Ipsofactoj.com: International Cases [2003] Part 4 Case 7 [NZCA]



Auckland City Mission

- vs -





26 MARCH 2002


Richardson P

  1. This family protection appeal is against the judgment of Rodney Hansen J delivered at the High Court at Auckland on 7 February 2001 ordering further provision out of the estate of Eric Clausen Miller in favour of his daughter, Mrs. Inge Barbara Brown ("Inge").


  2. Mr. Miller died on 20 April 1999 aged 80. His marriage had ended in divorce in 1975. There were two children of the marriage, Freda, who died in 1993 without issue, and Inge, who was born on 26 February 1959. She married Mr. Shane Brown in 1984 and they have three children: Christopher, born 24 October 1985; Jessica, born 13 October 1987; and Michael, born 10 January 1993. Inge and the three children are the only persons to whom the testator owed any moral duties in the Family Protection Act sense.


  3. Mr. Miller migrated to New Zealand from Denmark in 1955 with very little savings. He worked hard throughout his life in New Zealand, became a successful businessman and investor and built up substantial assets. His net estate as of the date of death, after allowing for administration and realisation expenses of $162,000, totalled $4.5m. He owned five commercial properties totalling in value $2,585,000, three residential properties (his home $850,000, a holiday house, and a further property) $1,627,000, shares $290,000, cash $127,000 and other minor assets, and his liabilities were only $55,000.

  4. As at the date of hearing in the High Court, 18 December 2000, the net value following the realisation of various assets was $4.6m. The then remaining assets included three properties which were to feature at the High Court hearing, Mr. Miller's home at Cape Horn Road, Auckland, factory premises at Ponsonby, $240,000 (where Inge and her husband carried on their business), and a commercial property at Stoddard Road, Mt Roskill, $1m (devised in trust for the grandchildren), and shares in Epic Holdings Ltd worth $80,000 which had before Mr. Miller's death replaced in a reconstruction shares in a company, Eagle Wire Ltd, which he had left in his will to Inge. There have been some asset and value changes since the hearing in the High Court but they are not of such significance relative to Inge's position as to require comment.


  5. By his last will of 7 June 1996 Mr. Miller made the following bequests:


    For gravesite flowers for himself and his daughter Freda for 10 years following his death the sum of $25,000.


    To his friend Suzanne Walker, $400,000.


    To Michelle Haywood, $50,000.


    To Sifiti Sulusi Tavui, his loyal and trusted employee of 36 years, $250,000 plus a motorcar.


    To Selma Rowse, his housekeeper, his figurines and brass coffee pot.


    To John Land, his nephew, his fishing dingy, gear, motor vehicle and trailer.


    To his daughter Inge, specified shares and investments, furniture, chattels and jewellery and the benefit of his forgiveness of one-half of an outstanding loan of $20,000 which he had made in 1984 to provide a deposit on their first home, and interest.


    To the Cancer Society of New Zealand $500,000.

    His commercial property at Stoddard Road, Auckland, was left in trust for his grandchildren to apply the income for their maintenance, education, advancement or other benefit until the youngest attained 20 and then to transfer the property to them in equal shares.

    The residue of the estate was to be divided as to two-thirds to the Auckland City Mission and one-third to the Salvation Army in New Zealand.

  6. Mr. Miller had had a very close and supportive relationship with Ms Walker (subpara [ii] above) and her daughter Michelle (subpara [iii] above, in many ways in the role of parent for Michelle) for over 23 years and right up to his death.

  7. Turning to the testamentary provision for Inge, the shares in the specified listed companies and investment units were sold by Mr. Miller before his death for some $80,000. The Epic shares ($80,000) had been treated in the affidavits of the trustee and Inge as her property, and the household effects were assessed at $16,700. On that basis Inge received under the will some $110,000 and, had the shares in listed companies and investment units not been earlier sold for some $80,000, she would have received a further $80,000, i.e. $190,000 in all. We should add, however, that the Judge, correctly in our view, treated the Epic shares as part of the residuary estate and we shall do so, too.


  8. Mr. Miller had given Inge and her husband their two-thirds of the shares in House and National Flags Ltd, which was the business the Browns both ran from the Ponsonby factory premises, and in his will Mr. Miller bequeathed his one-third shareholding to Inge. The shares were assessed as at his death as having no value but the business has continued to provide employment for both Inge and her husband.

