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High Court of New Zealand Decisions |
Last Updated: 14 December 2011
NOTE: PURSUANT TO THE FAMILY PROTECTION ACT 1955, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION PLEASE SEE WWW2.JUSTICE.GOVT.NZ/FAMILY/LEGISLATION/RESTRICTIONS.
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2011-404-000613
UNDER the Family Protection Act 1955
IN THE MATTER OF the Estate of the late PAW BETWEEN JEW
Appellant
AND TAB AND HJH AND JEW Respondents
Hearing: 28 July 2011
Appearances: G J Kohler for Appellant
D A Wood for Respondents
Judgment: 23 November 2011
JUDGMENT OF WHATA J
This judgment was delivered by Justice Whata on
23 November 2011 at 3.00 p.m., pursuant to r 11.5 of the High Court Rules
Solicitors:
Registrar/Deputy Registrar
Date:
Gellert Ivanson, PO Box 25239, St Heliers, Auckland 1740
Allen, Needham & Co., PO Box 12, Morrinsville 3340
Copy to:
G J Kohler, PO Box 4338, Auckland, 1140
D A Wood, PO Box 1452, Shortland Street, Auckland 1140
JEW V TAB AND HJH AND JEW HC AK CIV-2011-404-000613 23 November 2011
[1] This is an appeal from a decision of the Family Court. In that decision the Judge granted the respondents’ family protection claim with the result that each respondent received further provision for their maintenance and support at a best estimate of about 24 per cent of the value of the estate.
[2] The appellant, widow of the deceased, complains that this result has left her with only a modest interest of about 28 per cent of the total estate. She says this is unfair and unjust given that the deceased provided for the respondents, his children, through a family trust. Through that family trust the respondents are likely to receive the deceased’s 50 per cent share in the joint property held by the widow and her deceased husband.
[3] There is no dispute about the applicable principles. The critical issue is whether or not the Judge applied those principles correctly to the facts. There is also a preliminary issue as to my jurisdiction on appeal in light of Austin, Nichols & Co Inc v Stichting Lodestar1 and whether that Supreme Court decision displaces the directions in Little v Angus2 recently reinforced by the Court of Appeal in Henry v Henry.3 Those Court of Appeal decisions appear to be authority for the proposition that this Court does not substitute its own discretion over the Judge at first instance in this context.
Facts
[4] The key background facts dealing with Mr W’s distribution of his assets and the circumstances of Mrs W are helpfully distilled in the judgment of Her Honour, Judge S J Fleming.4 They are not seriously challenged by the parties. She records, by way of summary:
(a) Immediately prior to his death Mr W set up a trust into which he placed his half share of the property jointly held with Mrs W. The
1 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
2 Little v Angus [1981] 1 NZLR 126 (CA).
3 Henry v Henry [2007] NZCA 42. The respondent cited Blackstone v Blackstone (2008) 19
PRNZ 40 (CA). But for reasons I set out at [34] I do not consider that Blackstone supports the
respondents’ position.
4 TAB v JEW FC Manukau FAM-2008-092-2951, 12 January 2011.
income from the capital value of these assets is to be applied to support Mr W through her lifetime. The respondents are discretionary beneficiaries of this trust. This trust is hereafter referred to as the PAW Family Trust.
(b) Mr W left the residue of his interests, apart from some discrete personal items, to Mrs W.
(c) The capital value of the PAW Trust assets is about $275,000, with income generated from it in the order of $5000 to $15,000 per annum.
(d) Mrs W has limited financial means, with an estimated weekly income as at March 2009 of $140.
(e) Mr and Mr W were married for about 23 years, with Mrs W
contributing fully and financially to their relationship.
Respondents’ circumstances
[5] The Judge also describes the respondents’ circumstances in this way:
[36] TB is in her late 30s and is married with two young children. She is a qualified primary school teacher but is not working. Her husband is employed as a plumber. They own a house with what is described as a
―large mortgage‖ but no further particulars had been provided. Ms B says
the family struggles ―to make ends meet‖.
