Johnston-O'Loughlin v Johnston - [2025] NZHC 276

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-000783

[2025] NZHC 276

UNDER THE Administration Act 1969 and the Property Law Act 2007

IN THE MATTER OF

Estate of Heather Joy Johnston

BETWEEN

DESTINEE-JOY JOHNSTON- O’LOUGHLIN

Applicant

AND

CUSHLA-JOY JOHNSTON

Respondent

Hearing: 4 February 2025

Appearances:

A T Davis for the Applicant Respondent in Person

Judgment:

25 February 2025

JUDGMENT OF POWELL J

This judgment was delivered by me on 25 February 2025 at 12.00 pm.

Pursuant to R 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar

DESTINEE-JOY JOHNSTON-O’LOUGHLIN v CUSHLA-JOY JOHNSTON [2025] NZHC 276 [25 February 2025]

[1] Destinee-Joy Johnston-O’Loughlin (“Destinee-Joy”) has applied under s 21 of the Administration Act 1969 (“the Act”) for the removal of Cushla-Joy Johnston (“Cushla-Joy”) as an administrator of the estate of Heather Joy Johnston (“Mrs Johnston”).

[2] As Cushla-Joy took no formal steps to file any evidence or submissions in opposition to the application in accordance with the directions of Campbell J dated 17 October 2024, the hearing of the application proceeded by way of formal proof. Despite this, as Cushla-Joy was present, she was allowed to address the Court at the hearing.

Background

[3] Mrs Johnston died in February 2023. Destinee-Joy and Cushla-Joy are the sole beneficiaries of Mrs Johnston’s estate. The principal asset of the estate is Mrs Johnston’s home in Papakura (the Property).

[4] Destinee-Joy and Cushla-Joy have been the administrators of Mrs Johnston’s will since August 2023, after the original executor named in Mrs Johnston’s will renounced probate.

[5] Since Mrs Johnston’s death, Cushla-Joy has been residing at the Property without payment of rent, initially in the house located on the Property, and after this was severely damaged by fire at the end of October 2024, in a granny-flat at the rear of the Property.

The application

[6] Destinee-Joy’s position is that it is necessary to sell the Property in order to pay the debts of the estate (primarily legal costs incurred by Mrs Johnston totalling some $34,000). She notes that Cushla-Joy has been given time to see if she could buy out Destinee-Joy’s share of the Property but has not done so. Likewise, although a sale order was made by consent in August 2024, Cushla-Joy unilaterally pulled out of an agreement for the sale and purchase of the Property shortly before it was due to go unconditional, and has subsequently refused to commit to a later offer.

[7] Destinee-Joy also has concerns about the ability of Cushla-Joy to meet the outgoings of the Property while she remains in possession. Of particular concern was Cushla-Joy’s cancellation of the insurance policy which would have had a significant impact on the value of the estate had Destinee-Joy not realised that insurance had been cancelled and stepped in and arranged insurance herself.

The position of Cushla-Joy

[8] Cushla-Joy advised at the hearing that she accepts that the Property must be sold. She advised that she had been looking after the Property…

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.

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Details

Case: [2025] NZHC 276
Decision Date: 25 February 2025

CaseChat Overview and Summary

In the matter of the estate of Heather Joy Johnston, Destinee-Joy Johnston-O’Loughlin applied for the removal of Cushla-Joy Johnston from her role as an administrator of the estate. Destinee-Joy and Cushla-Joy are the sole beneficiaries of the estate, with the principal asset being the deceased’s home in Papakura. Destinee-Joy argued that the property needed to be sold to cover the estate's debts, primarily legal costs amounting to approximately $34,000. She contended that Cushla-Joy had been uncooperative in this regard, having pulled out of a sale agreement and cancelled the property insurance without informing Destinee-Joy. Cushla-Joy, on the other hand, acknowledged the necessity of selling the property but argued that she had been managing the property responsibly and had withdrawn from the sale due to the low offer price.

The court needed to determine whether it was expedient to remove Cushla-Joy as an administrator under Section 21 of the Administration Act 1969. The legal principles guiding such a decision include the duty to properly administer estates and execute trusts, the importance of considering the wishes of the deceased, and the necessity of focusing on the beneficiaries' interests. The court had to weigh the strained relationship between the co-administrators against the need for efficient estate administration.

The court found that Cushla-Joy’s actions, including her withdrawal from the sale agreement and failure to maintain insurance, demonstrated an inability to facilitate the proper administration of the estate. Given the significant delay and lack of progress in estate administration, the court concluded that Cushla-Joy’s continued role as an administrator would impede the estate's proper administration. Therefore, the court ordered the removal of Cushla-Joy as an administrator, leaving Destinee-Joy as the sole administrator. The court reserved the right for Destinee-Joy to seek further orders for the sale of the property and indicated that it would determine costs on the papers.

Orders