TALBOT v TALBOT [2017] NZCA 507

TALBOT v TALBOT [2017] NZCA 507 [10 November 2017]IN THE COURT OF APPEAL OF NEW ZEALANDCA557/2016[2017] NZCA 507BETWEEN JILLIAN KATE TALBOTAppellantAND GRAHAM EDWIN LAWRENCETALBOT (AS EXECUTOR FOR THEWILL OF EDWIN KELLAND TALBOT)First RespondentAND GRAHAM EDWIN LAWRENCETALBOT (AS EXECUTOR FOR THEWILL OF PAMELA LISBETH TALBOT)Second RespondentCA278/2017BETWEEN JILLIAN KATE TALBOTAppellantAND RACHEL LOUISE CASHINRespondentHearing: 11 October 2017Court: Gilbert, Venning and Wylie JJCounsel: P A Cowey and H C Carey for AppellantNo appearance for First and Second RespondentsJ V Ormsby and T M Ritchie for Graham Talbot(in his personal capacity) in CA557/2016R L D Paul for Respondent in CA278/2017Judgment: 10 November 2017 at 12.30 pmJUDGMENT OF THE COURTA The appeal in CA557/2016 is dismissed.B The appeal in CA278/2017 is dismissed.C The appellant must pay Graham Talbot costs on a band A basis and usualdisbursements in CA557/2016.D The appellant must pay the respondent costs on a band A basis and usualdisbursements in CA278/2017.E There is no award of costs in favour of the first and second respondents ineither appeal.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)Introduction[1] The primary appeal (CA557/2016) is brought under the Family Protection Act1955 (the Act). The appellant, Jillian Talbot (Jillian), seeks further provision from theestates of her late parents, Edwin Talbot (Edwin) and Pamela Talbot (Pamela).[2] Jillian's application initially came before Gendall J in the High Court inTimaru. He was not persuaded that there had been any breach of moral duty by Edwinand Pamela and he dismissed the application.1 Jillian now appeals this decisioncontending that it was wrong. She asserts that Gendall J adopted too narrow anapproach and that he failed to consider various matters said to be relevant. She asksthis Court to determine whether adequate provision was made for her propermaintenance and support and to remedy any inadequacy we find has been made out.[3] Graham Talbot (Graham) is Edwin and Pamela's only son and Jillian's olderbrother. He is the executor of Edwin's and Pamela's estates. In that capacity, he abidesthe decision of the Court. As a beneficiary of both estates, he is affected by Jillian's1 Talbot v Talbot [2016] NZHC 2382, [2016] NZFLR 1019 [Substantive Judgment].application. In his personal capacity he opposes Jillian's application for furtherprovision from the estates.[4] Rachel Cashin (née Talbot) (Rachel) is the oldest child. She makes no claimunder the Act. She has made it clear that, if Graham is ordered to repay moneys thathe (and entities associated with him) owed to his parents and which were forgiven intheir wills, she is not seeking any share of that repayment. She abides the decision ofthis Court.[5] The secondary appeal (CA278/2017) relates to costs. Gendall J reserved costsin the primary proceedings. The parties could not agree and Gendall J issued twoseparate judgments in this regard:(a) In the first judgment, Jillian was ordered to pay the reasonableindemnity costs of the estates,2 and costs on a 2B basis to Graham, witha 50 per cent uplift for some matters, and a 100 per cent uplift on onematter.3 The Judge also awarded indemnity costs in favour of Rachel.4(b) In the second judgment, Gendall J fixed the quantum of costs awarded.5There is no challenge to the quantum fixed in favour of the estates andGraham. Rachel was awarded $70,267, plus $892 in relation to thecosts application, GST exclusive.6 In a subsequent minute the Judgerequired Jillian to pay Rachel an additional $10,540.05 being GST onthe costs Rachel had incurred.7[6] Jillian appeals against the judgments insofar as they concern the award of coststo Rachel and Rachel appears to support the judgments. Graham had no interest inthis appeal, and his counsel were granted leave to withdraw when we heard argumentin relation to it.2 Talbot v Talbot [2017] NZHC 257 [First Costs Judgment] at [23].3 At [43].4 At [53].5 Talbot v Talbot [2017] NZHC 832 [Second Costs Judgment].6 At [25].7 The minute is recorded in an email from the Registrar to counsel dated 8 June 2017. It does notappear to have been otherwise recorded.Factual background[7] The Talbot family has been farming in the Claremont area in South Canterburyfor a number of generations. The principal farm property is located in Taiko Road,Claremont. It is known as Kingsborough Farm (Kingsborough). It was purchasedinitially by Rachel, Graham and Jillian's grandfather in 1915.[8] The grandparents had four children, two sons, Doug and Edwin, and twodaughters, Margaret and Jean. In 1955 the grandfather died. He left his residuaryestate, including Kingsborough, equally to Doug and Edwin, but subject to a lifeinterest in favour of his wife. Margaret and Jean did not take any interest in the farm.Rather, they were left minor legacies.[9] Doug and Edwin farmed Kingsborough together. Both married. Doug and hiswife, Louie, had no children. Edwin and Pamela had three children, Rachel was bornin January 1972, Graham in April 1974, and Jillian in October 1976.[10] In 1972 Doug died. He left his residuary estate to Edwin but subject to a lifeinterest in favour of Louie. Louie is still alive. She is in her late 90s and lives in arest home.[11] The grandmother died in 1985, and the residue of the grandfather's estate thenvested equally in Doug's estate and in Edwin.[12] Edwin initially settled a family trust — the EK Talbot Family Settlement Trust— and then he and Pamela completed a matrimonial property agreement allocating allassets, including land, reversionary interests, stock and plant equally between them.They then began farming in partnership. In July 1990, they also executed wills.