  9. At the date of Mr. Miller's death Inge and family were living in their house in Mt Roskill, which they later sold for $330,000 leaving them with equity of $158,000 and, by agreement with the executor, moved into Mr. Miller's house which they are renting at $500 per week. Earlier, for some 5 years, they had lived next door to Mr. Miller at Cape Horn Road. While they were ultimately left with $238,000 in equity when they sold that house, they had been obliged to redesign the house and incur considerable extra expense, some $250,000, to meet her father's wishes as to the height of the house relative to his. That clearly caused difficulties for them and in their relationship and Mr. Miller forgave $27,000 of an advance of $80,000 for the purchase of the section as an acknowledgement of those difficulties he caused. It appears that at no time has the balance of the $80,000 been treated as still owing and no doubt the $27,000 formal write off was fixed as the amount that could be forgiven in a period of 12 months without incurring gift duty.

  10. At the date of hearing in the High Court Inge and her husband had some $60,000 on deposit and $60,000 equity in a house they had bought in Epsom for $300,000, two cars worth approximately $20,000, plus Inge's interest under the will. They were receiving $720 per week income ($37,000 per year) from House and National Flags and Family Assistance of $8,000 per year.

  11. There is no suggestion that Inge, her husband, or her children have any health problems or special needs or that there were any health or other concerns in respect of her mother which required consideration. Subsequent to Mr. Miller's death Inge's mother sold her unit clearing $250,000 from the sale and we were advised at the bar that she has recently purchased another unit.

  12. The income from the grandchildren's trust over the 14 years from Mr. Miller's death until the youngest turns 20 is expected to amply meet their educational needs over that period.


  13. While relations between Mr. Miller and his wife remained acrimonious after the divorce there was frequent contact between father and daughters while they were growing up and later in adult life and with the Browns when Inge and her husband were working at House and National Flags. In 1994 Mr. Miller paid for Inge and her children to travel business class with him to Denmark, Hong Kong, and Disneyland. But he was hard working and frugal by nature and did not assist Inge financially to any significant extent beyond what has been mentioned. In the same way he provided mutual support to Ms Walker and Michelle Haywood, but without financial assistance.


  14. Mr. Miller's reasons for his testamentary depositions to Inge and the grandchildren and to the charities as stated to his solicitor, who also knew him well personally, were set out in the affidavit of the solicitor as follows:


    The deceased did not hold a high opinion of his son-in-law Shane Brown. The deceased was particularly hard working, and he often described Shane as "a nine to five guy", which he could not understand. Nor could he understand both Shane and Inge being unsuccessful with the property he gave them, and the business of House and National Flags Limited that he also gave them. He was concerned that whatever provision he made in his will directly for Inge would end up with Shane, and would be wasted also.


    As a result, he intended to provide substantially for their children, his grandchildren, which he saw as providing for Inge also, effectively by removing the need for her to support them financially. He regarded the property at Stoddard Road as being worth over $1 million, and in making his will he specifically directed that the property be held in trust with the income to be applied towards the education and well-being of the children until the youngest reached twenty years of age. He intended that they could then sell the property, and hoped that they would use the capital to set each of them up in their own business.




    The deceased himself chose the charities referred to in his will. He singled out the Cancer Society because his daughter had died from cancer, and the Auckland City Mission and the Salvation Army as particularly worthy because of their general support for the needy, and because he considered that they, unlike other charities, did not waste money on administration. Also, he was impressed by the service of Auckland City Mission in providing meals for the needy.


