Harsant v Menzies

[2012] NZHC 3390

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-000007 [2012] NZHC 3390

UNDER  the Administration Act 1969

IN THE MATTER OF     the estate of the late FREDERICK GEORGE HARSANT

BETWEEN  PAMELA CONSTANCE HARSANT Applicant

ANDGAIL MAVIS MENZIES, COLIN WALTER HARSANT AND MALCOLM JOHN HARSANT

Respondents

Hearing:         24 September 2012

Further memoranda received on 11 and 12 October 2012

Appearances: B M Stewart and Mr Hall for the Applicant

M J Harsant on behalf of the Respondents

Judgment:      13 December 2012

RESERVED JUDGMENT OF ELLIS J

This judgment was delivered by me on 13 December 2012 at 1 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:      Simpson Western, Private Bag 93533, North Shore City 0740

Copy To:       The Trustees of the Frederick George Harsant Estate, 720 Purangi Road, RD1,

Whitianga.

HARSANT V MENZIES HC AK CIV-2012-404-000007 [13 December 2012]

[1]      This is an application under s 21 of the Administration Act 1969 to remove and appoint new executors in the estate of Frederick George Harsant, who died on 5

June 1992.1

[2]      The applicant, Pamela (Pam) Harsant is a beneficiary under the will of her father (Frederick), dated 5 January 1992.  Probate was granted on 28 July 1992 to three of Pam’s siblings, the respondent executors, Gail Menzies, Colin Harsant and Malcolm (Sam) Harsant.2    Gail and Sam are also beneficiaries under their father’s will.3

[3]      At the time of Frederick’s death there were two other Harsant siblings who were also beneficiaries: Ronald (Ron) and Alison.   Alison died on 24 May 2012. Before her death she filed an affidavit supporting the position of the executors in these proceedings.

[4]      Pam seeks the removal of Gail, Colin and Sam and their replacement as executors by New Zealand Guardian Trust Company Ltd (Guardian Trust) be appointed in the stead of Gail, Colin and Sam.

[5]      The relevant parts of Frederick Harsant’s will are as follows:

I APPOINT my sons COLIN WALTER HARSANT and MALCOLM JOHN HARSANT and my daughter GAIL MAVIS MENZIES (hereinafter called my Trustees) to be the executors and trustees of this my will.

...

I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal ... to my trustees Upon Trust to pay thereout all debts duties and expenses whatsoever relating to my estate and to transfer the residue thereof to and among my children RONALD BRUCE HARSANT, GAIL MAVIS MENZIES, MALCOLM JOHN HARSANT, ALISON JOY HARSANT and PAMELA CONSTANCE HARSANT in equal shares.

I DIRECT AUTHORISE and empower my trustees in the administration of my estate and the carrying out of the trusts of this my will to exercise all or any of the following powers:

1 For reasons I shall later give I consider that the application is more appropriately brought as an application to remove and appoint trustees under s 51 of the Trustee Act 1956. For convenience, however, I will refer to the trustees as the “executors” for most of this judgment.

2 For clarity’s sake each of the Harsant siblings will be referred to in this judgment by the first names.

3 The third executor, Colin, received a substantial benefit during his father’s lifetime.

(a)       TO SELL call in and convert into money such part of my estate as shall not consist of money as and when my trustees shall think fit with all the powers of absolute owner [sic] thereof.

[6]      Subsequent clauses confer the power to let any property remaining for the time being unsold, to carry on any existing business and to borrow money for any purpose connected with the estate.

[7]      The cash component of the estate was distributed by the executors in July

1995 and there was a further distribution following the sale of a property owned by the estate at Cooks Beach.  The principal and remaining asset is an approximately 22 hectare farm property adjoining the developed Cooks Beach residential area and the Purangi River Estuary.

[8]      At the time of Frederick Harsant’s death, the Cooks Beach property was zoned “future residential”.   This zoning was a recognition by the Thames- Coromandel District Council (TCDC) that the land was suitable for residential development.  The only issue was, therefore, at what point the TCDC would permit the property to be developed.

[9]      At a meeting held in April 1995, it was agreed by all the beneficiaries that the farm  property should  be retained  for a few  years.   This  decision  was  made in recognition of the likely increase in value of the property if and when it was rezoned. Although it was also agreed that a further meeting would be held in four years time, it appears that that did not occur for another 12 years.

