Estate of Toner
[2023] NZHC 1646
•29 June 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-485-609494
[2023] NZHC 1646
UNDER the Administration Act 1969 IN THE MATTER
of the Estate of Patrick James Toner
Hearing: 21 June 2023 Counsel:
B R D Burke for Applicant D P MacKenzie for Caveator
P W Michalik for Carol Toner
Judgment:
29 June 2023
JUDGMENT OF RADICH J
Introduction
[1] Patrick Toner (Mr Toner) died in March 2021 leaving a wife (Mrs Toner) and four daughters – Maria Toner, Maureen Toner, Patricia Stacey (Mrs Stacey) and Victoria Threadwell (Mrs Threadwell).1 In his 2017 will, he appointed Mrs Toner and Mrs Stacey as the executors of his estate. In a codicil made two years later, he added a third executor, someone who is not a family member.
[2] Because of a range of issues that have arisen between family members, probate for the estate has not been sought by the executors. As a result, Mrs Threadwell obtained an order nisi under s 19 of the Administration Act 1969 (the Act), requiring
1 Mrs Threadwell is the daughter of Mr and Mrs Toner. Maria Toner, Maureen Toner and Mrs Stacey are Mr Toner’s daughters from earlier relationships.
Re Estate of Toner [2023] NZHC 1646 [29 June 2023]
the executors to show cause why administration should not be granted to her or to some other person appointed by the Court. Mrs Stacey has lodged a caveat against the application for administration, challenging the validity of the codicil.
[3] Mrs Threadwell no longer seeks a grant of administration in her favour. She seeks only that it be granted to an independent person appointed by the Court (independent administrator). Mrs Stacey and the other executors agree that administration should be granted in favour of an independent administrator and Mrs Stacey agrees that her caveat will not be maintained as a consequence.
[4] However, the point of contention is this: Mrs Stacey wishes her appointment as an executor under the will to be maintained so that there would be two administrators – Mrs Stacey and the independent administrator. Mrs Threadwell’s position in response is that, if Mrs Stacey is to be appointed alongside an independent administrator, then she (Mrs Threadwell) would wish to maintain her application for a grant of administration in her favour as well. That is to say, in those circumstances there would be three administrators – an independent administrator, Mrs Stacey and Mrs Threadwell.
[5] The two other executors appointed under the will support Mrs Threadwell’s position: they do not wish to have probate granted in their favour as executors, they support a grant of probate to an independent administrator, and they do not support a grant of administration to Mrs Stacey. But, if there was to be such a grant, they say that a grant should be made to Mrs Threadwell too.
[6] Maria Toner and Maureen Toner support Mrs Stacey’s position: they wish for the administrators to be an independent administrator and Mrs Stacey. They do not support a grant to Mrs Threadwell.
[7]The issues that emerge from the current positions of the parties are as follows:
(a)As the parties agree that the order nisi should be made absolute and, therefore, that probate of Mr Toner’s will should be granted to an independent administrator by the Court, who should that person be?
Section 6 of the Act provides the Court with a broad jurisdiction to grant administration to such persons as it thinks fit.
(b)Should Mrs Stacey administer the estate alongside the independent administrator? Given that Mrs Stacey has not applied for a grant of probate, strictly speaking, her appointment would be under s 6 also.
(c)In the event that a grant of administration is made to Mrs Stacey under s 6, should Mrs Threadwell’s application, as originally framed, be granted such that a grant should be made in her favour, alongside grants to the independent administrator and Mrs Stacey?
[8] For the reasons I go on to give, I am satisfied that the order nisi should be made absolute and that administration of Mr Toner’s estate should be granted to an independent administrator under s 6 of the Act.
[9] I go on to appoint Mr John Langford, a Wellington solicitor, as administrator of Mr Toner’s estate.
[10] I do not consider that a grant of administration should be made to Mrs Stacey alongside the independent administrator. Accordingly, I need not consider whether or not to make a grant to Mrs Threadwell.
Factual background
[11] Mr Toner died at the age of 90 on 2 March 2021. His estate consists of a share portfolio valued at approximately $1 million and a 50 per cent shareholding in a company called Made in Nippon Ltd (MINL), which has assets valued at somewhere between $3.5 million and $5 million. MINL’s assets are, primarily, two residential properties.
