Kirkwood v Kirkwood
[2019] NZHC 2559
•8 October 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-600206
[2019] NZHC 2559
UNDER the Administration Act 1969 IN THE MATTER OF
an application to discharge administrator
BETWEEN
SHAUNA LYNNE KIRKWOOD
Applicant
AND
DONALD ALEXANDER KIRKWOOD
Respondent
On papers Judgment:
8 October 2019
JUDGMENT OF DOBSON J
[1] This proceeding involves a dispute between siblings as to the administration of their mother’s estate.
[2] The deceased, Elizabeth Kirkwood, died on 18 October 2017 and probate of her will was granted to her daughter, Rowena Heather McKenzie (Rowena), and her son, Donald Alexander Kirkwood (Donald), on 11 January 2018.
[3] The major asset in the estate, the deceased’s former residence, was sold on 9 November 2018. However, distribution of the estate has been held up because of differences between Donald and his sisters as to amounts allegedly required to be taken into account before equal distribution in accordance with the probated will could be made to the four children of the deceased.
KIRKWOOD v KIRKWOOD [2019] NZHC 2559 [8 October 2019]
[4] The Law Store in Porirua had been acting in the estate but, on 2 October 2018, it wrote to Rowena and Donald, advising them of amended and additional terms of engagement. Those terms stated that, “due to the matter being exasperated”, the previous estimate provided of $7,000 to complete administration of the estate would be insufficient, and a further $5,000 plus GST and disbursements would be required.
[5] The letter required Rowena and Donald to acknowledge that they agreed to those new terms of engagement by signing underneath the following paragraph:
We, ROWENA KIRKWOOD & DONALD KIRKWOOD consent to the amended and additional terms of engagement and confirm our instructions to undertake the further work necessary.
[6] Following the sale of the deceased’s residence on 9 November 2018, The Law Store sent Donald emails that day, and again on 16 November 2018, seeking instructions from him and his consent to pay outstanding invoices from estate funds so that distribution of the estate could be calculated. No response to those emails was received.
[7] The Law Store sent a further email to Donald on 21 November 2018, requesting that he provide instructions urgently so that the estate could be distributed. The email noted that, while there may be issues outstanding regarding some estate chattels, those issues did not directly affect distribution of the estate funds and there would be no advantage to the estate in having The Law Store provide further assistance in sorting out those issues as that would only reduce estate funds. Firm instructions were requested on this issue as well.
[8]On 11 December 2018, The Law Store sent the following email to Donald:1
I refer to your email of 29 November 2018 ... specifically to the sentence: “You stated that you would disengage with us, if, I sought independent legal advice, having sought such, I now expect you to disengage from our dispute
...”.
I however note your subsequent instructions to pay the invoice for the Open2View photos taken for the sale of the Family Home, which has now been paid. This is a direct contradiction to your statement referred to above.
1 Emphasis added.
Therefore, before I provide advice to the both of you, as the estate lawyer, on issues that I understand are outstanding and how those issues maybe or should be resolved I ask that you Donald urgently provide your firm instructions in relation to The Law Store continuing to act for the estate and for you as executors.
I note that Rowena has no objection to The Law Store acting for the estate. Nevertheless, we will not be able to continue to act for the estate in the event you Donald terminates [sic] your instructions, as that would create a conflict of interest for us.
I look forward to your urgent instructions.
[9] Two days later, on 13 December 2018, Rowena emailed The Law Store, advising:
Failure to provide instruction from Donald leaves me in a position to disengage from The Law Store. Please provide your final account in detail of the work completed and statement of the Trust fund accounts.
[10] The Law Store replied that day, stating that a final invoice on the estate matter would be provided, along with a statement of account. ·It is perhaps unfortunate that The Law Store did not advise the executors to apply to the High Court for directions. If they had done so, the extent of effort required to resolve the dispute may have been less.
[11] However, instead there followed a spate of correspondence between Donald and Mr Harrigan, a lawyer in Australia who was admitted in both Australia and New Zealand. He had been instructed by Ms Shauna Kirkwood (Shauna), another of the four siblings, who resides in Australia.
[12] Amongst these communications was a letter dated 18 December 2018 in which Mr Harrigan invited Donald to voluntarily withdraw as an executor so as to reduce further unnecessary costs to the estate and advising he seek independent legal advice.
[13] Donald responded the following day, stating that he had followed all legal advice received to date and suggesting that it would be appropriate for Rowena to voluntarily relinquish her role as executor.
[14] On 21 January 2019, Shauna filed an application with supporting affidavit for orders that Donald be removed as an administrator and that she be appointed in his
place, citing his refusal to take the steps reasonably required of the executors. There were some procedural defects in that application and an amended application was filed in early April 2019.
