Waite v Waite
[2023] NZHC 829
•20 December 2023
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2023-419-44
[2023] NZHC 829
UNDER the District Courts Act 2016 IN THE MATTER
of an appeal against a decision of the District Court at Te Awamutu
BETWEEN
GRAEME JOHN WAITE
Appellant
AND
NGAERE ELEANOR WAITE
Respondent
Hearing: 2 October 2023 Appearances:
D O’Neill and F C Oback for the Appellant
K McDonald and N T Porima for the Respondent
Judgment:
20 December 2023
JUDGMENT OF GAULT J
This judgment was delivered by me on 20 December 2023 at 10:30 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Mr D O’Neill and Ms F C Oback, Barristers, Hamilton
Ms J Cooney (appellant’s instructing solicitor), Cooney Law, Cambridge Ms K McDonald and Ms N T Porima, Gallie Miles, Te Awamutu
WAITE v WAITE [2023] NZHC 829 [20 December 2023]
[1] Mr Graeme Waite (Graeme Waite) appeals against the reserved judgment of Judge R H Paul in the Family Court at Te Awamutu dated 25 January 2023,1 declining an application for leave under s 88(2) of the Property (Relationships) Act 1976 (PRA) to apply for orders under ss 23 and 25(1)(a) of the PRA to bring assets, which had transferred by survivorship to the respondent, Ms Ngaere Waite (Ngaere Waite), into the estate of Graeme Waite’s late father, Mr Jack Waite (Jack Waite).
Factual background
[2] Graeme Waite was born on 21 March 1955. In 1960, his parents separated. In 1965, his mother died. Graeme Waite did not inherit anything from her estate.
[3]In the 1970s, Jack Waite married Ms Watkins. In 1985, Ms Watkins died.
[4]On 14 April 1988, Jack Waite married Ngaere Waite.
[5] On 20 July 1988, Jack Waite executed a final will (the will). The will appointed two solicitors in Hastings, Mr Gallate and Mr Mansfield, as executors and trustees of the will, and provided:
(a)to Graeme Waite (his only son) – a silver dish, his clothing, personal effects/papers, carpentry tools and endowment insurance policy (if it did not vest in Graeme Waite upon his death);
(b)to Ngaere Waite – $25,000 plus a life interest in the home that they occupied and the income from the residuary estate: and
(c)after Ngaere Waite’s death, the residuary estate to Graeme Waite.
[6] In 1989, Ngaere and Jack Waite purchased a section at Te Pahu Road with proceeds from the sale of separate properties that each had owned. They also used the proceeds to build a large home which was used as a rest home and then later as a bed
1 Waite v Waite [2023] NZFC 580.
and breakfast. Jack Waite built the home and Ngaere Waite did most of the work within the business.
[7] On 10 February 2010, Jack Waite executed a codicil to the will deleting the appointment of Mr Gallate as executor and trustee. In all other respects, Jack Waite confirmed the will.
[8] In 2014, Ngaere and Jack Waite sold Te Pahu Road and purchased a smaller property at Kihikihi Road, as joint tenants.
[9] On 4 July 2018, Jack Waite suffered a stroke. Ngaere Waite cared for him at home until he entered residential care in 2020.
[10] On 8 April 2021, Jack Waite died. The Kihikihi Road property transferred to Ngaere Waite by survivorship under the joint tenancy.
[11] On 2 November 2021, in anticipation of the proceeding, Mr Mansfield retired as trustee and appointed Graeme Waite as the new trustee.
[12] On 23 November 2021, Graeme Waite filed an application (dated 19 November 2021), as executor of Jack Waite’s estate, for leave under s 88(2) of the PRA to apply for an order under s 25(1)(a) of the PRA.
[13] On 9 February 2022, Ngaere Waite responded with a separate application under the Family Protection Act 1955 (FPA) seeking that provision be made out of Jack Waite’s estate for her proper maintenance and support.
Family Court decision
[14] The Judge said that to grant leave Graeme Waite had to satisfy the Court that a serious injustice would be caused if leave were not granted, citing s 88(2) of the PRA. The Judge noted that if granted leave, Graeme Waite would seek half of the relationship property (which would include the Kihikihi property) be transferred to Jack Waite’s estate. Effectively that would mean Graeme Waite would receive half of the value of the relationship property as the main beneficiary.
