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High Court of New Zealand Decisions |
Last Updated: 28 June 2012
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2010-409-001965 [2012] NZHC 1168
BETWEEN ROSE VICTORIA MASTERS First Plaintiff
AND SUSAN FREDA STODDART Second Plaintiff
AND THE PUBLIC TRUSTEE OF NEW ZEALAND
Defendant
Hearing: 12 December 2011
Appearances: D M Lester and A J Fitzgibbon for Plaintiffs
N Till QC for Defendant
M J Wallace for Canterbury Museum Board (Party to be served) Judgment: 29 May 2012
JUDGMENT OF FOGARTY J
This judgment was delivered by Justice Fogarty on
29 May 2011 at 2.00 p.m., pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors:
Layburn Hodgins Ltd, PO Box 795, Christchurch
Public Trust, PO Box 3925, Riccarton, Christchurch (N Till QC)
Alexander Paull, PO Box 29624, Fendalton, Christchurch 8540 (M J Wallace) Copy to:
N Till QC, PO Box 252, Christchurch
M J Wallace, PO Box 13254, Armagh, Christchurch 8141
MASTERS V THE PUBLIC TRUSTEE OF NEW ZEALAND HC CHCH CIV-2010-409-001965 [29 May 2012]
Introduction
[1] Mr Arthur Harrison made his will on 23 March 1994, leaving the whole of his estate to the Canterbury Museum. He died in a fire at his home on 15 November
2009 aged 94. He was living alone. His estate was worth $12 million.
[2] His wife had died many years before. He had had a travelling companion, Mrs Ruth McCardy, who died in 2000. He had been one of five siblings, two of which predeceased him. He was survived by two sisters, five nieces and three nephews.
[3] From the early 2000s he received considerable companionship, love and affection from his younger sister, Rose, and her daughter Susan. They lived in Australia. He had left home at the age of 20 when Rose was then 12. Until the early
2000s they had kept in touch mainly on birthdays and at Christmas by cards.
[4] Mr Harrison’s own correspondence leaves no doubt that the renewed family connection was important to him. He described Susan as the daughter he had never had. He told Susan he would leave a substantial sum to Rose to remove any financial concerns as to her old age. He told Susan that his BHP shares were “ours”.
[5] On the back of an envelope found in the glove box of his car he had made a note
Change will.
$1 million Rose
BHP shares Sue
$10,000 Harry and Mary
A
[6] That was on an envelope franked in July of 2009, four months before he died. The note is unusual. But there was no challenge to it and it is in his distinctive handwriting, down to the signature.
[7] On 4 December 2000 the Public Trust office records contacting Mr Harrison. He had been in Christchurch for Mrs McCardy’s daughter’s wedding and had hardly arrived back home when he was informed that his friend had died in her sleep. He had just arrived from her funeral. The Public Trust Officer recorded:
He sounded very upset and needs time to seriously reconsider will as she was beneficiary in the will, he is unsure what to do as “there is no-one else”. He did not want me to contact him again. He will contact PT (told him Malcolm) when he feels up to it.
[8] Mr Harrison never amended his will after 1994. His sister, Rose, and niece, Susan, have now brought proceedings under the Law Reform (Testamentary Promises) Act 1949 seeking for Rose $1 million and for Susan an order vesting all the BHP shares to her. The shares were worth approximately $1.1 million at the date of death. He made no provision either for “Harry”. Harry is clearly a reference to Mr Harold Neill who was his odd job man. He mowed his lawns, helped prune the fruit trees and provided him some company.
Law Reform (Testamentary Promises) Act 1949
[9] The action is founded on s 3(1) of the Law Reform (Testamentary Promises) Act 1949 (“the Act”) which provides:
3 Estate 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.
[10] The section was substituted in 1961, by the Law Reform (Testamentary Promises) Amendment Act 1961. Every word of this section has been chosen carefully.
Summary of argument for relief
[11] Mr Lester, for the plaintiffs, argued that there was an obvious link between the promises that Mr Harrison (Arthur) made in the last couple of years of his life and the support and love that his sister Rose and niece Susan gave him. The claim pleaded support from 1980. But, for practical purposes, it was meaningful to Arthur only from some point of time after 4 December 2000, after the death of Mrs Ruth McCardy.
[12] Secondly, Mr Lester argued that to the extent that these services were of an intangible, but great, value to Arthur, the normal assessment of values does not apply.