[37] JW is also aged in her late 30s and is in a long term relationship with two young sons, the elder of whom has Down’s Syndrome. Ms W and her partner are sharemilkers and own an unspecified part of a dairy herd. They have raised a mortgage on the security of the herd. The evidence is they have no other assets.
[38] HW is in her mid 30s, is married and has one young child. The family is living in Australia. Ms H is an employment consultant. Her husband was made redundant in April 2009 and took some time to find full time employment. He is now employed but his income is much reduced. Their son has some health difficulties and has required hospitalisation with breathing difficulties. They have no assets and some debts in the form of a student loan, as well as some personal loans.
Disputed Distributions
[6] The primary reason for the proceedings relates to the trust assets of Mr W’s brother (RW) and the estates of his father and grandfather, from which Mr W’s estate is to benefit. RW died in 2007, two years after Mr W. Under the RW Trust deed, Mr W is to receive a half-share of the trust assets (estimated to be worth in the order of
$200,000). Mr W was a trustee of the RW Trust. Mr W’s interest in his grandfather’s estate was estimated at $76,408, while his interest in his father’s estate (the HW estate) was estimated at $102,500.5
[7] There is no express provision for the distribution of the trust or estate interests in Mr W’s memorandum dealing with the PAW Family Trust or in his will. Those interests are, nevertheless, plainly part of Mr W’s residuary estate and accordingly, in terms of the will, would pass to the widow appellant but for the family protection order.
[8] In the Family Court, it was understood that only the RW Trust assets would accrue to Mr W’s estate immediately, and that the interests in Mr W’s father’s and grandfather’s estates (worth approximately $180,000) would accrue at a later date (after the deaths of certain life tenants). Judge Fleming also noted the possibility that Mr W’s estate would receive a half-share of RW’s interest in his grandfather’s estate (estimated at $38,204), although it appears that this amount was put to one side as it
was unknown whether in fact that interest would arise.6
[9] In granting the respondents’ family protection claim, Judge Fleming directed for the RW Trust assets to be divided one-half to Mrs W and one-sixth to each of the three respondents. The respondents were also to receive in equal shares the interests in Mr W’s father’s and grandfather’s estates. The result was that Mrs W received approximately $100,000 (or 28%) from Mr W’s estate and the respondents each
received interests worth approximately $93,333 (or 24%).7
5 Refer paragraphs [19], [24] and [28] of the judgment; note the interest in the grandparents’
estate was based on the affidavit of Ross Denis Gisby, dated 9 August 2011.
6 At [26].
7 At [67]–[69].
[10] Subsequent to the hearing before me, Mr Ross Denis Gisby (of New Zealand Guardian Trust) filed an affidavit correcting two factual errors in his evidence. The first error was as to the timing of the distribution of Mr W’s grandfather’s estate. It transpires that that estate can now be distributed; the gross value expected to Mr W’s estate is estimated at $73,272. The second error related to his evidence that Mr W’s estate would receive a half-share of RW’s interest in his grandfather’s estate. That was in fact wrong.
[11] I invited counsel to make submissions on whether Mr Gisby’s errors were material. I am satisfied that while they are relevant to the assessment, the errors do not constitute by themselves a basis to quash or vary the Family Court decision. Rather than dwell on this aspect further, I propose to deal with the overall merits of the Family Court decision properly informed as to the correct factual position.
Reasons for the Court Order
[12] The primary reasons given for the Family Protection order can be found in the following passages of the judgment:
[51] The issue of whether there has been a breach of moral duty must be assessed as at the date of the testator’s death by reference to circumstances existing or reasonably foreseeable as at the date of his death. ... I conclude he was basically unaware or not conscious of the extent of his estate when he made his will because of his clear wish to preserve capital for his children and the steps he took to ensure that occurred during his life. It is improbable he would have intended these inheritances to have passed to his widow with no interest at all in them being preserved for his children.
