Ware v Reid
[2019] NZHC 506
•20 March 2019
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2016-412-000151
[2019] NZHC 506
BETWEEN JOCELYN DALE WARE
Plaintiff
AND
JAMES ROBERT REID AND ANTHONY JAMES HARRIS
Defendant
Hearing: 4 March 2018 Appearances:
A Logan and T M Sefton for Ms Walker
T J Shiels QC for J M Reid and G J Harris D Sim and J Pierce for Defendants
Judgment:
20 March 2019
JUDGMENT OF DUNNINGHAM J
Introduction
[1] The late William (Bill) Walker took over farming his parents’ farm, Hazeldale, in 1950. He developed it into a much admired Perendale and Cheviot stud farm. He and his wife Dorothy had four daughters. Using their accumulated assets, including assets held in family trusts, they were able to help all their daughters (and their daughters’ spouses) to become established on farms of their own.
[2] There is no real dispute that Bill and Dorothy wanted to achieve, as best they could, some equality between the four girls, even if that meant an unequal distribution in their wills to compensate for benefits that individual daughters had received during their parents’ lifetime. For example, when Bill died in December 1997 half his estate went to his daughter Helen, reflecting his view that she had received the least benefit
WARE v REID AND HARRIS [2019] NZHC 506 [20 March 2019]
to that point, while the eldest sister, Dale, received nothing, reflecting his view that she had already benefitted significantly through being able to purchase of the family farm Hazeldale on favourable terms. While this decision created some tension at the time, because Dale did not accept her father’s reasoning, she did not proceed with a threatened challenge to the will. However, when Dorothy died in February 2016, Dale, who was left only $30,000 of her mother’s estate, lodged a claim under the Family Protection Act 1955 (the Act).1
[3] Dale has now abandoned her claim in these proceedings. However, the youngest daughter, Helen, pursues her own claim under the Act. Helen received substantially less than her two middle sisters under her late mother’s will. At the date of her mother’s death, Helen’s share of the estate of $1,972,575 was $405,727, whereas the share that each of the two middle sisters would receive was $743,227. Helen says that this disparity cannot be accounted for by gifts made to her during her parents’ lifetime. She claims, in the circumstances, that her mother has breached her moral duty to treat her equally with her sisters.
[4] The issue for determination is whether, in all the circumstances, the disparity in provision for her under her mother’s will warrants the intervention of this Court under the Act.
The legal principles applying
[5] Helen’s application for greater provision from her late mother’s will is made under the Act. 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.
1 The estate statement of assets and liabilities at the date of death show the estate’s net value as
$1,907,575.00 but that uses the rating valuation for the property at 16 Scaife Place, Wanaka. Its market value at the time is assessed as $65,000 more than this.
[6] In summary, the Act confers a discretion on this Court to order that provision be made from an estate in favour of an applicant if the deceased’s will does not make adequate provision for that person’s “proper maintenance and support”. In Little v Angus, the Court of Appeal summarised the proper approach to a claim under the Act as follows:2
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.
[7] The current test for what constitutes “proper maintenance support” was set out by Richardson P in Williams v Aucutt as follows:3
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 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.
[8] In Henry v Henry, the Court outlined the basis for intervention and endorsed the “conservative approach” to be taken by the Courts which was articulated in Williams v Aucutt, saying:4
2 Little v Angus [1981] 1 NZLR 126 (CA) at 127.
3 Williams v Aucutt [2000] 2 NZLR 479; (2000) 19 FRNZ 260 (CA) at [52].
4 Henry v Henry [2007] NZCA 42, [2007] NZFLR 640 at [58].
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.
[9] The view that the Court should do no more than the minimum necessary to make adequate provision was affirmed in Fisher v Kirby, where the Court said:5
[120] The decisions of this Court from and including Little v Angus are properly viewed as a timely reminder that awards should not be unduly generous. But, in our view, neither 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. A broad judicial discretion is to be exercised in the particular circumstances of each case having regard to the factors identified in the authorities.
