Weaver v Flathaug HC Auckland M88 SD01

[2002] NZHC 1120

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY M88 - SD01

IN THE MATTER of the Family Protection Act 1955

AND

IN THE MATTER of the estate of LUDVIK KRISTIAN STEIN FLATHAUG late of Auckland, Retired

BETWEEN JANE WEAVER
Plaintiff

AND MURIEL EDITH FLATHAUG, IAN DONALD MALCOLM and PETER CARL NEUMEGEN as executors and trustees of the estate of the late LUDVIK KRISTIAN STEIN FLATHAUG
Defendants

M558-IM02
IN THE MATTER of the Property (Relationships) Act 1976

BETWEEN MURIEL EDITH FLATHAUG
Applicant

AND I D MALCOLM, P C NEUMEGEN and M E FLATHAUG as executors and trustees of the estate of the late LUDVIK KRISTIAN STEIN FLATHAUG Respondents

Hearing: 1 October 2002

Counsel: D K Wilson for the Plaintiff
G L Harrison for the Defendants/Respondents (Trustees)
G A Keene for M E Flathaug (Applicant and Defendant)

Judgment: 9 October 2002

RESERVED JUDGMENT OF PRIESTLEY J

Solicitors: Blair O’Brien, PO Box 36 014, Northcote
Kemps Lawyers, PO Box 62 566 Central Park, Auckland
P C Neumegen, PO Box 12 444, Penrose, Auckland

Counsel: D K Wilson, PO Box 5153, Auckland
G L Harrison, PO Box 5444, Auckland 1036

G A Keene, 45B Epsom Avenue, Auckland

Introduction

[1] The deceased Ludvik Kristian Stein Flathaug, was born in Norway. Germany’s occupation of that country during the Second World War resulted in him fleeing to England. There he met and married Muriel Edith Flathaug (the “widow”).

[2] The couple had two sons, John and Nils. The family emigrated to New Zealand in late 1955 - early 1956.

[3] The plaintiff was born in England on 21 May 1955 a few months before the departure of the Flathaug family for New Zealand. Her mother was Doreen Hewlett. Like the Flathaugs, Mr and Mrs Hewlett had two sons.

[4] In the light of various orders to which the parties have consented it is unnecessary for me to traverse the details of the relationship which developed between Mr and Mrs Flathaug and Mr and Mrs Hewlett in England during the early 1950s. Suffice to say that the couples became close friends and that for some years an exclusive sexual relationship developed between the deceased and Mrs Hewlett. The plaintiff was a result of that relationship.

[5] The close friendships came to an end with the emigration of the Flathaug family to New Zealand. Mr Hewlett was named as the plaintiff’s father on her birth certificate. The plaintiff was raised in all respects as the daughter of Mr and Mrs Hewlett. The deceased and the widow were her godparents but she did not meet them until 1971.

[6] It is the plaintiff’s claim against the estate of her natural father under the Family Protection Act 1955 which has precipitated the various proceedings before me.

Status of Children Act 1969

[7] The defendants have realistically accepted that the affidavits and, in particular the affidavit of the plaintiff’s mother, Doreen Marie Hewlett, point strongly to the deceased being the plaintiff’s biological father. Their decision to consent to the orders sought under the Status of Children Act 1969 is sensible and has helpfully narrowed the scope of the parties’ dispute. I am in any event satisfied on the balance of probabilities about the issue of the plaintiff’s paternity.

[8] By consent I make a declaration of paternity pursuant to s 10(1) of the Status of Children Act 1969 that the deceased, Ludvik Kristian Stein Flathaug, is the father of Jane Weaver born at Chingford in the County of Essex, England, on 21 May 1955.

Deceased’s will and estate

[9] The deceased who died on 22 March 2000 aged 79, left a will dated 11 July 1997. His entire residual estate was left to the Flathaug Family Trust (of which more later) which had been created by Deed of Trust in January 1989).

[10] The deceased forgave all debts owing to him by the family trust.

[11] The deceased’s estate totalled $781,072 comprising:

Pakuranga home (agreed valuation) $520,000

No 1 loan to Family Trust 84,790

No 2 loan to Family Trust 176,282

Family Trust and the wider family

[12] The widow was the settlor of the family trust under its 25 January 1989 deed. The original trustees were the deceased, the widow, and the family’s accountant. The terms of the trust are fairly standard. There is a broad discretion to distribute both income and capital to its beneficiaries.

[13] The beneficiaries are stipulated to be the two named sons of the deceased (John and Nils); any other children of the settlor born “hereafter” (there are none); four named grandchildren of the deceased; and any other children of John and Nils (ie grandchildren).