[52] In this case I am satisfied there has been a failure to make adequate provision for both the proper maintenance and support of the claimants. All three have established an economic need for provision and also for support over and above the small gifts that they received in terms of ―recognition of belonging to the family and of having been an important part of the overall life of the deceased.‖ (Ws v Aucutt). By making no testamentary provision apart from the small gifts the deceased has breached his moral duty judged by the standards of a wise and just testator.
[13] The reasons for the division or the quantum of the division are set out as follows:
[64] In my view, a wise and just testator would have made provision by way of an immediate capital sum to his three children, in view of the lengthy
delay before they can expect to receive any benefit from the trust he established, and their respective financial positions.
[65] Equally a wise and just testator would have made provision by way of capital sum for his widow as a buffer against any adverse circumstances which may arise. He had already provided for her accommodation in terms of the trust and his wishes as recorded in his statement of intention and I proceed on the basis that capital sum will continue to be available for Mrs W either by way of a contribution to a home or by way of income.
[66] I intend to deal with the monies presently due to the estate from the RW Trust separately from the balance of funds due in the future. Both the widow and the three children have a need for some immediate capital.
[67] I do not know the precise value of the funds due to the estate from the RW Trust and I will therefore provide for the claimants by way of a percentage rather than a fixed sum. In my view a wise and just testator would have divided the funds due from the RW Trust equally between his widow on the one hand and his three children on the other. In other words, the three children should receive 50% of the funds in equal shares, and the widow, the remaining 50%.
[14] The Court then summarised the judgment as follows:
[70] This is an unusual case and I have concluded the outcome does reflect the testator’s wishes if he had turned his mind to the additional funds coming to his estate by providing some additional capital for his widow but preserving the bulk of it for his three children. The evidence persuades me he was not conscious of those further funds when making his will.
[15] Ultimately, the Judge concluded:
[71] In providing for all three claimants equally I have considered each of their positions individually but they are really indistinguishable when weighing up the fact that in the case of one, there is only one parent working outside the home and earning an income; in the case of another, there is a child with special needs but she has more assets; and in the case of the third daughter she has no assets whatsoever. I am treating the maintenance and support claim as a composite award. The result means that each child has received further provision for their maintenance and support at a best estimate of about 24% of the value of the estate.
Appeal
[16] With the benefit of the submissions from the appellant I consider that the core grounds of the appeal are as follows:
(a) The final division of the estate is manifestly disadvantageous to the appellant, with her only receiving 28% of the estate as against the respondents’ 72% (plus the assets they will receive pursuant to the PAW Family Trust).
(b) The District Court Judge erred in holding: (i) That a ―moral duty‖ was breached;
(ii) That the children only received small gifts, when in fact they receive substantial Trust interest;
(iii) That Mr W did not know about the full extent of his brother’s
property; and
(c) The proposed distribution wrongly failed to give genuine primacy to
the widow’s interests.
[17] Overall, it is the appellant’s position that, if the Family Court decision persists, Mr W will not have in fact discharged his moral duty to the appellant. She is without significant resources, and the residual estate, as it is, is not nearly sufficient to provide for her needs.
[18] The respondents adopt the decision of the Family Court Judge on the basis that it represents a robust application of the orthodox principles and that the ultimate result is a fair and just one.
[19] The respondents also place significance on the fact that the moneys in dispute are inheritances. Mr Wood submitted, drawing on the Court of Appeal case of Re Harrison,8 that the moral duty to make some provision for children became greater when the testator receives a legacy from family. Mr Wood further emphasises that it is most unlikely that Mrs W would make provision for the deceased’s children. He
notes that s 3 details the persons entitled to apply and it recognises that the relevant
8 Re Harrison [1962] NZLR 6 (SC).
principal parties include not only the surviving spouse, but the children of the deceased. The risk highlighted by Mr Wood is that Mrs W will most likely use whatever entitlement she has to provide for her own children rather than the children of the deceased.