[10] Importantly, the Court’s power does not extend to rewriting a will because of a perception that it is unfair. Disparity in the treatment of beneficiaries is insufficient, in itself, to establish a claim.6 The mere fact that the existing will does not in fact carry out the testator’s expressed intentions is also insufficient to provide jurisdiction under the Act unless the result is that there has been a breach of moral duty.7
The family history
[11] In deciding how these general principles apply in the circumstances of this case, it is necessary to give some account of the Walker family history, and the assistance Bill and Dorothy gave to their daughters during their lifetime.
[12] Bill and Dorothy married on 2 April 1947 and in due course had four children. They were:
(a)Jocelyn Dale Ware (Dale), born in 1949, and married to Jeff Ware, an accountant;
(b)Jillian Moirene Reid (Jill), born in 1953, and married to Bob Reid, a stock agent;
5 Fisher v Kirby [2012] NZCA 310 at [120].
6 Re Leonard [1985] 2 NZLR 88 (CA) at 92; Williams v Aucutt, above n 3, at [70].
7 Re Downey (deceased) [1975] 1 NZLR 385 (SC).
(c)Gayelene Jeanette Harris (Gaye), born in 1957, and married to Tony Harris, a farmer;
(d)Helen Christine Walker (Helen), born in 1959, and whose partner is Stephen Evans (Steve), formerly a builder, but now a farmer.
There are now nine grandchildren, being the children of Dale, Jill and Gaye.
[13] The four girls grew up on the family farm, Hazeldale, a pastoral lease property situated close to Clinton in Southland. It was held in two titles. The larger block, referred to as Hazeldale, comprised approximately 1837 hectares. The smaller block, called The Limberlost, comprised approximately 488 hectares.
[14] The Limberlost was held in the W G Walker Trust (or the No. 1 Trust), which was settled in 1960 by Bill’s mother, with Bill and Dorothy appointed as the trustees.8 In 1991 the trustees transferred The Limberlost to a company, The Limberlost Ltd, but the shares in that company continued to be held by the No. 1 Trust.
[15] A second trust was settled by Bill in 1973 and is commonly referred to by the family as the No. 2 Trust. Dorothy was appointed as one of the two trustees. In 1974 a one-fifth share in Hazeldale was transferred to the No. 2 Trust. In 1984 the balance of the land was transferred to that trust.
[16] As will be seen, some of the assistance given to Bill and Dorothy’s daughters was effected through these trusts, but the parties appear to have treated these advances and distributions as, in effect, benefits the daughters received through their lifetime from their parents.
[17] All four girls were eventually settled on farms assisted in part by their parents’ financial generosity, whether given directly or in their capacity as trustees.
8 This trust was variously referred to in the documents as the W G Walker Trust, the W G Walker Children’s Trust and the No. 1 Trust.
[18] Dale and Jeff originally purchased Eastburn, a 5,300 hectare high country run in the Wakatipu basin and Cardrona Valley but, in 1980, started looking for another property. Around 1980 Bill suggested they purchase Hazeldale, saying he had offered it to both Bob and Tony but they had declined.9 Dale understood the market value for Hazeldale at the time was $1,000,000. That was based on an estimate of the combined value of Hazeldale and The Limberlost being $1,600,000. A valuation supplied in evidence states that the value of Hazeldale at the time was $1,100,000. However, there are references in the evidence to it having a much higher valuation.
[19] Dale accepts that by purchasing it (through acquiring the shares in the farm held by the No. 2 Trust, along with taking over various assets and debts of that trust), she and her husband received a net advantage of approximately $319,804. The purchase was completed in 1981. Dale and Jeff farmed both Hazeldale and The Limberlost in partnership with Bill and Dorothy from 1981 until 1989, when the partnership was dissolved.
[20] Jill and Bob acquired an undeveloped block from Bob’s father known as Veterburn, comprising 1,391.8 hectares, which they developed as a farm. They were assisted by a loan of $100,000 in 1981 from the No. 1 Trust which was subsequently forgiven.
