Remembered as owner and designer of the Memsahib fashion line, the late Valerie Svendsen left another legacy, a Waiheke property valued at $1.7 million fought over following her death.
Having no children, Ms Svendsen’s will divided her estate equally between a niece named as Linda May McCarthy and a ‘surrogate’ nephew Neil Peter McMillan. Mr McMillan claimed he had been promised full ownership of the Waiheke property in return for financial assistance provided Valerie and her husband, Alan, during their lifetime.
The High Court was told of Alan requesting in 2007 $185,400 to meet costs of renovating Waiheke. Mr McMillan was a regular acquaintance of the Svendsens. He had known them all his life. In 2007, he was teaching in London. Mr McMillan told the court he was promised the Waiheke property as an inheritance if he provided the money interest free. He borrowed funds from his London bank, sending the proceeds to the Svendsens in New Zealand. It was used to create a kitchen for Ms Svendsen; a library for her husband’s books. Mr McMillan completed repayment of the London loan in 2015, paying interest of up to 7.6 per cent in the interim. There was legal advice that their agreement should be reduced to writing; a proposed contract was never drawn up.
On the death of the widowed Ms Svendsen, Mr McMillan found he was to share the Waiheke property with Ms McCarthy. He sued. Nine individuals, including mutual friends of the Svendsens, provided High Court evidence of the close association between Mr McMillan and the Svensdsens. They recounted his many acts of kindness over the years; some recounted Ms Svendsen talking of an agreed inheritance in return for an interest free loan. Mr McMillan arranged Ms Svendsen’s funeral. In contrast, Ms McCarthy said Ms Svendsen had told her she was opposed to the arrangement. The court was told Ms McCarthy had less involvement in the Svendsens life compared with Mr McMillan. She lived most of her life in the United States, returning to New Zealand in 2008. Her personal visits to Ms Svendsen were infrequent until 2017 when gold card eligibility allowed her free ferry travel to Waiheke. She did not attend Ms Svendsen’s funeral.
Justice Brewer ruled provision of financial assistance could support a claim under the Law Reform (Testamentary Promises) Act. The Act allows compensation for failures to honour promises made whilst alive; it does not necessarily directly enforce any promise made. Mr McMillan was awarded three-quarters of the Waiheke property’s value. Mr McMillan took the financial risk of taking out an interest-bearing loan, on-lending interest free and without security in order to increase the Svendsens enjoyment of life.
Mr McMillan is to receive three-quarters of Waiheke’s net sale proceeds; Ms McCarthy the remaining quarter.
Re Estate of Valerie Svendsen – High Court (17.05.19)
19.091