Patricia Gemmell was removed as administrator of her late husband’s estate after selling his farm at Raupunga between Napier and Wairoa to his nephew at less than market price leaving estate beneficiaries in the cold. The High Court appointed a new administrator and ordered recovery of the land.
Thomas Gemmell died in 2008, leaving no will. Statutory rules in the Administration Act saw his 79 hectare Raupunga farm and a home in Masterton divided between his widow Patricia and his four children, three of whom were children from a previous relationship. The High Court appointed Patricia to act as estate administrator. As such, she was registered on title to the properties.
Evidence was given that Patricia came to the view that since she was registered as the owner, the properties were hers. Advice from lawyers that she held title as trustee were ignored. Instead of having title later re-registered in names of estate beneficiaries she proceeded to transfer title over the Raupunga farm to her sister-in-law’s son: Padre Phillips. The farm was valued at $325,000 two years after Thomas’ death. The sale to Padre nearly a decade later was at a price of $150,000 with the only cash changing hands being a $15,000 deposit, money paid by Padre’s mother Bessie. Padre said money he had spent managing the farm served as a credit for the balance of the purchase price. The price paid was low because the farm was run down, he said.
Justice Isac expressed doubts about justifications provided for the deal.
Patricia was removed as administrator with one of Mr Gemmell’s sons appointed as replacement. Title to the farm was transferred into his name as administrator. Both Patricia and her sister-in-law Bessie were in breach of trust for selling the land at undervalue, Justice Isac ruled. Padre was also liable, having arranged with mother Bessie for the deal to be done.
Patricia was penalised for her breach of trust as administrator with Justice Isac ruling she was not to share in the value of the Raupunga farm as a beneficiary; the value of the farm was to be split only between Thomas Gemmell’s four children as beneficiaries.
re Estate Thomas Gemmell – High Court (30.11.21)
22.009