Greenwood v Simpson - [2018] NZHC 845

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-000524

[2018] NZHC 845

IN THE MATTER Of the Estate of OSBORNE HOLMES GREENWOOD

BETWEEN

KELVIN PETER GREENWOOD

Plaintiff

AND

MARILYN CORRINE SIMPSON AND BRIAN KEITH GREENWOOD

Defendants

Hearing: 9 April 2018

Appearances:

D M Lester for the Plaintiff Defendants in person

Judgment:

30 April 2018

JUDGMENT OF DUNNINGHAM J

Decision

A.The defendants are jointly and severally liable to the plaintiff in the sum of $60,613.41.

B.Costs will be determined in accordance with the procedure set out at [63].

ESTATE OF OSBORNE HOLMES GREENWOOD [2018] NZHC 845 [30 April 2018]

Introduction

[1] The late Osborne Holmes Greenwood, and his wife Kura, had five children, four of whom are alive today. They are the plaintiff, Kelvin Peter Greenwood (Kelvin), the defendants, Marilyn Corrine Simpson (Marilyn) and Brian Keith Greenwood (Keith), and another sister, Kirsten Moghni (Kirsten), who lives in Sydney.

[2] The present dispute has arisen because Marilyn and Keith, as executors and trustees of the estate of their father, sold the major asset of the estate, the deceased’s home, to Marilyn’s son, Andrew James Simpson (Andrew) for approximately
$330,000, when its agreed market value at the time of sale was $570,0000.

[3] Kelvin says this was in breach of their obligations, as trustees and executors of the estate, to act prudently and reasonably in the sale of the property and to obtain a reasonable market price for the property. He claims that the shortfall of $239,427.94,1 being the difference between the market value of $570,000 and the sale price of
$330,572.06, should be repaid to the estate.

[4] Marilyn and Keith say that they were simply following their father’s instructions given to them during his lifetime, which was that he wanted them to sell the property to Andrew for “around $300,000”. They consider there was no inconsistency between carrying out their father’s verbally expressed wishes and the terms of the will which required them to sell or cash up the estate’s assets and divide them equally between the surviving four children. Accordingly, they are not in breach of their obligations as trustees and executors of the estate.

The issue

[5] The key issue arising in this litigation is whether the defendants had a duty to obtain a reasonable market price for the property, or whether their duties were properly discharged by selling the property in accordance with the deceased’s verbal instructions.

1 Information which came to light during and following the hearing suggests the shortfall is slightly more than this as the sale price was actually $327,546.36.

Background

[6] The late Mr Greenwood owned a home at 42 Torquay Place, Bryndwr, Christchurch (the property). His earlier will named Keith and another daughter, Sherron Ann Hill, as executors and trustees. In October 2005, Mr Greenwood made a new will where, because of Sherron’s ill health, he replaced her as trustee with his daughter Marilyn. Sherron has since died, leaving no surviving children.

[7] The…

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 Greenwood v Simpson

Details

AGLC: Greenwood v Simpson [2018] NZHC 845
Case: [2018] NZHC 845
Decision Date: 30 April 2018

CaseChat Overview and Summary

The High Court of New Zealand, Christchurch Registry, was tasked with adjudicating on the dispute between Kelvin Peter Greenwood and his siblings, Marilyn Corrine Simpson and Brian Keith Greenwood, concerning the sale of their deceased father's property at an undervalue. Kelvin contended that the sale of the property for $327,546.36, significantly below its market value of $570,000, breached the executors' and trustees' obligations to act prudently and reasonably. Marilyn and Keith defended their actions by asserting that they were merely following their father's instructions, given during his lifetime, to sell the property to Andrew for around $300,000.

The central issue before the court was whether the defendants had a duty to obtain a reasonable market price for the property or if their duties were discharged by adhering to their father's verbal instructions. The court examined whether the deceased's verbal instructions had testamentary effect, if the executors owed fiduciary, moral, or ethical duties to their father, and whether there was a legally binding agreement between the deceased and Andrew.

The court found that the deceased's verbal instructions did not have testamentary effect as there was no ambiguity in the will, and thus no need to rely on external evidence. The court clarified that executors have duties as trustees and must act prudently and properly in managing the estate. Furthermore, any agreement between the deceased and Andrew was not legally binding as it was not in writing and lacked essential terms. The court concluded that the defendants breached their duties by selling the property at a significant undervalue and failed to act reasonably, particularly considering the conflict of interest and lack of legal advice.

The court ordered the defendants to jointly and severally pay Kelvin $60,613.41, representing the shortfall in the property's sale price. The court declined to award interest on the sum, considering the plaintiff's benefits from the defendants' efforts to minimise costs. The court also directed that costs follow the event and provided a procedure for the parties to submit their costs claims within specified timeframes.

Orders