[15] The Judge said that Ngaere Waite opposed the application on the basis that leave should not be granted as the threshold requirement was not met. But, if leave were granted, Ngaere Waite had filed an FPA claim saying that a moral duty was owed by Jack Waite to her and that the relationship property should, in the majority, remain in her ownership. Graeme Waite submitted that the provisions of the will were sufficient to meet that moral duty.
[16] After referring to the modest pool of assets and the parties’ respective cases, the Judge considered the issue of leave. She accepted that Graeme Waite was entitled to make an application by virtue of his appointment as the executor in the estate of his father. She said that the purpose of seeking leave was to recover the relationship assets for the estate that the surviving spouse either owned or took by survivorship, noting that usually the reason for doing this is to provide for the beneficiaries or claimants of the estate. The Judge said that an application may also be brought to prevent a surviving spouse from receiving an undeserved windfall.
[17] The Judge addressed the meaning of serious injustice, referring to the two cases she found most helpful:
(a)Morgan v Public Trust,2 where the deceased’s will left the proceeds of an insurance policy to his children, but the deceased surrendered this policy before his death. On his death, the funds in the deceased’s joint bank account passed by way of survivorship to the deceased’s widow, meaning that an FPA claim by the deceased’s daughter would be against a worthless estate. The deceased’s estate had a claim against the widow under the PRA and the daughter had a strong claim under the FPA. The serious injustice test was met.
(b)Kennedy v Kennedy,3 where a stepson sued his stepmother in circumstances where all of the deceased’s property had passed to her by survivorship. The stepson was very wealthy and his FPA claim was
2 Morgan v Public Trust HC Auckland CIV-2006-404-003636, 20 November 2006.
3 Kennedy v Kennedy [2017] NZHC 168, [2017] NZFLR 149.
not for financial need but a moral need for recognition. The stepson’s claim was of the very weakest kind.
[18]The Judge then addressed the following factors.
(a)The financial need of the applicant. After referring to the financial dependence in Public Trust v Whyman and Kelly v Craige,4 the Judge said that Graeme Waite had not evidenced any financial need. The Judge noted that Graeme Waite owns with his wife a mortgage free home in Auckland and works full time, as does his wife. The Judge said that, arguably, he may be in a better financial position than Ngaere Waite.
(b)Special circumstances. After referring again to Public Trust v Whyman, the Judge said that no special circumstances had been advanced.
(c)Undeserved benefit. The Judge referred to Crotty v Williams,5 and said that Graeme Waite did not submit that any such windfall had been received by Ngaere Waite.
(d)The couple’s intention. The Judge noted Graeme Waite’s submission that the couple’s intentions could not be known because the Court did not have the benefit of any notes taken by the lawyer as to his instructions when Jack and Ngaere Waite were registered as joint tenants. The Judge said she could not make decisions based on supposition and could only take it that the property was registered in their names as joint tenants because that was their instruction. The Judge said it was more probable that Jack Waite appreciated he was leaving his half share in the matrimonial home to his wife and he considered that was appropriate and fulfilling of his moral duty to his wife. The reverse was the outcome if she predeceased him. His primary responsibility was to his wife, especially given her financial
4 Public Trust v Whyman [2005] 2 NZLR 696 (CA); Kelly v Craige [2020] NZFC 3126, (2020) 32 FRNZ 624.
5 Crotty v Williams FC Hamilton FAM-2002-19-1082, 29 August 2005.
contribution to the family home, her care of him and the contribution she made to the running of the businesses at the Te Pahu Road property. The Judge said Ngaere Waite was cross-examined on this point and the Judge was satisfied the evidence she gave was credible. Her evidence was that she recalled they received a phone call from the lawyer about how the property was to be owned. Jack Waite took the call from the lawyer and spoke with him and relayed the conversation to her regarding ownership of the property. They agreed that they were to be registered as joint tenants. Both understood that the Kihikihi Road property would pass to the survivor in the event of the death of one of them. The Judge said that in any event she took the legal title at face value as reflecting the parties’ intentions.
(e)Duration of relationship. The Judge observed that a short duration of relationship may result in an unequal sharing of relationship property and prompt a leave application. However, she said that this was not the case for Jack and Ngaere Waite who were married for 33 years.
