McKellow v Domney - [2020] NZHC 1118

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-611165

[2020] NZHC 1118

UNDER the Administration Act 1969

IN THE MATTER

of the Estate of Noeline Ada Domney of Palmerston North in New Zealand, Retired, Deceased

BETWEEN

JUDITH KAY MCKELLOW

Applicant

AND

STEVEN LYALL DOMNEY AND ROSS PAUL DOMNEY

Respondents

AND

LYALL WILLIAM DOMNEY

Interested party

Hearing: 15 May 2020

Counsel:

M J Wenley for the Applicant A McEwan for the Respondents

D I Sheppard for the Interested party

Judgment:

26 May 2020

JUDGMENT OF CULL J

[1] Judith McKellow applies for orders removing her brothers Steven Domney and Ross Domney as administrators of their late mother’s estate. She seeks an order vesting the property in her as the continuing administrator and a specific order vesting the estate’s assets in her sole name as executor. The application is made under s 21 of the Administration Act 1969 (the Act) on the grounds that Steven and Ross are acting out of self-interest by refusing to complete the administration of their mother’s estate.

MCKELLOW v DOMNEY AND ANOR [2020] NZHC 1118 [26 May 2020]

[2] There is hostility among the three administrators and at the heart of the current application is the life tenancy granted to their 89-year-old father, who lives in the principal asset of the estate, the property at Lowestoft Place in Palmerston North (Lowestoft Place). The life tenancy was not granted under the testatrix’s will. By agreement between the testatrix and her three children, the three entered into a Residential Tenancy Agreement with their father in their capacity as administrators of their mother’s estate. Lyall Domney, the father of Judith, Steven and Ross and the former spouse of Noeline Domney, initially filed an appearance reserving his rights as an interested party.

[3]Judith’s application is opposed by her brothers and her father.

Background facts

[4] The testatrix, Noeline, died at Palmerston North on 2 August 2017. She made her last will dated 23 May 2012 and probate was granted to the three administrators on 17 August 2017.

[5]Noeline’s will (the Will) provided:

(a)a bequest of $5,000 to each of Noeline’s grandchildren;

(b)Noeline’s half share in two properties in Douglas Street, together with joint investments held with Lyall, to Lyall;

(c)furniture and household effects were left to Lyall; and

(d)the residue of her estate was left in three equal parts to:

(i)the Bayne and Judith McKellow Family Trust;

(ii)Steven; and

(iii)Ross.

[6] Noeline’s bequest to her grandchildren and the devise of the Douglas Street properties to Lyall have been made, leaving only the residue of her estate yet to be distributed. The administrators cannot agree to the distribution of the residue.

[7] The Will records a loan arrangement made by Noeline to Steven to enable him to buy property. She left directions to her trustees that the loan and the interest she had paid should be brought into account and charged against Steven’s share in her residuary estate. Clause 7 of 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 McKellow v Domney

Details

AGLC: McKellow v Domney [2020] NZHC 1118
Case: [2020] NZHC 1118
Decision Date: 26 May 2020

CaseChat Overview and Summary

Judith McKellow has applied to the High Court of New Zealand for the removal of her brothers, Steven Domney and Ross Domney, as administrators of their late mother's estate, Noeline Ada Domney. Judith argues that Steven and Ross are acting out of self-interest and are refusing to complete the administration of the estate. She seeks an order vesting the property in her as the continuing administrator and a specific order vesting the estate's assets in her sole name as executor. The legal issues in this case revolve around the removal of administrators under s 21 of the Administration Act 1969 and the protection of a life tenancy granted to their father, Lyall Domney, in the principal asset of the estate, the property at Lowestoft Place in Palmerston North.

The court considered the principles outlined in previous cases that should guide its decision on the removal of an administrator. These principles include the court's duty to see estates properly administered, the importance of the testator's appointment of executors, and the need to consider the interests of the beneficiaries. The court also noted that mere incompatibility between trustees and beneficiaries is not enough to warrant removal, and that expedience is the focus of the court's jurisdiction under s 21 of the Act.

The court found that Steven and Ross were respecting the wishes of Noeline, who had promised their father, Lyall, a life interest in the property at Lowestoft Place. This promise was acknowledged by all parties, and the administrators had entered into a Residential Tenancy Agreement with Lyall. The court held that there were no grounds for concern that the estate was not being properly administered and that it was not expedient to remove Steven and Ross as administrators or to distribute the estate without the full agreement of the executors before Lyall's life tenancy terminates.

The application was dismissed, and if no agreement can be reached among counsel as to costs, counsel may file a short memorandum, no more than five pages within 20 working days of this decision.

Orders