GAVIN DONALD MCKENZIE AND & ANOR v LORNA MARGARET THOMAS [2002] NZCA 281 (14 November 2002)

IN THE COURT OF APPEAL OF NEW ZEALAND

ca120/02

	between	GAVIN DONALD MCKENZIE and MAURICE JOHN MCKENZIE
		Appellants
	AND	LORNA MARGARET THOMAS
		Respondent

Hearing:	31 October 2002
Coram:	Anderson J
	Baragwanath J Paterson J
Appearances:	J W Maassen and M Fitzgibbons for Appellants C T Gudsell for Respondent
Judgment:	14 November 2002

judgment of the court delivered by PATERSON J

[1] Mr McKenzie died in June 2000 leaving his estate to be divided equally among three of his children.He made no provision for his other two surviving children, Lorna Thomas and Harvey McKenzie.In his will he stated that Lorna and Harvey "have disowned me as their father and this has continued over a period."Lorna and Harvey brought proceedings under the Family Protection Act 1955 (the Act) and, in a judgment given on 20 May 2002, a High Court Judge awarded Harvey 10% of his father's estate, and ordered that the remaining 90% of the estate be divided equally between Lorna and the three children who had received a third of the estate each under the will.Two of these children, Maurice and Donald, now appeal against that judgment.

Background

[2] There were six children of the marriage of Mr McKenzie and his wife, who predeceased him.One of their children also predeceased him.The remaining five children were aged from 49 years to 63 years at the date of Mr McKenzie's death.

[3] The value of Mr McKenzie's estate at the date of his death was approximately $255,000 consisting of cash and a unit in a retirement village.

[4] Valma, one of the three children who shared equally under Mr McKenzie's will, supported the claim of Lorna and Harvey.Maurice and Donald did not.

The High Court judgment

[5] His Honour found that Mr McKenzie failed to recognise his moral duty to Lorna for various reasons, including:

(a) Her hard work on a farmlet during her childhood, such work supporting the family and assisting in building and sustaining family assets;

(b) Violent episodes in her childhood;

(c) 40 years of letter writing to her parents;

(d) Regular visits by Lorna to him in the period 1989 to 1998;

(e) Lack of recognition of a wrong done to her in respect of certain remarks made about her and her mother.

[6] The Judge considered and rejected claims of disentitling conduct against Lorna.These allegations did not form part of the appeal and counsel for Maurice and Donald submitted they did not in the High Court challenge that there had been a breach of duty towards Lorna.The challenge was to the amount required to justify that breach of duty.A reading of the affidavits filed in the High Court does, however, suggest that Maurice and Donald did allege disentitling conduct against Lorna.

[7] His Honour made the following finding:

I consider, however, that the facts of this case as they relate to Lorna are exceptional.It is worthy of note that all children were to share equally in the estate until the testator's irrational and unfair decision regarding Lorna and Harvey.That aspect, however, is not determinative on its own.I consider that Lorna should have an equal share of the estate with Valma, Maurice and Donald.The reasons are identified above.

[8] The reasons which the Judge identified included those summarised in paragraph 5 above but also included a reference to a prior will made in 1989. Under that will, Mr McKenzie left his estate equally to his five children.The will excluding Lorna and Harvey was made in March 1999.

Points on appeal

[9] Mr Maassen, for Maurice and Donald, submitted that an award of between $20,500 and $33,000 (8-13% of the residue) was reasonable and in accordance with other decisions of this Court.He submitted the Judge made four errors, namely:

(a) Awarding Lorna 22.5% when she asked for 20%;

(b) Giving no weight to:

(i) A refusal by Lorna to attend a family meeting in 1998 when Mr McKenzie proposed to distribute certain of his personal assets to his family;

(ii) Events which occurred after the will was signed and "loosened the bonds."

(c) Placing significant weight on the contents of the former will rather than focusing on whether there had been a breach of moral duty and deciding what was necessary to remedy the breach;

(d) Re-writing the testator's will.