(f)Conduct during the relationship. The Judge said there was no evidence to suggest that the conduct of Ngaere Waite was anything other than entirely supportive of her husband and their marriage.
(g)Nature and source of the relationship property. The Judge was satisfied that Ngaere Waite contributed significantly to the property pool. She sold her separate property and consolidated that with Jack Waite’s, purchasing the Te Pahu Road property. She then worked in the parties’ businesses taking most of the responsibility for day to day running until the parties were simply unable to continue. She then cared for her husband following his stroke and diagnosis of dementia until she was unable to do so. Their savings were then used to pay for his care and funeral costs.
(h)Has a moral duty arisen? The Judge said that all of the cases that had been referred to included a substantive application or an undeserved
windfall. The Judge said that Graeme Waite did not claim a moral duty or make an application under the FPA. Therefore, the Judge could not assess whether a moral duty had arisen. On the evidence the Judge did not see any need to maintain and support Graeme Waite given his circumstances. She considered it would be unlikely that the grounds for a FPA claim would be met given his circumstances.
(i)Merits of applicant’s case. The Judge referred to Graeme Waite’s submission that a serious injustice would occur because there were insufficient assets within the estate, as a result of survivorship, to meet the provisions of Jack Waite’s will. The Judge noted that a person may make a gift or provision within a will, but the estate simply does not have sufficient assets to provide for them. The Judge said this was not a basis upon which a serious injustice could be claimed of itself. The purpose of s 88 was not to undermine the legal function of survivorship. The Judge said serious injustice must be found.
(j)Widow’s position. The Judge noted it was fair to say the pool of assets is modest. The widow’s position at 81 years of age was that she has a home, a car and about $140,000 in the bank. These assets and her widow’s superannuation is what she has to live on until her passing. She has no medical concerns and may well live for many years to come. She will need to meet all rates, insurances, home and property maintenance, medical needs, food (with rising cost of living), electricity, vehicle expenses and fuel on this very limited income and savings. This does not consider her personal expenses. After years of work this is her situation.
[19] The Judge concluded that [Graeme] Waite did not have an FPA claim,6 that there appeared to be no moral duty unmet, that he was of sufficient means and that he did not seek recognition. The Judge said that, though Graeme Waite may see the present situation as unfair or unjust, there was no serious injustice caused to him. The
6 The Family Court judgment appears to be missing the opening part of paragraph [66].
application for leave was accordingly declined. That made Ngaere Waite’s FPA application redundant.
Approach on appeal
[20] It is common ground that this is a general appeal by way of rehearing. This Court’s approach on a general appeal is settled following the Supreme Court’s decisions in Austin, Nichols & Co Inc v Stichting Lodestar and Kacem v Bashir.7 The appellate court has the responsibility of considering the merits of the case afresh.8 The appellate court must be persuaded that the decision is wrong,9 but the weight it gives to the reasoning of the court below is a matter for the appellate court’s assessment.10 If the appellate court admits further evidence, that evidence will necessarily require de novo assessment and consideration of how it affects the correctness of the decision under appeal.11 Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.12
Applicable statutory provisions
[21] Section 88 of the PRA needs to be seen in its statutory context. It is a gateway provision for orders under s 25, the central provision in Part 7 of the PRA dealing with proceedings. Section 88 addresses who can apply for orders under s 25 in proceedings commenced after one spouse has died.
[22]Section 88 relevantly provides:
7 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 at [13] and [16]; and Kacem v Bashir [2010] NZSC 112; [2011] 2 NZLR 1 at [31]-[32].
8 Kacem v Bashir at [31].
9 Austin, Nichols & Co Inc v Stichting Lodestar at [13].
10 Kacem v Bashir at [31]. No deference is required beyond the customary caution appropriate when seeing the witnesses provides an advantage because credibility is important; see Austin, Nichols & Co Inc v Stichting Lodestar at [13], and Green v Green [2016] NZCA 486; [2017] 2 NZLR 321; at [31-[32].
