Estate of Pilbrow

[2023] NZHC 73

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-783

[2023] NZHC 73

UNDER	The Administration Act 1969
IN THE MATTER	of the Estate of Owen Ivor Maul Pilbrow
AND
IN THE MATTER	of originating application for orders by Trudy Joy Pilbrow as an executor of the Estate of Owen Ivor Maul Pilbrow

Appearances:

G W D Manktelow for the Applicant A R Rosser for Vicky Pilbrow

A S Cavanaugh for Interested Parties

Judgment:

2 February 2023

JUDGMENT OF COOKE J

[1]    By originating application filed 30 November 2022 the applicant seeks orders removing her and her sister Vicky Pilbrow as executors of the Estate of Owen Ivor Maul Pilbrow, and appointing Christopher Robert Darlow, solicitor of Auckland as sole executor of the estate in their place. The application is supported by an affidavit of the applicant sworn 25 November 2022. Other documents indicating consent, or showing a lack of opposition to the orders sought are also provided. I will describe those below.

[2]    The application was to be called in the Judge’s Chambers List on 7 February 2023, but it was referred to me as Duty Judge, and having considered the documents on the file I vacated the call in the Judge’s Chambers List indicating that I would consider the application on the papers.

RE ESTATE OF OWEN IVOR MAUL PILBROW [2023] NZHC 73 [2 February 2023]

[3]    The application also involved an application for leave to bring these proceedings under Part 19 of the High Court Rules 2016 pursuant to r 19.5. This is an appropriate procedure in the present case, and that leave is duly given.

Relevant circumstances

[4]    Owen died on 26 December 2020. Probate was granted on 22 March 2021 with Trudy and Vicky appointed as the administrators in accordance with the will.

[5]    Under the terms of the will the whole of the estate is divided in equal shares between Trudy and Vicky and their seven siblings. There are, however, differences concerning the administration of the estate. It consists largely of a former family home in Tauranga which Trudy and Vicky have been unsuccessfully seeking to sell. The differences relate to whether remedial work should be undertaken on the property to achieve its best possible return. In addition Vicky has brought a claim under the Family Protection Act 1955 against the estate. For these reasons it is thought that a neutral professional trustee should be appointed as the administrator of the estate in place of Trudy and Vicky. Mr Christopher Darlow, a well-respected Auckland solicitor has agreed to accept that appointment.

[6]    Trudy has explained why she considers an independent administrator is appropriate  in  her  affidavit.  Counsel  for Vicky  has  filed  a  memorandum  dated 1 February 2023 recording her consent to the orders. Five of the remaining seven siblings are represented by Mr Cavanaugh, and by memorandum dated 12 January 2023 they have indicated their consent to the orders sought in the application. A consent dated 18 January 2023 has also been filed from Jennifer Calderwood. The last sibling, Anne Pilbrow was served the application. She does not consent, indicating that she was not involved in the selection of Mr Darlow, and that she refused to pay for another trustee when family members could have done the task, although no formal opposition has been filed by her. I directed the Registrar to ask Ms Pilbrow whether she was seeking to be heard in opposition to the application, and whilst she reiterated her concerns she did not indicate she wished to do so.

[7]Section 21 of the Administration Act 1969 provides:

21       Discharge or removal of administrator

(1)Where an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.

(2)The administrator so removed or discharged shall, from the date of that order, cease to be liable for acts and things done after that date.

(3)Upon any administrator being discharged or removed as aforesaid (whether or not any other administrator is appointed) all the estate and rights of the previous administrator or administrators which were vested in him or her or them as such shall become and be vested in the continuing administrator or administrators (including any administrator appointed under subsection (1)) who shall have the same powers, authorities, discretions, and duties, and may in all respects act, as if he or she or they had been originally appointed as the administrator or administrators.

…

[8]    The approach to applications under this section was addressed by the Court of Appeal in Tod v Tod1 and Frickleton v Frickleton.2 Both decisions adopt what was said by Heath J in Farquhar v Nunns:3

(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.

(b)This jurisdiction involves a large discretion which is heavily fact- dependent.

(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration, but ultimately the question is as to what is expedient in the interests of the beneficiaries.

(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.

(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.

1      Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145.

2      Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154.

3      Farquhar v Nunns [2013] NZHC 1670 at [13] (footnotes omitted).

(f)The principles for the exercise of the Court’s discretion are the same, whether an application is made pursuant to s 51 of the 1956 Act or   s 21 of the 1969 Act.

[9]The interests of the beneficiaries must always be the ultimate focus.4

Assessment

[10]   I consider that the orders sought in the application are appropriate. Although details of the issues that have led to the disagreements have not been set out in an elaborate form, even Ms Anne Pilbrow says there have been difficult family dynamics. The two existing administrators and all but one of the siblings now agree to the proposed orders. Based on the affidavit evidence the property has not been able to be sold, and there are disagreements. One of the two existing administrators has brought proceedings against the estate. It makes sense for an independent solicitor to undertake the steps that are now being required for the effective administration of the estate in those circumstances. Given that the assets of the estate are limited to the former family home it is also important that steps be taken to address the issues as efficiently as possible, and in a manner that minimises the cost associated with such disputes. That includes the legal costs involved in making applications such as this one. Putting control in the hands of an independent solicitor facilitates this. I accordingly make the orders under s 21 appointing Mr Darlow as sole substitute administrator in place of Ms Trudy Pilbrow and Ms Vicky Pilbrow.

[11]   The originating application also sought an order confirming that the power of appointment of new trustees of the Pilbrow Property Trust is to vest in Mr Darlow pursuant to cl 10.1 of the Trust Deed. By Deed of Retirement and Appointment Trudy and Vicky and the relevant corporate trustee have resigned as trustees of that Trust and appointed Mr Darlow. As things presently stand I do not understand why an order for the Court is needed to appoint Mr Darlow as the sole replacement trustee, or precisely what assets that Trust holds. For that reason I do not presently make an order in the terms sought. If Mr Darlow considers that an order is necessary he may file a memorandum with the Court explaining why that is so and addressing the

4      Frickleton v Frickleton, above n 2, at [33].

requirements  for  making  such an order.   If he does so that memorandum can be referred to me to be considered on the papers.

[12]   Finally after preparing this judgment a further memorandum was filed by the applicant of today’s date. This reiterated the orders sought, but added an application that the costs and disbursements of the application be met out of the assets of the estate. Not all parties have consented to that order, and Ms Anne Pilbrow opposes the making of that order, but I accept that such an order would be appropriate, and direct that all reasonable costs and disbursements of this application be met out of the assets of the estate.

Cooke J

Solicitors:

Greg Kelly Law Ltd, Wellington for the Interested Parties Holland Beckett Law, Tauranga for Vicky Pilbrow