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Claims against deceased estates
Equity and Trusts (LAWS301)
University of Canterbury
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CLAIMS AGAINST DECEASED ESTATES
Summary
- Is the relationship covered by the PRA?
- esp.: de facto relationships of short duration usually not covered (ss 2E, 85)
- Have they validly contracted out of the PRA? If so will/intestacy If not choice of Option A or B (s 61). If no choice made, Option B (s 68).
- Option B no PRA division, will/intestacy
- Option A Classify property Divide relationship property Effect of Option A choice: Survivor cannot take under will/intestacy (s 76) UNLESS: - Will expresses contrary intention (s 76) - Court orders to avoid injustice (s 77)
Property (Relationships) Act 1976 (‘PRA’) Allows for surviving spouses, civil union partners and de facto partners to apply for division of ‘relationship property’. If so, survivor entitlements to will/intestacy are revoked. nothing in PRA prevents a person from making an application under the TPA or the FPA
Family Protection Act 1955 (‘FPA’) Allows for certain surviving family members to apply for provision from the estate, if provision made under will/intestacy is inadequate for their proper maintenance and support.
Law Reform (Testamentary Promises) Act 1949 (‘TPA’) Allows for claims against the estate to give effect to testamentary promises made in return for services/work performed during deceased’s lifetime. - Claimant doesn’t have to be a family member
- PRA – “romantic partners” – usually get half
- FPA – certain family members can claim where WM inadequately provided proper support and maintenance – no fractional guidelines, very case heavy
- TPA – claims by anyone to give effect to testamentary promises while alive, normally as payment for work/service
Claims under the Property (Relationships) Act 1976 (‘PRA’) :
- Claims under the PRA
Option A - Division of RelP after death
Generally, RelP is divided equally (s 11)
So after death, generally:
SepP of survivor RelP SepP of deceased 50% 50%
survivor deceased’s estate
beneficiaries under will/intestacy (not incl. surviving spouse/partner, s 76)
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- Is the relationship covered by the PRA
- de facto relationships of short duration usually note covered (ss 2E, 85)
- Have they validly contracted out of the PRA? If so will/intestacy If not choice of option A or B (s 61). If no choice made, option B (s68)
- Option B no PRA division, will/intestacy
- Option A classify relationship property, divide relationship property
Effect of option A choice: survivor cannot take under will/intestacy (s76)
UNLESS:
- Will expresses contrary intention (s 76)
- Court orders to avoid injustice (s 77)
- Address any other issues – benefits/negatives of a PRA claim
Surviving spouses, civil union partners and de facto partners can either: - take will/intestacy entitlements or - apply for division of ‘relationship property’ (then, survivor’s will/intestacy entitlements are revoked)
Where spouse is alive vs dead Applies to relationships ended by separation during lifetime & by death If ended due to death: PRA Part 8 applies
Relationships covered by the PRA: a. Marriages b. Civil unions c. De facto relationships (defined in PRA s 2D) Usually not de facto relationships of short duration: PRA ss 2E, 85 Usually = lived together as such for less than 3 years (s 2E) PRA does not generally cover these – only PRA division if (s 85): (a) the court is satisfied— (i) that there is a child of the de facto relationship*; or (ii) that the surviving de facto partner or, on an application made by the deceased de facto partner's personal representative, the deceased de facto partner has made a substantial contribution* to the de facto relationship; and (b) the court is satisfied that failure to make the order would result in serious injustice.
*Presumably, if a court found a couple was not in a de facto relationship as defined by the PRA then the law in Lankow v Rose would apply.
