WIGHTMAN & ORS v PUBLIC TRUST [2014] NZHC 3124

WIGHTMAN & ORS v PUBLIC TRUST [2014] NZHC 3124 [9 December 2014]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV 2012-409-001312[2014] NZHC 3124BETWEEN COLIN MARK WIGHTMAN, RICHARDCHARLES CLELAND OLDFIELD,RODGER WIGHTMAN ANDERSON,ANN MARIE FLOOD and PAMELAJANE PARROTTAND PUBLIC TRUST AS EXECUTOR OFTHE ESTATE OF ROBERT WALLACEWIGHTMANDefendantHearing: 15, 16 & 17 September 2014Counsel: S Grieve and S Caradus for PlaintiffsN Till QC and R Calvert for DefendantI Hunt and D Weatherley for Parties directed to be servedJudgment: 9 December 2014JUDGMENT OF WHATA JIntroduction[1] Robert Wallace Wightman (Wallace) was a Canterbury farmer. He died in 1965 leaving a large estate comprising of various land blocks near Methven and Rakaia. His eldest daughter, Clara, was left with the responsibility to distribute hisresiduary estate to "any or all" of his grandchildren. Clara passed away in 2011 andleft it to one of them. The residuary estate comprises a farm valued at about $11.5 million. This proceeding concerns a claim by five of the grandchildren againstWallace's estate on the basis that he failed to discharge his moral duty to them by, inshort, delegating an unfettered discretion to Clara to distribute the residuary estate.[2] The parties agree that this proceeding gives rise to four key issues, namely:(a) whether the estate has already been finally distributed;(b) whether the five grandchildren should be granted an extension of timeto make a claim against Wallace's estate;(c) whether there has been a breach of Wallace's moral duty to the grandchildren; and(d) if relief is to be granted, what is the nature of that relief?Background[3] The Wightman family has deep roots in Canterbury. Isabella Mary Wightman (nee Houston) came to Methven in 1902, the daughter of Irish immigrants, Clarissa and Adam. She married Wallace on 4 February 1913 and moved to the Rakaia Gorge homestead in about 1915. A family soon followed. Clara was born in 1915, Charles (Charl) in 1918, Robert Wilson (Wilson) in 1921 and Rebecca and Margaret in 1922 and 1923. Wallace farmed five properties between Methven and the Rakaia Gorge until the Great Depression. The banks closed down the farms and as with many NewZealand families, the Wightman family "struggled through those stressful years".1[4] Over the course of the next three decades, Wallace and Isabella accumulated a large estate comprising several properties in the Methven-Rakaia region. Thisincluded farming properties known as "Rangatira," "Poffs Reserve," "Winterslow,"and a farm property at Arundel Road in the Rakaia Gorge.2[5] Isabella passed away in August 1960 leaving successive life interests in the Arundel Road property to Wallace, her son, Charl and her grandson, David Miles Wightman. David would ultimately surrender his life interest in the property in January 2012 and it was sold at auction for about $7,810,000. The proceeds of salewere distributed in accordance with Isabella's will to David, Rebecca's three1 The source of this short narrative comes from an article published by Clara J Wightman in a book called Coal Range and Candlelight: Women of Methven & Districts: A Legacy of Memories (Methven Women's History Group, Ashburton (New Zealand), 2001).2 The other blocks in Wallace and Isabella's names were an unnamed 1100 acre block and the 100acre Chambers Block.daughters and Margaret's two daughters. As a consequence of this, thosegrandchildren received about $832,000 each.[6] The Rangatira, Poffs Reserve and Winterslow properties remained inWallace's hands until his death in 1965.The Wills[7] Wallace's wills and associated records, including his final will, revealsignificant care was taken in assessing the needs of both the children and the grandchildren in formulating the distribution of his estate. He did not consider that his children were in financial need but he did consider that there should be provision for his grandchildren. A record of his instructions, recorded by the Public Trust in August 1959 states:The [testator's] main idea is that his main farm be carried on for as long aspossible for the benefit of his grandchildren. He stated that all his children are well off as either they or their husbands have substantial holdings of land. He does not consider that there is any need for him to make any substantial provision for his children as they already have all that they need.[The testator] was insistent that his daughter Clara should fix the capital distribution. His idea is that she will know more about the grandchildren than he will and will, therefore, be in a better position to decide how the estate should be divided. It seems to me that this may be placing the daughter in a somewhat invidious position but [the testator] requires the Will to be in this form. The daughter, Clara, is single and has no issue herself.[8] The final will disposed of Rangatira by a power of appointment for the benefit of his grandchildren in cl 8(h) in the following terms:(h) From and after the death of the survivor of my said daughter Clara Jane Wightman and me (the death of such survivor being hereinafterreferred to as "the period of distribution") to hold my residuaryestate subject however to the provisions of sub-paragraphs (c) and (d) of this paragraph 8 UPON TRUST for all or any of my grandchildren and my great grandchildren in such shares and proportions for such interests vesting not later than twenty-one years after the period of distribution and in such manner in all respects as my said daughter Clara Jane Wightman should she survive me shall by deed with or without a power of revocation and new appointment or by will or any codicil thereto appoint AND in default of appointment and subject to any partial appointment UPON TRUSTfor such of the sons of my said daughter Rebecca Isobel Anderson as are living at the period of distribution and attain the age of twenty- one years and if more than one in equal shares PROVIDED HOWEVER AND I DIRECT that should any son of my said daughter Rebecca Isobel Anderson die before the period of distribution or be living at the period of distribution and die before attaining the age of twenty-one years leaving a child or children living at the period of distribution or the death of the son so dying whichever is the later then and in every such case such child or children (being a great grandchild or great grandchildren of mine) shall take and if more than one in equal shares the share or interest in the unappointed portion of my residuary estate which his her or their father would have taken under this sub-paragraph (h) hereof had he survived the period of distribution and attained the age of twenty- one years.