[13] Thirdly, Mr Lester submitted that the true issue in the case is one of quantum. He argued that the reconnection by visits, regular telephone calls, correspondence, and, in the case of Susan, active engagement in monitoring the benefit of his BHP share portfolio, were measured by Arthur’s response of ensuring that his sister would not have material needs in her old age and that Susan would have his BHP shares.
[14] Mr Lester emphasised that because the relief under the Act does not depend on the promises being made before the benefits are received, it is quite irrelevant to consider the motivation of the mother and niece. I would add there is absolutely no suggestion on the evidence that they renewed their contact in the knowledge that he was wealthy. To all outward appearances he was a man of very modest means. He said himself, in later correspondence to Susan, that he had three accountants, so that no one of them would know how much he was worth. Mr Harry Neill had no idea that he was wealthy.
[15] Mr Lester emphasised that the correct approach to reasonableness was to examine the worth of the services he received from his sister and niece, from his perspective, and that the values he ascribed should not be discarded lightly. He was a man who was financially astute.
Summary of argument for the Public Trust
[16] Mr Till QC, for the Public Trust, did not take issue with the presence of the promises. He focussed on the need to identify qualifying services. He said they were not present; that they were no more than what is normal love and affection between brother and sister and niece. This was particularly the case in respect of Arthur’s sister, Rose. There were some financial services provided by Susan, but nothing that would warrant her being provided the BHP shares.
[17] Mr Till argued that even if the Court would take a liberal and generous view of what was reasonable for such services, they could not by any measure be valued at more than $75,000.
[18] Developing his argument, Mr Till focused on the particular services and on the particularities of contact between Arthur and Rose and Arthur and Susan. This developed his proposition that the services claimed were no more than what would have been expected to be merely incidental to the relationships between Arthur and his sister Rose and Susan. In the case of Rose, because she did not do any work for Arthur, Mr Till described her claim as “a very weak one”. He argued the reasons for Arthur’s promise to Rose were not by way of reward for her services, but in recognition of the blood tie in his role as big brother. I note that this argument cannot be pushed too far because there is no suggestion he made any promise to his other surviving sister, Mavis.
[19] On Mr Till’s approach, his niece Susan had a much stronger claim because of the discussions she had with Arthur over shares and research she did for him. Mr Till stressed “the need for the award not to exceed the value of the services and the overriding requirement for the award to be reasonable in the circumstances”.
Summary of the case for the Museum Board
[20] The written submissions of the Museum Board disputed that there were qualifying services. Mr Wallace, for the Board, adopted the submissions for the Public Trust. Like the Public Trust, he argued that the promises by Arthur to look after his sister Rose and the ambiguous promise in respect of the BHP shares were not responding to anything more than normal love and affection from family members.
Summary of issues
The “services” and the “promises”
[21] We know that on 4 December 2000 Mr Harrison considered “there was no- one else”. There was certainly no perception on his part that he had been rendered any services prior to that date. Mr Lester did not pursue those earlier “services” prudently. His submissions focussed on the ten years or so prior to Arthur’s death, when his relationship with the plaintiffs clearly began to develop.
Rose’s evidence
[22] Rose tells the story. She and Arthur were from a family of five children. At Arthur’s death he was survived by Rose and Mavis. The other two siblings had passed away. There were eight nieces and nephews altogether.
[23] Arthur had left Australia when he was 20 and Rose was only 12. He shifted to New Zealand where he met and married his wife, June. She died in 1982. During his marriage with June, Rose sent him birthday and Christmas cards every year. He
and his wife visited them in their home in Springwood, Australia, in 1962, 1965 and
1967. Arthur and June travelled and sent postcards from all over the world. Rose and her husband and one of her daughters, Beverley, called and stayed with Arthur in
1985. In 1986, Arthur and Ruth, his travelling companion, came and stayed with them in Australia, and again in 1990 and 1998. Over this period Rose’s daughter, Susan, was also writing and keeping in touch with her uncle.
[24] Rose did not appreciate that Ruth had passed away in the year 2000. She thought she passed away in 2003. (That is an indication to me that their contact was not particularly significant prior to this point in time.) Rose encouraged Arthur to come over to Australia, and he came on a visit in 2004, staying with her and her husband for three days and then with Susan for three days. (A photo taken from this trip was found beside his bed.) Rose and Susan travelled to New Zealand to see Arthur several times, specifically in 2005, 2006, and 2007, all in August for his
birthday which fell on the 9th. Rose also went over with her daughter Beverley in
January 2009. This was the last visit to Arthur before he died.