[10]     TCDC notified a review of its District Plan in 1997.  The executors, through their  planners  and  lawyers,  lodged  a  submission  on  behalf  of  the  estate  and ultimately reached  agreement  with  the Council for a “structure plan”  which,  in general terms, allowed for the residential subdivision of the Cooks Beach property. The terms of the agreement reached were recorded in a consent order made in the Environment Court on 2 December 2003.   The value of the land was necessarily increased as a result.

[11]     Between 2003 and 2007 it seems that the executors became concerned with securing road access to the estate property through an adjoining large residential development which was being undertaken by Cooks Beach Developments Ltd (a company owned by Hopper Developments Ltd).    There were unfruitful communications by the executors with the Council and with the developers about that  issue  in  2004,  but  it  appears  then  to  have  become  largely  dormant  until

2007/2008.

[12]     It appears that formal communications between the executors and the other beneficiaries about these matters were largely non-existent and, as I have said, there was no further formal family meeting until February 2007.  That meeting was called in part because Alison had by then become unwell.  It was agreed at the meeting that steps would be taken more or less immediately to put the Cooks Beach property on the market for sale.

[13]     It appears to be agreed that at the February 2007 meeting, Sam indicated that the property was worth around $15 million.   Subsequently (in November 2007) a valuation of the property from Darrochs was in fact obtained for approximately that amount.  But there were also two earlier (2006) valuations, which (Pam says) were not disclosed at the meeting, indicatING that the property was worth considerably less ($8.5 million and $9.4 million plus GST respectively).

[14]     During 2007, Pam and Ron’s concerns about progress with the sale of the property increased.   Absence of information was also a growing concern.   These concerns led to Pam and Ron instructing solicitors in late August 2007.   Their solicitors wrote to the solicitors for the executors about progress with the sale on 12

September 2007.

[15]     The reply indicated that while advice had been sought about the sale by the executors, a marketing plan would not be in place until 2008.  Accounts for the year ending 31 March 2007 were provided.

[16]     There was a further exchange of letters at the end of 2007 and the solicitors for the executors advised that expressions of interest had now been sought from four

real estate agencies and that it was proposed that a decision be made about the preferred marketing sales agent over the weekend of 15 and 16 December 2007.  It seems that it was at this point that Pam and Ron were first told about the road access issue.   The executors’ solicitors advised that the estate might have to spend up to

$300,000 acquiring the access lot and then seeking to recover that sum from TCDC.

[17]     In January 2008, the executors’ solicitors advised Pam, Ron and Alison that Bayleys had been instructed as agents for the sale, which was to be conducted by way of tender.  At that point there was also some talk about the possibility of Sam and Gail acquiring the property themselves.  It was that possibility that first led the solicitors for Pam and Ron to suggest that (given the possible conflict of interest arising) Guardian Trust should be appointed as an independent trustee.

[18]     On 20 February 2008 there was a further meeting of the Harsant siblings at which a copy of the Darrochs’ valuation of $15 million was provided, together with the two earlier registered valuations to which I have referred above.

[19]     While this was going on, it seems that the executors succeeded in purchasing the roading access lot for $140,500 plus GST before the property was put on the market for sale.   In order to fund that (and to meet other expenses) the executors borrowed $385,000 from First Mortgage Trust.   The loan was, as I understand it, guaranteed  by  Sam  and  Gail  personally  and  secured  against  the  Cooks  Beach property as a whole.

[20]     Tenders closed on 17 March 2008.  Three offers were received, although one was considered to be non-complying.  The better of the other two was an offer by Hopper Developments Limited (Hoppers) for $7 million plus GST.  That tender was rejected on the basis that it was believed by all the Harsant siblings that a sale price of at least $10 million could be obtained.  It was proposed that the executors should, however, negotiate with Hoppers, through Bayleys, to see if Hoppers might increase their offer.

[21]     By this point the 2008 financial crisis was looming.  In a post-tender report prepared on 1 April 2008, Bayleys advised that market conditions had deteriorated

considerably with a big over-supply of coastal land and holiday homes in the Coromandel.  That was a particular issue in Cooks Beach because Hoppers’ earlier development had flooded the market.  The report indicated Bayleys’ view that a $10 million expectation was too high and that the offer received would not be substantially increased.   Bayleys also advised that the executors should not play “hard-ball” with Hoppers because, based on their experience, they would simply walk away.

