Kelsey v Taniora
[2018] NZHC 1727
•12 July 2018
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2017-419-000062
CIV-2017-419-000065 [2018] NZHC 1727
BETWEEN KATARINA TAKIORA KELSEY
Applicant
AND
MICHAEL JOHN TANIORA
Respondent/Defendant
Hearing: 22 February 2018; submissions dated 2 March 2018;
memorandum dated 28 June 2018; submissions by telephone on 11 July 2018 (J Niemand)
Appearances:
D Mayall for the Applicant
No appearance by or for the Respondent/Defendant
Judgment:
12 July 2018
JUDGMENT OF HINTON J
This judgment was delivered by me on 12 July 2018 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Solicitors:
Niemand Peebles Hoult, Hamilton
Party:
M Taniora
KATARINA TAKIORA KELSEY v MICHAEL JOHN TANIORA [2018] NZHC 1727 [12 July 2018]
[1] Katarina Kelsey applies to recall probate and to sustain a caveat, both applications arising out of the death of Lawrence Perkinson (the deceased) on 3 January 2010. The applications have proceeded by way of formal proof. Both applications are, however, legally complicated and the facts unclear, so that further enquiries have had to be made of counsel and further submissions received.
[2]The current proceedings are:
(a)a proceeding by way of statement of claim in CIV-2017-419-065 to recall a grant of probate (made under CIV-2010-419-141 in respect of Mr Perkinson’s will dated 28 February 2008 (the old will)); and
(b)an application in CIV-2017-419-062 to sustain caveat number 8806926.1 lodged by the applicant on 12 July 2011 against the title of a property owned by the deceased at 2 Fuller Street, Ngaruawahia comprised in computer register SA509/288.
[3] Ms Kelsey is a stepdaughter of the deceased. Her mother, Mere Perkinson, was in a relationship with the deceased from 2004 until she died in 2008. The deceased had signed the old will shortly before Mere died, leaving “all his assets and possessions” to Mere.
[4] Mr Taniora is the respondent/defendant in these proceedings in his capacity as the current executor of the deceased’s estate under the old will. He was a friend of the deceased.
[5] Mr Taniora obtained a grant of probate in respect of the old will on 22 March 2010.
[6] Immediately following Mr Perkinson’s death, a note was found dated 4 December 2009, and signed by the deceased. It provided:
I Lawrence Perkinson of 2 Fuller Street, Ngaruawahia, wish to honour my promise to Mere Rina Perkinson and that this home and contents to be given to her first grandchild Olivia Paige and youngest daughter Jazmine Clark Cook to be shared equally. I wish that Katarina Kelsey of 8 Front Miranda
Road, Waitakaruru have sole responsibility of all and any transactions associated with this home if she so wishes.
[7] On 12 July 2011, Ms Kelsey lodged a caveat against the Ngaruawahia property, as legal guardian of her daughter, Olivia Paige “a beneficiary in the estate” of the deceased. Ms Kelsey does not appear to have taken any other steps at that time.
[8]There was then a long period of inactivity, the reason for which is quite unclear.
[9] On 8 March 2017, Ms Kelsey received notice that Mr Taniora had filed an application for the caveat to lapse.
[10] On 22 March 2017, Ms Kelsey applied to sustain the caveat and filed proceedings seeking an order for recall of probate.
[11] On 3 April 2017, Associate Judge Doogue made an order that the caveat not lapse until further order of the Court.
[12] On 19 December 2017, a declaration was made by Duffy J in a third proceeding, CIV-2017-419-066, that the document dated 4 December 2009 and signed by the deceased, was a valid will (the new will) and that Ms Kelsey was to act as an executor of the estate.
[13] Service of the application that the caveat not lapse and the application to recall probate has been effected, as directed, on Mr Taniora and on the following parties:
(a)Jazmine Cook in her capacity as a potential beneficiary of the deceased’s estate. Jazmine is the applicant’s youngest sister, the deceased’s youngest stepdaughter. Service was effected on 7 July 2017;
(b)Erina Perkinson in her capacity as the deceased’s only surviving child. Service was effected on 5 July 2017, by way of Erina’s litigation guardian, Rana Paraha1 (“Ms Paraha”); and
(c)Olivia Paige in her capacity as a potential beneficiary of the deceased’s estate, by way of her litigation guardian, namely the applicant. The date of service is obviously not material in this regard.