[9] There is no dispute that this clause conferred on Clara the power to deal with the Rangatira property in favour of all or any of the grandchildren.[10] It is also clear that Wallace had a strong desire to maintain a familial connection to the land. Clauses 10 and 11 of the will include the following declarations:10. I DECLARE for the guidance of my trustee and the management of administration of my estate but without legally affecting his absolute discretion that I am firmly convinced that farming land is the best asset; that I accordingly want my said farm "Rangatira" to beretained and farmed by my trustee for as long as practicable for the benefit of my descendants who will share under this my will; and that I am relying on my trustee to ensure that my wishes in this respect are carried out.11. I also express the wish without intending to create any binding trust or obligation that if and when my trustee shall propose to sell or lease any farming lands of mine reasonable preference shall be given to my children and grandchildren.[11] In this vein, Poffs Reserve was devised as a life interest to successive life tenants, namely Clara, Charl (now deceased), and then grandson, David, with theremainder then being David's children.[12] Winterslow, a Crown leasehold property, was disposed of, in accordance withcl 6(b) of Wallace's will, to Charl.[13] An annuity was also provided for Margaret and Rebecca.[14] Wilson did not benefit from Wallace's estate.The first family protection claim[15] The will was challenged by Wilson, Margaret and Rebecca. Judgment was given by Wilson J in the Supreme Court (now the High Court) following the conclusion of oral evidence, on 28 October 1971.3 The claims of Margaret andWilson were dismissed. Rebecca's claim was successful to the extent that an annuitybequeathed to her by cl 8(c) of Wallace's will was increased from £200 per annum to$1,500 per annum.4[16] The increased provision fell against the income to be received by Clara from the estate, being the balance of any income from the estate after payment of annuities.[17] This decision was appealed to the Court of Appeal by Margaret and Wilson.5However, only Margaret ultimately proceeded with the appeal which was heard on 13 and 14 July 1972, at which time it was dismissed in oral judgments.Custody of Rangatira and the power of appointment[18] After Wallace's death, Clara resided at Rangatira but did not personallymanage the farm. The Public Trust appointed a Mr Gray as farm manager in 1966. He held that position for 37 years until he retired in 2003. Robert William (Wilson'sson) took over management of the farm in 2003.[19] Pursuant to cl 8(h) of Wallace's will, upon her death Clara exercised her power of appointment in favour of Robert William with no other provision made for the other grandchildren. She did however make even handed provision for them out of her own estate. She passed away on 30 August 2011 and probate was granted on 3 October 2011. However, Rangatira was not transferred to Robert William because of these proceedings, commenced on 2 July 2012.3 Oldfield v Public Trustee SC Christchurch A12/67, 28 October 1971.4 The New Zealand pound was replaced by the New Zealand dollar in 1967.5 Oldfield v Public Trustee CA86/71, 14 July 1972.The five claimant grandchildren[20] Ann Marie Flood (aged 58), Colin Mark Wightman (57), and Pamela JaneParrot (53) are Wilson's children. Rodger Wightman Anderson (57) is Rebecca's son. Richard Charles Cleland Oldfield (56) is Margaret's son. They have to datereceived nothing from their grandfather's estate. They are not currently in financialneed but are seeking familial recognition and provision for contingent need. All of them have pleasant childhood memories of spending time with their grandfather when they visited him at the family homestead.6[21] After the first FPA proceedings it appears that Ann, Colin and Pamela largely lost touch with Clara. Richard maintained some contact with Clara. She attendedhis daughter's wedding and occasionally spent Christmas with them. Rodger also lost touch with Clara finding it difficult to talk to her. He did engage with the Public Trust from time to time to assert his entitlement under clause 8(h). On one occasion in September 1999 he wrote seeking confirmation that he would be appointed to take over the farm:I want an explanation of when and why Clara Jane Wightman has changedthe terms of her father's will (Robert Wallace Wightman), and is leaving the farm "Rangatira" to Robert Wightman. I am one of two sons of RI Andersonand my grandfather stated in his will that the farm "Rangatira" was to be leftto the sons of RI Anderson. His wish was to try and keep the land in the family (not the Wightman surname) for as long as possible. I want a reply and answers to this in return post please, and a copy sent to: Mr CharlesSamuel Anderson as he is the other son of RI Anderson.[22] The Public trust did not respond to this request.[23] While the claimant grandchildren did not benefit from Wallace's estate, Claraleft them each $44,273.Robert William Wightman[24] Robert William, aged 61, is Wilson's oldest son. He too has fond childhood memories of his grandfather. Unlike his siblings however, he would later return to6 For example, Colin and Robert William recall visiting their grandfather from time to time and his habit of giving them a £1 note. Rodger remembers as a young boy being driven around the farm by his grandfather.Rangatira to maintain his grandparents' farming legacy and in so doing form a close relationship with his aunt Clara. It appears Robert William became aware of Clara'sintention, as early as 1984, to vest the farm in him. He assumed management of the farm in 2003 drawing a salary of $55,732 per annum and paid rent of $120 per fortnight. Shortly after he moved to the Rangatira farm he purchased an adjacent block of 75 hectares using the proceeds of the sale of his Sefton property and monies from an inheritance. He was actively involved in securing irrigation for his block and about a third of Rangatira using the Barhill Chertsey scheme.