BUSCH v IRELAND & ORS [2016] NZCA 391 [11 August 2016]

IN THE COURT OF APPEAL OF NEW ZEALAND

CA650/2014

[2016] NZCA 391

BETWEEN

ROLIEN GEERTRUIDA BUSCH

Appellant

AND

DENNIS PAUL IRELAND AND

ANGELA CATHERINE IRELAND

First Respondents

AND

STEPHEN JOHN GRANT AND DAVID

JAMES SMILLIE

Second Respondents

Hearing:

19 May 2016

Court:

Ellen France P, Stevens and Kós JJ

Counsel:

T J Shiels QC for Appellant

L A Andersen for First Respondents

Judgment:

11 August 2016 at 10 am

JUDGMENT OF THE COURT

A The application for leave to admit new evidence is declined.

B We answer the question for which leave was granted in the affirmative,

namely, that the High Court Judge applied the correct approach on

appeal. The appeal is dismissed.

C Costs are reserved pending the filing of memoranda as set out in [63].

____________________________________________________________________

REASONS OF THE COURT

(Given by Ellen France P)

Table of Contents

Para No

A testamentary promises claim

Background

Application for leave to admit new evidence

The appellant’s case on appeal

The appellate approach

The evidence

Mrs Osmand’s wills

Mr and Mrs Ireland

The Irelands’ children

Mr Scott

Ms Forsdyke

Other evidence

Drawing the threads together

Result

[1]

[4]

[15]

[17]

[20]

[30]

[30]

[37]

[51]

[53]

[55]

[57]

[60]

[63]

A testamentary promises claim

[1] Dennis and Angela Ireland brought a claim in the Family Court under the

Law Reform (Testamentary Promises) Act 1949 (the Testamentary Promises Act).

They claimed the appellant’s adoptive mother, Betty Osmand, made a testamentary

promise to them. The claim was unsuccessful.1 That was because Judge Flatley

found that no testamentary promise was made to the Irelands. The Irelands appealed

to the High Court. In the High Court, Gendall J heard new evidence and allowed the

appeal.2 As a result an award was made in favour of the Irelands.

[2] The appellant was granted leave to appeal by this Court on this question:3

Given the Family Court at first instance had made findings of credibility

against the first respondents, did the High Court apply the correct approach

on appeal?

[3] The appeal accordingly raises issues about the appellate approach where

issues of credibility are involved and new evidence is admitted on the appeal.4

1 Ireland v Grant [2013] NZFC 8802 [Family Court decision].

2 Ireland v Grant [2014] NZHC 1523 [High Court decision]. Whata J granted leave to adduce the

further evidence: Ireland v Grant [2014] NZHC 613. 3 Busch v Ireland [2015] NZCA 82. The relevant leave provision is s 67(2) of the Judicature Act

1908. Gendall J had declined leave to appeal: Ireland v Grant [2014] NZHC 2496. 4 Mr and Mrs Ireland are bankrupt and the Official Assignee is defending the appeal. The second

respondents, Messrs Grant and Smillie for the estate, did not take an active part in the appeal.

Background

[4] We draw on the summary of the factual narrative set out in the High Court

judgment.5

[5] Mr Ireland’s parents were friends of Mr and Mrs Osmand. He spent periods

on the Osmand’s farm property as a young boy. As a result of family tragedies,

including the death of Mr Ireland’s mother, and at Mrs Osmand’s insistence,

Mr Ireland began living with her and her husband. Mr Ireland’s evidence was that

from this time (when he was aged about 11) he was raised as the Osmands’ son.

[6] In the mid-1970s, Mr Ireland worked overseas. He met his wife. The

Irelands married in 1983 and had three children whilst living in England.

[7] Mr Ireland says Mrs Osmand asked the Ireland family to return to

New Zealand from around 1989. During the 1990s Mr Ireland visited New Zealand

to sort out the logistics of a move back to New Zealand. The family relocated in

1998 on what was to be a permanent basis but Mr Ireland had to go back to England

when the sale of a business he ran in England fell through. He stayed on there for

about 10 months. Mr Ireland then fell ill and Mrs Ireland returned to England with

the children to support him.