[12] In Mr Toner’s will of 8 August 2017, he appointed Mrs Toner and Mrs Stacey as executors of his estate; he gave his personal chattels to Mrs Toner; he gave one-half
of the residue of the estate to Mrs Toner; and he gave the remaining half of the residue in equal shares to Mrs Threadwell, Mrs Stacey, Maria Toner and Maureen Toner.
[13] The 2019 codicil changed the 2017 will only to the extent that it appointed Edward Saul (Mr Saul) as a third executor of the estate.
[14] The background to what is a relatively straightforward set of issues is complex. It is characterised by lengthy correspondence between solicitors and counsel and lengthy affidavits. The affidavit evidence spans well over 400 pages (including exhibits). Ultimately, it is not for me to determine the underlying factual allegations and denials that are chronicled in the documents. Rather, I must apply the tests I discuss below to the factual landscape that the documents reveal. Accordingly, I have endeavoured to distil the background to this decision to essential facts and events.
[15] Mr Toner suffered from supranuclear palsy. In her evidence, Mrs Toner has described the way in which the condition affected Mr Toner physically: he found it hard to keep his eyes open but “was aware of his surroundings, and knew what he wanted and what he was doing”. On 29 August 2017, Mr Toner’s condition had progressed to the extent that he signed an enduring power of attorney for his property in favour of Mrs Toner and Maureen Toner. He did not give an enduring power of attorney for his personal care and welfare.
[16] On 5 February 2019, Dr Rupali Sharma assessed Mr Toner’s capacity to “make decisions around his finances”. Dr Sharma referred to Mr Toner becoming withdrawn over time such that he was not participating in, or contributing to, decisions about the management of the MINL business. Dr Sharma concluded that:
[Mr Toner] is clearly demonstrating signs of decline and cognitive function with impairment of memory, inability to process complex information and provide well thought out decisions. In his current state I think it is prudent to invoke Enduring Power of Attorney for property, which is currently being held by Carol.
[17] Two days later, on 7 February 2019, Mr Toner executed the codicil to his 2017 will in which he appointed Mr Saul as a third executor of his estate. In his affidavit, Mr Saul described Mr Toner having told him that he saw Mr Saul as being a “circuit
breaker” in the tensions between his older daughters (Maria Toner, Maureen Toner and Mrs Stacey) and his wife, Mrs Toner. Ms Helen Foot, who prepared Mr Toner’s codicil in 2019, said that Mr Toner had believed that Mr Saul would be “an independent voice” and was someone who not only knew the family but had business experience.
[18] On 12 February 2019, Dr Sharma provided a certificate in which he recorded that Mr Toner was “not wholly competent to manage his own affairs in relation to his property”. The reason for the opinion was that:
Mr Patrick Toner has a neuro degenerative condition affecting his cognitive function, memory, communication which is impacting on his ability to comprehend and make decision on [sic] complex financial issues.
[19] Mrs Stacey (supported by Maria Toner and Maureen Toner) has expressed a view that, in the following months, Mrs Toner used the joint enduring power of attorney improperly and made a series of withdrawals from Mr Toner’s account and from a term deposit account without Maureen Toner’s knowledge. It is their position that Maureen Toner was not aware that, through Dr Sharma’s certificate, the power of attorney had been activated until 12 September 2020, some 19 months later.
[20] Mrs Toner saw the power of attorney as something that was “there in the background”. She referred to Mr Toner continuing to make decisions and to the power of attorney being something that “just sat there, waiting to be used”. She does not accept the allegations that have been made about withdrawals from the accounts.
[21] Mrs Toner says that, in any event, she did email Maureen Toner soon after the power of attorney came into effect, asking to meet but that Maureen Toner did not reply for nearly two years. Maureen Toner explained that Mrs Toner’s email had gone to an email address she did not use often.
[22] On 18 November 2020, Mr Toner was seen by Dr Cindy Towns to assess his decision-making capacity. Dr Towns said in her 24 November 2020 report that Mr Toner understood the bottom lines in his business affairs but not the particular income associated with each investment. Having noted that Mr Toner’s condition had
deteriorated over recent years, Dr Towns recorded having been “quite surprised” with a score that Mr Toner achieved in cognitive testing – indicating that he did a little better than she would have thought. She referred to Mr Toner having told her three times that he wished for Mrs Toner to be his enduring attorney, as she knew him best, and that he did not particularly want other family members to be involved.