[14] The widow is not a beneficiary of the trust. Nor is there any possibility of the plaintiff and her children being beneficiaries.

[15] The deceased’s elder son John died shortly after the deceased in April 2000. He left three children,- two adult daughters of his former marriage, and a son, now aged 9, by his de facto partner. The deceased’s younger son Nils has two adult daughters. The plaintiff has one daughter and two sons aged 21, 18 and 11.

[16] The Flathaug Family Trust has substantial assets and generates a large income. In addition to a property in Mt Wellington with a book value of $142,800, the trust had cash and investments at the end of the March 2001 year of slightly over $750,000. The trust’s income for the same financial year was $108,000 of which $41,400 was retained after tax.

[17] The trust’s only liabilities are loans from the deceased and the widow, representing in the main the consideration for an investment property which they transferred to it. Although not a beneficiary the widow received a distribution of $25,000 in each of the March 2000 and 2001 years. A similar distribution was made to the deceased during the last year of his life. Such distributions presumably represent interest paid on the loans.

Property (Relationships) Act 1976 claim

[18] The plaintiff’s claim under the Family Protection Act has understandably precipitated a claim by the widow under the Property (Relationships) Act 1976. There is no contest to this claim.

[19] The jurisdiction for the widow mounting such a claim is found in s 10B(1)(b) which provides

“10B Application of Act to division of relationship property on death of spouse or de facto partner

(1) This Act (including Part 8) applies to the division of relationship property between spouses or de facto partners when-

. . .

(b) in the case of spouses, 1 of them dies before 1 February 2002 and, at the date of that spouse’s death, no proceedings have been commenced between the spouses under this Act or the Matrimonial Property Act 1963.”

[20] This provision appears to cover the widow’s situation. Although the deceased died eleven months before the new legislation came into force the widow’s proceeding (commenced in the Family Court at Auckland) was not filed until 20 March 2002. The Family Court proceeding was transferred into the High Court to be heard in tandem with the plaintiff’s Family Protection Act claim.

[21] So far as the surviving spouse’s claim under Part 8 of the Act is concerned she must select one of the two options (A or B) under s 61. The widow elects option A, being to make an application under the Act for the division of relationship property.

[22] The widow’s claim is not contested, nor is there any procedural opposition. In particular:

[a] There is no opposition to the widow’s claim under the Property (Relationships) Act being out of time.

[b] There is no opposition to her election for option A being out of time.

[c] There is no contest that the deceased’s entire estate and all the widow’s assets constitute relationship property without any separate property component.

[d] It is accepted that an equal division of the relationship property pool between the deceased and the widow is appropriate.

[23] The relationship property pool to be divided equally between the deceased and the widow is:

Family home at 225A Pakuranga Road (agreed valuation) 520,000

Widow’s bank accounts 13,500

Debts owing by family trust to widow 274,500

Debts owing by family trust to deceased 261,000

Furniture 30,000

Motor vehicle 1,000

$1,100,000

[24] I accordingly make the following orders under the Property (Relationships) Act 1976.

[a] An order under s 24(2) extending the time within which the widow can apply.

[b] An order under s 62(2) extending the time within which the widow can elect option A.

[c] An order dividing equally the relationship property pool between the deceased’s representatives and the widow.

[d] An order under s 33(3)(c) vesting the relationship property pool of $1.1 million in the widow and the deceased’s representatives equally.

[e] Leave is reserved if further implementing orders are required.

Family Protection Act claims - discussion

[25] The deceased’s estate thus reduces to $550,000. The remaining issues before the court are the extent to which further provision should be made from that estate for the plaintiff and the widow.

[26] The claim of the widow must, for the purposes of the Family Protection Act, be a testator’s paramount consideration. (Re Rush (1901) 20 NZLR 249; Re Wotton [1982] 2 NZLR 691; Clements v Clements [1995] NZFLR 554). In Mr Keene’s submission the widow is entitled to further provision by vesting in her the deceased’s half share in the family home and by a further capital award.

[27] Mr Wilson for the plaintiff expressed some scepticism about the underlying motivation of the widow’s claim. He sees it (in conjunction with the Property (Relationships) Act claim) as a mechanism to reduce the size of the deceased’s estate in an attempt to defeat or minimise the plaintiff’s claim.

[28] The widow for her part sees her claims thus

“The fact that I am not a beneficiary under my husband’s will or the family trust would probably not have become an issue but for the plaintiff issuing these present proceedings. As a result of the present proceedings I have been advised by my legal advisor to seek further provision myself from my husband’s estate.”

