The Family Protection Act allows certain family members who have not been properly provided for under a will to seek provision from an estate for maintenance and support. A recent case gives us an interesting look at the way the Court approaches these claims.
The case concerned the estate of Mrs Ormsby, who passed away in 2007. The bulk of her estate was made up of a $2.3 million dairy farm in the King Country, which she left to her son Alan. While some of the residue of her estate was left to her daughters, Janine and Tia, her estate was effectively split 93.5% to Alan, and 3.2% to each of Janine and Tia.
Unsurprisingly, Janine and Tia made a claim under the Family Protection Act on the grounds that their mother had breached her moral duty to them by failing to make adequate provision for their proper maintenance and support.
When looking at claims under the Act, the Court’s task is two-fold. Firstly it must determine whether the will-maker owed a duty of care to the claimant and, if so, whether that duty has been breached. Secondly, the Court needs to consider what is required to remedy that breach.
The Court’s job is not to re-write wills on the grounds of fairness, and there is no presumption of equal sharing between children. A Court is permitted to do no more than the minimum necessary to redress the breach of moral duty that has occurred. There is no formula for assessing this, and each case turns on its own particular facts. The Court tends to look at a claimant’s need for family recognition, as well as any financial need they may have.
In this case, the Court was satisfied that Mrs Ormsby owed all three of her children a strong moral duty, given her particular shortcomings as a parent and the serious deprivations the children suffered during their childhood. It was noted that despite Janine and Tia’s “appalling treatment”, they continued to be dutiful daughters in circumstances where they could have been expected not to be.
The Family Court found that Mrs Ormsby had indeed breached her moral duty, and that a division of the farm between the three children in equal shares (i.e. a 33.3% share each) was necessary to remedy that breach. Alan appealed this decision on the basis that these awards went beyond the minimum necessary.
The High Court on appeal reduced Janine and Tia’s awards to 30% and 25% respectively. These amounts were held to be the minimum required to address the particularly shocking breach of moral duty by Mrs Ormsby. The disparity in awards reflected the finding that Janine’s claim was stronger than Tia’s as a result of her particularly harsh upbringing and greater degree of financial need.
Alan was refused permission to appeal the case any further, and therefore the High Court decision is the final say on the matter.
While this case provides a useful insight into claims under the Act, each case is different and needs to be assessed on its particular facts.If you would like any further information or advice please contact either of the article authors: Maretta Twentyman or Debbie Dunbar, or the Morrison Kent Wellington office (04) 472-0020.