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Last Updated: 30 January 2018
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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
CIV-2014-441-78 [2014] NZHC 2829
IN THE MATTER
|
of the estate of Ronald Clive Martin
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UNDER
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the Trustee Act 1956, the Declaratory Judgments Act 1908 and the
Administration Act 1952
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BETWEEN
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NAPIER INDEPENDENT TRUSTEES and PETER DESPARD TWIGG as trustees of the
estate of Ronald Clive Martin
Plaintiffs
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AND
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BELINDA NATUSCH and BARBARA ANN WESTON as trustees of the estate of Frances
Mary Lusk
Defendants
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Hearing:
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11 November 2014
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Counsel:
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D Chan for plaintiffs
AJ Davies for defendants and the trustees of the estate of Diane
Yates
HR Grayson for the estates of the brothers and sisters of the late
Ronald Clive Martin and their children
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Judgment:
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14 November 2014
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JUDGMENT OF FAIRE
J
Solicitors: Carlile Dowling, Napier
Willis Toomey Robinson Scannell Hardy, Napier
Greeson Grayson, Hastings
Napier Independent Trustees v Natusch [2014] NZHC 2829 [14 November 2014]
Table of Contents
Introduction
............................................................................................................[1]
Representation
........................................................................................................[3]
The
issue.................................................................................................................[4]
Position
of the parties
.............................................................................................[5]
Agreed statement
of facts
.......................................................................................[7]
Effect of the adoption order
made on 11 June
1943...............................................[8] The late Mr
Martin’s will
.......................................................................................[9]
The applicable legislative provisions
...................................................................[10] The
general effect
of clause 4 of the will
.............................................................[12] Relevant
provisions of the Administration
Act 1952
...........................................[13] The possible outcomes
.........................................................................................[17]
Analysis
................................................................................................................[20]
The
Court’s jurisdiction to make such
declaration...............................................[34] Costs
.....................................................................................................................[38]
Introduction
[1] The plaintiffs are the trustees of the estate of Ronald Clive Martin.
They seek declarations that:
(a) Under section 56 of the Administration Act 1952, the date
for determining whether an intestate leaves a person
for whom the
intestate’s estate is to be held on the trusts set out in that section, is
the date of the intestate’s death;
and
(b) The residuary estate of Ronald Clive Martin is to be held on the trusts set out in section 56 of the Administration Act 1952 for:
(i) The estate of Frances Mary Lusk, being the wife of Ronald
Clive Martin at the date of his death; and
(ii) The estate of Diane Gabrielle Yates, being the issue of Ronald
Clive Martin at the date of his death.
They also seek a direction that they, as trustees of the estate of Ronald
Clive Martin, distribute the residuary estate (after payment
of all costs and
expenses of the administration of the estate, including the costs of this
proceeding) as follows:
a) one-third to the executors and trustees of the estate of Frances
Mary
Lusk;
b) two-thirds to the executors and trustees of the estate of
Diane
Gabrielle Yates.
[2] They seek leave to amend the statement of claim by deleting
paragraphs 24 and 25 and the relevant prayer for relief. As
a result of an
amendment to s 56 of the Administration Act 1952, this relief is no longer
sought.1 I grant leave.
Representation
[3] Directions as to service and orders appointing Mr Grayson to
represent the estates of the brothers and sisters of the late
Ronald Clive
Martin and their children (referred to in this judgment as “the
siblings”) were made by Associate Judge
Smith on 6 August 2014. No order
was made in terms of representation of the estate of Diane Yates because counsel
had already signalled
that counsel had instructions to act on behalf of that
estate and an order was therefore not necessary.
The issue
[4] The issue raised by this proceeding is, what is the correct date
under s 56 of the Administration Act for determining the
beneficiaries who are
entitled to take?
1 Administration Amendment Act 1965, s 5.
Position of the parties
[5] Mr Davies confirmed, on behalf of the parties for whom he acts,
that they
support the plaintiffs’ submission that:
(a) The Court has jurisdiction to grant the declaration sought;
and
(b) The correct date for determining the intestacy is the date
of Mr Martin’s death and, as a result, the beneficiaries
of his estate are
his widow, the late Mrs Lusk, and his daughter, Diane Yates.
