Body Corporate 203344 v Shue
[2023] NZHC 3567
•7 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1406
[2023] NZHC 3567
BETWEEN BODY CORPORATE 203344
Plaintiff
AND
LILY SHUE
Defendant
Hearing: On the papers Counsel:
C P Browne/N Skara for the Plaintiff
Date of Judgment:
7 December 2023
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 7 December 2023 at 4 pm.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors:
Wilson Harle, Auckland
BODY CORPORATE 203344 v SHUE [2023] NZHC 3567 [7 December 2023]
Introduction
[1] The plaintiff is the Body Corporate responsible for a unit title development in Glen Eden, known as Westwood Park Apartments. Unit 10C in the development is in serious default in payment of levies. The current registered owner of that unit is Jar Meng Shue. Mr Shue has been deceased for more than three years. The unit is presently occupied by his daughter, Lily Shue, the defendant.
[2] The Body Corporate seeks summary judgment for the unit’s unpaid levies, and associated interest and costs. However, suit against a deceased can only proceed against a legally appointed representative of the deceased’s estate, and in Mr Shue’s case, there is none.1
[3] Accordingly, the Body Corporate applies for the appointment of Ms Shue as personal representative of the deceased, under r 18.7 of the High Court Rules 2016 (HCR).
[4] The proceeding was called before me in the summary judgment list on 24 October 2023. In a subsequent minute, I indicated my preliminary view that the Court lacked jurisdiction to make the representative order as sought. On 3 November 2023, the Body Corporate filed submissions in opposition to that view.
[5] Ms Shue has been served with the relevant applications and documents. She has taken no steps in the proceeding.
Background
[6] Westwood Park Apartments suffers from weathertightness issues. Efforts to resolve the issues span back to February 2009, when the Body Corporate obtained orders settling a remediation scheme under the Unit Titles Act 1972. The scheme authorises the Body Corporate to levy and collect the funds necessary to undertake remedial work. That work, and in particular the recovery of costs, is ongoing.
1 Counsel for the Body Corporate informs me that, as of March 2023, no application for probate has been made in respect of Mr Shue’s estate.
[7] Over the years, the Body Corporate has attempted to recover various unpaid levies in relation to Unit 10C. Payments have been made but the debt has never been cleared.
[8] In 2018, the Body Corporate commenced a proceeding against Mr Shue in the District Court (the District Court proceeding). On 19 July 2019, the Body Corporate sealed judgment in the District Court against Mr Shue for $26,708.53, the value of the unit debt at the time (the judgment). Attempts to enforce the judgment were unsuccessful and Mr Shue died on 6 July 2020, with the judgment debt unpaid.
[9] Sometime after, when Ms Shue was living in Unit 10C, the Body Corporate applied to the District Court for orders appointing Ms Shue as personal representative of the deceased’s estate for the purpose of the District Court proceeding. On 13 January 2022, Judge Bergseng made the order sought under r 20.7 of the District Court Rules 2014 (DCR).
[10] On 19 August 2022, the judgment was removed to the High Court. The orders noted the District Court’s appointment of Ms Shue as the personal representative of Mr Shue’s estate.
[11] On 23 March 2023, the Body Corporate obtained a sale order. The order named Mr Shue as defendant. After the issue of the sale order the unit debt continued to grow. Some payments were made to the Body Corporate, including $30,185.75 on 12 May 2023, being the amount sought in the sale order.
[12] On 28 June 2023, the Body Corporate commenced this proceeding, naming Ms Shue as defendant. At the time of commencement, approximately $57,500 was due to the Body Corporate.
Discussion
[13] The Body Corporate faces a predicament: it cannot, in the absence of a representative of the deceased’s estate, bring a properly constituted claim against the estate.2
[14] The procedural rules of court in various comparable jurisdictions3 provide a bespoke procedural solution to this predicament. For example, in England, r 19.12(2) of the Civil Procedure Rules applies: where a defendant against whom a claim could have been brought has died, and a grant of probate or administration has not been made, a claimant is permitted to commence a claim against the “estate of the deceased” and to simultaneously apply to the court for an order appointing a person to represent the estate for the purpose of the claim.
[15] The HCR, however, contain no equivalent provision. Counsel for the Body Corporate submits that a solution lies in a representation order under r 18.7 of the HCR:
18.7 Applications for directions as to service
(1)This rule applies when—
(a)the law requires the making of an application for directions as to service; or
(b)the plaintiff is in doubt regarding the persons on whom the statement of claim should be served; or
(c)an order is sought that any person represent any other person or class of persons who should be served; or
(d)the proceeding is under the Companies Act 1993 and is not a proceeding in the liquidation of a company or an application to set aside a statutory demand under section 290 of that Act; or
(e)the court directs that the plaintiff should apply to the court under this rule.
(2)The plaintiff must apply to the court without notice for directions as to service and for any orders for representation that may be required.
2 See Re Shardy (2003) 16 PRNZ 1009 (HC) at [24]–[25].
3 See Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 16.03; and Uniform Civil Procedure Rules 2005 (NSW), r 7.10.
(3)In support of the application, the plaintiff must provide (by affidavit or otherwise) the information that may be necessary to enable the court to decide what persons or classes of persons are interested in, or may be adversely affected by, the relief sought by the plaintiff and by what means the interests of each such person or class of persons may be adequately represented.
