Jackson v Jackson

[2016] NZHC 1723

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-106 [2016] NZHC 1723

IN THE MATTER	the Estate of IVY JACKSON
BETWEEN	RAYMOND BARRY JACKSON Applicant
AND	STEPHEN JAMES JACKSON First Respondent
AND	LINDA MARGARET JACKSON Second Respondent

Hearing:	13 July 2016
Appearances:	R Butler for the Applicant C Orton for the Respondents
Judgment:	27 July 2016

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 27 July 2016 at 4:00 pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Jackson v Jackson [2016] NZHC 1723 [27 July 2016]

Introduction

[1]      Mr Raymond Jackson has brought an originating application for an order under either s 6(2)(a)  or s 19(1) of the Administration Act 1969  appointing him administrator of the estate of his late mother, Ivy Jackson, who died in Auckland on

6 April 2015.   The respondents are Raymond’s brother Stephen, who is Ivy’s only other surviving child, and Stephen’s wife, Linda.  Stephen and Linda were appointed as executors of Ivy’s estate in her last will dated 15 January 2014.

[2]      The grounds upon which the application under s 19(1) of the Act is made are that:

(a)       Stephen and Linda have neglected and/or refused to prove Ivy’s last will within three months of Ivy’s death;

(b)      Raymond is a person interested in the estate; and

(c)       it is in the best interests of the estate, and persons interested in the estate, if he is appointed as administrator.

Background

[3]      In  a  judgment  dated  18 March 2016,1   Courtney  J  granted  leave  for  the application to be made by way of an originating application and for it to be filed in the Auckland registry of the Court.  It is convenient, to explain the background to the application briefly and neutrally, for me to adopt what Courtney J said at [4]-[6] of that judgment:

[4]       Raymond Jackson is concerned about the circumstances in which the will was executed, the application of the house sale proceeds and the application of the funds in Mrs Jackson’s bank account at the time of her death.   Mrs Jackson executed a will in 2012 which distributed her estate evenly among her three children.   In early 2014 she contemporaneously appointed  Stephen Jackson  as  her  attorney  under  an  enduring  power  of attorney, executed a sale and purchase agreement in relation to her house for

$669,996 and executed the new will that provided for the proceeds of the

1      Jackson v Jackson [2016] NZHC 471.

sale to go to him and Linda Jackson.  That will expressly excluded Raymond

Jackson and his sister (who has since died).

[5]       Raymond Jackson asserts that, even allowing for the costs of care in the last year of Mrs Jackson’s life, the sale proceeds could reasonably have been expected to have been at least $650,000.  Yet, when Mrs Jackson died

15  months  later  her  bank account  had less  than  $100,000 in it.   When

Raymond Jackson expressed his concerns to the executors they advised,

through their solicitor, that they are “not interested in applying for probate as there are technically no funds in the estate and all of the residuary estate has been distributed to the beneficiaries in accordance with the Last Will of Ivy Jackson”.

[6]       Because Stephen and Linda Jackson have declined to take any steps to apply for probate, Raymond Jackson has no means of having these issues addressed.  He therefore wishes to apply for orders that would allow him to administer the estate in place of the current executors and, in that capacity, address the issues that concern him.

[4]      To  further  explain  the  alleged  discrepancy  between  what  Raymond  says should have been the value of Ivy’s estate and the assertion by Stephen and Linda that  there  are  no  assets  for  distribution;  Mr Butler  submitted  that  the  evidence establishes that Ivy’s former home sold for approximately $670,000 in January 2014. Ivy  and  Raymond  and  Stephen’s  father,  Fred,  went  into  a  retirement  home  in January 2014.  After Fred died in October 2014, Ivy stayed there until her death in

2015.  On the basis of rest home fees of $3,700 per fortnight over 15 months, it is estimated that approximately $120,000 of the proceeds of the sale of the former home would have been spent in that manner; the real estate agent’s commission on the sale was $22,137.50.  This has left, according to Mr Butler’s calculations on the basis of the available information, something in the order of $527,000 “currently unaccounted for from the sale proceeds”.

Raymond’s concerns

[5]      Ivy suffered a stroke on 6 January 2014 and was hospitalised.  Raymond is also concerned that on 13 January 2014, she signed two enduring powers of attorney (authorising Stephen to become her attorney in relation to her personal care and welfare and also her property) and executed an agreement for sale and purchase of the home at 22 Keldale Place, Forrest Hill.  She executed the will two days later.  It is alleged that Stephen and Linda have refused requests to obtain certification as to Ivy’s competence to execute the documents.

[6]      There are also complaints that the respondents have failed to provide any documentary support by way of bank statements and other relevant documents supporting the bare allegations that no funds were left in the estate.  No information has been provided to satisfy Raymond as to the disposition of what he says was over

$500,000 in net proceeds of the sale of the home which have been unaccounted for.