[22]     On  30  May  2008,  Darrochs  also  provided  a  revised  valuation  of  $10.5 million. That report also noted the deteriorating market.

[23]     And on 15 July 2008, the executors’ solicitors emailed the solicitors acting for Pam and Ron recording Bayleys’ advice that due to the decline in the coastal market,

... if the estate land is not sold now, then it seems probable that it will need to be retained for a significant period probably in excess of five years.

[24]     Bayleys nonetheless entered into negotiations with Hoppers on behalf of the executors as requested.  Those negotiations continued from early April 2008 through until September 2008.  As a result of those negotiations, Hoppers made three successive offers in the following general terms:

(a)      $7 million cash with the estate to retain the original homestead with a minimum of 2,200 m2 of land surrounding it;

(b)$7 million cash with the estate to retain the commercially zoned area of approximately 2,000 m2 adjoining the main Purangi Road; and

(c)      $5.56   million   cash   and  five  developed   sections   adjoining  the foreshore reserve with 20 m frontages having an average area of 825 m2 each, to be allocated to the five beneficiaries.

[25]     In  real  terms,  the  first  two  offers  were  estimated  to  be  valued  at  $7.89 million, and the third at $8.3 million, although Pam puts its value at somewhat more

($9.65  million).    The  offers  each  had  short  settlement  dates  (within  a  month)

although each was also conditional on confirmation of finance.

[26]     The third Hoppers’ offer (see [24](c) above) was made on 8 September 2008 with a settlement date of 31 October proposed.   That was forwarded to Pam and Ron’s solicitors on 12 September.  On 17 September 2008, the executors’ solicitors advised by letter that the executors’ “preliminary” but nonetheless “firm” view was that negotiations with Hoppers should be discontinued and that it would be prudent to retain the land for a period of three to five years, by which time they believed there were reasonable prospects of obtaining a sale price of $10 million (plus GST) or more.

[27]     This letter set out in some detail the executors’ reasoning for that decision. Amongst the reasons was that under the offers made by Hoppers, the executors would have a second mortgage behind Hoppers’ first mortgage over the properties as security until the development proceeded to a stage where titles were available to be issued for the land component.  The executors said that this created a risk that there would  be  insufficient  equity  in  the  estate  land  to  properly  secure  the  second mortgage granted to the executors.

[28]     The executors’ proposed solution (as advised in the letter) was that while holding onto the bulk of the land for a further 3 to 5 years, they would apply to TCDC for a single lot subdivision of up to 2,000 m2 which, if sold, they believed would produce somewhere between $900,000 and $1 million.   They said that this could enable an interim distribution to be made to Alison and Ron, and possibly to Pam.

[29]     In early October 2008, Ron and Pam through their solicitors reiterated that it was in the best interests of all beneficiaries to conclude an agreement with Hoppers immediately, and that they were prepared to look at any of the three proposals summarised above.   They noted that there was no certainty that in 3 to 5 years a better price or even the same price would be achieved.  That view was reiterated by telephone at the end of October.

[30]     No further communication was received from the executors for the remainder of 2008.

[31]     In February and March 2009, inquiries were made on behalf of Pam and Ron as  to  progress  with  the  negotiations  and  with  the  subdivision.    The  executors’ solicitor replied that there had been no direct communication with Hoppers  but updated progress in relation to the subdivision.

[32]     On 2 September 2009, a lengthy solicitors’ letter was written on behalf of Pam and Ron, again expressing concern over the delay in selling the property.  The letter also expressed the view that Sam and Gail should resign as trustees and that an independent trustee should be appointed with a view to reopening the negotiations with Hoppers, or the property being placed on the market for sale, if Hoppers were no longer interested. Those suggestions were rejected.

[33]     In   February   2010,   Pam’s   solicitor   contacted   the   executors’  solicitor suggesting that a meeting be convened as soon as possible.4   A meeting eventually took place on 23 April. At it, the executors made it clear they still wished to achieve a price of $10 million for the property and that, as such a price did not seem to be achievable in the foreseeable future, the sale would probably need to be delayed for a further 3-5 years.

[34]     The executors also advised that a resource consent had been granted for a one lot subdivision of 1,900 m2 and that a private sale sign had been placed outside the lot over the Easter 2010 period.  The advertised asking price was $820,000.  Pam’s evidence about the meeting was that Sam accepted that the executors had not taken any advice on how the property should be marketed and sold, or the price.