[Affidavit, 4 December 2001, para 1.2]

[29] Mr Keene for the widow submitted that, regardless of motivation, there was a demonstrable need for further provision. Although the plaintiff’s proceeding was a trigger, the widow had nonetheless reviewed her overall financial position and had concerns.

[30] In Mr Keene’s submission the widow’s needs, in respect of which there was inadequate provision (after vesting of the entitlement under the Property (Relationships) Act) included her need for a home, her need to be free from financial anxiety, her need for sufficient income to maintain the lifestyle to which she had been accustomed during the deceased’s lifetime, the need to have sufficient capital to maintain the two dwellings situated on the Pakuranga Road property, and the need for a modest capital reserve in any event. Additionally the widow had no secure occupation right to the Pakuranga home.

[31] The effect of the orders made under the Property (Relationships) Act is to increase the widow’s assets from $319,000 (her assets are itemised in para [23] supra) to $550,000. That figure is $30,000 greater than the current value of the Pakuranga property which, as a result of arrangements concluded many years ago between the former owner of the property and Mr and Mrs Flathaug, comprises two dwelling houses, one of which was used by the deceased and the widow as a family home.

[32] The widow’s 4 December 2001 affidavit deposed that at the time of the deceased’s death their combined income was just under $28,500, being national superannuation and the deceased’s war pension from the Norwegian Government. The affidavit makes no mention of the $50,000 distributions to the couple from the family trust (inferentially being interest on their loans to it (supra para [17])). Her current superannuation and pension income is approximately $19,200 per annum. Additionally she receives sporadic rent for the second Pakuranga Road house.

[33] Apart from the widow and the plaintiff there are no other Family Protection Act claimants. The position of the deceased’s son Nils is comfortable. The position of the deceased’s adult grandchildren is unremarkable. With the exception of the plaintiff and her three children, the deceased’s children and grandchildren are discretionary beneficiaries of the family trust.

[34] The financial position of John’s third child Adam is weak. When John died (2 1/2 weeks after his father’s death) his assets were negligible. His de facto partner Elizabeth Harland is in receipt of a widow’s benefit. Adam attends Dilworth School. Undoubtedly Adam’s financial position and needs should be given close attention by the trustees of the family trust.

[35] In submissions on behalf of the wider family, Mr Keene stated that the deceased’s surviving son and grandchildren were “confident that they have been well provided for” as beneficiaries of the family trust and that they will ultimately benefit indirectly from any provision made for the widow as prospective beneficiaries under her will.

[36] The position of the widow for Family Protection Act purposes can accurately be described as an 83 year old woman with assets of $550,000; the right to call in significant capital by virtue of being a creditor of the trust; an obscure but nonetheless established interest income earned by her loan to the trust; and a modest superannuation and pension entitlement. She has no beneficial interest in the trust on which substantial assets have been settled, nor does she have any secure occupation (unless she negotiates with the trust) in her home.

[37] The plaintiff’s position is more complex. Her entitlement to further provision was resisted with some vigour by Mr Keene whose submission was that, even after further provision under the Family Protection Act had been made for the widow (which in his submission should reduce the estate to a figure of around $200,000), the plaintiff’s claim should nonetheless be assessed having regard to the competing claims of other potential claimants such as Nils and the deceased’s grandchildren.

[38] The plaintiff is aged 47. She has been married for 25 years and has three children (supra paragraph [15]).

[39] She works as a part-time secretary from home earning approximately GBP £600 per annum. She and her husband live in a modest home valued at approximately £280,000 with an equity of £150,000. Her husband is a self employed financial advisor earning (on British standards) a reasonably good income of £40,000 per annum. She and her husband have no other assets or liabilities of any significance apart from a motor vehicle and household effects.

[40] The plaintiff’s legal father Mr Hewlett died in October 1977, two months after her marriage. He apparently had minimal assets to leave to his widow. Mrs Hewlett (who additionally to the plaintiff has two sons) is 80, is in receipt of a widow’s pension, and has assets totalling £160,000.

[41] In assessing the plaintiff’s financial position the Court must guard against the temptation of converting the value of the plaintiff s assets and income into their New Zealand dollar equivalent and assuming the New Zealand currency equivalent accurately represents the plaintiff’s financial situation in the United Kingdom. It does not. Although there has been no direct evidence on the topic (and in some situations direct evidence might be helpful) courts are cognisant of the fact that the New Zealand dollar equivalent of a foreign currency will not necessarily equate with New Zealand purchasing power in the foreign country concerned.