[8] By the time the Irelands had worked through these issues and were ready to

come back to New Zealand, a foot and mouth outbreak in the United Kingdom

stopped them from travelling. After that, Mrs Ireland became ill and this again

delayed their travels. The Irelands eventually returned to New Zealand in 2002.

[9] When the Irelands first returned to New Zealand in 1998 they lived in a

Versatile cottage built on the Osmands’ farm. In 2002 on their return they bought the

neighbouring property, which they lived in until it was destroyed by a fire in 2011.

For about a year after the fire the Irelands lived in Mrs Osmand’s home. They then

moved to the Versatile cottage where they were living at the time of the Family

Court hearing.

5 High Court decision, above n 2, at [1], [3] and [14]–[22].

[10] In her will made in 1991, Mrs Osmand left the bulk of her estate and farm to

Mr Ireland. However in a later will signed in 2001 and in her final will of 2008 she

left the bulk of the estate to the appellant, who is her adopted daughter. Mrs Osmand

died on 4 September 2011.

[11] The Irelands brought a claim in the Family Court against the estate. They

claimed Mrs Osmand had promised to reward them if they gave up on their life in

England and returned to New Zealand to work for Mrs Osmand and provide services

during her lifetime by leaving the farm to them.

[12] Judge Flatley in the Family Court dismissed the Irelands’ application. He

found the evidence did not support the claim Mrs Osmand made either an express or

implied promise with testamentary disposition as reward for services rendered or

work undertaken.6 The Judge did not therefore consider the other elements of the

testamentary promises claim.7

[13] The Judge expressed concern about the Irelands’ credibility. The concern

focused on four parts of their evidence, namely, the number of trips Mr Ireland made

to New Zealand, the tenancy agreement that the Irelands entered into in relation to

the Versatile cottage despite their evidence they had paid for the construction of the

cottage, the manipulation of letters kept by Mr Ireland, and the general lack of

documentary evidence that could have been obtained to corroborate the claims

made.8

[14] The Irelands appealed to the High Court under s 5A of the Testamentary

Promises Act. That section provides a right of appeal by way of re-hearing to the

High Court against the decision of the Family Court. In the High Court, Gendall J

heard new evidence from Katherine Forsdyke, Mrs Ireland’s mother. The Judge

concluded that a promise had been made by Mrs Osmand to the Irelands.9 Services

were rendered and work undertaken by the Irelands in reliance on that promise10

and

6 Family Court decision, above n 1, at [199].

7 At [200].

8 At [177].

9 High Court decision, above n 2, at [86].

10 At [91] and [94]–[97].

there was a nexus between the two.11

Justice Gendall made an order vesting 50 per

cent of the farm in the Irelands.12

If unsuccessful in her appeal on the question posed

at [2], the appellant does not challenge the quantum of the award.

Application for leave to admit new evidence

[15] The appellant sought leave to introduce new evidence on the appeal before

this Court. The proposed evidence comes from Pauline Van Der Byl who was at one

point in business with Mr Ireland and is now in a dispute with him over that

business. She would give evidence of a discussion with Mr Ireland in 2011 after the

fire had burnt down the Irelands’ house. She said Mr Ireland told her that he had

been cut out of Mrs Osmand’s will. That would be advanced to contradict

Mr Ireland’s account he did not know of the change in position.

[16] We agree with Mr Andersen for the first respondents that this proposed

evidence is not directly relevant to the matters in issue. Rather, it relates to a

collateral matter and not the question of whether or not there was a testamentary

promise. Accordingly, we do not see the proposed evidence as cogent in terms of

determining the appeal. We decline leave to adduce this evidence on appeal.

The appellant’s case on appeal

[17] At the heart of the appellant’s case is the submission that Gendall J

overlooked the customary caution to be applied to findings of credibility in the Court

below. In developing this submission, Mr Shiels QC for the appellant says, first, this

error resulted from the Judge’s misstatement of the approach to appellate review set

out in Austin, Nichols & Co Inc v Stichting Lodestar.13

[18] Secondly, the appellant argues that Gendall J did not correctly approach the

new evidence admitted on the appeal. Rather, contrary to the decision of the

11

At [98]. 12

At [112]. 13

Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 [Austin,

Nichols].