[13] It is common ground that Rachel, Graham and Jillian had a happy childhoodand that Edwin and Pamela were loving and supportive parents who gave all of theirchildren the benefits of a happy upbringing and good educations.[14] Rachel left the family home to study in 1990. In 1992, Graham, aged 17, leftschool and began working on Kingsborough. Graham also undertook some farmingventures on his own account leasing land from third parties to farm ewes. In 1994Graham joined Edwin and Pamela in partnership (the EK and PL Talbot & SonPartnership) and the three of them continued to farm Kingsborough. In 1995 Jillianleft the family home, initially to travel, and then to study.[15] In 1998 Graham took over livestock management on Kingsborough. In thesame year, he settled a family trust for the benefit of his family. The trustees of thattrust, Graham and the family accountant, Brian Maxwell, purchased a separate blockof land from the EK Talbot Family Settlement Trust for $265,000. The Trust loanedGraham's trust the purchase price in full.[16] In July 1999 Edwin and Pamela executed new wills.[17] In 2002 Graham merged his individual farming interests (leased land andstock) with the EK and PL Talbot & Son Partnership's farming business. There wasno consideration paid by the partnership to Graham.[18] Edwin and Pamela and the children had a family discussion regarding theultimate disposition of Kingsborough on Christmas Day in 2005. Edwin and Pamelamade clear their intention to leave Kingsborough to Graham. Thereafter they hadvarious discussions confirming and refining their intention, principally withMr Maxwell but also with their solicitor, Richard Walton.[19] Valuations were obtained and in September 2006 Graham purchased the EKand PL Talbot & Son Partnership's assets at valuation for $544,950 plus GST.8Graham paid part of this money from his own resources. He borrowed approximately$160,000, either from the partnership or from his parents. Also in September 2006:(a) Graham entered into an agreement for sale and purchase with Edwinand Pamela. He agreed to purchase their half share in Kingsborough,8 This and subsequent purchases were completed either by a company formed by Graham and hiswife, or by the trust which had been settled. Moneys loaned or gifted were loaned or gifted to therelevant associated entity. It is not necessary to complicate this judgment by detailing theseentities. They were all associated with Graham and we use his name for simplicity.plus a separate block of land, for a total price of $1,551,000. Thepurchase proceeded, and Edwin and Pamela each loaned Graham thesum of $775,500 ($1,551,000 in total).(b) Graham repaid the EK Talbot Family Settlement Trust the sum of$265,000, being the amount paid for the land noted in [15] above. Thissum was then distributed by the Trust equally between Rachel, Grahamand Jillian.(c) The EK and PL Talbot & Son Partnership was dissolved. Grahamassumed full responsibility for the management of Kingsborough, withEdwin performing more minor tasks, such as tractor work, feedinglambs and helping to move stock.(d) Edwin and Pamela executed further wills. We will refer to Pamela's2006 will shortly.[20] Gendall J found that from about 2006 Graham and his associated interests, whowere farming Kingsborough farm and nearby land, progressively repaid to Edwin andPamela $229,125, and that Edwin and Pamela made various gifts to Graham and hisassociated interests to reduce the indebtedness owing to them. The gifts were made in2007, 2008, 2009 and 2012. They amounted in total to approximately $412,000.9 Nocounsel took issue with these findings before us.[21] Edwin died on 16 November 2014. Probate of his estate was granted to Pamelaand to Graham. Pamela died on 11 May 2015 and probate of her estate was grantedto Graham.Edwin's and Pamela's wills[22] As noted, both Edwin and Pamela made wills in 1990, 1999, 2006, as well asin 2012. Pamela's 1990, 1999 and 2006 wills and both Edwin's and Pamela's 2012wills are before this Court.9 Substantive Judgment, above 1, at [12].[23] The circumstances in 1990 were very different from those which applied as atthe dates of death and there is nothing relevant to be gleaned from Pamela's 1990 will.[24] By 1999 Edwin, Pamela and Graham were farming in partnership. BothRachel and Jillian had left home. Relevantly, Pamela bequeathed her share in thepartnership business to Edwin, if he survived her, but if not, then to Graham. She leftthe residue of her estate on trust, with the income to Edwin, her children andgrandchildren. On Edwin's death, she left her interest in Kingsborough (including herinterest in the remainder under Doug's estate, which was then and still is subject to thelife interest in favour of Louie) to Graham. The remainder of the residuary estate wasto go to Rachel and Jillian as tenants in common in equal shares.[25] The next wills were executed in September 2006. By this stage, Grahamowned all the assets of the partnership and half the farm. He was indebted to hisparents and to the partnership. Pamela left the residue of her estate on trust, with theincome to Edwin, her children and her grandchildren. On Edwin's death, she left herinterest in Kingsborough (including her interest in the remainder under Doug's estate)to Graham. She further directed that Graham was to be credited all moneys owed byhim (or his associated entities) to her, less $200,000. Graham was to have three yearsto repay the $200,000 to her estate and it was to be interest-free during this period.The remainder of her residuary estate (including the $200,000 to be repaid by Graham)she left to Rachel and Jillian as tenants in common in equal shares.