Webb v Smith and Bryan as Executors and Trustees of the Estate of Lola Ethel Webb HC Tauranga CIV 2010-470-264
[2010] NZHC 1640
•25 August 2010
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2010-470-264
UNDERThe Law Reform (Testamentary Promises) Act 1949
IN THE MATTER OF the Estate of Lola Ethel Webb of Tauranga, deceased
BETWEEN ROBERT WILLIAM WEBB AND NICHOLAS ANDREW WEBB Plaintiffs
ANDPAMELA SMITH AND LAURENCE JOHN BRYAN AS EXECUTORS AND TRUSTEES OF THE ESTATE OF LOLA ETHEL WEBB
Defendants
Hearing: 9 August 2010
Appearances: Mr S Barter for Applicant
Mr B Nabney for Plaintiffs
Judgment: 25 August 2010 at 4 p.m.
JUDGMENT OF ASSOCIATE JUDGE DOOGUE
This judgment was delivered by me on
25.08.10 at 4 pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors:
Mr Nabney, P O Box 13007,Tauranga – [email protected]
Barter & Co, P O Box 197, Albany Village – [email protected]
WEBB & ANOR V SMITH & ORS AS EXECUTORS AND TRUSTEES OF THE ESTATE OF LOLA ETHEL WEBB HC TAU CIV-2010-470-264 25 August 2010
[1] The plaintiffs in this proceeding are the sons of John David Webb (“John Webb”) who died in 2007. The defendants are the executors and trustees of the estate of Lola Ethel Webb who died in 2009.
[2] The plaintiffs’ father, after the death of his wife in 1991 (the mother of the plaintiffs), remarried, with his wife on the second marriage being Lola. Lola and John were married on 5 October 1997. Lola had been previously married herself and her married name was Bryan. Lola had four children, Dianne Allan, Pamela Smith, Laurence John Bryan and Roger David Bryan.
[3] In October 2005 John Webb executed his last will and he died on 24 August
2007. Lola executed her last will on 5 August 2008 and she died on 7 July 2009. She therefore survived John by a little under two years.
[4] During the joint lifetimes of John Webb and Lola, John sold what had been his previous matrimonial home in September 1997 and moved into Lola’s house. John’s sons, the plaintiffs, say in their statement of claim:
14. The plaintiffs were informed by their father that it was the intention of both himself and Lola to combine their assets for their own use and enjoyment while at the same time preserving an inheritance for both the children of [Lola] and himself.
15. The plaintiffs were informed by their father that it was the intention that upon the death of the survivor of the marriage the estate would be divided equally between the children of [Lola] and himself.
[5] I interpolate that if that was the intention, it was not carried out in the last will that the survivor of the two of them, Lola, left. She left the residue of her estate to her four children and left a legacy of $5,500 each under her will to John’s children. The plaintiffs say that this arrangement resulted in a substantial imbalance in favour of the four Bryan children which is apparent from the fact that the proceeds of sale received when John sold his home in September 1997 was $151,644.83.
[6] The plaintiffs bring a claim based upon The Law Reform (Testamentary
Promises) Act 1949. This is pleaded in the following way in the statement of claim:
20. That the plaintiffs relied entirely on the promise of their father and the promise of their stepmother, Lola Ethel Webb, that on the death of the survivor of the marriage, the estate would be divided equally between their respective children.
21. That in reliance on this promise neither plaintiff contested the provisions of their father’s will, which left the entire estate to Lola Ethel Webb.
[7] A significant item of evidence is a letter which Lola wrote to one of the plaintiffs, Robert, in October 1997. That letter was written in response to a letter that Robert had written to Lola. The letter partly reflected the aftermath of the marriage between John and Lola and the letter notes that it was a sadness to Lola and John that Robert did not come to their wedding and she said:
Your presence would have made a happy occasion perfect.
[8] While the letter from Robert to which Lola’s letter responds is not in evidence it clearly raised financial matters. In response, the letter from Lola said:
Now to answer some of your points ... I am not clear about the $40 - $50,000 your dad has given to a stranger. If I am the stranger you are referring to let me put your mind at rest. Definately (sic) NOT true. As a matter of fact we have just made out our will (sic) with Michael Stemmer (Solicitor) putting all our assets, ie your dad’s money from his house and my money and house in our joint names. When we die the whole estate will be divided in two. Half will be for my four children and half for you and Nicholas. If you look at that you will see that you and Nicky will get more than my children.
