IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE	
CIV-2017-409-778
[2022] NZHC 2485	

UNDER THE	Wills Act 2007 and the Administration Act 1969	
BETWEEN	CRAIG STEVEN EBERT
Applicant	

	CIV-2019-409-545	

UNDER THE	
Property (Relationships) Act 1976	
BETWEEN	SCOTT MALCOLM OSTERMANN
Plaintiff	
AND	CRAIG STEVEN EBERT
Defendant	

Hearing:	27 July 2022 (by way of VMR)	
Appearances:	A L Bodman and M K M Yarrall for Applicant/Defendant
S M Bevin and A L Bodman for Applicant from 22 September 2022	
Judgment:	28 September 2022	
Reissued:	6 October 2022	

JUDGMENT OF EATON J

This judgment was delivered by me on 29 September 2022 at ……… pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE ESTATE EBERT [2022] NZHC 2485 [28 September 2022]

Introduction

[1]	Craig Steven Ebert is the temporary administrator of the estate of his late sister, Andrea Joan Ebert, who died at Christchurch on 1 August 2017 and was survived by her two children.1

[2]	Craig is involved in two proceedings on behalf of the estate. The proceedings were consolidated on 25 November 2019.

[3]	Firstly, Craig seeks an order pursuant to s 14 of the Wills Act 2007 (the Act) declaring a document to be Andrea’s valid will. This is an originating application, made on notice. The declaration is sought because the document does not comply with s 11 of the Act. The notice of opposition filed by Andrea’s former partner,
Scott Ostermann, was struck out following non-compliance with unless orders.2

[4]	A second issue for determination is an application for division of relationship property under the Property (Relationships) Act 1976 (the PRA). Scott’s statement of claim was struck out by Judge Paulsen on 27 April 2022, leaving Craig’s counterclaim to be determined.

[5]	These matters proceeded by way of formal proof hearing.

Wills Act 2007 Background

[6]	Andrea created a will on 25 June 1990 (the original will). The original will appointed the Public Trustee of New Zealand as the executor and trustee of the will. It provided that on Andrea’s death, the residue of the estate was to be transferred to Scott. If Scott predeceased Andrea, the estate was to be divided equally between Andrea’s children living at the date of her death. If Scott predeceased Andrea and Andrea had no children living at the date of her death, the residue of her state was to be divided equally between her parents as to one part and Scott’s mother as to the other.

1	To avoid confusion, I will refer to the parties by their first names.
2	Re Ebert [2022] NZHC 365 at [41] and the subsequent minute of Associate Judge Paulsen issued on 27 April 2022.

[7]	Andrea was admitted to hospital on 13 June 2017 and diagnosed with cancer. Following her diagnosis, Andrea created handwritten notes that recorded her assets and liabilities, and her calculations dividing her estate. These changes reflected Andrea’s separation from Scott several years prior.

[8]	Andrea’s notes were expanded upon and refined during a discussion with her brother, Martin James Ebert on 16 July 2017. Martin recorded the salient points of that discussion in his working notes and subsequently prepared a document for Andrea that she signed and was witnessed by Martin (the contested document).

[9]	It is said the contested document was to be formally recorded, but due to the aggressiveness of Andrea’s cancer, she passed away before the task could be completed.

[10]	Andrea’s father, mother, daughter, and son (through his litigation guardian) consent to the contested document being validated as a will.

Law

[11]	Pursuant to s 14 of the Act, this Court has the power to validate a document that appears to be a will and does not comply with s 11 of the Act, if it is satisfied that the document expresses the deceased person’s testamentary intentions. In making its determination as to whether to validate the document, the Court may consider the document; evidence on the signing and witnessing of the document; evidence on the deceased person’s testamentary intentions; and evidence of statements made by the deceased person.3

[12]	Section 11 of the Act requires a will to be in writing and sets out specific requirements for how the will must be signed and witnessed. Relevantly, it requires there to be at least two witnesses who sign the document in the will-maker’s presence4 (with further specifications set out in subss 11(3), 11(4) and 11(5) of the Act).