Discussion and conclusions

[10] It was apparent to the Court that this appeal was motivated more by a sense of grievance of certain comments made in the judgment than by the actual award in favour of Lorna.Both Lorna and Harvey became estranged from their father in 1998.The Judge made a finding that the estrangement was entirely the responsibility of the deceased.There are other comments in the judgment which caused Maurice and Donald, with some justification, to feel that their father was denigrated gratuitously.The judgment far from allaying family tensions, exacerbated them.There is no doubt that from 1998, there was estrangement between Lorna and her father.Normally, both parties must take some share of the blame when there is an estrangement in a family.On our reading of the evidence we find it difficult to accept that the normal rule did not apply in this case and that the Judge's finding against the deceased was an appropriate finding on the affidavit evidence.

[11] This Court, on more than one occasion, has said that it is only in rare cases where blackening the character and motives of family members will assist in family protection matters.Counsel in such matters have a duty to be vigilant and to ensure that only appropriate evidence is included in affidavits.In this case, there were inappropriate statements made about family members in more than one affidavit.These do not assist this Court.

[12] We do not accept that a 22.5% award was more than sought.Lorna sought equality with her siblings.The breach of moral duty in the case of Harvey was not considered as grave as that in Lorna's case.Subsequently, the Judge reduced Harvey's entitlement and determined that Lorna should share equally with her other siblings.

[13] There is substance in the submission that the Judge failed to assess in Lorna's case the extent of the breach of moral duty and what was required to remedy it.There are statements in the judgment which suggest that His Honour was influenced by the 1989 will and the concept of equality.Although the Judge noted that the previous will under which the children shared equally was not determinative, he did refer to this will on more than one occasion.As noted by this Court in Williams v Aucutt [2000] 2 NZLR 479 at 493, it is normally inappropriate to award a share in residue as such and to redraw the will in that way.We cannot be certain that His Honour did not adopt equality with the other siblings as an important consideration in his determination. The previous will was in this case irrelevant to any award which was to be made.

[14] Although this is a modest estate, it is necessary to determine it on the "support" provision in s 4 of the Act.This is because neither the appellants nor the respondents provided the High Court with sufficient financial details to enable financial considerations to be taken into account.A party's income and asset position, whether that party be an appellant or a beneficiary in the position of a respondent, should be provided in all family protection cases. These factors are relevant to whether or not the deceased has breached a moral duty.

[15] In this case, we are of the view that if the Judge had approached the relief on the basis of orthodox principles, he could have justified an award in Lorna's favour of something near the amount awarded.While we do not accept all of the factors used by His Honour in establishing breach of moral duty, we accept that Lorna made a significant contribution during childhood to the family assets, kept in constant touch with her mother during her lifetime, and her father up until the date of the estrangement, made a significant contribution to the deceased in the eight years following her mother's death by regular visits to him at some distance from her home, and that the events which led to the estrangement should not greatly diminish the amount which a wise and just testator should have left her in fulfilment of his moral duty.

[16] To avoid a non-principled rewriting of the will by imposing an equal sharing, we would have preferred that a specific legacy be given to Lorna to remedy the breach of moral duty.There are, however, two problems in this particular case in awarding a lump sum.First, Harvey has not appealed, and he and the other siblings will receive specific proportions of the residue.We cannot adjust Harvey's share to a lump sum amount.Secondly, because the estate is a moderate one and we do not know the value of it after costs have been deducted from it, we may be unfair to either Lorna on the one hand, or the other children on the other, if we award a lump sum.In these circumstances the pragmatic solution is to award a proportion of the residue.

[17] On our view of the facts, justice can be done by setting aside the award to Lorna and awarding her 20% of the residue.There will be an order accordingly.

Costs

[18] Both the appellants' and respondent's reasonable costs should be deducted from the residue of the estate before it is divided among the beneficiaries.

Solicitors

Cooper Rapley, Palmerston North for Appellants

Till & Clarke, Cambridge for Respondent