MCMILLAN v PRETTY [2019] NZHC 1094

MCMILLAN v PRETTY [2019] NZHC 1094 [17 May 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-613[2019] NZHC 1094IN THE MATTER of the Law Reform (Testamentary Promises)Act 1949A N DIN THE MATTER of the Estate of VALERIE HELENSVENDSENBETWEEN NEIL PETER MCMILLANPlaintiffAND PAUL EDWARD PRETTY as Executor ofthe Estate of Valerie Helen SvendsenDefendantAND LINDA MAY MCCARTHYParty directed to be servedHearing: 6 May 2019Counsel: A R Gilchrist for PlaintiffM T Arnet for DefendantR O Parmenter for Ms McCarthyJudgment: 17 May 2019JUDGMENT OF BREWER JThis judgment was delivered by me on 17 May 2019 at 3:00 pmpursuant to Rule 11.5 High Court Rules.Registrar/Deputy RegistrarIntroduction[1] Mr McMillan claims under the Law Reform (Testamentary Promises) Act1949 (the Act) against Mr Pretty as executor of the estate of Mrs Svendsen. Mr Prettysupports the will but essentially abides the decision of the Court. Mr McMillan'sclaim is opposed by Ms McCarthy who, together with Mr McMillan, is a principalbeneficiary under Mrs Svendsen's will.[2] Mrs Svendsen died on 17 October 2017. Her will, dated 28 August 2017, wasgranted probate by the Court on 19 January 2019. It provides for three minor bequests,with the residue of the estate (the major part being a house on Waiheke Island) to bedivided equally between Mr McMillan and Ms McCarthy.[3] Mr McMillan claims Mrs Svendsen and her late husband made a promise tohim that, in consideration and reward for providing a loan of $185,415.60 interest-freeto them in order to renovate the Waiheke Island house, he would inherit the house aftertheir deaths and/or be the primary beneficiary of their wills. His case is that heprovided the money as well as various domestic and other services as a loving anddutiful nephew. He seeks to be awarded a full interest in the house.The law[4] Section 3(1) of the Act provides that the estate of a deceased person is liable toremunerate persons for work done under promise of testamentary provision:Where in the administration of the estate of any deceased person a claim ismade against the estate founded upon the rendering of services to or theperformance of work for the deceased in his lifetime, and the claimant provesan express or implied promise by the deceased to reward him for the servicesor work by making some testamentary provision for the claimant, whether ornot the provision was to be of a specified amount or was to relate to specifiedreal or personal property, then, subject to the provisions of this Act, the claimshall, to the extent to which the deceased has failed to make that testamentaryprovision or otherwise remunerate the claimant (whether or not a claim forsuch remuneration could have been enforced in the lifetime of the deceased),be enforceable against the personal representatives of the deceased in the samemanner and to the same extent as if the promise of the deceased were a promisefor payment by the deceased in his lifetime of such amount as may bereasonable, having regard to all the circumstances of the case, including inparticular the circumstances in which the promise was made and the serviceswere rendered or the work was performed, the value of the services or work,the value of the testamentary provision promised, the amount of the estate,and the nature and amounts of the claims of other persons in respect of theestate, whether as creditors, beneficiaries, wife, husband, civil union partner,children, next-of-kin, or otherwise.[5] This Court in Saunders v New Zealand Guardian Trust Company distilled thesection's requirements for an enforceable claim into four elements:1a) the claimant must have rendered services to, or performed work for,the deceased in the deceased's lifetime;b) there must be an express or implied promise by the deceased to rewardthe claimant;c) there must be a nexus between the services and the promise; andd) the deceased must have failed to make the promised testamentaryprovision or otherwise remunerate the claimant.[6] "Work" and "services" have both been construed widely by the courts.2However, services sufficient to ground a claim under the Act must be beyond thosenaturally incidental to a close family relationship.3 This distinction refers to thequality of the services (between those normally expected and those which go beyondthat), rather than the intentions underpinning their performance.4[7] Financial assistance has been considered a service for the purpose of the Act.5So have emotional support and companionship.6 Counsel for Mr McMillan notes theCourt of Appeal's comments in Thwaites v Keruse that "companionship, affection,cohabitation, may properly be regarded as "services" in some circumstances, wherefor example the promisor is elderly or lonely or in poor health."7[8] Section 2 of the Act defines "promise" to include any statement orrepresentation of fact or intention. The word is not used in a technical or legalistic1 Saunders v New Zealand Guardian Trust Company HC Palmerston North CIV-2008-454-389,12 August 2010 at [10].2 See Tucker v Guardian Trust [1961] NZLR 663 (SC) at 776.3 See Re Welch [1990] 3 NZLR 1 (PC) at 7.4 Re Lamb HC Timaru, M11/91, 7 October 1992 at 9; and Parata v McGowan [1994] NZFLR 937(HC) at 942–943.5 See for instance Tangimai v Tangimai [2014] NZHC 2348, in which payments of outgoings on amortgage and borrowing against a claimant's own address was considered service enabling thedeceased to build a home in the Cook Islands.6 See for instance Byrne v Bishop [2001] 3 NZLR 780 (CA).7 Thwaites v Keruse (1993) 11 FRNZ 19 (CA) at 23.sense, and a promise need not amount to a contractual undertaking.8 It need not be inwriting. A "promise" can include unilateral declarations by a deceased of theirintention to reward a claimant for services or work performed by them by the makingof a testamentary provision in their favour.9 The promise may be made before or afterthe work or services are performed, provided it is made in connection with them.10[9] The courts primarily focus on the claimant's understanding of the deceased'swords or conduct when determining whether a promise existed.11[10] The nexus between that promise and the services or work is determinedobjectively with the focus on the promisor rather than the promisee's motivation forperforming the services or work. The reasons for this were described by Blanchard Jin Byrne v Bishop (citations omitted):12 it can really be of no importance where the promise is to reward thingsdone for the promisor in the past. The requirement that there must have beena "promise" to reward the claimant is directed to the purpose of the promisor'sprovision rather than the motivation of the promisee and it is sufficient thatthe promise be in part only as a reward for services; family ties and otherconsiderations may also have influenced the making of the promise. It wouldbe repugnant if the fact that the services or work were performed out of agenerous spirit and not for mercenary reasons or in the hope of reward shouldcount against claimants by way of depriving them of a claim or devaluing it.