[25] On these visits Arthur would meet them in Christchurch. They would go to restaurants, visit Akaroa, Methven, and so on. Arthur began to give Rose and her daughters some of his late wife’s clothing and jewellery. These were happy times, particularly in 2007 when they travelled to New Zealand for his 90th birthday.
Corroboration of Rose’s evidence
[26] There is no doubt that this is not a one-sided point of view: that these were happy times. That they meant a lot to Arthur is apparent from his correspondence exhibited to the affidavits. It is also apparent from the family photographs. In an undated one page letter in 2009, the year he died, Arthur wrote to his niece, Beverley, Susan’s sister:
Dear Beverley,
Surprise, a quick note from me. Thank you for bringing your mother over to visit me last week. I enjoyed our time together and it brought back many memories. I felt closer to Rose in these few years than anyone else and can now appreciate the importance of blood relations. As I have told you and
Susan several times and I want to reassure you that I will be changing my will to make sure Rose is financially very well looked after.
My trip home was uneventful. The weather has been unseasonal and I have enjoyed being in the garden. I hope your garden is going well. I hope you have a good time in England later this year although it will be winter and cold and not ideal for sightseeing.
Have a nice life. Arthur
[27] This note from 2009 is similar in sentiments to a letter the year before on
23 January 2008, this time to Susan:
Thank you for keeping me up to date with family happenings. I am sorry I could not come over for your father’s funeral as I have told you many times I am better by myself. I have written your mother and told her that I want to be “big brother” and look after her. Please be assured that you will not bear the burden of looking after her as I will ensure that she is financially very well looked after.
Sue as I have told you many times, you are the daughter I never had. I appreciate your care and concern. I must stress that I am very independent and I do not want to impose on your already busy life.
Regarding your questions I want to be buried with June at Fairhill Cemetery. If the season is correct I would like flowers from my garden. I do not know who would come. I am an insignificant person and would like to die as I live
– quietly. There is a certain burden of money and it would be difficult to run my business from Australia. I do, however, have no doubt of your ability to
look after our shares. Please do not worry about me look after your family
and enjoy life.
Arthur
Susan’s evidence
[28] Susan’s evidence was that Arthur became more family orientated as he aged. She did not have much contact with him until her wedding in 1980. Arthur and June were invited, but due to June being unwell they were unable to attend. This began regular communications starting with sending wedding photographs. When June died in 1982, they sent flowers, which touched Arthur. From 1980 through to 1995, they communicated mainly by letters every couple of months, and every couple of months Susan would give Arthur a quick ring. She then tells the stories of the visits that I have covered.
[29] It was her evidence that while Arthur had Ruth as a travelling partner, he was content with her companionship in their travels. She also places Ruth’s passing away in 2003 and records Arthur coming over in 2004.
[30] Susan was a businesswoman, having a stock feeds business. She and Arthur began talking business and looking up information about shares. The family suggested to Arthur that he move back to Australia, and it was as part of his explanation as to why not that they learned of his business interests in New Zealand. She covers the same visit to New Zealand thereafter as I have mentioned before.
[31] During the last few years of his life, Arthur became more family orientated and wanted to know more about Susan’s children and became proud of their achievements. In addition to the visits, he would talk to them on the telephone and there was occasional correspondence between him and the children. Susan said in his last few years he let his guard down. He offered his war medals to Rose. He told Susan several times that she was like a daughter to him. She shared a common interest in gardening and antiques. They also developed a common interest in talking business and she began to research shares relative to the Australian market.
[32] Susan says she spent two to three hours each week over three years totalling
200 to 450 hours looking into shares for Arthur. She said they both took enormous pleasure and interest in his shares, whether they were up or down.
[33] In 2007, Susan and her husband purchased a news agency and she used to copy material from the magazines and send it to Arthur. Between 2007 and 2009, she spent about three to four hours a week, which would equate to approximately
450 to 600 hours during this period. Also during 2004 to 2009, Arthur would randomly ask her to check on rates, lease conditions, rents, interest rates, tax concessions and tax rates. Susan and her husband owned a couple of commercial properties and she and Arthur would compare conditions etc. About three or four years ago, before he died, they started talking about his BHP shares as Susan had always wanted to buy some but felt she had missed the chance with the commodity boom. Shortly before he died, Arthur said he had considered it carefully and he wanted her to have his BHP shares and would leave them to her in his will. As, of all
his shares, they were the ones he was most passionate about and he did not want them sold and cashed in, particularly in a depressed market.
