Brown v Brown
[2023] NZHC 1552
•15 June 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-788
[2023] NZHC 1552
UNDER the Administration Act 1969 IN THE MATTER
of the Estate of KATHLEEN NORMA BROWN
BETWEEN
STEVEN FRANCIS BROWN, CHERYL MOANA MARIA ALLAN, ERROL AMBROSE BROWN and MATTHEW JOHN BROWN
Applicants
AND
WILLIAM MOSES BROWN
First Respondent
REBECCA TAKIMOANA
Second Respondent
Hearing: 15 June 2023 Appearances:
H Davies for the Applicants
Judgment:
15 June 2023
ORAL JUDGMENT OF BECROFT J
Solicitors:
Shine Lawyers, Auckland, [email protected]
BROWN v BROWN [2023] NZHC 1552 [15 June 2023]
Application
[1] This is an application for removal of the current executor and trustee in the estate of Kathleen Norma Brown and the appointment of Trustees Executors Limited (TEL) as replacement executor and trustee, together with further relief.
[2] The matter has come to me in the Duty Judge List. It raises some issues which, as I set out, require careful reflection.
[3] In summary, the application for removal of the current executor and trustee and appointment of a replacement executor and trustee is made out and is granted. However, the “further relief” in terms of four further orders sought by the applicants should be adjourned for six weeks so that the newly appointed independent trustee can fully examine and assess the situation.
Background
[4] Kathleen Norma Brown (Ms Brown) died on 19 January 2021. Her husband predeceased her by about a year. They were separated.
[5]Ms Brown was survived by eight children.
[6] Probate of Ms Brown’s Will was granted on 10 March 2024. One of her children, William Moses Brown (William), was appointed as the executor of his mother’s estate.
[7] William is also the administrator of his father’s estate – that is Ms Brown’s husband.
[8] The eight children have effectively divided into two camps. On the one hand the four applicants. On the other, William (the executor and trustee of his mother’s Will), Rebecca Takimoana who has occupied the Brown’s property at 18 Resolute Way, Papakura for over 20 years, and the two other of Ms Brown’s children, Carol Ann Brown and Gloria Rose Brown.
[9]Resolute Way is by far the major asset in Mrs Brown’s estate.
[10] As far as is known, there are no cash or other assets in Mrs Brown’s estate. Resolute Way will, therefore, have to be sold if the eight beneficiaries are to receive their share of the estate.
[11] There have been a considerable number of meetings to try to resolve the distribution of Mrs Brown’s estate and much correspondence.
[12] In short, the four applicants want Resolute Way sold. The other four seem opposed to the sale. Indeed, there is a suggestion in the affidavit of Steven Francis Brown, one of the applicants, that William may have granted a tenancy at $300 a week to Rebecca Takimoana, his sister, to continue living in the property at 18 Resolute Way. The level of the rent is said to be under market rates. William is said to know this.
[13] Since the grant of probate and appointment of William as trustee and executor, it is clear that there has been no progress. The family is at a stalemate. Now, more than two years after Mrs Brown’s death, the family is no closer to the distribution of her estate.
[14] The suggestion is that William has either been negligent or has simply frozen in the pressure of the situation and has not made any decision. The issue is not academic. Two of the applicants – Errol Brown and Cheryl Allan – are each seriously ill with blood and bone cancer (Errol) and breast cancer (Cheryl) which resulted in a double mastectomy and now chemotherapy.
Procedural background
[15] The applicants applied to the Court for permission to commence proceedings by way of Originating Application. Appropriate leave to do so was granted by Gordon J on 17 May 2023.
[16]This judgment should be read in conjunction with Gordon J’s clear judgment.
[17] Gordon J directed service of all the relevant documents on the first respondent, William, and the second respondent, Rebecca Takimoana. When service was effected the applicants were to file affidavits of service and the matter referred to the Duty Judge for further directions.
