Burgess v Monk

[2017] NZHC 612

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2017-463-0008 [2017] NZHC 612

IN THE MATTER

of the Estates of Christian Theodore Emil

Burgess and Mary Alice Burgess

BETWEEN

WARWICK JAMES BURGESS Applicant

AND

PHILIP CHARLES MONK First Respondent

THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED Second Respondent

DAVID TROUNSON Third Respondent

OʼSULLIVAN CLEMENS

Fourth Respondent

Hearing:	8 March 2017
Appearances:	D G Chesterman for Applicant R J Latton for First and Second Respondent J N Briscoe for Party Directed to be Served
Judgment:	30 March 2017

JUDGMENT OF PETERS J

This judgment was delivered by me on 30 March 2017 at 2.15pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:           Bell & Graham, Matamata

Tompkins Wake, Rotorua

Counsel:            D G Chesterman, Auckland

R J Latton, Auckland

BURGESS v MONK [2017] NZHC 612 [30 March 2017]

Introduction

[1]      Mr Burgess, the applicant, seeks orders for the provision of documents and that the first and second respondents make an interim distribution to him of funds they hold as executors of the estates of his parents, Christian and Mary Burgess (“estates”).  Christian Burgess died in 1980 and Mary Burgess in 2007.

[2]      Mr Burgess seeks these orders by way of originating application dated 19

December 2016 (“application”).   Mr Burgess requires leave to proceed by way of such an application.   I have reservations about whether Mr Burgess should have proceeded in this manner but I shall grant leave as there is no objection to my doing so and the application for a distribution fails for a more fundamental reason, being a lack of jurisdiction.

[3]      The first and second respondents (“Mr Monk” and “NZGT”, together “the executors”) are the present executors and trustees of the estates.   For reasons it is unnecessary to address, the estate of Christian Burgess has not yet been wound up. Nothing turns on this however.  Christian Burgess left his estate to Mary Burgess and so the funds affected by this application may be treated as held by the executors for the estate of Mary Burgess.

[4]      The third and fourth respondents have not participated in the application. The third respondent is the executor of the estate of Mr Anthony Richard Western. Mr  Western  was  an  executor  and  trustee  of  the  estate  of  Mary  Burgess  until December 2009, when NZGT was appointed in his place.  The fourth respondents are the solicitors acting for the executors, and hold all funds in their trust account. They were not required to appear at the hearing before me as they abide the decision of the Court.

[5]      Mr Burgess served his application on the executor of the estate of his late brother, Hilton Burgess (“Hilton Burgess Estate”).  Hilton Burgess died in July 2010. The executor of the Hilton Burgess Estate is the (estranged) wife/widow of Hilton Burges, Mrs J E Burgess (“Mrs Burgess”).   Mrs Burgess and the children of the marriage are the beneficiaries of that estate.

[6]      On or about 20 February 2017, Mrs Burgess filed a notice that combined:

(a)       A notice of opposition to (Mr Burgess’s) application for distribution;

and

(b)An  interlocutory  application  seeking  an  order  that  the  executors distribute funds to her.

[7]      This notice is deficient  in various respects.   As counsel  for Mr Burgess submitted, it is not apparent whether the application is intended as an originating application (which aside from anything else would require leave) or an interlocutory application.  Nor does the notice identify the statutory provisions and/or authorities relied upon, whether in opposition to Mr Burgess’s application or in respect of the order that Mrs Burgess seeks.  As appears below, on the information before me I am not satisfied that there is jurisdiction to order an executor to make a distribution. However, the deficiencies in Mrs Burgess’s application are such that I decline to entertain it at all.

[8]      The executors have filed a notice of opposition to Mr Burgess’s application. It  also  does  not  identify the  statutory provisions  and/or  authorities  relied upon. Neither Mr Burgess nor the executors filed a notice of opposition to the application made by Mrs Burgess.

Background

[9]      I shall set the background out briefly as the immediate issue in this case is the

Court’s jurisdiction to make the order sought as to a distribution.

