Under the Family Protection Act 1955, various categories of family members including wives, husbands, de facto partners, children, grandchildren and parents are able to bring claims against the estate of a deceased family member for further provision in certain circumstances. This applies whether the claimant has been completely excluded or simply left an inadequate provision that they believe needs to be challenged.
A successful claim will involve consideration of the following issues:
(a) whether the deceased person owed a moral duty to the claimant to make adequate provision for their “proper maintenance and support” and whether they breached that duty?
(b) If so, what monetary award is necessary to be made to repair that breach of duty?
Is there a moral duty?
Regarding the phrase “proper maintenance and support”, the Court said has said that “Support” is used in its wider dictionary sense of “sustaining, providing comfort” and that a child’s path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased. Thus, proper support means more than merely providing financial support.
It is not uncommon for parents to divide their estate differently between different adult children. It is considered that there is no presumption of equal treatment between adult children. Nor does the court rewrite a will merely because it might be perceived to be unfair.
Every fact situation is different and good legal advice should consider a range of decisions that may apply to your case.
A couple of recent examples include the following:
a) In Cartwright and another v Joseph and others,[1] a father had been estranged from one of his two daughter for many years and completely excluded her and her sister from his $4 million estate. There had been a lack of economic support for his daughters growing up, but the daughters had nevertheless done well with their lives and both were in reasonably stable financial positions. Although it was accepted by the defendant in the case that there was a breach of moral duty, the court nevertheless found there was a breach of moral duty, agreeing that a wise and just testator in the deceased’s position would have reflected on his relationship with his daughters, put to one side his anger and resentment at them and made provision for them. In that case, the main asset in the estate was a property worth nearly $4 million. The Court made an award of 10% of the estate property in favour of each of the daughters. The other competing claimant there was the deceased’s second wife.
b) AB v RT[2] was another case where an applicant was virtually completely excluded. In that case, a husband and wife had two children, the applicant and a son who predeceased them. Both parents eventually died themselves and the applicant was effectively excluded entirely, receiving only $25,000. The estate was worth $2.4 million. In that case, there was also estrangement between the applicant and her parents. It was alleged that her father had been violent, with her mother under the complete control of her father. The applicant was subject to very controlling behaviour and was often beaten for minor transgressions or no reason at all. There were considerable factual disputes about this version of events and support for both versions of events in the affidavits. The court found that a just testator would not have effectively shut out the plaintiff on account of estrangement from such a long time ago.
One of the factors that is relevant in establishing whether or not there is a duty or a breach is whether there has been any “disentitling behaviour”. This is behaviour undertaken by claimant that would be in the category of being so bad that it disentitled any claim. This would include for example doing something to cause a period of estrangement over many years, and undertaking actions that no reasonable child would undertake towards their parent.
What sum of money is appropriate to remedy the breach?
Only monetary provision necessary and sufficient to remedy the breach is required. The court does not rewrite a will merely because of perceived unfairness. The question is what sum is required to give adequate provision for proper maintenance and support.
In the Cartwright decision I refer to above, the judge referred to a study in which it was found that in respect of adult children, claims much above the 10% mark cannot be assumed and that if the estate is large and the child is not in financial need then between 12.5 and 20% is available. The judge commented that those conclusions however are made in the context of the widely different circumstances of Family Protection cases and that these observations were little more than a comparative yardstick. His Honour referred to other authority where the court had noted that awards should not be unduly generous. Nor should they be unduly niggardly, particularly where the estate is large and it is not necessary to try and satisfy a number of deserving recipients from an inadequate estate.
The outcomes of recent cases have affirmed the Court’s (mainly) conservative approach but there are cases where Claimants have achieved good results. An example of a selection of some of the approaches is as follows:
i) Williams v Auckutt [2000] 2 NZLR 479 (leading Court of Appeal case) The estate was valued at $920k. One daughter received assets worth $870k, and the other only $50k. The daughter who had only been left $50k was financially far better off than the other daughter. She was eventually awarded around 10% of the estate, so only a small increase. This case is often referred to and relied on as a leading case in the area and signalled a clear conservatism towards claims by adult children.
ii) In Ormsby v Van Selm [2015] NZHC 2822, the son of the deceased received $2.59 million of assets (93% of the estate). The two daughters received 3.2% each. The daughter who brought the claim had had a dreadful upbringing. When she was born, she was placed in an orphanage (by her own parents!). After later being taken back to the family farm, the deceased showed little or no maternal affection towards her. The deceased worked as a nurse and was often absent from the family. The plaintiff’s father was a compulsive gambler who fathered eight children out of wedlock. Growing up, the plaintiff oversaw running the household despite her traumatic upbringing. It was under these circumstances that the High Court held it proper for the estate to be distributed in a more equal manner.
The Court awarded her 30% of the estate and the other daughter got 25%. This was a very generous award in my view and the approach taken by the Court is one which might not be taken by other Judges. This is because although the Court is not allowed to rewrite wills to equalise the position between beneficiaries, this was effectively what the Court did in that case.
iii) Ashworth v Lambie [2012] NZHC 1110, where the deceased had two daughters and one son. The deceased and his wife, whilst alive, had arranged for the gradual transfer of a family farm and farming assets to their son. Under the will his remaining assets totalling about $900,000 were split equally between the three siblings. The son had worked his entire adult life on the farm, leaving school aged 17 years. He contributed significantly to improvements on the farm. Despite the son effectively acquiring the farm property worth about $10 million, compared to the daughters’ $300,000, the Court rejected the daughters’ claims. The Court said however that the decision gave weight to the clear intention of the parents during their lives for the farm to pass to the son and recognised that the $300,000 received under the deceased’s will by each of the financially stable adult daughters was an adequate provision under the Act.
iv) In Martin v Finlayson, the family court found that the brother who had been favoured under the will (he was given a ten-year life interest in the only property owned by the estate) had already received considerable gifting (gifts and benefits conferred during the lifetime of the deceased). The will was accordingly varied. The decision was overturned on appeal however because the High Court found that providing for that ten-year interest was something a wise and just testator could do. Therefore, this was not a breach of the deceased’s moral duty to her other children, none of whom had the equivalent financial needs of the brother.
v) Talbot v Talbot [2016] NZHC 2382, a case with similar facts to Ashworth v Lambie. The son was left about $4.5million in assets and the two daughters about $1million each. The daughter who brought the claim was not wealthy, but she was certainly in a healthy financial position. The Court would not disturb the will.
The foregoing advice is
generic and my advice on your individual situation will differ depending on the
facts. In my experience, no one situation is exactly the same and every
scenario needs to be individually considered.