  15. We should add that it was common ground, at least some time before the hearing in the High Court, that Mr. Miller had breached his moral duty to Inge under the Family Protection Act. The only issues were what further provision from the father's estate was required to remedy that breach and the incidence of that further provision. Nevertheless the affidavits and exhibits ran to over 230 pages and appear from the judgment to have led to an inquest into the detail of family life and consideration of a host of incidents, apparently assumed to be relevant, but not ordinarily regarded as appropriate for family protection cases. As Wild CJ observed in Re Meier (deceased) [1976] 1 NZLR 257, 258:

    Though conduct and family relationships may in some cases well have relevance I think it appropriate in this case to recall that from the early days of the family protection jurisdiction the court has disapproved attempts by litigants to blacken each other's character - See, for example, Hoffmann v Hoffmann (1909) 29 NZLR 425, 428, per Sim J. Allegations and counter-allegations about petty incidents which occurred years before the date of death are generally unlikely to advance anyone's case and when, as in this case, it is sought to support them by affidavits from neighbours they may merely deepen rifts in the family and dishonour the memory of the testator. Counsel and solicitors bear a responsibility to their clients as well as the court in this respect.

    See, too, Williams v Aucutt para [71] where Blanchard J concluded his discussion of that topic with the comment: "It is a comparatively rare case where denigrating the character and motives of a family member will assist the cause of another in the eyes of a Judge trying a family protection proceeding."


  16. The Judge recorded the acknowledgement by all counsel that there had been a breach by the testator of his moral duty to provide for his daughter; that the issues which were the focus of argument were the amount of the award necessary to repair the breach and whether or not any part of the deceased's estate should be excluded from the incidence of the order in favour of Inge; that she sought an award of one-half of the estate and submitted that the charitable beneficiaries should bear the incidence, her position being generally supported by counsel for the grandchildren; that the three charities adopted a common position that an award of $650,000 was sufficient to repair the breach of moral duty and argued that the incidence of the payment should fall rateably upon the whole estate; and that counsel for the other principal beneficiaries were concerned to preserve the provision made for their clients and opposed any suggestion that the award for Inge should fall rateably upon the whole estate.

  17. Turning to the applicable legal principles, the Judge accepted the submission of Mr. Patterson for Inge that the recent decision of this court in Williams v Aucutt [2000] 2 NZLR 479 should not be read as authority for the proposition that claims by adult children should be viewed more conservatively than in the past. Rather, the Court was emphasising that the need for further provision should not turn on abstract notions of fairness or the ideal of equality but on principles laid down in cases of enduring authority.

  18. He went on to discuss the authorities in relation to an inquiry into breach, which was common ground, and then noted that in size the estate clearly came within the second category identified in Re Allen (deceased) [1922] NZLR 218, 222, where the testator had failed to make out of the abundance of his resources a provision sufficient for the proper maintenance and support of the claimant, and where the court was therefore able, he said, to consider the absolute scope and limit of the testator's moral duty, unconstrained by competing claims.

  19. The Judge reviewed Inge's financial position and the provision made for her. She was, the Judge found, a good and dutiful daughter. He saw it as greatly to her credit that, despite the rancour of her parents' separation, she maintained a close relationship with her father which she was able to sustain through difficult times. He was a man of many good qualities but, to family members in particular, he was often demanding, domineering, rude and, especially in later years, cantankerous.

  20. There was, the Judge continued, another side to Mr. Miller's character. Mrs. Walker and Michelle Haywood, who referred in glowing terms to his compassion, consideration and generosity, seemed to have been spared the irascibility and meanness of spirit which blighted his relationships with family members.

  21. The Judge noted that the financial demands of parenthood on Inge and her husband will be reduced by the provision made by the deceased for his grandchildren. But, he said, she had "an independent right to be freed from the shackles of economic necessity". He also accepted Mr. Patterson's submission that a wise and just testator would have some regard for her moral obligation to support her mother in her old age, that need being largely the product of a division of matrimonial property which was grossly unjust by contemporary standards.

  22. The Judge concluded that Mr. Miller never fully discharged his duty as a parent to her, either in childhood or adulthood. He denied himself the opportunity of making up for the neglect of a lifetime, primarily it seemed, as a result of his antagonism towards her husband.

  23. Turning to the charities, the Judge noted that the testator left almost $3m or some 60% of his estate to charities and that, there being no competing moral claims from the charities, the court was unconstrained in giving full effect to the moral duty owed by the testator, citing Pulleng v Public Trustee [1922] NZLR 1022 and Collins v Public Trustee [1927] NZLR 746.

