Hudson
[2024] NZHC 2498
•3 September 2024
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-612407
[2024] NZHC 2498
IN THE MATTER Wills Act 2007 IN THE MATTER
an application by Murray William Dahm, of Wellington, mortgage adviser for an order
that a document be declared a valid will of the deceased JACQUELINE DOROTHY HUDSON, of Wellington, Retired Airline Officer
Hearing: On the Papers Counsel:
B J Williams for Murray William Dahm
Judgment:
3 September 2024
JUDGMENT OF McQUEEN J
[1] Ms Jacqueline Hudson died on 28 May 2024. Mr Murray Dahm applies without notice for an order appointing him as temporary administrator of the estate of Ms Hudson. Mr Dahm also seeks a prospective costs order for payment of his fees for administering the estate.
Background
[2] Ms Hudson signed a will in November 2017 naming Mr Dahm as an executor together with her brothers and one sister. Between March and May 2024, Ms Hudson instructed her solicitors to prepare a draft will, but it was not signed before her death
HUDSON, [2024] NZHC 2498 [3 September 2024]
on 28 May 2024. Under that draft will, Mr Dahm was again named as an executor, along with Ms Hudson’s other sister and brother-in-law.
[3] When this matter came before Grau J as Duty Judge, she noted that the application and orders sought appeared generally to be in order but that it was necessary for the application for validation of the draft will to be filed before determination of Mr Dahm’s application.
[4] As the application for validation of the draft has now been filed, I consider that I can determine the application for an order appointing Mr Dahm as temporary administrator of the estate of Ms Hudson and related costs orders.
Application for order appointing a temporary administrator
[5] Mr Dahm explains the background to the application in more detail in two supporting affidavits. Mr Dahm first met Ms Hudson in 2015. He was actively providing mortgage advice to her, through his company Home Mortgage Services Ltd, until she repaid her last loans on 22 December 2022.
[6] On 10 November 2017, Ms Hudson signed a will under which Mr Dahm was appointed an executor together with her brothers, Peter Hudson and Stephen Hudson, and her sister, Michelle Gully (the 2017 will).
[7] Mr Dahm explains that during 2021 and 2022, Ms Hudson mentioned to him that she needed to update her will. On 23 January 2024, Mr Dahm met with Ms Hudson, at her request, to discuss her wishes for her new will (but not for the purpose of seeking his professional advice, which does not include advice about making wills).
[8] Mr Dahm explains that after this, Ms Hudson spent considerable time handwriting her will instructions. He says she was fastidious about that process.
[9] In March 2024, Ms Hudson instructed Greg Kelly Trust Law to make a new will for her. A draft will was prepared and sent to Ms Hudson but she died before it was signed (the draft will).
On 31 May 2024, Greg Kelly Trust Law wrote to Mr Dahm to advise that:
(a)Ms Hudson left a signed will dated 10 November 2017, under which the residue of her estate was divided equally between five individuals including her four siblings, and attached a copy;
(b)Ms Hudson also left an unsigned draft will (under which the residue of her estate was divided between eleven charities);
(c)Mr Dahm was the only person named as executor under both wills;
(d)Ms Hudson’s personal information was confidential; and
(e)They considered that they could only provide her personal information to Mr Dahm, since he was named as an executor under both wills.
[11] Following correspondence with Greg Kelly Trust Law, Mr Dahm says it was agreed that the will instruction file could be released to Mr Dahm’s lawyer and Mr Dahm so that he could obtain a legal opinion about whether the draft will could be validated by the Court. Mr Dahm says that his lawyer concluded that there were reasonable prospects of the Court validating the draft will.
[12] Following that advice, Greg Kelly Trust Law approved the release of a copy of the draft will on an unrestricted basis.
[13] Mr Dahm explains that he understands that it is his legal duty (and that of the other executors named in the draft will) to put the matter before this Court. Accordingly, an application for validation under s 14 of the Wills Act 2007 has been filed in the High Court will (the draft will validation proceeding). Mr Dahm says that he anticipates there may be opposition to the application to validate the draft will and therefore it may be some time before that matter is determined.