Choice of Option A v. Option B after death: PRA s 61 When one party dies, the legislation requires that a claim be made. Survivor may choose Option A or Option B [not both] - Option A – division of relationship property under PRA (usually receives 50% of relationship property) - Option B – no PRA division, take under will/intestacy
Once made, choice is generally irrevocable (s 67) (can only change if not properly informed/ manipulated)
If no choice made by time limit, treated as chosen Option B (s 68)
- Court can set these choices aside under limited circumstances (s 69) (unjust, unaware of relevant circumstances) But must make an application before final distribution of the estate (s 70)
EXCEPTIONS:
- Property is SepP if deceased acquired it from a 3rd person (not surviving spouse/ partner) by - succession (inheritance/ entitlement) - survivorship (joint tenancy) - gift - as beneficiary of a trust (if I have acquired property as a beneficiary of a trust will be separate property) (s 10(1)-(2)) UNLESS, with consent, it has so intermingled with RelP that unreasonable/impracticable to regard as SepP UNLESS (i. = RelP) it is family home*/family chattels* (s 10(4))
- as defined in s 2 s 2: family home— (a) means the dwelling house that either or both of the spouses or partners use habitually or from time to time as the only or principal family residence, together with any land, buildings, or improvements appurtenant to that dwelling house and used wholly or principally for the purposes of the household; and (b)includes a joint family home s 2: family chattels— (a) means chattels of the following kind that either or both of the spouses or partners own: (i) household furniture: (ii) household appliances, effects, or equipment: (iii) articles of household or family use or amenity or of household ornament, including tools, garden effects and equipment: (iv) motor vehicles, caravans, trailers, or boats, used wholly or principally, in each case, for family purposes: (v) accessories of a chattel to which subparagraph (iv) applies: (vi) household pets; and (b) includes any of the chattels mentioned in paragraph (a) that are in the possession of either or both spouses or partners under a hire purchase or conditional sale agreement or an agreement for lease or hire; but (c) does not include— (i) chattels used wholly or principally for business purposes: (ii) money or securities for money: (iii) heirlooms: (iv) taonga
Survivorship (EXAM: Do not assume anything is a joint tenancy unless that is specified)
This is survivorship between the spouse and partner. Partner, in JT, is automatically sole owner. This is not automatically assumed to be separate property; it could be classified as relationship property. If this occurs then only get half, the other half will go to the estate.
s 83: If the deceased's property passes to survivor NOT by succession e. by survivorship (such as joint tenancy with the deceased)
that property is NOT automatically considered survivor’s SepP o considered according to status would have had if not deal o unless court decides otherwise
So, deceased-survivor joint tenancy property could be considered RelP after deceased’s death (not automatically pass to survivor by survivorship)
PRA n/a to Māori land s 6: PRA does not apply to Māori land (as defined in Te Ture Whenua Māori Act / Māori Land Act).
Jean died, survived by her husband Bob. Classify the following property as relationship property or separate property. 1. Jewellery inherited by Jean from her mother. 2. Jean’s house (in which neither she nor Bob lived) that she owned as joint tenant with her brother and received by survivorship when her brother died. (You may assume the joint tenancy began before her relationship with Bob.) 3. Same house as above, except Jean and Bob lived in it during their marriage. 4. A house that Jean and Bob owned as joint tenants (in which neither lived). 5. Pet cat that lived in Bob & Jean’s home, cared for by them both.
How do you classify the property?
Jewellery Rebuttable presumption that all property is RelP Presume this is RelP Is there an exception? She acquired it from her mother by succession, using s10 this is separate property Therefore, no matter how much its worth it’s not part of the RelP Husbands 50% will not include the jewellery House not lived in She or bob didn’t live in it- got it through survivorship Start with s81, but acquired it through survivorship so using s10 exception its separate property House- family home What if they actually lived in the house- still acquired through succession Start with s81- rebuttable presumption Then s10 exception- yes its true she got it through survivorship which would usually make it an exception But 10(4) says if it’s a family home then its RelP Could cite the family home definition in the statute “as per this, this would count as a family home” Therefore is going to be RelP even though she acquired it as succession. Different house- joint tenants of home- renting it out. This is going to fall under s83. She has a joint tenancy with husband, not from a third person so don’t look at s10. Under rules of survivorship, deceased’s property part will pass to Bob, not automatically considered SepP Bob gets the property through virtue of survivorship rules But s83 is ambiguous so it could be considered RelP or SepP- it depends on the status as it had been had jean not died- it could be relationship under s83. Pet cat Usually s81- presumption that everything is considered to be RelP. Nothing to indicate anything different applies (eg acquired by third person) Usually if family chattel under s2 it will be RelP- even stronger case. Cite definition of family chattels in s