  24. The Judge remarked that, unusually, the charities played an active role in the proceeding and argued forcefully that further provision should not exceed $650,000. Elsewhere he compared the legacy to the City Mission with the total donations it received annually and with its annual income, commenting on the limited provision Mr. Miller had made for the charities in his lifetime; observed that the bequest to the Cancer Society was directly associated with Freda's death from cancer and, he inferred, was a gesture of both remorse and penitence on Mr. Miller's part; and he noted Mr. Miller's lack of any particular connection with the other charities.

  25. Turning to the quantum of the award, the Judge concluded he would not be justified in fixing an award by reference to a particular percentage of the estate. The amount required to repair a breach of moral duty was to be determined according to all the circumstances of the particular case, including the size of the estate and the financial, family and the moral and ethical considerations which would have influenced a wise and just testator in the position of Mr. Miller. These considerations would have included his daughter's loyalty and devotion to him despite his often shabby treatment of her, the emotional and financial deprivation she had experienced as a result of his neglect of his parental duties, as well as her present and likely future needs.

  26. A wise and just testator would have wanted to ensure that his daughter and her family were adequately housed and, having regard to their association with Cape Horn Road, could well see it as appropriate to devise them the property as well as its contents. As well, the wise and just testator would have wanted to secure the business premises for his daughter free of the need to pay rents at commercial levels, would have foregiven the full amount of indebtedness and would also have sought to secure his daughter against the exigencies of life and provide an income independent of the business, assessing that figure at $500,000. The value of the additional provision calculated in that way would be $1.6m. Awarding Inge that sum, the Judge left it to her and the trustee to negotiate for the acquisition of particular assets.

  27. Finally, the Judge concluded that the award should be borne by the residuary estate. It was apparent that the testator had given careful thought to the specific bequests. There was no evidence that he knew the value of his residual estate, which the Judge considered had undoubtedly increased after the will was made, and which, the Judge said, he suspected ended up much larger than the testator foresaw at the time he made his will.


  28. Counsel for both appellants, the Auckland City Mission and the Salvation Army, submitted that the award of $1.6m was excessive and plainly wrong. It went well beyond what was required to remedy any breach of moral duty. As well, the Judge erred in wrongly assuming that the testator did not know the value of his own estate; in failing to give adequate weight to contemporary social attitudes to a testator's duties towards adult children (Williams v Aucutt); in failing to give adequate weight to the testator's intention and, in particular, to the benefit to his daughter through the provision to his grandchildren; in finding that the testator had imposed on his daughter "a lifetime of neglect" and that she had a right "to be freed from the shackles of economic necessity"; in finding that he should have treated his daughter "generously"; by straying into an assessment of comparative fairness; by effectively rewriting the will; and by compartmentalising the basis of the award, in focussing on the father's house, business premises and additional contingency fund.

  29. Mr. Patterson, for Inge, submitted that the Judge had not erred in principle, that he was entitled to reach the decision he did, and that this court should not interfere with the exercise of the Judge's discretion under the statute. Counsel submitted that the ratio in Williams v Aucutt did not apply generally to adult children, but rather was confined to claims by adult children not in need of maintenance but relying on a claim for support and that, if support is to be limited to non-economic factors of a limited nature, as described in Williams v Aucutt (para [52]), then maintenance needs to include many, if not most, of the factors encompassed in the composite expression "maintenance and support" in the cases prior to Williams v Aucutt where the courts had moved progressively to a more liberal interpretation of the Act relative to claims by adult children.

  30. Mr. Patterson supported the category by category approach taken by the Judge in arriving at the quantum of the award. It was proper that the testator's house should be available to Inge, that the business premises should be vested in her so that the business could carry on with a better prospect for its future, and that a significant additional capital sum should be provided to deal with the contingencies of life. The expressions "freed from the shackles of economic necessity", making up for "the neglect of a lifetime", and the Judge's use of "generously" were consistent with the response a wise and just testator could be expected to take in this case. And the comparison the Judge made between provision for Inge and that for other specific beneficiaries simply recognised that Mr. Miller had lived his life in compartments and that the recognition accorded to the position of Mr. Tavui, Ms Walker and her daughter, and the Cancer Society, could properly be contrasted with the testator's failure to recognise the much greater claim of Inge.

