’s share of her mother’s estate was increased from ten per cent to 20 per cent to recognise the fact that the applicant had suffered sexual abuse at the hands of her father.25 In that case Whata J observed that proven parental abuse of a child during his or her upbringing “may bear on the content of a parent’s moral duty for the purposes of assessing the distribution of an estate”.26 Ms TD’s claim is not based on parental abuse but on abuse by a sibling. In principle, however, I do not consider this to be a material distinction. The fact that the abuse in the present case was not perpetrated by Mrs T and it did not occur within the family home are nevertheless factors to be taken into account in assessing the extent to which provision needed to be made to reflect the rape.

[35]   The next relevant factor is that Mrs T did not know of the rape before she died. Again, this is not fatal to a support-based claim. Whether or not there has been a breach of duty must be judged on the circumstances that exist at the date of the testator’s death whether they are known to the testator or not.27 The claim for support would, however, be stronger if, for example, Mrs T had known of the allegation and refused to believe it or to provide her daughter with appropriate support at the time.

24     Cartwright v Joseph [2018] NZHC 2383 at [34].

25     Joan v Mary [2012] NZHC 1830.

26 At [14].

27     Re McGregor (deceased) [1961] NZLR 1077 (CA); Carswell v Carswell [2013] NZHC 3562.

[36]   Taking these factors into account I do not consider a claim by Ms TD based solely on lack of support would have any prospect of attracting an award of more than ten to 15 per cent of the estate. Given her acknowledged lack of need for maintenance, the fact that she has received approximately 36 per cent of the estate means her claim for further provision has no reasonable chance of success and must inevitably fail. For that reason the appeal cannot succeed.

[37]   Finally, the claim raises another issue. This flows from the following paragraphs in Ms TD’s affidavit filed in support of her claim:

10. I accept that there was no obligation on my mother to treat [Mr O] and myself equally in her Will. I believe that when my mother prepared her Will benefitting [Mr O] more than me, she had in the forefront of her mind, the fact that [Mr O] lived near her and was therefore able to assist her more than I was able to because I lived overseas. While my mother and I maintained a very close relationship over the years, I was never able to provide the same care to my mother that [Mr O] could. However, for reasons which I will now outline, I believe that had my mother known the reasons why I left New Zealand when I was 21 years old, she would not have prepared her Will to provide a greater benefit to [Mr O].

…

47.It was the final insult when I saw that [Mr O] was to receive a greater share of my mother’s estate because he stayed in New Zealand and was able to assist my mother more. Had my mother known the reason I left, I am convinced she would not have done this.

48.The provision in my mother’s Will to keep the house for the benefit of the grandchildren for their tertiary education, is in effect another benefit for [Mr O] because his children are in New Zealand and young enough to benefit from this provision whereas my children are in London. …

[38]   These paragraphs suggest Ms TD’s real concern is not that her mother has failed to provide her with proper support. Rather, she believes her mother has preferred Mr O in the will when she may not have done so if she had known the true facts. In other words, Ms TD believes there is an unfair disparity between the manner in which her mother has treated her son and her daughter. Even if true, however, that factor alone cannot give rise to a tenable claim under the Act.

Result

[39]The appeal is dismissed.

Costs

[40]   At Mr Illingworth’s request I do not fix costs at this point. If the parties cannot reach agreement I invite counsel for Mr O to file a concise memorandum (ie no more than three pages in length) as to costs within 14 days. Counsel for Ms TD is to respond within 14 days and there will be seven days for any reply memorandum. I will then determine costs on the papers.

Lang J

Solicitors:

Fortune Manning, Auckland McLeod & Associates, Auckland Counsel:

V Crawshaw QC, Auckland

G M Illingworth QC, Auckland P Stevenson, Barrister, Auckland