11 Kacem v Bashir at [31].
12 Austin, Nichols & Co Inc v Stichting Lodestar at [16]; and Kacem v Bashir at [32].
88 Who can apply
(1)The following persons may apply for an order under section 25(1)(a) or (b) or an order or declaration under section 25(3):
(a)the surviving spouse or partner:
(b)any person on whom conflicting claims in respect of property are made by the surviving spouse or partner and the personal representative of the deceased spouse or partner.
(2)The personal representative of the deceased spouse or partner may, with the leave of the court, apply for an order under section 25(1)(a). The court may grant leave only if it is satisfied that refusing leave would cause serious injustice.
(3)The following persons may apply for an order under section 25(1)(b) or an order or declaration under section 25(3):
(a)the personal representative of the deceased spouse or partner:
…
[23] Section 88 modifies the primary entitlement to apply in s 23, which relevantly provides:
23 Who can apply
(1)The following persons may apply for an order under section 25(1)(a) or (b) or an order or declaration under section 25(3):
(a)either spouse or partner, or both of them jointly:
(b)any person on whom the spouses or partners have made conflicting claims in respect of property.
…
(3)If one of the spouses or partners has died, the application of this section is modified by section 88 (except in a situation described in section 10D(1)).13
[24]The central provision, s 25, relevantly provides:
25 When court may make orders
(1)On an application under section 23, the court may—
(a)make any order it considers just–
13 Section 10D(1) has no application in this case.
(i)determining the respective shares of each spouse or partner in the relationship property or any part of that property; or
(ii)dividing the relationship property or any part of that property between the spouses or partners:
(b)make any other order that it is empowered to make by any provision of this Act.
(2)The court may not make an order under subsection (1) unless it is satisfied,—
(a)in the case of a marriage or civil union,—
(i)that the spouses or civil union partners are living apart (whether or not they have continued to live in the same residence) or are separated; or
(ii)that the marriage or civil union has been dissolved; or
(b)in the case of a de facto relationship, that the de facto partners no longer have a de facto relationship with each other; or
(c)that one spouse or partner is endangering the relationship property or seriously diminishing its value, by gross mismanagement or by wilful or reckless dissipation of property or earnings; or
(d)that either spouse or partner is an undischarged bankrupt.
(3)Regardless of subsection (2), the court may at any time make any order or declaration relating to the status, ownership, vesting, or possession of any specific property as it considers just.
…
Serious injustice test in s 88(2)
[25] In Public Trust v Whyman,14 the Court of Appeal said the “serious injustice” test can be applied directly and there is no need to put a gloss on the words chosen by Parliament. The Court also said it is important to recognise that the “serious injustice” contemplated by s 88(2) will always (or perhaps almost always) be to a person other than the surviving spouse or partner, as a surviving partner can issue proceedings without leave.15 The Court said the primary reason for allowing claims by a personal representative was, presumably, to address situations of the type presented by that
14 Public Trust v Whyman [2005] 2 NZLR 696 (CA) at [47].
15 At [48].
case, where the children would seem to have a substantial claim under the FPA.16 Accordingly, it is sensible to apply the serious injustice test in such a way as to facilitate the making of claims in such circumstances.
Issues
[26] The grounds of appeal allege that the Judge took into account a lengthy list of irrelevant considerations, conflated principles under the FPA with principles under the PRA and took into account hearsay evidence in relation to how the joint tenancy transpired. These grounds can be rationalised into the following key issues:
(a)whether and, if so, how the absence of an FPA claim by Graeme Waite is relevant to the s 88(2) application for leave;
(b)whether the Judge erred in relation to the couple’s intentions; and
(c)ultimately, whether refusing leave would cause serious injustice.
Discussion
[27] I make two preliminary points. First, Mr O’Neill, for Graeme Waite, characterised the s 88(2) application as being to ensure that the estate receives its share of the relationship property, despite property having passed by survivorship. Section 88(2) provides only for leave to apply for orders under s 25. Granting leave to apply does not itself alter the status of property. The applicant must also seek a substantive order under s 25.
[28] In this case, Graeme Waite seeks an order under s 25(1)(a), which provides for orders determining shares in relationship property or dividing relationship property between spouses or partners.17 Identifying the relationship property pool is a prior
16 The Court also referred to Re Williams [2004] 2 NZLR 132 and said it was not to be taken as endorsing the result in that case, which it considered could be regarded as having resulted in serious injustice.