[14] No response and/or documents in defence have been filed by Mr Taniora or any other party, despite considerable time having elapsed. It has to be taken that there is no active opposition to the applications.
Application to recall grant of probate
[15] The issue is whether probate should be recalled to give effect to the deceased’s intentions, when a will, with a date later than that of the will of which probate has been granted, has been found.
[16] The Court’s jurisdiction to recall probate is set out in s 5(1) of the Administration Act 1969, which provides that the Court shall continue to have jurisdiction and authority in relation to the granting and revoking of probate and letters of administration.
[17]Rule 27.34 of the High Court Rules 2016 provides:
(1)If a grant is made in common form, a person may make an interlocutory application for an order for the recall of the grant.
(2)The court may make an order recalling the grant only if:
(a) …
(b) The application is unopposed; and
(c) One of the following circumstances exists:
…
1 Rana Paraha was confirmed as Erina’s litigation guardian on 5 July 2017 by Associate Judge Doogue.
(i)A will has been found with a date later than that of the will of which probate was granted; or
…
(3)If subclause (2) is not satisfied, a person wishing to apply for an order for the recall of the grant must bring proceedings.
[18] The Courts have consistently recalled a grant when either a will has been found with a date later than that of the will of which probate was granted, or the courts have made a finding that the initial grant of probate was void ab initio.2 In the current case, the facts are materially similar to those in Re McLeod,3 and Plimmer v Public Trustee4 where probate was recalled and reissued on the terms of a later discovered codicil or letter.
[19]In this case:
(a)the original grant of probate was in common form;
(b)the application is unopposed;
(c)the new will is dated later than that of the will of which probate was granted; and
(d)Duffy J has confirmed the validity of the new will.
[20]I agree therefore that probate should be recalled.
[21] The new will deals only with the house of the deceased, situated at 2 Fuller Street, Ngaruawahia, and contents, while the old will refers generically to all assets of the deceased. I have considered whether in those circumstances probate should be recalled only in respect of the house and contents. However, the evidence strongly suggests that the only assets of the estate are the house and contents. Mr Niemand has confirmed that to be the case and, given the lack of any opposition
2 Re Hall HC Dunedin, 23 April 2007, CIV-2005-412-879, Miller J; Re Penney (deceased) [1975] 2 NZLR 337; Plimmer v Public Trustee [1931] GLR 478.
3 (1912) 14 GLR 733.
4 [1931] GLR 478.
to the application, I have decided to make the order in the form sought, without qualification. To do otherwise would create unnecessary complications.
[22] I note that the application to recall probate referred to seeking of ancillary orders, but no order is sought beyond recall.
Application for order that caveat not lapse
[23] The legal principles applicable to an application to sustain a caveat are well settled.
[24] Section 137 of the Land Transfer Act 1952 provides that a caveat against dealings can be lodged by a person who claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or any trust expressed or implied, or otherwise.
[25] The caveator must show an entitlement to a beneficial interest in the land under the caveat.5 Something more than a potential or future interest is required.6
[26] For a caveat to be removed, it must be patently clear that the caveat cannot stand, either because there was no ground for lodging it at the outset or because any such ground no longer exists.
[27] The Court has a residual discretion not to uphold a caveat. That discretion is exercised cautiously, for example, when the caveat could serve no useful purpose or alternative safeguards are available.7
[28] Pursuant to the declaration of Duffy J on 19 December 2017, the new will is a valid will and is in fact now the deceased’s last will.
5 Guardian Trust and Executors Company of New Zealand Limited v Hall [1938] NZLR 1020 (CA) at 1025.
6 Philpott v NZI Bank Ltd (1989) 1 NZ ConvC 190,246 (CA).
7 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656;
Stewart v Kaipara Consultants Ltd [2000] 3 NZLR 55 (CA).
[29] The caveat was lodged by Ms Kelsey as the legal guardian of Olivia, who stands to receive a 50 per cent interest in the Ngaruawahia property, pursuant to the new will.
[30] Mr Mayall’s original submission was, simply, that as a beneficiary of the property pursuant to the last will, Olivia has a clear caveatable interest in the property and therefore the caveat must be sustained.
[31] However, a legatee under a will does not acquire an immediate beneficial interest in property devised to them, on the death of the testator. While the estate remains unadministered, those persons named in the will as legatees have no equitable interest in the property named therein.8 Instead, the executor takes full ownership on the death of the testator, without distinction between legal and beneficial interests.9 The executor can caveat property belonging to the estate at that point, but a beneficiary relying on the will, cannot.
