Gambrill v Whitfield

[2013] NZHC 885

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2012-404-006664 [2013] NZHC 885

BETWEEN  CHRISTOPHER BOYS GAMBRILL AND LUCY CHARLOTTE MACGINLEY AS TWO OF THE THREE EXECUTORS OF THE ESTATE OF CHARLES BARRY THURSBY WHITFIELD

First Plaintiffs

ANDWYNYARD WOOD (WHITFIELD) TRUSTEE SERVICES LIMITED Second Plaintiff

ANDWILLIAM GUY WHITFIELD Defendant

Hearing:         18 April 2013

Counsel:         R G Ewen for Plaintiffs

Judgment:      24 April 2013

JUDGMENT OF KEANE J

This judgment was delivered by  on 24 April 2013 at 4.45pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Wynyard Wood, Auckland for Plaintiffs

CHRISTOPHER BOYS GAMBRILL AND LUCY CHARLOTTE MACGINLEY AS TWO OF THE THREE EXECUTORS OF THE ESTATE OF CHARLES BARRY THURSBY WHITFIELD V WILLIAM GUY WHITFIELD HC AK CIV 2012-404-006664 [24 April 2013]

[1]      Charles Whitfield died on 6 July 2009 leaving a will, dated 24 December

2008,  under  which  he  appointed  Christopher  Gambrill,  his  solicitor,  and  his daughter,  Lucy  MacGinley  and  his  son,  William  Whitfield,  his  executors  and trustees.

[2]      In his will Charles Whitfield divided the net residue of his estate into six equal parts. One part was for his daughter Lucy, another for his son William, two parts were to go to the Barry Whitfield (Lucy) Trust for his daughter and her children as final beneficiaries, and the remaining two parts to the Barry Whitfield (William) Trust for his son William and any children of his.

[3]      At the date of Mr Whitfield's death the trustee of the Lucy and William trusts was Wynyard Wood (Whitfield) Trustee Services Limited and under the will Lucy became a trustee of her trust and William a trustee of his.

[4]      On this originating application Christopher Gambrill, Lucy MacGinley and Wynyard Wood seek orders removing William Whitfield as an executor and trustee his father's estate and as a trustee of the William Trust, on the ground that he has not participated in their administration, frustrating their administration in the interests of the beneficiaries, of whom he is one.

[5]      The application was served on William Whitfield by substituted service at his home address as a result of an order made by Associate Judge Abbott on 7 December

2012. William Whitfield has not filed a statement of defence or entered any appearance.  On  21  February  2013  the Associate  Judge  directed  that  the  claim proceed by way of formal proof under HCR 15.9.

[6]      In  making  that  order  the Associate  Judge  set  to  one  side  as  necessarily hypothetical whether William Whitfield had not responded to service, because he might be an incapacitated person.[1]  William Whitfield, he said, is to be presumed competent in the absence of evidence.[2]  Medical evidence could only be obtained

[1] High Court Rules, r 4.29.

[2] Erwood v Maxtead [2008] NZCA 139 at [26], Corbett v Western [2011] 3 NZLR 41 at [82].

with  William  Whitfield's  cooperation.  If  William  Whitfield  has  elected  not  to

respond to this application, whatever his reason may be, that remains his election to make.

[7]      In  determining  this  application,  on  formal  proof,  I  need  not  reach  any conclusion about Mr Whitfield's mental state, though his sister does consider that it may be relevant to his stance as to the administration of the estate and his own trust. I resolve this application on his recorded responses to requests made to him by his co-executors and trustees.

Administrative impasse

[8]      The major assets of the residue of the estate include funds in bank accounts, personal chattels, interests in two properties, shares and debts owed. A one-fifth interest in one of the properties is held by the Barry Whitfield Family Trust and Wynyard Wood (Whitfield) Trustee Services Limited. The debts owed are owed by the Barry Whitfield Trust and Whitwhit Holdings Limited.

[9]      In the 12 months after Charles Whitfield's death the trustees agreed to sell one property and to distribute the proceeds to Lucy and William, to resettle the assets of the Barry Whitfield Trust on the Lucy and William trusts in equal shares and to wind that trust up, each of those trusts then assuming one half of the debt that trust owes to the estate; then to resettle the Barry Whitfield Family Trust on the Lucy and William trusts equally and to wind it up as well. The intent was and remains to transfer all remaining property to the Lucy and William trusts in equal shares.

[10]     In June 2010 a deed of re-settlement relating to the Barry Whitfield Trust was executed by all three executors and trustees, but since then, on the evidence of Christopher Gambrill and Lucy MacGinley, they have been unable to agree with William Whitfield on the further steps called for. He has refused to participate in their decisions. They point to numerous documented instances in which he has been asked to meet to discuss the estate and its assets, or to join in signing the documents necessary to administer it and to resettle the trusts. He has declined to do so.

[11]     Lucy MacGinley says that William Whitfield is highly intelligent and holds a number of degrees primarily in law. But, at age 18, he was greatly affected by their mother's death in 1988. In his early twenties, he suffered a psychotic episode and remained under the care of a psychiatrist for eight years. Their father's death in July

2009, she believes, may have led him to come off his medication some nine months later. She attributes to that his stance since.

[12]     The instances on which William Whitfield has declined to respond to requests made to him, which are fully set out in the affidavits, are all in his own words. In some instances he has refused flatly, in others not completely intelligibly and in yet others abusively. In all he has shown an inflexible constancy.

Powers of removal

[13]     Where, as here, an application is made to remove a trustee without appointing a new one, s 51 of the Trustee Act 1956, which would otherwise give the power necessary, does not apply. Recourse must be had to the inherent jurisdiction of this Court to supervise trusts under which it has an ancillary power to remove trustees. As Eichelbaum CJ said said in L E Teariki & Ors v S C O'Reilly & Ors:[3]

[3] L E Teariki & Ors v S C O'Reilly & Ors HC Wellington CP 1002/91, 16 March 1992; Georgina

Kain & Ors v Jonathon Rhodes Hutton & Ors [2002] NZCA 180 at [17].

The power of removal is ancillary to the Court's principal duty to see that the trusts of the will are properly executed. The broad principle is that the Court must be guided by the welfare of the beneficiaries.

[14]     The power to remove an executor is conferred by s 21(1) which enables this Court  to  discharge  or  remove  an  administrator  without  necessarily  appointing another in his or her place, where he or she 'becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove the administrator'.

Conclusions

[15]     I am satisfied that the executors and trustees have been rendered incapable of administering the Charles Whitfield estate, because William Whitfield has refused,

for whatever reason, to play his part in its administration, handicapping completely his co-executors and trustees.  I see no alternative but to make an order, in the exercise of this Court's inherent power, and under s 21(1) of the Administration Act, removing him as an executor and trustee.

[16]     I  am  satisfied  equally  that  because  William  Whitfield  has  refused  to participate in the administration of his own trust, its administration also has become impossible and in the exercise of this Court's inherent jurisdiction I make an order removing him as a trustee there too. I see no need to appoint in his place any substitute trustee. Wynyard Wood is, I am satisfied, well capable of faithfully administering that trust by itself.

[17]     I am invited to make these orders without making any order as to costs and there will be no such order.

P.J. Keane J