17 As the Court of Appeal observed in Public Trust v Whyman [2005] 2 NZLR 696 (CA) at [21], an order relating to the status, ownership, vesting, or possession of any specific property may be possible under s 25(3), in which case leave would not be required at all given s 88(3), but Whyman did not proceed on that basis.
issue involving assessment of a claim by the deceased spouse’s estate against the surviving spouse. Here, however, the parties agree that if the appeal is allowed and leave is granted, the estate would receive 50 per cent of the relationship property which is agreed to be the Kihikihi Road house, a car, bank account balances and chattels. Together, these assets are valued at approximately $922,000 and so 50 per cent is
$461,000. Mr O’Neill acknowledged that Ngaere Waite would also receive her life interest in the estate’s share of the house (valued at $94,500) plus $25,000 under the will. Therefore, it is unnecessary to address the status of that property and its division. I note the Judge said the family home would unquestionably fall for equal division on an application of the provisions of the PRA.
[29] Secondly, if the appeal is allowed and leave is granted, both parties seek to have this Court determine Ngaere Waite’s FPA application on this appeal, rather than remit that application to the Family Court, in order to avoid further delay given Ngaere Waite’s age. Although I would be reluctant to address such an application on appeal without the benefit of the Family Court’s assessment, I accept that doing so may be appropriate given the parties’ consent. Given the brief submissions directed to this application on appeal, I gave leave to the parties to file their Family Court submissions after the hearing.
Relevance of the absence of an FPA claim
[30] Leave is not being sought in this case to facilitate a claim under the FPA. Mr O’Neill submitted there is no need for Graeme Waite to make an FPA claim. He submitted that Graeme Waite is satisfied with his father’s will and acknowledged there would be no grounds to make an FPA claim. Graeme Waite has no financial need.
[31] A proposed claim under the FPA is common but not a prerequisite when seeking leave under s 88(2). In this case, I accept that such a claim was unnecessary. The Judge did not say that an FPA claim was required, recognising the prior question was whether the deceased’s estate had a claim against the widow under the PRA, but I accept that in the circumstances the absence of an FPA claim, of itself, should not have weighed against leave. Financial need is a prerequisite to a monetary FPA claim
but is not a prerequisite to a PRA share in relationship property. The tension in this case was not between property passing by survivorship and an FPA claim, but between property passing by survivorship and the will. The s 88 cases involving FPA claims are different albeit there may be some analogy between granting leave to facilitate an FPA claim (as in Whyman and Morgan) and granting leave to give effect to the will where a PRA split is agreed.
[32] I accept that serious injustice may warrant bringing into an estate assets which have been transferred by survivorship and are therefore out of the reach of beneficiaries, but Mr O’Neill’s submission that that is the whole purpose of s 88 goes too far. The failure of a bequest is not, of itself, serious injustice. If s 88 were engaged whenever transfer by survivorship affected a beneficiary of an estate, it would undermine the function of survivorship, require wills to be drafted differently where transfer to a surviving spouse is intended and lead to more FPA claims by surviving spouses. In this case, Graeme Waite’s acknowledgement that there would be no grounds to make an FPA claim makes reconciling the will and transfer by survivorship as a result of the joint tenancy of central importance. Whether transfer by survivorship gives rise to serious injustice will depend on the circumstances, including in this case ascertaining the intentions of the couple at relevant times.
[33] The focus of serious injustice is on the applicant. Ngaere Waite’s competing position is relevant at least insofar as it may explain the deceased’s intention (reflecting moral duty to her or undeserved benefit by her) even though the effect on her would be more directly relevant to an FPA claim if leave were granted.
The couple’s intentions
[34] In relation to Jack Waite’s testamentary intention, Mr O’Neill submitted that the will does not reflect a lack of care in thinking about testamentary disposition. He acknowledged that the will was executed in 1988 (three months after the marriage) but emphasised that Jack Waite executed a codicil to the will in 2010 (more than 20 years later) in which he changed executor and nothing else. Mr O’Neill submitted the execution of a codicil suggests that Jack Waite was thinking about his will, he saw his solicitors regarding the codicil since it was witnessed by people from a law firm in
Hastings, and it may be reasonably inferred that he received legal advice about the codicil and chose not to make a change to his will.