[26] The operative wills, which are challenged by Jillian, were signed on5 November 2012. They are mirror wills. Both Pamela and Edwin left specific assetsto each other. The residue of their respective estates was left on trust, with the incometo provide for the maintenance of the survivor, their children and their grandchildren,during the survivor's lifetime. On the survivor's death, they directed their trustees tohold their residuary estates on trust. Graham was to get their interest in Kingsborough(derived through Doug's estate). Graham was also to be credited the aggregate amountof all moneys owing by him (or his associated entities) less $400,000. He was giventhree years to repay the $400,000 to the estate of the survivor, and that amount was tobe interest-free during that period. The remainder of the residuary estates (includingthe $400,000 to be repaid by Graham) was left to Rachel and Jillian as tenants incommon in equal shares.[27] We agree with Gendall J that Edwin and Pamela's testamentary intentions wereclear from an early stage.10 It was their intention from at least 1999, and probablyearlier, that Graham, as the only child who had shown any interest in farmingKingsborough, should receive the family farm, and that Rachel and Jillian should shareequally in the remainder of their estates. The remainder, from 2006 onwards, was toinclude a cash contribution from Graham by way of partial repayment of the debt heowed.[28] Gendall J was also satisfied that the evidence showed clearly that Edwin andPamela made proactive choices to grow their off-farm assets for the benefit of Racheland Jillian, and that they did so with the benefit of professional advice.11 He foundthat over the years considerable thought was given by Edwin and Pamela as to howthey could provide appropriately for their daughters, while ensuring their paramountintention to secure the family farm for Graham.12[29] No party took issue with these findings, and again we accept them.Value of the estates[30] The combined estates of Edwin and Pamela as at the date of death comprised:(a) a one half share in Kingsborough, derived through Doug's estate andsubject to the life interest in favour of Louie;(b) a leasehold bach;(c) various investments;(d) household chattels; and10 Substantive Judgment, above n 1, at [62].11 At [64].12 At [63].(e) the balance of the debt owing by Graham and various entities associatedwith him — agreed to be $886,875 — less the sum gifted to Grahamby his parents' wills — $486,875 — leaving a net balance of $400,000.[31] Both Graham and Jillian obtained valuations of the farm. There was adifference of some $600,000 between the respective valuations and counsel filed anagreed statement of facts setting out the bases for that difference. Gendall J adopteda midway point, and counsel took the same approach in their respective submissionsbefore us. Adopting that midway point, Graham receives approximately $4.4 million,or 67 per cent share of his parents' estates. Jillian and Rachel each receiveapproximately $1,056,000, or a 16.5 per cent share of the estates.13[32] A partial distribution has been made. To date both Rachel and Jillian havereceived $621,338.99. Jillian has taken the family bach at an agreed value. There area number of assets forming part of the residuary estates still to be distributed. Thefinal value of some of those assets is yet to be determined, and this will impact on thefinal distribution. Mr Cowey, appearing for Jillian, submitted that the final paymentto Jillian under the wills is likely to be approximately $1,013,000. We do not considerthat this relatively minor difference from the figure used by Gendall J impacts on thematters we are required to consider.The primary appeal — CA557/2016The issues[33] The agreed issues for determination by the Court in appeal CA557/2016 are asfollows:(a) Is the question of whether adequate provision has been made for theproper maintenance and support of Jillian an exercise of a discretion,or an evaluative judgement involving issues of fact and degree?(b) Was Gendall J correct when he determined that adequate provision hadbeen made for Jillian's proper maintenance and support?13 At [24].(c) In the event the appeal is allowed, what ought to be the appropriatequantum and timing of any additional payment(s) to Jillian?Approach to this appeal[34] Ms Ritchie, appearing with Mr Ormsby for Graham, contended that the properapproach to this appeal was to treat Gendall J's judgment as being a decision made inthe exercise of a discretion, requiring Jillian to establish an error of law or principle,the taking into account of an irrelevant consideration, a failure to take into account arelevant consideration, or that the decision was plainly wrong.