CHRISTOPHER ROBERT DARLOW as executor and trustee of the ESTATE OF JANELLA DIANE MOLETA AND DELLISSE MOLETA

[2024] NZHC 2711

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-1845

[2024] NZHC 2711

UNDER

Part 19 of the High Court Rules 2016 and s135 of the Trust Act 2019

IN THE MATTER OF

The ESTATE OF JANELLA DIANE MOLETA

BETWEEN

CHRISTOPHER ROBERT DARLOW as

executor and trustee of the ESTATE OF JANELLA DIANE MOLETA

Applicant

AND

DELLISSE MOLETA

Respondent

Hearing:

13 September 2024

Appearances:

E Fox for the Applicant

No appearance for Respondent

Judgment:

19 September 2024

JUDGMENT OF MUIR J

Barring Claims Against Trustee

This judgment was delivered by me on 19 September 2024 at 4 pm, Pursuant to Rule 11.5 of the High Court rules.

Registrar/Deputy Registrar Date: ……………………………

Solicitors/Counsel:
Fee Langstone, Auckland

DARLOW v MOLETA [2024] NZHC 2711 [19 September 2024]

Introduction

[1]                 Mr Christopher Robert Darlow, a senior and respected Auckland solicitor, is the Court appointed executor and administrator of the estate of the late Janette Diana Moleta (the Estate). The respondent, Ms Dellisse Moleta, is the sole remaining beneficiary of the Estate.

[2]                 Ms Moleta has made repeated allegations against Mr Darlow in respect of his executorship and trusteeship of the Estate. Mr Darlow is unable to proceed with the winding up of the Estate while there remains on foot the prospect of Ms Moleta instituting proceedings based on these allegations. To that end, he now applies for orders under s 135 of the Trusts Act 2019 (the Act) barring Ms Moleta from issuing proceedings against him.

[3]                 In accordance with the provisions of s 135(2) of the Act, Mr Darlow served Ms Moleta with a s 135 notice on 25 January 2024. This required Ms Moleta to bring her claim to court within 90 days.1 Despite this, and despite service of the current application, Ms Moleta has not further advanced her purported claim.

[4]                 Mr Darlow further seeks orders that legal costs incurred in relation to obtaining the s 135 orders be met from the Estate.

Background

[5]                 Janette Moleta died on 15 July 2017. Her daughter, Ms Moleta, was named as sole beneficiary, executor and trustee of the Estate.

[6]                 Ms Moleta’s two sisters filed claims under the Family Protection Act 1955 (FPA)  for provision from the Estate.  Ms Moleta defended these proceedings.  On  13 October 2020, at a point when the FPA proceedings were unresolved, Moore J appointed Mr Darlow as the executor and trustee of the Estate.2

1      Alternatively, on or before 24 April 2024.

2      Moleta v Moleta [2020] NZHC 2680 at [102]–[104].

[7]                 Ultimately, the High Court awarded each of Ms Moleta’s sisters $950,000 from the Estate.3  Significant costs were also ordered against Ms Moleta.4  As executor,  Mr Darlow met the relevant distributions and costs awards from the Estate’s assets.

[8]                 Ms Moleta made a complaint to the Law Society about Mr Darlow’s administration of the Estate. The complaint included allegations of corruption, dishonesty, a failure to disclose conflicts of interest, and criminal behaviour. The Standards Committee (the Committee) determined that the complaint was so lacking in merit that it did not warrant further action being taken. Ms Moleta then filed an application for review of the Committee’s decision to the Lawyers Complaints Review Officer, which was dismissed on 20 June 2022.

[9]                 Ms Moleta has also made numerous personal attacks on Mr Darlow in correspondence with him. Her allegation that he is “a corrupt, uncouth, illegal person who is only hellbent on perverting the course of justice, deep personal hatred of women who put in the work…” is characteristic of these attacks.

[10]              The remaining assets of the Estate comprise a property in Ellerslie and a cash balance of approximately $300,000. The property is tenanted, and the Estate receives approximately $1,370 in rent per fortnight.

Relevant law

[11]              Section 135(1)(a) of the Act provides that the Court may, on an application by a trustee, “bar a claim by any person that directly or indirectly affects the trust property, including a claim against the trustee personally”.5

[12]              Section 135(2) requires that before making an application, a trustee must serve a notice on the person who it is intended be barred. The notice must describe the general nature of the claim as it is understood by the trustee and state that if legal proceedings are not commenced within 90 days after service of the notice, a court may bar the claim or authorise the trustee to administer the trust property without regard to

3      Moleta v Darlow [2021] NZHC 2016 at [135].

4      Moleta v Darlow [2022] NZHC 620.

5      Trusts Act 2019, s 135(1)(a).

it.6 This has been said to require claimant beneficiaries to “put up or shut up”7 with the intent of bringing potential claims to a head, rather than “let an impasse hold up the administration of a trust”.8

