Exam Preparation and Testamentary Promises

Assignment Submission

It's concerning that a number of students have not yet submitted their assignments. It is crucial to understand that even with a late penalty applied, submitting the assignment is significantly more advantageous than not submitting it at all, which results in a grade of zero. One recent late submission was noted to be of commendable quality, suggesting that a respectable mark is still attainable despite the delay.

Exam Format and Advice

The upcoming exam will be structured into two distinct parts to comprehensively assess your understanding of the course material:

  • Part 1: This section comprises multiple-choice questions, to be answered on paper. Students are permitted to bring physical notes into the examination venue for this part. However, the use of laptops or any other electronic devices is strictly prohibited during this segment. Specifically, there will be 25 multiple-choice questions, each carrying a weight of two marks. Collectively, this section contributes to 50% of the total exam grade.

  • Part 2: The second part of the exam consists of two extended, open-ended questions. These require detailed, written responses, which must be composed using a laptop. It is important to note that access to external websites, online resources, or any form of electronic communication will not be allowed during this section. Each of the two questions in this part is valued at 25% of the overall exam mark.

Advice for the Exam

To maximize your performance on the exam, consider the following recommendations:

  • Careful Reading: Diligently read each question to fully grasp what is being asked. Avoid making assumptions or interpreting questions in a way that deviates from their literal meaning.

  • Emphasis on Reasoning: In responding to the longer-form questions, place greater importance on the logical reasoning that supports your conclusions, rather than the conclusions themselves. The strength and clarity of your analysis and the factors you consider are paramount.

  • Double-Checking: If a particular answer seems incorrect or inconsistent with your understanding, take the time to re-evaluate it. The principles of law are generally predictable, and inconsistencies may indicate an error.

  • Best Answer Selection: When answering multiple-choice questions, choose the response that is unequivocally the most accurate and complete. There should be one option that stands out as the clearly correct choice.

  • Course Content Focus: The exam will be strictly based on the material covered throughout the course. Ensure that your preparation is focused on the readings, cases, and lecture content that have been presented.

Resources for Struggling Students

For students who find themselves struggling with the course content, several resources are available to provide additional support:

  • Review Materials: Revisit assigned readings, carefully examine case studies, and thoroughly review lecture videos to reinforce your understanding of key concepts.

  • Hudson's Equity and Trusts: This text, accessible both in the library and online, is an invaluable resource, especially for mastering topics related to trusts and equity.

  • Consultations: Students are encouraged to seek individual consultations to discuss specific difficulties or questions. Please contact the instructor via email to arrange office hours for personalized assistance.

Testamentary Promises: Introduction

Testamentary promises, a legal concept specific to New Zealand, are governed by the Testamentary Promises Act of 1949. This legislation addresses situations in which individuals have been promised protection in a will in exchange for their assistance or services but are subsequently left without any inheritance.

In other jurisdictions, similar circumstances are typically addressed through alternative legal doctrines, such as estoppel or unjust enrichment:

  • Estoppel: This doctrine prevents a party from denying the validity of a claim or assertion after having made assurances upon which another party has relied to their detriment.

  • Unjust Enrichment: This principle applies when one party has unfairly benefited from the services, labour, or property of another party, creating an obligation to provide restitution or compensation.

Testamentary promises are specific to NZ

  • for people who cant make a family protexction claim

Law Commission Report

A report by the Law Commission has proposed the abolishment of the Testamentary Promises Act. The recommendation suggests that issues arising from unfulfilled promises of testamentary provision could be more appropriately and effectively resolved through the application of the doctrines of estoppel and unjust enrichment.

Key Aspects of Testamentary Promise Claims

  • Claims Against an Estate: Testamentary promise claims are brought directly against the deceased's estate, rather than against any trusts established by the deceased.

  • Claimants: These claims are frequently pursued by individuals who, while having provided significant assistance to the deceased, do not qualify as immediate family members under the Family Protection Act. This often includes relatives such as nephews or friends.