[6] Mr Grayson has canvassed those who are within the sibling
group and advises that he has received no instructions
to oppose the
submissions advanced by the plaintiffs and that he supports those
submissions.
Agreed statement of facts
[7] Pursuant to an order made by Dobson J, following receipt
of a joint memorandum of counsel, evidence has been
provided by way of an
agreed statement of facts. The agreed statement of facts provides as
follows:
(a) Ronald Clive Martin (“Mr Martin”) was married to Frances Mary
Martin.
(b) Mr and Mrs Martin adopted Diane Gabrielle Martin (“Diane”) by
Order of Adoption made under section 16 of the Infants Act 1908 on
11 June 1943.
(c) Mr Martin had no other children.
(d) Mr Martin made his last will on 14 October 1955, and a codicil to
the will on 23 February 1956 (“the Will”).
(e) Mr Martin died on 14 October 1970. He was survived by his wife,
Frances Mary Martin, and Diane.
(f) On 10 November 1970, the Supreme Court of New Zealand, Napier
Registry, granted probate in respect of the Will in proceeding P. No.
611/70. The plaintiffs are the trustees of the estate of Mr Martin. (g) Diane died on 12 May 2011. She had no children.
(h) Frances Mary Martin remarried and her name became Frances Mary Lusk. She died on 22 September 2012 and probate was granted to the defendants.
Effect of the adoption order made on 11 June 1943
[8] As a result of the adoption order made, Diane Yates is deemed to be the
child of the deceased, Mr Martin.2
The late Mr Martin’s will
[9] Clause 4 of the late Mr Martin’s will left the residue of his
estate to his
trustees on trust;
(a) To pay the net annual income arising therefrom to my said wife
during her life.
(b) From and after the death of my said wife (hereinafter called
“the date for distribution”) to hold as well
the capital as the
income thereof for such of my children as shall survive the date for
distribution and who attain or shall have
attained the age of twenty- one (21)
years and if more than one in equal shares PROVIDED
HOWEVER that should any child of mine predecease the date for
distribution leaving a child or children who survive the date for distribution
and who attain or shall have attained the age of twenty- one (21) years then in
every such case such last mentioned child or children
shall take and if more
than one equally between them all the share and interest of and in my estate
which his her or their parent
would have taken had such parent survived
to acquire a vested interest therein.
The applicable legislative provisions
[10] At the time of the late Mr Martin’s death on 14 October 1970, the Administration Act 1952 was in force. On 1 January 1971 that Act was repealed by s 84 of the Administration Act 1969. Section 75 of the Administration Act 1969 provides that Part 3 of the Administration Act 1969, which provides for the distribution of intestate estates, shall not apply where the death occurred before the commencement of the Administration Act 1969, that is, 1 January 1971. Section 75 further provides that the estate of any person who died intestate before the commencement of the Administration Act 1969 shall be distributed in accordance
with the enactments and law in force at the date of death of that
person.
2 Infants Act 1908, s 16; Interpretation Act 1999, ss 17 and 18; The Public Trustee v Pilkington
[1912] NZGazLawRp 84; (1912) 31 NZLR 770 (CA) at 779.
[11] Accordingly, the provisions of the Administration Act 1952 apply in
respect of Mr Martin’s estate.
The general effect of clause 4 of the will
[12] Mrs Lusk had a life interest in the residue. On her death, the
residue was to be distributed to Mr Martin’s children
living at the date
of her death. Mr Martin’s only child, Diane, died before Mrs Lusk.
Accordingly, an intestacy in respect
of the residue arose. It is a contingent
partial intestacy.3
Relevant provisions of the Administration Act 1952
[13] It is necessary to consider the following provisions of the
Administration Act
1952.
[14] Section 59 provides:
59. Where any person dies leaving a will effectively disposing of part
of his estate, the provisions of this Part of this Act
shall have effect in
respect of the part of his estate not so disposed of subject to the provisions
contained in the will.
