Kawe-Small v Ching
[2017] NZHC 1563
•7 July 2017
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2014-419-000472 [2017] NZHC 1563
IN THE MATTER of the estate of WHAKAAWI MANGO
KAWE, deceased
BETWEEN
TIAHUIA KAWE-SMALL Plaintiff
AND
RANGITAHI CHING First Defendant
RAUKAHA RARAKA Second Defendant
Hearing: 9 June 2017 Appearances:
G H J Brant for Plaintiff
K W Burroughs for First RespondentJudgment:
7 July 2017
JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 7 July 2017 at 3.30 pm
pursuant to R 11.5 of the High Court Rules
Registrar / Deputy Registrar
Date……………………….
KAWE-SMALL v CHING & OR [2017] NZHC 1563 [7 July 2017]
Introduction
[1] Whakaawi Mango Kawe died in 2002 leaving a valid will under which her son, Kereti Kawe, and daughters, Rangatahi Ching and Raukaha Raraka, were named executors. Mr Kawe died in 2012 without probate having been obtained. Now Mr Kawes’ daughter, and the executor of his estate, Ms Tiahuia Kawe-Small, has applied under s 19(1) of the Administration Act 1969 for a grant of administration with will annexed in relation to her grandmother’s estate. The estate is relatively modest; it comprises mainly a piece of land in Taupiri estimated to be worth between $150,000 – 200,000.
[2] Mrs Ching opposes the application. Because of historical grievances between her and Mr Kawe she regards it as inappropriate for his daughter to assume the position of sole administrator. She does not wish to act as executor herself. She has indicated a desire that her daughter, Priscilla Ching (who has indicated her willingness), be appointed either alone or as a co-executor with Ms Kawe-Small.
[3] Nor does Ms Raraka wish to act as executor. She has indicated her wish not to participate in the proceedings and to abide the decision of the Court.
[4] The proceeding has a confused procedural background and I mention only the aspects that are relevant now. In her amended statement of claim Ms Kawe-Small sought an order nisi calling upon Mrs Ching and Ms Raraka to show cause why letters of administration should not be granted to her and, subject to the Court being satisfied that no reason existed, an order granting her letters of administration with will annexed. Mrs Ching filed a statement of defence and affidavits in opposition. Ms Raraka filed a memorandum indicating that she would not take steps.
[5] The application came before Muir J in October 2016. It appears not to have proceeded to a hearing because the Judge instead raised the possibility of appointing the Public Trust as a means of rehabilitating family relationships. He made a consent order that the Public Trust be appointed, but conditional on the Public Trust consenting to act; Ms Kawe-Small was granted leave to renew her application if
consent was not given.1 The Public Trust indicated its wish not to consent. Ms Kawe-Small accordingly renewed her application.
[6] I therefore treat the application as a fresh application under s 19(1) for an order nisi that Mrs Ching and Ms Raraka show cause why Ms Kawe should not be granted letters of administration.
Granting letters of administration under ss 6 and 19(1) Administration Act 1969
[7] Section 19(1) of the Administration Act 1969 provides for the appointment of a new executor where the named executor has neglected or refused to prove the will or to renounce probate:
In any case where any executor named in a will neglects or refuses to prove the will, or to renounce probate thereof, within 3 months from the death of the testator, the court may, upon the application of any other executor or executors or any person interested in the estate or of Public Trust or of the Māori Trustee or of any creditor of the testator, grant an order nisi calling upon the executor who so neglects or refuses to show cause why probate of the will should not be granted to that executor alone, or with any other executor or executors, or, in the alternative, why administration should not be granted to the applicant or some other person.
[8] The mere failure to seek probate will not necessarily amount to failure or neglect for the purposes of s 19.2 However, in this case I am satisfied that this has happened. In unchallenged affidavit evidence Mrs Ching recalled that after her mother’s death all three executors consulted a local solicitor for the purposes of obtaining probate. By that point there was significant mistrust between Mrs Ching and Mr Kawe arising from allegations that Mr Kawe had misappropriated money
obtained for the purposes of upgrading Mrs Kawe’s house. Before an application for probate could be made Mr Kawe uplifted the original will and returned to his home in Invercargill.
[9] It appears that Mr Kawe made attempts over a period of several years to advance the matter of probate. Ms Kawe-Small described Mr Kawe visiting his sisters to try and persuade them to allow him to administer the estate alone. For the
reason already described, they would not agree. The matter was still at an impasse
1 Minute of Muir J 17 October 2016.
2 Ruocco v Wright HC Christchurch CIV-2008-409-311, 16 December 2008 at [17]–[19].
when Mr Kawe died. Mrs Ching clearly believed that she could not advance matters because she did not have the original will. In fact, she could have taken steps to force the production of the will but, even if she had appreciated that fact, it may have been too difficult and expensive for her to attempt. Mrs Ching is now elderly and does not feel able to undertake that task of administrating the estate. Ms Raraka, who is illiterate and whose capacity is in doubt, is clearly unable to do so.
