THE NATIONAL HEART FOUNDATION OF NEW ZEALAND, THE ROYAL NEW ZEALAND FOUNDATION FOR THE BLIND, THE CANCER SOCIETY OF NEW ZEALAND INCORPORATED AND KIDNEY HEALTH NEW ZEALAND INCORPORATED V PHILIPPA MARGARET CARROLL HC NEL CIV 2008-442-000495

THE NATIONAL HEART FOUNDATION OF NEW ZEALAND, THE ROYAL NEW ZEALAND FOUNDATION FOR THE BLIND, THE CANCER SOCIETY OF NEW ZEALAND INCORPORATED AND KIDNEY HEALTH NEW ZEALAND INCORPORATED V PHILIPPA MARGARET CARROLL HC NEL CIV 2008-442-000495 25 February 2009IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY CIV 2008-442-000495UNDER The District Courts Act 1947 IN THE MATTER OF an appeal against a decision of the District court at Nelson BETWEEN THE NATIONAL HEART FOUNDATION OF NEW ZEALAND, THE ROYAL NEW ZEALAND FOUNDATION FOR THE BLIND, THE CANCER SOCIETY OF NEW ZEALAND INCORPORATED AND KIDNEY HEALTH NEW ZEALAND INCORPORATED Appellants AND PHILIPPA MARGARET CARROLL Respondent Hearing: 19 February 2009 Counsel: B R Fraser and D J C Russ for the Appellants P J Radich for Respondent and for the grandchildren Judgment: 25 February 2009JUDGMENT OF WILD J Introduction[1] Four charities appeal against the decision of Judge Russell in the Family Court here in Nelson on 26 September last. The Judge increased, to $400,000, the $100,000 provision the testator, the late Sherle Edwin Gimblett, had made for the respondent (Philippa), who was his only child. That was an increase from 5% to 20% of the testator's estate, which at the time stood at about $1.9 million (currently$1.8m, including $136,000 of accumulated interest). The Judge ordered that the increased provision be paid from the residue of the testator's estate. The four charities are the residuary beneficiaries. [2] The charities say the Judge erred in two respects: a) Having found that the provision for Philippa was appropriately increased from $100,000 to $200,000, in then doubling that increased provision to $400,000 to reflect the fact that the testator had inherited the estate of his late wife, Audrey. In her last will Audrey had left her whole estate to the testator but, should he predecease her, to Philippa; and b) In directing that the increased provision for Philippa fall only on the residue, and not rateably upon the whole estate. The effect of this was that the increased provision was a charge upon that part of the estate bequeathed to the charities, and left the specific bequests unaffected.Approach on this appeal[3] Counsel were agreed that my approach on this appeal should be as stipulated by the Supreme Court in Austin Nichols & Co Inc v Stichting Lodestar [2008] 2 NZLR 141 at [16]. In short, if I considered Judge Russell's decision was wrong, I should substitute my own. [4] I queried with counsel whether the formula mandated by the Court of Appeal in May v May (1982) 1 NZFLR 165 was not more appropriate to an appeal such as this, since it essentially challenges the exercise of a judicial discretion, albeit a discretion to be exercised within the confines of the Family Protection Act, and upon the applicable principles laid down in the several leading Court of Appeal decisions on the Act. [5] The difference between the Stichting Lodestar and May v May approaches is significant. Stichting Lodestar requires an appellate Court to substitute its decision ifit considers the decision under appeal is wrong. On the May v May formula, the appellate Court should not interfere unless the first instance Court erred in principle, factored in irrelevant considerations, overlooked relevant ones, or made a decision that the appellate Court considers is plainly wrong. Plainly wrong does not mean simply 'wrong'. It refers to a decision which is outside the available ambit of judicial discretion, as assessed (somewhat obviously) by the appellate Court: G v G[1985] 2 All ER 225 (HL) at 228h and 229c per Lord Fraser in a judgment concurred with by the other four Law Lords. In short, even though the appellate Court might have arrived at a decision different from that made by the first instance Court, it does not substitute that different decision unless it decides that the decision under appeal was outside the range of decisions available to the first instance Court. [6] The Stichting Lodestar test poses no difficulties for an appellate Court in situations where the first instance Court misstated and/or misapplied the law – where it failed to give the only correct answer. But it is problematic where, as here, breach of moral duty having been conceded, the issue is the increased provision appropriately made to a claimant under s 4 Family Protection Act 1955. There is no single right answer. Thus, in fixing the increased provision, the Court needs to exercise its "discretion" in the third, special sense in which that word is defined in Stroud's Judicial Dictionary of Words and Phrases 6 th Edition 2000 at p693:The third discretion is where the laws have given no certain rule and herein discretion is the absolute judge of the cause, and gives the rule: (Callis 112, 113).[7] In G v G, Lord Fraser at 228f offered this explanation of a judicial discretion: there are often two or more possible decisions, any one of which might reasonably be thought to be the best, and any one of which therefore a judge may make without being held to be wrong. In such cases therefore the judge has a discretion His Lordship also cited from the decision of the Court of Appeal in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 in which Asquith LJ at 345 said this: We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. [8] At [16] in Stichting Lodestar, the Supreme Court said that an appellant exercising a general right of appeal is entitled to judgment in accordance with the opinion of the appellate Court: even where that opinion is an assessment of fact and degree and entails a value judgment a conclusion on which minds might reasonably differ.