[23] Dr Towns considered that Mr Toner retained decision-making capacity over his health and welfare – provided he was supported and conversation was kept simple
– but that he was vulnerable in relation to his business interests and that it would be prudent to invoke his enduring power of attorney for property. However, Dr Towns went on to say “I believe he retains capacity to appoint or change an Enduring Power of Attorney should he need to.”
[24] On 16 December 2020, Mr and Mrs Toner went to Perpetual Trust and Mr Toner executed a new enduring power of attorney, appointing Mrs Toner as sole attorney. Then, on 15 January 2021, Mr Toner signed a revocation of power of attorney, with effect from 16 December. At this point, Mrs Stacey, Maureen Toner and Maria Toner, on the one hand, and Mrs Toner, on the other, disagreed about, first, which power of attorney was valid and, secondly, whether Mrs Toner had used the first power of attorney inappropriately.
[25] After Mr Toner’s death, Mrs Stacey became aware of the codicil and the dispute about the powers of attorney escalated to include questions over Mr Toner’s capacity when the codicil was executed. It was, and continues to be, Mrs Stacey’s view that the codicil is invalid as it was executed two days after Mr Toner was assessed as lacking capacity to manage his business and property affairs. Mrs Threadwell’s position is that the threshold for the management of property is different to the threshold that applies in considering whether a person has capacity to grant a new power of attorney or to update their will.2
2 Counsel for Mrs Threadwell referred to Re K [1988] Ch 310 at 315, in which Hoffman J said that many enduring powers will be executed when symptoms of mental incapacity have begun to manifest themselves and that while a donor may be mentally incapable in the statutory sense of managing their property and affairs, they may still execute the power of attorney with full understanding.
[26] In May 2021, the disputes expanded once more. Now they included differences over the accounts of MINL. Maureen and Maria Toner believed draft accounts for the company to show inconsistencies. Mr Toner’s current account was a particular focus.3 In lengthy communications with accountants, concerns were expressed by Maria Toner and Maureen Toner about accounting entries. It is not necessary, in addressing the issues before the Court, to consider the rights or wrongs of this interrogation of the company’s accounts. It is enough to say that independent accountants were appointed, the independent accountants resigned, and that, ultimately, the parties agreed to apply to the High Court for the appointment of a liquidator to MINL in November 2022.4 An independent liquidator is now winding up the affairs of the company and attempting to reconcile the accounting issues that have been raised.
[27] In these ways, the administration of Mr Toner’s estate, including the dispute over the codicil, became tied inextricably with the issues relating to the power of attorney and the company’s accounts. In July 2021, the solicitors for Mrs Stacey, Maureen Toner and Maria Toner proposed mediation. Correspondence was exchanged but mediation did not proceed. Attempts at “global resolution” were made in May 2022. Exchanges between legal representatives at that time saw suggestions about applying for probate in common form, in solemn form (given issues over the validity about the 2019 codicil) or administration through the agreement of beneficiaries. The executors could not agree and so probate has not been sought since Mr Toner’s death.
[28] Mrs Stacey lodged a caveat against any application for administration on 21 June 2021.5
[29] Mrs Threadwell applied for the order nisi on 21 December 2022. She had signalled to family members for some months beforehand the need for the executors to apply for probate, failing which she felt that would need to make an application.
3 The lower its balance, the more that would be available for distribution to beneficiaries of the estate.
4 Toner v Made in Nippon Ltd HC Wellington CIV-2022-485-755, 15 December 2022 (Minute of Johnston AJ).
5 Updated caveats were filed on 8 June 2022 and 9 June 2023 as existing caveats lapsed.
Someone needed to do something. The order nisi was granted by Registrar on 17 January 2023 and was to be called on 27 February 2023.
[30] On 14 February 2023, Mrs Toner filed a notice of intention to appear in support of the application granting probate to Mrs Threadwell. She does not apply for administration, recognising her position in the dispute.
[31] On 10 March 2023, Mrs Stacey filed a notice of intention to appear in the proceeding, indicating her opposition to the appointment of Mrs Threadwell as administrator of the estate but not to the appointment of an independent administrator, so long as she was appointed alongside that person.
[32]On 17 March 2023, the parties filed a joint memorandum in which it was said:
The parties are agreed that an independent administrator will need to be appointed to administer Mr Toner’s estate. However, the issue in contention is whether Mrs Stacey or anyone else should join that administrator.