3	Wills Act 2007, s 14(3).
4	Section 11(4)(b).

[13]	Recently, this Court, in McKay v Society of St Vincent De Paul New Zealand
summarised the applicable case law:5

[12]	The principles to be applied in the present context are now well established. In short, the onus rests on the applicant to satisfy the Court on the balance of probabilities that the document propounded as the last will of the deceased reflects the testamentary intentions of the deceased. The Court is entitled to take into account any evidence that may assist in determining whether the document expresses the testamentary intentions of the deceased.

[13]	In undertaking the enquiry under s 14 the Court is required to focus on substance and intention rather than form. This is necessary to ensure that a person who in good faith sets out to express testamentary intentions, should not have those thwarted by technicalities.

Analysis – will validation

Testamentary capacity

[14]	Given the short period of time between Andrea’s diagnosis and her death, whether she had testamentary capacity at the time of signing the contested document is at issue. An affidavit has been provided by Dr Gibbs, a medical oncologist, dated 29 January 2019. Dr Gibbs assessed Andrea’s mental state for the period of 13 June 2017 to 1 August 2017 based on Andrea’s medical notes and Dr Gibbs’ recollection of his relevant interactions with Andrea. From these sources, Dr Gibbs opined that Andrea was likely alert and orientated on or about 16 July 2017 (the date Andrea signed the contested document). Dr Gibbs considered that Andrea’s condition rapidly deteriorated from 27 July 2017 onwards.

[15]	These conclusions align with a report prepared by Andrea’s palliative care team dated 28 July 2017, which records the observation of Andrea’s mother, Sandra, that Andrea’s confusion had started on 25 July and increased dramatically on 27 July.

[16]	From this evidence, I am satisfied Andrea had testamentary capacity when she signed the contested document.

5	McKay v Society of St Vincent De Paul New Zealand [2022] NZHC 846 (footnotes omitted).

Section 14 considerations

[17]	The contested document clearly does not accord with s 11 of the Act, as the signing of the document was only witnessed by Martin. However, it appears to be a will as its contents deal with the disposition of property.6

[18]	Evidence was provided as to Andrea’s testamentary intentions in the form of affidavits from Andrea’s parents, Andrea’s employer, Martin, and Guy Mortlock (a partner at Mortlocks Lawyers).

[19]	Martin’s affidavit explained that he had discussed Andrea’s testamentary wishes with her and that these were recorded in his handwritten notes. Martin deposed that he read these points out to Andrea, who ticked them off to confirm they were correct and then signed the contested document. Martin said he witnessed the signature and signed the page.

[20]	It is clear from these affidavits that Andrea intended to create a new will. In particular, the deposition of Guy Mortlock records that Andrea’s mother had phoned on 31 July 2017 seeking legal advice around the creation of a will.

[21]	The affidavits align in their recollection of Andrea’s testamentary intentions and reflect the content of the contested document.

[22]	In the circumstances of her death, and the events preceding it, I am left in no doubt that Andrea intended for her property to be dealt with in the manner set out in the contested document.

[23]	I am satisfied the requirements under s 14 are met here. The contested document expresses Andrea’s testamentary intentions and should be validated as a will.

6	Wills Act, s 14.

Relationship property background

[24]	Andrea and Scott commenced a de facto relationship in the 1990’s. They had two children. Exactly when this relationship ended is contested, however, it is apparent the parties did not divide their relationship property before Andrea’s death.

[25]	The assets to be divided between the estate and Scott are:

(a)	The net sale proceeds from the Cintra Place property, which are held on trust by Layburn Hodgins in the sum of $620,762.25 plus interest of
$637.92 as of 27 April 2022.

(b)	Andrea’s AMP life insurance policy (number 11136093), which paid out the sum of $468,461.00 to Scott on 23 August 2017 (Life Insurance Policy).