[9] Delivering the judgment of the Court of Appeal in Auckland City Mission v Brown [2002] 2 NZLR 650, Richardson P at [44] referred to: the difficult question of the amount required to remedy the failure to make adequate provision for the proper maintenance and support of (the claimant) in the particular circumstances.I note that in Henry v Henry [2007] NZFLR 640, delivering the judgment of the Court of Appeal, O'Regan J referred at [58] to the "broad value judgments" required in family protection cases where the need is not financial, but "more of a moral kind". [10] What is the difference between a decision involving such a value judgment by the Court, and a decision in the exercise of the Court's discretion? [11] Fortunately, I need not answer that tricky question. The reason is that, whether I apply the Stichting Lodestar test, or the May v May formula, the result here is the same. I therefore eschew resolving what does not need to be resolved, and is best left for more senior and better judicial minds.Family protection principles[12] The approach a Judge should take in considering a claim under the Family Protection Act is well established in a series of Court of Appeal judgments, notablyLittle v Angus [1981] 1 NZLR 126 at 127, Williams & Aucutt [2000] 2 NZLR 479 at [33], [49], and [58]-[70], Auckland City Mission v Brown at [32]-[42] and, most recently, has been reiterated in Henry v Henry [2007] NZFLR 640 at [27]-[58].[13] In his judgment, Judge Russell referred to all these decisions, and to others as well. He cited generously from some of them. The appellant charities do not contend that the Judge misunderstood the relevant principles.Factual background[14] As I have mentioned, Philippa was the only child of the testator and his late wife Audrey. Philippa was born in 1947. Philippa and her husband have two children, Logan and Blair, both adult and self-sufficient. [15] The testator and Audrey had been shoe retailers at Rangiora in Canterbury before moving to Nelson in the mid 1960s. They purchased what was then Healy's Shoe Shop in Bridge Street, renovating it and living in a flat above the shop. [16] In 1971 the testator and Audrey purchased a property on Wakefield Quay in Nelson, and moved to live there. [17] Although the date is not in the judgment, and appears not to be in evidence, it seems the testator and Audrey sold their shoe business and retired early in the 1990s. [18] Audrey died in 1994. With Philippa's help the testator then sub-divided the Wakefield Quay property into two separately titled properties (the new titles were issued on 13 August 1996). On one of these properties the testator built a new low maintenance home, into which he moved, again with Philippa's help. He sold that home in August 2002, moving into The Wood rest home in Nelson. [19] The testator did not like being in a rest home. The Judge had plenty of evidence that, after moving into The Wood, the testator took increasingly to drink, and had to be prescribed medication for depression. A Ms Gabrielle Heinz, a registered nurse who was the manager of The Wood while the testator was a resident in it, deposed that the testator did not cope well with old age, his perspective becoming increasingly narrower and inward looking. In particular, Ms Heinz deposed: I have no doubt that in the last years of his life, Mr Gimblett's cognitive ability was severely compromised by the rigours of advancing age, depression (and the associated medications) and alcoholism. I am not saying that Mr Gimblett lacked the capacity to order his affairs in his will. What I am saying is that his perception of what was the appropriate thing to do would have been influenced by the disabilities from which he was suffering. I suspect he always was a domineering and difficult person and this got progressively worse when he was with us [20] Also in evidence was a report dated 15 October 2003 by Mr D L Fry, a consultant physician. Reporting to the testator's doctor, Mr Fry commented: Formal assessment of cognitive function indicates a moderate impairment for recent events and disorientation to time. Whilst there is definitely a degree of Parkinsonism, I am not absolutely sure that this reflects true Parkinson's Disease The immediate concern is his recent personality change [21] The Judge also had the notes on the testator taken by staff at The Wood rest home. Amongst the entries on or around 25 August 2003 are these:Date Time Comment22.8.03 11.30 am Sherle becoming increasingly giddy in the mornings, especially this morning. GP contacted to come and give Sherle a check and review meds 23.8.03 2350 Found Sherle on the floor by his bed. Had gone to get up to go to the toilet and had fallen ? cause of fall. Hit his head on the corner of bedside table – wound above r/eye. 24.8.03 10.30 Sherle choosing to remain in bed today – probable shock after yesterday's fall. Wound above r/eye re-dressed. Bruising to r/lid and surround. GP to visit tomorrow. 24.8.03 pm Sherle up this shift. Went to tea – needed assistance to get ack to his room – felt giddy and nauseated. 25.8.03 1200 Spoke to Dr Knight re recent visit. BPb Some balance disturbances and ? early Parkinsons. 