[42] Harrison J recently faced a similar situation in Hardie v Hardie (High Court Auckland, M 1888-SD00, 20 December 2001)

“[39] Mr Wilson did not pursue a submission that I should take account of the fact that Ronald’s assets were in English currency which, on conversion, yielded an amount of NZ$858,780. I have already expressed my satisfaction that Ronald intends to live permanently in England. Taking judicial knowledge of comparative living costs, I am satisfied that for these purposes an English pound is of equivalent value to a New Zealand dollar. Similarly, the value of an award in New Zealand dollars will be considerably eroded for Ronald once it is converted into English currency.

I adopt the same approach.

[43] There is no evidence to suggest that the plaintiff had a disadvantaged childhood. She was brought up as the daughter of Mr and Mrs Hewlett. There is no evidence of any financial distress, abuse, deprivation, disability or need which would in any way heighten the testator’s moral obligation.

[44] The plaintiff and the deceased first met in 1971 when the deceased and the widow visited Mr and Mrs Hewlett. The plaintiff knew the deceased as her godfather. The deceased’s next visit to the United Kingdom was in early 1979 when the plaintiff was 24. During that visit the deceased and Mrs Hewlett revealed to the plaintiff that the deceased was her biological father. They also told her about their love and affection for each other during the early 1950s and the social arrangements which surrounded the plaintiff’s conception.

[45] There were two further visits by the deceased to the United Kingdom during the 1980s. During his 1987 visit the deceased spent some time talking to the plaintiff about his Norwegian origins and his wider family. He also assisted the plaintiff and her husband install bathroom tiles.

[46] The relationship developed further during the 1990s including occasional correspondence, a number of telephone calls initiated by the deceased in New Zealand, and a February 1997 visit by the plaintiff to New Zealand for which the deceased paid the air fares.

[47] It is abundantly clear that the deceased acknowledged the plaintiff as his child (his only daughter) and took an interest in her from 1977 onwards to the extent that geography and his delicate social and family obligations permitted.

[48] Some of the deceased’s correspondence has been exhibited. The relevant letters are affectionate and focus on family matters. In a letter dated 23 June 1994 the deceased wrote:

“I only wish I could have been more of a father to you.”

In a second letter dated 8 November 1994, the deceased says

“Jane I know that I haven’t been of any help to you over the years and thinking about you and your mother haven’t been of any help either but if you would send to me your bank and address plus your account number I will try my best to give you a little for yourself and the whole family for Xmas.”

[49] In the first two months of 2000 the plaintiff was in regular contact not only with the deceased but also with her half-brother Nils and his wife Adrienne. She was aware of John’s rapidly deteriorating health. She was also aware of the deceased’s declining health. Telephone calls to her by the deceased increased in frequency.

[50] The plaintiff was told that the deceased was entering hospital in early March for exploratory surgery in respect of which the prognosis was not good.

[51] On 18 March 2000 she was telephoned by her half-brother John advising her that her father was very ill. She telephoned the deceased in hospital and arrived in New Zealand on 20 March and was able to sit with him.

[52] A decision was made the next day to take the deceased off oxygen. The plaintiff and other members of the family were able to visit the deceased and kiss him a few hours before his death. The plaintiff returned to Britain the day after his death and was not able to stay for his funeral.

[53] The plaintiff’s evidence was that during his lifetime the deceased provided her with a total of £4532 which was used for the cost of air travel to New Zealand and, at the deceased’s request, to pay £1932 into the bank accounts of her three children.

[54] The widow’s evidence, which is in slight conflict, is that a total of $16,860 was paid to the plaintiff by the deceased in four payments between February 1995 and August 1999. This is evidenced by bank statements.

[55] Using current exchange rates the difference between these two figures (approximately $13,600 and $16,860) is insignificant. I find, however, that the deceased, totally appropriately, gave the plaintiff some modest sums for the benefit of his three grandchildren and to assist her travel costs to New Zealand so that she could visit him and his New Zealand based family.

[56] There is force in Mr Keene’s submission that for all intents and purposes the position of the plaintiff is similar to that of an adult adopted child who makes contact with a birth parent. The plaintiff was unaware that the deceased was her biological father until she was 24 and had been married for approximately two years.

[57] The plaintiff’s affidavit is reticent on the emotional impact this knowledge must have had on her. Subject to the geographic and social restraints which I have mentioned, both she and the deceased developed their relationship. The relationship was one which the deceased encouraged. He made efforts, unprompted by the plaintiff, to give her information about his background and his family. There was clearly a degree of affection and respect. Whilst it is true that a relationship of this type might well develop between an adopted child and a birth parent the critical difference (accepted by Mr Keene) is that the inevitable consequence of the declaration of paternity made under the Status of Children Act is to give to the plaintiff a potential claim against the deceased’s estate.