  • Nature of Promises: The promises underlying these claims can be either explicit or implicit. For example, a statement such as, "I'll look after you," may be construed as an implied promise of testamentary provision.

  • the claim is against the estate not the trust

Establishing a Claim

To successfully assert a testamentary promise claim, the following four critical elements must be substantiated:

  1. Promise: It must be demonstrated that a promise was indeed made. This promise can be either express, through direct statements, or implied, through conduct and circumstances.

  2. Services and Work: The claimant must establish that they provided services or performed work for the deceased. The legal interpretation of "services and work" is broad, encompassing a range of actions, such as providing transportation to appointments, offering companionship, and assisting with personal care. doesn’t have to be anything specific, it is enough if you provide companionship, as this can be seen as a valuable contribution that warrants recognition under the promise made by the decedent. Additionally, the nature of these services should be carefully documented to support the claim effectively.

  3. Nexus: A clear and direct connection, or nexus, must be shown between the promise made by the deceased and the services provided by the claimant. The services rendered must have been provided as a direct result of, and in reliance upon, the promise.

  4. Failure to Honor the Promise: It must be evident that the will-maker ultimately failed to fulfill the promise made to the claimant. This is typically demonstrated by the absence of any provision for the claimant in the will or by a provision that is significantly less than what was promised.

Judicial attitudes towards these claims have become more conservative over time, leading to generally modest awards. Courts recognise that many individuals provide assistance to others out of kindness and without an expectation of financial reward. Consequently, a central question in these cases is whether other beneficiaries of the estate should have their inheritances diminished as a result of such a claim.

Case Studies

Samuels v Atkinson

facts

  • Involving guys buying land and a farm after coming back from war

  • company was Glenhome Farms Ltd. Aitkinsons ran the farm. Sammy would come down regularly and spoend time with the family, he put money into. The farm, so he got a share of the farm

  • The claim by Mr Aitkinsons’ 3 children, Donald, Paul and Jenny. The boys were running the company, and when their parents died, they took over. The shares

  • they claimed, Sammy said he would give them his shares because of the service Atkinsons gave him. The services were companionship

  • But he didn’t. Sammy gave his estate to his niece and nephew

  • Jenny gave a lot of companionship to Sammy compared to the boys

This case centred on Sammy and Donald, who jointly acquired land following their service in the Second World War. The enterprise was incorporated as Glenholm Farms Limited. Sammy transferred 12.91% of his company shares to the Atkinson family.

The Atkinson family provided extensive care and companionship to Sammy. Following the illness and subsequent death of Sammy's wife, the Atkinsons continued to support him. Sammy found solace and relaxation on the farm.

Sammy had promised to bequeath his shares in Glenholm Farms Limited to the Atkinsons in recognition of the services they provided. However, this promise was not fulfilled, and Sammy's estate was allocated to his nephew, David, in Scotland. Subsequently, Donald, Paul, and Jenny Atkinson initiated a claim against the estate.

  • The High Court initially ruled in favour of the Atkinsons, validating the claim for the shares.

  • The Court of Appeal, however, offered a more critical assessment. It highlighted the reciprocal benefits enjoyed by both parties and emphasised that a claimant must demonstrate something beyond ordinary acts of kindness to warrant an award. Ultimately, the Court of Appeal awarded the Atkinsons a total of 200,000.

    • Jennifer specifically assisted Sammy by driving him to medical appointments and providing support with personal accounts, transportation, and personal care.

    • points made about this claim and generally testimonial promises of this type

      • It is difficult to value love and care because there are benefits both ways

      • They used the words ‘something extra’ to get an award, you need to do something extra than just regular you would do to be a good person and help someone out

Quantification

A common method of quantification employed by the courts involves calculating the amount of care provided per week over the years, multiplied by a fixed hourly rate. This approach provides a structured basis for determining the monetary value of the services rendered.