Option A: Division of RelP after death
Generally , RelP is divided equally (s 11)
So after death, generally:
RelP
50% 50%
surviving spouse/partner deceased’s estate
beneficiaries under will/intestacy
(not incl. surviving spouse/partner, s 76)
If a survivor chooses option A- all RelP is divided 50/ 50. After death, half goes to survivor, and half goes into estate. This remaining half will be divided between the beneficiaries/ under intestacy SepP where it goes depends on who’s separate property it is. -The remaining 50% estate- survivor doesn’t count (treated as predeceased for this purpose)
Survivorship not by succession
s 83: If deceased’s property passes to survivor NOT by succession e. by survivorship (such as joint tenancy) that property is NOT automatically considered survivor’s SepP
Joint account 26, Toyota Corolla 5000 Mazda Pulsar 9000 Family Chattels (not valued)
Total $391,970. Half share $195,985” Held : It doesn’t matter whose name the property is in, what matters is what the statute says. When you go under PRA then even your own personal property may be considered as relationship property. The court held the widow should receive half and the estate receive the rest. When the court did the division they didn’t spilt each item in half, rather figured out the amount ($) in total and then parties got to choose how to divide property. If they are unable to decide then court can divide for them. The outcome: “[19] The widow has retained in her possession the following: Half share of home $122,500 Her retirement plan $6719. Joint account $ 26,071 Mazda Pulsar $ Total $164,290.
[20] If the widow is to receive a half share of the relationship property, then she will need to receive a further sum of approximately $31, .... [21] The order of the Court is that the widow is to receive one half of the relationship property.” Summary
- Widow chose Option A, so will gift revoked (s 76) – no automatic entitlement to the will-gifted life interest
- In classifying total RelP to be divided, court included both deceased-owned RelP & survivor-owned RelP (Court can classify your own property as RelP - her & husbands)
- No dispute that RelP should be divided equally – widow to receive ½ of RelP, estate other ½
She got a cash payment because court held was not enough and a sum under the next legislation we look at... NB: some of the RP was actually SP so have to be careful what option you choose.
Flathaug v Weaver [2003] NZFLR 730 (CA) The deceased’s will left the entire estate to a family trust. The beneficiaries were the deceased’s children and grandchildren. There was also a widow who was not the mother of the children. Also, another daughter who was with a different parent. The entire estate left to family trust Daughter and widow get nothing, and widow chose first option A (PRA). It was not contesting that having going to option A she should get equal division The total relationship property was $1 including the widows own property in her own name Widow gets half and estate gets half What happens to estate amount? Will says entire estate goes to family trust Widow and other daughter got family protection act claims Widow got her 50% and then also got an additional under family protection act
RelP ($1) 50% 50%
surviving widow deceased’s estate ($550k) ($550k)
family trust under will Advantages/disadvantages Some disadvantages of Option A (PRA division) for survivor
Loses all benefits under will/intestacy (s 76) o They will get 50% of relationship property but will not get any access to separate property of the deceased. May not get 100% joint tenancy property (unlike with Option B) – instead could be considered RelP so only gets 50% (s 83) To release ½ of RelP, may have to sell e. farm, business o Total value is divided 50/50 so depending on what property is may have to sell.
Still, Option A better if other claims will be made against the estate
If there was going to be other claims against the estate using the other 2 statutes, then go through this to ensure you don’t loose property you’re entitled to.
Option B (will/intestacy) usually better for survivor if
Property in survivor’s name would be RelP under Option A o As long as will leaves you something, if it doesn’t then better to go with option A Most/all of deceased’s property = joint tenancy with survivor Will/intestacy gives a lot of deceased’s SepP to survivor
Contracting out of the PRA Couple can contract out of PRA – agree how to otherwise divide property on separation or death: - before/during relationship - after relationship ends (‘settlement/compromise agreement’): - between partners while both alive - between survivor and deceased’s personal representative (ss 21-21C) Assume the PRA applies and there is an option for option A division unless you are told the parties have validly contracted out of the PRA- if the case then you say that it is only option B.