[11] In the present case, for Mr McMillan's claim to succeed he must satisfy theCourt that Mrs Svendsen made a promise to leave her house or estate to him as areward for his provision of funds towards her and her late husband's housingrenovations, and that he provided the funds, as well as any others which are relevantto the promise.[12] Should the Court be thus satisfied, Mr McMillan will not automatically beawarded what he was promised in entirety. The Act provides that the promise shall"be enforceable against the personal representatives of the deceased in the samemanner and to the same extent as if the promise of the deceased were a promise for8 Nealon v Public Trustee [1949] NZLR 148 (CA) at 161.9 Jones v Public Trustee [1962] NZLR 363 (SC) at 374.10 At 374; and Law Reform (Testamentary Promises) Act 1949, s 3(2).11 Heathwaite v NZ Insurance Co Ltd [1951] NZLR 6 (SC) at 8.12 Byrne v Bishop, above n 6, at [10].payment by the deceased in his lifetime of such amount as may be reasonable, havingregard to all the circumstances of the case".13 Where the promise relates to real orpersonal property which forms part of the estate, s 3(3) enables the Court to make anorder vesting all or part of a specific property in the claimant.[13] The Court has a broad discretion to make an award, subject to the limitationsthat it should not be greater in value than what was promised, and it must be reasonableas recompense for the services provided.14[14] Section 3(1) lists the "circumstances of the case" which the Court must takeinto account in making an award as including in particular:(a) the circumstances in which the promise was made and the services wererendered or the work was performed;(b) the value of the services or work;(c) the value of the testamentary provision promised;(d) the amount of the estate; and(e) the nature and amounts of the claims of other persons in respect of theestate.[15] The value of the services or work, particularly those of an intangible kind, isassessed primarily from the perspective of the deceased rather than that of the claimantor purely objective valuation.15 The same is true for the value of the provisionpromised, which may indicate the deceased's assessment of the value of the servicesprovided.16 The Privy Council in Re Welch noted that "an assessment, even a generousone, by a promisor able to exercise a sound judgment would not lightly be departedfrom".1713 Law Reform (Testamentary Promises) Act 1949, s 3(1).14 See Re Collier-Cambus (dec'd) [1994] NZFLR 520 (HC) at 146.15 See Powell v Public Trustee [2003] 1 NZLR 381 (CA) at [24].16 At [40]; and see Thwaites v Kerr, above n 7, at 24.17 Re Welch, above n 3, at 7.[16] The Court typically has regard to any specific amount or property promisedbut is not bound to make an identical award to the promise. Often, awards will bereduced because the value of the property promised exceeds the value of the servicesto be rewarded.18 Nonetheless, Cooke J observed in Re Townley that the power wasnot intended to be used sparingly, and "in inflationary times the Court shouldnormally consider carefully whether the fairest order may not be to vest the specificproperty at least in part in the claimant".19Whether an operative testamentary promise existsMr McMillan's case[17] The nub of the dispute between Mr McMillan and Ms McCarthy hinges on theterms of the promise. Mr McMillan contends Mr and Mrs Svendsen made a discretetestamentary promise to leave him their home in return for one interest-free advancein 2007, which he provided, and this agreement was unaffected by their subsequentrequest for further contribution in 2011. Ms McCarthy contends that whateveragreement existed always required more than one payment to be made, meaningMr McMillan never fulfilled his obligations and no testamentary promise crystallised.[18] The parties provide widely divergent evidence as to the nature ofMr McMillan's relationship with Mrs Svendsen. Where Mr McMillan adducesevidence casting himself as a fond and dutiful surrogate nephew, Ms McCarthy'sevidence portrays him as an interloper in the family affairs and an abusive,intimidating figure in her aunt's life.[19] Mr McMillan's evidence provides a narrative as follows:(a) Mr McMillan knew Mr and Mrs Svendsen all his life and consideredhimself close to them. They had no children. He referred to them as auntand uncle, and they referred to him as a nephew.18 See Byrne v Bishop, above n 6.19 Re Townley [1982] 2 NZLR 87 (CA), at 89 per Cooke J.(b) After a period of his life in New Zealand, Mr McMillan went to teachoverseas in London, but remained in constant contact with theSvendsens. He returned to visit them in New Zealand at least once ayear. In the six years leading up to their respective deaths he visited twicea year. This included returning to visit throughout Mr Svendsen'sradiotherapy treatment and eventual funeral in 2012, totalling fourseparate visits. In 2015 Mr McMillan returned permanently toNew Zealand.(c) Mr McMillan says the Svendsens telephoned him in early 2007 while hewas in the United Kingdom. They told him they wished to renovate theirhouse on Waiheke Island and did not have the financial resources to doit. According to Mr McMillan they promised that, in return for up to$200,000 without payment of any interest or the registering of anymortgage, they would use the money to improve the house, and he wouldinherit the house after their deaths.(d) Mr McMillan agreed to this proposal, and borrowed £68,000, amountingto $185,415.60, from his own bank (and paid interest on it). Hetransferred the money to Mrs Svendsen's business account in March2007.(e) Mr McMillan points to a letter of advice provided to Mr andMrs Svendsen by their solicitor, Mr Peters, dated 4 April 2007 asrecording the basic structure of the agreement. That letter outlines anunderstanding that the Svendsens intended to carry out substantialalterations to the Waiheke Island house, which were to be paid for byMr McMillan, who would become the legal owner of the propertyfollowing both of their deaths. It recommends drawing up a contractobliging Mr McMillan to cover costs of alterations and any incidentalcosts such as fees or permits in return for the Svendsens undertaking toleave the property to him in the event the survivor still owned it at theirtime of death. It does not specify a total for Mr McMillan's financialcontribution. The proposed contract was never drawn up.(f) During a Christmas visit in 2007–2008 Mr McMillan recountsMrs Svendsen explaining that she and her husband were pleased he waswilling to help them get greater enjoyment from their property and tohave received the funds, and that no more would be asked of him. Herecounts similar expressions of satisfaction at other points.(g) The money provided was used to create a kitchen for Mrs Svendsen anda library for Mr Svendsen's books. Mr McMillan also records thatMr Svendsen made clear that he wanted Mr McMillan to inherit hisbooks. Mrs Svendsen's previous will of May 2010 recorded that,conditional on his waiving the debt, he was to inherit both the house andthe books.