Cundy v Cundy
[2019] NZHC 413
•12 March 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-001933
[2019] NZHC 413
BETWEEN ANN MAY CUNDY
Applicant
AND
JOHN FRANCIS CUNDY as the executor of the Estate of CHARLES ROY CUNDY
Respondent
Hearing: 15 February 2019
[Further submissions/affidavits received 28 February 2019]
Counsel:
M D Lloyd and P Gallagher for the Applicant K Lee and J M Skinner for the Respondent
Judgment:
12 March 2019
JUDGMENT OF EDWARDS J
This judgment was delivered by Justice Edwards on 12 March 2019 at 3.30 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Counsel: M D Lloyd, Auckland
Solicitors: Paul Gallagher Legal, Auckland Skinners Law, Auckland
CUNDY v CUNDY [2019] NZHC 413 [12 March 2019]
[1] The parties to this proceeding are estranged siblings. The applicant, Ann Cundy, seeks an order appointing her the administrator of their father’s estate.
[2] The respondent, John Cundy, is the current executor under the will. He has agreed to step down from that role but opposes the appointment of his sister as administrator. Instead, he proposes the appointment of an independent solicitor, Mr Cantrell or a person chosen by the New Zealand Law Society.
How did this situation arise?
[3] The parties are two of the five children of the deceased (Charles Cundy). Two of the other children, Paul and Matthew, support their sister. The other brother, Edward, does not wish to have any involvement in this proceeding.
[4] Charles died on 17 May 2017. John was appointed the executor and trustee of his will. Under the terms of the will, the residue of the estate was given to John on the proviso that the sum of $50,000 was paid to each of Paul, Matthew and Ann within three years of the date of his death. No provision was made for Edward because he had earlier received his father’s half-share in a property which they owned together.
[5] Ann alleges that John and his wife, Susanne, took money from Charles prior to his death. Her allegations centre on the sale of a property which I will refer to as “The Avenue”, and the purchase of another property referred to as “Oneriri Rd”.
[6] Charles owned a half-share in The Avenue; John and Susanne owned the other half. John says that his father told him he wanted to give his share in The Avenue to John and Susanne, just as he had gifted a half-share in another property to Edward.
[7] The Avenue was sold in 2014 for $1,061,888. The sale proceeds were used to discharge John and Susanne’s mortgage over The Avenue ($319,029.76), and a further advance was applied to the payment of the deposit on Oneriri Rd ($300,000). The balance was distributed to Charles ($170,758.27) and to John and Susanne ($170,758.27).
[8] The Oneriri Rd property was purchased later that year for $650,000. That property has a two-bedroom cottage on it in which Charles lived alone.
[9] Ann has suspicions about the authenticity of emails from Charles authorising the payment of The Avenue sale proceeds to John’s bank account, and for payment of the deposit on the Oneriri Rd property. Ann also queries why Charles is not registered as an owner of Oneriri Rd. However, John explains that the emails were authorised by Charles, and that he did not want his name on the Oneriri Rd title because it was always his intention to give the property to John when he died.
[10] Charles was diagnosed with motor neuron disease in 2016. He made his last will on 10 May 2016. Ann takes issue with the authenticity of the will. However, enquiries were made with the lawyer who witnessed the will. He confirmed that he attended on Charles and personally witnessed him signing the will.
[11] In March or April 2017, Ann went to Oneriri Rd to help look after Charles. By this time, it appears that his health had deteriorated. Ann claims that Charles was not well looked after. That is despite home help and nurses paid for by John visiting him daily. She also alleges that despite living next door, John and Susanne had nothing to do with Charles.
[12] John denies those allegations. He says he took care of Charles for 12 years before his death, and it was only in the months before he died that Ann took any steps to take care of him. John says Ann prevented him from seeing Charles when she arrived and that was very upsetting.
[13] Ann says that shortly before he died, Charles told her that he wanted to make a new will in which his estate would be shared equally between all of his children, with the exception of Edward. The lawyer who witnessed the 2016 will was asked to attend on him again, and he came out to the property to meet with Charles. However, the new will was not prepared. There appears to be a dispute between Ann and the lawyer as to the reasons for this. The lawyer says he had concerns about Charles’ mental competency at that time, and his deterioration in the year that he had last seen him was immediately apparent. Ann denies this. She says that the lawyer never
expressed any concerns to her, and he simply did not get around to preparing the new will. She harbours suspicions about the independence of this lawyer.
[14] It appears that tensions between the family members were running high shortly after Charles’ death. Ann posted some inflammatory and derogatory remarks about John on Facebook. Ann also says that John took money from her father’s bank account to purchase alcohol. John and Susanne did not attend the funeral. John says that this was because of threats made against him by one of his estranged brothers. John also alleges that Ann took four carloads of items from the Oneriri Rd cottage. There is also an issue with funeral expenses which were not met by the estate.