[35]     After further contact from Pam’s solicitors, the executors advised that the property had been on the market with Bayleys, at an asking price of $795,000, but no offers had been received.  They confirmed that the sale of the balance of the estate

property was on hold for the time being.

4 Ron had been suffering from ill health and had become less directly involved in the dispute. He

continued (and continues) to support Pam’s position.

[36]     In  February  2011  (after  further  prompting  on  behalf  of  the  applicant’s solicitor)  the  executors’ solicitor  advised  that  the  executors  were  undertaking  a formal review of the position and were aiming to have that process completed by 30

June 2011.

[37]     In May 2011, Bayleys prepared a further report for the executors.  A copy was provided to Pam and Ron. The report said:

It is hard to imagine the market returning back to the levels we saw in the

latter part of the “boom” (2006-2008).

[38]     The conclusion reached was that it could take 8-10 years before a price could be achieved at the level obtainable at the peak of the market in the 2006 to 2008 period.

[39]     In August 2011, the executors through their solicitors reported formally to the beneficiaries and expressed the view that the executors should continue with the strategy of holding the land for an indeterminate period.  The report also advised no offers to purchase the section had been received and the sale price had been reduced to $685,000.

[40]     These proceedings were filed in December 2011.

[41]     Pam’s evidence was that in April 2012 she learned by chance that Bayleys were auctioning the one lot section and also discovered by chance that Gail had listed the property at the same time for a sale price of NZ$575,000 through an international real estate listing website.   This prompted a further solicitor’s letter seeking further information regarding the sale of the section.  No reply was received.

[42]     On 1 May 2012, Pam reiterated her position that she had no bottom line in mind for the sale of the estate property, and asked the executors to advise their own expectations and bottom lines, bearing in mind Bayleys’ report.  Her solicitor’s email asked specifically

Are the trustees happy to wait for 8-10 years, or perhaps even longer if their expectations are to achieve an even higher sum?  Are their expectations still around the $10M?

[43]     No reply was received.

[44]     In the meantime the $385,000 loan taken out by the executors to fund the purchase of the access lot continued to accrue interest (although part of the sum borrowed had been set aside to cover interest for the initial two year term).  That loan  was  renewed  for  a  further  2  years  in  June  2010  when  the  loan  sum  was increased from $385,000 to $439,000, with the increase applied to First Mortgage Trust’s processing fee and, again, to cover interest payments during the term of the loan.

[45]     A further renewal for one year was obtained in June 2012.  The principal sum was increased from $439,000 to $561,500 for the following purposes:

(a)       $35,000 for “subdivisional costs”;

(b)      $22,581.50 for outstanding lawyers’ costs;

(c)       the balance of $64,918.50 to be retained by First Mortgage to cover

interest arrears, one year’s interest to the expiry of the loan and a

$3,000 processing fee.

[46]     It is also relevant to note that cl 14(a)(iv) of the new (June 2012) term loan agreement  (as substituted by clause 28 of that agreement) provides:

(iv) the trustees will ensure that, so long as any moneys are owing under this contract, except to the extent that the Lender consents in writing:

...

(B) no existing trustee shall be removed or retire as trustee of the trust; (C) no new or additional trustee of the trust shall be appointed;

[47]     It  is  not  clear  to  me  whether  First  Mortgage Trust  were  advised  of  the existence of the present proceedings at the time of entry into the June 2012 agreement.

[48]     As  part  of  the  process  of  renewing  the  loan,  an  updated  valuation  was obtained  from Townshend  Cullen.   At  the  request  of  First  Mortgage Trust,  the valuers also provided a “forced sale” valuation.

The position of Guardian Trust

[49]     Guardian Trust was approached by the applicant some time ago and advised its willingness to be appointed as replacement trustee and of the terms upon which it would accept such an appointment.  Initially those terms included the prior consent of First Mortgage Trust to any removal and replacement of the existing trustees pursuant to clause 14 of the latest loan agreement.

[50]     First Mortgage Trust has thus far declined to confirm that it would consent to Guardian Trust’s substitution or whether or not it would seek to call up the loan if substitution is ordered.  As a result, Guardian Trust has more recently advised that First  Mortgage Trust’s  prior  consent  is  no  longer  a  prerequisite  to  it  accepting appointment.

