O'Toole v O'Toole [2012] NZHC 676 (5 April 2012)

Last Updated: 4 May 2012

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2010-419-1676 [2012] NZHC 676

UNDER The Family Protection Act 1955

IN THE MATTER OF the last Will and Testament bearing date 5

December 2009 and the Estate of JOHN FRANCIS O'TOOLE formerly of Honolulu, State of Hawaii in the United States of America, Retired and Deceased

BETWEEN CAITLIN MAREE O'TOOLE First Plaintiff

AND THE OFFICIAL ASSIGNEE Second Plaintiff

AND MICHAEL JOSEPH O'TOOLE First Defendant

AND GRAEME DONALD MANKELOW Second Defendant

Hearing: 14 October 2011

Appearances: P T Finnigan for First Plaintiff

C T Jones for Second Plaintiff

C M Starr for First and Second Defendants

M M Bell and A M Lake for K O'Toole and P O'Toole

Judgment: 5 April 2012

_{JUDGMENT OF PETERS J}

This judgment was delivered by Justice Peters on 5April 2012 at 11 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

_{Date: ...................................}

O'TOOLE V O'TOOLE HC HAM CIV 2010-419-1676 [5 April 2012]

Introduction

[1] The issue in this case is whether the deceased, John Francis O’Toole (“the deceased”), was domiciled in Hawaii as at the date of his death, being 19 December

2009 (“date of death”).

[2] As at the date of death, the deceased had moveable assets situated in New Zealand. The plaintiffs seek provision from those assets pursuant to s 4 of the Family Protection Act 1955.

[3] The issue to which I have referred arises because succession to moveable assets is governed by the law of a deceased’s domicile. The defendants and the principal beneficiaries of the deceased’s estate contend that the deceased was domiciled in Hawaii (or, rather, the United States of America) as at the date of death and that, accordingly, this Court does not have jurisdiction to make the orders sought by the plaintiffs.[1] If, however, the deceased were domiciled in New Zealand as at the date of death, then a New Zealand Court would have jurisdiction to make the orders sought.

Parties

[4] The first plaintiff is the deceased’s granddaughter, being the daughter of the deceased’s eldest son, Laurence. The first plaintiff is a minor and her mother has been appointed as her litigation guardian. The Official Assignee is the second plaintiff, Laurence having being adjudicated bankrupt in September 2009.

[5] The first and second defendants are the deceased’s brother, Mr M J O’Toole

(“Michael”), and Mr G D Mankelow of Hawaii.

[6] In his last will dated 5 December 2009 (“the will”), the deceased appointed

Mr Mankelow as the executor of his estate. Mr Mankelow renounced his administration duties in 2010. Those responsibilities are now with Ms J Chadwick

of Hawaii, accountant. This Court has previously granted probate of the will and appointed Michael as the executor’s attorney in the administration of the deceased’s estate in New Zealand.

[7] The other parties who are interested in this matter are the deceased’s other two sons, Kevin and Peter. Kevin and Peter are the principal beneficiaries under the will and they have carried the case on the issue as to jurisdiction. The defendants have supported the beneficiaries’ case. Unless it is necessary to distinguish between them, references below to the defendants include the beneficiaries.

[8] These proceedings were commenced in 2010. The issue as to jurisdiction arose only after statements of defence had been filed, when the defendants sought various orders including orders dismissing the proceedings. The plaintiffs do not contend that the defendants waived or lost their right to protest jurisdiction as a result of any prior step in the proceeding. Accordingly, there is no objection to me dismissing the proceedings if I determine that the deceased was domiciled in Hawaii as at the date of his death.

Domicile Act 1976

[9] All concerned are agreed that the deceased’s domicile of origin was New Zealand, the deceased having been born here. It is also common ground that the domicile of origin adheres unless the defendants establish, on the balance of probabilities, that the deceased acquired a new domicile in Hawaii.[2] Section 9 of the Domicile Act 1976 sets out the circumstances in which a person is taken to have acquired a new domicile:

9 Acquisition of new domicile

A person acquires a new domicile in a country at a particular time if, immediately before that time,—

(a) He is not domiciled in that country; and

(b) He is capable of having an independent domicile; and

_{(c) He is in that country; and}

(d) He intends to live indefinitely in that country.