[26]	The estate also claims adjustments for occupational rent and outgoings paid in respect of Cintra Place since Andrea’s death. Ms Bodman, on behalf of Craig, provided the Court with a schedule setting out the proposed division of the property.

[27]	In addition to the items listed above at [25], the estate comprises of Andrea’s KiwiSaver superannuation entitlement, Kiwibank funds, a motor vehicle and Andrea’s personal belongings.

[28]	Ms Bodman submits that as a significant time has passed since the parties’ separation, and there is insufficient disclosure from Scott, it is impossible to assess the parties’ interests in the bank accounts and superannuation entitlements.

[29]	Ms Bodman submits the date of separation was in February 2010, but it is evident that the relationship was troubled prior. Evidence of the parties’ separation was presented in the form of a solicitor’s file note, consultation records, a psychiatric assessment summary, a Facebook message from Andrea to her daughter (Tia) and Martin and Tia’s evidence. The solicitor’s file note, dated 12 May 2010, recorded that Andrea had sought legal services regarding the division of relationship property and care of children. The solicitors’ notes on the file record that Andrea asked Scott to

leave the property in February 2010, which he complied with. The consultation records and psychiatric assessment also suggest Scott “moved out” or “separated” in early 2010.

[30]	Martin’s affidavit dated 14 September 2017 records his belief that Scott and Andrea separated “approximately six years ago” to the best of his knowledge. Tia’s dated 31 October 2019 records that she does not consider “there is any possibility at all that [Andrea] and [Scott] were in a relationship when [Andrea] died”. She deposed that they had been “separated for a long time”. This was supported by screenshots of conversations between Andrea and her daughter on Facebook messenger that took place in 2017. Relevantly, Andrea is recorded saying “I’ve been single for 10 years now”.

[31]	Given this evidence, I am satisfied that the date of separation was early 2010, at the latest, and will proceed on this basis.

Analysis -property relationship

Family home

[32]	It is accepted by Ms Bodman that Cintra Place ought to be treated as the family home (despite the parties never residing there while in a relationship), as it was purchased by Andrea and Scott in September 2016 using funds from the sale of their former family home and an EQC settlement payment. Ms Bodman submits it is relationship property and both Scott and the estate are entitled to an equal share.7

[33]	Cintra Place was sold for $765,000 (including GST) pursuant to an Order for Sale of this Court dated 5 May 2021, with settlement occurring on 4 November 2021. The Order for Sale provides that:

4.6 Scott shall be responsible for repaying all lending secured against the property before settlement. In the event there are insurmountable difficulties preventing Scott from repaying the lending prior to settlement, the lending shall be deducted from the sale proceeds and Scott shall account to the estate for all lending repaid from the sale proceeds.

7	Property (Relationships) Act 1976, ss 8(1)(a) and 11(1)(a).

…

4.8.	Scott shall be responsible for the property being in a saleable condition until the time of settlement on the property.

[34]	Scott failed to repay the Kiwibank lending secured against the property in the sum of $101,662.19 before settlement. Instead, this was repaid from the net sale proceeds from Cintra Place on settlement. As such, Ms Bodman submits it is deductible from Scott’s share of the sale proceeds in accordance with the Order for Sale. At the hearing it was confirmed that three weeks after Andrea’s death, Scott paid the sum of $36,883.17 to clear the revolving Kiwibank facility secured against the family home. Ms Bodman accepts a credit is due to Scott in that sum.

[35]	Another issue surrounding the division of the sale proceeds of Cintra Place is whether, and to what extent, Andrea’s parents have a share in the proceeds of sale. This issue is raised given their provision of loans in relation to the purchase of family homes, which is outlined in the affidavit of Andrea’s father, Robert. Andrea’s parents provided a loan for the purchase of a house in George St. When this property was sold, they were repaid part of the loan, with the balance of their funds being used to purchase a family home on Jennifer St. Andrea and Scott then purchased Cintra Place. The balance of the loan from Andrea’s parents left in Cintra Place was an approximately 31 per cent share, equating to $194,000 of the $620,000 purchase price.

