Beazley v Tauariki aka Stevens

[2015] NZHC 116

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003008 [2015] NZHC 116

UNDER

the Administration Act 1969

IN THE MATTER OF

an originating application to remove administrators in the estate of Tauwhitu Selwyn Norman Beazley of Auckland, retired (deceased)

BETWEEN

GLADESS BEAZLEY, DELLA MURRAY BEAZLEY, GRACE NGAPIU CASSIDY aka GRACE NGAPUI CASSIDY and GEORGINA FAY BEAZLEY

Applicants

AND

LINDA GRACE TAUARIKI aka LINDA GRACE STEVENS

First Respondent

HARVEY STEVENS aka HARVEY IAN TIPENE

Second Respondent

Hearing:	5 February 2015
Appearances:	J B Murray for Applicants No appearance for Respondents
Date ofminute:	10 February 2015

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 10 February 2015 at 12 noon

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

BEAZLEY v TAUARIKI & OR [2015] NZHC 116 [10 February 2015]

Introduction

[1]      The applicants  are the children and one of the grandchildren of Tawhitu Selwyn Norman Beazley, a widower who died intestate in September 2003.  They and the respondents, who are not related to Mr Beazley, are the administrators of Mr Beazley’s  estate.    The  applicants  have  applied  for  an  order  removing  the

respondents as administrators.1    The respondents did not appear at the hearing but

had  previously  indicated  through  their  lawyer  that  they  neither  consented  nor opposed the application.

[2]      The right to apply for letters of administration of the estate of a person dying intestate is determined in accordance with the order of priority set out at s 27.35(3) of the Administration Act 1969.  The persons having first priority are those with a beneficial interest in the estate in accordance with s 27.35(4).  In the absence of any spouse or civil union or de facto partner it is the children of the deceased who have the priority in terms of entitlement to a grant of administration.   It is also those

children for whom the estate is held on statutory trust for that person’s issue.2

[3]      Under s  21  a person  appointed  as  an  administrator  may be removed  on various specified grounds, including “where is becomes expedient to do so”.   I respectfully refer to Heath J’s comments in Bupa Care Services NZ Ltd v Gillibrand on what would satisfy the criterion of expedience under s 21(1):3

“Expedience” is a lower threshold than necessity, and imports considerations as suitability, practicality and efficiency.  While relevant, misconduct, breach of trust, dishonesty or unfitness need not be established to obtain an order. Hostility is another factor, though it is usually something that arises between administrators/trustees and beneficiaries.

The appointment of the parties as administrators

[4]      The circumstances in which the parties came to be appointed administrators of Mr Beazley’s estate are described in the affidavit of one of the applicants, Gladess Beazley, one of Mr Beazley’s daughters.  She and the other applicants are the natural

children or grandchildren of Mr Beazley, whereas the respondents are not, although

1      Administration Act 1969, s 21.

2      Administration Act 1969, s 77.

3      Bupa KF Services NZ v Gillibrand [2013] 3 NZLR 701 at [7].

they did live with the family for many years and were treated as children of the family.

[5]      The first respondent was the child of Mr Beazley’s wife.  The identity of her natural father is unknown and she was never adopted by Mr Beazley.  The second respondent is the child of a relative of Mr Beazley’s wife.  He was not adopted by Mr Beazley either.4

[6]      Although Mr Beazley died in 2003 steps were not taken to apply for letters of administration until 2014.   The only asset of any significance in the estate is a property in Mr Wellington on which there was a substantial rates arrears owing. There had been drawn-out family discussions as to what should happen to the house, including which of the family could and was willing to borrow enough to clear the rates arrears.  In the end the application was prompted by Council threats to sell the house to meet the unpaid rates.

[7]      It was not until 2013 that Gladess Beazley sought legal advice.  When she and other family members did so it did not occur to them to explain to the lawyer that the respondents were not Mr Beazley’s natural or adopted children.  They did not realise that this fact had any significance.   Nor, indeed, did they explain that Georgina Beazley, the fourth named applicant, was a grandchild rather than a child of Mr Beazley.   As a result, the affidavit drafted in support of the application to obtain a grant of letters of administration, sworn by all of the applicants and respondents, stated that:

We are the daughters and sons respectively of the deceased.

[8]      Following the granting of the letters of administration to the applicants and respondents there were further discussions as to how the property should be dealt with including who should live at the property, how money could be borrowed against the property to clear the rates arrears and how various interests could be sold if they wished. A deed of family arrangement was prepared. The respondents sought

separate legal advice.  In late 2014 they indicated dissatisfaction with the proposed

4      The respondents have not filed an affidavit and I therefore accept Ms Beazley’s unchallenged

evidence as correct.

family arrangement and sought to have their shares paid out.   It was at about this stage that the applicants advised the estate’s lawyers that the respondents were not Mr Beazley’s natural children, which led to the present application.

The application

[9]      Because  the  respondents  are  neither  the  natural  nor  adopted  children  of Mr Beazley their right to apply for appointment as administrators sat behind the applicants’ rights in terms of priority under s 27.35.  But there are other reasons that it is said to be expedient to remove them as administrators.  The respondents are in dispute with other family members as to the administration of the estate.  Not only is there disagreement with the proposed course that the applicants, as the beneficiaries of the estate, wish to adopt, the respondents have signalled an intention to make a claim against the estate, though the exact grounds have not been articulated.

[10]     The estate is not large; the estimated value of the property is about $300,000 but there are rates arrears of over $20,000 together with the substantial legal costs involved in the deed of family arrangement and the present application.   In these circumstances I am satisfied that the most efficient and practical course is to permit the applicants to administer the estate alone.   The continued involvement of the respondents can only lead to disagreement and  expense, to  the detriment of all concerned.

[11]     There is a final matter that I touch on.  In a letter dated 8 December 2014 the respondents’ lawyer advised that the respondents neither consented to nor opposed the application and then added:

Further we believe that your clients have misled the Court and because of their misconduct we believe that it is appropriate that the Public Trust be appointed in their place to administer the estate.

[12]     No  explanation   was   given  as   to   what   the  alleged   misconduct   was. Mr Murray, for the applicants, thought that it may have referred to the affidavits severally sworn by the applicants and respondents as to the fact that all were the daughters and son of Mr Beazley.  However, that misstatement has been explained and I accept it as having been innocent.

[13]     I do not accept the suggestion of appointment of the Public Trustee in the place of all the applicants as administrator.   There is no cross-application for the removal of the applicants as administrators and there is no reason to think that the applicants will not act properly in their administration of the estate.  Appointing an external party administrator would simply result in additional and unnecessary cost to the estate.

[14]     The application is allowed and I make an order removing the respondents as administrators of Mr Beazley’s estate.  The effect is that the estate is vested in the applicants in their capacity as administrators as joint tenants.5

[15]   Costs are sought on the application.   Mr Murray accepted that, in the circumstances, an application to remove the respondents would always have had to have been made regardless of the attitude of the respondents.   I consider that the proper  approach  is  to  allow  costs  on  a  2B  basis  but  not  for  the  filing  of  the application and affidavit in support.  This means that costs are allowed for steps 39,

40 and 42 which total 1.95 days and which result in a costs award of $3,880, together

with $200 for the filing fee.

P Courtney J

5      Administration Act 1969, s 24.