injustice suffered by widow —High Court ruling

Press, 22 October 1983, Page 19

injustice suffered by widow —High Court ruling

PA Dunedin A widow and her five children had suffered an unjustice by her young husband’s will and its trustees, said Mr Justice Hardie Boys in the High Court at Dunedin.

He was deciding an application under the Family Protection Act by the daughters of the late Charles Raymond Middleton, a farmer of Waitahuna, who died in 1970 after an accident.

His Honour said the injustice was done, pqrtly by the will which, bore no relation to the circumstances, and partly “it appears by the way in which the estate has been administered.” His Honour said he used the words “it appears” advisedly because Mrs Middleton had applied under the Trustee Act for an inquiry into the leasing of the farm and for an order directing its sale. “The material before me does not include any explanation from the trustees as to the reasons that have prompted them to act as they have, but I am, I think, entitled to draw the conclusion of injustice," he said. It was most regrettable that Mrs Middleton had not taken legal advice years ago for then much of the hardship she had suffered might have been avoided, he said. His Honour awarded a capital sum to Mrs Middle-

ton, a charge on the farm property. After her death, the three daughters would receive half of the remaining estate and the two sons the other half. Under Mr Midddleton’s will, made in November, 1961, he left a life interest to his widow, gave £2OOO to his daughters when they 'reached 21, and the balance of his estate to his sons at the age of 21. However, in a codicil dated November, 1965, he provided that should there be no sons, the daughters should take the whole estate after the death of their mother. At the time of Mr Middleton’s death, the daughters were aged nine, six, and five and the sons aged four and two.

“It is significant to note that the will was made one month after the first child was born, while the codicil was made before either of the sons had been born,” his Honour said.

“The deceased’s will clearly had in mind the retention of the farm property until one or more of the sons was old enough to take it over, but of course that was an intention based on hope or perhaps on expectation of a much longer life than Mr Middleton actually had.

“It was entirely unrealistic as a document becoming operative upon his early

death. But because of that apparent intention expressed in the will, the trustees, although they were directed to sell, were also empowered to retain the farm and continue the farming business as they thought fit.”

His Honour said the trustees were empowered to take the sons into partnership and give the eldest the option of purchasing the farm within three months of his father’s death and if he did not exercise this right, any subsequent sons would be offered the same option. “With sons the age of the two boys here, that was a meaningless provision and so was the apparent desire of the deceased that the farm should be retained for their benefit in the future,” he said. The will also directed that while the farm was being carried on, the trustees would allow the widow to live in the homestead free of outgoings and will the free use of farm produce. Mrs Middleton said in earlier evidence she had tried to run the farm herself but in October, 1971, the trustees appointed a fulltime manager who was put in the family home.

She and her children had to find alternative accommodation and she had existed on a very meagre income from the farm.

Friends had helped but she had received virtually no produce from the farm. When the manager left, the farm was leased and after the mortgage and other accounts were paid, there was $lB,OOO left. However, Mrs Middleton moved to Alexandra and bought a home after borrowing all the purchase price.

“That was a courageous decision,” his Honour said. “Although the trustees not had cash of $lB,OOO it was necessary for Mrs Middleton to borrow al) the purchase price until in Octooer, 1979, the trustees were persuaded to produce $7OOO which partly reduced the

indebtedness she had incurred." He said the trustees still retained $10,376 which provided her with a taxable income.

Although her finances had improved, she worked parttime as a cleaner to help provide for her children. While the family had struggled, the value of the farm had grown and it was now worth about 5520,000.

His Honour said that, significantly, the renewed term of the lease on the farm would expire when the youngest child reached 21 and so the future of the estate and farm would effectively be in the hands of the family.