[10] There is no dispute that s 9(a) to (c) inclusive are satisfied in this case. The sole issue is as to s 9(d), and whether prior to his death the deceased had formed an intention to live indefinitely in Hawaii.

[11] The parties referred me to several authorities which have been of considerable assistance.[3] These authorities establish that the question of whether a person has acquired a new domicile is a factual enquiry, to be conducted by reviewing the whole of the person’s life to see whether it is proper to draw an inference that the person concerned had formed the necessary intention. In some cases the Court has held that a lengthy period of residence in the new country is

sufficient evidence from which to infer the necessary intention and in others it has held such residence is insufficient. Each case falls to be decided on its own facts.

[12] Although it is for the defendants to establish the acquisition of the new domicile on the balance of probabilities, the authorities make it clear that a conclusion that a person has acquired a new domicile is not to be reached lightly. The following statements of Scarman J, as he then was, are sufficient to make this point:[4]

... The powerful phrases of the cases are, in my opinion, a warning against reaching too facile a conclusion upon a too superficial investigation or assessment of the facts of a particular case. They emphasise as much the nature and quality of the intention that has to be proved as the standard of proof required. What has to be proved is no mere inclination arising from a passing fancy or thrust upon a man by an external but temporary pressure, but an intention freely formed to reside in a certain territory indefinitely. All the elements of the intention must be shown to exist if the change is to be established: if any one element is not proved, the case for a change fails. The court must be satisfied as to the proof of the whole; but I see no reason to infer from these salutary warnings the necessity for formulating in a probate case a standard of proof in language appropriate to criminal proceedings.

The formula of proof beyond reasonable doubt is not frequently used in probate cases, and I do not propose to give it currency. It is enough that the authorities emphasise that the conscience of the court (to borrow a phrase from a different context, the judgment of Parke B in Barry v Butlin) must be satisfied by the evidence. The weight to be attached to evidence, the inferences to be drawn, the facts justifying the exclusion of doubt and the expression of satisfaction, will vary according to the nature of the case. Two things are clear – first, that unless the judicial conscience is satisfied by evidence of change, the domicile of origin persists: and secondly, that the acquisition of a domicile of choice is a serious matter not to be lightly inferred from slight indications or casual words.

Parties’ cases and evidence

[13] The defendants submit that there is ample evidence before the Court from which to infer that the deceased had formed an intention to live in Hawaii indefinitely. The plaintiffs submit the opposite. I am satisfied that the deceased was domiciled in Hawaii at the time of his death but make the following comments regarding the affidavits which the parties, and particularly the defendants and beneficiaries, have filed.

[14] First, several of the deponents have an interest in the outcome on the issue as to jurisdiction and some of the content of their affidavits is coloured by that interest. This is particularly so in the case of the affidavits filed in support of the defendants’ position after the jurisdiction point arose. I have treated with caution some of the evidence given in those affidavits.

[15] Secondly, there is little evidence by way of contemporaneous documents to shed light on the deceased’s intentions. Accordingly, the deceased’s actions must largely speak for themselves.

[16] Thirdly, there is no affidavit evidence before me from the legal advisor in Hawaii who drafted the will that was admitted to probate, or from the deceased’s solicitor, Mr Fletcher of Evans Bailey. Evans Bailey is representing the defendants (but not the beneficiaries) in this matter and Mr Fletcher is the solicitor on the record for the defendants. Mr Fletcher appears to have been the deceased’s solicitor at all material times and he prepared wills and other documents for or in connection with the deceased. I considered whether I should ask the defendants to provide evidence

from Mr Fletcher in particular but decided that any evidence he gave was unlikely to affect the view I reached on the other evidence available.

Facts

[17] The deceased was born in New Zealand in 1927. The deceased married in

1951 and he and his wife had three children, namely Laurence, Kevin and Peter, born in 1952, 1954 and 1964 respectively. The family lived in or about Taupo, where the deceased established and operated a metal cartage business.

