Paewai v Paewai-Kohe [2015] NZHC 1007 (13 May 2015)

Last Updated: 3 July 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2402 [2015] NZHC 1007

BETWEEN	API TERINA PAEWAI First Applicant
AND	HUIRANGI PAEWAI SMITH Second Applicant
AND	ENA PAEWAI Third Applicant
AND	KAREEVE MOANA WITEHIRA, KAMILLA MARIANA WITEHIRA AND KAYLA IVY EMMA WITEHIRA AS SUCCESSORS TO KARA IVY PAEWAI WITEHIRA (DECEASED) Fourth Applicant
AND	MANAHI MONTROSE PAEWAI Fifth Applicant
AND	NOEL MEHA PAEWAI Sixth Applicant
AND	ALMA RUTH PAEWAI-KOHE First Respondent
AND	ORA GOING-RICHARDSON AND DUNCAN RICHARDSON Second Respondent

Hearing:	On the papers
Judgment:	13 May 2015

_{JUDGMENT OF THOMAS J}

This judgment was delivered by me on 2015 at pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

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

PAEWAI & ORS v PAEWAI-KOHE & ORS [2015] NZHC 1007 [13 May 2015]

Introduction

[1] The applicants seek leave to appeal to the Court of Appeal against a decision I gave in the High Court at Auckland on 9 December 2014.¹ That decision was an appeal from the Family Court dated 15 August 2014 concerning the will of the mother of the applicants and respondents.²

[2] The application for leave is made under s 15(3) of the Family Protection Act

1955 and s 67 of the Judicature Act 1908. The test to apply is well settled. The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.³ The Court of Appeal in Waller v Hider stated the approach to take in the following terms:⁴

Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

When the disputed matter is entirely or largely a question of fact the task of the applicant under s 67 is harder. An issue of fact in a matter falling within the jurisdiction of an inferior Court will seldom be of public importance. It is better that we make no attempt to define the circumstances in which a factual contest can be taken to have private importance but obviously it may do so if the amount at stake is very substantial or the decision reflects seriously on the character or conduct of the would-be appellant or, as in Cuff, the judgment below has special consequences (for example, bankruptcy) for the losing party. Even then, however, leave cannot be anticipated if the applicant is seeking to disturb concurrent findings of fact in the lower Courts.

[3] The application for leave to appeal was filed in time. Submissions have been

_{received. With the parties’ consent this matter falls to be determined on the papers.}

¹ _{Paewai-Kohe v Paewai [2014] NZHC 3137.}

² _{Ehau v Wilson [2014] NZFC 6250.}

³ Andrew Beck and others McGechan on Procedure (online looseleaf ed, Brookers) at [J67.02];

_{Waller v Hider [1997] NZCA 221; [1998] 1 NZLR 412 (CA) at 413-414.}

⁴ At 413-414.

Background

[4] The proceeding concerned the will of Hineapa Paewai (Mrs Paewai). Mrs Paewai is the grandmother of the fourth applicants and the mother of the other five applicants. The first respondent, Alma Ruth Paewai-Kohe (Alma), is also Mrs Paewai’s daughter, as well as sister and aunt to the applicants. The second respondents are the executors of the will.

[5] Mrs Paewai issued her last will on 4 July 2008, 15 months before her death on 29 October 2009. She granted the bulk of her estate to Alma. At the time of the High Court hearing the estate consisted of one Mt Eden property worth approximately $2.5 to $2.8 million. Adjusted to incorporate changes since Mrs Paewai’s death, the will in effect granted 64 per cent (or, taking a property value of

$2.65 million, $1.7 million) to Alma. If the proportions stipulated in the will were preserved, the third and fifth applications would receive 3.6 per cent ($95,000) of the estate each, and the other applicants would receive 7.2 per cent ($190,000) each.

