Brummer v Murrel
[2015] NZHC 1036
•15 May 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2014-485-11496 [2015] NZHC 1036
BETWEEN AYSE BRUMMER
Plaintiff
AND
ANNE-MARIE MURREL Defendant
Hearing: 11 May 2015 Counsel:
G Takarangi for Plaintiff
C Stanley for DefendantJudgment:
15 May 2015
JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] The plaintiff, Ms Brummer, is the administrator of her late husband’s estate. She says that, following her husband’s death, the defendant, Ms Murrel, wrongly took possession of two vehicles owned by the deceased and sold them (or made arrangements for their sale) without accounting to the estate for the proceeds of the sales. She now sues Ms Murrel for the sum of $39,500, which she claims to be the value of the two vehicles, and costs. Because Ms Brummer believes Ms Murrel has no defence to her claim, she applies for summary judgment.
Background
[2] Ms Brummer is the widow of the late Mr Johan Bijen (the deceased), who died on 3 January 2011. The deceased did not leave any valid will. Letters of Administration of the deceased’s estate were granted to Ms Brummer on
3 November 2011.
[3] Ms Murrel is the sister of the deceased.
AYSE BRUMMER v ANNE-MARIE MURREL [2015] NZHC 1036 [15 May 2015]
[4] The deceased had three children from an earlier marriage. Those children, young men aged in their late teens or early twenties when the deceased died, resided at material times in Holland.
[5] In the period between the deceased’s death and the date Ms Brummer obtained Letters of Administration, Ms Murrel stepped in and undertook a number of functions which would normally be carried out by an executor or administrator. In particular, she:
(a) arranged the deceased’s funeral;
(b)arranged for a translation of a will made in the Dutch language by the deceased in 2004; and
(c) paid a number of the deceased’s accounts owing at the date of his
death (electricity $114.47, Telecom $123.43, and rent $780).
[6] Ms Murrel paid those accounts because she understood that Ms Brummer and the deceased had been separated for at least two years, and that a relationship property agreement had been reached between Ms Brummer and the deceased. She believed (wrongly as it turned out) that she was entitled to attend to the winding up of the deceased’s affairs following his death, for the benefit of the deceased’s three sons.
[7] In addition to taking the steps referred to at para [5] above, Ms Murrel sold or assisted in the sale of two vehicles owned by the deceased. First, she sold a Kawasaki motorcycle for $4,500 on 31 January 2012. She says that she used the proceeds of that sale in meeting certain debts paid by her, and in meeting legal bills she had incurred in obtaining legal advice relating to the deceased’s estate.
[8] The second vehicle was a classic Oldsmobile car. Ms Brummer says it was worth $35,000. Ms Murrel says that she had many conversations with the deceased’s second son, Kevin, as to what should be done with the Oldsmobile. She says that Kevin located an interested buyer in Holland, and ascertained that the Oldsmobile
could be sold in Holland for an amount which would be sufficient to cover the airfares which Kevin and his two brothers had incurred when they travelled from Holland to New Zealand for their father’s funeral.
[9] Ms Murrel says that the deceased’s three sons made the arrangements for the sale of the Oldsmobile in Holland, but she acknowledges that she assisted in a practical sense, acting on the boys’ instructions and on their behalf, and in what she thought was their best interests. She says she did not arrange the sale of the Oldsmobile herself, and did not meet the costs of shipping the car to Holland. She never received any part of the proceeds of sale. She says that the only thing she did was sign some customs forms when the car was collected from a storage unit in which it had been stored in New Zealand.
[10] Ms Murrel says that she is unable to provide evidence as to the exact amount for which the Oldsmobile was sold, beyond the fact that the deceased’s sons have told her that the sale price was €12,000.
[11] Ms Murrel does not challenge the validity of the grant of administration to Ms Brummer, and it is common ground that Ms Murrel was aware that Ms Brummer had obtained the grant of Letters of Administration when Ms Murrel:
(a) sold the Kawasaki motorcycle; and
(b) participated in the shipping of the Oldsmobile to the deceased’s sons
in Holland.