Law

[51]     As  I  have  said,  the  present  application  was  brought  under  s  21  of  the

Administration Act 1969 which permits the Court:

(a)       to discharge or remove an administrator when it is expedient to do so;

and

(b)to appoint any person to be administrator in his place, on such terms and conditions in all respects as it thinks fit.

[52]     Mr Malcolm (Sam) Harsant submitted, however, that the executors are no

longer holding the Cooks Beach property as administrators of Frederick’s estate, but

rather as trustees.5    I agree.  The position is as stated by Cartwright J in Re Eagle

(deceased):6

(i) The transition from executor to trustee

Although it is common for one person to discharge both functions, nonetheless the roles of executor and trustee are quite distinct The executor's duties include proving the will, burying the deceased, getting in the assets and paying the debts, funeral and testamentary expenses and death duties The residue is then transferred to the beneficiaries or the executor assents to the vesting of that property in him or herself as trustee At that point there is a transition to the office of trustee, who holds the property upon any specific trusts in the will If there are none, then the estate is held on trust for the beneficiaries according to their rights and interests under the will until a specified event occurs

In  Inland  Revenue  Commissioners  v  Smith  [1930] 1 KB 713, at 736

Lawrence LJ held

The property which on the death of the testator vests in the executor does not remain vested in him for ever So soon as he assents to the dispositions of the will becoming operative and to the trusts taking effect, the estate vested in him as executor is divested and vests under the dispositions of the will in the trustees of the will.

Formal assent marking the transition of duties from executor to trustee is not commonly given by executors in New Zealand Assent must therefore be inferred In Sullivan v Brett (supra) there were some assets remaining in the hands of the executor at the date upon which the application for extension of time was made. Somers J said at page 206:

Whether the executor's functions have been completed so that the actual assets which comprise that residue to which the trusts of the will may attach have been ascertained depends upon the course of administration   and   is   normally   only   within   the   executor's knowledge. To meet the claims of executor and beneficiary the law evolved the concept of assent as the means by which a personal representative might indicate that he does not require particular property of his deceased for the purposes of administration and that it may pass to the beneficiary ...

Somers J went on to observe that the effect of the assent is to perfect the beneficiary's title and at the same time to end the personal representative's interest  in  the  property.    In  order  to  determine  whether  assent  can  be inferred, the acts of the executor require examination.  If the residue after the claims against the estate for debts, legacies, testamentary and administration expenses has been ascertained then assent can be inferred.

5 The executors did not instruct solicitors to appear at the hearing before me and Sam Harsant made submissions on their behalf .

6 Re Eagle (deceased); Barbalich v Kennedy and Martin HC Auckland M721/97 & M 1171/97, 21

[53]     In  the  present  case  probate  was  granted  20  years  ago.    In  light  of  the executors’ stated position there is no need to infer assent.  But in any event it is clear that the Cooks Beach property is no longer needed for the purposes of administration and has long since been transferred into the names of the executors/trustees, who continue to hold it on behalf of the beneficiaries.

[54]     But whether or not the application is made under s 21 of the Administration Act or under s 51 of the Trustee Act 1956 does not, in my view, matter.  Section 51 permits the Court to replace trustees and for all present intents and purposes is materially identical to s 21.  It relevantly provides:

Power of Court to appoint new trustees

(1) The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

[55]     As under s 21, expedience is the test the Court must apply.  Expedience is a lower threshold than necessity and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness is not required o be established.7

[56]     There  is,  as  well,  the  Court's  parallel  inherent,  equitable,  jurisdiction  to remove and substitute trustees.  The leading cases are well known and I need only refer to  Letterstedt  v Broers8   and  Hunter  v Hunter.9      And it  is trite  that  these authorities  are  regarded  as  informing  the  circumstances  in  which  removal  is expedient under both s 21 of the Administration Act 1969 or under s 51 of the Trustee Act 1956.

[57]     The intensely discretionary nature of the jurisdiction has been repeatedly recognised in the case law. The particular facts and circumstances of the particular

7 R v Leitch [1998] 1 NZLR 420 (CA) at 428-429.

8 Letterstedt v Broers (1884) 9 App Cas 371 (PC).

9 Hunter v Hunter (1938) NZLR 520 (CA).

case are all important.  Other relevant guiding principles that are evident in the cases are that:10

(a)      the  starting  point  is  the  Court's  duty  to  see  estates  properly administered and trusts properly executed;

(b)the wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given considerable weight;

(c)       the welfare of the beneficiaries is the "litmus" test; and

(d)hostility as between administrators/trustees and beneficiaries is not by and of itself a reason for removal. Such hostility assumes relevance if and when it risks prejudicing the interests of the beneficiaries.