[21] Tony and Gaye, after owning a smaller unit, eventually purchased Ben Morven, a 929 hectare farm with the help of a $250,000 advance from the No. 1 Trust and a later advance of $100,000. The balance was funded by a distribution from Tony’s family trust and borrowings.
[22] In 1997, Bill agreed that Helen could take over the The Limberlost at government valuation, being $700,000, by acquiring the shares in The Limberlost Ltd held by the No. 1 Trust. Prior to acquiring the The Limberlost, Helen had received the following benefits:
(a)In 1987, she received the former Clutha Hotel, with a then value of
$88,000. This was to help equalise the benefit Dale had received on
9 Although Gaye disputes that Tony was offered Hazeldale.
the purchase of Hazeldale. Gaye and Jill had received payments of
$80,000 each for the same reason, some years earlier.
(b)Helen also received an advance of $72,316 towards the purchase of a house in Alexandra in 1992.
[23] The daughters received other advances and distributions from the trusts at various times. It is not necessary to detail them all here as it is the cumulative value of the benefits that each received which is the focus of Helen’s claim.
[24] Bill and Dorothy moved to a property at Crossleigh Crescent in Balclutha after selling The Limberlost to Helen, but Bill died soon afterwards, in December 1997. As already mentioned, his will left his estate to his three younger daughters in unequal shares with Helen receiving $137,547 and her sisters Jill and Gaye receiving $68,773 each. His wife Dorothy retained the Crossleigh Crescent property and a range of other assets, including shares, and a three bedroom crib at Aubrey Road, Wanaka, by survivorship.
[25] Dale threatened a challenge to the will, but that was not proceeded with. Although various views have been expressed about the validity of Dale’s concerns, the relevance of that material has dissipated since Dale withdrew her claim in these proceedings.
[26] In 1998, Dorothy made the will which is the subject of these proceedings. Helen says that two to three days before she made her last will, her mother told her what she intended to put in it. Helen’s recollection was that Dorothy was leaving something to Dale and to her grandchildren, and intended to “leave me her house in Crossleigh Crescent, Balclutha, and leave Jill and Gaye the Aubrey Road house in Wanaka”, with the balance to be left equally between Jill, Gaye and Helen. Helen explains that had that proposed division proceeded, it would have resulted in a “fairly even three-way split”.
[27] However, the will which Dorothy executed on 18 December 1998 did not carry out those intentions precisely. It left Dale the sum of $30,000, noting that “she
received the benefit of the majority of the family interest in the family farm at Hazeldale during her lifetime”. It gave a bequest of $5,000 each to Dorothy’s nine grandchildren. It gave the “Wanaka house property” to her daughters Gaye and Jill, and it divided the residue equally between Gaye, Jill and Helen.
[28] A record of Dorothy’s reasons for giving Dale a nominal amount in the will was attached to her will in a handwritten note. It said that before her husband Bill’s death she asked him if he was satisfied that his will was as he wanted it and his reply was “Dale and Jeff have had more than the others can ever hope to have”. The note goes on to say “the reason for this … was the difference of the purchase price and the real asset value of Hazeldale. They got it at family rates. This is only to be made public if my will is challenged”. The note does not give any explanation of why Helen was excluded from the gift of the Wanaka property and was to only receive an equal share of the residue.
[29] Other possible explanations for this are found elsewhere in the affidavit evidence. For example, Bob Reid says that it is explained by the fact that Helen acquired The Limberlost at below market value and from 1981 to 1990 she received 40 per cent of the income of the No. 1 Trust whereas Jill and Gaye received only 25 per cent. She also received half her late father’s estate.