[6] The applicants challenged the will in the Family Court under s 4 of the Family Protection Act 1955, claiming that the will did not provide proper maintenance and support. The Court agreed, finding that while there is no presumption of equal sharing between children, it was a generally accepted starting point, and in this case it was unjustified for Mrs Paewai not to treat her children the same under her will.⁵ It was ordered that the estate be divided in equal portions between the applicants and respondents, meaning they received 14.28 per cent (approximately $378,000) each.

[7] Alma then appealed to the High Court. I agreed with the overall conclusion of Family Court Judge that the will as drafted did not provide adequate maintenance and support for the applicants, and there had been a breach of moral duty judged by the standards of a wise and just testatrix. It was clear Mrs Paewai had some misunderstanding about the financial position of each of her children. However, the starting point is not equal sharing, but rather what limited adjustment is necessary to remedy the breach of moral duty and provide proper maintenance and support,

having regard to the particular features of the case. Broader questions such as the desirability of greater awards, or perceptions of fairness, should not come into play.⁶

I concluded as follows:

[93] Mere unfairness, therefore, is not sufficient. Mrs Paewai did not take her responsibilities as testatrix lightly. She gave proper and detailed consideration to her estate. Mrs Paewai clearly and for good reason considered Alma was entitled to a much greater share of the estate than her siblings. That situation should continue except to the extent of altering the shares sufficiently to repair the breach. Counsel for the respondents submitted that, even were the whole estate equally divided amongst all siblings, the provision at approximately $400,000 each would still not constitute proper maintenance and support. The issue is not however the maintenance and support a child might require for the rest of his or her life. Rather the issue is what is proper in the context of the claimants' competing moral claims, given their respective financial need, as well as the size of the estate, the claimant's relationships with Mrs Paewai, and her wishes.

[94] If the six respondents were to receive 15 per cent each, Alma would receive 10 per cent of the estate only. If the estate were equally shared between the siblings, they would each receive approximately 14.28 per cent. These examples demonstrate the difficulty in this case. While the estate is relatively substantial, and the respondents' are all in financial need, the issue is complicated because of the number of children between whom it is to be divided coupled with the need to adjust Mrs Paewai's legacy to the minimum required.

[95] Balancing those factors, in my assessment Alma should receive 40 per cent of the estate with the remaining 60 per cent divided equally between the first to sixth respondents so they receive 10 per cent each. If the property realises $2,800,000, the first to sixth respondents would receive $280,000 each (with Kara's $280,000 share divided equally between Kara's children), and Alma would receive $1,120,000. If the property realises $2,650,000, they would receive $265,000 and $1,060,000 respectively.

Grounds of appeal

[8] The applicants appeal on the basis of a number of alleged errors of fact and law. The following are said to be errors of fact:

(a) That it was not disputed that Mrs Paewai and Nitama were primarily cared for by Alma and her husband on a day-to-day basis.

(b) That Alma and her family provided 11 years of care to Mrs Paewai and Nitima, and that ongoing support took enormous energy from Alma.

(c) That living in the family home and caring for Mrs Paewai and Nitama had prevented Alma from establishing her own household.

(d) That undue weight was placed on the care taken by Mrs Paewai in drafting her will, and the Court failed to give appropriate weight to the fact that Mrs Paewai was mistaken as to significant facts that informed her will.

(e) That Alma incurred significant expenditure in relation to the payment of all outgoings connected to the property at which she lived with Mrs Paewai and Nitama.

(f) That undue weight was placed on Alma’s moral claim when balancing

it against the applicants’ claim for maintenance and support.

[9] As to the alleged errors of law, it is said the Court adopted an incorrect test under s 4 of the Act and/or exercised its discretion incorrectly, in that:

(a) it failed to consider what level of provision would be appropriate to provide for the proper maintenance and support of the applicants in light of their respective financial positions; and

(b) it treated the applicants’ claim for “support” rather than a claim for “maintenance” and thereby concluded a 10 per cent provision was appropriate, consistent with the decision of the Court of Appeal in Williams v Aucutt.⁷

[10] It is also submitted that the outcome of this appeal is important to the applicants, as the difference in outcome between the High Court decision and the

original Family Court award is significant in the context of the applicants’ poor

financial position.

