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Napier Independent Trustees v Natusch [2014] NZHC 2829; [2015] 2 NZLR 755 (14 November 2014)

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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
UNDER
the Trustee Act 1956, the Declaratory Judgments Act 1908 and the Administration Act 1952
BETWEEN
NAPIER INDEPENDENT TRUSTEES and PETER DESPARD TWIGG as trustees of the estate of Ronald Clive Martin
Plaintiffs
AND
BELINDA NATUSCH and BARBARA ANN WESTON as trustees of the estate of Frances Mary Lusk
Defendants


Hearing:
11 November 2014
Counsel:
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
Judgment:
14 November 2014




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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