(h) Mr McMillan's evidence is that the Svendsens contacted him in 2011 torequest a further $150,000 to complete the renovations. There wereproblems with an architect and unrealistic estimates.(i) Mr McMillan discussed the possibility of putting in more money withthe Svendsens and Mr Peters, their lawyer. Mr Peters suggested thatsteps should be taken to protect Mr McMillan's interests.(j) Mr Peters also requested Mr McMillan change his will to protect theSvendsens in case he predeceased them. Mr McMillan's amended willof March 2012 left any interest in the Waiheke Island house back to theSvendsens.(k) Mr McMillan points to a draft deed Mr Peters prepared for the parties in2011. This acknowledged the money Mr McMillan provided in April2007, and the prior agreement that he "would from time to time"contribute money towards the cost of alterations in consideration forwhich the Svendsens would leave the property to him in their wills. Thedraft deed referred to the April payment as "the first instalment" whichwent towards then-completed renovations to the upper flat of theproperty and provided for him to contribute a further $150,000 towardsrenovations to the lower flat "payable on or before 31 December 2012".(l) The draft deed was not executed. Mr McMillan submits this was due tothe death of a friend of his followed by Mr Svendsen's sickness and thenhis death on 14 September 2012. Two further deaths, of a close friendand Mr McMillan's civil partner, further delayed any progress.(m) Mr McMillan says that following Mr Svendsen's death Mrs Svendsenstill wanted him to put more money into the property. He was willing todo this but wanted to formalise his interest in the property as sheappeared to be wavering from the earlier promise.(n) According to Mr McMillan, Mrs Svendsen advised at Christmas 2014that she had changed her will, acknowledging this as a breach of theearlier agreement, on the basis that it no longer suited her. This versionof the will, dated 18 August 2014, treated Mr McMillan's money as ade facto loan, leaving him $185,415 plus interest at four per cent perannum, and directed that the Waiheke Island house be sold with proceedsdistributed to her brother's children.[20] Submissions for Mr McMillan also emphasise various other acts anddimensions of his relationship with the Svendsens described in his evidence, whichcould be considered services under the Act as well as indicating the strength of hisrelationship with them. In particular:(a) Mr McMillan telephoned the Svendsens fortnightly while living abroad.(b) Mr McMillan helped prepare the house for Mr Svendsen's return fromhospital during his radiotherapy (and flew from London to be present forit).(c) In 2014 Mr McMillan arranged for Mrs Svendsen and a companion totravel to Europe. He met a significant number of expenses, spending$12,015.58 in total.(d) Mr McMillan contributed $11,276.82 towards gardening and generalupkeep of the Waiheke Island property, and provided further sums relatedto his interactions with his aunt. Many of these went towards theWaiheke Island property, including a toilet, plumbing and gas repairs,firewood, a new washing machine and dryer, and maintenance. He alsopurchased and prepared meals for Mrs Svendsen, as well as buying (andpaying for) groceries.(e) After returning to New Zealand Mr McMillan regularly visitedMrs Svendsen, often twice a day. He also helped Mrs Svendsen withvarious appointments and visits in Auckland.[21] Mr McMillan supports his claim with affidavits from nine other witnesses.Two of these are his siblings and seven are various friends and acquaintances whoknew the Svendsens through to their deaths. Each affidavit broadly supportsMr McMillan's version of events, with the parties all separately recallingMrs Svendsen discussing an arrangement wherein Mr McMillan would providemoney towards renovations in return for inheriting the Waiheke Island property orbecoming the primary beneficiary of the estate. They variously depose thatMrs Svendsen maintained and discussed this understanding with them across manyyears until after her husband's death. They consistently describe the arrangementbeing discussed as current, including Mrs Svendsen saying that Mr McMillan wasgoing to inherit the property in return for the funds he had provided. Only one of thewitnesses explicitly says he believes Mr McMillan was required to provide more than$200,000, although another mentions the amount to be contributed being raised to$400,000 subsequent to 2007. Three of the affidavits also register a change inMrs Svendsen's attitude regarding the agreement towards the end of her life, when shebegan to consider changing her will to reduce Mr McMillan's inheritance.[22] These witnesses were not called for cross examination, so their evidence hasnot been tested directly, although counsel for Mr McMillan emphasises theirimpartiality between the parties in this case. I summarise briefly the evidence in theaffidavits.Winifred June Lee[23] Ms Lee was a friend of Mrs Svendsen for 60 years, visited the Waihekeproperty many times, and was told by the Svendsens that Mr McMillan had providedfinancial assistance and was to inherit the house in return.Faith Darleen Beyer[24] Ms Beyer knew the Svendsens for 40 years. She deposed to being aware ofMr McMillan's contributions and the agreement that he would receive the house andthe memorabilia. Mrs Svendsen discussed the agreement with her in 2015 andonwards.Hugh William McMillan[25] Mr McMillan is the brother of the plaintiff. He deposes he heard about thearrangement from his father, and that the plaintiff told him separately about needingto mortgage his own property to raise the money. He deposes he discussed therenovations with the Svendsens, and them having wasted quite a lot of money on anarchitect whose plan was not buildable. They also referred to the money the plaintiffput in and said they would be leaving the property to the plaintiff in return as acertainty. He affirms the Svendsens had approached the plaintiff about thearrangement.Lynne Marie McMillan[26] Ms McMillan is the sister of the plaintiff. She deposes that in all herdiscussions with the Svendsens she was informed that the plaintiff was to be the solebenefactor of their estate and receive the Waiheke Island house in exchange forproviding money to them to renovate the library and kitchen areas. On one of thesevisits a "now deceased lawyer" arrived to help facilitate and document thisarrangement.James Richard Johnstone[27] Mr Johnstone was a friend of the Svendsens for over 50 years. He considershimself to have been a trusted confidant. He deposes to having been involved indiscussions with the couple about revising their wills. Both believed Mr McMillanshould be the primary heir and receive their home in exchange for making a substantialloan towards renovations.[28] He deposes that the agreement was initially for a contribution of $200,000,which was subsequently increased to almost $400,000 in the ensuing years.[29] He deposes that the Svendsens regularly mentioned that Mr McMillan wasfunding the renovations in return for receiving the property once they had died.