Vugler [2019] NZHC 1408 (19 June 2019)

Last Updated: 1 July 2019

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-0375 [2019] NZHC 1408

IN THE MATTER OF	the Estate of Marie Josephine Vugler
BETWEEN	THE ESTATE OF MARIE JOSEPHINE VUGLER by its executors and trustees SHANE RODNEY VUGLER and MICHAEL WALMSLEY Plaintiff

Hearing:	19 June 2019
Appearances:	D G Hayes for the plaintiffs
Judgment:	19 June 2019

ORAL JUDGMENT OF JAGOSE J

Counsel/Solicitor:

David Hayes, Barrister, Hamilton Hunwick Law Limited, Hamilton

Re Vugler [2019] NZHC 1408 [19 June 2019]

[1] The plaintiffs, as executors and trustees of the estate of Marie Josephine Vugler, seek judgment by default on their claim for directions as to the treatment of a net $249,000 paid by Ms Vugler to one of her children, after providing in her will the residue of her estate, presently amounting to some $880,000, was to be divided equally between her children.

[2] The claim is brought wholly within the Court’s equitable jurisdiction, to determine “a claim to an entitlement as a beneficiary under a will”, and for “the giving of directions to persons in their capacities as executors ... [or] trustees ... to do ... a particular act”.¹

[3] All children have been served with the claim; none formally opposes it. There also appears to be some dispute between the children in relation to a family trust (inferentially, established by their parents). That issue does not arise for determination on the present claim.

Background

[4] Ms Vugler died on 19 June 2015, leaving a will dated 24 December 2012, of which probate was obtained on 6 October 2015. After leaving gifts to particular of her children (principally, a ring to each of three of her six daughters) – and after payment of debts, liabilities and expenses – the will relevantly provided for division and payment of the residue “equally among my children as shall be living at my death and if more than one as tenants in common in equal shares”.

[5] Ms Vugler had seven children. Between 1 October 2013 and 15 June 2015, some 25 payments totalling $273,500 were made from Ms Vugler’s bank accounts to that of one of her daughters, Helen Mary Erceg. Ms Erceg was an authorised signatory to her mother’s bank accounts since 19 June 2013 (replacing her brother, Shane Rodney Vugler, one of the plaintiffs as executor and trustee of his mother’s estate). As such Ms Erceg had authority to operate her mother’s accounts. Between 7 January and 23 May 2014, Ms Erceg also made eleven payments totalling $24,500 to Ms Vugler.

¹ High Court Rules 2016, r 18.1(a)(i) and (v).

[6] The payments are set out in the table below:

Date	To Ms Erceg	To Ms Vugler
1 October 2013	$2,000
8 November 2013	$190,000
13 December 2013	$50,000
7 January 2014		$1,000
23 January 2014		$1,000
7 February 2014		$1,000
17 February 2014		$2,000
24 February 2014		$3,000
3 March 2014		$2,000
19 March 2014		$3,000
1 April 2014		$6,500
11 April 2014		$4,000
15 May 2014		$2,000
23 May 2014		$1,000
9 June 2014	$1,000
25 June 2014	$1,000
21 July 2014	$4,000
21 August 2014	$2,000
4 September 2014	$2,000
2 October 2014	$2,000
9 October 2014	$2,000
29 October 2014	$1,000
30 October 2014	$500
12 November 2014	$2,000
27 November 2014	$1,000
17 December 2014	$2,000
7 January 2015	$2,000
29 January 2015	$1,000
18 February 2015	$1,000
4 March 2015	$1,000
11 March 2015	$1,000
8 April 2015	$1,000
22 April 2015	$1,000
13 May 2015	$1,000
3 June 2015	$1,000
15 June 2015	$1,000
	$273,500	$24,500

[7] In correspondence with the executors of Ms Vugler’s estate, Ms Erceg explained the $190,000 “was a gift”; the $50,000 “was for wage arrears”; and subsequent payments were “my wages ... for the two and [a] half year period, that I cared for Marie”. Ms Erceg explained she was Ms Vugler’s “primary caregiver”:

I ensured that Marie had 24/7 quality care, until she passed away at 5am on Friday 19^th June 2015, in her own home and surroundings, as she had always wished, with me at her side.

There is some indication of an earlier dispute over payment of Mrs Vugler’s caregivers (including another daughter, Ann Marie Vugler), for whom Ms Erceg says she substituted.

[8] Ms Erceg says her care of Ms Vugler extended to meeting certain of her mother’s expenses, including on maintenance and upkeep of her house and car, by ‘repayment’ of the $24,500 to keep her mother in funds for such purposes. But, if that is so, there is no explanation for Ms Vugler’s return to solvency to make the subsequent payments to Ms Erceg.

