Finlay v Jensen

[2020] NZHC 1211

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-320

[2020] NZHC 1211

UNDER THE

Administration Act 1969 and Part 18 of the High Court Rules 2016

IN THE MATTER OF

the estate of KATHLEEN MARY JENSEN

BETWEEN

FIONA MAY FINLAY

Plaintiff

AND

DARLENE MARY JENSEN

Defendant

Hearing:	2 June 2020
Appearances:	V Whitfield for the Plaintiff D Jensen in person
Judgment:	2 June 2020

ORAL JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 2 June 2020 at 12.50pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:

KJ Law, Hamilton

Finlay v Jensen [2020] NZHC 1211 [2 June 2020]

[1]                  This matter was called in Court on 2 March 2020. The plaintiff seeks, on her first cause of action, an order under s 21 of the Administration Act 1969 removing her sister, the defendant, as a co-administrator in the estate of their late mother.

[2]                  The defendant, with two of her adult sons, has been occupying the parties’ late mother’s former home, and has allegedly not being paying an appropriate level of rent for that occupation, and has refused to properly engage with the plaintiff in attempts to sell the property.

[3]                  The property may be worth somewhere in the vicinity of $700,000, and at one point the defendant did offer to buy out the plaintiff for $335,000. That was considered to be below the appropriate value of the plaintiff’s share in the estate (which was left to the two sisters equally), and it was not acceptable to the plaintiff.

[4]                  The evidence shows that there have been some text messages sent by the defendant to the plaintiff which have been abusive in character, and it also appears to show that the defendant has been unwilling to engage with the plaintiff for the benefit of the estate as a whole, in getting in and distributing the estate assets (in particular, by arranging to buy out the plaintiff, or to sell the property, so that the plaintiff can get what was left to her under her mother’s will).

[5]                  I am satisfied that the grounds for an order under s 21 of the Administration Act removing the defendant as administrator have been made out. In my view it is both necessary and expedient to bring this long-standing matter to an end, and in my view that will require the making of an order under s 21 of the Administration Act removing the defendant as an administrator.

[6]                  Having taken no step in the proceeding until today, the defendant appeared at Court this morning and asked for an adjournment. She said that her son passed away on 19 January 2020, and she had difficulty dealing with matters after that. She said that she had consulted a solicitor, but the solicitor was not a court lawyer. She said that she wanted an adjournment, to take steps in opposition to the claim.

[7]                  Ms Whitfield pointed out that the proceeding was served on the defendant on 9 December 2019, and probate was granted to the plaintiff and the defendant on 18 February 2019.

[8]                  I am not now prepared to delay the matter further. The Court fully understands that the loss of a son can be very distressing, but the proceeding was served well over a month before the defendant lost her son, and the defendant has in my view had sufficient time since January 2020 to get some advice and take appropriate steps to oppose the application. Indeed, it seems clear that she has been talking with a lawyer, but no steps have been taken to attempt to oppose the plaintiff’s claim.

[9]                  The defendant says that she is now prepared to consider sale of the property, but there have been occasions in the past where similar advice has been given to the plaintiff, and nothing has eventuated. There is an obvious danger that there may be further unwarranted delays if the proceeding is adjourned today.

[10]              In her affidavit in support, the plaintiff says that she has tried on a number of occasions to talk to the defendant about the issue of non-payment of rent at the property, and she wanted to sell the house. The plaintiff said that the defendant would not engage in conversation with her. The plaintiff said that she was becoming increasingly frustrated that the defendant was ignoring her requests, refusing to pay rent for the property, and that she wanted to get the issues resolved and to move forward with the sale of the property.

[11]              A solicitor’s letter was sent to the defendant on 13 May 2019. In her affidavit, the plaintiff detailed a number of text messages later received from the defendant, and I think it can fairly be said that the text messages were both abusive and sufficient to make it apparent that the plaintiff and the defendant are unable to be likely to cooperate over achieving an early sale of the house.

[12]              The plaintiff said that the defendant’s rental payments for the house were sporadic, and there has been no correspondence to indicate that she had even approached a mortgage broker about purchasing her share in the property. In all of the

foregoing circumstances, I am satisfied that the matter should not be delayed any further. The defendant’s application to adjourn the proceeding is refused.

[13]Section 21 of the Administration Act 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.

(4)   This section shall, with all necessary modifications, extend to the case where an administrator dies, and the powers and authorities hereby conferred may be exercised and shall take effect accordingly.

(5)  Nothing in this section shall restrict section 8.

[14]              I am satisfied that the evidence justifies the order sought for removal of the defendant as administrator, and I make an order accordingly.

[15]              When the matter was called on 2 March 2020 before me, I did raise with counsel for the plaintiff whether it would be better for an independent administrator to be appointed, rather than the plaintiff to remain as sole administrator after the defendant was removed. Ms Whitfield filed a memorandum on 13 March 2020, expressing the view that this is not a case for the appointment of an independent administrator. There has been no suggestion of any impropriety on behalf of the plaintiff, and the defendant’s non-payment of rent, as well as her refusal to deal with the property are, at core, acts to benefit the defendant rather than acts of antagonism or mistrust towards the plaintiff as administrator. Ms Whitfield submitted that the defendant would probably act the same way towards an independent administrator, because self-interest has been her driving force.

[16]              Ms Whitfield also submitted that it would be unfair to the plaintiff if the estate costs were increased by the appointment of an independent administrator.

[17]              I accept those submissions from Ms Whitfield. The deceased clearly intended that the plaintiff was to act as her administrator, with the defendant, but unfortunately that arrangement has become unworkable. Particularly given that there is no suggestion of improper conduct by the plaintiff, coupled with the relatively modest size of this estate, means that no independent administrator should be appointed.

[18]              The result is that there will be an order under s 21 of the Administration Act removing the defendant as a co-administrator of the estate. I will not make the consequential order vesting in the plaintiff the property in which the defendant is living in at this stage. That application was not included in the original summary judgment application, and I think it can be made readily enough (if a vesting order is in fact necessary) by an ex parte application made to the Court on the basis that the administrator is entitled to take title to the estate property.

[19]              The plaintiff is entitled to costs, but I will leave some time for her to consider the matter to see if some arrangements can be reached between the parties over costs. If they cannot reach agreement, the plaintiff is to file any memorandum seeking costs within 20 working days.

[20]              Finally, I mention that the plaintiff included a second cause of action in her statement of claim, being a claim for breach of fiduciary obligations. Summary judgment was not sought on that claim, and Ms Whitfield submits that it should be adjourned for further mention in two months’ time. I direct that the matter is to be listed again at 11.45am on 24 August 2020.

Associate Judge Smith