[30] He also deposes as to his own observations that Mr McMillan made manygestures of support for Mrs Svendsen following her husband's death, including upkeepof the house and grounds and replacing a considerable amount of equipment.[31] He deposes that Mrs Svendsen became "depressed and confused" followingher husband's death, and that Mr McMillan, amongst others, continued to providesupport.Rosaria Hall-Bresolin[32] Ms Hall-Bresolin had a professional relationship with the Svendsens since the1970s and met her husband through them. She describes Mr McMillan as "like a son"to the couple.[33] She also deposes she heard of the agreement that Mr McMillan would providethe couple with money in return for being left the house and books, while sentimentalfamily possessions would be left to Ms McCarthy and Mrs Svendsen's brother and hiswife.[34] She also deposes that in 2015 Mrs Svendsen asked her for her views on whatshe should do with her estate. Mrs Hall-Bresolin deposes she told Mrs Svendsen tohonour the agreement to leave the property to Mr McMillan who had invested a largeamount of money in the property, was like a son to them, was generous, and genuinelyloved the Svendsens.Vernon Leslie Tupper[35] Mr Tupper met Mrs Svendsen in the 1970s and knew the Svendsens onWaiheke since they moved there in the early 2000s, having fairly regular contact withthem. He was aware of an arrangement where Mr McMillan would receive the estateas major or sole beneficiary, in exchange for a large sum of money for renovations,which he believes was in excess of $200,000. He deposes that Mrs Svendsen wasshaken by her husband's death and subsequently considered changing her will tobenefit her own side of the family.Lynette Janet Friend[36] Ms Friend is Mr Tupper's partner. She confirms there was an arrangement forMr McMillan to receive the house in exchange for providing funds towardsrenovations. She also deposes as to "expensive plans" which led to cost overruns, andthat following Mr Svendsen's death Mrs Svendsen started to "change her mind",despite Mr McMillan providing constant family support with a high level of respect,care, and commitment.Craig Andrew Mortland[37] Mr Mortland describes having known the Svendsens since the 1970s. Hebecame close to them in the 1980s. He confirms they discussed the agreement withhim. He also deposes that, late in her life, Mrs Svendsen described Mr McMillan as"the closest that they had to a son and someone who had no agendas on them andsomeone that they loved deeply".[38] Mrs Svendsen's earlier wills are relevant. I summarise:(a) a will dated 28 May 2003, which makes no bequests to eitherMr McMillan or Ms McCarthy;(b) the will dated 17 May 2010, which leaves the Waiheke Island property,Mr Svendsen's books and various other items to Mr McMillan, andleaves nothing to Ms McCarthy;(c) the will dated 18 August 2014 which treated Mr McMillan's money as ade facto loan repayable with four per cent interest per annum and leavesnothing to Ms McCarthy;(d) a will dated 12 May 2016 which made various minor bequests beforedividing the residue of the estate equally as tenants in common betweenMr McMillan and Ms McCarthy; and(e) the final will which makes some changes but essentially preserves the2016 will's arrangement regarding Mr McMillan and Ms McCarthy.[39] Also in evidence is correspondence between a lawyer acting for Mr McMillanand a lawyer (not Mr Peters) acting for Mrs Svendsen in 2015. Mr McMillan'srepresentative's first letter is dated 20 October 2015. It opens by making clear that"whilst Mr McMillan wishes to protect his own position, [he] has no wish to beinvolved in legal action with his Aunt, or to cause her any unnecessary stress." Itrelays instructions that the lawyer treat Mrs Svendsen's needs as "paramount" anddisclaims any intention to restrict her dealings with regard to the property or anyreplacement (including relating to rest home arrangements). It goes on to stress thatMr McMillan desired to protect his interest in the house and uphold the originalagreement. It explains the amount of money provided (the advance and approximately$30,000 in further upkeep costs including hiring a gardener) and that Mr McMillansought as consideration that Mrs Svendsen honour the original agreement or, in thealternative, repay the loan with interest. The letter recounts Mr McMillan's narrativethat the renovations had proved costlier than expected, and that Mr McMillan had beenprepared to borrow and provide an additional $150,000 as requested, if he was put onthe title.[40] A letter in response from Mrs Svendsen's lawyer, dated 30 October 2015,expresses Mrs Svendsen's view that Mr McMillan was using "the veiled threat of legalaction" to force her to leave him the property. The letter alleges Mr McMillan merelysought a windfall on his $185,000 investment. The letter impliedly accusesMr McMillan of "ransacking" Mrs Svendsen's desk to see her private will. It furtherstates that "the balance of $150,000.00 was not fulfilled" and Mrs Svendsen had beenrequired to spend her own money to complete the renovations. It also warns thatMr McMillan's approach in the prior letter "is likely to do nothing more than furtherdamage the relations between himself and his Aunt". The letter gives Mrs Svendsen'saccount that Mr McMillan intimidates her, and that she has put a lock on her bedroomdoor. The letter suggests that Mr McMillan focus on improving the relationshipbetween the two or provide evidence to substantiate the amount of debt claimed in thealternative.[41] Mr McMillan's lawyer's response, dated 12 November 2015, expresses dismayat the contents of Mrs Svendsen's lawyer's letter. It rejects the various assertions madeand reaffirms Mr McMillan's positive account of the relationship as well as theagreement. This appears to be the end of the correspondence during Mrs Svendsen'slifetime.[42] Submissions for Mr McMillan emphasise there is no credible explanation forhis taking out a substantial loan himself and advancing it interest-free to the Svendsenswithout some underlying arrangement. He received no return on that money, took outa mortgage to secure it (which he did not pay off until 2015), and paid interest at ratesof 6.5–7.6 per cent on the borrowing personally. There is no evidence of anyexpectation he would receive interest or repayment from the Svendsens during theirlifetimes. His only expectation was that he would receive the Waiheke Island propertyfollowing their deaths.[43] Counsel submits the four elements of a successful claim are clearly made out.Mr McMillan rendered services in the form of providing money and various additionaldomestic and personal services and support. There was an express promise to rewardhim by leaving him the house and a clear nexus between his provision of money andthat promise. Mrs Svendsen failed to make the appropriate testamentary provision orremunerate him, having left him only half what was promised.[44] Submissions for Mr McMillan accept that the courts are generally cautiousregarding claims made by living claimants against estates, given the deceased cannotprovide their account of events, but emphasise that his claim is supported by a rangeof corroborating evidence, in both contemporaneous documents and variousaffidavits.20 Mr McMillan has provided direct evidence and affidavits from ninewitnesses, seven of whom are unrelated to him.