  • Some courts say you look at the hours they would have spent, and pay around $25 an hour and see what the cost is

  • A lot of these cases are with old people, so you are basically a caregiver and get a fairly low hourly rate

  • It is very hard to put a figure and no legislation to indicate what you should take into account, so it is very much up to the discretion of the judge, shown by the difference in prices in HC and CA

The discrepancy in the awards between the High Court and the Court of Appeal was significant:

  • High Court: 600,000

  • Court of Appeal: 200,000

Re Welch (1993) highlights the importance of understanding testamentary promises and how a court's interpretation of intentions can lead to vastly different outcomes in award decisions.

Mr. Stewart and Mr. Welch had a close relationship. Mr. Welch, who had no children or grandchildren, was treated as part of Mr. Stewart's family. There was mutual assistance between them. As Mr. Welsh did not leave a will, his estate was divided among his eight siblings.

  • Mr Stuart provided a surrogate family - there was assistance provided both ways because it was a situation where Welch got older, but they helped each other out. There was no will, so other people who would have received his estate were his siblings, who had very little to do with him in comparison to Stuart and his family

  • The key part of the case was what motivated Stuart to provide these services - was it because of the promise, or just love and affection for someone who is part of your family? It was love and affection, but this brings up if there is a nexus and connection between promise and action

The primary consideration in this case was the motivation behind the services provided. The court sought to determine whether the assistance was given because of the promise or simply out of affection. The court noted the importance of honesty and transparency in affidavits, as parties are unlikely to admit that their sole intention was to receive a large sum of money.

  • High Court: Mr. Stewart was awarded half of his mother's estate and half of Mr. Welch's estate.

  • Court of Appeal: The Court of Appeal reduced the monetary award to 20,000, finding that the relationship between Mr. Stewart and Mr. Welch was akin to a normal family relationship.

  • Privy Council: The Privy Council dismissed the appeal, upholding the 20,000 award.

Blumenthal v Stuart

Mr. Blumenthal was the stepson of Mr. Matheson for 22 years. During this time, Mr. Blumenthal operated his business, stored equipment, and resided on a property owned by Mr. Matheson without paying rent. The court noted that there were both benefits and drawbacks for each party. Mr. Blumenthal's absence of rental payments raised questions regarding the nature of their agreement, particularly whether it constituted a testamentary promise or a mutual understanding that benefited both parties. As a result, the court had to examine the intentions behind their arrangement and the implications of any implied commitments, ultimately determining whether such an agreement would enforce obligations that transcended a mere verbal understanding.

  • High Court: The judge awarded Mr. Bloomenthal nothing, stating that there was nothing "extra" in the situation. The help provided was motivated by the family relationship rather than the promise. Also, the lawyer mentioned that Mr. Matheson never mentioned wanting to give anything to Bloomenthal.

  • Court of Appeal: The Court of Appeal sided with the High Court. The court determined that the credits favoured Mr. Blumenthal, and there was no nexus.

Relevant Factors

In evaluating testamentary promise claims, the courts consider the following relevant factors:

  • Nexus: The existence of a clear and direct connection between the promise and the services provided.

  • Value of Services: An assessment of the monetary worth of the services rendered.

  • Cautious Approach: A conservative approach to ensure fairness and prevent unjust enrichment.

  • Promised Assets: The nature and value of the promised assets. The courts are generally reluctant to award the entire promised asset, often opting for a smaller cash award.

  • Estate Value: The overall value of the estate.

  • Competing Claims: The presence of other claims against the estate.

  • Something Extra: Whether the claimant provided something beyond what would be considered normal familial or social support.

  • Netting Off: Whether to offset any benefits the claimant received from the deceased against the value of the services provided.

Law Commission

The Law Commission has advocated for moving these claims out of the TPA and assessing them under a quantum meruit basis.

Conclusion

Testamentary promise claims can often be not worth it due to the high cost for little financial return. There were also other claims that can come into play. In many of these situations, there could be more than one claim, relationship property claim, a family protection claim, and a testamentary promise claim.