[30] After Dorothy made her will two things happened which were to exacerbate the difference between what Gaye and Jill were to receive under the will and what Helen was to receive. First, the Aubrey Road property at Wanaka was sold to Helen for $175,000 in September 2000 and, at the same time, her mother bought a much larger house at Scaife Place, Wanaka, which she purchased for $292,500. This meant that the “Wanaka property” referred to in the will was a more valuable property than envisaged at the time of making the will. Second, the house in Crossleigh Crescent, Balclutha, was sold for $310,000 in December 2012 when Dorothy had to go into care, and so an asset which might have continued to reap capital gains was removed from the residuary estate.
[31] Dorothy spent her last years at the Holmdene rest home and died on 15 February 2016 without having made a further will.
The case for Helen
[32] Helen’s case is that compared to her two sisters Jill and Gaye, she has received less financial assistance in her lifetime from her parents and her late mother’s will increased her disadvantage rather than amending it. She does not seek to compare herself to Dale as she considers Dale received disproportionately greater benefits when compared with her sisters during their parents’ lifetime and so the modest gift to Dale received under the will was appropriate. Instead, she focuses on whether her mother achieved, as she intended, rough equivalence between her, Gaye and Jill.
[33] Relying on the expert evidence of Mr Cameron, a chartered accountant, Helen says that if the benefits she and her two sisters received are totalled up and inflation adjusted, then, at 2016, before taking into account the will, she had received proportionately less than her sisters. Mr Cameron calculates they received a total of
$4,459,470 in inflation adjusted benefits prior to their mother’s death. Had that been shared equally, they would each have received at that point $1,486,490 in benefits, but in fact Jill received $16,125 more than this, Gaye received $105,495 more than this and Helen received $121,620 less than this.
[34] That disparity was exacerbated by the terms of Dorothy’s will. As at the date of death, the estate had a net value of $1,972,575 using a market value for Scaife Place in Wanaka of $675,000. Helen says that, when all gifts and dispositions are considered, including gifts under the will, she is disadvantaged by $346,620, as at the date of her mother’s death. Furthermore, that difference is now exacerbated as Scaife Place has since increased in value to $1,075,000.
[35] Mr Logan’s submissions set out in detail the legal principles which apply to the determination of claims under the Act, including that “without more, the Act is not intended to equalise the distribution of parental wealth between children in a family”. However, he argues that in this case, “the ethical and moral context of the family can result in a parent breaching his or her duty if that outcome is not achieved”. In effect, Mr Logan contends that the concept of “moral duty”, which is so often referred to in cases under the Act, should be understood and defined by the particular family context. He says in this specific family situation, the parents themselves defined the scope and
substance of the duty owed by them to their daughters as members of the family, and it is that duty which determines what constitutes proper maintenance and support for the daughters.
[36] In his submission, there was no question that Dale received a disproportionate share in the family’s wealth. He points out that Dorothy’s note attached to her will said “Dale and Jeff have had more than the others can ever hope to have” and that has been confirmed by the valuation evidence called by Helen.
[37] While Bill and Dorothy could not hope to be as generous to the younger three daughters, he says the evidence shows they intended to treat them equally, both through dispositions made in their lifetime, and through testamentary provision. Any imbalance not remedied in their lifetimes was to be redressed by their wills and that intention was conveyed to Jill, Gaye and Helen.
[38] Mr Logan pointed to evidence of this in the historic documentation, the conduct of Helen’s parents, and the statements to this effect which are set out in the affidavits filed in this proceeding. For example, in a letter dated 13 February 1981, when arrangements were being made for Dale and Jeff to purchase Hazeldale, there is reference to how best matters could be structured to “even up the distribution between your daughters”, by ensuring that Dale did not take any share in the No. 1 Trust which instead would be appointed to her three sisters. Similarly, in a follow-up letter from the Walker’s solicitors on 18 March 1981, the details of the proposal for Dale and Jeff to acquire Hazeldale were set out and it was noted that “it is obvious that Mrs Ware would receive an advantage over her sisters, but you could make this up to them in part under your will”.