[45] Mr McMillan submits the affidavits alone provide a sufficient basis fromwhich to infer the promise was made. In Chambers v Weston, the Court drewinferences from conversations third parties reported having with the deceased partieswhich supported the likelihood a promise was made.21Ms McCarthy's case[46] Ms McCarthy's evidence and submissions present a different narrative: thatany agreement required Mr McMillan to fund two lots of renovations – one for theupper flat of the property and one for the lower flat – before the promise to leave thehouse to him would come into existence. Her counsel submits there was no promise,but only part performance of an unformed arrangement between Mr McMillan and theSvendsens. Mr McMillan is not entitled to relief under s 3(1).[47] Submissions for Ms McCarthy note that Mr Peters's letter of 4 April 2007outlining the basic structure of the agreement appears to predate any firm sense of theoverall costings of the planned renovations. The letter does not outline overall costsor a specific figure for Mr McMillan to contribute. Counsel submits this beliesMr McMillan's claim that the agreement was originally for a sum up to $200,000.[48] Counsel for Ms McCarthy points out that the architect's plans discussed in thevarious affidavits, which were initially costed for $500,000 before being revised to20 Ace v Guardian Trust and Executors Co Ltd [1948] NZLR 103 (SC) at 105; affirmed in Brown vPourau [1995] 1 NZLR 352 (HC) at 370.21 Chambers v Weston (1982) 1 NZFLR 377 (HC) at 380.cost $350,000, predate the 2011 draft deed which recognises Mr McMillan's earlierpayment and anticipates the subsequent $150,000 payment. Counsel submits that ifthe plans were available from early on, this further discredits Mr McMillan's claimthat he was ever only to provide up to $200,000.[49] Ms McCarthy's submissions point to correspondence from Mr Peters for theSvendsens sent to Mr McMillan some time in 2012. That correspondence wasseemingly written while Mr Svendsen was still alive, and references his unexpectedillness, but the date is not clear. It is possible this letter is what Mr McMillan refers toin his submission that Mr Peters advised as to the need for him to protect his interest.It includes the following salient points:(a) Mr Peters states he is "repeating the advice to you so that you will beaware of the need in my view for all parties to conclude bindingarrangements." Mr Peters advises of the potential need for the WaihekeIsland property to be used to secure a loan in the event that either of theSvendsens requires supervised care, which would require more fundsthan they had access to.(b) Mr Peters suggests treating the extent of Mr McMillan's advances astransferring an interest in the property to him representing the value ofhis contribution against a current valuation. This would potentiallyassist in bringing the value of the survivor's assets within the eligibilitythreshold for a governmental residential care subsidy.(c) Mr Peters advises that "it would be in all parties' interests for anyfurther advance to be made as soon as possible up to the balance thatyou had agreed with [the Svendsens]" in order to ensure their cashposition remains strong and the property is not required as collateral.(d) Mr Svendsen is described as having mentioned "that the originalarrangement involved contributions of $300,000 or thereabouts, butsince then adjustments have been made to the timetable."[50] Counsel surmises that the referenced timetable adjustments arose out of theissues involving the architect's plans.[51] Counsel also provides an email dated 28 September 2012 from aMs McGowan, acting for Mr McMillan, addressed to Mr Peters, acting forMrs Svendsen. Counsel submits it is notable this letter appears to respond toMr Peters's correspondence. The email advises "it has been agreed" that, inter alia:(a) Mr McMillan "will purchase the property and that the $187,000 will beused as a deposit";(b) Ms Svendsen will have the right to continue to live in the property forthe rest of her life;(c) Mr McMillan will complete improvements to "the basement area";(d) the balance of the money will be secured by a loan advance, with detailspending as to whether a registered mortgage will be required or the loanwill remain unsecured;(e) Mr McMillan will provide any additional funds Mrs Svendsen requiresas part of the mortgage;(f) no interest is to be charged while Mrs Svendsen occupies the property;(g) Mr McMillan is to pay for maintenance of the property including thegardens while Mrs Svendsen occupies it and she will pay for otheroutgoing costs; and(h) "that in consideration of this arrangement [Mrs Svendsen] has made apromise to [Mr McMillan] that she will forgive the balance of the loanpursuant to the terms of her will."[52] The email requests confirmation as to whether the listed details suit the partiesand proposes working to finalise an agreement.[53] Mr Peters's response email is dated 9 October 2012. In it he affirms thatdespite Mr McMillan making "proposals concerning the possible future ownership ofthe property and related financing" there was no binding agreement at present, andthat Mrs Svendsen "may be sensitive to the implication that she has committed herselfin some way".[54] Counsel emphasises that Mrs Svendsen lived five further years withoutMr McMillan making any further contributions to renovation costs. Counsel submitsthat, had Mr McMillan satisfied his obligations under the parties' agreement at anypoint, Mr Peters would inevitably have been informed as to its satisfaction. Counselcontends there was only ever an inchoate agreement regarding the house.[55] The submissions for Ms McCarthy point to the amendments to Mrs Svendsen'swills to support this interpretation. Counsel contends that the will dated 17 May 2010,in which Mr McMillan is left the house, books, and various other items in return forforgiveness of the $185,415.60, was made in anticipation of Mr McMillan completingobligations regarding the lower floor. His disinheritance by the will dated 18 August2014, which leaves him only the initial advance and four per cent interest per annum,reflects his failure to complete his obligations. The 2016 and final will then expressesMrs Svendsen's ultimate view that Mr McMillan had completed half of his obligationto fund renovations, and therefore was entitled to half of the estate.[56] Counsel also points to the 2011 draft deed as representing the substance of theagreement between the parties, which was never fulfilled. A similar account is laidout by Mrs Svendsen's representative in the 2015 correspondence with Mr McMillan'slawyer. Regarding the various affidavits supporting Mr McMillan's claim, counselsubmits the witnesses' recollections are insufficient to overturn the documentaryevidence in the lawyers' correspondence that the agreement also obliged Mr McMillanto complete renovations of the lower floors.