Discussion

[58]     I have formed the view that it is expedient to grant the application and to remove and replace the three trustees here.  In expressing that view, I emphasise that the applicant made no allegation of misconduct, nor do I find any basis whatsoever for inferring any.   On the contrary, I consider that the trustees have at all times attempted to make rational decisions that are in the best interests of the beneficiaries as a group.

[59]     The reasons that I consider removal is nonetheless warranted are as follows.

[60]     Although not addressed in this way by Mr Stewart for the applicant, it seems to me that the starting point is the terms of the relevant trust itself.  In that respect it seems relevant that clause 5(a) of the will directs the trustees to sell and convert the Cooks Beach property, albeit “as and when my trustees think fit”.  Even though the

timing of the conversion is thus left to the trustees’ discretion, the law is that the

10 See for example Crick v McIlraith [2012] NZHC 1290.

property must be sold or converted within a reasonable period, which was traditionally regarded as 12 months.11

[61]     That said, however, it is also accepted that  a trustee will be justified in prolonging that period and the rule noted above needs now to be considered in light of s 14 of the Trustee Act which provides that realisation may be deferred by a trustee as long as he or she does not postpone for longer than is reasonably necessary to permit prudent realisation.

[62]     In the present case I have no doubt that the trustees’ decisions (a)      not to sell the Cooks beach property prior to 2007; and (b)      to decline Hoppers’ offers in 2007; and

(c)       not to offer the property subsequently again for sale -

were  all  made  in  what  they  considered  to  be  the  interests  of  “prudent realisation”.

[63]     While it is neither necessary nor desirable for the purposes of this judgment to second guess those decisions, I merely observe that:

(a)       some 20 years have now elapsed since the grant of probate and around

18 years have elapsed since the vesting of the property in the trustees;

(b)the   market   for   the   property,   and   its   value,   have   diminished considerably in the last four years;

(c)      other than some future, contingent, capital gain the trust is receiving no income from the property and, indeed, has borrowed considerably against  it,  with  no  means  (absent  a  sale)  of  meeting  the  interest

payments or of repaying the principal debt.

11 Laws of New Zealand Trusts at [309], citing Bate v Hooper (1855) 5 DEGM 8G 338, 43 ER 901 and Grayburn v Clarkson (1868) LR 3 Ch App 605.

[64]     In addition, it seems to me that the conundrum faced by the trustees is that, in order to justify their past decisions, they are compelled to hold onto the property for as long as it takes to realise the $10 million “bottom line” sales figure that they had hoped for in 2007.  In my view this gives rise to a risk that the trustees now equate prudence with the obtaining of the 2007 price in circumstances where the indications are that the wait may be considerable before anywhere near that amount can be achieved.  And, in the meantime, the property is yielding no income and the debt already incurred continues to compound.  Indeed, the indicators are that a forced sale of the subdivided lot may now be in prospect.

[65]     There are, in my view, grounds for considerable concern that the welfare of the beneficiaries is at risk.

[66]     Although I do not discount the weight that should be given to the wishes of Mr Harsant senior (as evidenced in his choice of executors/trustees), that is counterbalanced here not only by the passage of time but by the other factors to which I have referred.   It seems to me unlikely that Frederick Harsant anticipated that, 20 years after his death, his estate would not have been finally distributed.

Result

[67]     For  the  reasons  I  have  given,  I  consider  that  it  is  expedient  in  the circumstances of this case to order that:

(a)       Gail Mavis Menzies, Colin Walter Harsant and Malcolm John Harsant be removed as trustees of the estate of Frederick George Harsant;

(b)New  Zealand  Guardian  Trust  Company  Ltd  be  substituted  as  the trustee of the estate of Frederick George Harsant.

[68]     In my view, the terms of the current loan agreement between the present trustees and First Mortgage Trust are no impediment to those orders.  Nonetheless I recognise   that   consequential   matters   may  arise   as   a   result   of   the   present

arrangements  with  First  Mortgage  Trust  (including  the  guarantee)  and  leave  is reserved to all parties and to Guardian Trust to apply further should the need arise.

[69]     The applicant’s costs are payable on a 2B basis out of the estate.

Rebecca Ellis J