Supreme Court in Kacem v Bashir, the Judge treated the new evidence as an

opportunity to consider the matter afresh.14

[19] Finally, to the extent that Gendall J said he deferred to the credibility findings

in the Family Court, the Judge did not in fact do so. Mr Shiels emphasises in this

context the particular features of testamentary promises cases, namely, the

expectation of frankness and the need for greater caution if evidence is falsified.15

The appellate approach

[20] Gendall J took the view that whether or not there had been an express or

implied promise from the deceased to reward the claimant was not a decision in the

exercise of a discretion.16

As a result, the Judge considered he was “required” to

reach his “own view on the merits” in relation to that matter.17

The Judge went on to

say that “[o]nly in respect of the relief to be granted does the court of originating

application have discretion, which is subject to the ordinary constraints concerning

appeals against the exercise of a discretion”.18

[21] The critical passage from the judgment of Gendall J for these purposes is as

follows:

[12] There may be some suggestion that this Court ought to defer to the

Family Court on the basis that the Family Court had the advantage of

hearing the evidence first hand and was better placed to assess credibility.

The decision of the Court of Appeal in Rae v International Insurance

Brokers is commonly cited as advocating such deference. In that case the

high water mark was the statement that “[e]xceptional caution in departing

from the trial judge’s findings of fact are therefore regarded as imperative.”

[13] In my view, however, since the decision in Austin, Nichols & Co Inc

v Stichting Lodestar the position with respect to deference has somewhat

softened. I am expressly required to come to my own view on the merits,

and to defer no more than is “customary”. This view that Austin, Nichols &

Co Inc has softened the general approach is not without support. While I do

not have the advantage Judge Flatley had in seeing and assessing the

14

Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1. 15

Citing, for example, Ace v Guardian Trust [1948] NZLR 103 (SC) at 106; and Powell v Public

Trustee [2003] 1 NZLR 381 (CA) at [34]. See also Jones v Public Trustee [1962] NZLR 363

(CA) at 372–373; and Bill Patterson Law of Family Protection and Testamentary Promises

(4th ed, LexisNexis, Wellington, 2013) at [13.17]–[13.18]. 16

High Court decision, above n 2, at [9]. 17

At [10] citing Austin, Nichols, above n 13, at [16]. 18

At [10] citing Kacem v Bashir, above n 14, at [32]–[33].

witnesses that were before him, I do have the advantage of hearing evidence

from one new witness … . I therefore propose to approach this matter

afresh, deferring only to the extent necessary to accommodate the findings as

to credibility both adverse and otherwise made by Judge Flatley.

(footnotes omitted)

[22] This aspect of the appeal focuses on the extent to which it is correct to

describe the effect of Austin, Nichols as “softening” the approach in relation to

deference on credibility findings and on the approach where new evidence is

adduced on an appeal. The position in Austin, Nichols is encompassed in the

following passage from that judgment:19

The appeal court must be persuaded that the decision is wrong, but in

reaching that view no “deference” is required beyond the “customary”

caution appropriate when seeing the witnesses provides an advantage

because credibility is important. Such caution when facts found by the trial

judge turn on issues of credibility is illustrated by Rae v International

Insurance Brokers (Nelson Marlborough) Ltd and Rangatira Ltd v

Commissioner of Inland Revenue.

[23] As Mr Shiels emphasises, questions of credibility were not in issue in Austin,

Nichols. Rather, that case involved the use of trade marks in which the appellate

court was as well-placed to make an assessment as the Court below.

[24] In Kacem v Bashir, the Supreme Court explained that the “important point

arising from Austin, Nichols” was that:20

… those exercising general rights of appeal are entitled to judgment in

accordance with the opinion of the appellate court, even where that opinion

involves an assessment of fact and degree and entails a value judgment.

[25] In that case the Court also observed that if the appellate court admits further

evidence:21

… that evidence will necessarily require de novo assessment and

consideration of how it affects the correctness of the decision under appeal.