[18] The matter came before me as Duty Judge on 12 June 2023. At that time, as recorded in my Minute of 12 June 2023, there was uncertainty as to the statutory time allowed to the respondents to file a notice of opposition and other relevant documents. It was tentatively submitted that r 19.10 of the High Court Rules 2016 applied. That Rule provides that rules concerning interlocutory applications apply with all necessary modifications to proceedings commenced, as here, by Originating Application. Rule
7.24 is listed as one of those rules that applies. That rule provides that a respondent who intends to oppose an application must file and serve a notice of opposition before the end of the tenth working day after being served and no less than three working days before the hearing date.
[19] Mr Davies in his candid and responsible way conceded that as at 12 June 2023 (last Monday) only nine days had elapsed after the day of service. I adjourned the matter until today’s date. Mr Davies has confirmed that r 19.10 does cover the situation. I agree. As at today’s date, 12 days have now expired since the date of service of the application.
[20] Therefore, the matter can proceed today, given that there is no opposition filed and no appearance in Court today from any of the respondents.
[21] I did have a concern that two outstanding members of the eight siblings have not personally been served with any of the documentation. As Mr Davies emphasised, this was not ordered by Gordon J in her careful decision. In any case, it can be legitimately inferred, given what is said in the affidavit in support of this application, that because the two unserved children are members of the “opposing camp” to which the two respondents belong, those two respondents would have brought to their attention the fact of this application. I think that is a fair inference that Mr Davies has suggested should be drawn, and I do.
[22]I am, therefore, happy to proceed with the application.
Application for removal of William as executor and trustee and replaced by TEL
[23] The Court has the power under s 21 of the Administration Act 1969 (the Administration Act) to discharge or remove an administrator of an estate if, amongst other things, it “becomes expedient” to do so and to appoint any person in his place on such terms and conditions as the Court thinks fit.
[24] Mr Davies relied on Tod v Tod1 where the Court of Appeal endorsed the following statement from the judgment of Heath J in Farquhar v Nunns2 of the principles that should guide a court in dealing with an application under s 21 to remove an administrator:3
(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.
(b)This jurisdiction involves a large discretion which is heavily fact- dependent.
(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor executor or trustee) are to be given consideration, but ultimately the question is as to what is expedient in the interests of the beneficiaries.
(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.
(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.
[25] In my view, Mr Davies is right to say that the affidavit from Steven Brown, one of the applicants, clearly establishes that administration of this relatively confined and straight forward estate has not moved forward to distribution for some time now. Also, I accept that the first respondent appears not to be acting impartially and in the best interests of all the beneficiaries. There is no indication when, if ever, the estate will be distributed.
1 Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145.
2 Farquhar v Nunns [2013] NZHC 1670, at [13].
3 At [22].
[26] The need for urgency is heightened by the serious illnesses currently faced by two of the applicants.
[27] It must be the case that this estate needs to be finalised and distributed as soon as reasonably practicable. In my view, it is expedient that the current executor and trustee be removed. This is for reasons that include considerations of practicality and efficiency and also the unsuitability of the current executor and trustee who seems, at the least, conflicted.
[28] I formally order the removal of William Moses Brown, the first respondent, as executor and trustee of the estate of Kathleen Norma Brown. It seems to me that an independent and skilled trustee and executor should be appointed in his place to ensure prompt resolution of all the affairs of Mrs Brown’s estate.
[29] TEL is prepared to act and clearly has considerable experience. I order that company be the replacement executor and trustee of the estate of Kathleen Norma Brown.
The further applications
[30] The applicants apply for five further orders which, as I have previously mentioned, raise some significant issues. They are:
(a)Directing the executor to sell the estate’s property at 18 Resolute Way, Papakura, Auckland (Resolute Way) for the best obtainable price by public sale (by auction, by negotiation, by deadline sale or tender at the discretion of the executor) to be conducted by a firm of real estate agents selected by the executor.
(b)An order authorising the executor to serve any notices required under the Residential Tenancies Act 1986 on the second respondent to terminate the tenancy (if she is a tenant), alternatively, an order for vacant possession, namely that the second respondent must vacate the Resolute Way property by no later than 90 days from the date of the order.
(c)An order that the first respondent exhibit on oath an accurate account of all rental payments received by him from the second respondent and that the first respondent pay the amounts received by him from the second respondent to the estate.