[10] In these circumstances s 19(1) applies. Relevant to Ms Kawe-Small’s application are the High Court Rules which were in force at the time of Mrs Kawe’s death. Rule 655 applied to cases to which s 19(1) applied:
655Conditions of, and order of priority for, grant of administration with will annexed
(1) Where there is a will, but –
(a) No executor has been appointed by the will; or
(b) The executor appointed by the will –
(i) Has died in the lifetime of the testator; or
(ii) The executor has survived the testator but has died without proving the will; or
(iii) Has renounced probate of the will; …
(c) The appointment of the executor as executor is null and void by virtue of section 2 of the Wills Amendment Act 1977 –
letters of administration with the will annexed may be granted to the person entitled thereto in accordance with the order of priority set out in subclause (2).
(2) The order of priority referred to in subclause (1) is as follows:
(a) First, any residuary beneficiary holding in trust for any other person:
(b) Second, any residuary beneficiary for life:
(c) Third, the ultimate residuary beneficiary, or, where the residue is not wholly disposed of by the will, any person entitled to a share in the residue not so disposed of (including the Attorney-General when claiming such residue as bona vacantia on behalf of the Crown) or the personal representative evidence of any such person:
Provided that where the residue is not in terms wholly disposed of, the Court may, if satisfied that the testator has nevertheless disposed of the whole or substantially the whole of the estate as ascertained at the time of the application for the grant, make the grant to any beneficiary entitled to, or to a share in, the estate so disposed of, without regard to the persons entitled to share in any residue not disposed of by the will:
(d) Fourth, any specific beneficiary or any creditor, or the personal representative of any such person, or, where the estate is not wholly disposed of by the will, any person who, notwithstanding that the amount of the estate is such that he has no immediate beneficial interest therein, may have a beneficial interest in the event of an accretion thereto:
(e) Fifth, any beneficiary, whether residuary or specific, entitled on the happening of any contingency.
(f) Sixth, any person having no interest under the will who would be entitled to a grant if the deceased had died wholly intestate.
(3) Where, in any case to which section 19(1) of the Administration Act
1969 applies, no application for an ordesr nisi in terms of that section is made by an executor or by the Public Trustee or by the
Māori Trustee within 4 months from the death of the testator, letters
of administration with the will annexed may be granted to the person entitled thereto in accordance with the order of priority set out in
subclause (2).
(4) Persons who are entitled to the grant and who are members of the class specified in paragraph (2) or paragraph (d) or paragraph (e) of subclause (2) shall be entitled to the grant in order of priority in their class according to the value of their respective interests or the amounts of their respective debts.
[11] Rule 655 is subject to r 656 which provides that:
656Justification of entitlement to grant letters of administration with will annexed
(1) Where application is made for a grant of letters of administration with the will annexed and persons other than the applicant would (if living and competent [and not disqualified]) have under rule 655(2) a priority that is higher than, or equal to, that of the applicant, the applicant –
(a) Shall adduce proof to the satisfaction of the Court –
(i) That such persons are dead or incompetent [or disqualified]; or
(ii) That notice of the intended application has been given to them; or
(b) Shall file their consents in writing, duly verified by affidavit
…
[12] Because Mr Kawe would have been entitled to a share of his mother’s residuary estate, Ms Kawe-Small, as the personal representative of a beneficiary, is entitled to priority under r 655(d). She has satisfied the requirements of r 656(1)(a), having given notice of her application to those equal to or ahead of her in terms of priority (Mrs Ching and Ms Raraka).
[13] However, I also have regard to s 6 of the Administration Act which requires the Court, when granting letters of administration, to consider the rights of all persons interested in the estate and permits the Court to make a grant in favour of a person who would not otherwise be entitled to be appointed:
(1) In granting letters of administration with or without a will annexed, or an order to administer with or without a will annexed, in respect of the estate of any deceased person or part thereof, the court shall have regard to the rights of all persons interested in the estate of the deceased person or the proceeds of sale thereof, and, in particular, administration with a will annexed may be granted to a devisee or legatee; and any such administration may be limited in any way the court thinks fit;
...
(2) Where by reason of the insolvency of the estate or other special circumstances the court thinks it necessary or expedient to do so, it may –
(a) grant administration to such person or persons as it thinks expedient notwithstanding that some other person is appointed an executor or that, apart from this subsection, some other person would by law be entitled to a grant of administration;
(b) grant probate to 1 or more of the executors appointed by a will, notwithstanding that some other person or persons may also be appointed as an executor or executors.
(3) A grant may be made under subsection (2) of this section notwithstanding that any person excluded from the grant would be competent to take it.
(4) Before determining to exclude from any such grant any person who, apart from this section, would by law be entitled to or be included in, the grant, and wishes to have, or to be so included in, the grant, the
Court shall have regard to his or her competency and solvency, his or her ability effectively to administer the estate, the rights of all persons interested in the estate, and any changes in circumstances between the making of the will (if any) and the time when the Court is asked to make the grant.
