Armstrong v Keenan - [2018] NZHC 1196

IN THE HIGH COURT OF NEW ZEALAND

GREYMOUTH REGISTRY

CIV-2017-418-000031

[2018] NZHC 1196

IN THE MATTER OF THE ESTATE OF FRANCIS BERNARD KEENAN

BETWEEN

SUSANNE YVONNE ARMSTRONG

Applicant

AND

DIANNE FRANCES KEENAN

First Respondent

AND

FRANCIS BERNARD KEENAN

Second Respondent

Hearing: 14 May 2018

Appearances:

R W Maze for the Applicant

Judgment:

25 May 2018

JUDGMENT OF NATION J

Background

[1] Frank Keenan died on 25 November 2013 at Greymouth. He was survived by three children who he appointed as trustees and executors of his estate. His estate comprised a bank account with a balance of $20,528.95, three vehicles and a property at 302 Woodstock-Rimu Road, Ruatapu (the property) which I have been told has recently been the subject of a sale at $80,000. In his will, Frank Keenan left his estate to the three children equally.

[2] Elcock and Johnston, solicitors of Hokitika obtained probate of the will for the three named trustees and executors. They attempted to advance administration of the estate including the sale of the property. Because of disagreements amongst the trustees, they were unable to progress matters in the way that was needed.

ARMSTRONG v KEENAN [2018] NZHC 1196 [25 May 2018]

[3] In November 2017, one of the trustees, Susanne Yvonne Armstrong (Susanne), obtained leave of the Court to make an application by way of originating application to have her siblings, Dianne and Francis, removed as trustees on the grounds this was expedient because:

(a) the estate had not been properly administered because the trustees and executors were unable to cooperate and there was no basis to believe that would change;

(b) the estate had a single remaining asset, the house, which was in a state of disrepair and in respect of which debts were accruing;

(c) if the administration of the estate was not properly completely promptly, the estate would become insolvent;

(d) the estate could not afford the expense of an independent administrator; and

(e) the applicant was a suitable person to administer the estate alone.

[4] The proceedings were served on Dianne Frances Keenan (Dianne) and Francis Bernard Keenan (Francis). Francis is aged 66. Since his father’s death, he has been living in Whanganui. Dianne is aged 68. She lives in Hokitika. Susanne is aged 62 and has been living in Hanmer Springs.

[5] In a telephone conference of 11 December 2017, Francis voiced his strong opposition to the application. Dianne did not participate but contacted the registry after the conference had taken place. On 12 December 2017, Mander J issued a minute directing both Francis and Dianne to file notices of opposition and affidavits in support by 29 January 2018 if they wished to oppose the application. A half day fixture was allocated for the proceedings on 22 May 2018.

[6] On 7 February 2018, Mander J, as an indulgence, extended the time for Dianne and Francis to file notices of opposition and affidavits by 9 March 2018. He directed that, if they did not file those documents by 9…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Armstrong v Keenan

Details

AGLC: Armstrong v Keenan [2018] NZHC 1196
Case: [2018] NZHC 1196
Decision Date: 25 May 2018

CaseChat Overview and Summary

The case of Armstrong v Keenan involved an application by Susanne Yvonne Armstrong to have her siblings, Dianne Frances Keenan and Francis Bernard Keenan, removed as trustees and executors of their father's estate. The key legal issue was whether it was in the best interest of the beneficiaries to remove Dianne and Francis as trustees. The court considered the principles of expedience in estate administration, the testator's wishes, and the potential for hostility and conflict between the trustees to prejudice the interests of the beneficiaries. The court found that the conflict between the trustees had reached a level where it was impossible for them to make decisions necessary for the proper administration of the estate. The court concluded that Susanne was a suitable person to administer the estate alone and ordered that Dianne and Francis be removed as trustees and executors, leaving Susanne as the sole executor and trustee of the estate.

The court's reasoning was based on the evidence presented, which showed that Dianne and Francis had been unable or unwilling to cooperate with Susanne in the administration of the estate. The conflict between the siblings had reached a level where it was impossible for them to make decisions and take steps necessary to best realise the value of the estate's property. The court found that Susanne was a suitable person to administer the estate alone and would be able to make decisions over the future of the home in the way that was best able to benefit all three siblings who were entitled to share in the estate. The court also considered the potential for further delay and the cost of appointing an independent trustee, which would further erode the value of the estate. The court ordered that Dianne and Francis be removed as trustees and executors, leaving Susanne as the sole executor and trustee of the estate. The court also ordered that Susanne's reasonable costs should be paid from the estate so that they will be shared equally by those entitled to benefit from the estate.

Orders