[20] In responding to arguments raised by the appellant as to the significance of the PAW Family Trust, Mr Wood contends that there is a possibility that the trustees may resettle the Trust for the benefit of the discretionary beneficiaries, which, of course, includes Mrs W. He also emphasised that any benefit to the respondents from the Trust is some time away, and can only accrue after Mrs W has passed away.
[21] As to Mr W’s intentions to leave the balance of his estate to Mrs W, Mr Wood argues strongly that the Family Court was right in that Mr W did not take into account the inheritances when forming that view. He strongly rejects the contention made on behalf of Mrs W that Mr W was well aware of the W family interests. He makes the point that there is simply no reference to the W family interests in either the will or the trust deed.
[22] Mr Wood also submits that if the Trusts assume any significance, they were brought about by Mrs W and she cannot now complain about their existence.
Jurisdiction
[23] The respondents say that the appropriate frame for my jurisdiction on appeal is:9
In short, even though the appellate Court might have arrived at a decision different from that made by the first instance Court, it does not substitute that different decision unless it decides that the decision under appeal was outside the range of decisions available to the first instance Court.
[24] They say I am obliged to apply this test, derived from Little v Angus10 and reinforced by the Court of Appeal in Blackstone v Blackstone.11
9 Taken from The National Heart Foundation of New Zealand v Carroll HC Nelson CIV-2008-
442-495, 25 February 2009, at [5].
10 Little v Angus [1981] 1 NZLR 126 (CA).
11 Blackstone v Blackstone [2008] NZCA 312; (2008) 19 PRNZ 40 (CA).
[25] The appellants cite the decision of Rodney Hansen J in Burnage v Gleeson:12
[26] While there is undoubtedly a discretionary element in the evaluations required of a Judge in determining whether there has been a breach of moral duty and what may be required to repair a breach, I tend to the view that the application of Stichting Lodestar’s principles would oblige an appellate judge to intervene if he or she concluded that a decision was wrong. That is the duty of an appellate court ―even where [its] opinion is an assessment of fact and degree and entails a value judgment‖. In my view, the ground has shifted somewhat.
[26] The scope of my jurisdiction starts with s 15 of the Family Protection Act
1955, which confers the right of appeal. Subsection 15(1) states:
(1) A party to proceedings in which there is made a decision to which subsection (1A) applies, or any other person prejudicially affected by the decision, may appeal to the High Court against the decision.
[27] Subsection 15(1A) states:
(1A) The High Court Rules and sections 74 to 78 of the District Courts Act 1947, with all necessary modifications, apply to an appeal under subsection (1) as if it were an appeal under section 72 of that Act.
[28] Section 72 of the District Courts Act 1947 confers a ―general right of
appeal‖. The powers of the High Court on such an appeal include:
76 Powers of High Court on appeal
(1) Having heard an appeal under section 72, the High Court may—
(a) make any decision or decisions it thinks should have been made:
[29] Further under s 76, the High Court has wide powers to direct the District Court to rehear the proceedings, to consider or determine any matters that the High Court directs or to enter judgment for any party in the proceedings as the High Court directs.
[30] Section 76 confers a general right of appeal and therefore the comments of the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar13 appear to be
binding on me. Relevant to this case, Elias CJ observed (footnotes omitted):
12 Burnage v Gleeson HC Whangarei CIV-2010-488-151, 27 August 2010 at [26].
13 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at 146.
[4] ... the appellant bears an onus of satisfying the appeal court that it should differ from the decision under appeal. It is only if the appellate court considers that the appealed decision is wrong that it is justified in interfering with it.
[31] It is further observed at [13]:
[13] ... The appeal court must be persuaded that the decision is wrong, but in reaching that view no ―deference‖ is required beyond the ―customary‖ caution appropriate when seeing the witnesses provides an advantage because credibility is important.