Errors of fact

[11] I consider each alleged error of fact in turn.

[12] The first alleged error is that the Court (wrongly) considered it undisputed that Nitama and Mrs Paewai were cared for by Alma on a day-to-day basis.⁸ The applicants make the point that at various stages of their parents’ lives, the siblings lived in their house and provided care to them. However I did not ignore the evidence that the other children other than Alma for times lived with their parents and provided a degree of support to Mrs Paewai and to Nitama.⁹ I also note that Mrs Paewai received external assistance from outside caregivers.¹⁰ Overall I considered Mrs Paewai was best placed to evaluate the relative contributions of the children and she was clearly in no doubt that Alma’s support entitled her to a significant reward.¹¹

While the applicants may dispute on a granular level the extent to which Nitama and Mrs Paewai were cared for by Alma, and the weight to be given to that care in comparison to the other applicants, it was in my assessment never truly in doubt that Alma provided day-to-day care of Mrs Paewai for the period she was living with them.

[13] The second alleged error is my finding Alma looked after Mrs Paewai for eleven years.¹² It may be correct that Mrs Paewai relied on Alma less in the first six years in comparison to the last five. There was evidence that in the last five years Alma’s support was essential to Mrs Paewai and Nitama. Despite that varying degree of support, I have no doubt that Alma looked after Mrs Paewai and provided significant advantage to her throughout the whole period Alma lived at the house.

_{There is no identifiable error of fact.}

⁸ _{Paewai-Kohe v Paewai, above n 1, at [18].}

⁹ _{At [70].}

¹⁰ _{At [18].}

¹¹ _{At [70].}

¹² At [60].

[14] The third alleged error is my statement that by living at the family home, Alma was prevented from establishing her own household.¹³ The applicants submit there is no evidence Alma ever gave up an opportunity to set up her own household, or move to Australia, by reason of her decision to remain and care for Mrs Paewai and Nitama. It is correct that there is no evidence Alma gave up a specific opportunity. But the point was to demonstrate the possibilities not open to Alma,

were she to receive an opportunity overseas or not, in comparison to her siblings who did in fact go to Australia. The point stands that looking after Mrs Paewai and Nitama took enormous time and energy from Alma and one consequence of that care was that it necessitated her to remain at the house.

[15] The fourth alleged mistaken fact is said to be the undue weight placed on the care taken by Mrs Paewai in drafting her will, and the failure to give appropriate weight to the fact that Mrs Paewai was mistaken as to significant facts that informed her will. The applicants say that it is not possible to brush aside the mistakes and determine whether she would have still have left the bulk of the estate to Alma. Reliance is placed on the Family Court decision, in which the Judge found that the mistakes made by Mrs Paewai “significantly waters down the weight to be given to

her stated reasons”.¹⁴

[16] In many respects this was the point of the appeal. The Family Court dismissed Mrs Paewai’s views in their entirety. However, on appeal, and having regard to the available evidence (including Mrs Paewai’s diary), I considered Mrs Paewai had good reason to leave a large portion of her estate to Alma. The fact that Mrs Paewai was mistaken in a number of respects, such as the ability to subdivide of her property and her understanding of the extent of her children’s financial stability, did not strike at the heart of her reason for giving the bulk of her estate to Alma. In coming to the conclusion I reached, these factual inaccuracies were taken into account in reducing the share of the will bequeathed to Alma. These inaccuracies did not, however, provide sufficient justification to set entirely aside Mrs Paewai’s clear, well-reasoned and justified instruction to reward Alma in her will. It was

_{entirely proper here to give considerable weight to the willmaker’s intentions and the}

¹³ _{At [69].}

¹⁴ Ehau v Wilson, above n 2, [101].

care with which the will was crafted, given the strength of supporting and corrobative evidence.

