Wilkinson v Wilkinson

[2019] NZHC 1729

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2016-419-257

[2019] NZHC 1729

IN THE MATTER

The Family Protection Act 1955

IN THE MATTER

of the Estate of William Louis Wilkinson, deceased

BETWEEN

PATRICIA MARY WILKINSON

Plaintiff

AND

DAVID WILLIAM WILKINSON and

JOHN DUNCAN LANDERS as Executors of the Estate of William Louis Wilkinson, deceased

Defendants

[CONTINUED OVER]

Hearing (telephone

conference):

11 and 12 July 2019

Appearances:

A Gilchrist for the Plaintiff in 227 and Patricia Wilkinson in 257 S Robertson QC for the Plaintiffs in 227

P Stevenson for the Estate of Barbara Ann Wilkinson in 227, 257 and 71
D O’Neill for David Wilkinson in 227 and 257 and Pauline Wilkinson in 227

C Murray Earl for Neville Wilkinson in 227 and 257 J Niemand for Richard Wilkinson in 227 and 257

S A Grant for Henry Bell and Declan Bell in 227 and 257 S Jefferson QC for Daniel Wilkinson and James Wilkinson K Bond for Chyloe Wilkinson in 227, 257 and 71

R Clark for the Executors of the Estate of William Louis Wilkinson in 257

Ann Frances Wilkinson in 227 and 257

Judgment:

26 July 2019

JUDGMENT OF POWELL J

WILKINSON v WILKINSON [2019] NZHC 1729 [26 July 2019]

CIV-2018-419-227

IN THE MATTER                of the Trustee Act 1956

BETWEEN  PATRICIA MARY WILKINSON,

DAVID WILLIAM WILKINSON, and WILKINSON INDEPENDENT

TRUSTEES LIMITED as trustees of the KL WILKINSON NO. 2 TRUST

CIV-2019-419-71

IN THE MATTER                of the Family Protection Act 1955 AND

IN THE MATTER                of the Estate of BARBARA ANN

WILKINSON

BETWEEN  CHYLOE DEIDRE WILKINSON

Plaintiff

AND  PATRICIA MARY WILKINSON,

BRIAN BILAS and LYNETTE MARGARET NICHOLSON as

Executors of the Estate of Barbara Ann Wilkinson

This judgment was delivered by me on 26 July 2019 at 10 a.m. pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1]    The three proceedings that are the subject of this judgment involve the family of the late William Louis Wilkinson (“Bill”) and Barbara Anne Wilkinson (“Barbara”). Specifically:

(a)Their children:

§David William Wilkinson (“David”)

§Ann Frances Wilkinson (“Ann”)

§Patricia Mary Wilkinson (“Tricia”)

§Richard Peter Wilkinson (“Richard”)

§Neville Alan Louis Wilkinson (“Neville”) (“the children”)

(b)Their grandchildren: Children of Ann Wilkinson:

§Henry William Bell (“Henry”)

§  Declan Kenneth Bell (“Declan”) Children of Neville Wilkinson

§Daniel John Louis Wilkinson (“Daniel”)

§  James Colin Wilkinson (“James”) Child of Richard Wilkinson

§Chyloe Deidre Wilkinson (“Chyloe”)

(“the grandchildren”)

[2]    Bill died, aged 88, on 28 August 2015. Bill left a will and codicil which after providing for a number of specific requests and expenses left the residue estate in the following manner:

(a)To pay the interest received on his loan to Barbara during her lifetime, and, after her death, to forgive the loan to The Duke Trust.

(b)To pay the net annual income arising from the balance of his Estate to Barbara, during her lifetime.

(c)After the death of Barbara, to pay the net annual income arising from the balance of his Estate equally amongst his five children.

(d)Upon the death of each of the five children, to transfer a one fifth share of the balance of the residue, and to divide that equally amongst the children of Ann and Neville to the intent that, upon the death of the last of the five children, the whole residuary Estate will then have been transferred equally amongst the children of Ann and the children of Neville.

[3]    The Family Protection Act claims (“the 257 proceedings”) were made against Bill’s estate by Tricia, David, Neville and Richard, on the basis that there had not been adequate provision made by Bill for his children, with Ann taking the position that if the other children got greater provision in Bill’s estate she should as well. Barbara and Chyloe also made Family Protection claims against Bill’s estate, with Chyloe noting that she was the only grandchild not provided for.

[4]    Barbara then brought a Property (Relationship) Act 1976 claim against Bill’s estate which resulted in an order that Bill’s estate and Barbara’s assets would be divided equally so that they each received $3,640,549.00.1 In the meantime Tricia, David and the Wilkinson Independent Trustee, as trustees of the K L Wilkinson No 2

1      Wilkinson v Wilkinson [2017] NZHC 928.

Trust (“the Trust”) which had been settled by both Bill and Barbara, issued proceedings seeking orders to enable them to distribute the assets of the trust to the beneficiaries (“the 227 proceedings”). This proceeding was prompted by the realisation that, because Richard and Neville had been born after the execution of the trust deed, if Richard and/or Neville outlived David, Ann and Tricia:

(a)Richard, and/or Neville would not receive any benefit from the Trust after the death of the last survivor of David, Ann and Tricia; and

(b)The grandchildren of Bill and Barbara would receive all of the Trust assets upon the death of the last survivor of David, Ann and Tricia.

