Karen Elizabeth Eckhout is under threat of arrest for contempt of court after failing to properly distribute assets from her late husband’s estate.
Dan Eckhout died in 2017. What followed was an arm-wrestle over money between his third wife, 59 year old Karen, and a daughter from his first marriage, 50 year old Michelle. Born in South Africa, Dan led an itinerant life working on oil rigs around the world. Dan had five children and a stepdaughter from his first two marriages. Michelle was the only child to challenge Dan’s final will which left nearly all his assets to widow Karen. With Michelle living on the Channel island of Guernsey and Karen now in Perth, West Australia, disputes over Dan’s will have been carried out long distance in the New Zealand courts.
In 2021, the High Court ruled Michelle was entitled to $350,000 plus her legal costs in a successful claim under the Family Protection Act against her late father’s estate. Michelle and her father had a close and mutually supportive relationship from when she turned eighteen, Justice Downs said. Her father had offered financial support shortly before his death for her to purchase a home.
Karen was appointed administrator of her late husband’s estate after a South Africa executor named in Dan’s will declined to act. The High Court was told of difficulties in pinning down the extent of Dan’s assets. There was a family trust, now controlled by Karen as surviving trustee, with assets of some $2.1 million. The court was told this trust had been dissolved with Karen taking ownership of all assets. These trust assets did not form part of Dan’s estate on his death.
Karen proved evasive in disclosing what assets Dan owned. It took a court order to force disclosure. In May 2021, Karen filed a statutory declaration stating she had received some $1.6 million of which $642,400 was held in a Commonwealth Bank account in Australia. While declaring she held this money ready to hand over if Michelle’s claim was successful, Karen did not release any money. It took further court orders before Commonwealth Bank handed over the funds. By then, there was only $4828 in the account.
Justice Campbell issued a warrant for Karen’s arrest. Her non-compliance with court orders was flagrant, he said. Execution of the arrest warrant was suspended for one month, giving her time to pay money due Michelle. Karen is liable to pay in excess of $450,000; the court-ordered Family Protection claim plus all of Michelle’s legal costs to date.
Connolly v. Eckhout – High Court (1.04.21, 15.06.21 & 25.02.22)
22.044