[39]Dale, in her affidavit, confirms that her parents:
…had always expressed to me that they wished for us girls to be treated equally. Dad would discuss with us the need to equalise things within the family and saw the gifting of stock etc. as a means of doing so. He spoke of the importance of not having favourites. My parents made us aware of their thoughts on equalising during discussions with Mr Alan, prior to us purchasing Hazeldale in 1981. They wanted to ensure that all four of us were treated equally especially given the help they were giving us at the time.
[40] Gaye also recounts that her parents were conscious that “Dale and Jeff had received an enormous advantage in the transfer of Hazeldale and decided that they would therefore receive less in their estates”. However, she said “there was simply not enough money in Dad’s estate (or for that matter Mum’s estate) to adjust to reflect full equality”. She goes on to say that her mother discussed her will with her and her mother said:
That while Dale had been advantaged during Mum and Dad’s lifetime, it was important to Mum that Dale was remembered. She explained that the other daughters would have to accept that.
[41] In summary, Mr Logan argues that both parents’ intention was to achieve equality, although they accepted that could not be achieved between Dale and her three sisters. However, it was a necessary inference that equivalence among the three younger sisters was both intended and expected. He points out that not only were the lawyer’s recommendations largely adopted in order to do what was possible to make up the advantage Dale had received, but that this was done with a view to achieving equality. For example, subject to Dorothy’s interests, the assets and the income from the No. 1 Trust were appointed to Jill, Gaye and Helen in equal shares and when the assets of the No. 2 Trust were appointed to Dale, it was subject to payments of $80,000 each to Jill, Gaye and Helen.
[42] However, he submits that during the 1980s, Helen’s middle two sisters received substantially greater benefits in comparison to what she received. Specifically, Jill received:
1982
$100,000 cash advance – No. 1 Trust
1983
$12,345
1984
$100,000 advance – No. 1 Trust plus interest net from the trust
1985
$50,245 – drawings from the No. 1 Trust
1985
$25,000 cash advance – No. 1 Trust
Total
$287,590
[43]Gaye received:
1982
$250,000 cash advance – No. 1 Trust
1983
$90,000 advance plus interest paid from the No. 1 Trust
Total
$340,000
[44] In contrast, all that Helen had received in the same period was the Clutha Hotel which she received in 1987 and which was valued at $88,000.
[45] While the sisters dispute the degree of advantage each of them has had from their parents, including through the family trusts, Helen points out that none dispute that their parents intended to treat the sisters as equally as possible, and that one way in which things would be “evened up” was through their wills.
[46] After her mother’s death, there was an exchange of emails between Bob (in his capacity as a trustee of the estate) and Helen concerning the will. Bob enquired whether Helen had any concerns in light of Dale’s signalled claim. Helen replied outlining her concern that there was a discrepancy between what her mother had said she was going to put in her will and the terms of the will which she executed. Bob, who along with Tony had accompanied Dorothy when she made her last will, responded with the following explanation:
Dorothy never mentioned leaving the Balclutha house to you. The house in Wanaka was given to Jill and Gaye because you had received half your father’s estate and also half the No. 1 Trust and it was felt this would even things up. While this may not be perfect it was a fair assessment of everything at that time.
Bob also noted that he and Tony were asked to leave the room so that Dorothy could give her instructions to her lawyer Mr Anderson, alone.
[47] Helen’s response was that if that was her mother’s understanding, it was incorrect. While she did receive half her father’s residuary estate, many significant assets were not in his estate but went to her mother by survivorship, and she did not receive half the No. 1 Trust.
[48] In Mr Logan’s submission, that moral obligation to achieve equivalence was not achieved and that appeared to be because of a mistaken perception by Dorothy that Helen had disproportionately benefited when compared with her two sisters. Dorothy’s will should have evened up the distribution amongst the three younger daughters. What in fact it did was to exacerbate the disadvantage. This was particularly so when the benefits each received during their parents’ lifetimes were assessed by adjusting them for inflation.