[18] The deceased left New Zealand in 1970, apparently in something of a hurry because the IRD was investigating the legality of tax arrangements in which he was involved. The deceased had adopted a scheme designed to reduce the amount of income tax that he or his company was required to pay; the scheme or something similar had been tested in court proceedings, and the outcome had been unfavourable to the taxpayer. Although in subsequent years the deceased attempted to settle matters with the IRD, there is no evidence that he was able to do so.

[19] The deceased did not return to live in New Zealand after 1970. The deceased and Mrs O’Toole were divorced in 1979, at Mrs O’Toole’s instigation and against the deceased’s wishes. Neither the deceased nor his wife remarried.

[20] The deceased lived in Honolulu from 1975 until his death in 2009, that is some 34 years. Whatever the position may have been as to the deceased’s dealings with the IRD, it appears that the climate in Honolulu suited his health.

[21] In one of his affidavits, Peter O’Toole gives evidence that the deceased held a number of jobs in Hawaii, including selling parts for aircraft and working for a helicopter recovery company. The deceased filed State and Federal tax returns between 1984 and 2009. The deceased retired in the early 1990s. Thereafter the deceased established a small business buying and selling parts and equipment, including exporting the same to New Zealand, and the evidence is that he was working up until shortly before his death.

[22] The deceased lived in an apartment in Honolulu. There is evidence from Ms Chadwick, who was the deceased’s accountant from 1984 onwards, that the apartment was given to the deceased as part of a retirement package. There is also evidence that the deceased was in receipt of a pension from his previous employer and that he received government social security.

[23] Ms Chadwick’s evidence is that the deceased held a lease of 2,500 ft2 at Honolulu airport, for a term of 20 years. There is no evidence as to when the lease was obtained or the rent that was payable, let alone a copy of the lease.

[24] The deceased became a US citizen in July 1996 and appears to have acquired a US passport in 2006. The deceased retained his New Zealand citizenship throughout, and also held New Zealand and Irish passports.

[25] The deceased returned to New Zealand regularly, say once or twice a year for three or four weeks at a time, staying with friends and family when he did so. Mr Edwards, a close friend of the deceased, shared the deceased’s interest in aircraft and they often attended the Wanaka and Omaka air shows together. The deceased kept a vehicle in New Zealand, which he used during his visits here.

[26] The deceased also had assets in New Zealand. The deceased held a beneficial interest in a half share of a farm for 26 years, between 1973 and 1999. Michael and his wife held the other half share. The deceased was described as a farmer of Hamilton or of Taupo in documents relating to his interest in that farm.

[27] The deceased owned other real estate in New Zealand. In 2003 the deceased acquired two residential sections in Matamata, selling one in 2006 and the other in

2009. There is no suggestion that the deceased intended to construct a dwelling on the sections, for himself or for anyone else. The deceased retained in New Zealand the proceeds of sale of the sections. Peter O’Toole’s evidence is that the moveables situated in New Zealand at the date of death include the proceeds of sale of the Matamata sections and funds which the deceased inherited. It appears from the evidence that the funds making up the moveables exceed $330,000.00 and these funds are held on term deposit.

[28] The deceased maintained an interest in New Zealand affairs and voiced his opinions as to policies that successive governments adopted. Mr Edwards would bring New Zealand newspapers to the deceased when he came to Honolulu in the course of his work, generally twice a month. There is no evidence as to whether the deceased was or remained on the electoral roll in New Zealand or whether he voted in the United States.

[29] The will admitted to probate was executed in Honolulu on 5 December 2009. As I have said, the deceased had a solicitor in New Zealand. The deceased made a will in New Zealand in 1993, a codicil in 1998 and a further will in 2007, in each describing himself as of Honolulu. The documents in evidence include a file note of a meeting between the deceased and Mr Fletcher, to whom I have referred, on

28 October 2009, so just seven or so weeks before the date of death. From the file note it appears that they discussed the possibility of the deceased settling a trust in New Zealand for the benefit of the beneficiaries, as a means of minimising the possibility of a claim by Laurence.