[25] Clara left Wallace's residuary estate to Robert William, with an estimated netvalue of $11,478,243. Clara also made a specific bequest to him of $50,000 and like the other grandchildren left him the sum of $44,273.Other grandchildren[26] As noted, Charl's son, David Wightman, was vested a life interest in PoffsReserve and in Mt Hutt. He realised his interest in Mt Hutt and retained the sum of $3,385,000. The remaining granddaughters, Rebecca McPherson, Lynette Bellew, Corrina Anderson, Catherine Gray and Mary Oldfield received the balance of the Mt Hutt residue, namely $832,824 each. Like the other grandchildren, they all received$44,273 from Clara's estate.No issue estoppel[27] In a judgment of Panckhurst J dated 26 March 2013, it was determined that the decision of Wilson J dated 28 October 1971 did not give rise to a cause of action or issue estoppel in relation to the present claim on the basis that, amongst other things:7(a) the decision did not contain any determination that there had been no breach of moral duty in relation to the grandchildren;(b) the grandchildren could not have claimed at the time the earlier proceeding was determined; and7 Wightman v Public Trust [2013] NZHC 671.(c) there was no implicit finding concerning the power of appointment(in cl 8(h) of Robert Wallace's will) in the 1971 judgment.Statutory scheme[28] The Family Protection Act 1955 (FPA) consolidated and amended the lawrelating to claims for "maintenance and support" out of estates of deceased persons. Section 3 (as at 1965) conferred the claimant grandchildren an entitlement to claim in the following terms:3 Persons entitled to claim under ActAn application for provision out of the estate of any deceased person may be made under this Act by or on behalf of all or any of the following persons:(a) The wife or husband of the deceased:(b) The children of the deceased, whether legitimate or illegitimate:(c) The grandchildren of the deceased, being children (whether legitimate or illegitimate) of any child (whether legitimate or illegitimate) of the deceased:Provided that no claim under this Act may be made by any such grandchild of the deceased unless-(i) The parent through whom he is related to the deceased has died (whether in the lifetime of the deceased or subsequently): or(ii) That parent has deserted or failed to maintain the grandchild; or(iii) The grandchild and the persons (if any) who have custody of the grandchild do not know the whereabouts of that parent; or(iv) That parent is an undischarged bankrupt; or(v) That parent is a mentally defective person within the meaning of the Mental Health Act 1911:[29] By contrast, s 3(2) now reads, following an amendment in 1967 in apparent response to the Court of Appeal decision in Re McGregor:8(2) In considering any application by a grandchild of any deceased person for provision out of the estate of that person, the Court, in considering the moral duty of the deceased at the date of his death, shall have regard to all the circumstances of the case, and shall have regard to any provision made by the deceased, or by the Court in pursuance of this Act, in favour of either or both of the grandchild's parents.[30] Section 4 (as at 1965) frames the jurisdiction of the Court to make orders. It stated:4 Claims against estate of deceased person for maintenance(1) [I]f any person (in this Act referred to as the deceased) dies, whether testate or intestate, and in terms of his will or as a result of his intestacy adequate provision is not available from his estate for the proper maintenance and support of the persons by whom or on whose behalf application may be made under this Act as aforesaid, the Court may, at its discretion on application so made, order that such provision as the Court thinks fit shall be made out of the estate of the deceased for all or any of those persons.Final distribution[31] A FPA claim must be made within 12 months of the grant of administration. The time to make a claim may be extended by the Court provided that theapplication is made before "final distribution" of the estate.9[32] Fisher J observed in Hill v Hill that there must in fact be transfer of the estate to the recipient beneficiaries.10 He stated:11However, for the purposes of the Family Protection Act there is a cleardistinction between a beneficiary's acquisition of a vested equitable interest in an estate asset on the one hand and a "distribution" to the beneficiary forthe purposes of the Family Protection Act on the other. The vesting of an interest in a specific item of estate property in a beneficiary does not of itselfamount to a distribution for the purposes of the Family Protection Act All the estate assets remain subject to an award until placed beyond the trustee'sreach by a perfected alienation of the property. Thus in the case of land there must be the transfer of legal title. I do not think that a disposition pursuant to the exercise of a power of appointment is an exception. It confers a8 Re McGregor (deceased) [1961] NZLR 1077 (CA).9 Family Protection Act 1955, ss 9(1) and (2).10 Hill v Hill (1998) 17 FRNZ 515 (HC).11 At 522 (citations omitted).specific equitable interest but it does not change the legal title or even provide the beneficiary with the means of perfecting title without further action on the part of the estate trustees. The trustees must still execute a memorandum of transfer.[33] With respect, I agree.[34] Mr Hunt suggested that a different approach was adopted by Doogue J in Re Powell.12 But on closer inspection, the Judge simply resolved the issue on the facts.Indeed the Judge observed that "the issue is one of fact" and concluded:[19] In my view there can be no doubt that the last act of administration of the trustees in the estate of the late George Powell occurred when John Eric Powell, the surviving life tenant, died and his life tenancy was extinguished and the estate was then held on behalf of the George Powell trust. Thereafter the George Powell Trust as the sole beneficiary was the only body with any interest in the estate, and there was nothing further for the trustees of the estate of the late George Powell to administer in respect of that estate.