[34] Susan said she knew Arthur was leaving his money to a “charity”. However, she had no idea how much he was actually worth.
Corroboration of Susan’s claim from the correspondence
[35] Arthur’s letter of 23 January 2008, is addressing his death. In the paragraph in which he sets out his wishes as to where he is buried, he says “I do, however, have no doubt of your ability to look after our shares.” In the context there is a strong argument that he was anticipating that Susan would receive “our shares”. In the context of her evidence this is a reference to the BHP shares. However, there is some ambiguity about this paragraph. The sentence could be interpreted as explaining why he does not want to leave New Zealand and go to Australia. But that is a rather strange interpretation. The reasons for staying in New Zealand and not going to Australia have nothing to do with the BHP shares.
[36] Then there is the envelope in the glovebox. Susan explains how she and her mother were contacted by the police as Arthur’s next of kin when he died, and while sorting out his affairs had come across the envelope in the glovebox. She said that all the financial information she had provided to him over the years was in his office in a pile, along with other piles of papers. She records that she found that his neighbours and friends knew all about them.
[37] I find that Arthur made an implied testamentary promise to leave the BHP
shares to Susan.
Were these qualifying services?
[38] I turn now to assess whether these were qualifying services. Parliament has never defined the ambit of conduct which amounts to “the rendering of services to or the performance of work for the deceased in his lifetime”. The Privy Council in Re
Welch[1] in an advice delivered by Sir Robin Cooke, as he then was, considered a claim made by a stepson against the estate of his stepfather. The stepson and his family had enjoyed a close relationship with his mother and his stepfather who had no other children. He was treated as a son. His stepfather died without making a will and his stepson brought proceedings both under the Act, and as executor of his mother for an order under the Matrimonial Property Act 1963. The beneficiaries on the intestacy of his stepfather were his stepfather’s eight brothers and sisters. Williamson J in the High Court awarded the stepson on behalf of his mother’s estate a half share of the house and furniture and of the deceased’s shares in Fulton Hogan under the Matrimonial Property Act, and the other half interest under the 1949 Act. The matrimonial property award was not disturbed in the Court of Appeal. In the Court of Appeal, counsel for the brothers and sisters conceded there was enough evidence of services and a promise to reward the stepson, but pursued the proposition that the award was far too high. The Court of Appeal agreed, reducing the award to a relatively modest sum of $20,000.
[39] As one would expect from a judgment of Sir Robin Cooke, his analysis follows closely the words of the statute and in particular the criteria contained at the end of subsection (1). For the Board he said:[2]
Among the particular factors listed are the value of the services or work and the value of the testamentary provision promised (in 1961 the latter words were enacted in place of “the value of any real or personal property specified in the promise”). So it is plain, considering s 3(1) as a whole, that whenever a claim to relief is made out under it the criterion as to the relief to be granted is reasonableness. That is always the result at which the Court is to aim, no matter whether the award is of money or of specific property. If the deceased promised a certain sum or a certain property, that is a relevant consideration but not necessarily decisive. Their Lordships do not find this approach surprising. To give only one hypothetical example, if there were a promise of the whole estate prompted by gratitude, in perhaps an emotional moment, for a single act of rescue or kindness, it would not necessarily be reasonable to enforce that promise to the full.
[40] Sir Robin Cooke then went on to summarise the help that the stepson gave his stepfather in his business from time to time during holidays or in hours outside his own employment. He said that on the evidence there was some doubt as to
whether the stepfather’s intention to leave his stepson the shares and later the house,
were to signify reward for those services rather than a normal expression of family love and affection.[3]
It appears to their Lordships that some straining of the scope of the Act is required to bring within the concept of services the natural incidents and consequences of life within a close family group, such as existed in this case. The case is distinguishable from Hawkins v Public Trustee [1960] NZLR
305, where a grandson changed his name to that of the deceased, became in effect his adopted son, worked for him full time as manager of his farms, and entered into a bargain with the deceased whereby he was to receive initially the whole but as revised a quarter share of the estate. In those circumstances Shorland J found that the actions of the claimant in gratifying the deceased by assuming his name and performing the role of near-adopted son were "services" within the meaning of the Act. That was a case of much more than a normal relationship between grandson and grandfather; whereas, in the present case, as the Court of Appeal put it at p 8:
The evidence points to nothing more than a normal family relationship between a stepfather and stepson, who had the good fortune to get on well with each other. There was a reasonable balance of benefits and personal satisfaction on each side, and in earlier years Mr Welch helped his stepson with job opportunities and the gift of a section, as well as providing the general support of a father, and this carried on into the mutual companionship and family association of later times.
