Public Trust v Vernon

[2015] NZHC 1928

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-11285 [2015] NZHC 1928

BETWEEN

PUBLIC TRUST

Plaintiff

AND

ASHLEY WILLIAM VERNON AND BEVERLEY KAY VERNON Defendants

Hearing:	9-12 June 2015
Counsel:	H N McIntosh and H M Macfarlane for Plaintiff A C Beck for Defendants
Judgment:	13 August 2015

JUDGMENT OF THE HON JUSTICE KÓS

Index

Facts .......................................................................................................................[3]

Essential dates....................................................................................................[4] A family ..............................................................................................................[5] No funeral for Chris ...........................................................................................[8] An agreement to pay $50,000 to Ashley? .........................................................[10] Wills..................................................................................................................[20] Powers of attorney ...........................................................................................[22] Naomi’s death; Kenneth moves in with the Vernons ........................................[24] Kenneth’s health in 2006 ..................................................................................[27] Kenneth’s assets and accounts in March 2006.................................................[35] Ashley forges four cheques on Kenneth’s account, for his benefit ...................[36] The state of the family 2006–2008 ...................................................................[49] A loan from Kenneth to Kylie? .........................................................................[52] Ashley operates the accounts ...........................................................................[57] An inexplicable series of transfers ...................................................................[61] Depletion of the accounts 2006-2008 ..............................................................[65] Kenneth’s health: 2007–2008...........................................................................[69] Ashley’s dealings with WINZ............................................................................[73] Kenneth’s assets and accounts in September 2008 ..........................................[80] Kenneth’s death ................................................................................................[81] Inquiries into Kenneth’s estate, and Ashley’s responses ..................................[83] Appointment of Public Trust as administrator .................................................[97] The Public Trust tries to get answers ...............................................................[98]

PUBLIC TRUST v VERNON & ANOR [2015] NZHC 1928 [13 August 2015]

Proceedings are issued...................................................................................[106] How much money have the Vernons received? ..............................................[107] Assessment of the witnesses .............................................................................. [110] Pleadings ............................................................................................................ [114] Issues .................................................................................................................. [118] Issue 1: Should the payments to the Vernons be set aside for undue influence?[120] A relationship of influence? ...........................................................................[123] Was influence exercised?................................................................................[124] Was the influence undue? ...............................................................................[127] Were Kenneth’s assets depleted as a result of undue influence? ....................[128]

Is Equity’s conscience exercised? ..................................................................[129] Conclusion .....................................................................................................[130] Issue 2: Should the payments be set aside for breach of fiduciary duty? ..........[132] Issue 3: Should the payments be set aside as unconscionable? .........................[138] Issue 5: Are the Public Trust’s claims time-barred? ...........................................[142] Submissions ....................................................................................................[143] Discussion ......................................................................................................[147] Issue 6: What relief should be granted? .............................................................[154] Summary of conclusions ....................................................................................[161] Result..................................................................................................................[162]

[1]      After the death of his wife an elderly man goes to live with son and daughter- in-law.  All his assets in the world come to a little under $330,000.  When he goes into a rest home 30 months later, he has just $11,500.  When he dies, another three years later, just $1,400.  The son has spent his father’s money.  With, he says, his father’s blessing.  But the administrator of the father’s estate says the expenditure is

tainted with undue influence and must be repaid.1

[2] A summary of the conclusions I reach may be found at [161].

Facts

[3]      A detailed statement of agreed facts was filed by counsel.  The findings of fact that follow are drawn from that document or are further conclusions reached, on the balance of probabilities, on the evidence.  Where allegations seriously adverse to reputation  are  advanced,  strong  evidence  is  necessary for  each  allegation  to  be

sustained.2

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