[35] The Judge observed further:[20] The point is that there was nothing left to be done by the trustees in their capacity as trustees of the estate of George Powell after the death of John Eric Powell. Thereafter all actions by them related to the administration of the George Powell Trust, which everyone agrees is substantially charitable in nature.[36] Plainly therefore there was nothing further to be done in Re Powell with the same administrators simply assuming the role of trustees and hence final distribution had occurred.[37] For completeness, in Jurkovich v Fortune, Somers J observed when dealingwith "final distribution" under the Law Reform (Testamentary Promises) Act 1949:13It is not in doubt that the words "final distribution" refer to the point of timeat which the executor of a deceased person, having completed the administration of the estate, becomes a trustee.[38] The Judge observed further:1412 Re Powell (2000) 19 FRNZ 113 (HC).13 Jurkovich v Fortune [1988] 2 NZLR 442 (CA) at 445.14 At 446.Obviously, in the case of an ascertained residue there need be no actualtransfer in order to achieve "final distribution". That point is reached not by the transfer of assets but by the change in the fiduciary character of the personal representative.[39] But this analysis must be qualified by s 2(4) of the FPA, which states (in short) that no property held for beneficiaries in an estate shall be deemed to be distributed by reasons of the fact that the administrator has ceased to be an administrator and has become a trustee.15[40] Turning to the facts here, the Public Trust retains legal ownership and possession of the Rangatira farm. Accordingly I am satisfied that there has been no final disposition for the purpose of s 9 of the FPA.Extension of time?[41] Relevant factors in determining whether an extension should be granted include length of the delay, the extent to which it is excusable, the strength of the claim of breach of moral duty, and the extent of any prejudicial effect on the beneficiaries who have ordered their lives in reliance on the will.16[42] I deal with the strength of the claim below. I turn now to deal with other relevant factors.Excusable delay[43] The grandchildren became eligible to bring a claim when their parents died. Colin, Ann Marie and Pamela's father passed away in 1999. Richard's mother died in 2003 and Rodger's mother died in 2010. The proceedings were commenced in June 2012. The delays of 13, nine and two years between eligibility to make a claim and commencement of proceedings were significant. Nevertheless they were excusable.15 Re Magson [1983] NZLR 592 (CA) at 597.16 At 598.[44] Clara died on 30 August 2011. The proceedings were therefore commenced within 12 months of her passing and the contents of her will being made known to the family. I am satisfied that the plaintiffs did not have direct knowledge aboutClara's intention to exercise her power of appointment solely in favour of RobertWilliam until they became aware of the terms of her will. Anne Marie, Colin, Pamela and Richard were largely remote from the affairs of the estate, Clara and Robert William and so could not be expected to know. Rodger plainly had hissuspicions about Clara's intentions, as is evident from his abovementionedcorrespondence with the Public Trust about the power of the appointment. But I accept he was not certain about that because Clara never told him so directly and the Public Trust refused to disclose information about her will to him.17 So while some of the grandchildren had a right to make a claim from as early as 1999, they were not alerted to the need to commence proceedings to secure provision for themselves until relatively recently. As Fisher J put it in Hill, they were not galvanised into action until the will had been published.18[45] Mr Hunt contends that proceedings should have been commenced much earlier because the pleadings claim that the breach of duty arose upon the testamentary grant of an unfettered power of appointment to Clara in 1965. But this imputes to the plaintiffs knowledge of the legal basis for claim. In reality, apart from Rodger, they were simply not aware of the significance of cl 8(h) until recently, and Rodger made his feelings known to the Public Trust so there can be no serious complaint about his proceeding.Reliance?[46] Robert William relied on representations made by Clara to him that he would inherit the farm. As a consequence over the span of some 20 or more years he arranged his affairs on the basis that he would eventually own Rangatira. This involved a number of financial decisions, including the sale of land in Sefton and the17 Each of the plaintiffs was cross-examined on their knowledge of the Clara's decision to appointRobert William. They all denied direct knowledge of a decision to appoint until they sawClara's will or were told by another family member about Clara's will. I have no reason to doubttheir veracity about this.18 Hill v Hill, above n 8, at 521.purchase of a block adjacent to the Rangatira estate. It also involved a commitment to the management of the farm, as I say, over the span of decades.[47] However, this reliance should not be a bar to the claim. Robert William had only an expectation, not a right, to assume that ownership of Rangatira would vest in him until such time as the decision made under Clara's power of appointmentcrystallised. Any unfairness to Robert William can be mitigated by the nature of the remedy (if any) afforded to the claimants.Assessment of dutySubmissions[48] Mr Hunt submitted that the existence and nature of the relevant moral duty must be assessed against the circumstances that existed in 1965 and against the legislative framework that then existed. He placed particular emphasis on the limitations imposed by s 3 of the FPA, as it then was, in dealing with claims made by grandchildren. He submitted that s 3 (prior to amendment in 1967) evinced a clear statutory policy concerning grandchildren, namely that s 4 was directed to providing for their financial need only. This aligned with leading contemporary authority to the effect that the duty of the testator was primarily to provide for the financial needs of his children and not his grandchildren.19 He also submitted that a wider duty of maintenance and support including to provide familial recognition (without necessitous circumstances) could not reasonably have been foreseen by Wallace in 1965. Mr Hunt also contended that provision for the grandchildren wouldcircumvent Wilson J's finding that the testator had discharged his duty to the generation above (Wallace's children).