“Reasonable Prudence” & the Motorhome

Lloyd Wade had two children from his first marriage: Robena and her brother, Geoffrey.

In 1993, Lloyd met Francesca Duck. They lived together in a defacto relationship from around that time until he died in 2011.

In April of 2005, Lloyd and Francesca purchased a motorhome. They made a down payment of $20,000 taking out a loan of $126,493.10 the balance of the motorhome’s purchase price (the “Loan”). The Contract provided that Lloyd, his company Spring Cove, and Francesca, were joint purchasers of the motorhome, and were jointly and severally liable for the sales contract obligations.

Joint liability means that two or more people together (jointly) promise to do the same thing. Several liability exists where two or more people make separate agreements with another party.

When taken together, joint and several liability arises. The effect of this is that the people both together, and separately, promise to do something.

This results in one joint obligation and multiple several obligations. Since it is one obligation, performance by one person discharges all the others of their obligations. Until the obligation is discharged, however, each individual is liable for the entire obligation until it is performed.

The motorhome was originally registered in Spring Cove’s name. Six months later, on October 28, 2005, the ownership was transferred to Lloyd, however all payments on the Loan were made from Spring Cove’s accounts.

Lloyd died in June 2011, under his will Francesca was appointed executrix and obtained a grant of probate. As executrix Francesca made 26 monthly payments for the motorhome from the company account. Estate funds were later used to pay the outstanding loan balance.

Francesca gave evidence that Lloyd parked the motorhome in the driveway of their home in 2010, and that it remained parked there until 2012. Francesca claimed she did not consider the motorhome to be hers and apparently did not inspect or care for it until the spring of 2012 when a friend inspected it and discovered significant damage.

As executrix and trustee of Lloyd’s deceased estate Francesca transferred the motorhome for no consideration, to a friend who would assist her in determining the cost of repairs and would complete them. If the cost of repairs exceeded the resale value, the friend could keep the motorhome. Alternatively, the estate could reimburse the cost of the repairs and the motorhome would be returned to the estate.

Between July 2011 and August 2013 the estate made monthly payments on the motorhome from the Spring Cove account, at which point the funds in the account were exhausted.

In August 2013, Francesca sold the home she shared with Lloyd and paid the outstanding balance of the Loan (approximately $97,322) from the estate. The total amount paid by Spring Cove and the estate on the Loan was approximately $123,571.

In October 2013, Lloyd’s daughter Robena filed a petition seeking the removal of Francesca as executrix alleging that she had improperly paid the Loan with estate assets. The Court ordered Robena to replace Francesca as administrator of the estate and pay into trust the $125,000 she received as proceeds from the sale of the Clearwater home, pending the outcome of further litigation.

In 2017, Robena sought to establish Francesca’s liability for the loss of value in the motorhome, and brought an application to recover the funds that Francesca had used to pay off the loan.

The Court found that Francesca was not liable to the estate for 50% or any part of a debt incurred in the purchase of a motorhome or for the gift of the motorhome to a friend after Lloyd’s death. Ordering the release of funds held in trust to Francesca.

Robena appealed, the Court held Francesca, as the former executrix of Lloyd’s estate, was personally liable for the deterioration of estate property and jointly and severally liable for a loan paid in full by the estate as:

  • The contract unequivocally expressed Francesca had joint and several liability for the loan, she signed the sales contract alongside Lloyd, making her jointly and severally liable to the bank for the motorhome loan.
  •  Lloyd and his estate had paid the entirety of the motorhome loan. Therefore, Francesca was liable to pay the estate 50% of the monies paid towards the loan out of the estate – which was $61,785.
  •  Francesca’s failure to exercise “reasonable prudence” in preserving the motorhome, and her decision to transfer the motorhome for no consideration diminished its value was a breach of her duty to maintain the motorhome. Therefore she was personally liable for the loss. She was ordered to pay $30,000 to the estate, which is what she herself said it was worth at the time of the Deceased’s death.

In total, the Court ordered $91,785 to be paid to estate from funds held in trust for Francesca.


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