If validly contracted out of PRA PRA n/a will/intestacy applies
Statutory Requirements 21F: (2) The agreement must be in writing and signed by both parties. (3) Each party to the agreement must have independent legal advice before signing the agreement. (4) The signature of each party to the agreement must be witnessed by a lawyer. (5) The lawyer who witnesses the signature of a party must certify that, before that party signed the agreement, the lawyer explained to that party the effect and implications of the agreement.
Meet all requirements but still cancel contract
However, despite meeting all s 21F requirements if the court finds “procedural justice” then will allow the court to ignore any contract created under s 21F
s 21H(1): Even though an agreement is void for non-compliance with a requirement of section 21F, the court may declare that the agreement has effect, wholly or in part or for any particular purpose, if it is satisfied that the non-compliance has not materially prejudiced the interests of any party to the agreement.
s 21J(1): Even though an agreement satisfies the requirements of section 21F, the court may set the agreement aside if, having regard to all the circumstances, it is satisfied that giving effect to the agreement would cause serious injustice.
Spouse dies and wants to challenge agreement:
s 87: [survivor may challenge agreement per above provisions]
Claims by the estate
Re: De facto partners Must be living together at time of death and be of three years (s 2D) If short duration (<3 yrs): There is a dependant child of the de facto relationship; or De facto partner has made substantial contribution to property; and Would cause serious injustice to de facto partner not to grant order under this.
Further requirements for grandchildren Court to consider.. date of death.. moral duty having regard to all relevant circumstances and to any provision made by deceased.. favour of either or both of grandchild’s parents (s 3, FPA)
Further requirements for stepchildren They must have been maintained wholly/partly or legally entitled to such by deceased immediately before death (FPA s 3)
Further requirements for parents They must have been maintained wholly/partly or legally entitled to such by deceased immediately before death or neither romantic partner, or child of marriage is alive(FPA s 3)
Grounds for an FPA claim Under s4(1) FPA there exists an underlying idea of moral duty and where the Courts think that proper maitenance has not been provided to those owed this moral duty they can exercise discretion in ordering provision of the deceased estate.
- Has deceased breached the moral duty that would be owed by a wise and just person in that situation to the claimant? Under s4(1) FPA there exists an underlying idea of moral duty and where the Courts think that proper maintenance has not been provided to those owed this moral duty they can exercise discretion in ordering provision of the deceased estate. Has deceased breached the moral duty that would be owed by a wise and just person in that situation to the claimant? In this analysis the Court will consider the deceased reasons for provisions s11 FPA
- and the personal rep has the duty to provide the Court with relevant information s11A FPA
Allardice v Allardice (1910) 29 NZLR 959 (CA)
D had 6 children from first marriage, and 6 from his second. His will did not leave property to children in first marriage- four girls, 2 sons. All daughters were married, at the time did not work and husband was not wealthy. The deceased had breached his moral duty to his daughters by not leaving them anything under his will. He thought the sons were lazy.
“It is the duty of the Court, so far as is possible, to place itself in all respects in the position of the testator, and to consider whether or not, having regard to all existing facts and surrounding circumstances, the testator has been guilty of a manifest breach of that moral duty which a just, but not a loving, husband or father owes towards his wife or towards his children, as the case may be. If the Court finds that the testator has been plainly guilty of a breach of such moral duty, then it is the duty of the Court to make such an order as appears to be sufficient, but no more than sufficient, to repair it.”
Old case to show that in history you needed financial need. Much broader view in modern times, but still use moral duty test quoted in test, but no longer for financial need.
Look at:
Do you fall under the statutory list of family members?
Claims under the PRA
Flathaugv Weaver
- Will left entire estate to family trust; widow not a beneficiary
- Widow chose Option A
- Not contested that widow entitled to equal division of RelP
RelP ($1) 50% 50%
surviving widow deceased’s estate ($550k) ($550k)
family trust under will
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- For those who can claim, did the deceased have a moral duty to provide for the claimant, and did they breach this duty?
