WIGHTMAN AND OTHERS V PUBLIC TRUST HC CHCH CIV 2012-409-001312

WIGHTMAN AND OTHERS V PUBLIC TRUST HC CHCH CIV 2012-409-001312 [26 March 2013]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV 2012-409-001312[2013] NZHC 671UNDER The Family Protection Act 1955IN THE MATTER OF the Estate of Robert Wallace WightmanBETWEEN COLIN MARK WIGHTMAN, RICHARDCHARLES CLELAND OLDFIELD,RODGER WIGHTMAN ANDERSON,ANN MARIE FLOOD AND PAMELAJANE PARROTPlaintiffsAND PUBLIC TRUSTDefendantAND ROBERT WILLIAM WIGHTMANHearing: 25 March 2013Counsel: Ms S Grieve and Mr S Caradus for PlaintiffMr N Till QC and Mr R Calvert for DefendantMr I Hunt for Robert WightmanJudgment: 26 March 2013JUDGMENT OF PANCKHURST JThe proceeding[1] The plaintiffs are grandchildren of the late Robert Wightman who died in 1965. He was a farmer in the Methven area, having two farm properties and a leasehold interest in other farmland. The claimants seek:(a) an extension of time to bring this family protection claim; and(b) increased provision from their grandfather's estate to provide for theirproper maintenance and support.[2] The matter for my determination is a separate question arising from an earlier family protection claim. This was a claim by members of the previous generation,three of the testator's five children who sought further provision from their father'sestate. That claim was resolved by a judgment of Wilson J delivered in the then Supreme Court on 26 October 1971. The issue is whether that judgment gives rise to a cause of action or issue estoppel in relation to the new claim.[3] Another of the grandchildren also named Robert Wightman asserts an estoppel. To explain its basis it is necessary to outline something of the background and to refer to the 1971 decision.Family background[4] The testator was predeceased by his wife, but left five children, three daughters and two sons. Each received some form of provision from the estate, such as a life interest, a bequest of stock and farm equipment, and/or an annuity. The residue of the estate was to be held upon trust for grandchildren and great- grandchildren in such shares and proportions as the testator's daughter Clara shouldappoint. Clara, I note did not marry or have children and was also the oldest of the Wightman family. She did not die until recently, in August 2011. By her will she appointed shares in the residuary estate to 15 grandchildren, all of whom were livingat the date of the testator's death.[5] It is the exercise of the power of appointment which has given rise to this proceeding. Some grandchildren are disappointed as to the benefit they received from their grandfather's estate. I note that the residuary estate has a present value ofseveral million dollars.[6] This proceeding was commenced in mid 2012, within 12 months of Clara'sdeath. Five grandchildren from three of the four families are claimants. The PublicTrust represents the estate. It has taken the normal stance by providing information to the Court, but otherwise adopting a neutral position.The previous family protection proceeding[7] All five of the trustee's children were represented at the hearing in 1971.Mr R E Wylie was appointed to represent the residuary beneficiaries 'on all questions arising upon the (originating) summons' save for one, David Wightmanalso a grandson, who was represented by Mr PGS Penlington. The three claimants comprised two daughters of the testator and a son Robert Wightman, the father of the present Robert Wightman who I mentioned a moment ago.[8] The hearing of the family protection claim began on 13 May 1970. The best evidence of what occurred is contained in a memorandum prepared by a Public Trust solicitor and dated 19 May 1970. Mr EJ Somers, counsel for the Public Trustee began by providing to the Judge a summary of the position of the estate.[9] Mr JR Woodward then made submissions on behalf of the first plaintiff, Margaret Oldfield. She had received an annuity of $400. Mr Woodward submitted that this was inadequate provision. He sought an increase in the annuity to $3,000, a legacy of $20,000 and abolition of the power of appointment vested in Clara. As to these submissions the solicitor's memorandum included this:In my view he failed completely to establish any grounds for the abolition of the power of appointment, unless what he was trying to do was to suggest to His Honour that provision could be made from the capital of residue for the plaintiff and any other applicants, as if the power of appointment did not exist. This was not, I think, what Mr Woodward actually had in mind, but it seems to me highly unlikely that His Honour will in any way interfere with the power of appointment.[10] Counsel for the other two plaintiffs, Mr PT Mahon, then made similarsubmissions. Indeed, the solicitor's memorandum records that 'he too attacked the power of appointment'. Messrs Wylie and Penlington were heard next. They onbehalf of residuary beneficiaries opposed relief being granted to the claimants.