The Court of Appeal was right to say that Courtney J had rather overstated

the effect of Austin, Nichols when she indicated she should approach the

appeal to the High Court “uninfluenced” by the reasoning of the Family

Court. The High Court was required to reach its own conclusion, but this

did not imply that it should disregard the Family Court’s decision. What, if

19

Austin, Nichols, above n 13, at [13] (footnotes omitted). 20

Kacem v Bashir, above n 14, at [32] (footnote omitted). 21

At [31] (footnote omitted).

any, influence the Family Court’s reasoning should have was for the High

Court’s assessment.

[26] Accordingly, as this Court said in QBE Insurance (International) Ltd v

Pegasus Group Ltd:22

[The appellate Court] must review the evidence anew and form its own

opinion on disputed facts independently of the trial Judge exercising

however the customary caution where a credibility finding is in issue. We

are conscious that within the setting of a tightly contested trial the Judge is

constantly assimilating and evaluating evidence as it unfolds gradually under

examination. That factor does not of course immunise a Judge’s finding

from challenge. But the deliberative process, and the well accepted benefit

enjoyed by a trial Judge in seeing and hearing a witness, cannot be replicated

within the confines of an appellate hearing. We must give appropriate

weight to the trial Judge’s assessment of a witness whose credibility was

under attack.

[27] These authorities illustrate that if Gendall J was suggesting he could just start

afresh, given the new evidence, and ignore findings of credibility, that would not be

right. However, while the point being made in relation to the effect of Austin,

Nichols may have been expressed a little differently we do not consider the Judge’s

statement of the legal position was incorrect in a material way.

[28] The high point of the appellant’s case in this respect is the Family Court

Judge’s finding that the Irelands’ “obvious bitterness” towards Mrs Osmand had led

the Irelands “to construct a claim that they provided work or services which would

lead to a conclusion that a required promise was more likely than not to have been

made”.23

Judge Flatley went on to say:24

But in doing so they fabricated and manipulated evidence, such that their

credibility is seriously called into question. In any event, a clear nexus

between that work and the words of [Mrs Osmand] is required but is absent

here.

[29] There would need to be good reason to depart from such a finding on

appeal.25

To determine whether the High Court Judge was correct to do so we need

to examine the factors Gendall J relied on for taking a different view. We deal with

each of these in turn.

22

QBE Insurance (International) Ltd v Pegasus Group Ltd [2011] NZCA 268 at [83]. 23

Family Court decision, above n 1, at [198]. 24

At [198]. 25

Teat v Willcocks [2013] NZCA 162, [2014] 3 NZLR 129 at [31].

The evidence

Mrs Osmand’s wills

[30] The Family Court had evidence about four wills. The first will was dated

20 December 1983 (the first will). Under that will, all of Mrs Osmand’s property

was left to the appellant. The second will was dated 2 May 1991 (the 1991 will).

This will revoked the first will and the appellant was to receive $20,000 and

household articles and Mr Ireland the residue and bulk of the estate, including the

farm. The third will dated 13 March 2001 (the 2001 will) essentially reverted back

to the position as under the first will, as did the final will dated 28 February 2008.

[31] Mr Ireland’s evidence was that he was present at the time Mrs Osmand gave

instructions for the 1991 will. Judge Flatley referred to this as follows:

[89] It is [Mr Ireland’s] evidence that he attended a Dunedin solicitor,

Mr Haggitt, now deceased, with [Mrs Osmand] at the time she gave

instructions in relation to the 1991 Will and so he was aware of her intention

at that time, but there is no evidence to confirm this. Mr Grant, solicitor,

who continued to act for [Mrs Osmand] following Mr Haggitt’s death, said

that it would be very unusual for a major beneficiary to be present at a

meeting where instructions were given for the making of a Will and that he

was quite sure that it would not have been Mr Haggitt’s practice.

(footnotes omitted)

[32] Gendall J took the view that Mr Ireland’s evidence should not “simply be

discarded” absent some “clear evidence to the contrary being available”.26

Justice Gendall made the point the solicitor, Mr Grant, had no direct knowledge of

what had transpired but rather was giving evidence as to what he thought would have

been Mr Haggitt’s practice. By contrast, the Judge said, Mr Ireland’s evidence was

first hand evidence of his own experience.