[14] It is for this reason that Mr Dahm considers a grant of administration appointing a temporary administrator is required, pending determination of the will validation proceeding. Mr Dahm identifies a number of matters that require attention,
including paying Ms Hudson’s funeral expenses and testamentary expenses, securing Ms Hudson’s four residential properties, liaising with the property management company that is managing Ms Hudson’s rental properties, liaising with any investment adviser in relation to Ms Hudson’s current investments, dealing with Ms Hudson’s company, of which Ms Hudson was the sole director and shareholder, making payments due to the Inland Revenue Department and undertaking all other administration tasks to ensure that Ms Hudson’s estate is preserved.
[15] The other executors named in the draft will are Ms Hudson’s sister, Debra Gould (who is incorrectly named in the draft will as Deborah Gould) and brother-in-law, Michael Gould. Debra and Michael have both consented to administration being granted to Mr Dahm on a temporary basis pending determination of the will validation application.
[16] Mr Dahm explains that Ms Hudson was not survived by a spouse, civil union partner or de factor partner, however she is survived by her four siblings, Peter Hudson, Stephen Hudson, Michelle Gully and Debra Gould.
[17] Mr Dahm instructed his lawyer to write to Rainey Collins Lawyers in July 2024, as that firm has received instructions from three of the four executors named in the 2017 will, being Peter Hudson, Stephen Hudson and Michelle Gully, about this application. Further correspondence with Rainey Collins indicated that there would only be an objection to Mr Dahm’s appointment if he was a beneficiary of the draft will. On 20 August 2024, Mr Dahm’s lawyer advised Rainey Collins that Mr Dahm is not a beneficiary of the draft will and accordingly is not conflicted. Mr Dahm therefore expects no opposition to his appointment.
[18] The gross value of the estate left by Ms Hudson is not insignificant. The estate includes bank accounts, term deposits, KiwiSaver, investments, shareholdings, personal chattels including a car, three residential rental properties plus Ms Hudson’s own residence.
[19] Mr Dahm states that as he has been Ms Hudson’s mortgage adviser since March 2015 and someone in whom she confided about her affairs from time-to-time,
he considers he has the background knowledge and understanding of her affairs which would make him a suitable candidate for being a temporary administrator. He confirmed that he does not have any conflicts of interest which would prevent him from acting as the temporary administrator other than the inherent conflict of seeking reasonable remuneration for carrying out the role pending determination of the will validation proceeding. He reiterates that as an executor of the 2017 will he understands that he has a duty to put the matter of the draft will before the Court to determine whether it reflects Ms Hudson’s final wishes.
[20] Mr Dahm sets out his personal qualifications which include that he has undertaken investment advisor training and is a registered financial adviser with a Level 5 Certificate. He says that he started his own business as a mortgage adviser in 2014. Before establishing Home Mortgage Services Ltd, he was employed as a Branch Manager for Westpac between 2006 and 2014.
[21] Mr Dahm confirms that he seeks the grant of administration pendente lite be limited to administering Ms Hudson’s estate other than for distributing the estate. He confirms that he will faithfully administer Ms Hudson’s estate in accordance with the law and will, if required by the Court, file in the Court and verified by affidavit:
(a)a true and complete inventory of Ms Hudson’s estate; and
(b)a true and complete account of Ms Hudson’s estate—
(i)setting out the dates and particulars of all receipts and disbursements; and
(ii)showing, in his opinion, which of the receipts and disbursements are on account of capital and which are on account of income.
[22] Mr Dahm proposes to charge the estate based primarily on his standard hourly rate (presently $250 per hour) plus GST, together with office expenses and
disbursements. He says he anticipates instructing Bryce Williams Law Ltd to act as solicitors for him in his capacity as temporary administrator.
[23] Finally, Mr Dahm explains that given that the will validation application is likely to be opposed, he wishes to ensure that he will not be personally liable for the legal costs associated with that application or be liable to pay any other party’s legal costs. He says that he understands he is entitled to an indemnity from the estate for his legal costs where he has acted reasonably. In bringing this application and the will validation application, Mr Dahm says he has done so on legal advice.