[15] Section 56 provides:
56. (1) Where any person dies intestate as to any real or personal estate,
that estate shall be distributed in the manner or be held
on the trusts
mentioned in this section, namely:-
(a) If the intestate leaves a husband or wife, the surviving
husband or wife shall take the personal chattels absolutely,
and, in addition,
the residue of the estate shall stand charged with the payment of a sum of one
thousand pounds to the surviving
husband or wife with interest thereon from the
date of the death at the rate of four per cent per annum until paid or
appropriated,
and, subject to providing for that sum and the interest thereon,
the residue of the estate shall be held,-
(i) If the intestate leaves issue, in trust as to one-third for the
surviving husband or wife absolutely, and as to the other
two-thirds on the
statutory trusts for the issue of the intestate:
(ii) If the intestate leaves no issue, in trust as to two- thirds for
the surviving husband or wife absolutely, and as to the
other one-third if the
intestate leaves
3 In re Williams, Deceased, Anderson v Williams [1937] NZLR 872 (SC) at 874, lines 1-10.
both parents, in trust for the father and mother in equal shares absolutely
or, if the intestate leaves only one parent, in
trust for the surviving
father or mother absolutely:
(iii) If the intestate leaves no issue or parent, in trust for the surviving
husband or wife absolutely:
(b) If the intestate leaves issue but no husband or wife, the estate
shall be held on the statutory trusts for the issue of
the intestate:
(c) If the intestate leaves no husband or wife or issue but both
parents, the estate shall be held in trust for the father
and mother in equal
shares absolutely:
(d) If the intestate leaves no husband or wife or issue but one
parent, the estate shall be held in trust for the surviving
father or mother
absolutely:
(e) If the intestate leaves no husband or wife or issue or parent, the
estate shall be held in trust for the following persons
living at the death of
the intestate, and in the following order and manner, namely-
Firstly, on the statutory trusts for the brothers and sisters (whether of
full or of half blood) of the intestate; but if no person
takes an absolutely
vested interest under such trusts; then
Secondly, in trust for the grandparents of the intestate and, if more
than one survive the intestate, in equal shares; but
if there is no member of
this class; then
Thirdly, on the statutory trusts for the uncles and aunts of the intestate,
being brothers and sisters (whether of full or of half
blood) of a parent of the
intestate:
(f) In default of any person taking an absolute interest under the
foregoing provisions, the estate shall belong to the Crown
as bona vacantia,
and in lieu of any right to escheat. The Crown may (without
prejudice to any other powers), out of the whole or any part
of the
property devolving on it, provide for dependants, whether kindred or not, of
the intestate, and other persons for whom
the intestate might reasonably have
been expected to make provision.
(2) A husband and wife shall for all purposes of distribution or
division under the foregoing provisions of this section
be treated as two
persons
[16] Section 57 of the Act provides:
57. (1) Where under this Act the estate of an intestate, or any part
thereof, is directed to be held on the statutory trusts
for the issue
of the intestate, the same shall be held upon the following trusts,
namely:-
(a) In trust, in equal shares if more than one, for of intestate. all
or any the children or child of the intestate, living
at the death of the
intestate, who attain the age of twenty-one years or marry under that age, and
for all or any of the issue living
at the death of the intestate who attain the
age of twenty-one years or marry under that age of any child of the intestate
who predeceases
the intestate, the said issue to take through all degrees,
according to their stocks, in equal shares if more than one, the share
which
their parent would have taken if living at the death of the intestate, and so
that no issue shall take whose parent takes an
absolutely vested
interest:
Provided that if any female capable of taking under this paragraph (including
this proviso) dies before taking an absolutely vested
interest leaving any
illegitimate child or children who shall be living at the expiration of
twenty-one years from the death of the
intestate or who shall sooner attain the
age of Twenty-one years or marry under that age, that child or those children
shall take,
in equal shares if more than one, the share which his or their
mother would have taken if she had not so died:
(b) The statutory power of advancement, and the statutory provisions
which relate to maintenance and accumulation of surplus
income, shall apply, but
when an infant marries that infant shall be entitled to give valid receipts for
the income of the infant's
share or interest:
(c) The administrator may permit any infant contingently
interested to have the use and enjoyment of any personal chattels
in such manner
and subject to such conditions (if any) as the administrator may consider
reasonable, and without being liable to
account for any consequential
loss.
(2) If the trusts in favour of the issue of the intestate fail by
reason of no child or other issue attaining an absolutely
vested
interest-
(a) The estate of the intestate and the income thereof and all
statutory accumulations, if any, of the income thereof, or so
much thereof as
may not have been paid or applied under any power affecting the same, shall go,
devolve, and be held under the provisions
of this Act as if the intestate had
died without leaving issue living at the death of the intestate:
(b) References in this Act to the intestate" leaving no issue" shall
be construed as "leaving no issue who attain an absolutely
vested interest
":
(c) References in this Act to the intestate " leaving issue " or " leaving a child or other issue" shall be construed as "leaving issue who attain an absolutely vested interest ".