[15] Ann claims that her father’s estate should be worth at least $700,000. That comprises:
(a)the balance of the funds from the sale of The Avenue and/or a half-share in Oneriri Rd;
(b)savings in her father’s bank account in an amount unknown;
(c)Charles’ classic car collection, the value of which is unknown but which Ann estimates to be around $200,000; and
(d)personal effects including a collection of musical instruments and record collection, value unknown.
[16] Ann, Paul and Matthew commenced proceedings against John in May 2018 making the same allegations against John and Susanne as are made in this application.
Those proceedings are currently stayed pending resolution of this application.1
[17] Following his father’s death, John made some initial inquiries regarding the estate but has not applied for probate. In his view, the estate is likely to have a value less than $15,000. He claims that the estate owes him approximately $7,000 for the home care and nursing assistance he paid for his father. Although he denies the
1 Cundy v Cundy HC Auckland CIV-2018-404-0989, 17 October 2018.
allegations made against him, John accepts that it is appropriate that he stand down to allow someone else to administer the estate. He has nominated a solicitor, Mr Cantrell, who has indicated he is willing to act. Alternatively, he has suggested that the New Zealand Law Society appoint a solicitor as administrator. John has offered to pay $5,000 towards the costs of an independent administrator.
Who should be appointed administrator?
[18] Section 19 of the Administration Act 1969 (the Act) allows the Court to appoint a replacement executor where the appointed executor has failed to prove the will, or renounce probate, within three months from the death of the testator. Ann’s application was originally made under this section. However, John has conceded that he should step down. Accordingly, the application proceeds under s 6 of the Act.
[19] Section 6(2) of the Act confers a discretion on the Court to grant administration to a new executor who would not otherwise be entitled to be appointed. The Court may do so where, by reason of special circumstances, the Court thinks such an appointment is necessary or expedient. That decision is to be guided by the Court’s duty to ensure estates are properly administered and trusts are properly executed. The welfare and interests of the beneficiaries are the primary considerations.2
[20] I consider the evident animosity between the siblings is relevant to the determination of what is in the welfare and interests of the beneficiaries in this case. The estrangement stretches back a number of years and the split between family members appears to have historical roots. In the current context, the animosity is apparent in Ann’s Facebook messages on the one hand, and John’s allegations about Ann taking things from the estate on the other. The very fact that proceedings against John had already been commenced reveals something about the nature of the divide between the beneficiaries of the estate.
[21] That level of animosity raises concerns about the ability of any one of the siblings to administer the estate impartially and independently. It will be no easy task
2 Baird v Fisher [2014] NZHC 1347 at [6].
to approach the investigation and assessment of potential claims with a cool and objective head when family grievances run deep.
[22] It is the extent of animosity between the parties, and the resulting concerns about a lack of impartiality, that distinguish this case from Jackson v Jackson.3 Although the siblings were clearly estranged in that case, there does not appear to be the same level of discord as in this case. Court proceedings were not on foot and, unlike this case, there does not appear to have been any allegations of conflict made against the sibling seeking appointment as executor.
[23] These comments should not be interpreted as reflecting adversely on Ms Cundy, or on her capacity to accept appointment. Nor should they be interpreted as expressing a view on the merits of the claims that she has made against John, or indeed the claims made by John against her. Those are not matters which can be determined in the context of this application.
[24] Against the background of animosity and family disunity, I consider the welfare and best interests of all the beneficiaries requires the appointment of a neutral and independent third party to the role as executor.
[25] Ms Cundy has legitimately raised the question of costs. She has limited means and is unable to contribute to the cost of a solicitor to administer the estate. John has offered to pay $5,000 towards the administrator’s costs. Any costs over and above that will be met from the estate. It is in all parties’ interests to ensure that reasonable steps are taken to administer the estate in the most cost-effective manner. That extends to the disclosure of relevant documents to the executor, and the provision of all necessary information to ensure the estate is administered efficiently and expeditiously.
[26] That just leaves the question of who should be appointed. Mr Cantrell is suitably qualified and has agreed to act if appointed. However, in light of Ann’s objection, I consider selection by the New Zealand Law Society is preferable in the circumstances. Orders to that effect are set out below.
3 Jackson v Jackson [2016] NZHC 1723.
Result
[27]I decline to appoint Ms Cundy executor of the estate.
[28] The Registrar is directed to confer with the New Zealand Law Society about the nomination of a suitably qualified solicitor to administer the estate of the late Charles Cundy. The solicitor should be at least 10 years qualified with experience in estate administration and litigation. She or he must be independent of the Cundy family, their friends, and associates. The nomination should take into account John’s estimate that the estate is worth less than $15,000, and Ann’s claim that the estate has potential claims which would significantly increase the overall value of the estate.
[29] Leave is reserved to the New Zealand Law Society to seek further direction if required.
[30] The New Zealand Law Society (or the nominated solicitor) is requested to file a memorandum informing the Court of the nomination and annexing the solicitor’s consent to act. Upon receipt of that memorandum, final orders appointing a new executor in replacement of John Cundy will be made on the papers.
Edwards J