[13]              This Court has previously referred to the following principles as relevant to an application under the equivalent section of the Trustee Act 1956:9

(a)the Court is not required to undertake a substantive assessment of the merits of the claimant's claim. However, whether the claim has any merit may be taken into account when considering if it should be barred;

(b)a lack of action both before and after the three month period will count against a claimant;

(c)an explanation will be required as to why no steps were taken to initiate proceedings from the time the claimant had knowledge that the trustee was not going to meet their claim;

(d)evidence that a claim may not be prosecuted with all due diligence will count against a claimant;

(e)even where the claim is meritorious, and there is an explanation for the failure to initiate one to date, it would only extend the time for bringing a claim on conditions requiring the claimant to initiate his or her proceedings in a specified period of time, failing which it would be barred.

Service of the notice under s 135

[14]              In the latter part of 2023 Mr Darlow instructed his solicitors to prepare a notice under s 135(2) of the Act.

[15]              His solicitors were unable to serve  the  notice  on  Ms  Moleta personally. Mr Darlow accordingly obtained orders for substituted service which was effected on 25 January 2024. Ms Moleta was required to bring her claim by 24 April 2024.

[16]              On 27 March 2024, Mr Darlow received a letter from Rice Craig, lawyers stating that they were acting for Ms Moleta. They confirmed receipt by Ms Moleta of

6      Section 135(2).

7      Noel & Melva Yarrow Charitable Trust v Yarrow [2016] NZHC 1011 at [3].

8      Poulter v Poulter [2020] NZHC 3095 at [30].

9      Graham v Graham [2015] NZHC 1571 at [14].

the s 135 notice. They stated that they did not have instructions to take any of the steps specified in the notice.

Discussion

[17]              Despite service of the s 135(2) notice in January 2024 and of the application to bar on 7 August 2024, Ms Moleta has taken no steps to advance her claims, although continuing to communicate in abusive terms, including to Mr Darlow’s solicitors on 9 August 2024.

[18]              On 23 August 2024 Mr Darlow’s solicitors received advice from Mr David Jacques, a solicitor, that he “was assisting Ms Dellisse Moleta get an understanding of where the matter is at” but that he “did not have instructions yet”. He sought a “statement of position” and was subsequently directed by Mr Darlow’s solicitors to the reconciliation statement appended to his affidavit in support of the present application.

[19]              No notice of opposition to the application has been filed, nor any claim articulated by Mr Jacques. As identified in Graham v Graham the “lack of action” is a significant factor in terms of whether the application should be granted.10

[20]              As that case further identifies, I am not required to undertake a “substantive assessment” of the merits of Ms Moleta’s putative claims, though I note that I may take into account an absence of merit in determining whether the claim should be barred.11

[21]              On their face, Ms Moleta’s claims lack merit. They devolve, ultimately, to personal insults and vitriol. Complaints to the Law Society have been dismissed on the basis that there was no evidence Mr Darlow has not discharged his obligations as court appointed executor faithfully and impartially. Accordingly, this is not a case where the orders Mr Darlow seeks will prevent a meritorious claim from being

10     Graham v Graham, above n 8, at [13]–[14].

11 At [14(a)] and [15].

brought. Ms Moleta has been given every opportunity to “put up or shut up”.12 Her failure to bring her claim or even articulate one in a coherent way should not prevent Mr Darlow from winding up the Estate. This is precisely the type of case where s 135 orders are appropriate.

[22]              I am satisfied therefore that there is jurisdiction to make the order sought and that the order is appropriate in all the circumstances.

Estate costs

[23]              Mr Darlow seeks an order that “the actual costs and disbursements of this application, and the trustee’s applications for substituted serve of the s 135 notice be met from the Estate’s assets”. I have reviewed the invoices submitted in support of Mr Darlow’s claim which is for $29,451.38, including disbursements. I consider the claim reasonable.

[24]              Originally Mr Darlow also sought payment of a sum of approximately $18,000 for legal costs incurred in respect of defence of Mr Moleta’s Law Society complaints. In response to an inquiry from me as to the jurisdictional basis for me to make such an order, that aspect of the application has been abandoned.

[25]              Mr Darlow indicates that there will be some further limited costs involved in winding up the Estate, including accountancy costs, tax and conveyancing fees. I intend to make provision accordingly.

Result

[26]I make orders:

(a)barring Dellisse Moleta from bringing any  claims  against Christopher Robert Darlow in relation to his administration of the Estate of Janette Diana Moleta;

12     Noel & Melva Yarrow Charitable Trust v Yarrow, above n 7, at [3] and Poulter v Poulter, above n 8, at [30].

(b)that costs and disbursements on the application (and associated application) in the amount of $29,451.38 be met from the Estate’s assets;

(c)that the trustee’s further reasonable costs associated with the winding up of the Estate be met from the Estate’s assets;

(d)directing the distribution of the balance of the Estate to Dellisse Moleta.

Muir J