[35] There is no evidence as to whether Jack Waite received legal advice about relationship property or his moral duty to his wife when he executed his 2010 codicil, and I do not infer that he did receive such advice. However, I accept that his 2010 codicil which changed executor also explicitly confirmed the will in all other respects, the terms of which include giving to Ngaere Waite a life interest in the home that they occupied and the income from the residuary estate and after her death giving the residuary estate to Graeme Waite. I infer that remained Jack Waite’s intention in 2010.
[36] In relation to the couple’s 2014 purchase of the Kihikihi Road property as joint tenants, I make four points. First, I do not accept Mr O’Neill’s submission that Jack Waite’s understanding of the effect of owning the Kihikihi Road property as joint tenants is irrelevant to the assessment of serious injustice. Jack Waite’s understanding is relevant to assessment of his intention in circumstances where there is an apparent conflict between the will and the subsequent joint tenancy. His understanding is relevant to whether the terms of his will relating to the home the couple occupied and his residuary estate have no effect since the home and other joint assets were transferred by survivorship and there was no residuary estate. This affects the force of the Judge’s statement that a person may make a gift or provision within a will, but the estate simply does not have sufficient assets to provide for them.
[37] Secondly, Mr O’Neill submitted that the Court cannot ascertain what, if any, advice was given to Jack Waite about the effect of ownership as joint tenants. Mr O’Neill submitted that Ngaere Waite’s evidence about what was said to Jack Waite by their solicitor over the telephone was hearsay. He noted that no evidence was called from the solicitor about the advice given.
[38] I accept that in the Family Court, Mr O’Neill objected to the admissibility of Ngaere Waite’s evidence about the phone call, and that the Judge implicitly rejected the objection given the reference to this evidence. I also accept that evidence from Ngaere Waite relaying what Jack Waite told her their solicitor said to him over the telephone about ownership as joint tenants would have been hearsay if it were offered
to prove the truth of its contents, that is to prove what the solicitor said. However, Ngaere Waite did not give such hearsay evidence. As Mr O’Neill submitted, there was no evidence before the Court as to what advice was given to Jack Waite.
[39] What Ngaere Waite said in evidence was that she and Jack Waite agreed that they were to be registered as joint tenants and that they both understood this meant the Kihikihi Road property would pass to the survivor of them in the event of the death of one of them. Rather than hearsay, that was a statement of belief as to Jack Waite’s understanding (albeit based apparently on what the solicitor said). I accept that in the Family Court Mr O’Neill also submitted the evidence was speculation. Ngaere Waite’s statement of belief as to her husband’s understanding may be inadmissible opinion depending on the basis for it and the application of s 24 of the Evidence Act 2006. However, given her statement, her belief was likely based simply on what her husband said to her (albeit when relaying what the solicitor said to him). The basis of Ngaere Waite’s belief was not explored in cross-examination and I do not consider the Judge materially erred in admitting it.
[40] Thirdly, in any event, the Judge was entitled to take the 2014 joint tenancy at face value. Neither party called the solicitor who acted on the 2014 purchase. I do not draw an adverse inference against either party in this respect. The change to a joint tenancy when the Kihikihi Road property was purchased did not place the onus on Ngaere Waite. Nor did the fact that she adduced evidence of her husband’s understanding. The purchase of the Kihikihi Road property occurred more than 25 years into the marriage and following the sale of a property to which both spouses had contributed and which had not been held as joint tenants. The will and 2010 codicil did not require the Judge to infer that Jack Waite was mistaken when the Kihikihi Road property was registered in Jack and Ngaere Waite’s names as joint tenants in 2014. It is more likely Jack Waite understood what this meant. The Judge’s reference to his primary duty being to his wife given the contributions she had made needs to be seen in that context. As an explanation for the joint tenancy, it was not an irrelevant consideration. In that regard, the Judge was not applying an irrelevant FPA consideration. The same may be said of the criticisms of the Judge’s reference to the duration of the relationship, the conduct during the relationship and the nature and source of relationship property.