[12] The deceased’s estate was relatively small. Under the Administration Act
1969 (the Act), s 77, Ms Brummer as the deceased’s widow was entitled to the deceased’s personal chattels and a “prescribed amount” from the residue of the estate, in priority to any claim of the deceased’s three sons. The relevant “prescribed amount” was $155,000.1 The result of the application of the Act in this case, then, is
that (subject to any claims which might have been made by the deceased’s sons
1 Administration (Prescribed Amount) Regulations 2009, reg 5.
under the Family Protection Act 1955), Ms Brummer was entitled to the deceased’s
entire estate.
[13] A claim under the Family Protection Act was instituted by Ms Murrel on behalf of the deceased’s three sons, but that claim was abandoned by Ms Murrel when the Family Court pointed out that two of the sons were of full age, and that any claim by them would have to be prosecuted by them, and not by Ms Murrel on their behalf.
The parties’ positions
[14] Ms Brummer relies in part on s 52 of the Act, which relevantly provides:
52Liability of person fraudulently obtaining or retaining estate of deceased
If any person other than the administrator, to the defrauding of creditors or without full valuable consideration, obtains or receives or holds any part of the estate of a deceased person…he or she shall be charged as executor in his or her own wrong to the extent of the estate received or coming into his or her hands, after deducting—
…
(b) any payment made by him or her which might properly be made by an administrator.
[15] In the alternative, Ms Brummer says that Ms Murrel has converted property owned by the estate.
[16] On either basis, she says that Ms Murrel has no defence to the estate’s claim
for reimbursement.
[17] Ms Murrel frankly accepts that she was not entitled to sell the motorcycle, or send the Oldsmobile to Holland for sale. But she says that she was acting only as a trustee for, and/or on the instructions of, the deceased’s three sons. The proceeds of sale of the Oldsmobile were received by or for their benefit, and not for her own benefit. Ms Murrel has applied for leave to make a third party claim for indemnity against the deceased’s three sons, as the recipients of the proceeds of the sale of the Oldsmobile.
[18] Ms Murrel raises two other matters in opposition. First, she disputes the value of the Oldsmobile as claimed by Ms Brummer. Secondly, she seeks to set off certain estate expenses which she has paid against any liability she may have to the estate.
[19] Ms Murrel says that the deceased’s three sons must have a reasonably strong claim for further provision from the estate under the Family Protection Act, and that the justice of the situation requires that all three matters (the estate’s claims in respect of the motorcycle and the Oldsmobile, Ms Murrel’s proposed third party claims for contribution from her three nephews, and any claim the nephews might make under the Family Protection Act) should be heard in this Court at the same time. To that end, she submits that the Court should exercise its discretion to decline to enter summary judgment, so that she can pursue her third party claims and the deceased’s sons can bring an appropriate claim under the Family Protection Act if they elect to do so.
[20] Ms Murrel acknowledges that the deceased’s sons would be out of time to claim under the Family Protection Act, but the estate has not been fully distributed, and she submits that an extension of time to file claims would readily be granted under s 9 of the Family Protection Act if the deceased’s sons wish to make claims.
Applications for summary judgment – general principles
[21] Rules 12.2(1) and 12.4(1) of the High Court Rules provide:
12.2Judgment when there is no defence or when no cause of action can succeed
(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
12.4 Interlocutory application for summary judgment
(1) Application for judgment under rule 12.2 or 12.3 must be made by interlocutory application.
[22] The principles to be applied in considering an application for summary judgment have been clearly established through decisions of the Court of Appeal such as Pemberton v Chappell,2 Grant v NZMC Ltd3 and Westpac Banking Corporation v M M Kembla New Zealand Ltd.4 The following broad principles are to be applied:
(a) The plaintiff must satisfy the Court that the defendant has no arguable defence to the claim brought against it. The issue is whether there is a real question to be tried.
(b)It is generally not possible to determine disputed issues of fact based on affidavit evidence alone, particularly when issues of credibility arise. Issues of law, even though they may be complex, can, however, be determined in an application for summary judgment.
(c) Although the Court should adopt a robust approach, summary judgment may be inappropriate where the ultimate determination turns on a judgment that can only properly be reached after a full hearing of all the evidence.