[49] Mr Till QC emphasised that the moral duty and any purported breach must be assessed in terms of the circumstances as they existed in 1965.[50] Ms Grieve, by contrast, urged that I must interpret the scope of the moral duty in light of changing social conditions and the principles applicable to s 4 stated19 Re Izard (deceased) [1954] NZLR 234 (SC); Re McGregor (deceased) [1961] NZLR 1077 (CA).in recent authority. The upshot of this is that the duty to maintain and support the grandchildren encompassed the requirement to provide familial recognition. She agreed however that the assessment of whether there has been a breach and the relief for any such breach must be undertaken in light of the circumstances as they existed in 1965.Assessment[51] I have come to the view that as at 1965 the obligation to make adequate provision for the "proper maintenance and support" of family members included, where appropriate, recognition of financial need and family belonging. I therefore reject the suggestion that a testator in 1965 was obliged only to provide for the grandchildren if they were in necessitous circumstances at the time of the testator's death. However, if a grandchild's parent was alive at the time of the testator's deaththen special circumstances were (and are) needed to establish a moral obligation to that grandchild. By way of summary, my reasons are:(a) I am bound to apply the legal definition of proper maintenance and support laid down by the Court of Appeal in Williams v Aucutt to the effect that:20Support is used in its wider dictionary sense of "sustaining, providing comfort". A child's path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased.(b) In any event, as at 1965, according to then leading authority:(i) the moral obligation to make adequate provision for the proper maintenance and support extended to grandchildren irrespective of their eligibility to make a claim;2120 Williams v Aucutt [2000] 2 NZLR 479 (CA) at [52].21 Re Wright (deceased) [1954[ NZLR 630 (CA); Re McGregor (deceased) [1961] NZLR 1077 (CA).(ii) financial need was not required to maintain a claim under s 4 FPA;22(iii) while it was not easy to establish a breach of duty to a grandchild especially while the parent was alive, there was no presumption against grandchildren and all of the circumstances had to be considered – as subsequently explained in Re Horton.23[52] I now turn to explain each of these reasons in more detail.Williams v Aucutt[53] Williams v Aucutt authoritatively states that the concept of proper maintenance and support is a composite term, requiring (in short) adequate provision for both financial need and familial recognition. It is declaratory of the law as it relates to the interpretation of s 4 of the FPA. It is not fact specific. It draws together the common threads of leading authority and academic commentary to clarify the proper ambit of a testator's latent moral obligation to eligible beneficiaries.24Ordinarily I would be bound to apply it.25[54] A curious issue in this case however is whether the composite concept affirmed in Williams is apposite to a testamentary decision that took place 50 years ago. Mr Hunt's basic point is that Wallace could not have expected to be required toprovide for his grandchildren if they were not in financial need. Relevantly, s 6 of the Interpretation Act 1999 requires:An enactment must be applied to the circumstances as they arise.22 Re Harrison (deceased) [1962] NZLR 6 (CA).23 Re Horton (deceased) [1976] 1 NZLR 251 (CA).24 See also Brewer v Wright [1982] 2 NZLR 77, at 86, citing among other cases: Bosch v Perpetual Trustee Co Ltd [1938] AC 463 (PC) at 479; Re Harrison (deceased) [1962] NZLR 6 (CA), Re Allen (deceased) [1922] NZLR 218 at 220.25 Customs v Lawrence Publishing Co Ltd [1986] 1 NZLR 404 at 414-415; Cross v CIR [1991] 3 NZLR 1 at 6; Couch v Attorney General (No 2) [2010] 3 NZLR 149 at [51]. See JF Burrows and RI Carter Statute Law in New Zealand (4th ed, LexisNexis, Wellington, 2009) at 190[55] This provides a proper basis for ambulatory interpretation so that an enactment is interpreted in a way that is consistent with evolving social conditions.26But I think clear justification is needed to permit regressive interpretation that is discordant with current leading authority, legal norms and social values. As I will shortly explain, there is no justification for this in this case.Pre-1965 position[56] Mr Hunt relies on the applicable eligibility criteria stated at s 3 pre-1967 to show that a different statutory policy applied as at 1965 and that s 4 was directed to the financial need only. The effect of s 3 was that claims by grandchildren could onlybe commenced when the grandchild's parent was deceased, absent, bankrupt ormentally defective. This was changed in 1967 so that the Court was simply required to have regard to any provision made to the parent. There is academic support for MrHunt's submission. Bill Patterson notes that in the first edition of his book it wassubmitted that the 1967 amendment to s 3 removing the eligibility criteria marked achange in legislative policy, so that after the change:27 it was no longer appropriate to state as a general principle that the claim of grandchildren whose parents are alive is ordinarily not a strong one or that the need of the grandchildren must be measured in light, inter alia, of the ability of the parents to provide for them.[57] But the current text also notes:28That might well be a dominant factor in a small estate or in an estate wherethere are substantial competing complains, but a finding that a grandchild'sparent does have the ability to provide for him or her in an adequate way does not necessarily mean that there was no moral duty on a grandparent also to make some provision, even some liberal provision, for thegrandchild, if the grandparent's assets are liberal enough.