Barribal v Te Tuhi HC Auckland CIV 2009-404-7824

[2010] NZHC 1576

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-007824

UNDER  Section 51 of the Trustee Act 1956

IN THE MATTER OF     the estate of NIU RANGI CLARK BETWEEN  MARGARET GAYE BARRIBAL

Plaintiff

ANDJAMES TE TUHI First Defendant

ANDFRANCIS MICHAEL MORICE Second Defendant

Hearing:         13 September 2010

Appearances: Ms M Macnab for plaintiff

No appearance for defendants

Judgment:      13 September 2010 at 3 pm

JUDGMENT OF LANG J

[on application for removal of trustees]

This judgment was delivered by me on 13 September 2010 at 3 pm, pursuant to Rule

11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt

Ms M Macnab, Auckland

BARRIBAL V TE TUHI AND ANOR HC AK CIV-2009-404-007824  13 September 2010

[1]      Niu Rangi Clark died at Auckland on or about 1 April 1995.   Prior to her death  she  had  been  living  in  a  house  property  situated  at  58  Harrisville  Road, Tuakau.  At the time of her death one of her sons, Hori Edward Clark, was residing in that property with her.

[2]      This Court granted probate of Ms Clark’s Will on 15 May 1995.  The trustees and executors named in the Will were Ms Clark’s cousin, Mr James Te Tuhi, and her solicitor, Mr Morice.

[3]      The Will provided for certain specific bequests to be made to Ms Clark’s four children.   These comprise the plaintiff, Hori Clark, Marjorie Anderson and Huia Mitchell.  Thereafter, the balance of her estate was to be divided equally between her children.  All of Ms Clark’s children are still alive.

[4]      As at the date of Ms Clark’s death her only assets were a bank account, having a credit balance of approximately $11,000, and the house property situated at

58 Harrisville Road.   The bank account has now been exhausted in meeting the outgoings payable in respect of the Harrisville Road property.   As a result, the Harrisville Road property is now the only asset in the estate.  Ms Clark’s son Hori Mitchell moved into that property shortly before his mother’s death and he has been living there ever since.   Although he may have paid some rates in relation to the property he has never paid any rent over the last 15 years.

[5]      The present proceeding has arisen because in recent years neither Mr Te Tuhi nor Mr Morice has taken any steps to administer Ms Clark’s estate or to distribute it. Mr Te Tuhi appears to have taken no steps at all after the property was registered in the names of himself and Mr Morice as trustees.  He lives in Northland, and appears to have left the administration and distribution of the estate entirely in the hands of Mr Morice.

[6]      Mr Morice has now retired from practice as a solicitor and is in very poor health.  For some time after Ms Clark’s death he arranged for the outgoings of the property to be paid from the funds in the bank account.  When these were exhausted,

he paid the outgoings for approximately a year using his own resources.  For some years, however, he appears to have done nothing.

[7]      The plaintiff is anxious that the estate be distributed and that outstanding issues in relation to it be resolved.  She is supported in that desire by her sister, Huia Mitchell.   Nothing has been heard from Hori Clark or from Marjorie Anderson. They have been served with this proceeding but have taken no steps in relation to it. Mr Te Tuhi has also been served with this proceeding, but has elected not to take any steps in relation to it.

[8]      It  is  clear  that  Mr  Morice’s  health  problems  now  preclude  him  from performing his obligations as an executor and trustee of Ms Clark’s estate.   It is equally obvious that Mr Te Tuhi is either unable or unwilling to accept responsibility for those functions.  For that reason I am satisfied that both trustees should now be removed.

[9]      There is an obvious and urgent need for an independent professional trustee to be appointed.  The urgency arises from the fact that it appears that the property is not currently insured.   Substantial arrears of rates are also owing to the Franklin District Council and Environment Waikato.

[10]     The new trustee will need to take steps to deal with those issues.  It will also need to arrange for the property to be sold, either to Mr Clark or to a third party.  The proceeds of sale will then need to be distributed to the four beneficiaries.  The new trustee  will  need  to  negotiate  with  Mr  Clark  regarding  these  issues,  and  also regarding the issue of his future occupation of the property and the payment of rental for the period during which he has occupied the property.  These are clearly delicate issues, and the detachment and objectivity of an independent professional trustee will be required if they are to be resolved without further significant cost to the estate.

[11]     The Public Trustee has indicated a willingness to act as trustee provided certain conditions are met. The plaintiff appears to accept those conditions.

[12]     Section 51(1) of the Trustee Act 1956 permits the Court to make an order appointing a new trustee in substitution for an existing trustee where it is expedient to do so, and where it is found inexpedient, difficult or impracticable to do so without the assistance of the Court.

[13]     I am satisfied that the plaintiff has made out her claim.  It is necessary and expedient, in my view, for the Public Trustee to be appointed as trustee of Ms Clark’s estate in substitution for the existing trustees.  That is the only way in which the estate will be able to be distributed to the beneficiaries in a timely manner.

Order

[14]     I make an order under s 51(1) of the Trustee Act 1956 appointing the Public Trustee as the trustee of Ms Clark’s estate in substitution for James Te Tuhi and Francis Michael Morice.

[15]     I make a further order appointing Mr Te Tuhi an advisory trustee.  Both the plaintiff and Ms Mitchell advocate that step.  The Public Trustee has no objection to it.

[16]     Finally, I make an order adding the Public Trustee as third defendant in this proceeding.  I reserve leave to the Public Trustee to apply to this Court on 48 hours notice for any orders or directions that it may need in relation to the manner in which the estate is to be administered or distributed.

Costs

[17]   The plaintiff is entitled to costs on a Category 2B basis together with disbursements as fixed by the Registrar.  I direct that those costs and disbursements are to be paid from Ms Clark’s estate as soon as funds are available for that purpose.

Lang J