PAEWAI and Others v PAEWAI-KOHE and Another

JurisdictionNew Zealand
JudgeCooper J
Judgment Date11 September 2015
Neutral Citation[2015] NZCA 437
Docket NumberCA331/2015
CourtCourt of Appeal
Date11 September 2015
BETWEEN
Api Terina Paewai
First Applicant
Huiarangi Paewai Smith
Second Applicant
Ena Paewai
Third Applicant
Kareeve Moana Witehira, Kamilla Mariana Witehira and Kayla Ivy Emma Witehira as Successors to Kara Ivy Paewai Witehira (Deceased)
Fourth Applicants
Manahi Montrose Paewai
Fifth Applicant
Noel Meha Paewai
Sixth Applicant
and
Alma Ruth Paewai-Kohe
First Respondent
Ora Going-Richardson and Duncan Richardson
Second Respondents

[2015] NZCA 437

Court:

Harrison, French and Cooper JJ

CA331/2015

IN THE COURT OF APPEAL OF NEW ZEALAND

Application for leave to appeal against a High Court (HC) decision that allowed an appeal against claim under s4 Family Protection Act 1955 (FPA) (claims against estate of deceased person for maintenance) — the deceased's will had left 64 percent of her estate to the daughter who had cared for her and her Downs syndrome son during their respective life times — the rest of her estate she divided in unequal shares between her surviving children and one share to the children of her deceased daughter — the Family Court (FC) had held that equal division would have been appropriate for the purposes of s4 FPA — also held that the deceased had been mistaken as to the financial situation of two of her children when making her will — the HC held that the FC erred by adopting a presumption of equal sharing amongst the children but that there had been a breach of moral duty — concluded that 40 per cent of the estate should go to the daughter who cared for her and the remaining 60 per cent divided equally between the siblings — whether the HC Judge erred in finding that equal treatment of children was not an appropriate starting point for assessment of proper provision under s 4 FPA — whether the applicants had identified questions of law or fact such as would justify granting leave for a second appeal.

Counsel:

T Molloy for Applicants

B P Molloy and H G Holmes for First Respondents

No appearance for Second Respondents

  • A The application for leave to appeal is dismissed.

  • B The respondents are entitled to costs calculated for a standard application for leave to appeal on a band A basis with usual disbursements.

JUDGMENT OF THE COURT
REASONS OF THE COURT

(Given by Cooper J)

1

The applicants, all of them children or grandchildren of Hineapa Paewai (deceased), seek leave to appeal to this Court under s 67(2) of the Judicature Act 1908 and s 15(3) of the Family Protection Act 1955 (the Act) against a judgment of Thomas J. 1

2

Thomas J had allowed an appeal against a Family Court decision granting the respondents' substantive application under s 4 of the Act. 2 She subsequently refused an application for leave to appeal to this Court. 3

3

Api Paewai, Huiarangi Paewai Smith, Ena Paewai, Manahi Paewai and Noel Paewai are five of the deceased's children. Nitama and Kara Witehira were also children of the deceased, and are themselves now deceased. The fourth applicants, Kareeve, Kamilla and Kayla are the children of Kara Witehira, and so they are the deceased's grandchildren. Alma Paewai-Kohe was the eighth of the deceased's children and the second respondents are the executors of Mrs Paewai's will.

4

Mrs Paewai died on 29 October 2009. She made her last will on 4 July 2008, when she was 82 years old. Under the will, her estate was to be divided as follows: 4

  • (a) The family home at 7 Hillside Crescent, Mount Eden, Auckland, was left to Alma together with one half of the land at the address on which the dwelling was erected.

  • (b) Following subdivision, the other half of the land was to be sold.

  • (c) The proceeds of sale — net of costs of subdivision and sale — were to be divided between Ena (Auckland), Kara (Manurewa), Noel (Auckland), Huiarangi (Gold Coast), Api (Auckland) and Manahi (New South Wales) in the following proportions:

    • (i) Ena and Manahi were to receive 10% each;

    • (ii) Noel, Huiarangi and Api were to receive 20% each; and

    • (iii) Kara was to receive 20% on trust for her maintenance and welfare during her lifetime and then the balance to her three children: Kareeve, Kayla and Kamillia.

  • (d) Alma was to retain the chattels during Nitama's lifetime.

  • (e) After Nitama's death the chattels were to be distributed between the children in accordance with a list Mrs Paewai left with the will.

  • (f) Any residue of the estate was to be divided between the children in equal shares.

5

At the time of the High Court hearing, the major asset in the estate was the property at 7 Hillside Crescent. It was valued at between $2.5 and $2.8 million. When the will was made, Nitama was still alive. He had Down Syndrome, requiring constant care. Mrs Paewai included in her will a statement that:

… In making this gift I am taking into account the assistance [Alma] has given to me and my son Nitama and that she will continue to provide a home for Nitama during his lifetime.

6

The effect of the will was to leave 64 per cent of the estate's value to Alma, 3.6 per cent to Ena and Manahi and 7.2 per cent to the remaining children.

Family Court judgment
7

In the Family Court, Judge McHardy determined that by making her will in these terms Mrs Paewai had breached the moral duty she owed her children. His conclusion was based on the disparity of the bequests to Alma compared with those to the other children and grandchildren. The Judge also identified an apparent failure to take into account the likelihood that Nitama would not survive Mrs Paewai very long, and that Alma was unlikely to have to care for him over a long period.

8

The Judge considered Mrs Paewai should also have taken into account that by postponing distribution until both she and Nitama were dead, equal division would have been appropriate for the purposes of s 4 of the Act. 5 He considered Mrs Paewai had assumed some of her children were in a better financial position than they were. Overall, there was nothing in the circumstances justifying a wise and just testator in the position of the deceased distributing her estate in “such an unequal fashion”. 6

9

The Judge ordered that the Hillside Crescent property be sold, and that the net proceeds of sale be divided equally between the siblings, with Kara's children taking her share in equal amounts.

High Court judgment
10

Thomas J held the Family Court Judge erred in law by adopting a presumption of equal sharing amongst the children. 7

11

However Thomas J agreed with the Family Court Judge that there had been a breach of moral duty judged by the standards of a wise and just testator. She considered all of the applicants had demonstrated financial need and they were all entitled to support to a greater extent than provided for in the will. She also...

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