[33] When the 2001 will was prepared, it was accompanied by a letter written by

Mrs Osmand. The letter included the following:

I leave my houses and farm all stock and everything that on it at the time of

my death to my daughter Raylen Osmand [the appellant]. If she dose not

want to use the farm she can lease it but not sell it. Dennis was going to look

after it for me but it has taken him 10 year to thing about it he is still telling

26

High Court decision, above n 2, at [36].

me lies and live in England. He wood be usles. You cannot depend on him

when anything happens to me… .

(emphasis added)

[34] The 2001 will was also accompanied by a file note from Mr Grant. This file

note recorded “discussed claims that [Mr Ireland] might have been promised share in

her estate. No promise ever made”. Gendall J observed that Judge Flatley took this

file note as cogent evidence of the absence of any promise from Mrs Osmand to

Mr Ireland. Gendall J cited this excerpt from Judge Flatley’s judgment:27

[101] It is clear from the file note of 30 March 2001 that [Mrs Osmand’s]

position was that at no time had she promised to give the farm to

[Mr Ireland] or any share in it and that she had no intention of doing so.

[35] Gendall J’s response was that if Mrs Osmand was trying to write Mr Ireland

out of the will despite an earlier promise, “it would clearly be in her interests to be

unequivocal in such a manner to her estate solicitor”.28

The Judge also considered it

was important to understand that this will was written at a time when Mrs Osmand

was “unsympathetic to the multitude of issues plaguing the Irelands, preventing their

return from England”.29

[36] It is useful to note at this point that two themes emerge from the evidence.

The first of these is that Mrs Osmand appears to have said different things to

different people at different times. Mr Andersen is correct when he says that it does

not necessarily follow in these circumstances that no promise was made. The timing

of the 1991 will is of some significance because it came only some two years after

Mr Ireland said Mrs Osmand asked the Ireland family to return to New Zealand. The

second theme that can be drawn from the evidence is that the relationships between

Mrs Osmand and the Irelands and between Mrs Osmand and the appellant very much

had their ups and downs. The varying states of play in these relationships provides

some background to the changes to the wills.

27

Family Court decision, above n 1, cited in High Court decision, above n 2, at [39]. 28

High Court decision, above n 2, at [40]. 29

At [40].

Mr and Mrs Ireland

[37] We need to address three aspects of this evidence.

[38] Before doing so, we interpolate here that the Family Court Judge began the

judgment by stating that in Mr Ireland’s original affidavit “there [was] no evidence

of a required promise made”.30

The Judge referred to various quotes in the affidavit

evidence of Mr and Mrs Ireland that he said were the extent of evidence of an

express promise. Other references were “particularly vague” and lacked any nexus

between the promise and work or services rendered.31

[39] If by this observation the Judge meant that there was no evidence of an

express promise that would be wrong. In his first affidavit, and in a subsequent

affidavit, Mr Ireland did depose expressly to a promise that the farm would be his in

return for his return from England and work on the farm. It may be the Judge rather

meant to question in a more general sense, given his subsequent findings, the

satisfactory nature or otherwise of this evidence.

[40] The first aspect of Mr Ireland’s evidence to which we need to refer is a letter

Mrs Osmand sent to Mr Ireland on 3 December 1989 which read:

I am just going into selling the sections up top and putting a house on the top

and that would do you, you would have a house of your own over here. I am

going to shift a state house here and fit it out just now. I am not leaving the

farm to Raylene. I will have to leave you as trustee you were brought up

with us. I have to sort all these things out now for I am getting older all the

time.

[41] The Family Court Judge was properly critical of irregularities in relation to

the letters like this one produced by Mr Ireland.32

Some letters, for example, were

not included in their entirety. Judge Flatley saw this as manipulation of the evidence

by Mr Ireland.33

We agree that in this and in other respects, such as his evidence

30

Family Court decision, above n 1, at [21]. 31

At [26]. 32

At [32]. 33

At [37].

about the number of return trips he made to New Zealand and the manner in which

he gave his evidence, Mr Ireland’s evidence was unsatisfactory.34

That said, for the

reasons given by Gendall J we see this letter as providing support for the conclusion

a promise was made.