30.8.03 pm Sherle drinking quite a bit of alcohol while taking medications that state no alcohol. He's still dizzy and feeling sick. I know why now (alcohol). [22] The significance of Mr Fry's report and these notes is their proximity to 25 August 2003, when the testator made his last will. [23] Those observations and notes are borne out by other evidence the Judge had. Philippa's two children are a daughter, Logan, born in 1970 and a son, Blair, born in 1971. In 1989 Logan (then 19 years old) developed cancer and became very ill. Sherecovered and completed a medical degree. Having done this, her long-time partner was killed, in about July 1994. Philippa deposes that Logan needed considerable support during those difficult years. Despite that, she deposes that the testator was always very critical of Logan, and refused to provide any support to her or show her any kindness. He refused to come to the funeral of Logan's partner. Philippa deposes that, following Audrey's death on 19 October 1994, she travelled to Nelson to help the testator for several weeks. Because Logan was still vulnerable and upset following her partner's death some three months earlier, Philippa took Logan with her. Philippa deposes that the testator was extremely and unnecessarily unpleasant to Logan during this visit, for example calling her a lazy bitch. [24] This persisted for several years. When Logan married in Queenstown in February 2000, the testator refused to come: he said Logan was a bitch. Devastated by this, Philippa deposes that for the first time in her life she confronted her father about his behaviour, and in particular told him what she thought of his attitude and behaviour to Logan. She states that she then had no contact with the testator until November 2000 when she and her husband decided the time had come to make amends, and they were able to repair the relationship in time for the testator's 80thbirthday on 26 November 2000. [25] Philippa deposed that she had continued her help to and contact with the testator right up until her death. She deposed that she made several visits to Nelson in the mid-1990s to help the testator with the subdivision of the Wakefield Quay property and the design and construction of the low maintenance home the testator had built for himself. She said that the testator several times came to visit and stay with Philippa and her family in Sydney, and his stays were generally for the three months November – January. His last such visit was in 1999/2000. In December 2000 Philippa rented an apartment in Nelson, and spent a week with the testator, including buying him new clothes and organising him at the retirement home. Her last visit to the testator was in November 2005. When he became ill, immediately before he died, Philippa travelled to Nelson but unfortunately the testator had died one hour before she arrived. Philippa stated that she telephoned the testator every week until about 2000, and in the last few years of his life rang him approximately every three weeks to keep him up-to-date with family news. She and her family alsosent him cards on his birthday (which Philippa shared) and at Christmas after the testator ceased his trips to stay with Philippa and her husband in Sydney. [26] This evidence satisfied the Judge that Philippa had always been a dutiful and supportive daughter, her support continuing right up until the testator's death. The charities did not submit to the Judge that there was any disqualifying conduct on Philippa's part, or that she had been other than a dutiful and supportive daughter throughout the 60 years of her life.The testator's wills[27] The testator's first will, made in 1996, left all the residue of his estate to Philippa. The judgment does not detail the specific bequests. [28] In his second will, made in August 2000, the testator made specific bequests of $10,000 to each of his grandchildren (leaving also his motorcar to Blair) and split the residue 50:50 between Philippa and the four charities. [29] In May 2002 the testator made a third will. This retained those specific bequests to his two grandchildren, but, for the first time, reduced the provision for Philippa to $100,000. The residue went to the four charities. The solicitor who took the instructions for that will made a file note:Reasons – daughter comfortably off – not maintained contact. Advised of provisions of FP Act – was minded to exclude daughter all together, but decided on gift of $100,000 in view of FP Act.[30] Four months later, in September 2002, the testator made a fourth will which increased the specific legacy to Blair to $500,000, but was otherwise unchanged. [31] The testator made his last will on 25 August 2003. That was about 13 months after he had been admitted to the rest home and was almost exactly three years before he died. The provisions were:• A bequest of $100,000 to Philippa.• Bequests, each of $250,000, to Logan and Blair.• The residue equally to the four charities (the appellants).Philippa's financial position[32] Philippa disclosed total assets exceeding AUD3 million, and an annual income before tax of about AUD55,000. Approximately AUD2.4 million of Philippa's assets were in the fund in her name in the Carroll Family Superannuation Fund. By way of explanation she deposed: the assets of the Carroll Family Superannuation Fund represents proceeds of sale of my husbands and my former matrimonial home. We are presently living in rental accommodation and intend to withdraw most of the superannuation funds to purchase a home in Mosman, Sydney, the same location where we have lived for the last ten years. My husband and I are both approaching retirement age and would like to purchase our own home before we retire. Neither of us are entitled to any government superannuation under either Australian or New Zealand law.