[58] It is also abundantly clear from the pre 1965 authorities that there was a distinction drawn between the capacity to bring a claim and the nature and content of the moral duty owed to grandchildren. F B Adams J in Re Wright in 1954 stated:2926 Mafart v TVNZ [2006] NZSC 33, [2006] 3 NZLR 18 at [7], noted in JF Burrows and RI CarterStatute Law in New Zealand (4th ed, LexisNexis, Wellington, 2009) at 19.27 Bill Patterson Law of Family Protection and Testamentary Promises (4th ed, LexisNexis, Wellington, 2013) at 177.28 At 177.The principles laid down [in Bosch v Perpetual Trustee Co Ltd] are in my opinion, applicable to claims by grandchildren as well as to all other claims. There is no difference in kind between one sort of claim and another, the words of the Act applying with equal force in all cases.[59] Gresson P also stated in Re McGregor:30The fundamental conception of the Act is to permit the Court to remedy a failure on the part of a deceased person to make "adequate provision for the proper maintenance and support of wife, child, or children," and since 1947, grandchildren. That a particular individual, e.g., a grandchild, might notbe qualified to apply and so have no legal right as was the case prior to1947 would not necessarily negative the existence of the moral obligation.There might well be cases where there was a very strong moral obligation to make some provision for a grandchild which was disregarded, but which the Court even now would be powerless to rectify.[60] Nevertheless the relationship between parent and child assumed primacy in 1965,31 as it does today.32 Furthermore, the fact that the parent was alive at thetestator's passing was (and is) a major factor in determining whether the testator was obliged to make provision for the grandchildren.33 Gresson P and Turner J inRe McGregor rejected the claims of the grandchildren in that case effectively on the basis that there was no duty to the grandchildren because at the time of the testator'sdeath their parents still lived and they were not in financial need.34 But even then, neither Judge ruled out the possibility of a meritorious claim by grandchildren whoseparents were still alive at the time of the testator's death. Gresson P adoptedMcCarthy J's formulation in the Court below that the duty to make provision mightarise in "special circumstances"35 and Turner J posited that the duty might arise where the future needs of the grandchild were clearly foreseeable.36[61] Thus in Re Horton, Cooke J said the following about the approach taken to claims by grandchildren in period under scrutiny:3729 Re Wright (deceased) [1954] NZLR 630 (CA) at 638.30 Re McGregor, above n 16, at 1084.31 At 1090.32 Flathaug v Weaver [2003] NZFLR 730 at [32].33 Re McGregor, above n 16, at 1088.34 At 1090 and 1107. Cleary J considered that the 1955 change to s 3 plainly removed therequirement for the parent to have died prior to the testator: at 1096.35 At 1090.36 At 1105.37 Re Horton (deceased) [1976] 1 NZLR 251 (CA). See also Patterson, above n 18, at 174.During those two phases of the legislation the tenor of the decisions was that ordinarily it was not easy for a grandchild to establish a breach of moral duty, especially perhaps if the parent was living or if the grandchild was claiming in competition with a child having a family of his or her own to support; but there was no presumption against grandchildren and all the circumstances had to be considered.[62] Notably also Burrows describes the changes to s 3(2) as an example of anamendment that incorporates "in an Act a judicially – identified principle or gloss".38Section 3(2) replaced the eligibility criteria with the requirement: to have regard to all the circumstances of the case [and] to any provisionmade in favour of either or both of the grandchild's parents.[63] I would also add that as the Privy Council emphasised in Bosch v Perpetual Trustee Co Ltd in 1938 and the Court of Appeal re-emphasised in Re Harrison in 1961, "need of maintenance" was not determinative.39 In Bosch, dealing with a large estate, the Privy Council stated:40The amount to be provided is not to be measured solely by the need of maintenance.[64] In Re Harrison Cleary J took this to mean:41 the obligation is not to be conditioned solely by the need of maintenance considered only from an economic point of view.[65] Foreshadowing perhaps the broader concept of moral obligation affirmed inWilliams v Aucutt, Cleary J also opined:42In many cases the size of the testator's estate, or the deserving nature of the daughter's claim, may be such that she cannot be excluded without breach ofthe moral obligation, even although she be happily married to a husband of means.[66] And Gresson P observed:4338 J F Burrows and R I Carter Statute Law in New Zealand (4th ed, LexisNexis, Wellington 2009) at 196.39 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 (PC) at 479; Re Harrison (deceased) [1962] NZLR 6 (CA) cited by the Court of Appeal in Williams v Aucutt, above n 20, at 488.40 Bosch v Perpetual Trustee Co Ltd, above n 37, at 479.41 Re Harrison (deceased), above n 39, at 18.42 At 1943 At 14.In considering whether there is a moral obligation, regard is had not only to the needs of the applicant but also to the extent of the estate which the testator had to dispose of and to the claims of which the other persons had upon him.[67] Accordingly, while it was difficult in 1965 for grandchildren to maintain a claim while they still had parental support, their claims had to be assessed like other claims on all of the circumstances of the case. Therefore I do not consider that legal frame as it existed in 1965 prevents the application of the composite description of the testator's latent moral duty subsequently affirmed in Williams v Aucutt.[68] Nevertheless whether there was a moral obligation to the grandchildren and whether it had been breached must be assessed by reference to the factual circumstances as they existed in 1965. If a parent was alive at the time of thetestator's death, then special circumstances were and still are required to establish a breach of a grand parent's duty to a grandchild. 