[58] Nonetheless, in weighing the plaintiff’s claim I accept that, unlike her two half-brothers, the plaintiff was not a member of the deceased’s family in New Zealand and, unlike the widow and the deceased’s two sons, was not instrumental in the acquisition and husbandry of his assets.

[59] The deceased over the last few weeks of his life was clearly perplexed by the topic of his obligations towards the plaintiff. He sought advice on it. The evidence of his solicitor Mr P C Neumegen, is instructive:

“5. Ludvik had been ill, with cancer, for a number of weeks prior to his death on 22 March 2000. In the period shortly before his death ie over a period of around 3-4 weeks prior to 22 March 2000, Ludvik came to see me numerous times for advice. His health was steadily deteriorating. Ludvik won my respect because he was fighting his terminal illness with great dignity. At times he was clearly in pain. During this time I got to know Ludvik particularly well as we had many long conversations about his life and the issue of whom to provide for in his Will.

6. Ludvik was in a real dilemma during this time - it almost haunted him. He wanted to “do the right thing” by everyone. This wish, by him, naturally brought into discussion the question of making provision for the Plaintiff. In that regard, it was clear the Ludvik was pleased that he had made recent contact with the Plaintiff, after many years of not having any kind of relationship with her. After making contact with her in the 1990’s, he felt that he had been very generous to her such as paying for her air fares to fly to New Zealand, and giving her money as well. I have no idea as to the sums involved, in that regard, but to Ludvik the amounts were reasonably substantial.

7. Ludvik felt a strong sense of duty towards his wife, Muriel, who had been married to him for 56 years. In his view Muriel had greatly contributed to what wealth he had acquired by running the business side of his work. Ludvik was from Norway and spoke English as a second language. Muriel was the main person he felt he needed to make provision for under his Will.

8. I recall, during our discussions about his Will, reading Ludvik some extracts from Mr Patterson’s well known text on Family Protection Law in NZ. I made him well aware that if he did not make provision for the Plaintiff in his Will, then she could make a claim under that Act for further provision out of his estate. My advice to him was that the wisest thing he could do was to make a cash bequest of some sort, to the Plaintiff, in order to “head off’ such a possibility.

9. During one period, just prior to his death, Ludvik came to see me each day over a five day period. I remember reading him extracts from the Patterson text one day, and him then going away to think about it. He then came back the next day for further advice, and consideration of the topic, which resulted in me reading to him, again, some extracts from Mr Patterson’s text book on the topic of “moral duty”.

10. In his view he had given the Plaintiff far more during his life than he had ever given his two sons. He told me that he had done more than enough to do the right thing by the Plaintiff while he was alive. He was confident the Plaintiff would get an inheritance from her mother in England. He was confident his surviving son or his late sons children would get an inheritance from Muriel.

11. In the end after extensive and clearly anguished thought on the topic, Ludvik made the decision not to provide a cash bequest for the Plaintiff in his Will.”

[60] The issue for this court is whether the deceased’s assessment of his obligation to the plaintiff was correct.

[61] In Mr Wilson’s submission the deceased had a duty not to downgrade significantly the plaintiff’s status as his daughter. There were two blows which had been inflicted on her. The first was her discovery at the age of 24 that the deceased was her natural father. The second was an apparent rejection in his failure to make provision for her. The plaintiffs financial position was modest. Her personal income was low.

[62] The deceased, as was evident from Mr Neumegen’s affidavit, had clearly expressed a desire to benefit her in some way if he was able to do so. He had expressed written regrets that he had not been able to do more for her. (Supra para [48]. The deceased had gone out of his way to develop the relationship with the plaintiff and had publicly recognised that she was his daughter.

[63] In Mr Wilson’s submission the plaintiff should be treated in a way which was appropriately comparable to the position of her two half-brothers. Counsel did not suggest equality but nonetheless submitted that her treatment should not be “second rate”. An appropriate award in Mr Wilson’s submission would range between 20% to 25% of the estate or, in monetary terms, between $100,000 and $125,000.

[64] Mr Keene for the widow accepted that the plaintiff played a significant part in the deceased’s overall life. In his submission, however, the inter vivos gifts and the deceased’s financing of the plaintiff’s travel to New Zealand were adequate recognition of the plaintiff. To all intents and purposes the plaintiff was a stranger to the family. The deceased’s moral obligations to Nils ranked ahead of his obligation to his daughter. Having regard to the competing obligations to the widow, Nils and the deceased’s grandchildren, the size of the deceased’s estate was insufficient to justify an award to the plaintiff.