[33] Acknowledging that this asset position debarred Philippa from seeking "maintenance" in terms of s 4 of the Act, Mr Radich had advanced her claim as one for "support". In his submissions to me Mr Radich summarised the claim in this way:This is a Family Protection Act (Section 4) case which is in the category where an adult child seeks moral and emotional reinstatement and recognition as a worthy and respected member of a family. This is not a case where a child advances her claim on the basis of financial need. the case is no less the worthy through being in the category where moral recognition is what is being sought.[34] Amongst the citations in the Judge's decision are two which warrant prominence in a "recognition" claim by an adult child, such as this: a) Paragraph [62]: from the Court of Appeal's decision in Flathaug v Weaver & Ors (2003) 22 FRNZ 1035:[32] The relationship of parent and child has primacy in our society. The moral obligation which attaches to it is embedded in our value system and underpinned by the law. The Family Protection Act recognises that a parent'sobligation to provide for both the emotional and material needs of his or her children is an ongoing one. Though founded on natural or assumed parenthood, it is, however, an obligation which is largely defined by the relationship which exists between parent and child lduring their joint lives.b) From the judgment of Richardson P, Gault, Keith and Tipping JJ, delivered by Richardson P, in Williams v Aucutt:[52] A child's path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased. Just what provision will constitute proper support in this latter respect is a matter of judgment in all the circumstances of the particular case. It may take the form of lifetime gifts or a bequest of family possessions precious to its members and often part of the family history. And where there is no economic need it may also be met by a legacy of a moderate amount. On the other hand, where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for a family member.[35] In the light of these authorities, the following points were urged to the Judge by Philippa's counsel: a) That the testator's $1.9 million estate represented the collective efforts of Audrey as well as the testator. Moreover, Audrey's contribution had been both as a working wife and as a mother throughout the marriage. The major part of the testator's estate came from the proceeds of a property on Wakefield Quay, Nelson, which Audrey and the testator had acquired during their marriage through their joint enterprise; b) Philippa's contributions to the family shoe shop business as a child. For example, she had attended to the banking; c) Philippa being self-supporting since she had left home;d) Philippa not making any financial demands on her parents, and not receiving any significant financial assistance or beneficence from her parents during their lifetimes; e) Audrey's wish that her assets pass directly (or indirectly if her husband survived her) to Philippa as her only child. Audrey's will did not mention the four appellant charities – or any charities; f) The movement in the testator's wills from his first will in June 1996 (approximately a year and a half after Audrey's death in October 1994) in which he left his whole estate to Philippa, to his last will relegating Philippa to the most minor legatee, by a significant margin. The coincidence of the initial relegation of Philippa (in the testator's August 2000 will) to the testator's confrontation with Philippa in February 2000, when she challenged her father over his attitude and behaviour toward Logan. The August 2000 will was made during the period Philippa had no contact with the testator following the confrontation but shortly before they made amends; g) The testator's unfounded view that Philippa had not maintained contact with him, coupled with the fact that the testator did not reciprocate Philippa's ongoing support, and never reciprocated her contact with him, or took the initiative in keeping in touch. [36] The Judge summarised the way in which Philippa's counsel closed his submissions in the following two paragraphs:[35] Mr Radich concluded by submitting that it cannot possibly be right that a dutiful only child of some 60 years could properly end up with 5% of the estate, which was the product of joint family endeavours, particularly in the situation where there are no competing moral claims. [36] In concluding, Mr Radich submitted that Philippa's contribution to her father's life was the greatest of all of the beneficiaries named in its will, that a component of the estate came from her mother, that there was no disentitling conduct, that the opposing beneficiaries have no moral claims on the testator's estate and that Philippa had been harshly treated by the testator in her later years. He said that an award of $500,000 is justified to remedythe breach of moral duty that has occurred. He seeks to have Philippa's costs paid for from the estate.First appeal point: error in increasing provision for Philippa to reflect origins of testator's estate[37] There is relatively sparse authority as to the relevance of the fact that a testator has inherited part of his estate from a spouse who predeceased him. The Judge referred to the judgment of Chisholm J in Re the Estate of Torrie: Torrie v Roberts HC CHCH CIV 2005 409 144, 12 October 2005. Two adult children had claimed under the Family Protection Act against the estate of their father who, prior to his death, had been living in a de facto relationship for some six years. The testator had been married to the claimants' mother, Marlene, for some 30 years. This is what Chisholm J said:[36] In my opinion a wise and just testator in Rodney's situation would have also taken into account that he had inherited Marlene's estate when she died in 1995. Although there is no direct information about the duration of Rodney and Marlene's marriage, it can be safely inferred that by the time she died they would have been married for around 30 years and that during the course of that marriage she had played a significant role in the accumulation of matrimonial assets. Her interest in the pig farm alone would have been at least $76,000, probably significantly more. It can also be inferred that the inheritance of Marlene's assets would have provided a springboard for the later accumulation of assets by Rodney.