44Did Wallace breach his moral duty?[69] Having resolved that I can apply the principles affirmed in Williams v Aucutt,I can deal with the basis for the claim reasonably succinctly as the facts are not complicated. The framework provided by Williamson J in Re Ward for the assessment of breach is not controversial, so I adopt it for my assessment:45Under the principles which are contained in those various decisions, it is necessary to consider a number of factors applying to grandchildren; including the ability of their own parents to provide for them; the closeness of any association between the testator and the grandchildren; the prospect of any inheritance they have from other grandparents; the size of the estate; the amount of competing claims; and any provision made for the children of the grandchild or grandchildren.[70] I will then assess whether overall Wallace was under an obligation to make provision for his grandchildren at the time of his death and if so whether he breached that obligation.44 The implication of Williams v Aucutt for grandchildren is summarised by Bill Paterson in Law ofFamily Protection and Testamentary Promises at 181 as follows: "If a parent has died, then thegrandchild's claim would normally be based on conventional principles involving the combinedelements of "maintenance and support".45 Re Ward (deceased) (1990) 7 FRNZ 586 (HC) at 591.Parental support[71] At the time of the will, the evidence suggests that Wallace would have reasonably anticipated that his children would be able to provide for the financial needs of the grandchildren. But it is also relevant under this heading that no or very limited provision was made for the parents of the claimant grandchildren. There was then effectively no or little provision by Wallace for the financial or familial recognition needs of the claimant grandchildren via their parents.Closeness[72] The claimant grandchildren were still young when their grandfather died. It appears nevertheless that they had a loving relationship with their grandfather although their contact may have been largely irregular (by modern standards). As between the claimants and Robert William, there was no appreciable difference between them in terms of their relationship with their grandfather. There is certainly nothing in the evidence to suggest that the testator thought ill of any of them or might not be disposed to provide for any of them. On the contrary, Wallace's expressintention to provide for his grandchildren is a clear marker of his desire to recognise them.Prospect of inheritance from others[73] The estates of both grandparents favoured their eldest daughter and son,Clara and Charl. Ample provision was also made by Wallace for Charl's grandchildren and Isabella's will made similarly ample provision for Rebecca and Margaret's daughters. No direct provision was otherwise made for the remaining grandchildren, though Clara's even handed legacy meant that each of thegrandchildren received around $44,000 from her estate .Size of Estate[74] I have described the estate at [3]-[6] and outlined the primary distributions at [7]-[14]. The claimants put the value of the total estate at about $180,000 in 1965.46The residuary estate is estimated to be worth $11.478 million today. The annual net earnings from the Rangatira farm are however reasonably modest.47Provision for grandchildren[75] The will provided four mechanisms for providing for grandchildren,48reflecting Wallace's clear intention to provide for them. Clara's power ofappointment was however the primary mechanism. This envisaged the trustee of theestate will hold on trust for "all or any of [the] grandchildren and great grandchildrenin such shares and in such proportions for such interests. and in such manner in all respects as [Clara] shall ... by will appoint." Problematically, a wise and just testator standing in Wallace's shoes in 1965 could not be sure that the financial or familial recognition needs of the grandchildren would be met via this mechanism. At most, Wallace could have hoped that Clara would exercise the powers bestowed upon her in a way that satisfied his duty of maintenance and support. But it could be no more than that. It is akin to the error made by the testator in Bosch, in thinking that he could rely on the discretionary judgment exercised sometime in the future to discharge his moral obligation.49 As it transpires, there was in fact no provision made by Clara for 14 of the 15 eligible grandchildren. In this regard, the failure to provide a mechanism to discharge the moral duty is exemplified in the result. The46 This figure is drawn from the judgment Oldfield v Public Trustee SC Christchurch A12/67,28 October 1971 at 2 where Wilson J said: "the estate is a large one. It was valued for probatepurposes at over $180,000, it was substantially reduced by duties and administration costs butsubstantially that deficit has been made up on paper by the increased value of the land whichcomprised the major asset in the estate. At the present time it is of a net value of $208,000".47 In three of the past five years the farm has made a loss. In the other two it has made modestprofits of less than $100,000.48 (1) Under cl 7 David received a life interest in Poffs Reserve and it was ultimately divided amongst his children. (2) Under cl 8(h) Clara was given the power to appoint the residuaryestate to "all or any" grandchildren or great-grandchildren. (3) And under cl 8(h), if Clara failed to exercise her power of appointment, the residue went to the sons of Rebecca in equal shares. (4) The Public Trust was given the power to raise to whole or some of the "contingent or vested share" of any grandchild or great grandchild in the estate and apply it towards their "maintenance, education, advancement or benefit".49 Bosch v Perpetual Trustee Co Ltd, above n 21. See also Re Harrison (deceased,) above n 39 at 17.claimant grandchildren have not directly benefited under the will, and Wilson'schildren have not benefited at all.Competing claims[76] There is only one competing claim against the residuary estate, namelyRobert William's claim. It is a compelling claim, but for reasons that arose subsequent to Wallace's death. In 