  31. Finally, as to the stance taken by the charities, Mr. Patterson submitted that for the past 80 years it appears that the law has been regarded as settled by Pulleng v Public Trustee and that charities have generally adopted an attitude of abiding the decision of the court while, where appropriate, making submissions for the benefit of the court; and that the litigious approach taken by the charities in this case, particularly where the charities could not claim to be entitled to any special recognition by the testator, was not appropriate.


  32. For reasons we can set out quite shortly, we are satisfied that the Judge erred in principle and in his conclusions and in the result the award in favour of Inge was far in excess of what was required to remedy the breach of his duty under the Family Protection Act s4 to make adequate provision from his estate for her proper maintenance and support after his death.

  33. First, Williams v Aucutt is not to be read and applied in the limited way explained by the Judge accepting Mr. Patterson's submission (para [17] above). The plurality judgment (in which Blanchard J concurred) referred to pointers to concerns that some orders in recent years may have been out of line with current social attitudes to testamentary freedom relative to claims by adult children (para [45]). One of those pointers was the survey by Nicola S Peart discussed at para [47], citing Ms Peart's conclusions that in larger estates where the testator is able to satisfy all moral claims owed, the courts generally seem to award between 12.5 per cent and 20 per cent of an estate to a dutiful child who is not in financial need and that the Act is now more often used to recognise the special bond between parent and child which requires parents to leave a portion of their estate to their children regardless of age or need. Blanchard J observed that in the last few decades an expansive view appears to have been taken of the power of the court to refashion the will of a deceased in order to fulfil what has been regarded as his or her moral duty and that there is substance in the criticisms of the way in which courts sometimes apply the present law. It is, he said, to be remembered that the court is not authorised to rewrite a will merely because it may be perceived as being unfair to a family member, and it is not for a beneficiary to have to justify the share which has been given (para [68]).

  34. Then, as to the test to be applied, the Williams v Aucutt judgment continued (para [52]):

    The test is whether adequate provision has been made for the proper maintenance and support of the claimant. "Support" is an additional and wider term than "maintenance". In using the composite expression, and requiring "proper" maintenance and support, the legislation recognises that a broader approach is required and the authorities referred to establish that moral and ethical considerations are to be taken into account in determining the scope of the duty. "Support" is used in its wider dictionary sense of "sustaining, providing comfort". 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. Just what provision will constitute proper support in this latter respect is a matter of judgment in all the circumstances of the particular case.

  35. In many cases the question as to whether adequate provision has been made for proper maintenance and support is likely to involve a compendious inquiry into the combined elements of the composite expression. It is where it is accepted that the claimant has adequate provision from his or her own resources and the existing testamentary provision for the proper maintenance of the claimant that the inquiry will focus on the adequacy of the provision for proper support in the circumstances.

  36. Second, it is not clear from the judgment that when he came to settle on the amount of the award the Judge had in mind that the order had to be limited to the amount required to repair the breach of moral duty to Inge. As the court emphasised in Little v Angus [1981] 1 NZLR 126, 127, cited in Williams v Aucutt at para [35], "Only to that extend is the will to be disturbed." To like effect, Blanchard J said at para [70], "It is not for the Court to be generous with the testator's property beyond ordering such provision as is sufficient to repair any breach of moral duty. Beyond that point the testator's wishes should prevail even if the individual Judge might, sitting in the testator's armchair, have seen the matter differently."

  37. Reinforcing the concern we have just expressed, we consider that the Judge's category by category assessment and his measure of housing for Inge's family and rent-free premises to support their business is tantamount to rewriting the will in a situation where it is apparent from the other testamentary dispositions that the testator deliberately decided not to devise those properties to Inge or anyone else. He intended that they be sold and the proceeds form part of his estate to meet his testamentary dispositions. Further, the approach the Judge took based on those property values led to a very high award.

  38. Next, and contrary to the Judge's conclusion (para [27] above), we see nothing in the evidence to suggest that Mr. Miller, careful businessman and investor who was in apparent good health and attending his business only days before his death, was not aware of the size of his estate then - and three years earlier when he made his will - or that the estate increased significantly in value during that time.