[32] And further at [16]:
[16] Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.
[33] The decision of the Court of Appeal in Blackstone v Blackstone14 does not contradict this starting point. In that case the Court of Appeal observed:
[8] Duffy J first considered the nature and scope of the appellate jurisdiction and the applicability of the Supreme Court case of Austin, Nichols. She considered (at para 27) that appeals from a discretion are not affected by Austin, Nichols and that the principles in May v May [1982] 1
NZFLR 165 (CA) continue to apply. We agree.
[34] It is significant, however, that the Court of Appeal went on to note, with apparent approval, that Duffy J held that an appeal from parenting orders is a general appeal and not appeal against the exercise of a discretion.15 The Court of Appeal then recited the following from D v S:16
[18] ... An appeal to the High Court from the Family Court is an appeal by way of rehearing. Whilst the High Court will naturally give weight to the views of the specialist court and may in some cases think it best to remit the case for reconsideration, it is fully entitled to substitute its views on questions of fact, including the issue of what is in the best interests of the child or children concerned. There is no rule of law requiring the High
14 Blackstone v Blackstone [2008] NZCA 312; (2008) 19 PRNZ 40 (CA).
15 At [9].
16 D v S [2003] NZFLR 81.
Court to defer in these respects to the Family Court even in a finely balanced case.
[35] In the present context, s 4 of the Family Protection Act 1955 states that:
The Court may, at its discretion on applications 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 ...
[36] While the section refers to a ―discretion‖, it would be a misnomer to describe a judgment of the Family Court under s 4 as an exercise of discretion in the sense used in May v May. While s 4 involves a remedial discretion, a Judge is obliged when acting pursuant to s 4 to reach the correct outcome according to the law. In my view the discretion arises only on the correct application of the law to the facts as proven to the satisfaction of the Judge. By comparison in May v May the Court was concerned about whether time should be extended to make an application. In that context, the Judge has a genuine discretion to choose among a range of options.
[37] I acknowledge that this may appear, at first blush, discordant with the following observation by the Court of Appeal in Henry v Henry.17
[24] This Court made it clear in Little v Angus [1981] 1 NZLR 126 at p 127 what standard of review should be taken on appeal. It said that the approach was that ―on an appeal the Court will not substitute its discretion for that of the Judge at first instance unless there be made out some reasonably plain ground upon which the order should be varied‖. In reaching that conclusion the Court was reiterating what Cleary J had said in delivering the judgment of this Court in Re Blyth (Deceased), Blyth v Blyth [1959] NZLR 1313. There was no dispute that this restrained approach applies to appeals from the Family Court to the High Court. A similar restrained approach applies on second appeals to this Court.
[38] Plainly the standard of review stated in Henry is directly relevant to me given that it is dealing with the same specific jurisdiction. It seems to me, however, that even on this approach I may intervene if there is a plain ground upon which the order of the Family Court should be varied. Reconciling this with Austin, Nichols, in arriving at whether there is such a ground, I need not give undue deference to the
opinion of the Family Court. I proceed on that basis.18
17 Henry v Henry [2007] NZCA 42 at [24].
18 Compare Moon v Carlin HC Auckland CIV-2010-404-5486, 23 February 2011.
Merits
[39] The critical question is: did Mr W make adequate provision to discharge his duty to provide for Mrs W and his children?
[40] I must approach the resolution of this question with the following guidance in mind:19
[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 the testator’s wishes should prevail even if the individual Judge might, sitting in the testator’s armchair, have seen the matter differently.
[41] Having regard to the full context of this case, and with the benefit of detailed argument, I agree with Judge Fleming that there needs to be some adjustment to recognise Mr W’s duty to the respondents. But with respect to her careful reasoning, the revised division of property was in the end too generous with the testator’s property and beyond what was sufficient to repair any breach of moral duty. My reasons for reaching this conclusion are as follows.