[10]     In 2009 the executors sold all the assets in the Mary Burgess estate for

$6 million.  Mr Burgess is a residuary beneficiary as to a 60 per cent share and the estate of Hilton Burgess 40 per cent.

[11]     Mr Burgess’s application is expressed to be made pursuant to ss 64A, 67 and

68 Trustee Act 1956 and the inherent jurisdiction of the Court.   I do not consider these provisions of the Trustee Act have any application as a matter of principle but

the first matter to determine is whether or not the estate is still in administration, because the executors submit that it is and that Mr Burgess has no fixed entitlement until the process of administration is completed and the residue of the estate ascertained.

[12]     The relevant provision of the will of Mary Burgess is as follows:

I GIVE the whole of my estate to my trustee UPON TRUST:

(a)       to pay out of it my just debts funeral and testamentary expenses and all taxes and duties payable in respect of my taxable or dutiable estate.

(b)       to divide the residue (“my residuary estate”) into ten (10) equal parts as to value and to hold six (6) of such parts for my son WARWICK BURGESS absolutely and four (4) of such parts for my son HILTON BURGESS absolutely.

[13]     The executors submit that “testamentary expenses” include expenses they may incur in proceedings that Mr Burgess and another plaintiff, CTE Burgess Limited, have commenced against them and others in the High Court at Rotorua (“Rotorua  proceeding”).     The  executors  submit  that  the  residue  will  not  be ascertained until determination of the proceeding.

[14]     If the estate is still in administration, and counsel for Mr Burgess did not contend otherwise, Mr Burgess must establish that the Court has jurisdiction to order an executor to make an interim distribution to him regardless.

[15]     None of the provisions of the Trustee Act to which I was referred confer such jurisdiction.  Section 64A is concerned with variations of trust; s 67 is irrelevant and s 68 is concerned with an application to review an act or omission or decision or exercise of a power conferred by the Trustee Act.  Nor was I referred to any authority for the proposition that the Court has inherent jurisdiction to order an executor to make an interim distribution in circumstances such as the present.   It may be that such jurisdiction exists but if so it is not apparent on the information and authorities provided to me.

[16]     Accordingly, at present I am not satisfied that I have jurisdiction to order the executors to make a distribution.  I decline this part of the application accordingly.

[17]     That is not the end of the matter however because an executor may make an interim distribution if he or she wishes, as indeed the executors have previously.

[18]     In submissions at the hearing, counsel for the executors said that they had been particularly concerned to retain all funds on hand because Mr Burgess has sought an order in the Rotorua proceeding rescinding the sale of an asset and they might require the funds if that relief were ordered.

[19]     But for this, however, counsel said the executors would make an interim distribution to Mr Burgess of $1,092,319,1  as such a distribution would remedy an inequality in the executors’ distributions to date.  For reasons not explained, to date the  executors  have  paid  Mr  Burgess  $1,191,938  and  the  Hilton  Burgess  Estate

$1,480,000, rather than distributing in the proportions in which each is to benefit from the residue.

[20]     The executors’ concern as to the order sought for rescission has now been resolved, as counsel for Mr Burgess and the executors have agreed on amendments to the pleading to address the executors’ objection.  This appears from counsel’s joint memorandum dated 14 March 2017.  Given this, and the matters to which I have just referred, it would not seem that Mr Burgess requires any order from the Court to achieve his object. The objection the executors had, has now fallen away.

Documents

[21]     Mr Burgess seeks “updated account statements” and “all source documents relating to money going in and out of the Estate account from 2 October 1980”.  I decline to make the order sought on the grounds that the executors state that they have already provided all relevant documents to Mr Burgess and that they will do likewise, without delay, as regards any other relevant documents that should come to

hand.

1      This is the sum Mr Burgess estimates as being the funds required for legal costs and living expenses – see [41] of his affidavit sworn 19 December 2016.

Costs

[22]     I make no order as to costs. These are to lie where they fall.

..................................................................

Peters J