[33] Affidavits had already been filed by Mrs Threadwell, Mrs Stacey and Maureen Toner. However, it was thought that further evidence was needed and, from that point, affidavits were filed by Mrs Toner, Mr Saul, Mrs Stacey, Mrs Toner in reply and then another from Mrs Stacey.
Legal principles
[34] The application for an order nisi is made under s 19 of the Act. Under s 19 (by way of summary) if an executor in a will neglects or refuses to prove a will within three months from the death of the testator, the Court may, upon the application of any person interested in the estate, grant an order nisi calling upon the executor to show cause why administration should not be granted to the applicant, or to some other person.
[35] Given Mrs Stacey’s caveat, s 61(d) comes into play under which the Court may order that the order nisi be made absolute or discharged, or that the application for administration be brought in solemn form. An application for probate in solemn form
requires pleadings and a contested hearing at which the Court can inquire into issues relating to the validity of a will.6
[36] However, as described earlier, because the parties now agree that an independent administrator should be appointed, the question that had been raised through the caveat about the validity of the codicil, which added an executor, is moot.
[37] The only question is as to who should be approved by the Court to administer the estate. While an order nisi under s 19 requires an executor to show cause why administration should not be granted to the applicant or “some other person”, s 6 is the source of the Court’s jurisdiction to appoint an administrator. Section 6(2) is in the following terms:
(2)Where by reason of the insolvency of the estate or other special circumstances the court thinks it necessary or expedient to do so, it may—
(a) grant administration to such person or persons as it thinks expedient notwithstanding that some other person is appointed an executor or that, apart from this subsection, some other person would by law be entitled to a grant of administration:
(b) grant probate to 1 or more of the executors appointed by a will, notwithstanding that some other person or persons may also be appointed as an executor or executors.
[38] The independent administrator sought by the parties would be appointed under s 6(2)(a). As mentioned already, because Mrs Stacey has not sought a grant of probate as an executor of the will, if she was to be appointed alongside an independent administrator, it would be under this provision also. And if Mrs Threadwell was to be included as an administrator, that appointment would be made – through her s 19 application – under s 6 as well.
[39] In considering whether to make an order under s 6(2), the primary considerations for the Court are whether or not special circumstances exist and whether or not it is “expedient” to make the orders sought.
6 Jurisich v Harris [2016] NZHC 525, [2016] NZAR 754 at [7]; and The Estate of Turk [2020] NZHC 1495 at [12].
[40] In Harvey v Harvey, van Bohemen J saw the principles expressed by the Court of Appeal in Tod v Tod as applying to the discharge or removal of an administrator as being equally relevant under s 6.7 The relevant principles are these:
(a)The starting point is the Court’s duty to see estates properly administered.
(b)The jurisdiction involves a large discretion which is heavily fact- dependent.
(c)The wishes of the testator (evidenced by the appointment of a particular executor) are to be given consideration, but ultimately the question is what is expedient in the interests of the beneficiaries.
(d)Expediency is a lower threshold than necessity and imports considerations of suitability, practicality and efficiency.
(e)Hostility as between administrators and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if it risks prejudicing the interests of the beneficiaries.
[41] Grice J in Hall v Radich-Chaytor looked to a dictionary definition for “expedient” as “advantageous” and emphasised the point that expediency must relate to the trust and to beneficiaries as a whole.8
[42] Accordingly, I must consider Mr Toner’s wishes but ultimately the focus is on expediency; on seeing Mr Toner’s estate administered properly and efficiently. I need to consider what would be in the best interests of the beneficiaries as a whole. If there might be hostility between someone appointed as an administrator and other beneficiaries, that is a factor I should take into account.
7 Harvey v Harvey [2021] NZHC 1771 at [39], citing Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22]. See also Rosinger v Sachs [2021] NZHC 3022.
8 Hall v Radich-Chaytor [2020] NZHC 409 at [46]–[49].
Analysis
[43] It is important to recognise Mr Toner’s wishes. They will not lightly be put to one side. For Mrs Stacey, it is submitted that it was her father’s wish that she be executor of his estate and that the estate be administered jointly. On that basis, she says that an independent professional should not be the sole administrator. She has said in her evidence that she wants to fulfil her duty to her father as a named executor of his estate. It is her submission that this is the most important starting point for the proceeding.