Decision

[65] I intend to make awards in favour of both the widow and the plaintiff. In doing so I have, of course, considered the provisions of s 4(1) of the Family Protection Act 1955 and the well settled principles against which a court assesses a testator’s obligation to make adequate provision.

[66] In making the awards, I have considered the circumstances of both the widow and the plaintiff and regard the widow’s claim as being paramount.

[67] Although I see no current inadequacy so far as the widow’s income needs are concerned I do not consider that her current asset position ($550,000 after the Relationship (Property) Act orders) is adequate to meet her accommodation needs. The widow candidly concedes in her affidavit that, but for the plaintiff’s claim she would have had little incentive to mount her proceedings. Having mounted them, however, I consider that she is entitled to the security of the home in which she and the deceased were living in the years before his death.

[68] In the same way the second house on the property enabled the widow and the deceased to look after the previous owner of the property, so too would it suit a similar arrangement should the widow need care. This would enable her, so long as her health permitted, to stay in her home without having to enter a rest home. I do not consider the widow should be placed in a position where she has to go cap in hand to the trustees of the family trust who might not necessarily (despite it being a family trust) be permitted or disposed to allow her unrestricted use of the deceased’s half share in the family home.

[69] So far as the need for extra capital is concerned (beyond the estate’s half share of the family home) to provide a reserve fund, I do not consider that a case for further provision has been made out. The widow is entitled to call for the repayment of significant capital under the debt owing to her by the trust.

[70] In my judgment an appropriate award by way of further provision from the deceased’s estate to the widow is:

[a] Provision out of the estate of the deceased’s half share in the Pakuranga family home (being the equivalent of $260,000).

[b] Vesting in the widow the deceased’s notional half share in the household furniture and motor vehicle (being the equivalent of $15,500).

[71] The effect of such further provision would be to leave intact and under the widow’s control virtually all of the $274,500 debt owing to her by the trust. It also reduces the deceased’s estate to the figure of $274,500.

[72] Turning to the plaintiff’s claim counsel were not able to cite any authorities comparable to the plaintiff’s position. Particularly relevant in my judgment is the absence of any evidence that the plaintiff had a disadvantaged childhood; the fact that she was unaware of the relationship until shortly after her marriage; and the fact that she was not a part of the deceased’s New Zealand family, nor was she acknowledged as his daughter until adulthood.

[73] Re Berryman (deceased) [1966] NZLR 743, proclaims in its headnote that except to the extent provided by the Family Protection Act the “illegitimacy” of a claimant is not a disabling factor either as to the right to claim or as to the amount which should be awarded in competition with the claims of “legitimate” children.

[74] That case involved a modest estate where the only claimants were the son of the deceased’s marriage (who took the deceased’s entire estate), and the deceased’s ex nuptial daughter.

[75] Wilson J, having regard to the fact that the only other claimant on the deceased’s bounty was the son who was in good health and not in need, made an award of $3500 out of an estate of $12,800. The testator in Wilson J’s view had failed to discharge his moral duty to make adequate provision for his natural daughter by way of a lump sum to relieve hardship which she might well suffer on her husband’s death and/or when she was unable to continue employment. Wilson J further commented that there was no evidence that she had been deprived of a normal upbringing, her mother having married her stepfather when the claimant daughter was four.

[76] W M Patterson in “The Law of Family Protection in New Zealand” (2nd ed, 1994) para 15.5 states

“While the question is not specifically discussed [in Re Berryman] the fact that the child received a normal upbringing with a stepfather may be taken as having reduced the moral duty that would otherwise have been owed toward her by her natural father.”

[77] Since Re Berryman (deceased) Parliament has enacted the Status of Children Act 1969. That statute’s policy is the removal of any adverse discrimination against ex nuptial children. The Act’s preamble proclaims it to be an Act “. . . to remove the legal disabilities of children born out of wedlock”.

[78] Against that policy imperative I would prefer to regard a claimant ex nuptial child’s upbringing as one of many factors to weigh when considering a testator’s moral obligation towards an adult child. The fact that the child’s upbringing may have taken place inside another family will not in itself reduce a testator’s moral duty. The nature and quality of the claimant’s upbringing will instead inform the moral duty.

