Stepson was pitted against stepmother when Graeme Waite found as residuary beneficiary of his late father’s estate that it consisted of little more than two bank accounts holding some $18,000. He challenged stepmother Ngaere’s right to take full ownership by survivorship of a Kihikihi property near Hamilton, valued at about $770,000, previously part-owned by his father.
The High Court was told Graeme was aged five when his parents separated. His mother died five years later. His father Jack remarried. Jack was widowed fifteen years later. His subsequent marriage to Ngaere lasted 33 years.
Graeme was named as executor of his father’s estate. He had received nothing on the death decades previously of his mother. And while named as residuary beneficiary in his father’s estate, again there was little prospect of a financial benefit.
Evidence was given that his father’s will contains a specific bequest of $25,000 to his widow Ngaere. This is to be paid first before stepson Graeme receives any financial benefit.
As executor of his father’s estate, he sued under the Property Relationships Act, setting in train a circuitous legal process to bring back into the estate property that his father had jointly owned with his now widow Ngaere. If successful, this litigation would benefit Graeme personally as residual beneficiary of his father’s estate.
Title to land recognises two types of joint ownership: ownership as ‘tenants-in-common’ where each owner’s share remains their separate property on death and is passed on according to terms of their will (or if there is no will according to the rules on an intestacy); or joint ownership, described in legal jargon as a ‘joint tenancy,’ where ownership of a joint interest passes automatically to the survivor on death.
Use of the words ‘tenant’ and ‘tenancy’ in this context have nothing to do with contemporary landlord/tenant rental agreements; they are archaic terms describing forms of land ownership, a residue of feudal English land law.
The Property Relationships Act allows survivorship rules to be reversed in exceptional circumstances. It requires proof that a ‘serious injustice’ would otherwise arise.
It has been used when a father stated in his will that proceeds of a life assurance policy would go to his children. Before his death, he cashed in the policy. The proceeds were paid into a joint bank account. The full content of this account passed to his widow by survivorship when he died. His children were held entitled to the value of the cashed-in policy.
Graeme Waite argued there had been a ‘serious injustice’ when his stepmother assumed full ownership by survivorship of the Kihikihi property she owned jointly with Graeme’s father.
Justice Gault affirmed a District Court ruling there had been no ‘serious injustice.’ Stepmother Ngaere had not received an undeserved windfall. Source of funds for the Kihikihi purchase could be traced back to separate property they each sold to fund construction of a large new home at Whatawhata used first as a rest home and later as a bed and breakfast. This property, which they owned as ‘tenants in common,’ was sold to buy their final home at Kihikihi. There was evidence that their ownership of Kihikihi was registered as joint tenants with full understanding that this gave each the right of survivorship.
Simply having an estate with insufficient funds to meet a bequest, does not, on its own, amount to a ‘serious injustice’ justifying reversal of a part-owner’s rights of survivorship Justice Gault ruled.
Waite v. Waite – High Court (20.12.23)
24.040