…
[16] Rule 18.1 lists the categories of proceedings to which pt 18 of the HCR applies. This proceeding does not fit into the stated categories in r 18.1(a)–(d). The Body Corporate therefore relies on r 18.1(e), which allows the Court to direct that pt 18 applies to a given proceeding. Counsel contends that such a direction in this proceeding is supported by analogy with the category of proceeding stated in r 18.1(d): mortgages and charges over land.
[17] As to the representation order, Counsel submits that an order under r 18.7 is a “fair and convenient” means of permitting the Body Corporate to recover the unpaid levies and that jurisdiction is supported by the decision of Judge Bergseng under the equivalent rule in the DCR.
[18] I do not accept that this Court has jurisdiction to make the representation order sought. For whatever reason, the HCR lack a specific provision permitting an order for representation of a deceased’s estate to enable the commencement of a proceeding against the estate. In the absence of an express rule, it would be inappropriate to use a rule relating to directions as to service to, in effect, make a limited grant of administration ad litem. In this sense, the Body Corporate’s application cuts across the Court’s probate jurisdiction and its important safeguards.
[19] Estate representation for litigation carries serious consequences. Decisions relating to whether a proceeding is settled or how a defence is run can affect the estate’s value. When appointing a representative, conflicts of interest need to be avoided and competing beneficial interests considered. These are matters that should be dealt with in the probate jurisdiction.
[20] The representation order sought is inappropriate for the additional reason that there is no evidence that Ms Shue consents to representing the deceased’s estate. The Court will not generally appoint a person as a representative against their will.4
[21] In any event, a representation order will not finally resolve what will likely be an ongoing issue for the Body Corporate; that is, until Unit 10C is formally transferred to an entitled successor, future levies may continue to go unpaid, and the present applications would need to be repeated to recover those levies.
[22] For these reasons, I decline the application for representation. However, there are several options available to the Body Corporate to now pursue.
Failure to obtain probate of a valid will
[23] If the deceased has left a will, then there has been neglect to prove it and the Body Corporate, as a creditor of the deceased’s estate, could apply for a grant of an order nisi calling on the executor to show cause why the Body Corporate should not be granted administration.5
Intestate estate
[24] If the deceased died intestate, the Body Corporate could seek a grant of letters of administration. The Body Corporate could make its application on one of two grounds: either it could apply according to its interest as a creditor of the estate;6 or it could apply for a discretionary grant of administration, pleading special circumstances.7 Estate insolvency, although unlikely to be the case here, would also support an application for a discretionary grant or an application for administration under pt 6 of the Insolvency Act 2006.
4 Re Curtis and Betts [1887] WN 126 (CA) at 127.
5 Administration Act, s 19.
6 Administration Act 1969, s 6(1). A creditor ranks third in priority for a grant in an intestacy after those having a beneficial interest and the Attorney-General, if claiming bona vacantia: High Court Rules 2016, r 27.35(3).
7 Administration Act, s 6(2). See also Re Lundon [1940] NZLR 975 (SC).
A limited grant of administration ad litem
[25]Alternatively, the Body Corporate could seek a limited grant of administration
ad litem to an independent8 person.
[26] A grant ad litem enables a deceased’s estate to be represented by the grantee for the purposes of commencing, prosecuting and defending legal proceedings.9 Any judgment subsequently obtained against the grantee is binding upon the person who may thereafter take out general administration of the estate.10
[27] Although there is no explicit reference to a grant ad litem in the Administration Act 1969,11 jurisdiction to make the grant arises out of the Court’s statutory jurisdiction to grant administration for general, special or limited purposes.12
[28] An application could be made irrespective of whether there is a valid will, but a court may be disinclined to make the grant where there is available an appropriate person to take out a full grant of probate or letters of administration.13
Status of the proceeding
[29] The statement of claim names Ms Shue as defendant. Ms Shue is not responsible for the debts of Unit 10C and, in the absence of a representation order, the claim against her is amenable to an order striking it out. However, in my view a stay is more appropriate, pending the Body Corporate’s next steps.
8 Re Coe [2013] NSWSC 968, (2013) 9 ASTLR 287 at [23].
9 Faulkner v Daniel (1843) 3 Hare 199 (Ch) at 207–208. One example involving the appointment of a representative to defend a claim is Re McGown [1947] VLR 113 (SC) where a grant was made appointing an administrator ad litem to represent the deceased’s estate for the purpose of defending any proceedings instituted by the victims of a motor vehicle accidents caused by the deceased.
10 Davis v Chanter (1848) 2 Ph 545 (Ch).
11 Section 9A of the Law Reform Act 1936 provides for the appointment of an administrator ad litem but in circumstances where there is a claim for damages or compensation against the estate of a deceased insured and there is no administrator within the meaning of the Administration Act.
12 Administration Act, s 2(1) definition of “administration” and s 5(1).
13 See Smith v Mackrill [1978] Qd R 403 (SC).
Result
[30] The application for the appointment of Ms Shue as representative of the estate of Mr Shue is declined.
[31]The proceeding is stayed pending further order of the Court.
[32]There is no order as to costs.
Associate Judge Brittain
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