[35] Mr Cowey for Jillian argued that whether or not there was a breach of moralduty involves an issue of fact and degree, which falls to be considered afresh on appeal,pursuant to the principles discussed by the Supreme Court in Austin, Nichols & Co Incv Stichting Lodestar but that the appropriate remedy, in the event that a breach is found,involves the exercise of a discretion.14[36] Various authorities were cited to us, and it was submitted that there was someconflict in the decisions. We accept that Judges have, on occasion, suggested thatdecisions under the Act are essentially discretionary, but our reading of theseauthorities suggests that this comment has primarily been made where issues ofquantum have been in issue on appeal.15 Other judges, particularly in the High Court,have taken the view that the issue of whether or not there has been a breach of moralduty falls to be determined as a general appeal, pursuant to Austin, Nichols.16[37] In our judgment the position is straightforward. Whether or not there has beena breach of the moral duty set out in s 4 of the Act is a threshold issue, turning onmatters of law, fact and degree. Appeals involving this threshold issue fall to bedetermined by reference to the approach set out in Austin, Nichols. If there is a breachof moral duty found, then what remedy should be granted by the court below is anissue involving the exercise of a discretion, and an appellate court will only intervene14 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].15 Fisher v Kirby [2012] NZCA 310, [2013] NZFLR 463 at [120] and [124]; Little v Angus [1981] 1NZLR 126 (CA) at 127.16 JEW v TAB [2012] NZFLR 193 (HC) at [36]; Bones v Wright [2013] NZHC 1922 at [39]–[40];Brain v Harwood [2014] NZHC 1092 at [22]–[23].if there has been an error of law or principle, if the Judge below took into account anirrelevant consideration or failed to take into account a relevant consideration, or if thedecision below is plainly wrong.17Adequate provision for proper maintenance and support of Jillian?[38] Section 4 of the Act permits a claimant to make an application to the court forit to exercise its discretion to intervene in relation to a deceased's estate if "adequateprovision" is not available for the "proper maintenance and support" of the claimant.An application under s 4 can be made by any of the various persons listed in s 3(1) ofthe Act, including by the children of the deceased.[39] The onus is on the claimant to prove that the deceased was in breach of his orher moral duty, as at the date of death, by failing to make adequate provision for theclaimant's proper maintenance and support.18[40] This Court in Little v Angus noted that the test is whether, objectivelyconsidered, there has been a breach of moral duty by the deceased judged by thestandards of a wise and just testator or testatrix.19 "Moral duty" is a compositeexpression which is not restricted to mere financial need but includes moral and ethicalconsiderations.20 "Proper" also means something different to "adequate", and theamount to be provided is not to be measured solely by the need for maintenance whichwould be the case if the Court were concerned solely with adequacy.21[41] There are three leading decisions of this Court in relation to whether a testatoror testatrix has breached a moral duty to his or her adult children. They are Williamsv Aucutt,22 Auckland City Mission v Brown,23 and Henry v Henry.24 The latter twodecisions affirmed the approach set out in Williams v Aucutt.17 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].18 Williams v Aucutt [2000] 2 NZLR 479 (CA) at [68].19 Little v Angus, above n 15, at 127.20 Vincent v Lewis [2006] NZFLR 812 (HC) at [81(b)].21 Bosch v Perpetual Trustee Co Ltd [1938] AC 463 (PC) at 476 and 478.22 Williams v Aucutt, above n 18.23 Auckland City Mission v Brown [2002] 2 NZLR 650 (CA).24 Henry v Henry [2007] NZCA 42, [2007] NZFLR 640.[42] In Williams v Aucutt this Court said:[52] The test is whether adequate provision has been made for theproper maintenance and support of the claimant. "Support" is an additionaland wider term than "maintenance". In using the composite expression, andrequiring "proper" maintenance and support, the legislation recognises that abroader approach is required and the authorities referred to establish thatmoral and ethical considerations are to be taken into account in determiningthe scope of the duty. "Support" is used in its wider dictionary sense of"sustaining, providing comfort". A child's path through life is supported notsimply by financial provision to meet economic needs and contingencies butalso by recognition of belonging to the family and of having been an importantpart of the overall life of the deceased. Just what provision will constituteproper support in this latter respect is a matter of judgment in all thecircumstances of the particular case. It may take the form of lifetime gifts ora bequest of family possessions precious to its members and often part of thefamily history. And where there is no economic need it may also be met by alegacy of a moderate amount. On the other hand, where the estate comprisesthe accumulation of the family assets and is more than sufficient to meet otherneeds, provision so small as to leave a justifiable sense of exclusion fromparticipation in the family estate might not amount to proper support for afamily member.(Emphasis added.)[43] The assessment required involves several interrelated factors, including themerits of the claim, the applicant's circumstances as at the date of death, past relationsbetween the testator and the applicant, the size of the estate, and the strength of otherclaims.25 Mere unfairness is not sufficient to warrant disturbing a testamentarydisposition26 and there is no presumption of equality between the children of adeceased.27[44] Where a breach of moral duty is established, the courts should do no more thanis necessary to repair the breach by making adequate provision for the applicant'sproper maintenance and support.28 Beyond that, the deceased's testamentaryintentions should be honoured, even if the individual judge dealing with theapplication might have seen the matters differently.2925 See In re Harrison (Deceased), Thomson v Harrison [1962] NZLR 6 (SC/CA) at 13; Williams vAucutt, above n 18, at [39]; Ormsby v Van Selm [2015] NZHC 2822 at [30].26 Vincent v Lewis, above n 20, at [81(e)]; Williams v Aucutt, above n 18, at [70].27 Williams v Aucutt, above n 18, at [70]; Re Phelps CA277/93, 2 November 1994 at 5.28 Fisher v Kirby, above n 15, at [119].29 Williams v Aucutt, above n 18, at [70].