An
unsigned will together with variations to a relationship property agreement
signed hours before the sudden death of Supreme Court judge the late Sir Robert
Chambers are central to a $2.5 million entitlement his widow refuses to pay
immediately to her stepson.
David Chambers, the elder son of the late
Sir Robert, is suing his stepmother, barrister Lady Deborah Chambers QC. Sir Robert and Lady Deborah jointly owned
five properties valued at some twelve million dollars at the date of Sir
Robert’s death: three at Remuera in Auckland, one in Wellington and a holiday
home at Pauanui. Evidence was given that
Lady Deborah’s earnings as a barrister were typically three to four times
greater annually than her husband’s judicial salary.
Sir Robert died in May 2013 following a
brain aneurysm. He left a blended family
of two sons from his first marriage, two step-daughters and a widowed second
wife: Lady Deborah. At his death, a copy
of a new will was sitting on a law firm server awaiting his signature. The High Court validated the unsigned will in
April 2014 under the Wills Act as being Sir Robert’s valid will. The terms of this will acknowledges that Sir
Robert had as much love and affection for his two step-daughters as he did for
his own sons. The High Court was told the
effect of this will was to potentially favour his step-daughters over his two
sons.
The Chambers signed a series of relationship
property agreements once they started living together in 2002 and then subsequent
to their 2004 marriage. The last
variation was signed by Sir Robert in April 2013, followed by Lady Deborah who
signed the afternoon before her husband died. Critically, this last variation provided
“entitlements” to be paid out of the Chambers’ relationship property to
children of the blended family. Each of
the four children was entitled to a share of relationship property on the death
of their parent, capped at an inflation-adjusted $2.5 million per child. Lady Deborah refused David Chambers request
for immediate payment of his entitlement when his father died.
The 2013 variation stated “entitlements”
were to be paid on the anniversary of the child’s parent’s death, or later at
the discretion of the surviving spouse. Lady Deborah said the relationship property
agreement envisaged she would enjoy the benefit of these assets as the
surviving spouse for her life, but she had a discretion to make early payment
to Sir Robert’s sons if they were in financial need. David is not in financial need, she
said. The court was told David Chambers,
now aged 31, works as a software engineer with an annual salary of US$120,000
coupled with employee stock options.
Justice Mallon ruled that Lady Deborah
interpreted the 2013 variation too narrowly.
Early payment was the expectation.
The 2013 variation speaks of payment after the anniversary of the
parent’s death as being “late”. The
discretion as to timing of payments is not predicted on financial need. Lady Deborah herself had expressed the wish
that should she predecease Sir Robert that he would defer paying her daughters’
“entitlements” only until they reached age 24.
There is nothing in the 2013 variation to prevent Lady Deborah paying
all or part of David’s “entitlement” now, regardless of his financial
circumstances, Justice Mallon said.
Her Honour also ruled the relationship
property now owned outright by Lady Deborah is impressed with a constructive
trust in respect of the two $2.5 million “entitlements” owed Sir Robert’s two
sons.
Chambers
v. Chambers – High Court (6.04.16)
16.053