[11] Mr JG Leggat representing, Charles Wightman, then voiced opposition to the claim. He apparently devoted a considerable period of time to an analysis of thesupporting affidavits sworn by the plaintiffs. In the result he persuaded the Judge that the affidavits were deficient, that there had been inadequate disclosure of the means of the claimants. It may well be that Mr B McClelland appearing for another of the children supported the arguments advanced by Mr Leggat.[12] At this point in the hearing, about mid-afternoon on the first day, matters took an unexpected turn. The Judge accepted that the affidavit evidence was deficient, but he indicated to counsel that he was minded to adjourn the proceeding and provide an opportunity for the claimants to repair the breach, that is to file further affidavits better disclosing their means.[13] This excited some spirited opposition, along the lines that the onus to establish the claim was upon the plaintiffs and they should not have a second chance to establish that they were in need of maintenance and support. However, such opposition was to no avail. Wilson J was unpersuaded, the adjournment was granted and opportunity extended for further affidavits to be provided.[14] The hearing did not resume until late October 1971. It began with cross- examination of some of the deponents, followed by further legal submissions. Late in the day the Judge delivered an oral judgment. He found that this was to use his words, 'a very large estate'. He recorded that the net value of the estate was $208,000. He further noted that there were no competing claims and no infant children were shown to be in need of provision. Nonetheless, the Judge carried on to consider whether there was any breach of moral duty by the testator, as this was the first and threshold question for his consideration.[15] The plaintiffs had to show that they were indeed in need of proper maintenance and support. Having reviewed the circumstances of Margaret Oldfield and Robert Wightman, the Judge concluded that they had not established need. He then turned attention to the third claimant, Rebecca Anderson, and found that there was evidence of need. However, he was only inclined to increase her annuity from $400 to $1,500.[16] Finally the Judge concluded that although only one of the three complainantshad succeeded, the claims had been 'properly brought' and therefore he awardedcosts to the claimants and to all other parties, such costs to be met out of the estate.[17] Before I depart from the 1971 hearing, it is as well to record the legal position in relation to who could claim at that time under the then Family Protection Act. This was defined in s 3 of the Act: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 who 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 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:...An appeal[18] Margaret Oldfield pursued an appeal to the Court of Appeal. This was heard in mid-July 1972. Like Wilson J, two of the Judges in the Court of Appeal delivered oral judgments, while the third concurred in those judgments. The Judges upheld the approach adopted in the Supreme Court and also the outcome reached by Wilson J. Hence the appeal was dismissed. From this point, I need not refer to the appealjudgments again, it is sufficient for present purposes to refer to the original judgment of Wilson J in considering the present arguments based on estoppel.Cause of action and issue estoppel[19] Robert Wightman through Mr Hunt asserts both arise in this instance. The gist of the former estoppel is that the cause of action sought to be controverted in a current proceeding has already been determined between the same parties in a previous judicial decision.[20] Issue estoppel is subtly different in that it 'bites on the facts and issues required to establish a cause of action'1. Hence, if upheld, a party is estopped from relitigating a finding, whether of fact or law, or a mixture of the two where that finding was previously decided between the same parties.[21] What cause of action, or issue is said to have been determined by Wilson J in 1971, so as to found an estoppel in relation to the grandchildren's claim?[22] As to cause of action of estoppel, I understood Mr Hunt to contend:(a) That the matter for determination in 1971 was whether the testator had been in breach of any moral duty owed to the plaintiffs(b) That the grandchildren were represented by Mr Wylie who opposed this claim(c) The Judge, Wilson J, held that there was no breach of moral duty (presumably save for the need to increase one annuity).(d) This present claim seeks to re-litigate that finding.I shall summarise my conclusions in relation to these contentions in a moment.1 S Wilken and K Ghaly The Law of Waiver, Variation and Estoppel (3rd ed, Oxford UniversityPress, New York, 2012), at [14.09].