The issues to be determined
[23] The following issues fall to be determined:
(1)What amounts is Ms Murrel entitled to set off against any amount for which she might be liable to Ms Brummer as administrator of the deceased’s estate?
(2)Should the Court exercise its discretion to decline to enter summary judgment, to allow Ms Murrel to pursue her third party claims against
the deceased’s sons?
2 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
3 Grant v NZMC Ltd [1989] 1 NZLR 8 (CA).
4 Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).
(3) If summary judgment is to be entered, is Ms Brummer entitled to
$35,000 in respect of the sale of the Oldsmobile, or to some lesser amount?
Issue 1 - What amounts is Ms Murrel entitled to set off against any amount for which she might be liable to Ms Brummer as administrator of the deceased’s estate?
[24] The following is a list of the amounts which Ms Murrel seeks to set off against any liability she may have to Ms Brummer as administrator:
(a) Genesis electricity account: $114.47 (b) Telecom telephone account: $123.43 (c) Gill & McAsey: $402.50
(d)Rent on property occupied by the deceased at the date of his death: $780
(e) Fee for translation of the Dutch will: $2,060 (f) Cushla Jamieson, Solicitor: $3,047.50
(g) Airfares for the deceased’s sons’ travel to New Zealand for
their father’s funeral: €9,023.53
[25] Mr Takarangi accepts that Ms Murrel is entitled to deduct expenses paid by her which would clearly have been the responsibility of the administrator of the deceased’s estate. He refers in that regard to s 52(b) of the Act, which allows for the deduction (in circumstances such as these) of “any payment made by [a person other than the administrator who obtains or receives or holds any part of the deceased’s estate] which might properly be made by an administrator”.
[26] Mr Takarangi accepts that the Genesis and Telecom accounts fall into this category. He also accepts that one of two rent payments made by Ms Murrel ($390)
is a proper deduction. He submits that none of the other items which Ms Murrel seeks to set off are proper deductions.
[27] Ms Murrel has produced copies of receipts for two payments of rent, each of
$390 made by her to the landlord of the Lowry Bay property occupied by the deceased at the date of his death. The payments cover the period 6 January 2011 to
19 January 2011. It seems to me that these were expenses properly chargeable to the estate, and that Ms Murrel should be entitled to set them off against any liability she has to the estate.
[28] There is very little detail provided in respect of the Gill & McAsey account for $402.50 paid by Ms Murrel. However, it appears that this law firm was dealing with the payment of the funeral directors’ account, and that the account was sent (by the solicitors then acting for Ms Brummer) to Mr Gill on 23 March 2011 with the advice “Please find enclosed for the estate’s attention, a copy of the funeral account” (emphasis added). On the face of it, Gill & McAsey appear to have been regarded by both parties as acting “for the estate” at that time. In those circumstances, I am of the view that Ms Murrel has an arguable defence of set-off in respect of the Gill & McAsey account.
[29] With regard to the other lawyer, Ms Jamieson, a similar argument can be made, at least relating to the cost of her services before August 2011. Ms Murrel’s evidence is that she engaged Ms Jamieson to assist in resolving the estate. I note that in May 2011, the then solicitors for Ms Brummer wrote to Ms Jamieson, expressing their agreement that the Dutch will needed to be translated. In July 2011, Ms Jamieson wrote to the same solicitors, stating she had arranged for a copy of the will to be translated. On 8 August 2011, according to Ms Murrel’s evidence, Ms Jamieson received the translated will back. At the same time, the plaintiff’s solicitor advised that the Dutch will was likely invalid.
[30] In light of these facts, it appears reasonably arguable for Ms Murrel that, prior to August 2011, both parties regarded Ms Jamieson as acting for the estate in the same sense as they regarded Mr Gill as so acting. I conclude that Ms Murrel has
produced sufficient to show that she has an arguable defence of set-off in respect of
Ms Jamieson’s account.