(d)Directing that the costs and disbursements of this application be paid by the respondents.
(e)Such further or alternative relief as the Court deems appropriate.
[31] It will be seen that the applicants wish the Resolute Way property to be sold; for the new executor to bring to an end any existing residential tenancy or, alternatively, obtain vacant possession; and for the first respondent, the former administrator, to exhibit on oath an accurate account of all rental payments received by him from the second respondent. In fact, in Court, Mr Davies’ main submission in respect of the order (b) above was for vacant possession.
[32] In my view, that is a very “harsh” and probably premature step to be taken today, particularly the order for vacant possession of Resolute Way (which was Mr Davies prime objective), even given that no opposition has been lodged by either the first respondent or the second respondent – who is currently in occupation of the property.
[33] Mr Davies has pressed me hard to make all these orders today. He has clearly submitted it would be in the best interests of the estate generally, and for all the beneficiaries, for the Court to step in and robustly make those orders.
[34] For the sake of argument, I accept that I have the power to make most of the orders sought, although I note that the application for the first respondent to exhibit on oath an accurate account of all rental payments is withdrawn. I think that is appropriate. That application suggests that Ms Takimoana, the second respondent, might indeed be in lawful occupation of the Resolute Way property by way of tenancy. That suggestion is backed up in the affidavit of Steven Brown (at paragraph 4.9), that notes Ms Takimoana, who moved into Resolute Way with her husband and children about 20 years ago, now occupies the property by way of a tenancy agreement at $300
per week agreed to by the first respondent, William Brown, as the then trustee and executor of the estate.
[35] It may well be that $300 per week is well below the market rate. It may well be that William knew this. But the fact remains that there is a clear suggestion that a legal tenancy is in place.
[36] That is a different situation as set out in Jensen v Jensen4 where Fitzgerald J made the very order as to vacant possession sought here. In that case, however, there was only a licence to occupy the deceased’s property by one of her sons and it had been made directly with his deceased mother.
[37] Here, the suggested tenancy agreement was made with the then executor of the estate. That is a much stronger position for Ms Takimoana than in Jensen.
[38] If there is a tenancy, then TEL does not need the Court to direct that it serves the appropriate notice under the Residential Tenancies Act 1986. That is something that can be done in the exercise of the discretion of an executor and trustee.
[39] In my view, it would be much better for the new executor and trustees to assess the situation carefully, to understand the family dynamics, to ascertain what legal rights of occupancy the second respondent, Ms Takimoana, may have and to consider what steps should be taken.
[40] I indicate that at this stage the case for selling the house seems overwhelming and unarguable. That is well set out in the affidavit evidence.
[41] Nevertheless, I am reluctant today to go so far as to make an order even directing the sale of the 18 Resolute Way until the independent trustee is appraised of all of the circumstances and, in particular, establishes the precise legal basis (or not) for Ms Takimoana’s continued occupation of the house.
4 Jensen v Jensen [2019] NZHC 329.
Conclusion
[42] In my view, it is preferable to adjourn the outstanding applications that I have set out previously5 but only for six weeks given the urgency of the situation and, in particular, the ill health of two of the applicants. The matter should be placed back before the Duty Judge for final decision as to whether the orders sought should be made. TEL will need to seek leave to make the application for such orders as are required, in its own name. If I am available, I am happy to deal with the matter.
[43] It seems to me that what would be very likely to happen on that day is for an order for sale of Resolute Way to be made on the basis of clear protections being provided for Ms Takimoana if she is the legal occupant of the property in the way of giving her the appropriate notice to vacate the property.
[44] Whether the application for a statement on oath as to a schedule of rental received is continued with, will be for the applicants to decide. At first glance, it seems to me that the provisions relied upon for such an order – being ss 4B and 44 of the Administration Act 1969 – are wide enough to cover a “past” administrator who has been replaced, as is the case for William.
[45] I formally adjourn this matter until Thursday, 27 July 2023 at 10am in the Duty Judge List at Auckland.
Becroft J
5 At [30].
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