[23] Alternatively, Mr Hunt contended that in the earlier proceeding a subsidiary point directly an issue was the abolition of the power of appointment. This was advanced by the claimants, opposed by Mr Wylie on behalf of the residuary beneficiaries and the judgment 'implicitly included a determination that the vestingof the power of appointment in (Clara) was not a breach of any duty owed to theclaimants, or any other party represented'. Hence, the argument continued, an issueestoppel arose as to the standing of the power of appointment and this was a determination between the same parties.Conclusions[24] I do not accept either contention. I can summarise my reasons quite briefly.[25] With respect, I view the plea of cause of action estoppel as more ingenious than realistic. On my reading and appreciation of the judgment the determination upon breach of moral duty was limited to the then claimants. Wilson J noted the'absence of any competing claims', (page three of his decision), and thereafter focussed on whether the plaintiffs had established that they were in need of maintenance and support. I can find nothing close to a determination that there was no breach of moral duty in relation to the grandchildren.[26] This is unsurprising given the then s 3 of the Family Protection Act. That section precluded a claim on the part of grandchildren, unless one of the exemptions in the proviso applied, and there was nothing to suggest that any of them met the circumstances of the Wightman grandchildren. In short, it is my clear view that they could not have claimed at that time.[27] Turning to issue estoppel I do not accept there is any implicit finding concerning the power of appointment contained in the 1971 judgment. The power is not of course mentioned by Wilson J. That however is understandable. The only sense to make of the submission on behalf of the plaintiffs in seeking abolition of the power of appointment is that if a $20,000 legacy were to be awarded resort to theresiduary estate may be necessary to enable payment of such an award. An affidavit of Mr John Hoglund, the Ashburton District Public Trustee, dated in April 1971 recorded that estate income in recent years had been applied to meet annuities with little or no residuary income, and that there was a capital overdraft of more than $82,000, although he also indicated that a marked increase in farming profit was anticipated on account of changes to the farming operation.[28] Legacies however were not awarded. Relief other than an increase to one annuity did not arise. Wilson J did not have to confront from where further provision for the plaintiffs was to come. In short, the issue of abolition of the power of appointment fell away and required no finding on the part of the Judge.[29] This is not to say that I reject the notion of an inferred judicial determination. This topic is discussed in Spencer, Bower and Handley a text referred to and relied upon by Mr Hunt:Where the decision necessarily involves a judicial determination of some issue of law or fact, because it could not have been legitimately or rationally pronounced without determining or assuming a particular answer, that determination, though not expressed, is an integral part of the decision. There is otherwise no such thing as an issue estoppel by implication2.[30] Some instances then follow in the text including for example, that a'judgment for damages in an action for trespass to land establishes the claimant's right to possession, but not necessarily his title'. This example, divorced from the present context, to my mind demonstrates an implicit determination. Despite the absence of reference to it, some determinations may only be 'legitimately andrationally pronounced' if some underpinning requirement exists. Often it will be undisputed, therefore not mentioned, but this does not prevent an estoppel where the requirement is clear and obvious on the face of the decision. But that is not this case.[31] For these admittedly brief reasons, I do not find that either cause of action or issue estoppel arises in the present instance and therefore the reserved question will be answered in those terms.2 KR Handley Spencer Bower and Handley: Res Judicata (4th ed, Lexis Nexis, London, 2009), at107.Further directions[32] During the hearing yesterday I discussed with counsel the need for a timetable to advance the matter to a substantive hearing in the event that the estoppel pleas were rejected. There has been some further discussion, and agreement that the best course is to allow a month for a memorandum to be filed, hopefully a joint memorandum, which includes an agreed timetable for the steps to progress matters to a substantive hearing.[33] I accordingly direct that such memorandum be filed within the next month. In the event that agreement is not reached, counsel may request a telephone conference so that that the matter can be listed before a Judge or an Associate Judge.Solicitors:I Hunt: igh@younghunter.co.nzSM Grieve: stephanie.grieve@andersonlloyd.co.nzS Caradus: s.caradus@duncancotterill.comN Till QC: nicholas@tillqc.comR Calvert: info@publictrust.co.nz Subject: Richard Calvert