[9] Ms Erceg’s explanation was in part incentivised by her receipt of correspondence from solicitors for the executors of Ms Vugler’s estate (little of which was in evidence before me),² in which they appear to have proposed she agree the money she received was an advance on her share of the estate, or loans for repayment. Notwithstanding her characterisations of the payments as a gift and wages, Ms Erceg said she would agree to $50,000, less her “repayments of $24,500”, being deducted from her share of her mother’s estate.

[10] As to the $190,000 ‘gift’, Ms Erceg said it was “for [a] tram”, a “retreat”, at Tapu on the Coromandel peninsula. Ms Erceg said Ms Vugler had taken her sister, Paula Louise Ghent, and her husband, Bruce Ghent, “to Tapu to see the tram she had brought me, when they visited her in April/May 2014”. The executors’ solicitors put that to Ms Ghent, who responded:

² My 18 June 2019 minute observed:

1. I am scheduled to hear this undefended matter, on which the plaintiffs seek judgment by default, at a formal proof hearing set down for tomorrow, 19 June 2019.
2. HCR 15.9(4) requires the plaintiffs “before or at the formal proof hearing [to] file affidavit evidence establishing, to a Judge’s satisfaction, each cause of action relied on”.
3. I apprehend the essence of the plaintiffs’ claim is the equitable doctrine of satisfaction, under which there is a presumption advances made to children after provision for their legacy are in satisfaction of the legacy. The presumption is open to being rebutted by evidence of the will-maker’s contrary intention.
4. The affidavit evidence presently filed is skeletal. In particular, while Ms Erceg’s 15 and 30 October 2018 emails to the executors provides some basis for rebuttal, almost none of the correspondence referred to by her is in evidence. It also is unclear if “the file” referred to at paragraph 12 of Mr Hunwick’s affidavit sworn 10 May 2019 may be thought to contain other relevant information.
5. If comprehensive affidavit evidence is not to be filed at the hearing, counsel may wish to reflect if judgment by default is the desirable course for resolution of their claim.

The plaintiffs did not file any additional evidence at the hearing but wished nonetheless to proceed.

When my husband and I were home in April/May 2014 Helen took me, my husband and Mum down to Tapu to see her tram. During that visit I wasn’t informed either by my Mum or Helen of what the financial arrangement to purchase this tram was. I was under the impression that Helen and her sons had bought the tram to go fishing there at the weekends. I was aware that Mum knew about the tram and had been there before.

The law

[11] The equitable doctrine of ‘satisfaction’ arises in circumstances including “where a will-maker leaves a legacy to a child by will and later makes an advancement during his or her life, but leaves the legacy unrevoked”.³ A presumption arises against the child taking ‘double portions’ – ie, the advance and the legacy – as being contrary to the will-maker’s intentions and therefore not allowed unless a clear contrary intention is shown.⁴ But the presumption traditionally applied to large sums of money paid without explanation,⁵ and not smaller sums or money paid as an allowance.⁶ And, as a presumption, it stands to be rebutted, although “equity is said to lean in favour of satisfaction”.⁷

Discussion

[12] On the slim evidence before me, but recognising Ms Erceg has not filed any defence, I find the $190,000 was an advance engaging the presumption of satisfaction. There is insufficient evidence to rebut it. There certainly is no evidence of Ms Vugler’s clear contrary intention the $190,000 should be a standalone gift. The very best to be said is Ms Vugler was aware of the money’s application to acquire the tram.

[13] In my preliminary view, the $50,000 was a loan, partially repaid, and the other smaller payments do not engage the presumption. But, so far as the relief sought by the plaintiffs is concerned, I do not need to, and therefore do not, make those latter findings.

3. Lindsay Breach Nevill’s Law of Trusts, Wills and Administration (13^th ed, LexisNexis, Wellington, 2019) at 477.
4. See Re Turner’s Will Trusts [1968] 1 All ER 321 (Ch) at 323; In re Newton King (deceased) [1953] NZLR 244 (SC) at 248; Pohio v New Zealand Guardian Trust Company Ltd [1994] DCR 874 at 880.

⁵ Leighton v Leighton (1874) LR 18 Eq 458 at 472.

⁶ Suisse v Lord Lowther [1843] EngR 451; (1843) 2 Hare 424 at 434, 67 ER 173 at 179.

⁷ Breach, above n 3, at 477.

[14] If Ms Erceg’s share of her mother’s estate does not exceed $190,000, it presumptively would be accounted for by that advance. Even including the net payments made to Ms Erceg from Ms Vugler’s account, a one-seventh division of Ms Vugler’s estate still would only be minorly in excess of $160,000.

Result

[15] I therefore direct the executors and trustees of Ms Vugler’s estate:

(a) in paying and dividing the residue of the estate equally among her children in accordance with her will, are to treat the payment of
$190,000 to Ms Erceg on 8 November 2013 as an advance in satisfaction to that amount of Ms Erceg’s legacy under the will; and

(b) are to have their actual and reasonable expenses of administration out of the estate, as provided at the will’s clause 3.2.1.




—Jagose J