[31] Ms Murrel’s claim to set off $2,060, being the costs of obtaining a translation of the Dutch will, also seems to me to be reasonably arguable. In my view an executor or administrator acting in the deceased’s estate would arguably have thought it necessary to obtain a translation of the Dutch will, even if (under New Zealand law) the will would have had no effect because it was made prior to the deceased’s marriage to Ms Brummer. By way of example only, I think it arguable that an administrator would have considered it necessary to read the Dutch will to see if it referred to any additional assets or liabilities, perhaps in Holland.
[32] As noted about at [29], in May 2011 the then solicitors for both parties were in correspondence over the will translation. The dispute then was over the costs of the translation, which had been obtained from the Internal Affairs Translation Services.
[33] There is nothing in the evidence to show that the charge of $2,060 made by a Department of the Crown was anything but a reasonable amount for the translation which was provided. In those circumstances, I think that Ms Murrel has a reasonably arguable defence by way of set-off in respect of the $2,060 charged for the translation.
[34] While I regard the foregoing set-off claims as either clear or reasonably arguable, I see no basis on which Ms Murrel can set off the sum of €9,023.50 as an amount which would properly have been payable by an administrator. In the absence of an express testamentary provision, I am not aware of any statutory or other provision which would entitle an executor or administrator to pay, out of estate assets, travel costs incurred by people travelling to attend the deceased’s funeral.
[35] In the result, I find that Ms Murrel is entitled to set off the sum of $1,017.90 against any amounts payable by her to the estate. In addition, she has reasonably arguable set-off defences in respect of the will translation cost of $2,060, the Gill &
McAsey account for $402.50, and the Cushla Jamieson account for $3,047.50. These arguable set-off defences should go forward to trial.
Issue 2 - Should the Court exercise its discretion to decline to enter summary judgment, to allow Ms Murrel to pursue her third party claims against the deceased’s sons?
[36] In Sudfeldt v UDC Finance Ltd, the Court of Appeal held that the ability of a defendant to join third parties when the plaintiff has applied for summary judgment can be adequately provided by the exercise of the Court’s discretion on the hearing of the summary judgment application, and appropriate directions given for the ongoing conduct of the proceeding, including the issue of the third party claims, if
the summary judgment application is dismissed.5 The Court noted that it is
obviously desirable to retain in a single proceeding both the ability to obtain summary judgment and the ability to bring in third and subsequent parties in appropriate cases.
[37] Considerations relevant to the exercise of the Court’s discretion to decline summary judgment and allow the issue of third party claims include questions of delay for the plaintiff, and the avoidance of possibly different results on the same issue.6 In BNZ v Mulholland, Master Williams QC (as he then was) refused the defendant’s application to join co-guarantors as third parties. While the defendant would have been entitled to contribution or indemnity from his co-guarantors, factors against allowing joinder were:
(a) the delay which would be involved if leave were granted to the defendant to issue third party claims;
(b) the fact that the plaintiff was entitled to the fruits of its judgment;
(c) the fact that entry of judgment would not prevent the defendant from commencing separate proceedings against the co-guarantors, and
5 Sudfeldt v UDC Finance Ltd [1987] 1 PRNZ 205 (CA).
6 BNZ v Mulholland (1991) 4 PRNZ 299.
(d)the fact that there was no evidence as to the ability of the co- guarantors to contribute to the judgment against the defendant.
[38] The last of those factors (ability of proposed third parties to pay) is particularly pertinent in this case. Such evidence as there is suggests that the deceased’s three sons may well be unable to contribute from their own resources to Ms Murrel’s liability to their father’s estate. Between the three sons, they were apparently unable to contribute to the costs of the travel from Holland to New Zealand for their father’s funeral, and there is nothing before me to suggest that they would be able to pay now. The proceeds of the sale of the Oldsmobile were largely spent on the airfares, and the small amount which was apparently left over (around €3,000) may also have been spent.
[39] Nor is there anything in the evidence to suggest that Ms Murrel has even asked her nephews to contribute to her liability to the estate. If they have acquired any significant assets since early 2011 it may be that they would make an appropriate contribution to Ms Murrel’s liability without the need for the issue of any third party proceedings. There is simply no evidence on the point.