[9] The letter went on to refer to the fact that Lola and Robert’s mother had been good friends; that John and Lola had been managing their money carefully and decided to pool their resources and live in one house.
[10] Since the commencement of proceedings the defendants have sought and obtained particulars from the plaintiffs on the basis of the plaintiffs’ claim. In their further particulars dated 22 June 2010 BOD [0049] the plaintiffs stated:
1.In regard to paragraph 20 of the Statement of Claim, the promise made by the deceased is particularised as follows:
(a) the date on which the promise was made was the 25th of
October 1997;
(b)the promise was communicated by the deceased to the plaintiffs by way of letter dated 25 October 1997;
(c)the exact terms of the promise are set out in the letter, which is attached as exhibit “E” to the Affidavit of R W Wells (sic) sworn on 30 March 2010.
2.In regards to paragraph 20 of the Statement of Claim the services or work that the Plaintiffs provided to or performed for Lola Webb being:
(a) No specific services or work was performed.
[11] The defendants have now filed an application to strike out the plaintiffs’ proceeding on several grounds. These may be summarised as being in the first place on the ground that the claim discloses no reasonably arguable cause of action or case and, in particular, that the letter which is said to have communicated the promise and which I have referred to at paragraph [8] above does not contain any words which would constitute a promise for the purposes of the Act and that even if the words used in the letter do amount to a promise for the purposes of the Act there is no link between the promise made and any services or worked performed or to be performed by the plaintiffs to the deceased during her lifetime. Further the strike out application says that the plaintiffs’ decision not to contest the provisions of their father’s will does not constitute the rendering of services or performing of work for the purposes of the Act.
[12] Essentially, the grounds on which the plaintiffs oppose the application to strike out include:
a) That the surrendering of an inheritance in favour of the deceased is a tangible “service”; and
b) That forbearance from contesting a will is a tangible “service”.
[13] The plaintiffs/respondents also resisted the suggestion that there was no necessary linkage between the promise that they say Lola Webb made and their refraining from taking steps under The Law Reform (Testamentary Promises) Act
1949, as I mention further below. I also describe the grounds of opposition to the strike out application in more detail below.
[14] I consider that the correct approach to dealing with this strike out application is that set out in Sim to the following affect:
HCR15.1.7(a) Dismissal or strike out: principles and approach — general: Caution in disposing of such cases on a summary basis is necessary both to
prevent injustice to claimants and to avoid skewing the law with confident propositions of legal principle or assumptions about policy considerations, undisciplined by facts. It is inappropriate to strike out a claim summarily unless the court can be certain that it cannot succeed. The case must be “so certainly or clearly bad” that it should be precluded from going forward: Couch v Attorney-General [2008] NZSC 45; [2008] 3 NZLR 725 (Elias CJ and Anderson J at paras [32] and [33]).
[15] In their notice of opposition the plaintiffs oppose the making of the orders for strike out and they set out the following grounds:
(a) That the letter of 25 October 1997 contains the promise that the estate of the father of the Plaintiffs and the mother of the respondents would be divided as set out in that letter;
(b) That the Plaintiffs’ father predeceased the Respondents’ mother;
(c) That in reliance on the promise made the Plaintiffs made no claim on their deceased father’s estate;
(d) That the surrendering of an inheritance in favour of the deceased is a tangible “service”; and
(e) Forebearance from contesting a Will is a tangible “service”.
The Law Reform [Testamentary Promises] Act 1949
[16] The relevant part of s 3 of the Act provides as follows:
3Estate of deceased person liable to remunerate persons for work done under promise of testamentary provision
[(1) Where in the administration of the estate of any deceased person a claim is made against the estate founded upon the rendering of services to or the performance of work for the deceased in his lifetime, and the claimant proves an express or implied promise by the deceased to reward him for the services or work by making some testamentary provision for the claimant, whether or not the provision was to be of a specified amount or was to relate to specified real or personal property, then, subject to the provisions of this Act, the claim shall, to the extent to which the deceased has failed to make that testamentary provision or otherwise remunerate the claimant
(whether or not a claim for such remuneration could have been enforced in the lifetime of the deceased), be enforceable against the personal representatives of the deceased in the same manner and to the same extent as if the promise of the deceased were a promise for payment by the deceased in his lifetime of such amount as may be reasonable, having regard to all the circumstances of the case, including in particular the circumstances in which the promise was made and the services were rendered or the work was performed, the value of the services or work, the value of the testamentary provision promised, the amount of the estate, and the nature and amounts of the claims of other persons in respect of the estate, whether as creditors, beneficiaries, wife, husband, [[civil union partner,]] children, next-of-kin, or otherwise.]
