Howie v Howie

[2015] NZHC 2362

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2015-488-97 [2015] NZHC 2362

BETWEEN

ROSS ANTHONY HOWIE

Plaintiff

AND

MICHAEL TIMOTHY HOWIE Defendant

Hearing:	28 September 2015
Counsel:	A Easterbrook for Plaintiff No appearance for Defendant
Judgment:	28 September 2015

ORAL JUDGMENT OF FOGARTY J]

Solicitors:           Webb Ross McNab Kilpatrick, Whangarei

HOWIE v HOWIE [2015] NZHC 2362 [28 September 2015]

[1]      This is an application to remove one of two executors of the estate of Doreen Howie.  The plaintiff is one executor.  The defendant is the other.  They are also the only beneficiaries of the estate.

[2]      The grounds of the application are that the defendant is occupying the only significant asset of the estate, being the property at 9A Wrack Street, Whangarei. The defendant  does  not  have the plaintiff’s  consent  to  occupy the property (as executor or beneficiary) and despite the request, he has failed to vacate it or purchase it at market value.

[3]      The plaintiff and the defendant are brothers.  The estate is of their mother. They are both the residual beneficiaries of the will after payment of estate debts. There are no specific gifts.

[4]      There no ability to pay the estate debts except by selling the property.   It cannot be sold for the best value while the defendant remains in occupation.  The plaintiff cannot obtain an order for the recovery of the land without the defendant’s cooperation as co-executor.

[5]      There is no doubt that both the plaintiff and the defendant, as co-executors, have a duty to administer the estate in the best interests of all the beneficiaries, being themselves.   A beneficiary cannot use his status as an executor to prefer his own interests over any other beneficiary.

[6]      Similarly, the plaintiff, as a beneficiary, is not entitled to take advantage of his position as executor in order to pursue his interests as a beneficiary.  On the other hand, the plaintiff, as executor, is obliged to administer the estate.  I am satisfied that this was an appropriate step for the plaintiff to take.   I am satisfied that the proceedings have been fully served.  There was a problem with service.  The first service of the statement of claim and other documents was on 21 July but omitted to serve the notice of proceedings  which  was  served  on  27  July.    However, both services are proved by affidavit, including the signed acknowledgement of receipt of the documents by the defendant.

[7]      I am satisfied that the defendant has known since, at the very latest, 27 July of the need to file a statement of defence, failing which these proceedings would continue in his absence.   I am also satisfied that the affidavit in support of the application, which exhibits a copy of the probate and a copy of the will, has proved the material facts of the estate and that by affidavit the conduct of the defendant, as executor, impeding giving effect to the will.

[8]      The  obstruction  to  the  due  administration  of  the  estate  is  because  the defendant lives and occupied the property without the consent of his co-executor and his occupation of the property is preventing the plaintiff, as executor, from selling the property at market value to the best interests of the two beneficiaries.

[9]      The defendant is essentially preferring his interests over those of the plaintiff, both being co-beneficiaries.

[10]     The High Court has an inherent jurisdiction to remove trustees who are not carrying out their trust obligations.  There is also a statutory jurisdiction.  Exercising both jurisdictions, the inherent and under s 21 of Administration Act, this Court removes Michael Timothy Howie as executor of the estate of Doreen Howie, which order takes effect immediately.

[11]     I turn now to the question of the costs of and incidental to this application. The costs of this application have been borne, in the first instance, by the firm Webb Ross McNab Kilpatrick Limited and those costs will appear as a debt due by the estate.  Mr Easterbrook has given thought to the fairest way of dealing with an order for costs.   It is important that his client not be seen as executor to profit from the litigation.  Mr Easterbrook envisaged that any order for costs against the defendant will be satisfied by the defendant making the payment to the plaintiff, as executor of the estate, and so the monies received will be paid into the estate accounts. Alternatively, if the defendant does not pay the costs and the property is sold, then the defendant’s liability for costs to the estate will be debited against his entitlement as beneficiary by the plaintiff in his capacity as executor.

[12]     Mr  Easterbrook  sought  costs  calculated  on  a  2B  basis,  except  for  the preparation   of   written   submissions   which   he   calculated   on   a   2A   basis. Mr Easterbrook submits that the categorisation should be either 2A or 1B.  I do not agree.   This is a category 1 proceeding, being a proceeding of a straightforward nature, rather than being a proceeding of average complexity.

[13]     I have tested that judgment by looking at the first item, commencement of proceedings.  Classified as A, it is 1.6, B, 3.  I do not think the preparation of the statement of claim requires three days work.   I think 1.6 is appropriate.   So I am

going to classify this case as 1A.

[14]	The plaintiff, as executor, is entitled to costs as follows: Item 1, 1.6 days at $1,480	$2,368
Item 2, filing interlocutory application for directions as to service 0.3 days	$444
Item 40, preparation of written submissions 0.5	$740
Item 34, appearance at the hearing, ¼ day	$307
Item 29, Sealing, order or judgment 0.2 $296	$4,218
The disbursements are the filing fees	$740

TOTAL  $4,958

Result

[a]       Mr M T Howie is removed as an executor of the estate of Doreen

Howie.

[b]       Mr M T Howie is ordered to pay costs of $4,958.00 to the plaintiff’ in

his capacity as executor of the estate of Doreen Howie.