Applicable legal principles
[24] Section 5 of the Administration Act 1969 grants this Court general jurisdiction in relation to the granting and revoking of probate of wills and letters of administration and in regard to the hearing and determining of matters relating to the estates of deceased persons. Section 7 of the Act provides that:
7 Administration pending legal proceedings
(1)Where any legal proceedings touching the validity of the will of a deceased person, or for obtaining, recalling, or revoking any grant of administration, are pending, the court may grant administration of the estate of the deceased to a temporary administrator, who shall, until he or she is discharged or removed under section 21, have all the rights and powers of a general administrator, other than the right of distributing the balance of the estate remaining after payment of debts, funeral and testamentary expenses, duties, and fees, and every such temporary administrator shall be subject to the immediate control of the court and act under its direction.
(2)The court may, out of the estate of the deceased, grant to a temporary administrator appointed under this section such reasonable remuneration as the court thinks fit.
[25] In Re McHugh, this Court observed that in order to exercise its jurisdiction under s 7:1
(a)there must be a legal proceeding touching the validity of the will of a deceased person or the grant of administration;
1 Re McHugh [2015] NZHC 1271 at [12].
(b)it must be necessary to grant an order for interim administration to preserve and manage the assets of the estate pending the resolution of those proceedings; and
(c)the proposed appointee must [be] suitably qualified to perform the tasks of the administrator and must have sworn an affidavit to faithfully administer the estate.
[26] A temporary administrator must be appointed to administer an estate as there needs to be an appropriate person with legal responsibility to preserve the assets of the estate, to obtain relevant information, and to take the initiative in progressing proceedings.2
[27] Section 7 contemplates that a temporary administrator receive reasonable remuneration for taking on the role. A prospective costs order may be granted to provide either or both indemnity costs (that an applicant’s costs are paid from the estate) and immunity costs (that an applicant will not have to pay another party’s losses).3 These orders are generally made in cases where the proceeding is not hostile and/or the applicant is not acting out of self-interest.4
[28] An application may be made without notice under r 27.4 of the High Court Rules 2016.
Discussion
[29] Counsel for Mr Dahm, Mr Williams, emphasises that it has now been nearly three months since Ms Hudson died and steps need to be taken to secure her property, pay debts and expenses and administer her estate, pending the determination of the will validation proceeding.
2 Re Parker [2022] NZHC 2878 at [18].
3 At [24] citing Woodward v Smith [2014] NZHC 407, [2014] 3 NZLR 525. See also Eastgate v Walker-Prentice [2020] NZHC 1042 at [17].
4 At [25] citing the discussion in McCallum Jnr v McCallum [2021] NZCA 237, (2021) 32 FRNZ 851 at [41]–[45]; and Woodward v Smith, above n 3, at [39].
[30] I have sighted the documents filed in the will validation proceeding although they are still to be processed by the Court registry. Mr Dahm has sought directions as to service, having also filed an affidavit with information to enable the Court to decide what persons/organisations are interested in, or may be adversely affected by, the relief sought by Mr Dahm. In summary, these are Ms Hudson’s siblings, cousins and charities who would inherit under the draft will or the 2017 will. The application is supported by an affidavit from Carolynn McLaughlin, who is a legal executive at Greg Kelly Trust Law. Ms McLaughlin explains that she was the author responsible for the 2017 will and the draft will. Ms McLaughlin sets out the instruction process for both wills, given the similarities between the instructions in relation to each will. Ms Hudson’s sister, Debra, and Mr Dahm also file affidavits in support of the application which set out further information. A detailed memorandum of counsel has been filed. Amongst other things, it notes that a prospective costs order should be made to protect Mr Dahm as applicant in the will validation proceeding.
[31] Accordingly, as there is now a proceeding in this Court concerning the validation of the draft will, the Court has jurisdiction under s 7 of the Administration Act to grant administration of the estate to a temporary administrator.
[32] I conclude that it is necessary to appoint a temporary administrator to preserve and manage the assets of Ms Hudson’s estate pending the resolution of those proceedings (other than for the distribution of the estate).