(2) This section shall apply—
(a)Whether the services were rendered or the work was performed before or after the making of the promise:
(b)Notwithstanding anything to the contrary in [subpart 2 of Part 2 of the Property Law Act 2007], or any other enactment.
[17] The first issue is whether the plaintiffs rendered services to the deceased by refraining from making an application under the Family Protection Act 1955 against the estate of their late father. There are in fact decided cases where the Court has considered different but analogous abstentions from action or refraining from taking particular legal steps to enforce a right, and determined the consequent question whether such abstentions etc could amount to the rendering of a service for the purposes of the Act. The first case I shall mention is Tucker v Guardian Trust and Executors Co of New Zealand Ltd [1961] NZLR 773. In that case both the plaintiff and the deceased were beneficially entitled to a house property in the estate of their deceased mother. The deceased wanted to continue to live in the house. The plaintiff agreed to disclaim his interest in the house in return for which the deceased undertook to leave it to the plaintiff in his will. McCarthy J, having regard to the spirit in which the Act must be approached, considered that the plaintiff’s Act fell within the meaning of the term “services” [at 776]. The Tucker judgment was referred to with approval – although not on that exact point – in the recent New Zealand Court of Appeal decision in Samuels v Atkinson [2009] NZCA 556.
[18] In Re Le Prou (1990) 8 FRNZ 72, the facts before the Court were that the plaintiffs were grandchildren of the testator and his second wife. The grandmother
left the entire estate to the testator. At the grandmother’s funeral, the testator handed the plaintiff a note stating that on his death the estate would be divided between the two children of the testator from his first marriage and the three plaintiff grandchildren. The Judge concluded that there was evidence of a breach of duty by the deceased towards her grandchildren which would justify the bringing of a Family Protection Claim [at 76]. A challenge to the grandmother’s will was considered by one of the plaintiffs but given the assurances contained in the letter handed over by the beneficiary at the funeral all thoughts of challenging the deceased’s will were abandoned. By abandoning a challenge to the deceased’s will the plaintiffs were found to have “rendered services so as to found a basis for relief under the Law Reform (Testamentary Promises) Act 1949.
[19] The defendants say that the application by the plaintiffs must fail for the additional reason that there is no linkage between the posited promise and the “services” provided by the plaintiffs, namely the foregoing of their rights to claim under the Family Protection Act 1955.
[20] It is the case for the plaintiffs that had Lola Webb not written the letter that she did in 1997, which provided assurance to the plaintiffs, they would have brought proceedings under the Family Protection Act 1955 following the death of their father in 2007. They did not do so and it is now too late.
[21] One minor complexity in the present case is that it would seem that the plaintiffs were told by both their father and by Lola what the proposed arrangement was. What seems to have happened is that Lola and John were of the view that it would not be advantageous to them to divide their estates and distribute them to their separate families. Instead, their common intention seems to have been that they would amalgamate their property which would be for the use of either of them so long as one of them remained alive. After the survivor of the two was dead, the intention was that the estates would be divided up in such a way as to provide their respective children with gifts representing the individual birth right of the children of each family. Lola clearly associated herself with this intention and confirmed it when she wrote her letter in 1997.
[22] In submissions, Mr Nabney did not contend that the plaintiffs actually gave an express assurance to Lola that if she were to proceed in this way, they would refrain from taking steps to challenge their father’s will.
[23] Mr Nabney referred me to the uncontradicted evidence of Robert Webb as follows:
12. My father re-informed me just prior to his death on 24 August 2007 that in his Will he was leaving his assets to “Lola” to utilise during her lifetime, and subsequently the remaining assets would be divided between the two families; that is my brother Nicholas and myself, and Lola’s four children.
[24] Mr Nabney said that these statements by the father re-affirmed what Lola had said and the statements continued to have “causative effect”. He further submitted that the letter which Lola wrote was clearly intended to influence what the sons did.
[25] In Samuels v Atkinson [2009] NZCA 556 at paragraph 24 the Court of Appeal said:
The central principles of the testamentary promises jurisdiction are that: a claimant must have rendered services to or performed work for the deceased in his or her lifetime; the claimant must prove either that the deceased made an express promise to reward him or her for such services or work by making some provision for that claimant by will, or that such a promise may be implied; the promises must be linked to the services; and reasonable provision has not been made.
