Neumegen v Durrans - [2020] NZHC 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-000689

[2020] NZHC 2018

UNDER Trustee Act 1956, s 75

IN THE MATTER OF

the Estate of JEAN DURRANS

BETWEEN

PETER CARL NEUMEGEN as executor of the estate of JEAN DURRANS

Plaintiff

AND

JANET MARY DURRANS

Defendant

Hearing: 06 August 2020

Appearances:

A McDonald for the Plaintiff

No appearance for the Defendant

Judgment:

10 August 2020

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 10 August 2020 at 4.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
Daniel Overton & Goulding, Auckland Akarana Chambers, Auckland

NEUMEGEN v DURRANS (estate of JEAN DURRANS) [2020] NZHC 2018 [10 August 2020]

Introduction

[1] The plaintiff, Mr Neumegen, is the sole executor of the estate of the late Jean Durrans. Mrs Durrans had two adult children, Andrew Durrans and Jean Durrans (known as JD). I will refer to them as Andrew and JD respectively. They are the residuary beneficiaries of Mrs Durrans’ estate.

[2] JD is the defendant. She has made or indicated some claims against the estate (beyond her claim as a residuary beneficiary), but has not initiated or pursued those claims in any formal way. Mr Neumegen believes the claims are, subject to one exception, without merit. He wishes to complete administration of the estate, but feels that he cannot while JD’s potential claims hang over it.

[3] To resolve this impasse Mr Neumegen served a notice on JD under s 75 of the Trustee Act 1956. The notice called upon JD to bring a proceeding to enforce her claims within three months. JD did not bring any proceeding.

[4] Mr Neumegen then commenced this proceeding under s 75, seeking orders barring JD’s claims, and enabling him to deal with the estate without regard to those claims. He made a detailed affidavit in support, dated 18 May 2020.

[5] JD was served with the proceeding on 28 May 2020. She did not file a defence. Mr Neumegen sought judgment by default, and a formal proof hearing was held for that purpose.1

Background

[6] Mrs Durrans died on 7 August 2017. Mr Neumegen was appointed executor under her will, which was dated 22 June 2017. Probate of the will was granted on 16 November 2017.

[7] The principal assets of the estate were a three-fifths share in a property that was Mrs Durrans’ former home (the property), monies held in bank accounts and various investments. Those assets have all been realised.

1 High Court Rules 2016, r 15.9.

[8] The will provides for gifts of money and specified items to various individuals. Those gifts have all been made. The residue of the estate, as at March 2020, was
$998,392.38.

JD’s claims

[9] JD has made or indicated she has three claims against the estate. In summary, the claims are for:

(a)reimbursements of various alleged costs incurred by her on the estate’s behalf;

(b)entitlement to the proceeds…

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 Neumegen v Durrans

Details

AGLC: Neumegen v Durrans [2020] NZHC 2018
Case: [2020] NZHC 2018
Decision Date: 10 August 2020

CaseChat Overview and Summary

In this case, Mr. Neumegen, as the executor of Jean Durrans' estate, sought orders barring claims made by one of the beneficiaries, Janet Durrans (JD), and enabling him to distribute the estate without regard to those claims. JD had made claims for reimbursement of costs, entitlement to the proceeds of a National Bank account, and entitlement to a share of a property held by her brother's family trust. Mr. Neumegen rejected these claims and served a notice on JD under s 75 of the Trustee Act 1956, calling upon her to bring a proceeding to enforce her claims within three months. JD did not bring any proceeding, and Mr. Neumegen subsequently commenced this proceeding.

The court considered the legal issues of whether the substantive orders should be made, what costs should be awarded against JD, whether an order should be made entitling Mr. Neumegen to deduct any costs award from JD's share of the residuary, and whether an order should be made that Mr. Neumegen's own costs as executor as they relate to the proceeding be borne by JD from her share of the residuary estate. The court held that the substantive orders should be made, subject to two modifications. The court also held that costs on a 2B basis should be awarded against JD, and that Mr. Neumegen should be entitled to deduct that costs award from JD's share of the residuary estate prior to distribution to her. However, the court declined to make an order that Mr. Neumegen's own costs be borne by JD, as this order was not sought in the statement of claim and JD had not been given notice of it.

In conclusion, the court made orders barring JD from bringing any claim against the estate for reimbursement of costs (other than the $2,869.94 that Mr. Neumegen had accepted), entitlement to the proceeds of Mrs. Durrans' National Bank account, or entitlement to any part of the two-fifths share that Andrew James Durrans' family trust formerly held in Mrs. Durrans' former home. The court also made orders enabling Mr. Neumegen to distribute the estate without regard to the above claims (other than the $2,869.64 claim for reimbursement that Mr. Neumegen had accepted), and entitling him to deduct the costs award from JD's share of the residuary estate prior to distribution to her.

Orders