[36]	Ms Bodman submits the loan from Andrea’s parents was incurred for the purpose of acquiring relationship property (the family home) and therefore constituted a relationship debt that the estate and Scott are jointly liable for pursuant to s 20 of the PRA.

[37]	Ms Bodman submits the parties agreed this contribution would represent a proportionate interest in the property, as opposed to a set value of $194,000. I find the evidence supports the fact that the parent’s interest in the property was intended to be proportionate, rather than a fixed value. In addition to the purchase history, handwritten notes from Robert, who is now deceased, recorded his share in the property as a proportion. This debt was also recognised in the contested document in proportionate form.

[38]	I am satisfied that Robert and Sandra’s interest in the Cintra Place property, and accordingly the proceeds of sale, is 31.3 per cent.

Occupational rent/post separation adjustments

[39]	Craig’s evidence is that after Andrea’s death, Scott asserted sole control over Cintra Place. This was accepted by Doogue J in her minute considering an order for sale, in which she determined that Scott was “exercising sole control over the affairs of the property to his sole financial benefit”. Scott also trespassed Craig, Martin and Andrea’s parents from the property and placed tenants in occupation without consulting the estate

[40]	The estate obtained a rental appraisal for Cintra Place for the period of September 2017 to October 2021. The appraisal assesses the property as having an average rent during that period of $550 per week. This valuation conflicts with evidence in an affidavit of James Roberts, who has known Scott since 2014deposed that Scott told him that he had rented out the family home to one of his friends and was receiving $400 a week “off the books”. He also deposed that Scott told him he was “renting the house out at $1 a week on the books and did not want the Eberts finding out about the $400 he was otherwise receiving”. As this is hearsay evidence and there is no disclosed record from Scott showing the value of the rent paid to him, I prefer the rental figure of $550 per week obtained by the valuer. The calculations will reflect this.

[41]	Occupational rent for the period that Scott had exclusive use of the property, being 1 August 2017 to 19 September 2021 ( 216 weeks), is sought.8 This amount (based on the appraised rental value) is $59,400. Further adjustment is required to reflect the evidence of related estate costs that were paid by Scott ($9,802.19) and costs paid by the estate properly payable by Scott ($1,055.95). I accept the net occupation rental figure is $ 50,653.76.

[42]	Ms Bodman accepted that Scott contributed to the Cintra Place outgoings for some time. The relevant evidence showing the extent to which Scott contributed to

8	Property (Relationships) Act, s 18B.

rates and property insurance is set out in the updating affidavit of Craig dated 25 May 2022. This affidavit also sets out the amount the estate seeks for the security monitoring costs paid up until the sale date. Ms Bodman explained these payments have been adjusted for in the post separation compensation sought by the estate, as reflected in the schedule provided to the Court.

[43]	A claim for occupational rent is available under s 18B of the PRA. In C v C, this Court noted the Court must be satisfied that it is just in the circumstances to make an order for occupational rent.9 In that case, Lang J found one party had obstructed the sale process of the family home and the husband was accordingly entitled to be compensated for occupational rent for that period of time.

[44]	Here, I consider occupational rent is appropriate for the period between Andrea’s death and the end of the tenancy. During that period Scott had asserted exclusive control over the property, received a rental income from the property and the estate was required to go to the extent of procuring an Order for Sale (with the delay this likely incurred benefitting Scott).

Life insurance policy

[45]	Andrea held a life insurance policy. Following her death Scott received the sum of $468,461.00 being the sum payable on the policy. It is accepted that from that sum he paid $30,000.00 to her daughter and $17,050.43 to meet the funeral expenses.

[46]	Ms Bodman submits Andrea’s life insurance policy was payable only in the event of her death.   Therefore, it had no value at the date the parties’ separated.    Ms Bodman submits that the policy was owned by Andrea and that she is the life insured by the policy.