[26] The following linkages must be established before there will be a valid claim under the Law Reform (Testamentary Promises) Act 1949. The first arises from the wording of s 3 of the Act which provides that relief is available where the claimant proves “an express or implied promise by the deceased to reward him for the services or work by making some testamentary provision”. That must mean that the testatrix knew that the claimant had performed, or intended to perform, services for her. Such a linkage may be inferred from all of the circumstances; it does not require an expressed acknowledgement of the services and an express linkage of those to the intention to make testamentary provision. However, where a testator makes a gratuitous promise in circumstances where her promise is uninfluenced by any services; jurisdiction under the Act cannot arise.
[27] A potential difficulty in the path of the plaintiffs is that their statement of claim does not assert that they expressly represented to Lola Webb that they would forego any claim that they might have against their father’s estate under The Law Reform (Testamentary Promises) Act 1949. There may also be difficulty in implying that at the time when she wrote the letter the testatrix understood that the plaintiffs were disavowing any intention to apply under the Act and that as a reward for that disavowal she promised to make provision; that such was her reason for making the promise. The circumstances in which Lola wrote the letter making the promise that she and John would leave their estates equally to their respective children were that she and John had recently married and at a time when there were no doubt some anxieties on the part of John’s sons. The letter appears to have been written in a conciliatory and assuring tone. It would appear to have been Lola’s wish, and the reason why she wrote the letter, that she wanted the sons to accept her as their stepmother. That may have been Lola Webb’s motivation for writing the letter rather than because John Webb’s sons advised her that they would not bring a Family Protection Act claim.
[28] The statements that John made towards the end of his life were no doubt consistent with Lola’s views about distribution of the estates but they cannot be the foundation of a testamentary promises claim against Lola’s estate.
[29] If as Samuels v Atkinson holds, it is a central principle that the plaintiff has to show that there was an express or implied promise to reward the promisee for services rendered, there may have to be a factual analysis carried out at the trial into the issue of whether Lola believed that Robert and Nicholas had made a decision not to bring a Family Protection action.
[30] In their notice of opposition the defendants referred to, inter alia, Couch v Attorney General [2008] NZSC 45. In that case, Elias CJ stated that it was inappropriate to strike out a claim summarily unless the Court can be certain that it cannot succeed. She was of the view that, in a developing area of law such as negligence, in the circumstances of that case, attempting to determine the question of whether a duty of care was owed and whether it was breached was inappropriate. The law was still developing and questions of that kind were particularly unsuitable
to being resolved without the discipline of facts first being found. In the present case, the essential facts are undisputed and the enactment on which the claim has been brought has existed in settled form for several decades. The leading authorities on the affect and meaning of the section date back to the 1950s. That would suggest that one can therefore be reasonably confident in coming to a conclusion about whether the claim has any prospects of success.
[31] In A-G v McVeagh [1995] 1 NZLR 558, at p 566 it was stated that:
The Court is entitled to receive affidavit evidence on a striking-out application, and will do so in a proper case. It will not attempt to resolve genuinely disputed issues of fact and therefore will generally limit evidence to that which is undisputed. Normally it will not consider evidence inconsistent with the pleading, for a striking-out application is dealt with on the footing that the pleaded facts can be proved; see Electricity Corp Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641, 645-646; Southern Ocean Trawlers Ltd v Director-General of Agriculture and Fisheries [1993] 2
NZLR 53, 62-63, per Cooke P. But there may be a case where an essential factual allegation is so demonstrably contrary to indisputable fact that the matter ought not to be allowed to proceed further.
[32] In this case there are issues of fact and law which need to be determined. So far as factual matters are concerned, a question poses itself of whether Lola Webb promised to reward the plaintiffs for the posited “services.” Those issues are not suitable to be decided on a strikeout application.
[33] It might yet be possible for the plaintiffs to satisfy a trial Judge that Lola Webb made a promise which was linked to the foregoing of a claim under the Family Protection Act.
[34] In the end it cannot conclusively be said that the plaintiffs’ claim has no serious chance of succeeding. I therefore decline to make a strike out order.
[35] If either side seeks an order for costs they should file memoranda. But I do not wish to convey that I am disposed to make an order for costs.
J.P. Doogue
Associate Judge
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