[44] I do not agree, as was suggested for Mrs Stacey, that the selection of an executor by a testator should only be altered if there has been, on the part of that person, impropriety or considerable hostility. When s 6 is engaged, the wishes of the testator are certainly to be given consideration but, ultimately, the focus must be on what is expedient in the interests of the beneficiaries. The focus for the Court is its duty to see the estate properly administered.
[45] It is important to reiterate at this point that it is not for the Court to resolve the various issues in the family dispute, unrelated to the present application. It is not for the Court to decide, based upon exchanges in the evidence, who is blameworthy and who is not. However, the views that members of the family have expressed are relevant when considering the principles, discussed in [40] and [41] above, that need to be applied.
[46] Mrs Stacey submits that this is not case where the disagreements amongst family members and their conduct rule out every family member from the role of administrator as there was no impropriety on her part that could disqualify her from the role. Mr MacKenzie has referred to Cundy v Cundy on the basis that, essentially, there needs to be evidence of impropriety on both sides of a family dispute before a level of animosity could be reached that would require all members of a family to be excluded from administration.9
9 Cundy v Cundy [2019] NZHC 413.
[47] In Cundy, the parties were two of the five children of the deceased. The caveator alleged that the named executor took money from the deceased before his death. While tensions were running high between family members before the deceased’s death, the caveator then posted “inflammatory and derogatory remarks” about the executor on Facebook. She then commenced proceedings against the executor which were stayed pending the Court’s decision on administration. The executor denied the allegations but considered it was appropriate for him to step down to allow an independent person to administer the estate. The Court said:
[20] … 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 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. 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.
(Footnotes omitted).
[48] For Mrs Stacey it is submitted that the present case is more closely aligned with Jackson v Jackson.10 In Jackson, the Court determined an application for an order under ss 6 and 19 of the Act appointing Raymond Jackson as administrator of his late mother’s estate. The respondent was Raymond’s brother, Stephen, who was a named executor of the estate. Raymond’s application was based on his concern that the deceased had suffered a stroke before she signed her enduring powers of attorney and the value of the estate should have been significantly higher than was the case at
10 Jackson v Jackson [2016] NZHC 1723.
the time of her death. Essentially, Raymond was granted letters of administration to obtain the necessary information to carry out investigations into the drop in the estate’s value.
[49] I do not believe that Cundy should be distinguished on the basis of a submission that, here, there is no evidence of impropriety by Ms Stacey. The point in Cundy was that there was animosity between the parties (deriving from their alleged impropriety) that undermined the independence of the proposed administrator and which required an independent professional to be appointed. Jackson was clearly a different case where administration was sought for a different purpose.
[50] This case may better be compared with Public Trust v Lawrence, where the dispute between the children of the deceased was concerned with which independent professional should be appointed as administrator of the estate.11 All three of the children were named as executors of Mr Lawrence’s will. Like here, there was an allegation that one of the children, a named executor, had withdrawn the deceased’s funds inappropriately before his death. This caused a “falling out between the siblings”.12 The Court was satisfied, having regard to the “tenor of communications” between the parties, that relationships had broken down to a point where it would be impossible for them to work together in the administration of the estate.13
[51] Similar conclusions are inescapable on the facts of this case. Communications over the codicil, the power of attorney and the company accounts are worded strongly and emotively. Serious allegations have been made as between family members. Language in affidavits is intemperate. For example, in her first affidavit, Mrs Stacey has said that “Carol has unilaterally taken money from Dad’s estate …” and that she has been “taking advantage of my elderly father” and “misappropriating company and private funds”. She has referred to Mrs Threadwell having made “incorrect statements”, “wrongful claims” and to being “at a loss to understand” how her views about the codicil can be “misconstrued as manipulation”. Evidence from Mrs Stacey
11 Public Trust v Lawrence [2022] NZHC 558.
12 At [10].
13 At [81].
in reply has referred, for example, to “dramatic claims”, to “attempts to undermine my professional credibility” and to “numerous untrue and contradictory claims”.