[47]	Ms Bodman submits that since the date of separation in 2010, Andrea paid all premiums on the policy. Accordingly, bank statements show regular payments to “AMP Life Limited” from an account Andrea appears to have been the sole user of

9	C v C HC Auckland CIV-2007-419-1313, 26 June 2008.

(although Scott’s name was still in the title of the bank account). In his affidavit, Craig explains that most likely represents payments towards the life insurance policy.

[48]	Section 8(1)(g) of the PRA provides that relationship property consists of the proportion of the value of any insurance policy (as defined in s 2), or of the proceeds of such a property which is attributable to the de facto relationship.

[49]	Although the Life Insurance Policy passed to Scott by survivorship, s 83 of the PRA provides:

83	Relationship property defined

(1)	If, on the death of a spouse or partner, any property of that spouse or partner passes to the surviving spouse or partner, whether by survivorship or otherwise (but not by succession), then unless, in any proceedings under this Act, the court decides otherwise,—

(a)	that property is not automatically to be treated as the separate property of the surviving spouse or partner; and

(b)	the status of the property as relationship property or separate property is to be determined according to the status it would have had if the deceased spouse or partner had not died.

[50]	Accordingly, Ms Bodman submits the status of the Life Insurance Policy is to be determined as if Andrea had not died, and is not automatically treated as the separate property of Scott.

[51]	Furthermore, s 30 of the PRA allows the Court to apportion the paid-up value of an insurance policy, subject to an application under the Act, as follows:

30	Orders in relation to insurance policies

Where an application under this Act relates to any policy of assurance or insurance the court may—

(a)	vest the policy in either spouse or partner subject to such conditions (including the payment of premiums by either spouse or partner) as it thinks just:

(b)	direct the payment of a proportion of the surrender or paid-up value from one spouse or partner to the other:

(c)	make such other order as it thinks just.

[52]	Ms Bodman points to commentary on s 30 of the PRA which notes that          s 8(1)(g) of the PRA, which defines what portion of the policy is relationship property, “would seem to exclude that part of the proceeds attributable to a post relationship death of the insured party”.10

[53]	Ms Bodman submits that in a case such as this one, where the policy had no value at the date of separation, the death of the insured party post separation and the resulting increase in the value of the policy is not attributable to the relationship. She said it is therefore not relationship property.

[54]	Ms Bodman cited the Court of Appeal decision of Re Little (deceased) in which the Court classified the proceeds of a life insurance policy under the Matrimonial Property Act 1976 (MPA).11 In that case, one party had died while proceedings were pending and there was a marked difference between the value of the policy at the date of separation and the policy proceeds payable on death. The Court found the policy should be valued at the date of separation and only the surrender value was matrimonial property. His Honour Richardson J noted:12
The whole object of valuing an asset is to achieve a just division between the parties. That object assumes particular significance where post-separation events have substantially affected the value and it is intended to implement the sharing of the global matrimonial property by vesting the particular asset in one party with compensating payments or vesting of other assets in the other. The wide use in practice of the discretion under s 2(2) is testimony to its practical significance in achieving justice between the parties. It has enabled the Courts to allow one spouse to take the benefits or losses resulting from changes in the value of property which, broadly speaking, that spouse has brought about since the date of separation and at the same time to allow both to share in changes due to external factors affecting both equally (Meikle v Meikle [1979] 1 NZLR 137, 158). However, the numerous reported decisions under the subsection are merely illustrations of the perceived need to depart from a division based on the hearing date valuation in order to achieve a result which is fair to both parties. The discretion under s 2(2) enables the Court to do justice in a practical way by fixing the value of the property as at the date of separation where a subsequent (1990) 6 FRNZ 577, 580increase in value should fairly be allocated to one rather than shared equally by both.

On that test I am satisfied that the value of the wife's insurance policy in this case should be arrived at as at the date of separation. As at separation her expectation of life, measured in terms of table B in the second schedule to the

10	Nicola Peart (ed) Family Property (online ed, Thomson Reuters) at [PR 30].
11	Re Little (deceased), [1991] 1 NZLR 135 (CA).
12	At [9].