[49] Mr Logan warned about the use of nominal values being deceptive because the greatest benefits were received by Jill and Gaye in the early 1980s, whereas Helen received her benefits in the period from 1987 through to 1999, and so those benefits were proportionately less valuable. As the accounting experts acknowledged, there is an increased value in money being provided earlier rather than later. In total, and inflation adjusted, Mr Cameron’s evidence was that the three younger sisters had received $6,240,387 in benefits during their lifetime and under their parents’ wills. Had this been distributed fairly, each of them would have received $2,080,129. Because Helen only received $1,733,509 in benefits, Mr Cameron calculated she has been disadvantaged by approximately $346,620.
[50] While Mr van Dyk has approached the exercise differently, to reach a much smaller overall differential, Mr Logan outlined a number of reasons why Mr Cameron’s approach was to be preferred. He also noted that even Mr Cameron’s analysis did not take account of a range of other advantages which Gaye and Jill received during their parents’ lifetime. For example:
(a)off the books transfers of stock (and possibly plants) to Jill and Gaye;
(b)the supply, free of charge, of stud rams to the other sisters from the Hazeldale Perendale stud for significant periods of time and which Helen only received for one year; and
(c)concessionary interest rates charged on loans to the Reids.
These matters, although in part disputed, added to the cumulative picture that Jill and Gaye had been advantaged as compared to Helen.
[51] For all these reasons, Mr Logan submitted that the moral duty, as Bill and Dorothy had defined it, was breached. He says this could not be explained. There was nothing disentitling in Helen’s conduct and she maintained a close relationship with her mother until her death, including by providing financial support to her mother. For example, she paid for her mother’s property and medical insurance and for her rates, telephone and electricity.
[52] In seeking relief under the Act, Helen does not wish to disturb the legacies to Dale or to the grandchildren. Rather, her proposed solution is to bring the value of the Wanaka property into the residuary estate, to be shared equally between the three younger daughters. Alternatively, she asks that the Court determines a lump sum to be paid to her to ensure equivalence in the distribution of the family wealth.
The case for Jill and Gaye
[53] Jill and Gaye oppose Helen’s claim on the grounds that the statutory threshold for relief under the Act has not been met. Mr Shiels QC submits that the Act is not a mandate for orders for the sole purpose of fulfilling testamentary expectations. In any event, there is no evidence to suggest that Dorothy contemplated the type of detailed spreadsheet approach now advanced for Helen or to suggest that her intention of achieving quality went beyond achieving a broad equality in nominal terms.
[54] The starting point must be the statutory provisions of the Act. The term “moral duty” which is regularly used by the Court can only sensibly be understood as a moral duty to adequately provide as required by the Act. The use of that term in case law cannot be intended to create a moral duty which is extraneous to the Act’s purposes.
[55] In the leading case of Little v Angus, the Court referred to the standards of a wise and just testator, and that must mean a notional standard rather than the subjective standard of a particular testator.10 Importantly, Williams v Aucutt emphasised that what
10 Little v Angus, above n 2, at 127.
the Act requires is “adequate provision”.11 Where there is no economic need, recognition may be in “the form of lifetime gifts or a bequest of family possessions”. It may also be met by a legacy “of a modest amount”. Mr Shiels relied in particular on the statement by Blanchard J in Aucutt that it was 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”. He also points out that it is a well established principle that there is no need for other beneficiaries to justify their benefit.12
[56] In respect of the documentary evidence Helen relies on which refers to achieving equality between the sisters, Mr Shiels suggests there are difficulties with some of it being construed on as an expression of the parents’ intention. For example, the letter by Bill’s solicitor dated 18 March 1981 which states “… you could make this [disparity] up in part under your will” is really a suggestion by the lawyer of how equality can be achieved, rather than evidence of either Bill or Dorothy’s intentions. Similarly, the letter of 13 February 1981 is the solicitor’s recommendation of how benefits could be evened up between the daughters, rather than evidence of the parents’ intention.