[42] The Family Court Judge saw the reference to trusteeship as different from

inheritance and owning the property. He also saw the letter as indicating the Irelands

would get the section rather than the farm.35

[43] We agree that the reference to trusteeship was inapt. But we also agree with

Gendall J that the reference to Mr Ireland being a trustee was:36

… likely to be a reference to him inheriting the farm under the will instead

of Ms Busch. It is important to understand that the word “trustee” must be

read in light of Mrs Osmand’s overall education and understanding of

technical legal matters, and the words that followed, specifically “I will have

to leave you as trustee you were brought up with us. I have to sort all these

things out now for I am getting older all the time.”

[44] As Gendall J stated, a later letter from Mrs Osmand to Mr Ireland dated

14 May 1990 is also relevant. It reads as follows:

The sooner you come home the better. I have about had it Raylene and Paul

are around all the time panicking we have to lock everything … .

[45] The second aspect of the evidence of the Irelands related to their financial

position. The Family Court Judge found that the evidence in relation to the financial

state of the Irelands’ business in England and its winding-up37

supported a

conclusion Mr Ireland experienced financial difficulty in England and that his

decision to relocate to New Zealand was very likely motivated by those problems

and the opportunities available in New Zealand.38

In addition, the Judge rejected the

claim that the Irelands built or paid for the Versatile cottage citing the absence of any

34

Mr Shiels referred, for example, to the number of occasions on which Mr Ireland had to be

directed by the Family Court Judge to answer the question and the fact that he sometimes

blamed his lawyer for gaps in the evidence. 35

At [36]. 36

High Court decision, above n 2, at [77(b)]. 37

The company went into liquidation in early 2000. 38

Family Court decision, above n 1, at [135].

documentary evidence of that and the oddity of the fact the Irelands entered into a

tenancy agreement in relation to the cottage.39

[46] To put this evidence in context, there were two possible theories canvassed in

the evidence. First, the Irelands had to leave England because their financial state

there was somewhat precarious. The second theory, the Irelands’ case, was that they

left England because Mrs Osmand had promised Mr Ireland the farm if he returned

to work there.

[47] We agree with Gendall J that in this respect the Family Court Judge should

have given weight to the evidence from Christchurch lawyers confirming that the

Irelands had purchased a property outright in New Zealand in 2002 prior to their

return.40

The statement in evidence showed a cash deposit of $175,000 being paid.

As Gendall J said:41

It is difficult to appreciate how paying a 50% property purchase deposit

would be possible in the face of alleged financial difficulty. Further, it seems

that the remaining $175,924.58 was also funded by the Irelands direct,

without a mortgage. The certificate of title shows no mortgage registered

against the title until 2006. This must further support a contention that the

Irelands were not impecunious.

[48] We accept that the evidence about the tenancy agreement is difficult to

explain. However, as Gendall J said, the finding of financial difficulty also ignored

the evidence of Mr Scott.42

Mr Scott was Mrs Osmand’s accountant for some

30 years and evidently close to her. He was, as Gendall J said, best placed to

comment on financial issues within his knowledge. Mr Scott stated that

Mrs Osmand had told him that Mr Ireland had remitted funds to her to erect the

Versatile cottage and to enable her to have an operation. Margaret Weatherall, a

friend of Mrs Osmand, said Mrs Osmand told her that Mr Ireland had put “a lot” of

money into the Versatile cottage.