[57] Ms McCarthy in her evidence disputes Mr McMillan's positive account of hisrelationship with Mrs Svendsen, instead characterising their relationship as distant andabusive.[58] Ms McCarthy says her aunt told her, two weeks before her passing, that shehad never heard from or about Mr McMillan until Mr Svendsen contacted himregarding the renovations. She says Mrs Svendsen did not support seekingMr McMillan's help. Further, Mr McMillan was not even mentioned at familygatherings throughout her own life.[59] Ms McCarthy describes her uncle's recovery from treatment for chemotherapyprior to his death, during which he resided at his home with Mrs Svendsen's niece,Patricia, as a caretaker. Ms McCarthy says she ate dinner each night with Patricia andMr and Mrs Svendsen, and afterwards they would sit in the living room and talk orwatch television. During this period, she says there was no mention of Mr McMillanor the McMillan family by any party, including many friends who paid visits. Herevidence is that Mr McMillan never visited during this time.[60] Ms McCarthy gave evidence she learned of the alleged promise followingMr Svendsen's death. Her understanding is that it was between Mr Svendsen andMr McMillan, and that Mrs Svendsen had opposed it. It was a source of tension, andMrs Svendsen described it as requiring Mr McMillan to pay over $400,000 inrenovation costs in order to get the house in the end. His failure to meet all the costsdepleted the Svendsens' cash reserves, resulting in Mr McMillan becomingunwelcome at the house, and being refused title to the property. During this period,Ms McCarthy alleges, Mr McMillan refused to make the $150,000 payment unless hisname was put on the title of the house, a state of affairs which endured until afterMr Svendsen's death.[61] Ms McCarthy characterises the relationship between Mrs Svendsen andMr McMillan as abusive. She says Mrs Svendsen never referred to Mr McMillan asher nephew, except when introducing him in public, which she explained she did dueto wanting not to upset him, as he was abusive when they were alone together. Shecontends that after Mr Svendsen died Mr McMillan began visiting regularly in orderto harass Mrs Svendsen regarding title and attempted to coerce her to change the willin his favour. She gave evidence her aunt dreaded his visits and struggled to cope withhis constant discussion of her will. When Ms McCarthy offered to "tell him to fuckoff" Mrs Svendsen asked her to refrain because she was afraid of him. Ms McCarthyrecounts her aunt telling her she told Mr McMillan that Ms McCarthy had been addedto the will, and that Mr McMillan reacted angrily, asserting that Ms McCarthy shouldjust be given the chattels with the house left to him.[62] Ms McCarthy also disputes Mr McMillan's claim of having been involvedwith "duties, works, and services", as cleaning duties were performed by herself andhouse-cleaners. She further contends that Mrs Svendsen did not appreciateMr McMillan hiring a gardener for the property, which she described as him "actinglike he owns my house".[63] Ms McCarthy gave evidence that prior to Mrs Svendsen's funeral she spoke toMr McMillan about the renovation payments. She told him the renovations cost closeto $400,000 and asked if he had paid for the remaining invoices. She says he told herthat he had and did not respond when she told him he would be asked for receipts toprove it (Mr McMillan denied this conversation occurred).[64] In submissions Ms McCarthy's counsel points to the 2015 lawyers'correspondence, in which Mrs Svendsen is described as intimidated, and having put alock on her door, as providing some support for this narrative.[65] In response, counsel for Mr McMillan submits the single letter fromMrs Svendsen's lawyer is the only evidence for this negative characterisation of hisclient's behaviour, which is otherwise unsubstantiated. Counsel notes Mr McMillan'srelationship with Mrs Svendsen was positively portrayed across affidavits from arange of her other acquaintances. Counsel emphasises that Mr McMillan was referredto as "my nephew" in the wills of the deceased, was a pallbearer at both Svendsens'funerals, and gave a eulogy at both. Mr McMillan also provided money to theSvendsens without any formal instrument at his own expense, and substantially paidfor Mrs Svendsen visiting Europe with a friend, both of which speak to a positiverelationship. Counsel for Mr McMillan explains the remarks in the 2015 email as alate-in-life shift in attitude not reflective of the substance of the relationship betweenthe parties. He notes that by this stage Mrs Svendsen was in her mid-80s, 20 yearsinto her retirement, eight years after the arrangement was first made, andapproximately three years a widow. A single account to her lawyer should notcountermand the wider accounts of her life and the relationship of the parties.[66] Submissions for Mr McMillan argue the progression of the wills is betterunderstood on the basis he was to receive the entirety of the property in 2010, prior tothe later requests for further contributions. Counsel submits any alleged intimidationis not reflected by the 2014 will, which makes Mr McMillan's position worse bydisinheriting him, although in 2016 the will changed entirely again, with bequests toMr McMillan and Ms McCarthy on equal bases. The 2014 will and othercorrespondence also displace any relevance of Mrs Svendsen having purportedlyinitially opposed the agreement.Submissions as to quantum[67] Submissions for Mr McMillan characterise his services to Mrs Svendsen asclearly above and beyond what could normally be expected of a family relationship,particularly given the limited biological connection between them. The gist of thesubmissions is that, given the particular value of the promise and services receivedfrom the perspective of the deceased, giving full effect to the promise constitutesreasonable recompense.[68] Counsel also notes the arrangement in this case did not involve mutual benefitduring the life of the deceased, which might reduce what can be considered reasonablerecompense.22 Mr McMillan borrowed at detriment to himself and provided otherservices in reliance upon the promise he would receive the property, leaving an"unremunerated balance".23[69] Mr McMillan has provided a "quantum affidavit" prepared by Matthew Kemp,a chartered accountant experienced in providing litigation support. He provides threecalculations relating to the money Mr McMillan borrowed in order to provide$185,415, and the $30,000 contributed towards various other costs. His conclusionsare:22 See Samuels v Atkinson [2009] NZCA 556, [2010] NZFLR 980 at [78].23 Powell v Public Trustee, above n 15, at [31].(a) That if Mr McMillan were to be repaid the initial funds he provided andthe various property and travel expenses he paid for with interestcalculated in accordance with the relevant Judicature (Prescribed Rateof Interest) Order and Interest on Money Claims Act 2016 provisionshe would be entitled to $354,619.98 as at 24 September 2018, and atcurrent rates interest would accrue at $33.13 per day from25 September 2015.