In support of the present appeal Mr Withnall contended that the deceased had made his own assessment of the value of the appellant's services by promising to leave him the chief assets in his estate, and that the deceased's own assessment should not be disturbed. As to that contention, manifestly it will often be impossible or inappropriate to weigh in any nice scales services or work on the one hand and testamentary reward on the other. An assessment, even a general one, by a promisor able to exercise a sound judgment would not lightly be departed from. In this case, however, the difficulty is that there is no evidence that the promises were ever seen by either the deceased or the appellant as an assessment of a reward for services. As already indicated, their Lordships regard much of the evidence of services as tenuous. The discrepancy between the value of the deceased's assets and the value of anything that can pass muster as "services or work" underlines that the predominant motive of the deceased in making the representations was affection for his stepson and the latter's family, and the natural tendency to give effect to ordinary family expectations.
[41] The appeal was dismissed.
[42] A number of conclusions can be drawn from this reasoning. Firstly, it is that family support, here for a widower who has lost his second partner, and is in his last years, can be considered as a service to him. There was no moral imperative on his
sister or her daughter to bring Arthur into the embrace of their family in his last few years. They did.
[43] There is no doubt that Arthur was grateful for that. There is no doubt that, but for that conduct, he would not have even considered changing his will and making provision for them. He made no provision for any of his other relatives, who included Rose’s sister, Mavis, and Susan’s sister, Beverley, and other nephews and nieces.
[44] Persons do not always tell their family what is going to be in their will or that provision will be made for them in their will. Arthur did, to Susan and Beverley, as to provision for Rose, in an identical phrasing:
“I will ensure that she [Rose] is financially very well looked after.” [2008, to
Beverley]
“I will be changing my will to make sure Rose is financially very well
looked after.” [2009, to Susan]
[45] It is quite clear from the letters from which I have quoted that Arthur made a deliberate decision to tell his nieces Susan and Beverley what he was going to do. He would have known that Rose would find out.
[46] There is equally no doubt on the evidence, contrasting his recorded views in
2000, that that was as a response to the affection which grew into love which Rose had showed him over his last years.
Resolution of the characterisation of the conduct as “services” and “promises” or
“testamentary intent”
[47] Only a law could impose a duty on a Judge to attempt to distinguish a natural wish to provide for a sister and make a generous bequest to his niece developed in the context of a loving and supportive relationship, from a sense of obligation to reward them for their services. Does Parliament require this in order to apply s 3(1)? There is nothing in the section which requires such a separation.
[48] As the cases show, it is difficult to maintain a distinction between a testamentary intent and a promise. I do not think that Parliament can require the impossible. Life is full of conduct which is actuated by more than one motive, to achieve more than one purpose. It is normally sufficient when applying a statute of this sort to identify the necessary motive or purpose. The fact that others are there also is superfluous.
[49] It is important to keep in mind that the context is one of very little contact while Arthur had the company of his wife and then later of his travelling companion, Ruth McCardy. Rose, Susan and Beverley reached out to him when he was alone, in his last years. They did so from Australia to New Zealand. They did not have to. They did not do so for mercenary reasons. At that time they had no reason to believe he had any significant wealth. Arthur was entitled to take the view that their social contact with him was more than normal natural love and affection. On the facts, there is a basis for him wanting to reward them for the comfort and interest they brought to him in his later years. He very probably did not formulate his response as a response to a “service”. Parliament does not require that. As the
passages quoted from in Re Welch[4] above make plain that the conduct of Rose and
Susan can be classified as services for the purposes of the 1949 Act, as well as being natural love and affection.
[50] The promises of testamentary provision for Rose, and Susan, were the result of a combination of natural love and affection to, and of services by, both Rose and Susan. I am satisfied that in this case there are:
1. Qualifying services on behalf of both sister and niece; and
will.