(3) Where under this Act the estate of an intestate or any part
thereof is directed to be held on the statutory trusts
for any class
of the relatives of the intestate, other than issue of the intestate, the same
shall be held on trusts corresponding
to the statutory trusts for the issue of
the intestate as if those trusts were repeated with the substitution of
references to the
members or member of that class for references to the children
or child of the intestate.
The possible outcomes
[17] If the correct date for determining the beneficiaries under the
intestacy is the date of Mr Martin’s death, then the
beneficiaries of the
residue of his estate will be Mrs Lusk his widow, and his daughter, Diane,
pursuant to s 56(1)(a) and 56(1)(a)(i).
[18] If the correct date for determining the beneficiaries under the
intestacy is the date of Mrs Lusk’s death, then the
beneficiaries will
be:
(a) Any brothers and sisters of the deceased who come within s
56(1)(e);
and
(b) Any children of those brothers and sisters who come within s
57(1)(a)
as applied by s 57(3).
[19] If the correct date for determining the beneficiaries under the
intestacy is the date of Diane’s death, then the beneficiaries
will be
either Mrs Lusk or the sibling group, that is the brothers and sisters of the
deceased and their children.
Analysis
[20] Section 56 of the Act does not state what the correct date for
determining the beneficiaries under the intestacy is.
[21] Section 56 refers to “where any person dies
intestate ...”. This was a contingent intestacy because it
was not clear at the date of the death the late Mr Martin whether or
not there was any intestacy.
[22] Because of this issue, Mr Chan correctly observed in his submissions that there is the possibility that the correct date for determining the beneficiaries under
the intestacy is a later date, such as when the intestacy became a certainty,
that is when Diane predeceased Mrs Lusk, or when it
actually arose, that is when
Mrs Lusk died.
[23] Sections 56 and 57, when considered fully, suggest that the correct
date is the date of the testator’s death. Some
of the beneficiaries
under an intestacy are specifically identified as persons “living at
the death of the intestate”.
(a) Section 56(1)(e) deals with brothers and sisters living at the
death of the testator and provides that they will take if
the testator leaves no
husband, wife, issue or parents:
(b) Section 57(1)(a) refers to:
(i) Children of the intestate living at the death of the
intestate;
(ii) Grandchildren of the intestate living at the death of the
intestate if their parent (being a child of the intestate)
has predeceased
the intestate.
[24] Section 56(1)(a) provides that the surveying spouse takes $1,000
plus interest on that sum “from the date of death” of the
deceased.
[25] I accept Mr Chan’s submissions that these provisions suggest
that the date of the deceased’s death is the defining
date. In short, the
correct date for determining beneficiaries is the date of the deceased’s
death.
[26] Mr Chan helpfully summarised relevant authorities on the issue,
which I mention shortly. Two cases had to consider
ss 47 and 48 of the
Administration 1908, the predecessor to s 56 of the 1952 Act. Those provisions
are substantially similar.
[27] In In re Harrison the testator left a life interest in the residuary estate to his widow, with the capital to be paid on her death or remarriage to persons who the
widow appointed. The widow failed to exercise the power of appointment
before she died. The Supreme Court held:4
In the present case the testator must be treated, I think, as having died
intestate as to his residue, although the fact that he had
so died was not
established until after his widow had died without exercising her power of
appointment.
[28] In In re Williams, the testator left a life interest in his estate to his widow and on her death the residue was to be distributed to his brothers and sisters. All of the testator’s brothers and sisters died before the widow, leaving an intestacy as to the residue. The court held that what had occurred was a partial intestacy. The court further held that the persons to take must be settled by considering the position at the date of the testator’s death and not the later date. It follows from that, the court said, that one must consider that only relatives who were alive at the moment of the testator’s death are entitled to take under the Administration Act, that is persons other
than the wife.5
[29] The relevant wording of s 56 of the Administration Act 1952 is
substantially the same as s 47 of the 1908 Act. Mr Chan correctly
submits that
there appears to be no reason why the decisions In re Harrison and In
re Williams should not also apply to the 1952 Act.