[57] While Helen recounts that her mother expressed an intention shortly before she made her will to distribute her estate equally between the three younger daughters, that is inconsistent with the will that Dorothy made at that time. Even if Helen correctly remembers Dorothy’s proposals for her 1998 will, on her own recollection it would only result in a “fairly even split” and it was far from guaranteed that subsequent movements in the value of the Wanaka property and the Balclutha property would be the same. All of this is inconsistent with the detailed spreadsheet approach to equality proposed by Helen. In any event, at least on Gaye’s affidavit evidence, her parents acknowledged there was “simply not enough money to achieve full equality”. Finally, Mr Shiels submits that much of the evidence relied on could have no relevance to Dorothy’s intention as at 1998 when she made her last will and it would be dangerous to treat Bill’s intention (even if that could be assessed from the evidence relied on) as Dorothy’s intentions.
11 Williams v Aucutt, above n 3, at [52].
12 Williams v Aucutt, above n 3, at [68]; Auckland City Mission v Brown [2002] 2 NZLR 650 at [39];
Talbot v Talbot [2017] NZCA 507 at [55].
[58] Mr Shiels also warns against going back too far in the past. Bill died on 12 December 1997 leaving his estate in unequal portions to the three younger daughters, presumably to equalise matters as best as possible between those three. If he did not fulfil any moral duty to do so, that was the time and context in which to raise that issue. The Court has no role in achieving equality by an award under the Act which relates to Bill’s stated intentions in his estate. It can only now look at Dorothy’s stated intentions and her estate.
[59] In addition, before Bill’s death, there were plans to put Helen onto The Limberlost. This involved winding up the No. 1 Trust. An agreed final position for the winding up was recorded by the accountant, Mr Harvie, on 9 June 1998, which all parties accepted as fair. Importantly, at that stage, the parties were happy to equalise nominal benefits without any attempt to inflation index them. It submitted for Gaye and Jill that it is unsatisfactory for Helen to now go behind that by disputing some of the figures and suggesting that CPI adjustments should, for the first time, be brought into the equalisation process.
[60] As there is no factual evidence to support an expectation by Helen of a precise CPI adjusted equality, it submitted that it is worth looking at whether there was equality in nominal dollars. This exercise has been undertaken by Mr van Dyk, the accounting expert giving evidence for Gaye and Jill. If those nominal benefits plus the distribution under Dorothy’s will are brought into account, then the three youngest daughters have received the following amounts:
(a) Jill $1,422,425.50;
(b) Gaye $1,344,624.50; and
(c) Helen $1,298,151.50.
[61] On these figures Helen, Jill and Gaye share in a total of $4,065,201.50 in nominal benefits in the following proportions:
(a)Jill – 34.99 per cent;
(b)Gaye – 33.08 per cent; and
(c)Helen – 31.93 per cent.
[62] Furthermore, even using Mr Cameron’s figures, but treating them as Mr van Dyk says they should be treated, each of the three girls has still received more than 30 per cent of the total benefits, including from the estate. The minor variations that these calculations result in simply do not give rise to grounds for a claim under the Act.
Discussion
[63] The parties accept that the principles set out in the leading cases on claims under the Act apply. The key difference between them is that counsel for Helen seeks to define “moral duty” by reference to the intentions of the testator in this case. He says, in the context of this family, I should interpret the testator’s moral duty as being to achieve equality, as far as possible, in real, not nominal, terms between the youngest three sisters.13 However, I am satisfied that this approach confuses the concept of moral duty, which is what the nominal wise and just testator would have done to adequately provide for his or her children, with the concept of testamentary intention.
[64] The concept of moral duty is an objective concept, albeit to be applied in the particular circumstances of the claimant’s family, taking into account factors such as the size of the testator’s estate, the competing claims on the estate, the circumstances of the claimant including any financial need or dependency, and any other relevant factor, including estrangement and the reasons for it.14
[65] In my view, the applicant is wrong to take the history of gifts and benefits afforded to her and her siblings through the mechanisms of the family trusts and otherwise as the starting point. The starting point should be the will and the provision made for the claimant as at the date of death. In this case, with an estate of approximately $2,000,000, Helen would have received a distribution of approximately
$400,000.