What are reasonable payments?
[51] All three experienced counsel candidly acknowledged that the true difficulty in this case is quantum. As Mr Wallace put it, one of the difficulties which has prevented them from settling the case is that there is no precedent for promises of this magnitude being litigated under this statute.
[52] All counsel agreed that what is reasonable needs to be a judgment drawn from the particular context of the case. That said, there are three lines of jurisprudence which complicate the analysis.
[53] The first is that the statutory relief for testamentary promises has been likened to contract, said to be “very close to contract”. Prior to Welch, Richardson J said in McCormack v Foley that:[5]
The obligations with which the testamentary promises legislation is concerned are of a promissory nature and so “the relationship with contract is very strong”.
[54] Yet where there is a contract the common law refuses to engage on the merit of the value that one party pays for the benefit provided by the counterparty. Provided there is consideration, it is left to the parties to assess the merit of the benefits being exchanged. This natural common law reluctance manifests itself, I think, in the passage that I have quoted from the judgment in Re Welch, where Sir
Robin Cooke said: [6]
An assessment, even a general one, by a promisor able to exercise a sound judgment would not lightly be departed from.
[55] There are any number of cases to be found where the Court has departed from the deceased’s promises. But the context can vary enormously. It is one thing for a frail widow to promise too much to a handyman or a housekeeper. It is another thing for an astute multi-millionaire to decide how to provide for his sister and how
to reward his niece, in return for their support of him.
[56] The second line of jurisprudence which complicates judgment is the desire for certainty. In Humphrey v New Zealand Guardian Trust, William Young J said: [7]
Testamentary promises claims should be decided in accordance with reasonably well established principles and the pattern of existing awards. The reasons for this are obvious. Like cases should be dealt with in a like way. Further, if reasonable consistency is maintained, cases such as this should, generally be able to be settled on a basis which does not involve the parties in substantial legal fees.
[57] This dicta is similar again to the dicta in Re Welch where Sir Robin Cooke, having noted that Parliament had granted “a large element of judicial discretion”, said:[8]
...it is desirable that a reasonable degree of judicial consistency be achieved in exercising the statutory jurisdiction.
[58] The third line of cases are those decisions which have held that where there are no competing claims and the estate is sizeable and the promise has been expressed in broad terms, then a “liberal” approach is justified. Such an approach was taken in Kite v May[9] and, more recently, in Samuels v Atkinson the Cout of Appeal confirmed that in a case under the Act which called for a large and liberal construction, “it would be wrong to be parsimonious”.[10]
[59] I think these different dicta are all reconcilable. It is a truth of general application that judicial dicta glossing a statutory discretion are usually coloured by the context within which the statutory discretion is to be exercised. Where the deceased has not quantified the promise the Courts will naturally be reluctant to be over generous and in a like context will try to be consistent. What is reasonable in a context will naturally reflect competing claims on the estate. Where the estate is large and the claims are fewer it is easier to argue for a larger, yet reasonable sum.
[60] Reflecting on this inextricable relationship between specific context and the colour of judicial remarks, I think the only safe course is to go back to the words of
the statute. I note again that this statutory discretion was carefully revised in 1961. I
propose to follow the time honoured approach of taking each consideration made mandatory by Parliament separately and then bring my reflections on those considerations together before forming a judgment.
[61] I consider I have had regard to all the circumstances of the case in a general sense, as recorded in the reasoning above. I now turn to consider the effectively mandatory requirements to include in that regard “in particular”:
the circumstances in which the promise was made and the services were rendered or the work was performed,
I note the first comma in the list of “particular” considerations is after “performed”. Parliament intended these three factors to be taken into account together. In the case of Rose, this is a case of services being rendered. A lonely widower who has lost his second life companion will naturally value the love and support of a sister. It need not be a daily presence without it still being a daily fact, a constant in his life. This support was particularly important in his last years after he was widowed and after Ruth had died. After which he had said to his solicitors that there was no one else in his life. Rose assumed an important part in his life and he valued that and it is in these circumstances that Rose’s services were rendered.
[62] As to Susan, although a significant part of her argument was contending for work being performed, and that needs to be acknowledged, she also plainly met an emotional need of her uncle. She, therefore, also has a claim for services rendered.