[45] Against this background, we turn to consider the submissions made on behalfof Jillian. We start by considering the errors Jillian suggests were made by Gendall J.We then turn to the core issue — did Edwin and Pamela breach the moral duty theyowed to Jillian?Did the trial Judge err in his approach to the matter?[46] First, Mr Cowey submitted that Gendall J failed to recognise that Edwin andPamela's combined estates were large.[47] We do not consider there is anything in this criticism. Gendall J addressed theassets in the combined estates, and noted the valuations that had been obtained. TheJudge observed that these were "relatively large estates" and noted they were togetherworth approximately $6.5 million.30[48] Secondly, it was argued that the Judge failed to take into account whatMr Cowey referred to as the "accumulated family assets". Mr Cowey argued thatthese accumulated assets totalled approximately $9.1 to $10.3 million, and that thisvalue was a relevant circumstance to the court's enquiry.[49] We do not accept this argument. The $9.1 to $10.3 million that Jillian suggestsis the accumulated value of family assets is based on a valuation obtained a year afterPamela's death and it ignores some but not all of the inter vivos transactions. The Actfocuses on the estate of the deceased as at the date of death.31 The key issue is whetheror not adequate provision has been made from the estate for the proper maintenanceand support of a person for whom or on whose behalf application is made. We do notconsider that a valuation obtained a year after Edwin's and Pamela's deaths, of variousassets some of which are no longer in their estates, has any relevance to the issueGendall J or we are required to determine.[50] Thirdly, it was argued that Edwin and Pamela's inter vivos support for Grahamwas a relevant circumstance.30 Substantive Judgment, above n 1, at [76].31 Family Protection Act 1955, ss 3(1) and 4(1).[51] Inter vivos support given to family members can be relevant in certaincircumstances, for example, where the estate has been depleted by the making of intervivos gifts to such an extent that the testator or testatrix cannot meet his or her moralduty.32[52] It cannot, however, be said in the present case that Edwin and Pamela sodepleted their estates that they could not meet their moral duty to Jillian. Rather theevidence at trial established that the gifts they made in partial reduction of Graham'sdebts were seriously considered and that they took professional advice on the matter.On the evidence, the gifts made were carefully assessed in light of the need to retainsufficient funds for Edwin and Pamela to live on, to provide for Jillian and Rachel,and to protect Graham's ability to run the farm and service a mortgage to fund theultimate payment required to be made to help pay out Rachel and Jillian. An answergiven by Mr Walton, Edwin and Pamela's solicitor, to a question posed to him in cross-examination bears this out. The following exchange occurred:Q. Are you satisfied that they understood the effect of what they were doingand the financial implications in that the girls weren't treated equally?A. They had three priorities in my assessment in view and the first was tomake sure that they themselves did not cut themselves short, as we haveall had experience is sometimes people go overboard with estate planning,succession planning and find that they themselves are in position wherethey are short. So the first step was to ensure that there were mechanismsin place to ensure they were adequately and effectively provided for forthe rest of their lives. Subject to that, their absolute determination was tosee the legacy, the Kingsborough legacy retained and held by Graham whohad proved by that stage that he was a worthy successor for the Talbotfarming property through his work and effort. In, in fact he'd evenenhanced the, the farming operation and it was subject to that thatprovision was to be made for the two girls and that was to be made equallyand it was their awareness of the vicissitudes of farming, the good seasons,the bad seasons, it was their awareness that farming was not necessarilyhighly income productive but capital-intensive that made them wantingto, to ensure that no excess debt had to be raised by Graham which wouldaffect the viability of the farming operation.[53] Further, the evidence established that Graham made regular payments to hisparents in reduction of the debt owing to them. This permitted Edwin and Pamela toput money aside for Jillian and Rachel. Pamela noted in an email sent to Mr Maxwell32 See, for example, Ashworth v Lambie [2012] NZHC 1110 at [54]; Re Howse HC AucklandA1093/84, 26 September 1990.in October 2012 that Graham was not only paying the accounts but that he was alsopaying them $1,500 fortnightly. She commented that without these regular paymentsfrom Graham, they would not have been able to continue their saving programme inorder to provide for their daughters.