[14] In Baird v Fisher Collins J comprehensively addressed the special circumstances in which the Court might bypass an executor in granting administration under s 6.3 The starting point is the Court’s duty to ensure estates are
properly administered and trusts properly executed.4 To bypass an executor who
wishes to be included in the grant the Court must be satisfied that there are special circumstances in light of s 6(4) of the Act. Special circumstances exist “when the integrity of the administration of the estate is at risk and the welfare of the beneficiaries is compromised”.5 Collins J held that incompetence under s 6(4) of the Act can include an inability to discharge the responsibilities of being an executor; a conflict of interest will be a relevant factor.6 A desire to re-litigate past grievances would be an impediment to an executor’s ability to effectively administer the estate.7
The current application
[15] The basis for Mrs Ching’s opposition is her fear that Ms Kawe-Small will not be able to manage the disputed issues, which have their roots in longstanding grievances within the family. I have already referred to the serious allegation of dishonesty by Mr Kawe in relation to his mother’s money. There are also complaints that Mr Kawe (and his family) have never acknowledged the sacrifice that Mrs Ching made in giving up her employment to care for her mother for more than twenty years. Clearly, these grievances are still very important to Mrs Ching.
[16] Moreover, evidence from both Mrs Ching and Ms Kawe-Small suggested that there is still a level of negativity within Mr Kawe’s family towards Mrs Ching’s family. In addition there are current issues that Ms Kawe-Small acknowledges will
need to be resolved by whoever acts as administrator.
3 Baird v Fisher [2014] NZHC 1347.
4 At [6], citing Crick v McIlraith [2012] NZHC 1290 at [16]; Harsant v Menzies [2012] NZHC
3390 at [57].
5 At [6].
6 At [20].
7 At [22].
[17] First, there is an allegation (Ms Kawe-Small did not identify by whom) that Ms Ching had withdrawn $46,000 from Mrs Kawe’s account without authority. Secondly, Mrs Ching occupies part of her mother’s land under a lease that expires in
2020. The rental is $800 per annum and Ms Kawe-Small alludes to the possibility that the rental is in arrears. Thirdly, Mrs Ching and her husband have built a house on the land which, under the terms of the lease, will remain Mrs Ching’s property upon expiry and, if she chooses not to remove it, she will be entitled to compensation from her mother’s estate. Mrs Ching’s husband, Edward Ching, has deposed to the couple’s wish to buy the land at the expiration of the lease. Given Mr and Mrs Ching’s apparently modest means and their view that they made both personal and financial sacrifices to care for Mrs Kawe, this issue clearly has the potential to result in an intractable dispute.
[18] Ms Kawe-Small gave evidence before me. She is an educated, articulate woman who holds a responsible position in her community. She said that she was previously unaware of the ill-feeling and mistrust between Mrs Ching and her father but now clearly understands the difficulties; the reason she seeks sole appointment is her apprehension of dead-lock between herself and anyone else appointed from within the family. She is opposed to the idea of an independent solicitor being appointed because she is keen to minimise cost.
[19] Although Ms Kawe-Small is undoubtedly competent, the task of administrator in this case will not be straightforward. Not only are there historical grievances to navigate, the decisions that will have to be made regarding the lease will directly affect all the beneficiaries in different ways. There is an ongoing sense of distrust among family members that will, for example, make it difficult to negotiate the issues arising on the expiry of the lease. In my view the prospects of the estate being administered effectively and speedily by anyone in the family acting alone are remote. Conversely, Ms Kawe-Small’s apprehension of dead-lock if more than one family member is appointed is also valid. Either way, further litigation seems inevitable. There will be attendant delay and expense, which will be to the detriment of the family generally. As a result I do find that there are reasons that Ms Kawe-Small should not be appointed.
[20] This view is not intended to reflect adversely on Ms Kawe-Small’s integrity or ability. Nor is it intended to reflect adversely on Priscilla Ching, who expressed her willingness to work with Ms Kawe-Small to resolve the issues. Nor does it indicate any adverse view about Mrs Ching’s willingness to co-operate in the task of administering her mother’s estate. Rather, it is recognition of the very human fears and anxieties that result from longstanding grievances and deeply entrenched family dynamics.
[21] Undoubtedly the same concerns led Muir J to order that the Public Trust be appointed. That suggestion was accepted by all the parties at the time and the application was only renewed because the Public Trust’s consent could not be secured.
[22] In my view, the best chance of Mrs Kawe’s estate being administered with minimal delay and expense lies in the appointment of an independent trustee. I note that the appointment of an independent solicitor has previously been considered. The only reservations the parties had as to that course appeared to be the expense. But even appointment of the Public Trust, to which all the parties were agreeable, would have carried some expense.
[23] I therefore make the following orders:
(a) Ms Kawe-Small’s application is refused.
(b)The parties should confer and file memoranda – preferably joint – nominating a suitable independent solicitor, together with that person’s confirmation of consent to act.
(c) If agreement cannot be reached as to a suitable person the parties may file separate memoranda with nominations and consents to act.
(d)I will make an order under s 6 on the basis of the information provided in the memoranda.
(e) Leave is reserved to counsel to seek a telephone conference before me if necessary.
[24] In the circumstances, where the difficulties in this case are not the fault of any of the parties to it I decline to make any order as to costs. Costs are to lie where
they fall.
P Courtney J
0