[52] These references are not identified in order to single out Mrs Stacey in any way. Robust language is used also in the affidavits of other deponents. However, the focus of the proceeding is on Mrs Stacey’s wish to be appointed as an administrator. Alongside the independent administrator, no other family member wishes to be involved.14 The submission is made for Mrs Stacey that the deadlocks that existed over the codicil, the power of attorney and the company accounts are no longer there, such that disharmony has subsided. However, the tenor of affidavits, filed up until May this year, and reflected in submissions filed in the proceeding, suggests that a relatively high level of emotion remains.
[53] For an administrator to have a view that one beneficiary was responsible for impropriety, that another condoned it, and that the positions of other beneficiaries are unimpeachable would cause real challenges in the just and even-handed administration of the estate. Even if the points that are made for Mrs Stacey are correct – and I am not in a position to make substantive findings on the underlying disputes – for an administrator to be making decisions in the interests of all beneficiaries with that frame of mind is likely to be a step too far when considering the principles referred to in [40] above.
[54] In her evidence, Mrs Stacey has indicated that she is “strongly opposed to the appointment of [Mrs Threadwell] as an Executor” because she “consistently sides with her mother [Mrs Toner]” and that she “reject[s] the attempt by [Mrs Threadwell] to attempt to distance herself from the dispute … by portraying herself as neutral”. That, in my view, makes the point entirely.
[55] Given the long delays encountered already, efficiency must come to the fore. None of the named executors effectively advanced probate in the two years following Mr Toner’s death. Any one or more of them could have made an application. I acknowledge Mrs Stacey’s submissions in explaining the delay – that the parties were
14 Unless the Court was to appoint Mrs Stacey in which case, as mentioned, Mrs Threadwell would wish to be involved as well.
working through a range of issues, that they had attempted settlement on different occasions and that she had proposed probate in common form of the will (but not the codicil) since March 2021. However, focusing on who is to blame for the delay, as has been something of a feature in the case, is not helpful. There remains a concern on the part of the Court that the past delay, caused by an inability to resolve underlying issues, raises the prospect of future delays.
[56] The prioritisation of the MNIL liquidation has prejudiced the estate and its beneficiaries. The estate’s primary asset is its shares in MINL. The investment properties owned by the company were estimated to be worth $5.5 million in January 2022 but the evidence from Mrs Toner is that their value has decreased, as the property market has weakened, to approximately $3.66 million now.
[57] It can be observed that these proceedings have taken a similar path to that taken with the MINL liquidation. The parties had agreed that an independent auditor would be appointed to reconcile the inconsistencies in the MINL accounts but the parties did not agree on who the auditor should be. The only way that resolution could be achieved was through an application to the Court for the appointment of a liquidator. It took the parties about 18 months to reach that point after concerns with MINL’s accounts was raised. Similarly, here, the parties have engaged in protracted discussions through their legal representatives. Numerous letters and emails between April 2022 and February 2023 record various proposals for resolution, including disagreements over an appropriate independent administrator.
[58] In all of the circumstances, I agree with the submissions made for Mrs Threadwell and Mrs Toner that a single independent administrator is needed to resolve issues between the parties that are ongoing, and to prevent resort to further Court action and the consequent drain upon resources.
[59] The appointment of Mrs Stacey, or Mrs Threadwell, as an administrator would not in my view be a tenable option for the Court under s 6.
Who should the independent administrator be?
[60] On 19 June 2023, an affidavit was filed by counsel for Mrs Threadwell from John Langford in which he refers to his availability for appointment as an independent administrator and provides his credentials.
[61] On 20 June 2023, an affidavit was filed by counsel for Mrs Stacey from Allan (Andy) Marshall in which he refers to his availability for appointment as independent administrator and provides his credentials.
[62] It is understood that the prospect of Mr Marshall’s appointment had support from all parties and that, more recently, the prospect of Mr Langford’s appointment has been raised as an alternative by counsel for Mrs Threadwell.
[63] Both Mr Langford and Mr Marshall are eminently suitable for appointment as independent administrator. Both have been in practice for approximately 50 years and have considerable experience in the administration of estates and trusts. Both are held in high regard within the profession. The Court would have no hesitation in appointing either of them. However, the factor which has led to Mr Langford’s appointment is the difference in their hourly rates. While Mr Marshall’s rate is entirely reasonable, Mr Langford’s is considerably less. In circumstances in which the Court’s focus must be on the efficient administration of Mr Toner’s estate, the cost of the appointment to the estate is a material consideration.
