Paterson v Archer
| Jurisdiction | New Zealand |
| Judge | J G Adams |
| Judgment Date | 14 January 2011 |
| Court | Family Court |
| Docket Number | FAM-2009-090-000563 |
| Date | 14 January 2011 |
UNDER Family Protection Act 1955
IN THE MATTER OF The Estate of Ernest James Paterson
FAM-2009-090-000563
IN THE FAMILY COURT AT WAITAKERE
Claim under s3(1)(c) Family Protection Act 1955 (persons entitled to claim) by grandchildren — father predeceased the testator — majority of father's share of testator's estate fell into residue to be divided amongst his other siblings — modest estate — moral duty to grandchildren — adult grandchildren in modest financial circumstances — infant grandchildren — principles relating to Family Protection Act claims.
B MacLean for Appellant
P Revell for Estate (given leave to not appear)
A Gilchrist for the surviving children
J Browne for the adult grandchildren beneficiaries
JUDGMENT OF JUDGE J G Adams
[Family Protection: Grandchildren]
When Ernest James Paterson died on 20 October 2008 he was an old man, 94 years old, and he had experienced declining health for several years. He had a degree of deafness, dementia, and had suffered from acute confusion for a couple of years before his death.
His wife, 15 years his senior, had died a number of years earlier.
Mr Paterson had close relationships with his four children. Each one of them had been involved in varying significant ways, providing company and comfort for him in his declining years.
He had been a builder and his final building task had been the erection of two units, a large unit and a small unit, on a site adjoining the old family home. He sold the old family home to his son, Gordon. Mr Paterson moved into the larger unit and his other son, Ron, moved into the smaller unit.
Like many families, some children fared better and some fared worse, as the years went by. Among Mr Paterson's four children, the oldest, Ron, never quite found the knack of having a penny stick to him. Ron was supposed to pay rent to his father for the smaller unit but much of the time his father let it go. Ron obtained a sum of money, perhaps $40,000 or more, from a matrimonial settlement and set about creating a recording studio at the smaller unit.
Ron made a number of alterations to the smaller unit. After he married for the third time alterations were made so that his third wife could provide a Thai massage service.
Ron's three younger siblings seemed to have thrived, better than Ron, financially and in the careers of their children.
Dorothy, now aged 69, still works as a doctor's assistant but her health has been deteriorating. Her husband is over 80 and they have an old house worth $175,000 and savings of $22,000. They have a blended family of eight children and nine grandchildren. Dorothy's own five children are in their 40s and appear to have good jobs.
Gordon, now aged 66, lives with his wife in what was the old family home, now worth $370,000 but in need of repairs in excess of $50,000. They have investments of $140,000. Gordon has prostate cancer which was in remission at the time he swore his affidavit. He is in employment. His three children, in their late 20s and early 30s, have good jobs.
Joan, now aged 63, is married with two children in their late 30s (the oldest may be 40 by now). She and her husband are comfortably settled with a house worth
$635,000; her husband has a beach apartment with a net value of $370,000 and they have other property in trust. Their children are well settled.
This case would never had happened except for a twist of fate. Whilst his father was infirm, and everyone expected him to die at any day, Ron was admitted to hospital for an operation, he contracted septicaemia and he died quite suddenly and unexpectedly on 22 March 2008, seven months before his father died. Ron was only
Initially the family decided not to tell his father that Ron had died because his own death was expected imminently but, in time, attempts were made to tell him, but his dementia was such that he could not take it in.
Ron had four children of his first marriage, one to his second and two his third. His widow was in her mid 30s, left with the care of their two boys, then aged 5 1/2 and almost 4, together with her two daughters from her previous marriage in Thailand which ended when her first husband died. She was left no real assets and had to shoulder approximately $40,000 of debt.
The estate comprises the larger unit which is valued at $375,000 (well below its official capital value of $440,000); the smaller unit which is valued at $260,000 (well below its current value of $390,000) and cash of $62,000. In all the estate is worth approximately $697,000. There may be some adjustments required because of rental.