[38] The Judge also referred to the judgment of Judge Ullrich in Re Lawrie FC Lower Hutt, FAM-2003-032-356, 6 August 2004. Four adult children made a claim under the Family Protection Act for further provision from the very modest estate of their deceased father. The children's mother died in 2000, and the testator remarried in 2002, though died six months later. Each child received a personal item, with his second wife receiving the residue. The Judge held that, properly to reflect the relationship between the testator and his children, the estate residue would be split into two parts, one going to the children and the other to the second wife. The children also received various items that originated from the relationship between their mother and the testator, so as to give effect to an agreement between the children and the second wife reached before proceedings commenced.[39] In the face of that somewhat sparse authority, the appellant charities accepted that the fact that the testator's estate included Audrey's estate (which she had wished to go to Philippa) was relevant to the Judge's assessment whether the testator had breached his moral duty to provide proper support for Philippa. [40] Although the point is conceded, I record my agreement with the view Chisholm J expressed in Torrie. That view could not, wisely and justly, be gainsaid. I consider that view is supported by what Richardson P said in Williams v Aucutt, in the passage I have cited in [34]b) above. In Williams v Aucutt one of two daughters of the testatrix sought further provision from her estate. The case had the following similarities to this case: the testatrix had inherited the estate of her husband, who had died some 20 years earlier. Her estate was comparatively large – around $920,000. The claimant daughter and her husband disclosed assets worth close to $1 million. The daughter did not claim an economic need for maintenance and support but:[3] Rather, her claim was and is that she deserved greater provision than was made for her under the will to recognise that she belongs in the family and to recognise her position in the overall life of her mother and the contribution she made in that respect.[41] The testatrix had left most of her estate to her other daughter (Mrs Christine Williams), explaining in her will that the reason was that Christine was financially much worse off than Mrs Susan Aucutt, who was well provided for from other sources. The testatrix had left Susan shares worth approximately AUD7,000 and a number of specific articles such as a John Gully painting and a 19 th Century Worcester tea set. Heron J had increased the provision for Susan to 25% of the estate (net of some small bequests and legacies). Allowing the appeal, the Court of Appeal reduced the further provision for Susan to $50,000. This background provides the necessary context to Richardson P's specific comment:[52] On the other hand, where the estate comprises the accumulation of the family assets and is more than sufficient to meet other needs, provision so small as to leave a justifiable sense of exclusion from participation in the family estate might not amount to proper support for a family member.[42] I consider that Richardson P's reference there to the estate comprising "the accumulation of the family assets", is a reference to the fact that the testatrix had inherited her husband's estate. If that is correct, it supports the view Chisholm J and Judge Ullrich took in Torrie and Lawrie respectively. [43] The charities conceded that the testator had breached his moral duty to provide proper support for Philippa. But they submitted the Judge had erred in factoring in the origins of the estate, not in assessing whether the testator had breached his moral duty, but in assessing the further provision for Philippa necessary to remedy that breach. [44] The submission, as it was put to me, was this:19. The Judge went on to: (i) Wrongly apply a two stage test for FPA claims, viz: (a) What is the amount required to repair the breach? And(b) What are the ascertained origins of the estate and the ascertained wishes of the contributor? His Honour wrongly used the second part of his analysis to justify an additional award to the Respondent of $200,000 [83] increasing her total award to $400,000 [89].