[79] The principles relating to a Family Protection Act claim by an adult child were recently examined by the Court of Appeal in Williams v Aucutt [2000] 2 NZLR 479. Richardson P, whose judgment was that of four members of a five bench court, comprehensively reviewed the history of the statute. His judgment also focused on law reform material and analyses relating to the exercise of judicial jurisdiction in favour of adult children

“[40] Finally, it is common following Re Allen to speak of two classes of estate. The first and by far the most numerous class consists of those cases in which, owing to the smallness of the estate and to the nature of the testamentary dispositions, the applicant is competing with other persons who also have a moral claim upon the testator. The second is where, owing to the largeness of the estate or the nature of the testamentary dispositions, the applicant for relief is complaining not of the unjust distribution of an inadequate fund among dependants, all of whom had a moral claim upon the testator, but of the failure of the testator to make out of the abundance of his or her resources a provision sufficient for the proper maintenance of the claimant. Applying the Consumer Price Index to the two estates referred to, Re Allardice (1910) 29 NZLR 959, considered by Salmond J to be in the first class, an estate of £20,000 is in present-day terms equivalent to $2m, and Re Allen, an estate of £80,000 and said by Salmond J to be clearly in the second class, is equivalent to $8m today.

[42] There is a considerable volume of law reform material and other analyses in overseas jurisdictions concerning the exercise by Courts of their jurisdiction in favour of adult children who are not asserting economic need, with some suggestions for restricting awards to meet what are said to be prevailing social attitudes; and in some cases legislatures have enacted specific provisions precluding or curtailing awards to financially independent adult children (eg Law Commission No 61, “Second Report on Family Property: Family Provision on Death” (London, 1974); Law Reform Commission, New South Wales, “Testator’s Family Maintenance and Guardianship of Infants Act, 1916” (LRC Report 28, 1977); Queensland Law Reform Commission, “Uniform Succession Laws for Australian States and Territories: Issues Paper No 2 - Family Provision” (WP47, 1995); Law Reform Commission of British Columbia, “Report on Statutory Succession Rights” (LRC Report 70, 1983); and Manitoba Law Reform Commission, “Report on the Testators Family Maintenance Act” (Report 63, 1985)).

. . .

[45] While it is not evident that the limited response to the New Zealand Law Commission’s preliminary paper is an adequate barometer of community attitudes in New Zealand and there are difficulties with the Law Commission’s report adverted to by Blanchard J in his judgment at para [68], there are pointers to concerns that some orders in recent years may have been out of line with current social attitudes to testamentary freedom relative to claims by adult children.”

[80] Richardson P then referred to the October 1988 “Report of the Working Group on Matrimonial Property and Family Protection”. He also referred to University of Otago research carried out by Nicola S Peart, “Awards for Children under Family Protection Act” (1995) 1 BFLJ 224,

[81] Addressing the case before the Court of Appeal Richardson P returned to well-settled but case focused Family Protection Act principles:

“[52] . . . we reject the argument that the Court must expressly find a need for proper maintenance and support. 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 recognises that a broader approach is required and the authorities referred to establish that moral and ethical considerations are to be taken into account in determining the scope of the duty. “Support” is used in its wider dictionary sense of “sustaining, providing comfort”. A child’s path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased. Just what provision will constitute proper support in this latter respect 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.”

[82] Blanchard J agreed with that judgment. Referring also to the law reform materials Blanchard stated

“[68] In the last few decades an expansive view appears to have been taken of the power of the Court to refashion the will of a deceased in order to fulfil what has been regarded as his or her moral duty. This trend has not met with universal approval, as reference to the working group’s report of 1988 (“Report of the Working Group on Matrimonial Property and Family Protection”), mentioned by the President, and to the Law Commission’s report in 1997 (“Succession Law: A Succession (Adjustment) Act”) will confirm. I would not wish to be thought to endorse all that the commission has said on the subject of the claims of adult children. I venture to suggest that it has taken a rather extreme position. Nonetheless, there is substance in the criticisms of the way in which Courts sometimes apply the present law. It is to be remembered that the Court is not authorised to rewrite a will merely because it may be perceived as being unfair to a family member, and it is not for a beneficiary to have to justify the share which has been given. Rather, it is for a claimant to establish that he or she has not received adequate provision for proper maintenance and support.

[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 acknowledgment 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.

[70] It is not for the Court to be generous with the testator’s property beyond ordering such provision as is sufficient to repair any breach of moral duty. Beyond that point the testator’s wishes should prevail even if the individual Judge might, sitting in the testator’s armchair, have seen the matter differently. As I have said, the Court’s power does not extend to rewriting a will because of a perception that it is unfair. Testators remain at liberty to do what they like with their assets and to treat their children differently or to benefit others once they have made such provisions as are necessary to discharge their moral duty to those entitled to bring claims under the Family Protection Act.”

[83] Counsel also cited to me the more recent Court of Appeal decision (in respect of which leave has been sought to appeal to the Privy Council) of Auckland City Mission & Ors v Brown and Harrop, [2002] 2 NZLR 650. In that decision the Court of Appeal articulated again the “test” which it had formulated in paragraph [52] of its Williams v Aucutt judgment (supra).

