04 September 2015

Estate: Mahon v. Mahon

Melva Mahon died a widow aged 88 leaving a net estate worth more than $5.3 million, the fruits of a family business operating amusement rides at A&P shows up and down the country.  The High Court dismissed claims from members of one branch of her family that they had been short-changed, not receiving half the value of her estate.
The High Court was told Melva Mahon and her husband had two children: Bill and John.  Bill died tragically in 2004, killed in an accident while servicing one of their amusement rides at an Easter Show.  Keeping the show on the road fell primarily on John, with help from both his son and one of Bill’s sons.  Melva’s will on her death divided the bulk of her estate 60% to John and his family, 40% to Bill’s family.  Bill’s descendants sued, claiming they were entitled to a 50% share.
They first argued Melva had been unduly influenced by John.  She signed no fewer than 12 wills between 1972 and 2008.  It was only in the last three wills between 2004 and 2008, after both her husband and son Bill had died, that the 60:40 disparity appeared.  Bill’s family said this disparity arose because of Melva’s deteriorating health and the influence John held over her.  Justice MacKenzie dismissed the claim of undue influence.  The evidence conveyed a clear picture of a strong-minded woman not easily susceptible to persuasion against her better judgment, he said.  Indications were that she favoured John because of her concerns about the continuation of the family business and the burden she perceived as falling on John.
Bill’s family also argued that a farm at Whatawhata and two sections on Great South Road in Ngaruawahia were not part of Melva’s estate; she held them on trust in equal shares for each branch of the family.  Evidence was given that the properties were transferred to Melva by her husband in the 1980s, ostensibly to keep them safe from Inland Revenue investigations into tax fraud.  Bill’s family said there was an unstated intention that the transfers would be unwound after any tax investigation with Bill and John ultimately to get half each.  Justice MacKenzie said there was no evidence of a “common intention” that the properties were held on trust with Bill and John the ultimate beneficiaries.  Neither of them made any contribution to the properties.  If there were any “common intention”, he said, it would most likely be for Melva to transfer the properties back to her husband.
Finally, Bill’s family made a claim for a further contribution from Melva’s estate under the Family Protection Act.  This allows a claim where a family member requires maintenance and support.  Dismissing their claim, Justice MacKenzie said the Act is not designed to rewrite a will just to redress a perceived inequality in distributions.  He pointed out that each branch of the family had shared equally in taking control of the family business, separate from Melva’s estate.
Mahon v. Mahon – High Court (4.08.15)

15.101