Serious injustice
[41] Mr O’Neill submitted that refusing leave would cause serious injustice. He submitted the serious injustice is primarily that Graeme Waite will receive nothing, and Ngaere Waite will receive everything. The only asset in Jack Waite’s estate is approximately $18,000 in two separate bank accounts. Everything else had been owned jointly with Ngaere Waite and transferred to her way of survivorship. Therefore, the only way in which Graeme Waite would be able to succeed to any inheritance would be if leave were granted under s 88(2).
[42] Graeme Waite does not challenge the life interest. He is content to receive his inheritance after Ngaere Waite dies. Given that the only asset in the estate is the
$18,000 in the bank accounts, the $25,000 bequest to Ngaere Waite will mean that Graeme Waite will receive nothing from the estate other than the personal items referred to above. In this context, Mr O’Neill submitted that it is unnecessary for Graeme Waite to establish that he has a financial need. He also submitted that the special needs (special circumstances) and undeserved benefit factors were not applicable. He submitted these conflate the principles under the FPA with the issue of serious injustice. Indeed, he submitted that the rest of the factors identified by the Judge were all irrelevant considerations. Instead, he emphasised that Graeme Waite is the only son (and apparently only child) of Jack Waite and the will showed Jack Waite’s intention that, whilst taking care of his wife, his son would inherit his property after her death.
[43] As Mr O’Neill submitted, the list of factors relevant to a leave application under s 88(2) will depend on the context of the case. I have already addressed the absence of an FPA claim, where financial need would be an important factor. The absence of an FPA claim does not mean that financial need is irrelevant but I accept it has reduced significance in this case where a key issue is reconciling the will and the joint tenancy, which I have also already addressed.
[44] Similarly, the absence of other factors present in previous cases is not fatal to the application. I refer in particular to special circumstances (such as those that existed in Morgan v Public Trust) and undeserved benefit (such as existed in Crotty v Williams,
also referred to by the Judge). However, it does not follow that the absence of such a factor is irrelevant. Nor do I accept that the rest of the factors identified by the Judge were all irrelevant considerations. Factors are to be weighed in the assessment of the statutory “serious injustice” test; the presence or absence of a factor is not determinative of or a proxy for the statutory test.
[45] Even so, the circumstances of this case as found above are different from Morgan v Public Trust, where surrendering the insurance led to the daughter having a strong claim under the FPA. This case is also different from Crotty v Williams. In that case, before the husband died the couple separated, agreed to divide their relationship property assets equally and the husband had amended his will to leave his estate to his stepchildren and his sister’s children. Nevertheless, the major asset passed to the widow by survivorship. Morgan and Crotty involved specific adverse acts or omissions by the will-maker before death that were materially different from this couple’s purchase of the Kihikihi Road property as joint tenants in 2014. I do not characterise that purchase as an undeserved windfall for Ngaere Waite. I also note that Jack Waite could have unilaterally severed the joint tenancy at any time before his death if he had not intended his share to transfer by survivorship. Although an FPA claim is not required, it is material that Jack Waite’s decision to own the home (and other property) in joint names did not amount to such a clear breach of his moral duty to his son.
[46] Having regard to all these relevant factors and particularly Jack and Ngaere Waite’s purchase of the Kihikihi Road property as joint tenants, I do not consider that refusing leave would cause serious injustice. Ultimately, I consider the Judge was correct to decline leave.
Ngaere Waite’s FPA claim
[47] It is therefore unnecessary to address Ngaere Waite’s FPA claim. If it had been necessary, I would have found that leaving Ngaere Waite only a life interest (valued at
$94,500) plus $25,000 was a breach of Jack Waite’s moral duty to her taking into account the grant of leave that affects the joint tenancies. That amounts to approximately 25 per cent of Jack Waite’s half of the relationship property as now
agreed, resulting in 75 per cent going to Graeme Waite. Ngaere Waite’s FPA claim as widow should be recognised as paramount given the length of the marriage, her contribution by way of introduction of assets, work in the businesses which formed the basis of their savings and her care for the deceased when he became unwell. Given the modest estate and the parties’ respective needs, I would have awarded Ngaere Waite 40 per cent of Jack Waite’s half of the relationship property as an appropriate remedy for the breach.
Result
[48]The appeal is dismissed.
[49] The respondent is entitled to costs. If costs cannot be agreed, I will receive memoranda not exceeding three pages within 20 working days and determine costs on the papers.
Gault J
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