Leading Cases on the Property Relationships Act 1976 

Leading Cases in New Zealand on the Family Protection Act

On Section 88 “Serious injustice”

 

Public Trust v Whyman [2005] 2 NZLR 696

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The leading case on Section 88 of the Family Protection Act is Public Trust v Whyman where the Court of Appeal said that a “serious injustice” test can be applied directly: there is no need to put a gloss on words. It is important to recognise that the “serious injustice” will always be to a person other than the surviving spouse or partner. The primary reason for allowing claims by a personal representative was, presumably, to address situations of the type presented by that case, where the children would seem to have a substantial claim under the FPA. Accordingly, it is sensible to apply the serious injustice test in such a way to facilitate the making of claims in such circumstances.

 

Williams v Aucutt [2000] 2 NZLR 479

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In Williams v Aucutt, a five-judge Court of Appeal invented the notion that a wealthy claimant ought nevertheless to be awarded moneys to recognise what I will call that person’s “membership of the family” or something of that sort. In reliance on that decision, there has been a widespread acceptance that a spouse who is not in financial need should get 10%, or perhaps 20% or some other unpredictable percentage of an estate.

 

Horne v Public Trust CIV -2010-442-44 HC Nelson [2010]

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In Public Trust v Horne, following Whyman, the High Court considered the appropriate test to be that if a Court considered an applicant had a reasonably arguable claim FPA claim, then it is likely to be a serious injustice to prevent such a claim being made by refusing leave to bring PRA proceedings. In other cases such as Kennedy v Kennedy [2017] NZFL 149 (HC) at [19] the test has been expressed as credible.

 

Waite v Waite [2023] NZFLR 728

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In Waite v Waite the Court refused to grant leave. There was no serious injustice. The applicant had no financial need or other special circumstances, and the testator and his surviving spouse had intended to own properties as joint tenants in circumstances where the testator knew his primary obligation was to his wife, the wife had contributed substantially to the relationship property, and the wife was of an advanced age and required the asset pool to live on until her passing. The fact that the applicant received nothing under the Will, as all assets transferred by survivorship, it did not result in a serious injustice.

 

 

 

Moral Obligation

 

Prestidge v Leach & Black, Wellington CP 59/92, 23.2.96 

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A man had three children, David, Kristal and Stefan and left nothing to Kristal and Stefan in his Will. At the time of the trial in 1996 Kristal was 26 years old and Stefan was 24 years old. 

The father got on well with his son David who was cared for in the Will. The father's Estate was worth about $1m. The family home was left to the wife and to David. 

The father had cut Kristal and Stefan off for perceived slights. 

The trial Judge gave $100,000 to each of Kristal and Stefan, saying that this was what a "just and wise testator" would do. Neither of them had any money. One was at university and the other was working as a barman to pay off his student loan. 

The father had included all three children in Wills that were made in 1975, 1982, 1986 and 1988 (the 1988 Will was made two years before the final Will in which they got nothing). 

The Judge said that "fathers and mothers must make allowances for teenagers' inadequacies and immaturity.” 

 

Matthews v Phochai [2020] NZHC 3455, 18.12.20 

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Mr Matthews began a defacto relationship with Ms Phochai at a time when he was 60 and she was 44. They lived together until he died in 2016 at the age of 71. They had both been married before and signed a s 21 Agreement by which they would retain the assets that they owned at the time of getting together as their separate property. They also agreed that the incomes they earned while living together were to be their separate property. 

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Mr Matthews left her nothing in his Will. A Family Court Judge awarded her $1m from his Estate of about $3m and the High Court reduced that sum to $750,000. 

The woman had assets that were worth about $217,000. 

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Two children received nothing under Mr Matthews' Will and the Family Court Judge awarded them $570,000 and $200,000. There was no appeal to the High Court from that decision. The two children of Mr Matthews' first marriage were Gina a daughter who lives in Australia with her family, and Mark who is single and who lives in Tauranga in supported accommodation. He is a paranoid schizophrenic. 

The decision of the High Court does not refer to the circumstances of the two children. 

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Fry v Fry [2014] NZHC 2256,17.9.14 

This was a claim by a son- one of three children - against his father's Estate. 

The son was 41 years old at the time of the trial and not in financial need. He owned his own house which was subject to a mortgage of only $20,000. He was earning well. 

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He had two sisters, neither of whom were making claims against their father's Estate. One lives in Melbourne with her partner and the other has chronic health issues. One is a solo parent living in rental accommodation. The son accepted that one of his sisters was probably in greater need than him. [32] 

The Estate appears to have been worth about $1,380,000 [30] and the son wanted $460,000. The Judge gave him $175,000.

 

In giving him this smaller sum the Court took particular account of two factors. The first was that the step-mother paid for the house in which the deceased and she were living with her own money. The second factor was that the claimant was not her child. 

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Following the Aucutt case: Moore J held that the son was entitled to a payment "Family recognition alone can give rise to a duty to provide for an adult child.” [11] 

He also said: 

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"Despite the absence of need, it is appropriate that some recognition is given to the relationship between the father and son” [14]. 

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It was held that the father owed a duty to provide for the son [15]; that there had been a close family relationship between the father and son; and a close working bond between them in a family business for 10 years. [15] 

The father anticipated that with his money going to his second wife, the second wife would leave moneys for the son but the Court said that this could not be predicted. 

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Cartwright and another v Joseph and other [2018] NZHC 2383, 11.9.18 

John Harrison met and married Esther Harvey in 1970. They had two children Cathy (born in 1973) and Sarah (born in 1976). It was a short marriage and the couple separated in 1977. 

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Esther had a series of breakdowns and was diagnosed with schizophrenia. After the separation the two children were not really welcome in the father's house. The father began a defacto relationship with Nita. The two girls went to live with the father and Nita for a while but the father was difficult. Sometimes he would not speak to Cathy for days at a time. He also forbade her from visiting her mother. In 1998 he wrote to her and said "I have no time at all for disloyal people. They do not get second chances, ever." And he hardly saw her again. Sarah fared a little better and was able to see her father. He refused to make any contribution to their tertiary education. Amazingly, both girls have studied law and ended up as lawyers with successful 

careers. 

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The Estate was worth about $4m. The two daughters were each awarded a share in a property which should have given them about $385,000 each. The father's de facto partner had a need for much of the Estate. 

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It was conceded that the father, having left nothing to the two children, was in breach of his moral duty to them. The father had, in Moore J's assessment "a chronic sense of bitterness and betrayal." [23] The father said that his "parents and my siblings turned their backs on me, at a time when I approached them for help, some 15 years ago. He said that Catherine had done much the same: "... for many years I devoted my life to her... [but] when she "was 15, she decided to go back to her mother... Since that time we have been estranged. She has made no effort at reconciliation and no contribution to the estate. It is my wish that she is not entitled to any share whatsoever in this Estate." [23] The Judge held that neither child "was in the slightest bit responsible for the failure of their relationship with their father.” [28] 

At para 29, the Judge said that he agreed with the Court of Appeal's observation in Little v Angus [1981] 1 NZLR 126 that “Changing social attitudes must have their influence on the existence and extent of moral duties.” (p 127) 

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In Litte v Angus, Cooke J said "The principles and practice which our Courts follow in Family Protection cases are well settled. The enquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so, what is appropriate to remedy that breach. Only to that extent is the Will to be disturbed. The size of the Estate and any other moral claims on the deceased's bounty are highly relevant. Changing social attitudes must have their influence on the existence and extent of moral duties. Whether there has been a breach of moral duty is customarily tested as at the date of the testator's death...