Ron's widow has rented both units from the estate. She resides in the larger unit and has reconfigured the smaller unit for business purposes.
Although the last Will was made on 18 June 2002, it is helpful first to set out the terms of the previous Will made on December 1991.
On 19 December 1991, Mr Paterson's wife was still alive, but if she predeceased him, the relevant terms of the will are these.
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(a) The smaller unit was to pass to Ron but if Ron did not survive then one third of that property was to pass to Ron's daughter Diane and two thirds was to pass to his youngest son Haydon. That meant that nothing was provided for the other three children that Ron then had.
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(b) The larger unit passed to the other three children (Ron's siblings) with substitution of issue.
It is interesting to note what was to occur to the residue. If the residue did not exceed $20,000 it went equally to all of the children who survived him. If the residue exceeded $20,000 then Ron got only $5,000 (and if he predeceased that$5,000 went to Diane and Haydon in the proportions noted earlier) and the remainder of the residue went to the other three children with substitution of issue.
The last Will is dated 18 June 2002.
As with the previous Will, the larger unit was shared equally between Dorothy, Joan and Gordon with substitution of their issue.
The smaller unit passed to Ron but if he did not survive then it fell into the residue to be divided under para 4.3 of that Will.
Under para 4.3 the residue (now comprising the smaller unit and the cash) is to be divided into four equal parts. One part goes to each of Dorothy, Joan and Gordon with substitution of their issue. The remaining one quarter is to be divided equally among those of Ron's children who survived the testator.
Again, it is instructive to note what would have happened to the residue in the event that Ron survived. In that event the residue would have simply been the cash. If the residue was less than $20,000, then it was divided equally among the younger three children (that is, Ron would not have received a portion). If the residue was greater than $20,000 then Ron would receive $5,000 and the balance went to his three siblings.
When the deceased made his last Will he was aware that Ron's third wife was expecting their child (the older of the two boys).
This Family Protection claim was commenced on behalf of the two infant children of Ron. Of those children, Andrew was aged 6 and Raymond 4 at their grandfather's date of death.
Ron's five older children have also claimed.
Under the last Will each of those seven grandchildren through Ron receive one seventh of one quarter (that is, a 1/28 share) of the residue which comprises the smaller unit and the cash. That amounts to approximately $11,000 per grandchild — they share a little over 10 percent of the value of the estate.
Each of the seven claimant grandchildren point out that they will never succeed to anything from their father. Each of them does have a degree of need.
Brian Paterson, aged 50, is a single man with no assets except a motor vehicle worth $20,000. He works for the Inland Revenue Department as a computer programmer.
Diane Nikora, aged 48, works for New Zealand Police in a Watch House for what she describes, without further elaboration, as a meagre income. She has two adult children. She lives with her mother (Ron's first wife) and stepfather in rented accommodation. She lived with her father for a period of time after the first of her two divorces and it can be inferred from the previous Will that she had a close relationship with her grandfather. She assisted in his care at one stage. I infer that her mother, in rented property, is unlikely to have a substantial estate.
Michael Paterson is aged 47 years. He lives with his second wife and has financial responsibilities for two sons who must now be aged 17 and 14 years and who live with their mother. He owns a company but his income was $35,000 annually when he swore his affidavit. Ron's widow permitted him and one of his children to reside in the estate property for a year after Ron died but there were difficulties concerning his son and one of Ron's teenage Thai stepdaughters so the arrangement did not endure.
Daryl Paterson, aged 43, is separated and when he swore his affidavit he said that he was about to be unemployed from 17 July 2009. He has provided no update. He said he rented accommodation. He is the younger of the four children of Ron's first marriage.
Haydon Paterson, aged 30, is the child of Ron's second marriage. He is living in a de facto relationship, has no dependents, rents accommodation and is working in computer web design.
The younger two children live with their 38 year old mother. Since the proceedings were filed, Raymond has developed a serious condition...
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