IN THE MATTER OF an application for removal of administrators
BETWEEN ROSEMARY LEE CRICK JOHN HOWARD MCILRAITH IAN DAVID MCILRAITH Plaintiffs
ANDROBERT BRUCE MCILRAITH IAN DAVID MCILRAITH Defendants
Hearing: 5 June 2012 (Heard at Timaru)
Appearances: L A Andersen for Plaintiffs (on 5 June 2012); P I Pati (on delivery of judgment: 6 June 2012)
J B Lovely for Defendants
D H McIlraith in Person (a person directed to be served) Judgment: 6 June 2012
JUDGMENT OF ASSOCIATE JUDGE OSBORNE [as to application for removal of administrators]
Introduction
[1] Alice McIlraith appointed her lawyer, James Wallace, and her trusted son, Robert, (the defendants) as the administrators of her estate. She died. James Wallace and Robert obtained a grant of probate. Three of Mrs McIlraith’s other children as plaintiffs in this proceeding assert that it is expedient that the defendants
be removed as administrators and that others be appointed in their place.
CRICK V MCILRAITH HC TIM CIV-2011-476-000690 [6 June 2012]
Background
[2] Bruce and Alice McIlraith had a farm. They also had five children (one daughter and four sons). Within their lifetimes, Mr and Mrs McIlraith saw their children, all adults, become deeply divided over issues of provision, entitlement and obligation. I refer to the parents as “Mr and Mrs McIlraith” and, for convenience, to their children by their first names.
[3] Mr McIlraith died in January 2001. Litigated disputes over his estate were eventually resolved by a consent order in 2006. I will return to that consent order.
[4] This litigation relates to the estate of his widow, Mrs McIlraith, who died in February 2011. Her mental capacity had been diminished for some years prior to her death. There is however no dispute as to the validity of her last will, which was dated 20 June 2001. In it she appointed James Wallace and Robert as her administrators. Probate was granted on 29 April 2011. Mrs McIlraith divided her estate equally between her five children. The evidence indicates that the administrators have faithfully carried out their responsibilities.
[5] The estate is not large. It will have a net value of around $270,000 before the costs of administration are deducted. The home owned by Mrs McIlraith sold for a little over its rating valuation after an initial hiccup when the plaintiffs said that such steps should not be taken in the meantime. Through arrangements between two of the children, Mrs McIlraith’s chattels have been divided. That leaves a debt of approximately $195,000 to be collected from Mr McIlraith’s estate. It also leaves the administrators to deal with a family protection claim issued by a son, Donald.
[6] Donald indicates that his family protection claim may approach the value of the residuary estate by reference to his understandings that:
(a) his brother, Robert, received approximately $200,000 from the
family’s wealth; and
(b) his sister, Rosemary, stands to receive some approximately $150,000;
and
(c)…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Crick v McIlraith [2012] NZHC 1290
Case
[2012] NZHC 1290
Decision Date
CaseChat Overview and Summary
The plaintiffs in this case, Rosemary, John, and Ian McIlraith, sought the removal of Robert McIlraith and James Wallace, the administrators of their mother's estate, and their replacement with Adair Craik and James Guest. The plaintiffs claimed that the removal of Robert McIlraith was expedient as he had a conflict of interest between his duty to the beneficiaries and his interest as a debtor of the estate. They also claimed that the application for probate by Robert and James Wallace was contrary to the wording and spirit of a consent order made in the Family Court in proceedings relating to the estate of Bruce McIlraith. The plaintiffs invoked the power of the Court under s 21 of the Administration Act 1969 and the Court's inherent jurisdiction.
The court found that the plaintiffs' reliance on an inherent jurisdiction in relation to administration matters was misconceived as the inherent jurisdiction relates to trustees and not to administrators. The court proceeded on the basis that it was to deal with this application in terms of s 21 of the Administration Act only. The court adopted the principles that this jurisdiction involves a large discretion which is heavily fact-dependent; the starting point is the Court’s duty to see estates properly administered and trusts properly executed; the welfare of the beneficiaries is the “litmus” test; and hostility as between administrators or trustees and their beneficiaries is not of itself a reason for removal.
The court found that the removal of Robert McIlraith as an administrator was expedient as his appointment was inconsistent with the spirit of the 2006 consent order and it would remove an understandable and merited resentment and lack of confidence on the part of siblings. However, the court found that the removal of James Wallace as an administrator was not expedient as there was no suggestion that he had been involved in any impermissible conduct and Mrs McIlraith had chosen to appoint him as her executor and trustee and did not subsequently give rise to any understanding that she would revoke such appointment.
The court ordered that Robert Bruce McIlraith be removed as administrator of the estate of Alice May Clark McIlraith subject to certain conditions, including that Adair Craik be requested to advise the Registrar whether she will accept appointment as an administrator of the estate. If Adair Craik declines to be appointed, the Registrar is to liaise with the President of the Canterbury- Westland Branch of the New Zealand Law Society to nominate a suitable candidate to accept appointment as an administrator of the estate. The court dismissed the summary judgment application in relation to James Laybourne Wallace and the appointment of James Christopher Dexter Guest, and reserved all issues of costs.