[45] Orally, Mr Fraser submitted that the Judge had approached further provision for Philippa on the basis that the origins of the testator's estate are a separate category of award justifying a separate entitlement. [46] Having read, and re-read, paragraphs [82]-[89] of Judge Russell's decision, I am not persuaded he fell into error. Even assuming he did, I consider the outcome would have been the same had the Judge followed the approach urged by the appellant charities. [47] What the Judge said (in [83] of his decision), was that $200,000 would be sufficient to remedy the breach, but for the fact that the testator's estate included that of Audrey. Then (in [86]-[89]), the Judge decided that the testator, if acting wisely and justly, ought to have taken into account that his estate included Audrey's, whenhe was considering proper support for Philippa. Had he done so, the provision would have been $400,000. Although the Judge did not articulate his reasoning for the further increase from $200,000 to $400,000, I anticipate that it reflects the fact that a division under the Property (Relationships) Act 1976 would have approximately halved the testator's estate. As Audrey had wanted her estate to go to Philippa, the Judge increased the provision as he considered the testator, had he acted wisely and justly, would have done. [48] Effectively, the Judge's approach holds that, as the testator's moral breach was the greater because he overlooked that he was the 'keeper' or 'guardian' of Audrey's estate, so the provision necessary to remedy it must also be greater. I view that as no different, in effect, from the approach advocated by the appellant charities. Their argument was that the Judge ought to have factored in the origins of the estate in assessing whether the testator had breached his moral duty to Philippa. That must encompass assessing the magnitude of the breach. [49] The point is that the magnitude of the breach and the level of provision appropriate to remedy it are inextricably linked. The latter should be proportionate to the former. [50] This is fundamental in all the leading cases, for example: a) Little v Angus. Delivering the judgment of the Court of Appeal, Cooke J at 127 said:The principles and practice which our Courts follow in Family Protection cases are well settled. The inquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so,what is appropriate to remedy that breach. Only to that extent is the will to be disturbed. (my emphasis) b) Williams v Aucutt. In his separate but concurring judgment Blanchard J said:[70] It is not for the Court to be generous with the testator's property beyond ordering such provision as is sufficient to repair any breach of moral duty. Beyond that point the testator's wishes should prevail even if the individual Judge might, sitting in the testator's armchair, have seen the matter differently. (my emphasis) c) Henry v Henry. The Court's judgment given by O'Regan J includes this:[58] In cases of financial need, the amount necessary to remedy the failure to make adequate provision in the will will be able to be determined with greater precision, and with less room for broad value judgments, than in cases where the need is more of a moral kind. The conservative approach requires that the Judge makes the assessment of what is required on a basis which focuses on what is necessary to make adequate provision, but to do no more than that. Broader questions of desirability of greater awards or the Judge's views of fairness should not come into play. (again, my emphasis) [51] Referring me to the judgment of Heath J in Kinniburgh v Williams [2004] NZFLR 467, Mr Fraser submitted:Quantum stands alone and it must be "pitched at a level designed solely to remedy the extent of any breach of moral duty" per Heath J, Kinniburgh v Williams.[52] With respect, quantum does not stand alone and neither Heath J inKinniburgh, nor any of the judgments of the Court of Appeal, suggests it does. I reiterate that there is an inextricable link between breach of moral duty and the provision 'appropriate' or 'sufficient' or 'necessary' or 'required' (all words used by the Court of Appeal in the judgments I have cited) to remedy it. The breach and its remedy stand together, literally hand in hand. [53] Accordingly, I consider the appellant charities' primary argument on their first appeal point lacks any merit.[54] Alternatively, should I not accept the charities' primary argument, Mr Fraser submitted that the $400,000 provision that the Judge had ordered in Philippa's favour exceeded what was permissible. He contended that a review of the leading cases established something of a "tariff" for appropriate further provision, which had been exceeded by the Judge. His survey is conveniently replicated in tabular form:Case Type of claim Size of Estate Total provision ordered % of EstateFlathaug v Weaver & OrsCA237/02 13.5.03 Maintenance $550,000 $40,000 7.2%Henry v Henry CA116/06 5.3.07 Recognition $97,000 $13,500 13.91%Williams v Aucutt [2002] 2 NZLR 479 Recognition $920,000 $100,000 10.86%Auckland City Mission v Brown [2002] 2 NZLR 650 Maintenance $4.6 million $850,000 18.47%Kinniburgh v Williams[2004] NZFLR 467 Recognition $410,000 $40,000 9.75%[55] Mr Fraser submitted that the total award for Philippa - $400,000 or 20% of the estate – was out of line with the level of awards made in the five cases in this table. He made the point that the award, in percentage terms, is higher than the 18.47% award made in Auckland City Mission v Brown, a case in which the Court found that the claimant was in need of further provision. It is a small point, but I note that, in Auckland City Mission v Brown, the Court at [45] stated that its (reduced) award was "a little under 20 per cent" of the net estate. I accept thatAuckland City Mission v Brown involved a maintenance claim: in [44] the Court referred to provision "for the proper maintenance and support" of the claimant. [56] Although Mr Fraser did not put this figure to me, I note that, in percentage terms, the average provision made in the three 'recognition' claims was 11.5% of the estate. [57] I am conscious also of what Richardson J said in his