[84] The discretionary power vested in this Court under s 4(1) of the Family Protection Act does not entitle me to re-write the deceased’s will merely because of a perception that the deceased has in some way been unfair to the plaintiff. The broad term “support” must, however, be given a wide and generous interpretation.

[85] In the case before me the deceased sought in a number of ways to recognise the plaintiff as his daughter. It was to a 24 year old married woman that he acknowledged his relationship as her father. He was clearly troubled by the fact that he had not, up to that point, been able to do much for her as a father.

[86] There is really no contest that the plaintiff was raised as a member of the Hewlett family in Essex and not as a member of the Flathaug family in Auckland. Nonetheless the deceased acknowledged the plaintiff as his daughter. He maintained regular contact with her. He was solicitous of her interests and her family’s. He took steps to introduce the plaintiff to his New Zealand family and brought her out to New Zealand for that purpose. To their credit his two adult sons accepted the situation and were to a large extent welcoming. This introduction of the plaintiff to the New Zealand family, for understandable reasons, did not evoke in the widow unbridled enthusiasm. There were difficulties and constraints with which the plaintiff had to contend.

[87] As is apparent from Mr Neumegen’s evidence the deceased agonised over his obligations to the plaintiff. He was acutely conscious of his obligations towards his widow. He was also aware of the security which the family trust constituted for his New Zealand family in respect of which the plaintiff could never be a beneficiary.

[88] There is considerable force in Mr Wilson’s argument that the deceased’s revelation to the plaintiff of his biological relationship was something of a blow to her. It would have needed a readjustment on her part. It would have required a reassessment of all her childhood verities.

[89] In my judgment the deceased’s moral obligation to support his daughter went beyond the modest inter vivos payments he made to her. He correctly assessed his primary obligation as being to his widow, for the reasons articulated to Mr Neumegen. He also, as a just and wise testator, had to assess his obligation to each of his adult children. The economic and financial position of his son John was much weaker than the plaintiff’s. The plaintiff’s economic and financial position, compared to the deceased’s second son Nils’s was arguably slightly weaker having regard to the purchasing power of their assets in the United Kingdom and New Zealand respectively. Unlike Nils and his children, the plaintiff and her children could never have recourse to the family trust.

[90] In addition to assessing his moral obligation towards the plaintiff and Nils based solely on economic need, the deceased needed to weigh the emotional impact of his revelations on the plaintiff and to achieve some congruency between his desire to treat her as a member of the family and some form of testamentary recognition. Those obligations in the plaintiffs side of the scale had to be balanced against Nils undoubted contributions to the deceased’s assets.

[91] In my judgment, difficult and agonising though the balancing exercise was for the deceased, he fell short of his moral obligation to the plaintiff in deciding that he had no further obligation to provide for her support. The provision necessary to repair that breach of the deceased’s moral obligation is an order for further provision in the sum of $90,000.

[92] In my judgment that sum represents adequate provision for the plaintiff having regard to the deceased’s moral obligation towards her and also having regard to the size of the estate and competing claims.

Result

[93] In terms of the plaintiff’s claim under the Status of Children Act 1969 the Court makes a declaration of paternity pursuant to s 10(1) that the deceased, Ludvik Kristian Stein Flathaug, is the father of Jane Weaver born at Chingford in the County of Essex, England, on 21 May 1955. (para [8])

[94] In terms of the claim by Muriel Edith Flathaug under the Property (Relationships) Act 1976, the Court makes the following orders:

[a] An order under s 24(2) extending the time within which the widow can apply.

[b] An order under s 62(2) extending the time within which the widow can elect option A.

[c] An order dividing equally the relationship property pool between the deceased’s representatives and the widow.

[d] An order under s 33(3)(c) vesting the relationship property pool of $1.1 million in the widow and the deceased’s representatives equally.

[e] Leave is reserved if further implementing orders are required. (Para [24])

[95] In terms of the claim seeking further provision under the Family Protection Act 1955 by M E Flathaug the Court makes the following orders:

[a] Further provision out of the estate of the deceased’s half share in the Pakuranga family home.

[b] Vesting in the widow the deceased’s notional half share in the household furniture and motor vehicle. (Para [67])

[96] In terms of the plaintiff’s claim seeking further provision under the Family Protection Act 1955 the Court orders further provision from the deceased’s estate in the sum of $90,000. (Para [91])

Costs

[97] At the request of all counsel costs are reserved. In the unlikely event of costs not being resolved, a claiming party is to submit a memorandum within 35 days and an opposing party a memorandum in reply 14 days thereafter.