The value of the services or work,
[63] “The value” might suggest some kind of objective measurement. Depending on the context, it can be quite objective. Take the case of Mr Harry Neill. He was the handyman. There is a market for his work. He was paid for his work as he did it. If one assumes he was not paid, a Court could reasonably compute a fairly reliable value for that work, by way of quantum meruit. There may well be an emotional support dimension which would also need to be valued as a service. In that case it would be harder to put a monetary value on. But there is nothing in the phrase “the value” which requires the Court to apply an objective test, let alone
reduce this to a dollar value. The paradigm perfect contract provides for an exchange of benefits with each party deciding whether the benefit to be received is worth the benefit to be transferred. It is ancient common law wisdom that it is inherently dangerous for a Court to presume what ought to be a reasonable exchange. Reasonable exchanges can be judged with confidence only if the transaction is in a competitive market, where there is no need for any particular relationship between the party and the counter party.
[64] Imbedded in the contractual approach to value is respect for the value placed on work by the contracting party. This deeply imbedded wisdom of the common law is reflected in passages of the advice of the Privy Council in Re Welch,[11] as I have noted.
[65] Value is also calculated or assessed by a contracting party as something which will be sought or appreciated by the counterparty. In the case of promises post consideration, it is plainly a value which would be appreciated by the counterparty. A miserable sum would be more of an insult than a value. That in turn makes relevant the social context in a case like this. Mr Harrison was a very wealthy man. One gains the impression from the evidence that his sister and his niece could be described at the very least as middle class. They were certainly quite capable of flying regularly to New Zealand.
[66] On the other hand, one can infer that there were good reasons for Arthur to believe that a substantial payment to Rose would secure material comforts of value to her in her remaining years. Viewed in that context, NZ$1 million is not a large amount of dollars in Australia to go into retirement with. A reward of a payment which would see her “financially very well looked after” could easily be valued by Arthur as NZ$1 million.
[67] In the case of Susan, her claim is, as I have noted, a mix of services rendered and work performed. Arthur was a successful investor. He did not make his money because of the contribution of Susan. He already had his BHP shares. He would
have gained some useful information along with enjoyable conversation discussing
financial matters with Susan. I approach the circumstances more so on the basis that he enjoyed the relationship with Susan to the point where he naturally referred in correspondence to the BHP shares as “our”. It would have been no big thing for him to have left those shares to her in his will. The problem here is that I think the value of her emotional and family support to him would not be valued by him as being as important as the support of Rose, for natural reasons. I am merely reflecting the natural order of things. But one can usefully reflect that in terms of rewarding Susan, she had less needs than her mother and so had less reason to “value” an allocation of his estate.
The value of the testamentary provision promised,
[68] In this case, Arthur did tell Susan and Beverley that Rose would be given enough to make sure she is financially very well looked after. That requires a significant sum of money, of which $1 million is in the zone.
[69] In the case of Susan, he said in his letter of 23 January 2008, in a paragraph which was partly anticipating his death and partly explaining why he did not want to run his business from Australia, he said:
I do, however, have no doubt of your ability to look after our shares.
[70] He would have known the value of those shares. There is no evidence of the precise values at January 2008, but clearly it would have been very large.
The amount of the estate,
[71] $12 million. An ample estate to meet any reasonable amount.
The nature and amounts of claims of other persons...
[72] There is only one such person, the Canterbury Museum Board. The Board receives contributions from local authorities across Canterbury and donations to maintain and grow the Canterbury Museum. By the will the museum is entitled to a capital bequest of $12 million. If this claim succeeds that is reduced to $10 million.
Judgment
[73] Now comes the most difficult task. As the Privy Council properly recognised, s 3(1) is in truth a discretion granted by Parliament to the Judge. The Judge must decide in the light of all the circumstances “such amount as may be reasonable, having regard to all the circumstances of a case”.
[74] Where such judgments have to be made against all the circumstances, with particular considerations made mandatory, it is not possible to reach a decision by way of syllogism. It is not possible, in that sense, to demonstrate an inevitable result. Different people applying the same criteria to the same set of facts will come to different decisions.
[75] For the reasons stated above I give little weight in this case to the goal of certainty. The desire of certainty can only be justified, as William Young J said, as promoting settlement. Reducing payments under this Act to a formula to achieve a model of certainty would be an error of law. To be sure, cases should be decided like for like; that is a basic element of justice. But, where so many facts are relevant, it is very rare to find precedents “on all fours”. This certainly is not one of those cases.