plurality judgment inWilliams v Aucutt, and reiterated when delivering the Court's judgment in Auckland City Mission v Brown. I cite from the latter:[33] The plurality judgment (in Williams v Aucutt, in which Blanchard J concurred) referred to pointers to concerns that some orders in recent years may have been out of line with current social attitudes to testamentary freedom relative to claims by adult children (para [45]). One of those pointers was the survey by Nicola S Peart discussed at para [47], citing Ms Peart's conclusions that in larger estates where the testator is able to satisfy all moral claims owed, the Courts generally seem to award between 12.5 per cent and 20 per cent of an estate to a dutiful child who is not in financial need and that the Act is now more often used to recognise the special bond between parent and child which requires parents to leave a portion of their estate to their children regardless of age or need. [58] It follows that the award challenged here – 20% of the testator's estate – is at the top end of awards in the cases surveyed by Ms Peart – awards which the Court of Appeal has suggested may have been out of line with current social attitudes to testamentary freedom. [59] Mr Fraser contended that this case is "closely comparable" to Williams v Aucutt, because of the similarities I referred to in [40] above. I disagree. Any further provision the Court made in Williams v Aucutt for the testatrix's daughter Mrs Susan Aucutt was at the expense of her sister Mrs Christine Williams, whose financial position was not strong. Indeed, it was Christine who appealed to the Court of Appeal against the substantially increased provision for Susan ordered by Heron J in the High Court. That is not the position here, where there are no competing moral claims. [60] Mr Fraser sought to reinforce his alternative argument with three other points. First, he argued that the provision the testator had made for Logan and Blair helped to recognise Philippa, because it recognised the family unit. The provision the testator had made for Logan and Blair was part of the factual matrix for the Court in considering whether the testator had breached his moral duty to support his only child Philippa, and the extent of that breach. I do not accept that. Provision for grandchildren is not provision for children. Nor is it "recognition" for a child. Indeed, substantial provision for a grandchild (or grandchildren) when there is comparatively little provision, or even no provision at all, for a child, can aggravate the breach of moral duty. It can be salt in the wound.[61] Significantly, Mr Fraser was unable to fortify this submission with authority, when I inquired what he was relying on. In Auckland City Mission v Brown the testator had left a commercial property valued at $1 million in trust for his grandchildren, to apply the income for their education and maintenance. Although the Court noted that, and noted the testator's reasons for that provision (his poor opinion of the claimant daughter's husband, and view that he would waste any provision he made for his daughter), that provision for the testator's grandchildren does not seem to have affected the Court's assessment of the appropriate provision for the testator's daughter. Indeed, in assessing, in [44]-[45], what that provision should be, the Court seems to have put to one side the provision made for the grandchildren: (leaving aside the education expenses of the children provided for under the will) [62] Secondly, Mr Fraser submitted that current social thinking is that people are expected to stand on their own feet, and should not expect inheritances. As I understood his point, it is that the social welfare state had taken the place of the expectation children once had of provision from their parents. I do not accept that at all. It does not accord with my reading of current expectations in New Zealand society. It is not supported by the passages from Flathaug v Weaver and Williams v Aucutt I have set out in [34] above. Further, it seems to run contrary to what Richardson P was conveying in [40] of his judgment for the Court in Auckland City Mission v Brown:[40] As well, charities such as the Cancer Society, the City Mission and the Salvation Army are regarded under our laws as serving the public good. In contemporary less closely-knit communities affected by the economic and social changes of the last 15 years, charities may properly be regarded by altruistic testators as having an enhanced role. It is not unreasonable that the charities draw the attention of the Court to their work and the benefits for the public which they can achieve with the support of substantial donations.(my emphasis) [63] Thirdly, Mr Fraser submitted that the Judge had had scant regard to Philippa's financial position, which had resulted in him making more provision than necessary to repair the testator's breach of his moral duty to her. I do not accept that either. In [21] of his decision, Judge Russell mentioned Philippa's statement ofassets and liabilities dated 26 June 2007, and in [47] he detailed Philippa's financial position. In [48] he noted that her claim was not one for maintenance. [64] Fourthly, Mr Fraser sought to downplay the testator's obligation to take account of Audrey's wishes as expressed in her last will. He pointed out that Audrey could have adopted any of the following courses: left the testator only a life interest in her estate; formed a trust in Philippa's favour; made substantial provision for Philippa in her will. But she had done none of those things. Instead, she had trusted her husband – the