1965, his moral claim against Wallace's estatecould not have been any greater than his siblings and cousins' claims.Special circumstances[77] In light of the above, I am satisfied overall that the mechanism adopted by Wallace did not discharge his moral duty to properly recognise the place of the claimant grandchildren in the Wightman family. Significantly in my view five factors combine in this case to take it well outside the normal run of cases. First, this is a very large estate. The net worth of the residuary estate is estimated at $11,478,243.50Second, the testator plainly intended to make some provision for the grandchildren depending on their future individual circumstances. Third, the claimant grandchildren have not been recognised at all. By contrast several grandchildren had received more than $800,000 from Isabella and/or significantly benefited through their parents. While the Act is not concerned with fairness or equity as between claimants, such grossly disparate treatment of equally eligible claimants demands careful examination.51 Fourth, there are no competing claims against the estate byWallace's wife, children or remaining grandchildren, except by Robert William. Fifth, Robert William had no superior moral claim against the estate than the other grandchildren at the time of the testator's death.[78] Accordingly, in view of the special circumstances of this case, claimant grandchildren deserved and needed, like their sibling and cousins, familial recognition. By leaving them nothing, Wallace breached his moral duty to them.50 The most recent valuation puts the value of the Rangatira farm at $12,875,202.51 See for example Fisher v Kirby [2012] NZCA 310 where three children with a strong moral claim were left almost nothing from a large estate while their cousins with comparatively weak claims received the bulk of the estate. The children received substantial awards. As a matter of logic, where the claims are morally equal, but some are given nothing, that must tend to indicate a breach.[79] For completeness I reject Mr Hunt's submission that this finding cuts across Wilson J's judgment. The grandchildren are eligible to claim in their own right andthe lack of provision for their parents via the will is simply a factor that is relevant to the assessment.[80] I turn then to the issue of relief.Relief[81] Williams v Aucutt provides further guidance on the question of relief. It states:52Just what will constitute proper support in this latter respect is a matter of judgment in all the circumstances of a particular case. It may take the form of lifetime gifts or a bequest of family possessions precious to its members and often part of the family history and where there is no economic need it may also be met by a legacy of a moderate amount. On the other hand, where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion of participation in the family estate may not amount to proper support for a family member.[82] The claimants seek five per cent each of the residuary estate.53 But I do not think it is appropriate to apply a percentage analysis to the circumstances of this case. Rather, while I accept that this is a large estate, the provision to them must be coloured by the reasonable expectations of the testator in 1965.[83] As Mr Hunt stressed, the will and contemporaneous record plainly envisaged that, if possible, the farms would remain in family hands. Clause 8(h) specifically contemplates that the land could be handed down to descendants that would assume responsibility for the land. This Court is not unfamiliar with the importance offamilial connection to land, and clearly, at the time of Wallace's death the Wightmanfamily have a deep connection to the Rangatira farm. It would be inconsistent withWallace's intentions for a distribution to the grandchildren to cause a substantial part of the Rangatira farm to be sold out of the family. This must be taken into account when identifying what is required to remedy the breach of duty in this case.52 Williams v Aucutt, above n 20 at [52].53 A five per cent award from Wallace's residual estate would see the claimants receive approximately $574,000 each.[84] As to the quantum, I am able to consider the circumstances of the grandchildren after the testator's passing for the purpose of assessing what is required to repair the breach.54 Further, my discretion to grant an extension of time to bring proceedings is premised on no unfairness arising to Robert William. In this regard, I am mindful of the legitimate expectations that Robert William held in relation to the property and the sacrifices and life changes he has made based on representations made to him. It seems to me that it would be unfair if the effect of the disposition would be to remove Robert William from the entire property and his ongoing management of it.[85] Finally, the symmetry in passing the farm to Robert William will not be lost on those with a sense of the history of this matter. Clara placed the farm in the handsof Robert William, Wilson's eldest son, bridging a generational divide caused by Wallace's decision to leave Wilson without an inheritance. It was a gesture of a matriarch, as was her decision to leave her inheritance on an even handed basis to all of the grandchildren (also factor to be considered in fixing quantum).Result[86] On the basis of the foregoing, having examined the financial circumstances of the Rangatira farm, I consider that a distribution of $150,000 to each of theclaimants will discharge Wallace's moral duty to them. As I have not canvassed howthis order might be implemented, I reserve leave to the parties to revert to me for timetabling orders in terms of the management of this issue.5554 Re Izard (deceased) [1954] NZLR 234 (SC); Re Ward, above n 43.55 Notably cl 8(h) contemplates that the distribution may be made over time rather than in a lump sum.Costs[87] My present view is that the reasonable costs of the parties and the Public Trust shall be paid out of the estate. Nevertheless, memoranda as to costs including quantum may be filed within 15 working days, though I do not expect this will require further intervention of the Court.Solicitors:Duncan Cotterill, ChristchurchN Till QC, Christchurch Young Hunter, Christchurch