[40] What appears to have happened is that Ms Murrel has simply assumed that her nephews would be unable to contribute, unless and until they make successful claims against the estate under the Family Protection Act 1955. But the fact that the deceased’s two older sons would have to commence their own claims under the Family Protection Act was pointed out in a minute issued by Judge von Dadelszen in the Lower Hutt Family Court as long ago as 16 January 2012, and no such claims have since been made. A letter dated 10 February 2012 from the solicitor then acting for Ms Murrel suggests that the Family Protection Act claim she had purported to commence on behalf of the three boys was discontinued shortly thereafter. Presumably Ms Murrel duly advised her nephews of the discontinuance.
[41] A further factor weighing against the granting of leave to issue third party claims is that there does not appear to be any risk that conflicting findings on the same issues might be made by different courts if Ms Murrel’s application for leave to issue the proposed third party is refused. The important point is that Ms Murrel
concedes that she was not entitled to act as she did in selling the motorcycle and participating in the shipment of the Oldsmobile to Holland for sale in that country. There does not seem to me to be any serious risk that the deceased’s sons might argue in any separate contribution proceedings Ms Murrel may issue against them that Ms Murrel was entitled to act as she did in respect of the motorcycle and the Oldsmobile. The likely issues in such a proceeding (assuming there were any issues) would probably only be issues arising as between Ms Murrel and the deceased’s sons; those are issues with which the estate should not have to be concerned.
[42] If leave were given to Ms Murrel to issue her proposed third party claims, I think the plaintiff would be subjected to further delay which in my view cannot be justified. With parties based in Holland who have yet to file any application for leave to commence Family Protection Act proceedings (assuming they are minded to do so), any Family Protection Act claims (and Ms Murrel’s third party contribution or indemnity claim) would probably not be resolved before some time in 2016 at the earliest. Against that, Ms Murrel has done what she has done (with respect to the two vehicles) with full knowledge that she was not entitled to do it. She has acknowledged that she was aware before Christmas 2011 that Ms Brummer had been appointed administrator of the estate by the Court, and there is no dispute that the motorcycle and the Oldsmobile were estate assets. In my view, those actions should not be rewarded now by allowing Ms Murrel a substantial delay while, with the assistance of the deceased’s sons if they are willing to cooperate with her, she seeks to have the Family Court “ratify”, in Family Protection Act proceedings which might or might not be filed, the state of affairs her unlawful actions have brought about.
[43] A final factor, also weighing against a grant of leave to issue the third party claim, is that the effect of s 52 of the Act should not, in my view, be undermined by allowing a person who has wrongfully meddled in a deceased estate to delay his or her obligation to account to the lawful administrator, while he or she pursues those who may have wrongfully received the relevant estate property. In this case, Ms Murrel has failed to raise any arguable defence that she did not “obtain or receive or hold” the motorcycle or the Oldsmobile, and it is clear that she has not provided the estate with full valuable consideration for those items. (In respect of the motorcycle, she sold the vehicle and must therefore have “obtained” it and “held” it.
In respect of the Oldsmobile, the evidence shows that the vehicle could not have been sent to Holland without Ms Murrel signing a customs form which apparently permitted the release of the vehicle from New Zealand. In my view, her ability to control the release of the vehicle from New Zealand customs implies that she sufficiently “held” the vehicle for the purposes of s 52 of the Act.) The effect of s 52 in these circumstances is that Ms Murrel is charged “as executor in her own wrong” to the extent of the estate which came into her hands, and she has an immediate obligation to account. She should not be allowed to postpone the discharge of that obligation while she endeavours to recover property she has caused to be wrongfully removed from New Zealand (the Oldsmobile) or wrongfully sold (the motorcycle).
[44] Ms Stanley did raise the issue of delay by Ms Brummer in pursuing the estate’s claims for reimbursement, and it is correct that Ms Brummer has delayed for a period in excess of two years in pursuing her present claims. However, in my view, that delay is insufficient to cause me to exercise my discretion in Ms Murrel’s favour. I accordingly decline leave to issue the proposed third party notice against the deceased’s sons, and Ms Brummer will have summary judgment on an appropriate part of her claim.
[45] I now turn to consider the third issue, namely the extent to which summary judgment should be entered on Ms Brummer’s claim for $35,000 in respect of the Oldsmobile.
