Leading cases on the Property (Relationships) Act 1976

Whyman is the leading case on section 88 of the Property (Relationships) Act 1976. The Court of Appeal held that the "serious injustice" test in section 88 can be applied directly — there is no need to put a gloss on the words.

The Court emphasised that the "serious injustice" will always be to a person other than the surviving spouse or partner. The primary reason for allowing claims by a personal representative was, presumably, to address situations of the type presented by Whyman itself, where the children appeared to have a substantial claim under the Family Protection Act. The serious injustice test should be applied in a way that facilitates such claims.

In Williams v Aucutt, a five-judge Court of Appeal introduced the idea that a wealthy claimant should nevertheless be awarded something to recognise their "membership of the family."

In reliance on Aucutt, there has been widespread acceptance that a spouse or child who is not in financial need should still receive 10%, or perhaps 20%, or some other unpredictable percentage of an estate. It remains one of the most influential — and most argued-about — decisions in this area.

In Public Trust v Horne, following Whyman, the High Court considered the appropriate test for granting leave under section 88. If the Court considers that an applicant has a reasonably arguable Family Protection Act claim, it is likely to be a serious injustice to prevent that claim being made by refusing leave to bring PRA proceedings.

In other cases, including Kennedy v Kennedy [2017] NZFL 149 (HC) at [19], the test has been expressed as "credible." Either way, the threshold to obtain leave is not a high one once a genuine FPA claim is in play.

In Waite v Waite the Court refused to grant leave. There was no serious injustice on the facts. The applicant had no financial need or other special circumstances.

The testator and his surviving spouse had intended to own properties as joint tenants in circumstances where the testator knew his primary obligation was to his wife. The wife had contributed substantially to the relationship property and was of an advanced age, requiring the asset pool to live on until her passing. The fact that the applicant received nothing under the Will, because all assets transferred by survivorship, did not amount to a serious injustice.

A father had three children — David, Kristal and Stefan — and left nothing to Kristal and Stefan in his Will. At the time of trial in 1996 Kristal was 26 and Stefan was 24. The father got on well with David, who was cared for in the Will. The estate was worth about $1m. The family home was left to the wife and to David. The father had cut Kristal and Stefan off for perceived slights.

The trial Judge awarded $100,000 to each of Kristal and Stefan, saying that this was what a "just and wise testator" would do. Neither had any money — one was at university and the other was working as a barman to pay off a student loan. The father had included all three children in earlier Wills made in 1975, 1982, 1986 and 1988, the last being only two years before the final Will in which they got nothing. The Judge observed that "fathers and mothers must make allowances for teenagers' inadequacies and immaturity."

Mr Matthews began a de facto relationship with Ms Phochai when he was 60 and she was 44. They lived together until he died in 2016 at the age of 71. Both had been married before. They signed a section 21 Agreement under which they would retain the assets they each owned at the start of the relationship as separate property, and agreed that the incomes they earned while living together would also be separate property.

Mr Matthews left Ms Phochai nothing in his Will. A Family Court Judge awarded her $1m from his estate of about $3m; the High Court reduced that to $750,000. She had assets of about $217,000. Two children of his first marriage also received nothing under the Will and were awarded $570,000 and $200,000 in the Family Court — those awards were not appealed. The two children were Gina, who lives in Australia with her family, and Mark, who is single, lives in supported accommodation in Tauranga, and is a paranoid schizophrenic. The High Court decision does not refer to those circumstances.

This was a claim by a son — one of three children — against his father's estate. The son was 41 at trial and was not in financial need. He owned his own house, subject to a mortgage of only $20,000, and was earning well. He had two sisters, neither of whom was making a claim. One lives in Melbourne with her partner; the other has chronic health issues and is a solo parent in rental accommodation. The son accepted that one of his sisters was probably in greater need than him.

The estate was worth about $1,380,000 and the son sought $460,000. Moore J awarded him $175,000. The Court took particular account of two factors: the step-mother had paid for the house in which she and the deceased were living with her own money, and the claimant was not her child. Following Aucutt, Moore J held that the son was entitled to a payment — "Family recognition alone can give rise to a duty to provide for an adult child" — and that "despite the absence of need, it is appropriate that some recognition is given to the relationship between the father and son." The Court found a duty to provide, a close family relationship, and a close working bond between father and son in a family business over ten years. The father had anticipated that his second wife would in turn leave money to the son, but the Court held that this could not be predicted.

John Harrison married Esther Harvey in 1970. They had two daughters, Cathy (born 1973) and Sarah (born 1976). The marriage was short and the couple separated in 1977. Esther had a series of breakdowns and was diagnosed with schizophrenia. After the separation the daughters were not really welcome in their father's house. He began a de facto relationship with Nita. The daughters lived with their father and Nita for a while, but he was difficult — sometimes he would not speak to Cathy for days at a time, and he forbade her from visiting her mother. In 1998 he wrote to her saying "I have no time at all for disloyal people. They do not get second chances, ever." He hardly saw her again. Sarah fared a little better. The father refused to contribute to either daughter's tertiary education. Both daughters nevertheless studied law and became lawyers.

The estate was worth about $4m. The two daughters were each awarded a share in a property that should have given them about $385,000 each. The father's de facto partner had a need for much of the estate. It was conceded that the father, having left nothing to his daughters, was in breach of his moral duty to them. Moore J described the father as having "a chronic sense of bitterness and betrayal," and held that neither child "was in the slightest bit responsible for the failure of their relationship with their father." The Judge agreed with the Court of Appeal's observation in Little v Angus [1981] 1 NZLR 126 that "Changing social attitudes must have their influence on the existence and extent of moral duties."

Little v Angus remains the orthodox statement of how Family Protection claims are approached in New Zealand. Cooke J said: "The principles and practice which our Courts follow in Family Protection cases are well settled. The enquiry 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."

The size of the estate and any other moral claims on the deceased's bounty are highly relevant. Changing social attitudes must have their influence on the existence and extent of moral duties. Whether there has been a breach of moral duty is customarily tested as at the date of the testator's death.