What court will consider In this analysis the Court will consider the deceased reasons for provisions s11 FPA The personal rep has the duty to provide the Court with relevant information s11A FPA. The Court can refuse an FPA award if the Court thinks the character or conduct of a person should disentitle them to make a claim s5 FPA.
FPA awards “The Court may, at its discretion ... order ... any provision the Court thinks fit ...” s4(1) FPA Awards can be lump sum or periodical s5 FPA
Claims by spouse/partner Test: Must be eligible under s 3 If spouse/partner already got a PRA division, ‘moral duty’ FPA entitlement may be reduced/eliminated But spouse/partner can get both PRA division + FPA award - PRA s 57: can make claims under all 3 statutes: PRA, FPA, TPA - PRA division first; then FPA & TPA claim/s against estate – which is usually reduced to 50% after PRA division
Flathaug v Weaver [2003] NZFLR 730 (CA)
Will left entire estate to family trust of which the widow was not a beneficiary
- Chose option A and was awarded half RelP
- Widow and ‘extra nuptial’ daughter made FPA claims against the estate amount and won, High Court “rightly recognised the widow’s claim as paramount”
Even after PRA claim a romantic partner’s claim may still be “paramount” to ensure “proper maintenance” (Flathaug v Weaver, Williams v Aucutt). Need not go further than proper maintenance (EM v SL)
Proper maintenance? - ‘Support’ is an additional and wider term than ‘maintenance’ and is used in its wider sense of ‘sustaining and providing comfort’” (citing Williams v Aucutt) - “Proper maintenance is more than merely adequate maintenance .... What is proper maintenance must relate to the lifestyle enjoyed by the spouses during their marriage.” - “The widow's claim is normally regarded as paramount” (citing Flathaug v Weaver) - Must assess spouse FPA claim in context of estate size & other claims’ strengths - “Where a widow has assets such that she does not need any further proper maintenance and support, [FPA claim] should fail.” Wylie v Wylie – Applied Williams test more conservatively finding no grant of FPA is moral obligation met
Summary: Multiple partners may make claims. Deceased must offset moral obligation by providing proper maintenance (Williams) This is determined on a case by case basis, often look at the length of the relationship and what the
BE CAREFUL WITH %’S - FPA award will be determined case-by-case, not per any pre-determined % or
formula.
General points (additional to test + likely approach):
May differentiate between children (particularly where they have different financial need) (Williams)
Little relationship with parent will reduce what is owed to discharge moral duty (Weaver)
No knowledge of child will = no moral duty owed to that child (Weaver)
Will take in to account variety of circumstances including age of child (will they retire soon?) (Fisher)
You cannot contract out of the FPA (Kinney)
Summed up law (In Fisher v Kirby)-
“The question remains 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.” “The more recent decisions of this Court have re-emphasised ... that mere unfairness is not sufficient to warrant disturbing a testamentary disposition and that, where a breach of moral duty is established, the award should be no more than is necessary to repair the breach by making adequate provision for the applicant's proper maintenance and support.” “The decisions of this Court ... are properly viewed as a timely reminder that awards should not be unduly generous. But, in our view, neither should they be unduly niggardly, particularly where the estate is large and it is not necessary to endeavour to satisfy a number of deserving recipients from an inadequate estate. A broad judicial discretion is to be exercised in the particular circumstances of each case having regard to the factors identified in the authorities.”
Changes in courts’ approach: original approach seen in:
Allardice v Allardice [1908] – view with caution as too old - adult children, not well off, got nothing in will
Held: awards made to married daughters but not sons, they should have done something to make their own
Williams v Aucutt – one rich child, one moderate child, parent rich
Facts: mother died, v. wealthy. Two daughters, one rich one moderate. Left 95% to one in recognition of this
financial situation
HC held: increased to 25% in recognition of the place in family
CA held: upheld HC reasoning but said too much to discharge duty reduced to 10%
Auckland City Mission v Brown – one child, moderate finances, WM didn’t like way child managed property
Facts: WM didn’t like way only daughter and her husband had managed property. Daughter of modest
circumstance. left to them in the past so gave $190K out of $4m estate to her.