Issue 3 - If summary judgment is to be entered, is Ms Brummer entitled to
$35,000 in respect of the sale of the Oldsmobile, or to some lesser amount?
[46] Ms Brummer provided with her first affidavit a copy of a valuation of the Oldsmobile prepared by a company called Restorations Unlimited. The report put a value of NZD$35,000 on the vehicle as at 6 May 2013. The valuer, Mr Terry Price, was of course unable to inspect the vehicle; he was only able to carry out research on Ebay and TradeMe, and study a photograph of the Oldsmobile given to him by Ms Brummer. He referred to the “good condition and engine size” of the vehicle in reaching his valuation figure.
[47] Ms Murrel’s evidence is that the deceased had owned the Oldsmobile for more than five years when he died. She says that he had been trying to sell the vehicle, because it kept breaking down and was costing him a lot to fix. Being a classic car, parts were not readily available, and usually had to be shipped in from America. Ms Murrel says that the deceased had been unable to sell the vehicle on TradeMe for some time prior to his death. The original purchase price paid by the deceased for the vehicle was NZD$29,000.
[48] Ms Murrel also says that after the deceased’s death she spoke to car enthusiasts who had had a connection with the deceased in his lifetime, to see if she could sell the Oldsmobile. She says that no one would offer more than NZD$20,000 for the vehicle. When the deceased’s sons later received an offer of €12,000 for the vehicle, that seemed to her to be a far better deal than would be achieved in New Zealand.
[49] In the foregoing circumstances, I am of the view that Ms Murrel has a reasonable argument that the value of the Oldsmobile may have been no more than the NZD$20,000 for which she says she could have sold the vehicle in New Zealand. I bear in mind in particular that the valuation report produced by Ms Brummer is hearsay evidence, and it is not clear if Mr Price (who was unable to inspect the vehicle) was aware of the purchase price paid for it some five years earlier, or the mechanical issues to which Ms Murrel referred in her affidavit.
[50] I accept that the actual sale price of €12,000 may have been higher than the NZD$20,000 which was apparently available for the vehicle in New Zealand, but I have no evidence of what it cost to ship the vehicle to Holland, or whether those costs have or have not been included in the €12,000 sale figure.
[51] Subject to deduction of the amounts which Ms Murrel is (or arguably may be) entitled to set off – set out in para [35] of this judgment – there will accordingly be summary judgment for Ms Brummer for the sum of $20,000 in respect of the Oldsmobile. Ms Brummer’s claim for any additional sum in respect of the Oldsmobile will have to go to trial in the usual way.
Orders
[52] I make the following orders:
(a) I enter summary judgment for Ms Brummer as administrator, in the sum of $17,972.10 (being $20,000 in respect of the Oldsmobile and
$4,500 in respect of the motorcycle, less the sum of $6,527.90 – the total of the actual or arguable set offs referred to in para [35] of this judgment).
(b) The following claims are to proceed to trial:
(i) Ms Brummer’s claim in respect of the value of the
Oldsmobile, to the extent that the claim exceeds the sum of
$20,000
(ii) Ms Brummer’s claims for an additional $5,510 ($2,060 plus
$3,047.50 plus $402.50, reflecting Ms Brummer’s contention that no (or lesser) set-offs should be allowed in respect of the will translation costs of $2,060, and/or the Gill & McAsey and/or Cushla Jamieson accounts for $402.50 and $3,047.50 respectively).
(iii)Ms Brummer has not included any formal claim for interest in her statement of claim. In those circumstances I will not include any amount for interest in the summary judgment. If Ms Brummer wishes to pursue an interest claim, it will need to be included in a suitably amended statement of claim.
(c) Counsel may file memoranda on costs if they cannot agree. I note in that regard that Ms Murrel is on legal aid, and that the amount of the claim is very small by normal High Court standards. Any memorandum Ms Brummer may wish to file on costs is to be filed within 21 days of the date of this judgment. Any memorandum from
Ms Murrel in reply is to be filed and served within 14 days of her receipt of Ms Brummer’s memorandum.
Associate Judge Smith
Solicitors:
0
0
0