[17] The fifth alleged error is my finding that Alma made significant payments in relation to the outgoings connected to the property. The applicants say they were not significant, because of the lack of evidence provided by Alma suggesting that her financial position was significantly affected by payment of the portion of bills that were attributable to costs incurred by Mrs Paewai and Alma.

[18] I do not consider there to be anything in this point. Alma performed a vital role in ensuring Mrs Paewai did not have to worry about paying bills and rates and other outgoings on the family home. The final determination I reached did not depend on the precise calculation of those outgoings. In my decision I simply recited the evidence. I did not describe the payments as “significant”. The point misses the broader question of the personal and emotional contributions made to Mrs Paewai and Mrs Paewai’s undoubted appreciation for them.

[19] The last alleged factual error is that this Court is said to have given undue weight to Alma’s moral claim when balancing it against the applicants’ claim for maintenance and support. As this broad assertion relies on proof of the preceding alleged errors of fact, and proof that the errors (if any) are of such importance to justify further litigation, it cannot stand in light of my contrary findings above.

Errors of law

[20] As identified above, there are two alleged errors of law. First, the High Court failed to consider what level of provision would be appropriate to provide proper maintenance and support for the applicants in light of their respective financial positions, and secondly, the High Court treated the applicants’ claim as a claim for “support” rather than “maintenance” and thereby concluded a 10 per cent provision was appropriate.

[21] The applicants submit that the High Court should have first considered the issue of what an adequate provision would have been for the applicants, and then

turned to consider whether that provision needed to be modified based on Alma’s

moral claims against the estate.

[22] The approach adopted is mandated by the case law.¹⁵ That is, to respect the wishes of the testatrix except to the extent of altering the shares sufficiently to repair the breach.

[23] After determining that the Family Court Judge had erred in law, I considered whether the application should have been granted. I assessed the likely financial result under the will, decided it was inadequate,¹⁶ and considered what further provision was necessary in the context of the applicants’ moral claims and financial need.

[24] The decision considered the issue of proper support and maintenance. As identified in my judgment, despite the relatively substantial size of the estate, the number of children meant any equal division of the estate property would result in each receiving no more than approximately 14.28 per cent of the estate. The decision records the applicants’ position that, even were the whole estate equally divided, the resulting provision would still not constitute proper maintenance and

support.¹⁷ It also records the applicants’ wish that, despite the differential between

them in the will, they all be treated equally.¹⁸

[25] I did not settle on the amount of 10 per cent for each of the applicants by reference to the decision of Williams v Aucutt. It must be remembered that there were effectively six challenges to the will. Given the number of Mrs Paewai’s children, it was necessary to consider the impact of altering the percentage of their shares on all of them, including Alma. For example, increasing the applicants’ shares to 15 per cent each would have reduced Alma’s share to ten per cent. However, I was satisfied that, for sound and rational reasons, Mrs Paewai intended to give the bulk of her estate to Alma (approximately 64 per cent under the will). All

_{the children, including Alma, are in financial need. Alma will have no home as a}

¹⁵ _{Henry v Henry, above n 6.}

¹⁶ _{Paewai-Kohe v Paewai, above n 1, at [88].}

¹⁷ _{At [93].}

¹⁸ At [89].

result of my decision which, in contrast to the will, requires the sale of the property in which she resides. The fact my analysis was done by reference to the value of the estate and potential provision under different scenarios demonstrates that consideration was given to the actual provision the applicants would receive. The conservative approach requires any order to be limited to the amount required to repair the breach of moral duty.

[26] In the circumstances, I considered 10 per cent of the estate was sufficient to repair the breach. The result, whereby the applicants will likely each receive over

$265,000, makes adequate provision for the applicants whilst being no more than that. The applicants clearly favour the result of the Family Court decision. The rationale for that decision was, however, plainly wrong.

[27] For those reasons, which reiterate in different wording the reasons provided in my judgment, I consider there to be no error of law.

Result

_{[28] The application for leave is dismissed.}

Thomas J