[33] I consider that Mr Dahm is an appropriate person to appoint as temporary administrator. He has appropriate qualifications. He has no personal interest in the estate. He has knowledge of Ms Hudson’s estate given his work relationship with her for a decade, indicating that he is a person Ms Hudson trusted. I accept that it is appropriate for Mr Dahm to be supported in the role by legal advisers. Given these matters, and the nature of the estate and its assets, I agree with Mr Williams that it is not necessary to appoint a commercial or professional trustee and this will assist in avoiding unnecessary costs. Mr Dahm has confirmed in his affidavit that he will faithfully administer the estate. His application is supported by Ms Hudson’s sister Debra Gould and Debra’s husband Michael Gould, the other executors named in the draft will. There has been an opportunity for the other executors of the 2017 to raise
an objection to Mr Dahm’s proposed appointment but it appears no issue has been taken, following the confirmation that Mr Dahm is not a beneficiary under either will.
[34] I consider that Mr Dahm may charge the estate reasonable fees for undertaking the role of administrator at his usual hourly rate of $250 per hour (plus GST), together with office expenses and disbursements.
[35] I accept that Mr Dahm has brought this proceeding to ensure assets in the estate are appropriately managed. Similarly, he has brought the will validation proceeding to assist the Court to determine whether the draft will should be validated. In these circumstances, it is appropriate in both proceedings for there to be an order that Mr Dahm to have his costs paid out of the estate and that Mr Dahm not be personally liable to pay the costs of any party. While there are two separate proceedings, I do not consider that this impedes the making of such orders. Mr Dahm has “responsibly brought proceedings where the litigation is necessary because of the state in which this will-maker left their affairs” and “costs will not normally be visited on the person bringing the proceedings, regardless of the result”.5 In addition, Mr Dahm has a reasonable belief that the draft will is the last will of Ms Hudson and accepts that he has a duty to take all reasonable steps to get that will validated.6
[36] However, I do not consider it appropriate to order that any costs Mr Dahm is ordered to pay to a party that contests the will validation proceeding will be paid out of the estate. This Court in Re Parker ordered that the temporary administrator was entitled to have her costs associated with the proceedings paid out of the estate and that she would not be liable to pay the costs of any other party.7 The Court then declined to make an order that any costs the temporary administrator was ordered to pay to a party that contested the proceedings would be paid out of the estate on the grounds that:8
5 See Re Parker, above n 2, at [22].
6 See Re Parker, above n 2, at [23] citing Re Young [1968] NZLR 1178.
7 Re Parker, above n 2, at [27].
8 At [28].
[the temporary administrator] will be protected personally from having to pay any costs to another party by the second order as to costs just made. It will be for the Court to decide in due course whether any other party’s costs should be paid out of the estate.
[37] I agree with this reasoning and therefore decline to make the order sought by Mr Dahm that any costs Mr Dahm is ordered to pay to a party that contests the will validation proceeding will be paid out of the estate.
[38] Finally, I record that the present application made by Mr Dahm is appropriately made without notice to any other person, as contemplated by r 27.4 of the Rules. The application is supported by an affidavit from Mr Dahm and a memorandum of counsel as required by r 7.23 of the High Court Rules 2016. The other persons who may have an equal entitlement to apply have been given notice of or have consented to this application, this being Ms Hudson’s siblings and her brother-in-law, and requiring the application to proceed on notice would cause undue delay.
[39] I am therefore satisfied that it is appropriate to make the orders, in part, as sought by Mr Dahm.
Orders
[40]Accordingly, I order that:
(a)temporary administration pendente lite of the estate of Jacqueline Hudson be granted to Murray Dahm, limited to administering all of Ms Hudson’s estate except for distributing the estate;
(b)Murray Dahm is entitled to charge the estate reasonable fees, office expenses and disbursements for undertaking the role of administrator;
(c)Murray Dahm is entitled to have his costs associated with this proceeding and the will validation proceeding paid out of Ms Hudson’s estate; and
(d)Murray Dahm will not, personally and independently of the estate, be liable to pay the costs of any other party in this proceeding or the will validation proceeding.
McQueen J
Solicitors:
Bryce Williams Law Ltd, Lower Hutt
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