[64] While Mr Toner’s will does not include provision for an independent administrator’s costs to be paid from the estate, the Court retains jurisdiction to enforce trusts generally; a jurisdiction it may exercise in relation to costs, whatever a will may provide.15
Costs
[65] The only issue in dispute in the case was whether Mrs Stacey should be appointed as a co-administrator of Mr Toner’s estate. A subsidiary issue, which did not need to be addressed, was whether, in the event that Mrs Stacey was appointed,
15 See for example Sunde v Sunde [2019] NZCA 552.
Mrs Threadwell should be appointed as a third administrator. Mrs Stacey has been unsuccessful on the primary issue.
[66] In these circumstances, Mrs Threadwell applies for costs on the basis that she should not have had to make the application for an order nisi in the first place. Mrs Toner seeks indemnity costs, to be paid from Mrs Stacey’s share of the estate, on the basis of a submission that Mrs Stacey has failed to recognise her lack of independence.
[67] Mrs Stacey has said that costs should lie where they fall. It is said that this was the position reached by the Court when it ordered MINL’s liquidation and that a similar order would be consistent for the parties.
[68] The conclusion I have reached is that costs should lie where they fall up until the point at which the parties agreed that an independent administrator should be appointed – following which Mrs Stacey adjusted her position and sought to be appointed as a co-administrator. The correspondence shows that point to be 27 January 2023.16 The position from that point differs from the position in MINL’s liquidation where, although the parties did not agree upon a liquidator, the issue for the Court was only as to the individual to be appointed and an opposed hearing was not necessary. Mrs Stacey should pay costs on a 2B basis to Mrs Threadwell and Mrs Toner for all steps taken after that point in time.17
[69] This is not a case in which these costs should fall upon the estate. While Mrs Stacey was a named executor in the will, she did not seek probate in that capacity and, as discussed in [38], were she to have been appointed as an administrator, it would have been under s 6. Traditionally, three categories of estate or trust litigation have been identified:18
16 Through an exchange of correspondence between counsel for Mrs Stacey and Mrs Threadwell.
17 An approach of this sort is consistent with that adopted, for example, in Public Trust v Lawrence, above n 11, at [123].
18 From the frequently cited judgment of Kekewich J in Re Buckton [1907] 2 Ch 406 (Ch) at 413– 415.
(a)proceedings brought by trustees to obtain guidance on the construction of a trust deed or some aspect of the trust’s administration;
(b)proceedings brought by someone other than a trustee for the same purposes as the first category where an application by a trustee would have been justified;
(c)proceedings where a beneficiary’s ‘hostile claim’ is advanced against the trustees or other beneficiaries – including claims among trustees.
[70] In the first two categories, all necessary parties’ costs are for the benefit of the trust and will be ordered to be paid out of the trust fund. In the third, costs follow the event with the usual principles applying.19 The word ‘hostile’ in the third principle may be applied broadly in the sense of a position taken in a proceeding that is materially at odds with the position of other executors or beneficiaries. As the authors of The Law of Costs in New Zealand say, it is possible for proceedings of this type to be so contentious that there will be a ‘successful’ party.20 That is so here.
Result
[71]I make the following orders:
(a)Administration of the estate of Patrick James Toner is granted to John Anthony Langford, solicitor, of Wellington.
(b)A grant of administration is not made to Patricia Ann Stacey or to Victoria Jo Louise Treadwell.
(c)Mr Langford’s usual and reasonable charges for his professional services as administrator are to be paid from the estate of Patrick James Toner.
19 Woodward v Smith [2014] 3 NZLR 525, [2014] NZHC 407.
20 David Bullock and Tim Mullins The Law of Costs in New Zealand (Lexis Nexis, Wellington, 2022) at [4.15.]
(d)Mrs Stacey is to pay costs on a 2B basis to Mrs Threadwell and Mrs Toner for steps taken in the proceeding since 27 January 2023.
(e)In the event that the level of 2B costs cannot be agreed between the parties, then Mrs Threadwell may, within 10 working days from the date of this decision, file a memorandum and Mrs Toner and Mrs Stacey may, within a further 10 working days, file a memorandum in response. Any such memoranda should, including schedules, be limited to five pages in length.
Radich J
Solicitors:
Harmans, Christchurch for Applicant Gibson Sheat for Caveator
Grieg Gallagher & Co, Wellington for Mrs Carol Toner
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