[32] The reason that even a specific legatee does not acquire an immediate interest was explained by the High Court of Australia in Official Receiver in Bankruptcy v Schulz.10 Prior to the administration of the deceased’s estate being completed, there is no specific property capable of constituting the subject matter of any trust. It cannot be said what property will need to be realised for purposes of administration. For that reason, the legatee cannot point to a specific item of property, even though devised to them in the will, and say “that is mine”.
[33] Once administration has been completed, the property in question ceases to be part of the estate and becomes trust property, held by any trustees if named, or deemed to be held in trust by the executor otherwise.11 Following completion of administration, a beneficiary claiming an interest in a particular property can then lodge a caveat.
8 Rutherford v Rutherford [2015] NZHC 878 at [18] and [22].
9 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 312; Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 (PC) at 707-708.
10 At 312; see also G E Dal Pont and K F Mackie Law of Succession (2nd ed, LexisNexis, Australia, 2017) at 308.
11 Rutherford v Rutherford [2015] NZHC 878 at [19] and [22].
[34] The point at which administration is deemed to be complete is when the executor “assents”, an assent being an indication that the property is not required for the purposes of administration and may be distributed as the will directs. This is a question of fact which can be inferred from the evidence, as opposed to requiring an express acknowledgement by the executor that administration is complete. Although it is difficult to find clear statements about the completion of administration, as a general rule it would require the gathering in of assets and repayment of debts, those being the tasks of an executor.
[35] Mr Mayall says it can be inferred that administration in respect of the old will was completed by Mr Taniora, considering the significant amount of time which has elapsed since probate was granted in 2010. Mr Mayall submits also that the proving of the new will and recall in respect of the old will should have no bearing on the recognition of Olivia’s equitable interest in the property, as it would merely involve a change in trustee from Mr Taniora to Ms Kelsey.
[36] I do not need to consider this last point, because I am not satisfied on the balance of probabilities that the administration of the old will was complete. I accept that the passing of significant time since probate can be relevant, but I do not consider that assent can be inferred solely on that basis. The fact that such a long period of time has elapsed since the deceased died and probate was granted, could equally suggest that Mr Taniora has been negligent in seeing to the administration of the estate and outstanding accounts have not been settled. More importantly, Ms Kelsey says, as recorded in the judgment of Duffy J, that the deceased borrowed a significant amount on a credit card before his death to provide for his birth daughter. There is no evidence of repayment. There is also evidence that there is a mortgage on the property, although when the debt accrued is unclear. In these circumstances, it would appear that administration is not complete.
[37] While Mr Mayall argued in the alternative that a legatee could in some circumstances lodge a caveat before administration is complete, the cases he cited were cases where the caveator relied, not on an interest under a will, but on a separate deed, for example a deed of mutual wills.
[38] I accept counsel’s further argument that Ms Kelsey herself, as executor under the new will consequent upon the decision of Duffy J, has an interest that would support a caveat. That cannot be doubted. That interest does not depend on probate being first granted to her. However, the application before me is to sustain a caveat, lodged on behalf of Olivia, albeit in Ms Kelsey’s name, not an application to lodge a caveat in respect of Ms Kelsey’s interest as executor. A party seeking to sustain a caveat has to do so on the basis on which the caveat was lodged.12
[39] Therefore, I find that the caveat must lapse as it has not been proved on the balance of probabilities that Olivia has a caveatable interest in the property.
[40] I see no reason why Ms Kelsey could lodge a further caveat in her capacity as executor. Alternatively, she will presumably now apply for probate and have the property speedily registered in her own name.
Conclusion
[41]Orders are made as follows:
(a)For the recall of probate in respect of the deceased’s will dated 28 February 2008; and
(b)That caveat number 8806926.1 lodged by the applicant against the title of the property at 2 Fuller Street, Ngaruawahia, in computer register SA509/288 shall lapse.
[42]As I understand it, Ms Kelsey will now act very promptly to obtain probate.
12 Colin Adams Ltd v Baker CA178/98, 5 May 1999 at [5]-[7].
[43] At counsel’s request, I direct that the file is to remain in Auckland, so that probate can be sought here, rather than it being sent back to Hamilton or to Wellington.
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Hinton J
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