[54] Also relevant to this issue are Graham's contributions to the value of the estatesover the years. This factor would need to be weighed in the balance if the inter vivosgifts made in this case are to be taken into consideration. The evidence at trialestablished that Graham worked long hours on Kingsborough, that he took minimaldrawings, and that it is likely that the farm would have had to have been sold if Grahamhad not left school to work on it. Graham also introduced into the partnership hispersonal farming interests at no cost to his parents. He took over the farm managementand financial responsibility of Kingsborough from 2006 onwards. It was his estimatethat he contributed approximately $1.4 million towards improvements on the farm,and Jillian accepted under cross-examination that Graham had made a significantinvestment into the farm. It was Rachel's evidence that at the Christmas 2005 familymeeting, Edwin and Pamela made it clear that they wanted to reward Graham's hardwork.[55] Gendall J was aware of and referred to all of these matters.33 He did not,however, agree that in the circumstances of this case the inter vivos gifts to Grahamwere a critical factor in assessing Jillian's application.34 We agree. Inequality betweensiblings does not justify the Court's intervention and it was not for Graham to defendhis parents' decision to compensate him for the sacrifices he made or, as a beneficiary,to justify the share in their estates which he has been given.35[56] Mr Cowey next argued that Gendall J erred in his approach to the key issue ofwhat constituted proper support for Jillian by focusing on her financial circumstancesin isolation from other relevant considerations.[57] Again, we do not accept this criticism of the judgment.33 Substantive Judgment, above n 1, at [30], [36] and [47] — Graham's contributions; at [12], [17]and [73] — inter vivos gifts; and at [78] — Graham's fortnightly payments.34 At [82].35 Williams v Aucutt, above n 18, at [68]; Auckland City Mission v Brown, above n 23, at [39].[58] Initially, Jillian's case was premised on the submission that Edwin and Pamelaset out to achieve equality between their three children. As the case moved to trial, itbecame clear that that had never been Edwin and Pamela's intention, and Jillian thenchanged tack. She then proceeded on the basis of her alleged financial need. In thatcontext, Gendall J did analyse, albeit relatively briefly, Jillian's personalcircumstances.[59] It was clear that Jillian has significant personal assets and income earningpotential. She does not own her own home. Rather she, her partner, and their children,live in a rented villa. Her partner is, however, independently wealthy. In cross-examination, Jillian acknowledged that she and her family do have a comfortablelifestyle. The evidence clearly established that she was in a financially stable position,and that she had an established ability to support herself.36[60] At the time of the hearing in the High Court, Jillian's financial position wasrelevant. She had put it in issue, and there is no basis for the assertion that Gendall Jfocussed on her personal circumstances to the exclusion of other relevant factors. Aplain reading of the judgment makes it clear that he did not do so.[61] We now turn to consider the primary issue, namely whether or not Edwin andPamela fulfilled their moral duty to provide proper maintenance and support forJillian, by leaving her a legacy of just over $1 million in their wills.The provision made for Jillian[62] We agree with Gendall J that it is hard to see how, in the circumstancesprevailing in this case, an inheritance of just over $1 million is insufficient toadequately provide for Jillian's proper maintenance and support.37[63] We note Jillian's evidence, when cross-examined, that the sum she is to receivewas "significantly more" than the sum she had estimated in her emails to her motheras to her likely inheritance. She acknowledged that the likely distribution to her was36 Substantive Judgment, above n 1, at [67].37 At [69] and [72].a significant sum of money, and that her mother would have thought that it would be"okay".[64] This was a large estate, but Jillian was not in economic need. Propermaintenance and support could be provided for Jillian by a legacy of a moderateamount. In our judgment, a sum a little in excess of $1 million is, on any objectiveassessment, and at the least, a moderate amount. It is not provision so small as to leavea justifiable sense of exclusion from participation in the family estate.[65] Jillian is receiving approximately 16.5 per cent of her parents' estate as at thedate of death. This Court in Williams v Aucutt referred to a survey carried out byNicola Peart, which considered 235 cases brought by children under the Act between1985 and 1994.38 That survey showed that in larger estates, where the testator is ableto satisfy all moral claims owed, the courts have generally awarded between 12.5 and20 per cent of the estate to a dutiful child not in financial need.39 The provision of a16.5 per cent share of the estates to Jillian falls well within the range of awardsconsidered appropriate by the courts in such cases.[66] In our judgment, the provision made for Jillian was adequate to provide for herproper maintenance and support, and there can be no realistic argument to the contrary.[67] Nor do we consider that Edwin and Pamela failed to recognise Jillian asbelonging to the family.[68] The evidence at trial was that both Edwin and Pamela were aware of the claimsof their daughters to participate in their estates. They discussed the issue with MrMaxwell and Mr Walton. They made provision for their daughters in their earlierwills. They required Graham to partially repay the debt owing by him to help providefor the daughters. They were also aware of the need to maximise off-farm assets whichthey would pass onto their daughters. As Gendall J noted, Pamela was widely regardedas a canny and clever investor and she worked hard to increase the value of off-farmassets.4038 Nicola S Peart "Awards for children under the Family Protection Act" (1995) 1 BFLJ 224.39 At 228.40 Substantive Judgment, above n 1, at [78].