[42] First, Mr W’s will gives certain items to his children and forgives his Trust of
all debts owed. It then records:
3. If my wife [Mrs W] ... survives me by 14 days I give the whole balance of my estate to the said [Mrs W] and appoint her my executrix but if she does not survive me by 14 days the following provisions shall apply ...
[43] Second, in properly assessing whether Mr W has discharged his moral duty, the full context includes the capital invested in the PAW Family Trust, set up for the respondent children.20 In this way Mr W had regard to their interests and to their future well-being in forming that Trust. Ultimately, they will have the benefit of 50 per cent of the joint property of Mr and Mrs W as a consequence of this trust, which
is valued at $275,000.
19 Black Williams v Aucutt [2000] 2 NZLR 479 (CA) at [70]; refer also Auckland City Mission v
Brown [2002] 2 NZLR 650 (CA) at [36].
20 See, for example, Henry v Henry [2007] NZCA 42.
[44] Third, the actual division of Mr W’s assets, if the will is literally applied, results in a distribution of about $380,000 to Mrs W and $275,000 to the children, representing approximately 58 per cent and 42 per cent respectively. This level of distribution appears to be at the mid-range of distributions to children identified in the authorities.21 On that basis I consider only a moderate level of intervention is required.
[45] Fourth, I acknowledge that the (approximately) $180,000 left in Mr W’s estate derives from his father’s and grandfather’s estates. The children might expect to benefit from that legacy. This, however, is offset in part by the fact that the children will instead benefit from 50 per cent of the joint property of the marriage. While this is not an immediate distribution, I am satisfied it is one that will ultimately reach them. There is only a remote risk of the Trust fund settling to the benefit of Mrs W given that Mr W’s brother GW, is a Trustee of the Trust and that he supports the respondents’ position.
[46] Fifth, Mr W was obliged to provide for his wife’s support and maintenance during her lifetime. All parties accept that is the correct starting point. Given the modest assets held by them, it should have been obvious at the time of Mr W’s death that she would need additional support beyond the revenue earned from the children’s Trust. The inheritances were all that were left to support her. They are also relatively modest. This further adds weight to my view that I ought to take care before overriding the express testamentary wishes of Mr W.
[47] Sixth, if the Family Court’s proposed division is maintained, an issue arises as to whether Mr W had discharged his duty to Mrs W. The outcome of that split would result in about $100,000 being distributed to Mrs W, while the respondents would receive $93,000. When that is overlaid with Mr W’s distribution via the PAW Family Trust to the respondents, the result is, in my view, manifestly
disproportionate, particularly given Mrs W’s limited financial means.
21 Refer, for example, The National Heart Foundation of New Zealand v Carroll at [54], and
Auckland City Mission v Brown at [33].
[48] Seventh, I do not agree the financial circumstances of the children described at paragraphs [36]–[38] of the Family Court judgment are such to warrant the level of immediate intervention made by the Family Court. I also note that the children were prepared to proceed on the basis that Mrs W had a life interest in the income derived from the further payments. This suggests that there is not an absolutely pressing need for further funds at this time. I accept, however, that their circumstances are such that some provision should be made for them.
[49] Finally, while principles of interpretation have moved to fully embrace the factual matrix, and quite properly that matrix has been considered by the Judge, I do not consider it was valid to depart from Mr W’s express intentions on the basis of an apparent omission by him to take into account the inheritances. It is not sufficiently clear to me that Mr W plainly intended that the inheritances should be distributed for the benefit of the children.22 That is because I am unable to agree that Mr W was not
aware of RW’s Trust assets when he was a trustee of that Trust.23
[50] In summary, I prefer to approach the assessment by placing greater weight on the full distribution of Mr W’s assets, including via the PAW Family Trust. Without intervention, $275,000 would be distributed ultimately to the children and $380,000 would be distributed to Mrs W. I see no clear breach of Mr W’s moral duty to his children to warrant distribution of the entirety of the inheritances from Mr W’s father’s and grandfather’s estates to the respondents.