[7]      Raymond’s purpose in seeking letters of administration is to provide him with the   authority   to   obtain   all   necessary   information   which   will   explain   the circumstances in which his mother had her financial affairs managed and executed documents.  He will be better able also to carry out such investigations as may be necessary to determine whether the estate has any claim against any person which might result in funds being brought into the estate.  For example, it is suggested that the  real  estate  agent  who  conducted  the  sale  may  have  acted  improperly,  the allegation  being  based  on  a  sale  price  of  $669,996  in  January  2014  against subsequent sales of the property:  two months later for $795,000 and in November

2015 for $913,000.

[8]      Raymond also wishes to investigate claims by Stephen that a bank account in Ivy’s name, which is said to have contained some $110,000 at the time of her death, was held jointly with Stephen and that Stephen was entitled to the funds in the account by succession.   Raymond seeks to obtain information about this account, which has not so far been provided to him, I assume with a view to considering whether it might be said that Stephen was merely a trustee rather than a beneficiary of the funds in the account.

No findings of disputed fact

[9]      In fairness to Stephen and Linda, I make it clear that I have formed no view as to the merits of Raymond’s claims and concerns.  I acknowledge that they have provided plausible explanations for the circumstances in which the enduring powers of attorney, agreement for sale and purchase and will were executed by Ivy, and they do not acknowledge any wrongdoing with regard to the proceeds of the sale of the Forrest Hill property.

[10]     Mr Orton did not concede that there is any merit in the allegations that the estate should have several hundred thousand dollars in assets, nor that there is any proper basis for a claim against the real estate agent who sold the Forrest Hill property.  Counsel focused his submissions, however, on an argument that Raymond should not be appointed administrator because he has a direct personal interest in the outcome of any investigation into the estate’s affairs and the management of his late mother’s affairs before she died, and that this  would conflict with his duties as administrator.   Mr Orton argued that, if the Court was minded to appoint an administrator,   The   Public   Trustee   should   be   appointed,   being   neutral   and independent.

[11]     I  am  not  persuaded  by  any  of  the  arguments  that  Raymond  would  be conflicted if letters of administration were granted to him.  The cases relied upon by Mr Orton2 are distinguishable on their facts and do not assist the respondents.  Any duties Raymond might have as administrator, to the beneficiaries of the estate, would only  apply  in  the  event  that  the  estate  had  assets.    The  sole  purpose  of  the appointment which is sought by Raymond is to use his position as administrator to

conduct an investigation and obtain relevant information, with a view to determining whether  there  are  funds  should  be  brought  into  the  estate.    To  that  extent,  his personal interests are aligned to those of other beneficiaries.

[12]     Moreover, I am satisfied that if a point was reached at which it became untenable for Raymond to continue to act as administrator, for example because of the way in which his family protection claim or any claims on behalf of the estate was or were being managed, the respondents or the Court of its own initiative could

take steps to appoint another administrator in his place.

2      Blackler v French HC Hamilton M306/99 & A76/00, 16 August 2000; Re Estate of Andrews

[2012] NZHC 2491; Re Estate of Titchener [2014] NZHC 1347.

[13]     I am not persuaded either that The Public Trustee should be appointed.  There is no evidence before the Court that The Public Trustee would be prepared to accept appointment and, if so, on what basis.  Plainly The Public Trustee would expect to be paid a fee for services as administrator and Stephen and Linda have not made any suggestion as to how such fees would be met.

[14]     Raymond will undertake such investigation as he considers appropriate as administrator at his own expense, although it is likely that he would seek to recoup any expenditure in that exercise from the estate in due course if it comes into funds. That is a downstream issue.

Decision and orders

[15]     I am satisfied on the evidence that there are  matters which Raymond is entitled to pursue further and that the most effective vehicle to enable him to do so is for him to be appointed administrator under s 19 of the Act.

[16]     Being satisfied that the executors named in  Ivy’s will have neglected or refused to prove it within three months from Ivy’s death, I make the following orders:

(a)      An order nisi shall issue that letters of administration of the estate of the  late  Ivy Jackson  shall  be  granted  to  Raymond  Barry Jackson unless Stephen James Jackson and Linda Margaret Jackson, as executors of the will of the late Ivy Jackson, show cause, within a period of 28 days from the date of this judgment, why administration should not be granted to Raymond Barry Jackson.

(b)Service of the order at [16](a) shall be effected on the respondents by serving a sealed copy on their solicitor, Corban Revell, 133A Central Park Drive, Auckland.

[17]     Raymond Jackson is entitled to costs on a scale 2B basis.   If the parties cannot  agree  on  the  costs  to  be  paid,  the  applicant  shall  file  and  serve  a memorandum as to costs no later than  4:00 pm,  Friday 12 August 2016.   The respondents shall file and serve any memorandum in reply by 4:00 pm, Friday

2 September 2016.  Costs shall then be determined on the papers unless the Court directs otherwise.

………………………………..

Toogood J