(b) That a time value of money/present value calculation relating to thefunds provided and property and travel expenses would produce afigure of $347,455.97 as at 24 September 2018. Interest would accrueat $31.89 per day from 25 September 2018.(c) That the financial opportunity cost of Mr McMillan obtaining the useof the funds and lending the money to the Svendsens would be around$376,080.33 with interest accruing at a rate of $34.52 from25 September 2018.[70] These figures go towards the scale of the contribution Mr McMillan made tothe Svendsens' renovations and Mrs Svendsen's life generally. Counsel submits thefact the money provided allowed the Waiheke Island property's value to be increasedfrom its then-current value of $720,000 is particularly relevant. The submissions positthe financial opportunity cost as the "real" measure of the contribution, given fundswere provided in 2007 with no expectation of a return until after the Svendsens wereboth deceased.[71] To guide the Court's discretion, counsel points to Smith v Malley.24 That caseinvolved a claimant spending around 15 years making twice-weekly visits to anelderly first cousin once removed, in which she provided food and fresh vegetablesgrown by her husband, as well as undertaking specific and regular tasks andhousework. Following an accident and illness she became unable to visit in person,but the Court considered the two had remained on friendly and sympathetic terms.The Court in that case considered the services provided sufficient works to justify24 Smith v Malley [1950] NZLR 145 (SC).remunerating the claimant for the full value of the deceased's promise that she wouldinherit her house.[72] Counsel also cites Le Couteur v Norris in which an award of $590,000 wasmade out of an estate valued between $2,420,000 and $3,060,000, on the basis of thetestatrix's promise to leave a specific home to her daughter.25 This promise was inreward for generally including the deceased in her own family life, as well as a widerange of other services which "far exceed the normal services that a dutiful child mightprovide their aged parent".26[73] The quantum of the award was determined in light of other benefits thedaughter had received prior to her mother's death including financial benefits wortharound $210,000 and in the context of a strong mother/daughter relationship enjoyedby both parties.27 The daughter was also to receive a one-third share of the balance ofthe estate.28[74] Counsel submits it is clear the money and services in this case had great valuefrom the perspective of the deceased, well beyond the value of the money paid. Thesecontributions involved considerable detriment to Mr McMillan.[75] Regarding competing claims, the submissions suggest there are no meaningfulrival claims on Mrs Svendsen's estate that would prevent an award reflecting the fullpromise. Mr McMillan submits Ms McCarthy had no real basis to expect to inheritunder Mrs Svendsen's will. No testamentary promise was made to her, and thesubmissions characterise her involvement with Mrs Svendsen as well within thenormal incidence of family life. Counsel points to Jones v Public Trustee, in whichthe fact the testator had five living relatives who might otherwise benefit was notsufficient to prevent the Court of Appeal giving full effect to his promise to leave hishouse to the stepson and daughter who cared for him at great inconvenience for25 years.2925 Le Couteur v Norris [2018] NZCA 572.26 At [41].27 At [74]–[75].28 At [76].29 Jones v Public Trustee, above n 9.[76] Counsel for Ms McCarthy contends that should the claim succeed any awardshould be heavily constrained in light of what is reasonable as recompense for theservices provided. Counsel submits the total financial contributions made towardsMrs Svendsen by Mr McMillan represent only about 15.3 per cent of the value of theWaiheke Island property, which is insufficient even when paired with other servicesto make an award for the entirety of the property reasonable. Given the key service inMr McMillan's case is the provision of money, counsel for Ms McCarthy submits thecontribution made is the appropriate measure for any award.[77] Further, counsel disputes the analogy to Le Couteur, arguing that case involveda much greater degree of involvement and efforts to include the deceased in theclaimant's own life, compared to which Mr McMillan's efforts are comparativelysparse.[78] In her evidence Ms McCarthy also emphasises the relative strength of her ownconnection with Mrs Svendsen throughout her life and performance of duties by wayof assistance during Mrs Svendsen's later years. These go some way to rebut thesubmission for Mr McMillan that there are no "real" other claims to be considered.Alternative Cause of Action[79] Should his testamentary promise action fail, Mr McMillan makes a claim indebt for the sums advanced plus interest.[80] Counsel for Mr McMillan submits this debt should be paid by the estate beforethe balance is distributed equally between Mr McMillan and Ms McCarthy as the willprovides. Counsel submits it would not be fair to treat Mr McMillan andMs McCarthy equally, given Mr McMillan has provided financial resources andMs McCarthy has not, yet they stand to be treated equally under the will.Discussion[81] I accept Mr McMillan's evidence that the promise was made in 2007 over thetelephone as he describes:(a) Mr McMillan was clearly in a close and affectionate relationship withMr and Mrs Svendsen. His evidence of their support for him when hecame out as gay is illustrative. They were a very important part of hislife and even though he spent most of the period with which we areconcerned in the United Kingdom he kept in close touch with them.(b) The fact that in 2007 Mr and Mrs Svendsen felt able to ask him for aconsiderable sum of money shows the nature of the relationship.(c) So too does Mr McMillan's response. He was working in the UnitedKingdom as a school teacher. He agreed to provide the money. He didnot have the money himself. He went to his bank and borrowed it. Headvanced it to the Svendsens without any documentation, withoutsecurity and free of interest. He did that because of his relationshipwith them. It was an open-ended advance because they told him theywould use the money to renovate their Waiheke Island house, and theypromised him they would leave the house to him in their wills.(d) I do not accept the promise was conditional on Mr McMillan providingfurther money. I am satisfied the Svendsens knew the full renovationswould cost more than the amount they asked for. Mr McMillan was,after all, a school teacher. They used his money to renovate the top flatof the house, which is where they lived.(e) I am also satisfied that, as time passed, Mr and Mrs Svendsen's positiontowards their promise became modified. That is within human nature.They asked Mr McMillan for more money – $150,000 – to put towardsrenovating the bottom flat of the house. Mr McMillan was prepared todo that but was concerned enough to want some legal comfort.Mr Peters's involvement illustrates the way matters were moving.