[51] Finally, I note for completeness that it appears that a half-share in the RW Trust’s interest in the grandfather’s estate — a sum of $36,636 — will in fact be paid to the three respondents. While it is not directly relevant to whether or not Mr W discharged his moral duty, it is part of the wider factual matrix in assessing whether any alleged breach of moral duty to them is amplified. The absence of those monies from the estate mitigates what might have been a factor in determining whether the
moral duty is properly discharged.
23 Refer below at [56].
Variation of Family Court Order
[52] I do consider however that the respondents are entitled to a share of the inheritances in such proportion as reasonably reflects Mr W’s duty to them. While the respondents are not in dire need, their economic circumstances are such that it would be anomalous not to provide for them at all out of the cash inheritances. To that extent I respectfully agree with the reasoning of Judge Fleming that Mr W has not adequately addressed the financial circumstances of his children when dealing with the inheritances – being the only liquid assets capable of immediate distribution. Having said that, the dominant inference to be drawn from the arrangements set up by him is that the children would receive their interests from his wealth after sufficient provision for Mr W.
[53] On the basis of the foregoing, I am satisfied that a 12 per cent distribution to each of the respondents out of the residual estate is sufficient to repair the breach of moral duty in this case. When this figure is combined with the distribution to them via the PAW Family Trust, the ultimate distribution is well within the spectrum for such distributions in furtherance of that moral duty.24 The balance of the property should be distributed to Mrs W.
The significance of Re Harrison
[54] For completeness, I do not accept that the reliance placed on the case of Re Harrison by the respondents is well placed. It is relevant to record the observations of Gresson P in Re Harrison:25
The testator was bound to regard his wife as having the first and foremost claim upon his estate. ... In leaving the whole of his estate to her he gave her as well as the power of disposing of it in her lifetime if she chose, or by will at her death. It is most unlikely she would be disposed to leave anything to the appellant. Though the daughter is in no present need, she is the testator’s daughter and indeed his only child, and he did virtually nothing for her at the time. That supports a claim that at any rate after the death of the widow she should receive something, the more so because a very large part of the testator’s estate came – not long before his death – from his father, the
24 See cases cited above at n 20; Henry v Henry [2007] NZCA 42; Nicola Peart and Bill Patterson
Charities and the FPA: A Turning Tide [2007] NZLJ 53 at 54.
25 At 14.
appellant’s grandfather, and he had acquired also about four years before his death £4,400 from an uncle, the appellant’s grand uncle. I think a wise and just father would, or at least should, have considered that his only child for whom he had never done anything worthwhile should ultimately receive at least some of this ―grandfather‖ money.
[55] Contrary to the facts in Re Harrison, Mr W has specifically made provision for his children via the creation of the Trust on the same day as the will. I agree with the appellant that the Family Court decision appears to place insufficient significance on that Trust in forming a final view on the adequacy of the distributions under the will.
[56] Furthermore, I have formed the view that Mr W, in creating the PAW Family Trust contemporaneously with the will, intended to provide primarily for his children through the vehicle of the Trust. I am also not prepared to accept that Mr W unwittingly bequeathed his inheritances to Mrs W. He was, as I have said, a trustee of the RW Trust. It is implausible in my view that he did not have a reasonable grasp of the content of that Trust.
[57] While there must be an element of speculation to this, in my view we are removed from approaching the threshold for wholesale revocation of the clear testamentary wishes of Mr W, bearing in mind it is for the respondents ultimately to demonstrate that a departure is appropriate. As I have indicated a more moderate revision is required.
Outcome
[58] Given the foregoing, the appeal is allowed in part and the Family Court order is modified as follows:
(a) Mrs W is to receive 64 per cent of the residual estate; and
(b) Each respondent is to receive 12 per cent of the residual estate.
Costs
[59] I invite submissions within 14 days, with replies seven days thereafter.
Whata J
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