[5]    Barbara died on 29 March 2018, following which Chyloe brought Family Protection claims against Barbara’s estate (“the 71 proceeding”).

[6]    By July 2019 the 227 and 257 proceedings were ready to proceed and had been set down for sequential hearings beginning on 15 July 2019. At a pre-hearing telephone conference on 11 July 2019 counsel indicated that the parties were in broad agreement on terms of settlement for all those proceedings, and following a further telephone conference on 12 July 2019, confirmed that the only party not then legally represented (Ann Wilkinson) had now confirmed that she also had no opposition to the proposed settlement. As a result, I vacated the fixture and adjourned the proceedings to enable counsel to complete execution of the joint memorandum of counsel (which has now occurred) on the basis I would then proceed to issue a brief formal judgment with regard to the settlement.

The proposed settlement

[7]    In order to effect settlement of all three proceedings the parties are agreed that orders should be made to reflect:

(a)there has been a clear breach of moral duty by Bill;

(b)the children, Barbara’s Estate and Chyloe should receive an order of capital that will come off the other grandchildren’s capital sums;

(c)the breach for Bill’s Estate should be determined as at the date of death on the basis of a $4.6m Estate;

(d)Barbara’s Estate should be determined as at the date of death on the basis of a $4.6m Estate and the provision from Bill’s Estate and be divided equally between the trusts nominated by the children;

(e)the K L Wilkinson No. 2 Trust net assets are to be divided equally between the children and grandchildren.

[8]    To reflect this position the parties seek orders in terms of the orders annexed at “A”. In summary this will mean that once the various specific requests and expenses have been dealt with:

(a)the children and grandchildren will share equally in Bill’s Estate;

(b)the children will share equally in Barbara’s Estate (through their respective family trusts);

(c)the net value of the trust fund is to be divided equally between all of the children and grandchildren;

(d)the legal costs of the Estates and the trustees are to be met out of the Estates and Trust respectively but otherwise each of the parties bears their own costs.

Legal principles

[9]    The 257 and 71 proceedings have been brought pursuant to s 4 of the Family Protection Act 1955. The section gives the Court a discretion to intervene in relation to a deceased’s estate if “adequate provision” is not available for the “proper maintenance and support” of a claimant, including by the children and grandchildren of the deceased.2

2      Family Protection Act 1955, s 3(1).

[10]   Where such adequate provision described by the courts as a breach of moral duty is established, case law is clear3 the courts should do no more than is necessary to repair the breach by making adequate provision for the applicant’s proper maintenance and support.4

[11]   In contrast the 227 proceedings are brought under s 66 of the Trustee Act 1956 which enables trustees to apply to the Court for directions concerning any property subject to a trust or respecting the management or administration of any such property or respecting the exercise of any power or discretion vested in the trustee. A trustee acting under any direction from the court is protected from liability for any act subsequently declared to have been a breach of trust so long as he or she is not guilty of fraud, wilful concealment or misrepresentation in obtaining the court’s direction.5

[12]   In New Zealand Māori Council v Foulkes, Kós J described the section as “simply an enactment of a broad Equitable jurisdiction that has long resided in the Chancery Courts.”6 It is not confined to mere points of minor importance but rather provides a “parallel source of jurisdiction to resolve any substantial question of law concerning the meaning or administration of a trust.”7

Discussion

[13]    Having considered the pleadings and evidence filed and having read the memorandum of counsel and the proposed orders it is clear that it is in the interests of justice for the settlement to proceed. As I indicated to counsel at the telephone conference, the role of the Court in civil proceedings is to determine issues where the parties are not able to reach agreement themselves. Where, as in this case, the parties have been able to reach agreement that provides a strong basis for giving effect to those orders unless contrary to law. In relation to each of the proceedings the orders sought are consistent with the legislative framework and relevant case law. In

3      Henry v Henry [2007] NZCA 42, [2007] NZFLR 640 at [27].

4      Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463 [119]. See also Williams v Aucutt [2000] 2 NZLR 479 (CA), Williams v Aucutt [2000] 2 NZLR 479 (CA), Auckland City Mission v Brown [2002] 2 NZLR 650 (CA), Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.

5      Trustee Act 1956, s 69.

6      New Zealand Māori Council v Foulkes [2014] NZHC 1777, [2015] NZAR 1441 at [44].

7 At [46]. Noting at [49] s 66 is generally not an appropriate avenue to resolve disputed issues of facts.

particular with regard to the 257 and 71 proceedings, those arguably omitted from adequate provision from Bill’s estate, the children and Chyloe, are now provided for, while still ensuring that the grandchildren (who were the initial beneficiaries) retain significant entitlements. Likewise, the proposed settlement of the 227 proceedings under the Trustee Act avoids the possibility of an unforeseen outcome in the event David, Ann and Trisha predecease Neville and Richard.

[14]   I take into account too that all those with a claim have consented to the orders being made. There is otherwise no reason not to give effect to the settlement agreed by the parties.

[15]As a result I therefore make the orders sought.

Decision

[16]Orders in the terms set out in Annexure A.

Powell J