[49] As to the associated concern by the Family Court Judge as to the absence of

documentary evidence supporting the Irelands’ claim, some source material could

39

At [152]. 40

The Family Court Judge questioned the lack of evidence of transfer of the funds. 41

High Court decision, above n 2, at [82]. 42

At [83].

have been obtained from banks and the like. However, we agree with Gendall J that

some account should have been taken of the fact the Irelands’ records and belongings

were destroyed by a fire.43

[50] Finally, the Family Court Judge found that the Irelands had exaggerated the

evidence of the work they said they had done on the farm.44

He accepted they were

likely to have done some work but that was limited by way of reasonable assistance

given time they had spent living rent-free on the farm. By contrast, the High Court

Judge accepted that the affidavit evidence of the Irelands established significant

work and services were provided.45

Some misconception has arisen from the fact

that the Family Court Judge did not factor in that some of the hours recorded

reflected a three-week period when the Irelands spent 24 hours a day looking after

Mrs Osmand’s farmstay.

The Irelands’ children

[51] The Family Court Judge was critical of the evidence of the Irelands’ three

children particularly that of Jessica who he found to be not credible.46

The Judge

also considered that the affidavit evidence of the other two children, Naomi and

Lydia, provided little assistance.47

He was concerned that all three children had

based their evidence on what they had been told by their parents and that the children

were influenced by their feeling Mrs Osmand had treated them unfairly.48

[52] Lydia’s evidence, however, can be seen as in a different category. Her

evidence was that she had a special bond with Mrs Osmand and that Mrs Osmand

had told her that her father would take over the farm. She said that Mrs Osmand had

talked about the farm being her father’s. Gendall J highlighted the fact that Lydia’s

evidence reflected her direct conversations with Mrs Osmand and that Lydia was old

enough at the relevant time to have an independent recollection of the discussions.49

43

At [47]. 44

Family Court decision, above n 1, at [175]. 45

High Court decision, above n 2, at [95]. 46

Family Court decision, above n 1, at [49]. 47

At [53]. 48

At [55]–[56]. 49

High Court decision, above n 2, at [59].

Mr Shiels is correct that this can be seen as evidence of an expectation rather than a

promise, but it is a thread that should have been taken into account.

Mr Scott

[53] Mr Scott’s evidence is relevant on two aspects, first, whether there was a

promise and secondly as to the funding arrangements for the erection of the Versatile

cottage. We have dealt with the latter. Mr Scott’s evidence in relation to the promise

was important. He said that throughout his relationship with Mrs Osmand, she had

indicated to him that Mr Ireland would be getting the farm. Mr Shiels emphasises

that Mr Scott accepted that he had not discussed with her what would be in her will.

But she did say to him that she wanted Mr Ireland and the family to come home from

England and take the place over.

[54] Mr Scott accepted he was not too sure how Mrs Osmand would have

accomplished Mr Ireland obtaining the farm but he would have thought “naturally”

that it would be left to him. We agree there are aspects of this that may be viewed as

evidence as to expectation. But it is important evidence nonetheless supporting the

Irelands’ claim because Mr Scott was close to Mrs Osmand over a long period of

time and, as we have said, a trusted adviser. This evidence accordingly came very

close to someone, in effect, speaking for Mrs Osmand.

Ms Forsdyke

[55] Ms Forsdyke said she was assured by Mr and Mrs Ireland of the benefit of

going back to New Zealand. That benefit was “mainly the security they would have

from being the eventual owners of the Betty’s farm”. She also went on to say that

when she was in New Zealand for a visit, Mrs Osmand spoke to her about the farm

and said it was security for Ms Forsdyke’s son-in-law and daughter. She talked

about going out for the day with Mrs Osmand and in the course of that outing she

said Mrs Osmand told her she had promised Mr Ireland the farm and indicated he

would get her half anyway when she died because it was already in joint names.

[56] Gendall J rightly recognised some of the limitations on this evidence.

Ms Forsdyke accepted that she was “incensed” by the Family Court Judge’s

decision. She was also obviously not independent. Further, she developed her

evidence somewhat from her affidavit, which referred only to the “security” of the

farm. But she did explain in her evidence in cross-examination that she should

perhaps have said that Betty promised the farm. She accepted the concepts of

security and a promise were different but maintained that she understood a promise

had been made. It was open to Gendall J to accept this evidence as credible. Having

done so, this evidence became part of the totality of the evidence that had to be

evaluated.