HC held: increased share to $1 CA held: Only give enough to ensure moral duty was not breached, reduced share to 20%
Child much less wealth than in Williams, but still conservative approach to apply to less wealthy
Silbery v Silbery-Dee - WM disinherited son, child was wealthy
Facts: mother/son breakdown in relationship, argued lots over family business
R v S – Nasty child abused mother, mother got restraining order, child was poor
Facts: Daughter harassed mother, abusing her to point she got restraining order. Left daughter 10% of estate
Held: Mother had discharged her duty in this instance, although the child would in usual circumstnaces be awarded more they would not do so where this kind of relationship existed
Fisher v Kirby – wealthy WM had 3 children, left $3 to niece/nephews, no mention of childs finances HC Held: granted FPA to children (totalling 1) and CA held: increased one sons award by$150k
Likely to get more if have financial need, unless there is bad conduct. Court will consider variety of circumstances including your age – how close to retiring are you? Do you have a long time to earn?
Kinney v Pardington – WM didn’t tell family about premarital daughter, daughter & WM knew, daughter poor Facts: Wm didn’t tell wife or sons about pre-marital daughter, WM and daughter knew and father had paid her visits, just never allowed to refer to him as father. Father’s marital son accepted that daughter should be given 50%.
Held: Father had breached moral duty and awarded daughter 70% of estate - Daughter: difficult childhood, in financial need, on the benefit and had a child...cf..: not in financial need Distinguished several child cases – court very fact specific with its application
Rough benchmarks from these cases: for adult children Wealthy child (only needs ‘support’), normal relationship - Williams; Silbery: 10% of estate
Child not wealthy but not very poor (needs both ‘maintenance’ & ‘support’) - Auckland City Mission v Brown: normal relationship 20% - Flathaug: limited relationship 7% ("long-lost daughter")
These percentages are only rough benchmarks FPA award will be determined case-by-case, not per any pre-determined % or formula.
Vincent v Lewis [2006] NZFLR 812 (HC) If you behave badly, get less Daughter left harassing messages asking for money, spray painting rude messages on property ("money grubbing slut", not taking care of mother when sick Will left daughter $200k from $2m+ estate (10%) Daughter in financial need – she was sick Daughter said she should get more than 10% - court said usually this would not be enough, but the negative conduct meant she did not get more. No breach of moral duty given bad conduct High Court said, normally would increase but here the nature of their relationship meant this wasn’t a breach of moral duty. Misconduct means you should expect less, often Courts don’t use s5 and just apply moral duty approach. - igh Court said, normally would increase but here the nature of their relationship - meant this wasn’t a breach of moral duty. Misconduct means you should expect less, - often Courts don’t use s5 and just apply moral duty approaHigh Court said, normally would increase but here the nature of their relationship meant this wasn’t a breach of moral duty. Misconduct means you should expect less, often Courts don’t use s5 and just apply moral duty approach Court said, normally would increase but here the nature of their relationship meant this wasn’t a breach of moral duty. Misconduct means you should expect less, often Courts don’t use s5 and just apply moral duty approach - igh Court said, normally would increase but here the nature of their relationship - meant this wasn’t a breach of moral duty. Misconduct means you should expect less, - often Courts don’t use s5 and just apply moral duty approach. - igh Court said, normally would increase but here the nature of their relationship - meant this wasn’t a breach of moral duty. Misconduct means you should expect less, - often Courts don’t use s5 and just apply moral duty approach.
Claims under the Law Reform (Testamentary Promises) Act 1949 (‘TPA’) :
- State TPA 3 (1).
- The elements of a TPA claim in Samuels:
- The claimant provided work/services to the deceased during the deceased’s lifetime
- Deceased made an (implied or express) promise of testamentary provision (i. by will) to the (usually) claimant as a reward
- Nexus (the link) between promise and work/services
- Reasonable provision has not been made
- Work through each step of the test applying case law to the facts
- Outline what will be awarded + relationship of PRA, TPA & FPA.