13 On the assumption, which is contested, that the older sister Dale has received greater benefits.
14 Little v Angus, above n 2, at 127.
[66] It is clear that she has no financial need. She has expressly stated that her case is not brought on this basis, nor could it be, when she and her partner own a significant and valuable asset in the form of the shares in The Limberlost.
[67] There is no challenge to the nine grandchildren each receiving a modest bequest of $5,000 each. The only other persons with an expectation to be considered as potential beneficiaries are, of course, the remaining sisters. A bequest of approximately $400,000 to one of four sisters, with no demonstrated financial need, does not, on the face of it, suggest a failure to provide adequately for the proper maintenance and support of Helen. It could only be such if, in the context of assistance given by the testator to other members of the family during the testator’s lifetime, that such a bequest is so niggardly as to lead a “justifiable sense of exclusion from participation in the family estate”.15 I do not consider that is the case here.
[68] Dorothy was well aware of the assistance which had been given to all her children, through the earlier will of her husband and through the decisions she and Bill had made as trustees of family trusts. While I accept that she and her husband intended to see these benefits were distributed with a view to achieving approximate equivalence, I do not accept that they intended to achieve equivalence through the sort of forensic accounting analysis which has subsequently been undertaken for these proceedings.
[69] The reality is that it was impossible to determine in financial terms the value of the support both given and received between parents and children. Numerous matters were disputed. These included:
(a)the numbers and value of stock received from the parents;
(b)whether advances from the trust should be treated as gifts from the date they were advanced, or from the date they were forgiven;
(c)whether foregoing salary when working on trust property should be taken into account; and
15 Williams v Aucutt, above n 3, at [52].
(d)to what extent increases in value in the land were through the efforts of the individual farmer to improve the land or through inflation.
In short, there was a myriad of issues thrown up by the parties which complicated any quantification of the benefits had and received, and which could not be resolved on the affidavit evidence.
[70] From my perspective, the simplest approach was to take the figures advanced on behalf of Helen and ask whether, if that were the true position, I should revisit my preliminary view that there was no breach of moral duty to Helen in the will. In my view, it does not. While the disparity she claims there was with her sisters, in dollar terms, was a meaningful sum, it fell well short of a failure to provide for her and recognise her as a family member, such that a just and wise testator would have needed to make greater provision for her in the will than Dorothy did. On Helen’s evidence, she received more than $1,700,000 in benefits in her lifetime (albeit through a combination of family sources). Standing back and considering the matter objectively, the provision of approximately $400,000 from her late mother’s $2,000,000 estate readily met the test of fulfilling Dorothy’s moral duty under the Act to make adequate provision for Helen, particularly given her responsibility to make provision for the other beneficiaries.
[71] In my view, the crux of Helen’s complaint is not that her mother failed to make adequate provision for her, but that the will did not reflect her mother’s testamentary intention to achieve equality of benefits to the younger three girls over time. The relevant moral duty, however, is not defined by the testator’s intentions, but by the objectives of the Act. In this case, the will clearly provided adequate provision for the proper maintenance and support of Helen and no further provision is required.
Result
[72]Helen’s claim under the Act is dismissed.
[73] Costs are reserved (noting that the trustees expressly sought to be heard on costs at the conclusion of the claim). If costs cannot be agreed, then any memorandum on behalf of parties seeking costs is to be filed within 20 working days of the date of
this decision. Any memorandum in response is to be filed in a further 10 working days. Costs will be determined on the papers, unless I require to hear from counsel.
Solicitors:
Ross Dowling Marquet Griffin, Dunedin Wanaka Law, Wanaka
T J Shiels, Barrister, Dunedin Downie Stewart, Dunedin
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