[69] As we noted above at [32], Jillian has taken the family bach by way of partialdistribution. While there was no evidence relevant to the significance of that bach tothe family, we suspect that an asset of that kind might well have a special place in thefamily's life. Some support for this view can be found in the fact that Jillian took it aspart of her share in the estates.[70] We consider that Jillian has not been excluded from the family, and thatappropriate recognition has been given to her as a dutiful and loving daughter.The wills[71] Mr Cowey emphasised that Jillian's claim is not about inequality, and beforeus, Jillian was seeking only an order that Graham should be directed to pay the wholeof the outstanding debt, by regular fortnightly instalments of $1,500. It was arguedthat such alteration to Edwin's and Pamela's wills, to require repayment of the totaldebt as at the date of death, would not impose an undue financial burden on Grahamand would make adequate provision for Jillian's proper maintenance and support, andwould mean that she has not been excluded from participation in the family estate.[72] There is force in Mr Ormsby's submission that Jillian's appeal ultimatelychallenges the value of the debt forgiveness set out in Edwin's and Pamela's respectivewills.[73] Were the Court to accede to Jillian's request, it would be tinkering with therelevant provisions in the wills. This is not a case where the testamentary intentionsof the deceased are in doubt. We have referred above to the earlier wills. It is clearthat it was their primary intention from an early stage to ensure that the farm remainedin the family, while providing for their daughters. To this end the wills from 2006onwards made provision for the daughters. That provision increased as circumstanceschanged.[74] Both Edwin and Pamela considered that the provision they had made forRachel and Jillian was appropriate. Mr Maxwell gave evidence that he spoke to Edwinand Pamela about the appropriate provision for Rachel and Jillian in the 2006 wills,and that they were "quite happy at that stage on what values they had then that theirgirls were adequately provided for". He also gave evidence that both Edwin andPamela thought "pretty carefully" about the provision they were making for Racheland Jillian under both the 2006 and 2012 wills. Similarly, Mr Walton gave evidencethat Edwin and Pamela understood their circumstances, and were clear in theirtestamentary intentions. He said that at the time of making the 2006 wills, the detailswere gone into in considerable detail, and that the transfer of the farm assets and thehalf share in the farm and completion of the wills in 2006 evolved over a period ofsome 15 to 18 months after discussions.[75] Notwithstanding the professional advice received, it is also clear from filenotes and draft wills produced in evidence that Edwin and Pamela made their owndecisions as to the appropriate repayment required from Graham. They placedconsiderable importance on minimising the debt burden Graham would face, while atthe same time acknowledging Rachel and Jillian's respective claims against theirbounty.[76] As this Court noted in Williams v Aucutt, the court's power under the Act doesnot extend to rewriting a will, and testators remain at liberty to do what they like withtheir assets and to treat their children differently.41[77] There is nothing in the circumstances of this case requiring us to depart fromthis well-settled approach.Result — CA557/2016[78] For all of the above reasons, we have concluded that there has been no breachof duty by either Edwin or Pamela to Jillian, and that they made adequate provisionfor Jillian's proper maintenance and support in their respective wills.[79] Jillian's appeal in proceedings CA557/2016 is dismissed.41 Williams v Aucutt, above n 18, at [70].The costs appeal — CA278/2017[80] Jillian challenges the order requiring her to pay indemnity costs to Rachel andthe quantum of those costs.Agreed issues[81] The agreed issues are as follows:(a) Did Gendall J apply the correct criteria in exercising his discretion toaward costs on an indemnity basis?(b) Did Gendall J wrongly focus on the position of Rachel, rather than theactions of Jillian?(c) If an award of indemnity costs was appropriate, was the quantumreasonable?(d) In the event that the costs appeal succeeds, should there be an upliftabove 2B costs, and if so, in what percentage?We consider that issues (a) and (b) can be considered together.Indemnity costs[82] In his initial decision on liability for costs, Gendall J ordered indemnity costsunder r 14.6(4)(f) of the High Court Rules 2016 — namely that some other reasonexisted that justified the Court in making an order for indemnity costs.42 The Judgeconsidered that there were two other reasons:(a) Rachel had not made a claim under the Act, rather she did not wish tobe prejudiced by the dispute between Graham and Jillian; and(b) Rachel nevertheless needed to be involved in the proceeding to ensurethat she was not prejudiced.42 First Costs Judgment, above n 2, at [49]–[50].[83] Mr Cowey argued that the Judge erred in law when he found that Rachel wasentitled to indemnity costs under r 14.6(4)(f). He submitted that the Judge should haveconsidered Jillian's conduct in the proceedings, in particular whether she behavedeither "badly or very unreasonably",43 and not on Rachel's position.