Other evidence

[57] The Irelands called evidence from two other witnesses, John Clearwater and

Ms Weatherall. Mr Clearwater said that Mrs Osmand left him with the impression

that Mr Ireland was to receive the farm. He said he understood that Mr Ireland was

coming home from England to look after Mrs Osmand and take over the property.

Ms Weatherall referred to Mrs Osmand “chopping and changing her mind” about

what she was going to do with the farm.

[58] Evidence to the opposite effect came from three people who had a fairly

lengthy associations with Mrs Osmand. Tawhiri Karetai spoke of maintaining

regular contact with Mrs Osmand over a long period. He said Mrs Osmand told her

the farm would be the appellant’s. Roberta Paget, a friend of Mrs Osmand said she

never heard a promise of the farm to Mr Ireland. Donna Ropata said that

Mrs Osmand told her that Mr Ireland’s share was the section and the money she gave

him. The rest of the farm would go to the appellant.

[59] Judge Flatley preferred the latter evidence to that of Mr Clearwater and

Ms Weatherall.50

Gendall J did not disagree with that assessment but concluded that,

“on balance”, Mrs Osmand gave the two “groups” different versions as to what

would happen to the farm on her death.51

Mr Shiels is critical of Gendall J’s

observation that the difficulty for these witnesses was that they were proving a

negative.52

We do not see the Judge’s observation as any suggestion of a reversal of

50

Family Court decision, above n 1, at [85]. 51

High Court decision, above n 2, at [77(e)]. 52

At [68].

the onus but, rather, an identification of the practical difficulties of supporting a

negative.

Drawing the threads together

[60] Gendall J’s conclusion was as follows:

[86] In reaching the conclusion that there has been a promise made by

Mrs Osmand to the Irelands, I have had regard to their evidence

(acknowledging Judge Flatley’s credibility findings), their daughters’

evidence (particularly Lydia’s), the other evidence of corroboration (of

which I found Mr Scott’s evidence particularly compelling), the context (the

most important contextual matters being the entire family background of

Mr Ireland’s upbringing with the Osmands and the fact that the Irelands

moved to New Zealand from the other side of the world) and importantly the

3 December 1989 letter indicating Mrs Osmand’s intentions and promise, as

confirmed later in Mrs Osmand’s 1991 will. In reaching this conclusion I

have also placed some weight on the evidence of Ms Forsdyke who, first, I

found to be a caring and sensitive grandmother who had established a

relationship with Mrs Osmand and, secondly who, although an interested

party here as the mother of Mrs Ireland, I found to be a credible witness.

This evidence not only supports the making of a promise to the Irelands, but

also goes some way as independent evidence to establish that the promise

was made also to Ms Forsdyke herself.

[61] Essentially for the reasons given by Gendall J, we agree. This was not an

easy case and Mr Ireland, in particular, did not always advance his own cause in a

satisfactory manner. The matter was further complicated by the admission of the

new evidence on appeal, which did require some reassessment of the totality of the

evidence in the way the Supreme Court anticipated in Kacem v Bashir.53

It would

obviously have been preferable for all of the evidence, including that of

Ms Forsdyke, to have been considered together. But, because of the new evidence

and the fact there was evidence not factored in by the Family Court, we consider this

was one of those unusual cases where, despite the credibility finding, the appellate

Judge was correct to take a different view to ensure a just result.

[62] In summary, there were a number of threads of evidence that should have

been brought into the mix or given greater weight in the Family Court but were not

and which, taken together with the new evidence, lead to the view taken by

Gendall J.

53

Kacem v Bashir, above n 14, at [31].

Result

[63] The application for leave to admit new evidence is declined. We answer the

question for which leave was granted in the affirmative, namely, that the High Court

Judge applied the correct approach on appeal. The appeal is dismissed. Costs are

reserved pending the filing of brief memoranda advancing any reasons why costs

should not follow the event. The memorandum from the appellant is to be filed by

12 noon Tuesday 16 August 2016 and by the first respondents by 12 noon Tuesday

23 August 2016.

Solicitors: Solomons, Dunedin for Appellant Official Assignee, Ministry of Business, Innovation and Employment, Christchurch for First Respondents Gallaway Cook Allan, Dunedin for Second Respondents