(f) Mr McMillan continued his close relationship with Mr andMrs Svendsen. He visited from the United Kingdom every year and heotherwise maintained contact. He came when Mr Svendsen wasterminally ill, and he supported them through this period. He was apallbearer at Mr Svendsen's funeral and delivered a eulogy.(g) Afterwards, Mr McMillan continued to support the widowedMrs Svendsen. I consider the fact Mr McMillan paid for Mrs Svendsenand a companion to visit Europe, with him as a guide, to be an unselfishand caring gesture.(h) I accept also that as she aged Mrs Svendsen became changeable aboutMr McMillan inheriting the house. Ms McCarthy became a presencein her life. The correspondence between lawyers in 2015 shows howthe situation was changing. But nothing came of it. Mr McMillan didnot press his claim. He made no threats. Through his lawyer heexpressed support for his aunt and dismay at her reported allegations.(i) I accept Mr McMillan's evidence that from the 2015 correspondence toMrs Svendsen's death he continued to support her. As families do,unpleasantness was put aside and not referred to.(j) Mr McMillan's support was tangible. He paid for the grounds of thehouse to be maintained. He did this while he was still living in theUnited Kingdom and after his return to New Zealand. He visitedMrs Svendsen regularly and he supported her with transport andprovisions. When Mrs Svendsen died, Mr McMillan arranged herfuneral, gave the eulogy and was a pallbearer.[82] I am significantly influenced in my acceptance of Mr McMillan's evidence bythe affidavits of the seven friends of Mr and Mrs Svendsen which he filed in supportof his case. None were required for cross-examination.[83] I found Ms McCarthy's evidence difficult to place much weight on. Her attackon Mr McMillan's account of his closeness to the Svendsens' was fierce, yet she spentmost of her life in the United States, returning to New Zealand in 2008. From thenuntil 2012 she lived in Wellington and on her own evidence was in contact with theSvendsens "just a few times".[84] Ms McCarthy's evidence is that in 2012 Mrs Svendsen invited her to come toWaiheke Island to work in a shop Mrs Svendsen operated. Ms McCarthy spent threemonths living with them before moving to Auckland. Ms McCarthy, who isMrs Svendsen's niece, did not attend Mr Svendsen's funeral.[85] Further, it was not until 2017 when Ms McCarthy turned 65 and was able touse the Gold Card to get free travel between Auckland and Waiheke Island that shebegan to see Mrs Svendsen weekly.[86] Most of Ms McCarthy's evidence consisted of relating conversations she saidshe had with Mrs Svendsen in which Mrs Svendsen said adverse things aboutMr McMillan or things inconsistent with Mr McMillan's account of the promise. Thisevidence was hearsay. However, no objection was taken to it and I considered thatbecause of the allegations made in Mrs Svendsen's lawyer's letter in 2015 there wasreasonable assurance Ms McCarthy was reliably reporting what Mrs Svendsen toldher.30 But, that does not mean the statements were true.[87] I am satisfied on the balance of probabilities that Mrs Svendsen said things toMs McCarthy and to her lawyer which justified in her mind changing her position onleaving the house to Mr McMillan. At the same time, she continued to enjoyMr McMillan's support.What is now reasonable?[88] The promise having been made and not kept, I now have to assess what isreasonable relief in all the circumstances.[89] I will take the approximate value of the Waiheke Island house as $1,400,000.3130 Evidence Act 2006, s 18.31 This figure is drawn from a Gulf Valuations Ltd Valuation Report dated 23 April 2019, admittedby consent.[90] I know almost nothing of the personal circumstances of Ms McCarthy otherthan she turned 65 years of age in May 2017 and that possession of the Gold Cardmade it financially viable for her to visit Mrs Svendsen regularly. So, I should take itthat Ms McCarthy is of modest means and that a share in Mrs Svendsen's estate wouldbe of real value of her.[91] I take account also that Ms McCarthy is Mrs Svendsen's niece by blood andthat Mrs Svendsen cared enough for her to leave her half of the residue of her estate.[92] It would be unreasonable to decide that because a half share of the house isworth approximately $700,000, and because Mr McMillan's financial contribution asanalysed by Mr Kemp, at its highest, is worth approximately $376,000 plus interest,the half share in the house is an adequate response to the promise. That would ignorethe circumstances in which the promise was made. Mr McMillan put himself atfinancial risk to make the advance. It would ignore also the nature of his relationshipwith Mr and Mrs Svendsen which caused him to take the risk and the extent to whichthis support increased their enjoyment of their lives. This is not a mathematicalexercise.[93] I make the point, however, that this case does not turn on personal services asin Le Couteur v Norris. The promise of the house was made in return for Mr McMillanadvancing the money. It was not made as a reward for him providing personal supportfar exceeding that which might be expected. I do not accept the submissions ofMr McMillan's counsel in that regard. I take the evidence of Mr McMillan's othersupport as both going to the likelihood of the promise being made in the first placeand the nature of his relationship with Mr and Mrs Svendsen.[94] I have decided it would be reasonable to respond to the promise by awardingMr McMillan three-quarters of the value of the Waiheke Island house. That, in myview, recognises the promise was made, adds to the half share in the house whichMrs Svendsen wanted him to have a further proportion to recognise the factMr McMillan advanced money under the circumstances I have described, and alsorecognises Mrs Svendsen's wish to benefit Ms McCarthy. To be clear, when the houseis sold Mr McMillan will receive three-quarters of the net sale proceeds andMs McCarthy will receive the remaining quarter.[95] The rest of the will I leave undisturbed. That means Mr McMillan andMs McCarthy will share equally in the remainder of the residue.[96] Mr McMillan's counsel asked me to provide a right of first refusal forMr McMillan in relation to the house in the event I awarded him only a share in it. Idoubt if I have the jurisdiction to do that and, in any event, I think it better ifMr McMillan wants the house that he competes for it on the open market at arm'slength.Result[97] I award Mr McMillan three-quarters of the net sale price of the Waiheke Islandhouse. Ms McCarthy will receive the remaining quarter. Mr Pretty, as executor, willmarket the house, sell it, and distribute the net proceeds accordingly.[98] The rest of the will is unchanged. The remainder of the residue will be dividedequally between Mr McMillan and Ms McCarthy.Costs[99] The parties seek the opportunity to make submissions regarding costs.Memoranda are to be filed no later than 28 June 2019.________________________________Brewer JSolicitors:Vlatkovich & McGowan (Whangaparaoa) for PlaintiffHauraki Gulf Law (Waiheke Island) for DefendantOgles Podwin & Associates (Auckland) for Ms McCarthy