Wellington couple who spent all elderly father’s estate money inheritance appeal dismissed
A couple who spent the bulk of a family inheritance while the benefactor was alive, depriving a grieving nephew of his share, have had their appeal dismissed.
Kenneth Vernon was in poor health and depressed after losing a son and his wife within a five-month period, when he moved in with his surviving son, Ashley Vernon.
He was in line to inherit half of his father’s estate, and had been assigned enduring power of attorney.
Kenneth Vernon’s grandson, Dante Pauwels-Vernon, 19, of Otaki, whose father Chris died of cancer in 2005, aged 51, was due the other half.
When Vernon went to live with Ashley and his wife Beverley of Tawa, north of Wellington, in 2006, the retired publican and war pensioner had assets worth nearly $330,000.
But by the time he moved into a rest home in October 2008 his assets were reduced to a bank balance of $11,000.
He died aged 91 in September 2011 with $1400 to his name.
The couple wound up in the High Court at Wellington faced with accounting for $280,354, plus seven years’ interest after being sued by the Public Trust for the outstanding inheritance money owed to Pauwels-Vernon.
Ashley Vernon told the trial he believed his father wanted them to have the money, and the spending was on living expenses for the whole household.
However the Court heard how on 11 August 2006, the year after Ashley Vernon was given power of attorney, he signed an agreement to sell his father’s house for $290,000.
He used power of attorney to immediately open a bank account in his father’s name, and transferred the sale proceeds, and all his father’s remaining accounts into it, assigning control to himself.
Three days $46,500 was transferred to the couple’s account via what was later found to be a forged cheque, and the spending spiralled.
It included $17,000 to buy a car, travel to Australia and two cruises, wedding expenses and a $50,000 loan to their daughter.
Meanwhile, Pauwels-Vernon’s family was in a precarious financial position after his mother’s fiance Frank van Kampen was killed in 2009 by a drunk driver while he cycled home.
Vernon was found to have forged four cheques using his father’s name including to buy the car and an extended warranty for it for him and his wife, he also transferred $46,500 to the couple’s account, and paid $5000 on their credit card- leaving nothing from Pauwels-Vernon.
Both the Vernons were ordered to replenish the estate with $280,354, plus interest and costs.
The Vernons appealed on the basis that the judge erred in finding that Ashley had exercised undue influence over his father.
Justice Rhys Harrison found in a judgment published on Wednesday, it was not a case of undue influence because Ashley Vernon had been given power by his father and had not had to pressure him over the transactions.
But what had arisen was a breach of fiduciary duty arising through his control of the accounts, neither exercising care, nor avoiding conflicts of interest, the appeal judge found.
Ashley was aware of the provisions of his father’s will and set about fore-stalling the possibility of receiving only half the estate, by transferring almost all of it to himself, he wrote.
“That is sufficient to show Ashley must have known his actions were dishonest. He cannot have honestly believed that when entrusted with the power of protection of his father’s property he was acting in Kenneth’s interests in spending all Kenneth’s money on his own needs.”
The Vernons were ordered to pay the Public Trust’s appeal costs.
First published at: August 11, 2016 at 04:10AM.
Syndicated from: http://www.stuff.co.nz/business/money/83054949/Wellington-couple-who-spent-all-elderly-fathers-estate-money-inheritance-appeal-dismissed