testator. [65] All those points are undeniably correct. And that is precisely the point: Audrey left everything she had to the testator, trusting and believing that he would take into account her testamentary wishes, as expressed in her last will. I consider this point supports the view Judge Russell took. I do not accept that it detracts from it, still less exposes it as wrong. [66] The submissions for the appellant charities do not persuade me that Judge Russell's decision is wrong (the Stichting Lodestar test). Nor am I persuaded that the Judge erred in principle, took into account some irrelevant consideration, overlooked some relevant one, or made a decision that was beyond the bounds of a proper exercise of his s 4 jurisdiction (the May v May formula). [67] In the circumstances here, I consider that $400,000 appropriately repaired a substantial breach of moral duty by the testator to Philippa. Indeed, I would not have allowed this appeal had the Judge accepted Mr Radich's submission that total provision of $500,000 was required to remedy the breach. [68] In the result, neither of the alternative ways in which the appellant charities argued their first point on appeal succeeds, and I dismiss that point.Second appeal point: Judge erred in imposing the whole burden of the increased provision for Philippa on the charities[69] This point challenges the Judge's order under s 7(1) of the Act, which provides:The incidence of the payment or payments ordered shall, unless the Court otherwise determines, fall rateably upon the whole estate of the deceased, or, in cases where the authority of the Court does not extend or cannot directly or indirectly be made to extend to the whole estate, then to so much thereof as is subject to the authority of the Court.[70] There were two aspects to this point. First, Mr Fraser submitted that s 7(1) was directed to the Court. Effectively, Mr Fraser contended that s 7(1) was a direction to the Court to order that any further provision it made was to fall rateably on the whole estate, any departure from that requiring justification by the Court. [71] The second aspect followed from the first: Judge Russell had not given anyreasons for ordering that the whole of the provision he made for Philippa be paid from the residue of the estate i.e. for departing from the presumptive position set out in s 7(1). [72] Section 7(1) is not a directive to the Court. It spells out, primarily for the benefit of executors, the default position if the Court makes no order as to the incidence of further provision ordered. I do not accept that s 7 contains any presumptive direction to the Court. If Mahon J in Re Swanson (deceased) [1976] 2 NZLR 27 (overturned on appeal at [1978] 2 NZLR 469, but not on this aspect) was intending to suggest that a Court must justify directing a departure from the default position in s 7(1), then I respectfully disagree with His Honour. But, having read the judgment, I do not think Mahon J was saying that at all. He was merely making the point that a s 7(1) determination must be consistent with "reason and justice". No- one could argue with that: a s 7(1) determination that was capricious or arbitrary would be indefensible. It is significant that Mahon J adopted the analysis of Street J in R v Seery [1969] 2 NSWR 290. Street J went to some lengths to emphasise that the s 7(1) discretion was essentially unfettered. What an hypothetical wise and just testator would have done was relevant, but so also was what the particular testator would have wished.[73] As to the second aspect of this second appeal point, I do not accept Mr Fraser's submission that the Judge gave no reasons for directing that the provision for Philippa fall wholly on the residue of the estate. In [93] of his judgment, he gave these three reasons: i) It would leave the other specific bequests the testator had made undisturbed. ii) The testator did not owe any moral duty to the residuary beneficiaries i.e. the appellant charities. iii) That was the approach taken by the Court of Appeal inAuckland City Mission v Brown. [74] The order the Judge made repaired the testator's substantial breach of his moral duty to Philippa. It preserved intact the bequests he had made to his grandchildren Logan and Blair. It preserved also his wish that the remainder – the residue – of his estate go to the four appellant charities. Certainly, each charity will receive less than it would have had the Judge made no determination under s 7(1), but the point is that each still receives a quarter share of the residue of the testator's estate. [75] I see no error in the Judge's order, indeed I entirely agree with it. The charities' second appeal point also fails and is dismissed.Costs[76] The respondent's costs are to be paid to her out of the estate. The effect of that order is that the charities bear the respondent's costs of this appeal. That is appropriate, since the appeal has failed. [77] That costs order is not intended to convey any criticism of the appellant charities, either in bringing this appeal or in relation to Philippa's claim generally. They have not acted in an untoward way. The fact that no other beneficiary wasdefending the will (Logan and Blair actively supported Philippa's claim) is a proper situation for charities who are residuary beneficiaries to test the claim: Auckland City Mission v Brown at [42]. Each of the four appellant charities does wonderful, worthwhile work and can put to good use every dollar left to it.Solicitors: Fletcher Vautier Moore, Nelson for the Appellants Radich Law, Blenheim for the Respondent and Third Parties (the grandchildren)