[30] Mr Chan referred me to Laws of New Zealand dealing with
estates:6
167. Judicial interpretation of earlier statutes in pari materia. Where words used in an enactment are plainly taken from a similar context in an earlier statute in pari materia, and the words in the earlier statute received a clear, well-settled, and recognised judicial interpretation, the Court may presume that Parliament was aware of the interpretation and, in the absence of anything in the statute indicating a contrary intention, intended it to be followed. However, the more recent decisions have emphasised the qualification attached to this presumption that the judicial interpretation of the earlier word or expression must be clear, well settled, and recognised. The more recent decisions have also warned that the presumption cannot be taken too far, and that it should not be used to perpetuate error. The validity and strength of the presumption must now be regarded as doubtful.
[citations omitted]
4 In re Harrison (Deceased) [1916] NZLR 1098 (SC) at 1099, 1100.
5 In re Williams, Deceased, Anderson v Williams above, n 3 at 874–875.
6 Laws of New Zealand Statutes: Statutory Interpretation at [167].
[31] On the above basis it might well be presumed that Parliament
intended the
1952 Act to have the same meaning as the 1908 Act as interpreted in re
Harrison and
re Williams.
[32] Mr Chan has carried out a search of the position in other
jurisdictions. He referred to a number of English cases as being
consistent
with the proposition that the correct date for determining the beneficiaries
under the intestacy is the date of the intestate’s
death.7
[33] I conclude that the correct date for determining the beneficiaries
under this intestacy is the date of the late Mr Martin’s
death. A
consequence of that is that the plaintiffs are entitled to the declarations and
directions sought.
The Court’s jurisdiction to make such declaration
[34] Section 3 of the Declaratory Judgments Act 1908 gives the Court
authority to make a declaration in this situation. Section
66(1) of the Trustee
Act 1956 gives the Court jurisdiction to provide direction. Mr Chan also
referred to the Court’s inherent
jurisdiction.8 In my view,
the declarations and the directions sought are authorised respectively by the
Declaratory Judgment Act and s 66(1) of
the Trustee Act.
[35] After hearing briefly from counsel, I advised that I would make
orders as sought and that the reasons would be issued shortly.
[36] These are the reasons.
[37] For the avoidance of doubt, I again record the orders that were
pronounced in
Court on 11 November 2014 as follows:
Declarations are made that:
7 Public Trustee v McKee [1931] 2 Ch 145; Re Douglas’s Wills Trusts [1959] 2 All ER 620 (Ch);
In re Bowen-Buscarlet’s Will Trusts [1972] 1 Ch 463; Administration of Estates Act 1925 (UK), s
46.
8 Neagle v Rimmington [2002] 3 NZLR 826 (HC).
(a) Under section 56 of the Administration Act 1952, the date
for determining whether an intestate leaves a person
for whom the
intestate’s estate is to be held on the trusts set out in that section, is
the date of the intestate’s death;
and
(b) The residuary estate of Ronald Clive Martin is to be held on the
trusts set out in section 56 of the Administration Act
1952 for:
(i) The estate of Frances Mary Lusk, being the wife of Ronald
Clive Martin at the date of his death; and
(ii) The estate of Diane Gabrielle Yates, being the issue of Ronald
Clive Martin at the date of his death.
A direction is made to distribute the residuary estate (after payment of all
costs and expenses of the administration of the estate,
including the costs of
this proceeding) as follows:
(a) one-third to the executors and trustees of the estate of Frances
Mary
Lusk;
(b) two-thirds to the executors and trustees of the estate of
Diane
Gabrielle Yates.
Costs
[38] When I apply In re Buckton9 and r 14.6(4)(c) of
the High Court Rules, I conclude that this is a case where all parties’
costs are to be paid from the estate
on a solicitor and client
basis.
[39] Accordingly, I order:
(a) The reasonable solicitor-client costs of the proceeding of the plaintiffs, the defendants, the executors and trustees of the estate of Diane Gabrielle Yates, and the Sibling Group shall be paid by the
plaintiffs from the estate of Ronald Clive Martin;
9 Re Buckton [1907] 2 Ch 406 at 414–415.
(b) The parties have leave to apply if there is any dispute in relation
to
costs.
JA Faire J
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