Estate and Gift Duties Act 1968, was 28.41 years. The sharp increase in the value of the policy was brought about by her premature death. The husband made no contribution to that increase. It is not a factor from which both should benefit. The increase in value should be credited to her estate.

[55]	Ms Bodman noted s 2G of the PRA is equivalent to s 2(2) of the MPA, which provides the Court with a discretion to determine the date at which the value of the property is to be determined. Further, she referred to G v G, in which Ellis J observed:13
[25] Section 2G provides that the value of the property is to be determined  as at the date of hearing unless the Court decides that the value is to be determined as at another date. That provision essentially reproduces the old s 2(2) under which the Court’s broad discretion was customarily exercised in favour of a date of separation value where assets were of a depreciating kind or where one spouse had sole control over the use and disposition of the value. The customary approach has thus been to value such assets as insurance policies, chattels, vehicles and bank accounts as at date of separation. …

[56]	Ms Bodman accordingly submits that the Life Insurance Policy ought to be valued at the date of separation, at which time it had no value. The increase in the policy as a result of Andrea’s death post separation is not attributable to the relationship and the resulting payment should vest in the estate in full as Andrea’s separate property.

[57]	I accept Ms Bodman’s submissions as to how the life insurance should be dealt with are appropriate.

[58]	The learned authors of Relationship Property on Death consider the separation-date value of the policy to normally be the appropriate way of assessing life insurance policies for relationship property purposes.14 A hearing-date valuation would include post-separation contributions within the pool of relationship property, which is inconsistent with the narrower focus in s 8(1)(g). While the authors comment that where the non-owner partner has made contributions to the policy post-separation this may be reflected in s 18B compensation, this does not appear to be applicable in

13	G v G [2003] NZFLR 289 (FC) at [25].
14	Nicola Peart, Margaret Briggs and Mark Henaghan (eds) Relationship Property on Death
(Brookers, Wellington, 2004) at 190.

the present case. As such, the life insurance policy had no value at the time of separation.

[59]	Here, the most appropriate assessment of the life insurance policy’s value at the date of separation is nil. While the evidence is limited, it would appear that for policies such as the one used by Andrea, there is no surrender value, and the policy only gains value when the life assured dies.15

Orders

[60]	In relation to the proceeding CIV-2017-409-778, I declare that the document attached as exhibit “B” to the affidavit of Craig Steven Ebert in support of his originating application (filed on 29 September 2017) is the valid will of the deceased, Andrea Joan Ebert.

[61]	In relation to CIV-2019-409-545, I order that:

(a)	The net sale proceeds of Cintra Place are to be divided between the estate and Scott as set out in Schedule A attached to this judgment.

(b)	The Life Insurance Policy is Andrea’s separate property and the sum of
$468,461.00 is to be repaid by Scott to the estate less the sum of
$47,050.43 (payment to Tia and funeral expenses) and $36,883.17 (for payment of the mortgage).

(c)	Scott’s interest in the Cintra Place sale proceeds ($91,687.16) is offset against the funds payable in accordance with (b) above, with the balance of $292,840.24 being a debt payable by Scott to the estate pursuant to s 33(3)(i) of the Property (Relationships) Act 1976.

(d)	All other assets held by the estate and Scott respectively are separate property.

15	M v A HC Wellington CIV-2006-485-1868, 5 April 2007, at [39].

(e)	The funds held on Trust by Layburn Hodgins be paid:

(i)	to Sandra Ebert in the sum of $228,754.37; and

(ii)	the balance to the estate.

(f)	That interest earned on the funds held by Layburn Hodgins be apportioned proportionately between Sandra Ebert and the estate.

Costs

[62]	Costs shall follow the event on a 2B basis.

[63]	I reserve the right to the applicant/defendant to seek further direction in the event of any further adjustment to Schedule A being necessary.

...................................................
Eaton J

Solicitors:
Cavell Leitch, Christchurch

Copy to:
Scott Ostermann – Plaintiff

SCHEDULE A