[84] Ms Paul, for Rachel, referred to the relevant provisions in the High CourtRules, and noted that bad behaviour, or very unreasonable behaviour, is not a thresholdrequirement under r 14.6(4)(f).[85] We agree with Ms Paul. Rule 14.6(4) sets out the circumstances in which anaward of indemnity costs can be made. Bad or very unreasonable behaviour is notdirectly referred to in the rule at all. Such matters may well be relevant to thecircumstances outlined in r 14.6(4)(a) and (b). A party's behaviour could also be aground for an award of indemnity costs under r 14.6(4)(f), but it is not a specificrequirement. Rather, r 14.6(4)(f) is a category "reserved for specific circumstancesoccurring in the particular proceedings".44[86] As noted at [83], Gendall J awarded Rachel indemnity costs under r 14.6(4)(f)for two reasons. Both were appropriate in the circumstances of this case. Rachel wasan unwilling but necessary party to Jillian's unsuccessful application, and Gendall Jtook the view, with which we agree, that Jillian's application was unmeritorious. ThisCourt has previously held, in similar circumstances, that an unsuccessful applicantshould be required to indemnify a sibling who cannot avoid being dragged into suchproceedings as his or her own inheritance is potentially affected.45 We can see noreason to depart from that approach in this case.[87] The second ground of appeal is that Gendall J failed to assess whether Rachel'sactual costs were unreasonably high.[88] Gendall J, in his second judgment on costs, noted the submission made forJillian that costs claimed were excessive. The Judge observed that Rachel's costs didappear to be "reasonably high, given what might be said to be her subordinate role in43 Referring to Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].44 Tamihere v MediaWorks Radio Ltd [2015] NZHC 268 at [6].45 Lewis v Cotton [2001] 2 NZLR 21 (CA) at [64] and [71]–[72].opposing Jillian's application".46 He went on, however, to observe that Rachel hadincurred costs of $70,267 relating solely to the proceeding.47 The Judge concludedthat Rachel's claim had to be "broadly seen as proper in all the circumstances".48[89] We are not persuaded that Gendall J's assessment in this regard was plainlywrong. Jillian was seeking the redistribution of both Edwin's and Pamela's estates,and the provision of such further sum as the court saw fit to discharge their moral dutyto provide for her proper maintenance and support. As Gendall J noted in thesubstantive decision, if Jillian's claim had succeeded, and an order had been made thatshe was to be paid additional amounts from the residue of the estates, that might wellhave reduced Rachel's entitlement.49 Even if Jillian was unsuccessful, then the usualcourse would be that the costs incurred by the executor of the estates would be metfrom the residue of the estates, and again that would likely have reduced the amountavailable to Rachel as one of the residuary beneficiaries. In the circumstances, Rachelwas clearly entitled to take appropriate and necessary steps to protect her position.[90] Mr Cowey next seeks to descend into the minutiae by referring to the relativelylimited cross-examination undertaken by Rachel's counsel, and by criticising theamount of time claimed in preparing for the hearing.[91] We do not consider that this is appropriate. Indemnity costs are determined byreference to actual costs, but they can be less if the court considers that the actual costsare unreasonably high. Costs will generally be accepted as being reasonably incurred,and therefore recoverable, if a reasonable observer would expect those costs for thelitigation at issue.50 Gendall J was in the best position to assess the steps taken byRachel, and whether or not the costs claimed for those steps were unreasonable. Wedo not see any error of principle in the way in which he approached the matter. Nordid he take into account irrelevant considerations, or fail to take into account relevantconsiderations. His decision that Rachel's costs were broadly proper is not plainlywrong.46 Second Costs Judgment, above n 5, at [20]–[21].47 At [21].48 At [23].49 Substantive Judgment, above n 1, at [38].50 Bradbury v Westpac Banking Corp (2008) 18 PRNZ 859 (HC) at [204]–[205].[92] Finally, Mr Cowey submitted that Gendall J made an arithmetical error, whenhe said in his first costs judgment that the costs awarded to Rachel (exclusive of GST),amounted to $71,559.51 This is not a proper ground for appeal, and in any event, theerror was accepted at a very early stage by Rachel. She did not seek payment of theamount stated by the Judge, but rather the lesser sum of $71,159 which, it is commonground, is the aggregate of the amounts awarded, less GST. When the GST is added,the total award of costs is $71,159, plus GST of $10,540.05.Result[93] For the reasons we have set out, Jillian's appeal in proceedings CA278/2017 isdismissed.Costs on both appeals[94] Counsel were agreed that costs on both appeals should be fixed on a band Abasis, with usual disbursements.[95] Jillian has failed on both appeals. She is to pay Graham's costs on a band Abasis and usual disbursements on appeal CA557/2016. She is to pay Rachel's costson a band A basis and usual disbursements on appeal CA278/2017. The estate wasnot represented and no costs are awarded in favour of either the first or secondrespondents.Solicitors:Parry Field, Christchurch for AppellantWynn Williams, Christchurch for Graham Talbot51 Second Costs Judgment, above n 5, at [25].