The High Court has recently accepted an application by three children to have their father’s widow removed as the executor of his estate.

The father passed away in 2021. He had two testamentary documents: a Will, and a contracting out agreement with his widow.

The Will provided $600,000 to each of the father’s three children and left the remainder of the estate to his widow.  

The contracting out agreement included a clause for the division of relationship property in the event that the father or widow passed away. The agreement stated that the surviving party would receive 80% of the relationship property.

Upon the father’s death, his widow decided to receive her entitlement under the Will rather than the contracting out agreement.

The father’s children sought to remove the widow as the executor and have an independent executor appointed. This was so they could potentially claim against the father’s share of the relationship property.

The children applied for summary judgment having the widow removed as the executor.

Summary judgment allows the Court to make a decision without a full hearing, making it cheaper and quicker than going through the full court process. This can be applied for when a party believes the other party has no arguable grounds against their claim.

There are three elements which must be met for an application of summary judgment:

  1. Satisfactory explanation for any delay;
  2. Risk of miscarriage of justice; and
  3. Merits of the applicant’s case.

In this case, the application for summary judgment was delayed by over seven months from when the children’s first claim was filed.

The Court accepted that the children had to first instruct lawyers, and write to the defendant raising the issues in these proceedings. From that point, the application was commenced relatively quickly, particularly considering the children all lived overseas.

The Court concluded that this explanation for the delay was satisfactory.

The Court also noted that the widow did not raise any ‘specific risk of miscarriage of justice’. The Judge recognised that there was a ‘possibility of delay’ arising from the proceeding, but that was not enough to risk a miscarriage of justice.

The case for a summary judgment therefore turned on the third element, whether the children’s claims had any merit.

The children argued that leaving the relationship property assets outside of what they could claim under the estate would ‘cause serious injustice’.

The relationship assets and the widow’s assets amounted to approximately $24 million, while the children could only claim against the $2.9 million of separate assets under the Will.

The children claimed that while the widow was executor she would not apply to have the relationship property divided.

They also argued that it would be unconscionable if the widow could retain 100% of the assets under the contracting out agreement.

It was claimed by the children that until an independent executor had considered:

  • the contracting out agreement and its relevance,
  • ascertained the estate’s assets and liabilities,
  • sought directions from the Court, and
  • potentially applied for leave to divide relationship property,

their claims against the estate could not be properly considered.

The children relied on other cases where the Courts had replaced an executor for the purpose of considering a claim to divide relationship property under an estate.

The Court considered the fact that the estate had significant value and currently the children could only claim a small portion of it. Further, the children’s circumstances such as their individual financial positions needed to be considered.

The Court could not conclude that the children’s claims were without merit. The claims had sufficient merit to justify leave being granted to apply for summary judgment, and the children were successful in getting that leave.

If you think you are being treated unfairly by an executor, or have a claim under an estate, it is important to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

 

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.