  39. Turning to the charities, in the observation he made relative to the size of the legacy to the City Mission and what he drew from Mr. Miller's reasons for benefitting the Cancer Society, and lack of any particular connection with the other charities (para [24] above), the Judge appears to have overlooked that it is not for a beneficiary to have to justify the share which has been given (Williams v Aucutt, para [33] above) and that where the provision is sufficient to repair any breach of moral duty, the testator's wishes should prevail (para [36] above). In this regard it is clear from the reasons he gave to his solicitor that Mr. Miller did not act arbitrarily in selecting these charities.

  40. As well, charities such as the Cancer Society, the City Mission and the Salvation Army are regarded under our laws as serving the public good. In contemporary less closely knit communities affected by the economic and social changes of the last 15 years, charities may properly be regarded by altruistic testators as having an enhanced role. It is not unreasonable that the charities draw the attention of the court to their work and the benefits for the public which they can achieve with the support of substantial donations.

  41. On this general topic, in Pulleng v Public Trustee (para [23] above) Reed J said at p1029: "A bequest to charity is very fitting in the case of a testator who has ample means and can make such bequest without inflicting hardship on his own family". And in Collins v Public Trustee (para [23] above), at p751, Skerrett CJ said that it was right to say that counsel for the Masonic Lodge had taken a proper attitude in submitting that adequate provision should be made for the widow and that the son, having received a good education, was sufficiently provided for and ought not to be granted further relief. To like effect, in Re Hawke [1935] GLR 700, 702, Callan J observed that it was not helpful to the court to have a one-sided argument and that there was no inconsistency on the part of the charity in submitting that the rights of the family claimants under the statute should be measured in a generous, not a niggardly fashion, and at the same time offering certain observations by way of testing and criticising the claims made for the children.

  42. We can see no basis for criticising the stance taken by the charities in this case. In some circumstances it may be appropriate for the charities simply to abide the decision of the court and provide relevant information as to the testator's connection with and intentions in benefitting the charity. One such case is where competing claimants can be expected to test the respective claims. In other circumstances, as here, where there is no other beneficiary defending the will, and where the trustee was also the accountant for the Browns' business, it is, in our view, entirely proper to support the will, test the claims, and while perhaps formally submitting to the order of the court, respectfully suggest what, if any, further provision should be made for the claimants.

  43. Finally, we are concerned that the number and strength of the Judge's comments denigratory of the testator which we have noted could well be seen to have led to a higher award than could be justified by a clear focus on the amount required to repair the acknowledged breach of moral duty.

  44. We turn to the difficult question of the amount required to remedy the failure to make adequate provision for the proper maintenance and support of Inge in the particular circumstances.

  45. She and her family are in good health and have no special needs. As at Mr. Miller's death Inge and her family were living in their own house which they later sold for $330,000, leaving them an equity of $158,000, and they had a modest income for a family of five (leaving aside the education expenses of the children provided for under the will) of $37,000 from the business. Under the will Inge received the personal effects and the benefit of the forgiveness of one-half of the long-standing $20,000 loan and interest and remains liable to repay the remaining one half. We consider a wise and just testator would have ensured that they had the means to acquire a more substantial house for the family debt free and to clear the loan, together with a sum to supplement their business income and provide a reasonably substantial contingency fund. In the result we consider that Mr. Miller would have repaired the breach and discharged his moral duty if he had also bequeathed Inge a legacy of $850,000 plus an amount sufficient to clear the loan, with the award being borne by the residuary estate. On that approach the total provision for her on his death would amount to a little under 20% of his net estate.

  46. The appeal is allowed and the award made in the High Court is reduced accordingly. The costs orders made in the High Court will stand and there will be no orders as to costs of the appeal.


Re Meier (deceased) [1976] 1 NZLR 257; Williams v Aucutt [2000] 2 NZLR 479; Re Allen (deceased) [1922] NZLR 218; Pulleng v Public Trustee [1922] NZLR 1022; Collins v Public Trustee [1927] NZLR 746; Little v Angus [1981] 1 NZLR 126; Re Hawke [1935] GLR 700


DS Alderslade for First Appellant (instructed by Chapman Tripp Sheffield Young, Auckland)

MD O'Brien and GMG Joe for Second Appellant (instructed by Bell Gully, Wellington)

WM Patterson and PJ Bull for Respondents (instructed by Minter Ellison Rudd Watts, Auckland)

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