Milne v Partington - [2021] NZHC 1640

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-0820

[2021] NZHC 1640

BETWEEN
ALLISON MILNE

Plaintiff

AND

BARBARA ELLEN PARTINGTON and WARREN JOHN PARTINGTON as

executors and administrators of the ESTATE OF DONALD GEORGE MILNE (deceased)

Defendants

Hearing: 22 – 25 February 2021

Appearances:

J Turner and V Harris for the Plaintiff

J Armstrong and J Daly for the Defendants

Judgment:

5 July 2021

JUDGMENT OF HARLAND J

Solicitors:
McVeagh Fleming Lawyers, Albany, Auckland Armstrong Murray, Takapuna, Auckland

MILNE v PARTINGTON [2021] NZHC 1640 [5 July 2021]

Overview of the case

[1] On 8 July 2019, at 92 years of age, and after a period of declining health, Donald Milne1 died. Less than a fortnight before he died and without legal advice, he entered into what appears to be an unconditional private agreement to sell his house at 224 Molesworth Drive, Mangawhai to his niece and goddaughter, Allison Milne, for the sum of $470,000, when the market value of the property was $645,000. Allison now applies for specific performance of that purported agreement.

[2] Barbara and Warren Partington are Don’s sister and brother-in-law by marriage and are his executors under his last will. Neither they nor Allison benefit from this will. The beneficiaries of the will are Barbara’s nieces and nephews and Don’s stepchildren, receiving half of his estate, with the remaining half being left to charities. Don’s house is the main asset in his estate.

[3] As executors, Barbara and Warren oppose Allison’s claim of specific performance of the agreement. They say that the agreement was conditional on Don securing a unit in the Summerset Falls retirement village in Warkworth, an event which did not eventuate due to the level of care he required. If I agree, they say that the agreement should be rectified to record this condition or that the plea of non est factum applies to the agreement. They also say that the agreement was in all the circumstances an unconscionable bargain. If they are successful, the agreement would be at an end; however, Barbara and Warren do not object to Allison purchasing the house at market value.

[4] Although Don’s capacity to enter the agreement was not challenged, whether he suffered from a significant disability because of his general state of health at the time he signed the agreement is in issue. Barbara and Warren’s case is that because of his health challenges at the time, Don’s ability to assess his own interests was diminished, making him susceptible or vulnerable to being taken advantage of, which they say is what Allison did.

1 Donald was known by all as “Don”. During the hearing the parties and most of the witnesses preferred to be called by their first names. I reflect this preference by adopting it in my judgment.

[5] Allison says Don was fully cognisant of what he was doing and that he freely and rationally chose to enter the agreement with her. She says…

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 Milne v Partington

Details

AGLC: Milne v Partington [2021] NZHC 1640
Case: [2021] NZHC 1640
Decision Date: 5 July 2021

CaseChat Overview and Summary

In Milne v Partington, the High Court was asked to determine whether a niece could compel her uncle to sell his house to her for $470,000, significantly less than its market value of $645,000. The defendants opposed the claim on the grounds that the agreement was conditional on the uncle being able to secure a care unit, or if not, the agreement was unconscionable. The Court held that the agreement was not conditional and was an unconscionable bargain. The plaintiff's claim for specific performance was dismissed.

The Court found that the agreement was not conditional on the uncle securing a care unit because the parties intended to be bound by the agreement and the occupancy condition was added later. The Court also found that the agreement was an unconscionable bargain because the uncle suffered from a qualifying disability due to his poor health, which significantly diminished his ability to assess and act in his own interests. The plaintiff knew about this disability and passively accepted the benefit of the agreement in circumstances where she had an obligation in equity to ensure that the uncle received proper and full independent legal advice about the implications of entering into the agreement. The Court held that the bargain was not fair and reasonable because the price was well less than market value. The defendants are entitled to costs.

Orders