[76] This decision has been delayed because I have had difficulty coming to judgment. I have come to the conclusion that considerable weight should be given to the values indicated in Arthur’s correspondence in respect of Rose, but less so in respect of Susan.
[77] I distinguish here an aspect of Humphrey[12] which I have not yet referred to. In Humphrey, as in here, Willian Young J was dealing with a case where the services founding the jurisdiction were very close to natural love and affection. He said:
[46] So it is with some hesitation that I am prepared to accept that Sylvia and Helen have each made out a claim for relief, albeit that the relief which they can fairly expect is limited.
And also:
[52] So, notwithstanding my hesitations based on Re Welch, I think that there is a reasonable nexus between the promises made and the services provided. Accordingly, I am prepared to find in favour of Sylvia and Helen in the sense that I am satisfied that they have made out grounds for relief. Nevertheless, their claims are modest. (Emphasis added)
[78] It needs to be kept in mind that in that case the Judge had no evidence at all of any valuation by the deceased of the worth of their services. Where there is no such valuation, and where the Judge considers that the proof of services has just got over the bar and no more, it is natural that the Judge will be reluctant to place a high value on those services in the absence of an indication from the deceased. Sylvia had given evidence that the deceased had told her that he would see her and her family “right”. That indication was of little help to the Judge.
[79] I have also come to the conclusion that the promises contained in the letters are consistent with the notes made on the envelope. In all the circumstances, weight should be given to the envelope as confirming what was intended in the promises in the letters.
[80] I consider that the sum of NZ$1 million is reasonable as an award to Rose having regard to all the circumstances of her case.
[81] I do not consider that the award to Susan of all the BHP shares is reasonable having regard to all the circumstances of the case. It is my judgment that Arthur’s concern for the welfare of Rose and his intent and promise in that regard was more important to him than provision of shares for Susan. On the evidence as has been presented to the Court, that is a state of mind which is not surprising. It is largely reflected by the fact that on two occasions, using virtually identical language, he was very particular about what he was going to do for Rose.
[82] Arthur naturally referred in a letter to Susan to the BHP shares as “our shares”. He did intend to amend his will to provide those shares to her. But it is my judgment that on the evidence he would not have thought that he had any obligation to provide her all of those shares. Whereas by contrast, I think he did feel a real sense that he should provide for Rose. I do not think that the hundreds of hours that Susan spent providing financial information and generally engaging with Arthur on
financial matters were made with the intent that she would be rewarded. And, of course, that is not a requirement of the statute as I have had occasion to mention earlier.
[83] More significantly, I doubt that Arthur was aware of the time that she had spent and would have identified that as time spent solely for him. I think it was for their mutual enjoyment and value. Against these circumstances, I simply am not able to come to the conclusion that a parcel of shares worth approximately $1.1 million at the time of death is reasonable in all the circumstances to be awarded to Susan.
[84] Having come to that view there is an even more difficult task, whether she should be awarded anything and if so, how much. I do not think those questions were ever really addressed by Arthur, who was treating the shares as “ours” and intending to will them to her. I am satisfied, however, that he would have regarded her social contacts with him, including their mutual interest in financial matters, as support, in a similar way, but of lesser value than the support he received from Rose. It is on that basis that I think his reference to the shares as being “ours” can be seen as a promise reflecting past services provided by Susan.
[85] It has to be very much a judgment, one with which I am comfortable against the language of the statute. In my view the appropriate quantum to be awarded for Susan is the sum of $250,000.
[86] The costs of these proceedings of all parties should be borne by the estate. I reserve leave to the Public Trustee to apply for directions to fix the costs of the first and second plaintiff.
[1] Re Welch
[1990] 3 NZLR
1.
[2] Ibid at 6.
[3] Ibid at 7.
[4] Above n
1.
[5]
McCormack v Foley [1983] NZLR 57 at
68.
[6] Re
Welch above n 1 at
7.
[7]
Humphrey v New Zealand Guardian Trust [2004] NZFLR 179 at
[65].
[8]
Re Welch, above n 1 at
7.
[9]
Kite v May [2001] NZFLR 514 at
[81].
[10]
Samuels v Atkinson [r2009] NZCA 556 at [95].
[11] Above n 1.
[12] Humphrey v New Zealand Guardian Trust, above n 7.
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