Allows for claims against the estate to give effect to testamentary promises made in return for services/work performed during deceased’s lifetime TPA s 3(1) “Where ... a claim is made against the estate founded upon the rendering of services to or the performance of work for the deceased in his lifetime, and the claimant proves an express or implied promise by the deceased to reward him for the services or work by making some testamentary provision for the claimant, whether or not the provision was to be of a specified amount or was to relate to specified real or personal property, then, subject to the provisions of this Act, the claim shall, to the extent to which the deceased has failed to make that testamentary provision or otherwise remunerate the claimant ..., be enforceable against the personal representatives of the deceased in the same manner and to the same extent as if the promise of the deceased were a promise for payment by the deceased in his lifetime of such amount as may be reasonable...”
4 basic elements of a TPA claim: per Samuels v Atkinson 1. Claimant provided work/services for deceased during deceased’s lifetime 2. Deceased made (express or implied) promise of testamentary provision (i. by will) [usually to claimant] as a reward 3. Nexus (i. link) between promise and work/services 4. Reasonable provision has not been made
- Work or Services:
Neither is defined in TPA Work: reasonably clear: “the word has its ordinary, everyday meaning” Samuels v Atkinson Services: less clear: - tangible & measurable or - intangible & difficult to value
Re Welch [1990] 3 NZLR 1 (PC) Normal family activities in a normal close family are not services. Stepson wanted more from step-fathers estate, could not bring FPA claim because he was not being maintained, so tried to bring under this statute. Said there was a testamentary promise, he had helped with the business unpaid, and lived with him for some years. HC did give him what he wanted under TPA, CA reduced the amount which was then upheld by PC. PC saying nexus was not in existence- but parties did not challenge this, therefore PC did not change the amount the CA stated. But PC did say that in this case, the nexus wouldn’t have been satisfied as the promise was made out of affection- not in return for work/ services. Work/ services step also probably not satisfied. - Stepson left with small TPA award - “some straining of the scope of the [TPA] is required to bring within the concept of services the natural incidents and consequences of life within a close family group”
- Stepfather’s unfulfilled promise to leave whole estate to stepson was out of affection, not as reward for services So ‘services’ in family context must go beyond those of normal family relationships. Need “something extra” to what naturally happens when living in a family (Samuels v Atkinson)
Blumenthal v Stewart [2017] NZCA 181 De Facto son- court said services were not something extra as required normal things you are expected to do in a normal family relationship. Court held for TPA that he should not get a TPA claim, because that “additional thing” in family relationship was not present. Not “something extra” here.
Surrogate families - often considered as “something extra”
Byrne v Bishop [2001] 3 NZLR 780 (CA) Previously reclusive drunken neighbour was treated as part of the family of other neighbour. What they did for him was considered work/ services- gave him meals, holidays etc. Will left neighbours property- not family. Will held invalid for lack of testamentary capacity, but they won claim under TPA as several times he said he would leave his farms to the neighbours children.
Neighbours won under TPA- but only got one, not both farms because he also had close family members, neighbours had benefitted from him. CA upheld that one farm should go to the children. Did exceed what normal neighbours do- services. - Treating alcoholic neighbour as part of family = services - TPA award: one farm for children of neighbour family (you get what the court thinks is reasonable) - “To qualify as “services” or “work” under the Act, what has been done for the deceased must have been beyond the normal expectations of family life or social interaction. Services can include not only things done for the deceased but also companionship, affection and emotional support exceeding what is normally to be expected of a relative, a member of the same household, a neighbour or a friend.”
Samuels v Atkinson Held that providing a surrogate family can amount to services. He financially assisted his friends children and promised to leave shares of his farm to the sons, and also something for daughter. Will did not do this, children received nothing. Said the benefits received outweighed the benefits given. Friends children did get some money, but CA reduced the HC’s original award. But did won TPA claim.
Le Couteur v Norris [2018] NZCA 572 Biological family relationship (mother-daughter) Services by daughter “far exceeded the normal services that a dutiful child might provide their aged parent” - Enabled mother to live independently- and enabled sons to live without concern for mother. Mother made her last will, left her house to her daughter. She later sold that house (usually would be adeemed and gift fails) but court said that particular house had sold, she moved housed but didn’t revise will, court had made informal amendments to will including hand written notes saying she would give 2nd house to daughter, but moved to 3rd house and this was a flat. Could daughter get flat that the mother last lived in under the TPA? Not mentioned, but she did promise to leave last house mother lived in. CA agreed, and said all 4 TPA requirements were satisfied.