[15] Since service of the amended application, Donald has traded criticisms and recriminations with his sisters as follows:
· an affidavit sworn by Rowena on 16 August 2019, which explained her dealings with assets from their mother’s estate and supported criticisms that had been made by Shauna in her application to remove Donald as an executor;
· informal communications from Donald to the Court and (in terms of directions earlier made by me) a relatively extensive affidavit sworn on 6 September 2019 responding in part to Rowena’s 16 August 2019 affidavit; and
· an affidavit in reply sworn by Shauna on 18 September 2019.
[16] As canvassed in minutes I have previously issued, disputes of this type over the proper administration of the estate of a deceased person would generally lead to a substantive hearing before the Court, most often including a measure of cross- examination of deponents on their competing contentions about the propriety of steps taken or not taken in relation to the assets in the estate.
[17] In this case, after receiving an indication of the usual process the Court would follow, all involved have confirmed their wish that the outstanding issues in their mother’s estate be resolved on the papers.
[18] I have accordingly reviewed all of the documents filed in relation to the dispute between the siblings, which are listed in [14] and [15] above.
[19] Donald’s affidavit makes reference to a possible basis for a testamentary promises claim in relation to the estate of their father, as well as oblique reference to
a possible family protection claim for a disproportionate distribution from his mother’s estate on the basis of greater contributions to both his parents during their lifetimes.
[20] Any such claims would now be out of time and the grievances cited by Donald do not, on their terms, suggest any claims that would be likely to succeed, given all the other circumstances that are revealed in his and other affidavits.
[21] Donald also raises criticisms of dealings with estate assets by Rowena. Her affidavit explains the steps taken and I am satisfied that there is not sufficient in Donald’s concerns to warrant holding up completion of administration of the estate, pending another round of clarifications from Rowena.
[22] Donald also records grievances at allegedly unequal dealings with personal possessions and other chattels forming parts of the estates of both his parents. Ultimately, however, whilst he maintains the criticism of improper dealings by his sisters, he does not advance any reasonable basis for holding up completion of administration of the estate in order to pursue these complaints.
[23] The affidavits reveal entrenched differences between Donald and his sisters. I am satisfied that requiring a fuller airing of the mutual criticisms by way of a Court hearing would do nothing to heal those differences and, given the modest size of the estate, would be quite disproportionate in achieving a resolution.
[24] I am satisfied that orders to complete administration of the estate are now appropriate.
[25] I treat the $1,000 loan, acknowledged by Donald in [13] of his affidavit and responded to in [3](g) of Shauna’s reply affidavit, as a separate financial transaction, not required to be accounted for in the financial statements of the estate.
[26] As to Shauna's application to remove Donald as executor and that she be appointed in his place, it is my view that doing so at this point in the proceedings would only serve to incur further unnecessary costs. I therefore decline to make the orders sought.
[27] Another matter that has arisen is that of their mother’s ashes. In her reply affidavit dated 18 September 2019, Shauna, while acknowledging that her mother’s ashes do not form property, requested that they, along with those of their father, be given to Rowena. Rowena also claimed that Donald had kept their mother’s ashes and was refusing to discuss a joint occasion at which they might show their respects.
[28] Donald responded by saying that his parents had stipulated their wishes, in their respective wills, that their ashes be combined after they had both passed away and he advised that they now reside together in his loving home.
[29]In Elizabeth Kirkwood’s will, she instructed:
If I die before William, I would like my ashes to be kept until he dies so that our ashes can be combined. At that time, I leave it to my children to decide what should happen to our ashes.
[30] In light of the difficulty her children have had in co-operating following their mother’s death, it might seem overly optimistic at this point to hope they come to an agreement as to how best to afford their parents’ ashes due respect. It is, however, not the role of the Court to give directions on this particular issue, given that this is an application seeking discharge of an administrator. It is nevertheless hoped that, out of love and respect for their parents, the parties might put aside their differences and arrange an appropriate ceremony or place to either scatter or inter their ashes.
[31] An outstanding issue is Shauna’s application that the costs she has incurred in pursuing the application for removal of Donald as an executor be charged to him by way of deduction from his share of the estate. For his part, Donald blames Rowena for frustrating completion of the administration and denies that he should be liable for the costs of the present application. From a review of all of the information on the file, I am satisfied that Donald’s conduct has been a major (but not the only) cause of the differences that have precluded a more orderly and efficient distribution of the estate. I direct that one half of the reasonable costs incurred by Shauna in bringing the proceeding is to be a charge against the estate, with the second half of those costs to be deducted from Donald’s share of the net residue.
[32]I accordingly direct The Law Store to:
(a)deduct its reasonable fees and disbursements as previously advised to the beneficiaries;
(b)pay Shauna’s reasonable legal expenses in bringing the application for removal of Donald as an executor, allocating one half of that sum equally to all beneficiaries and the second half to be deducted from Donald’s share;
(c)account to all siblings for the balance.
Dobson J
Solicitors:
Harrigan Lawyers, Forest Lake, Queensland for applicant The Law Store, Porirua
Copy to:
The respondent
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