[30] The beneficiaries went to Honolulu before the deceased’s death. On

14 December 2009 the deceased transferred his apartment and some land he owned in Nevada to the beneficiaries. Kevin O’Toole’s estimate is that those properties were or are worth about US$340,000.00 in total. The deceased also had cash of about US$40,000.00. As I have said, the deceased died on 19 December 2009. The deceased’s body was cremated and his ashes scattered above a bay in Hawaii.

Decision

[31] As I have said, I am satisfied that by the time of his death the deceased had formed an intention to live indefinitely in Hawaii.

[32] From the facts to which I have referred, the matters which I consider the most significant are the length of the period for which the deceased was resident in Hawaii, and the fact that the deceased remained resident there for many years after his retirement and when he was well advanced in years. The only residence the deceased had was in Hawaii. This was not a case where the person concerned had

houses in two or more countries or spent relatively equal periods in two or more countries as was the case in Re Fuld, Roberts v Public Trustee and Winans.[5]

Although on its own a period of residence may be insufficient evidence from which to infer an intention to live indefinitely in a place, I am satisfied from the combination of matters to which I have referred that the deceased had formed the necessary intention by the date of his death.

[33] Counsel for the defendants referred me to a recent decision of the English Court of Appeal, in which considerable reliance was placed on the length of the deceased’s residence in what was contended was his domicile of choice. The Court in that case said:[6]

23. In considering whether Ramadan had at some stage an intention to reside permanently and indefinitely in England, long residence in England is of course a starting point. It is furthermore important that the residence in England was the home of his family. That was true during his marriage ... and ... once he was in a relationship with Diane. It is common sense that the longer the residence and the more it is home, the more likely the inference that there is the intention to reside permanently and indefinitely. But at any stage when it might be proper to make that inference, it is important to place in the balance any continued connections with Cyprus so as to be able to be clear whether his intention has become one of settling finally in England, abandoning Cyprus. One must further be satisfied that the situation is not one in which Ramadan has simply not finally made up his mind because, as Scarman J said in Fuld, in such a situation the domicile of origin is retained.

[34] I accept that the deceased did not at any time sever ties with New Zealand, and that he retained connections with New Zealand. The deceased’s family were here, he visited frequently, he had owned land in New Zealand, a substantial part of his estate was located here and he made wills here. However, I do not consider these matters are incompatible with the deceased having formed an intention to live indefinitely in Honolulu.

[35] For those reasons I consider that the deceased was domiciled in Hawaii as at the date of death.

[36] I do not consider it necessary to do more than to dismiss the plaintiffs’ proceedings but the parties may serve memoranda if they consider others orders are required. The parties may file submissions on costs if they wish.

..................................................................

Peters J

Solicitors:

_{Foley & Hughes, Auckland – email:} [e-mail]

_{Evans Bailey, Hamilton – email:} [e-mail]

_{Corcoran French, Christchurch – email:} [e-mail] / [e-mail]

Counsel:

_{Paddy Finnigan, Barrister, Auckland – email:} [e-mail]

Copy for:

Insolvency and Trustee Service, Auckland – email: [e-mail]

---

[1] Butchart v Butchart [1932] NZLR 125 (CA) at 131; and see also W M Patterson Family Protection and Testamentary Promises in New Zealand (3rd ed, Lexisnexis, Wellington, 2004) at 80.

[2] Domicile Act 1976, s 8.

[3] Re Craig [1998] NZFLR 439 (HC); Agulian & Anor v Cyganick [2006] EWCA Civ 129; Holliday v Musa [2010] EWCA Civ 335; Udny v Udny (1889) 14 App Cas 631 (HL); Winans v Attorney-General [1904] AC 287 (HL); and In the Estate of Fuld (No. 3) [1968] P 675 (EWHC).

[4] _{In the Estate of Fuld (No. 3) [1968] P 675 (EWHC) at 678.}

[5] In the Estate of Fuld (No. 3) [1968] P 675 (EWHC); Roberts v Public Trustee HC Christchurch

_{M316/97, 13 November 1997 and Winans v Attorney-General [1904] AC 287 (HL).}

[6] Holliday v Musa [2010] EWCA CIV 335.