Don’t worry about how the court deals with the last step of quantum. Not expected to calculate quantum in any
uncertain cases in the exam.
Mental state of claimant at time
Claimant can do services without any desire/expectation of reward (e. out of kindness) and still get TPA award
“It would be repugnant if the fact that the services or work were performed out of a generous spirit and not for
mercenary reasons or in the hope of a reward should count against claimants by way of depriving them of a claim or
devaluing it.” (Byrne v Bishop)
What the court will consider s 3(1) (continued): “... the claim shall, to the extent to which the deceased has failed to make that testamentary provision or otherwise remunerate the claimant ... be enforceable against the personal representatives of the deceased in the same manner and to the same extent as if the promise of the deceased were a promise for payment by the deceased in his lifetime of such amount as may be reasonable, having regard to all the circumstances of the case, including in particular the circumstances in which the promise was made and the services were rendered or the work was performed, the value of the services or work, the value of the testamentary provision promised, the amount of the estate, and the nature and amounts of the claims of other persons in respect of the estate, whether as creditors, beneficiaries, wife, husband, civil union partner, children, next-of-kin, or otherwise.”
Contracting out of the TPA Does not exclude contracting out. But no formal contracting-out scheme in statute (unlike PRA)
Some exceptions
- Joint tenancies – pass to survivor by survivorship
- Restrictions on alienation of interests in Maori freehold land (Te Ture Whenua Maori Act 1993 / Maori Land Act 1993, s 106(1))
- ‘Unworthy heirs’ – killer can get TPA award but it “must be calculated to ensure that the killer's benefit is no more certain or more valuable than the killer would have been entitled to if the victim of the killer had continued to live for the period reasonably expected before the victim was killed.” (Succession (Homicide) Act 2007, s 10)
Practice Question John died intestate. His stepdaughter Carol says that last year, John promised to leave her the whole of his estate in his will as she had been his only stepchild. She thinks this entitles her to an additional amount from the estate under the TPA. Does it? Would carol get anything from John?
Work/ services not much info- so insufficient info, has been a promise, but nexus missing Focus on nexus requirement: The reasoning of John is because she’s his only stepchild, so no real link between specific work done and the promise. Welch refers to stepchild- says step child usually not service satisfactorily. There was a promise, but with the information the claim fails on services and nexus. Not even partly a reward for services so would likely fail. Not entitled to any estate under the statute.
Relationship between PRA, FPA & TPA: PRA ss 57, 78 Can make claims under all 3 - PRA, TPA, FPA (PRA s 57) would have to be a spouse/ partner. Successful claim (or relevant s 21 agreement) under PRA takes priority over entitlements under will, intestacy, FPA, TPA. BUT reasonable funeral expenses and estate-administration-related debts take priority over PRA claims. (PRA s 78)
Choosing PRA division might be better if there will be claims made under the estate, such as FPA. If you’re a spouse, and you know a different person may make a FPA claim- good idea to think about PRA rather then will/ intestacy, as you will get that 50% quarantined off for you.
Useful example Simplified version of
Re Sepsy HC Dunedin CP65/87, 12 August 1988 (under old wills statute) Will left property to de facto partner’s children. Was valid will, but then got married to partner so now she is wife, those children are now step-children. So will revoked due to marriage, his will leaving property to children is now
revoked. Children cannot get property under will. Neither intestacy, as under intestacy step-children are not entitled. So would look under 3 statutes. (Not TPA as no suggestion of promise). PRA doesn’t apply for children, so would look towards FPA. Imagine... Man’s will left property to de facto partner’s children They married (so now: stepchildren) Then husband died. Stepchildren =? Will? No, revoked on marriage Intestacy? No, stepchildren not entitled PRA? No, only for spouse/partner FPA? Yes, possible.
Claims against deceased estates
Course: Equity and Trusts (LAWS301)
University: University of Canterbury
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