Landon-Lane v Hart
[2022] NZHC 1358
•9 June 2022
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE
CIV-2022-406-006
[2022] NZHC 1358
UNDER Section 21 of the Administration Act 1969 IN THE MATTER
of an application for orders for the removal of executors and vesting orders
BETWEEN
MARY-ANNE LANDON-LANE
Applicant
AND
MARIE DAWN HART AND MARK WILLIAM WALKER
Respondents
Hearing: 23 May 2022 Appearances:
S F Gaines for the Applicant
Judgment:
9 June 2022
JUDGMENT OF COOKE J
[1] By application dated 8 March 2022 the applicant seeks orders removing her and the respondents as executors of the estate of their mother, Mrs Mary Walker, and appointing Mr Charles James Murdoch, solicitor of Blenheim, as the replacement sole executor.
[2] The application is supported by affidavits from the applicant and Mr Murdoch. It was commenced by an application for leave to bring the proceedings as an originating application under Part 19 of the High Court Rules 2016, and for directions as to service. On 5 April Gendall J gave such leave together with directions as to service, and directions requiring the respondents to file their opposition within 20 working days of service with a case management conference to then be convened.
LANDON-LANE v HART [2022] NZHC 1358 [9 June 2022]
[3] An affidavit of service sworn 20 May 2022 confirming service on 13 April has been filed. The respondents’ opposition was to be filed within 20 working days, that is by 17 May. No opposition to the application has been filed.
[4] The application was called before me on 23 May 2022. There was no appearance for the respondents. I directed the filing of written submissions in support of the application with an indication that I would then deal with the application on its merits.
Relevant background
[5] Mrs Walker died in June 2017. Probate was granted July 2020. The applicant and respondents are three siblings named as co-executors and the residual beneficiaries in equal shares. The assets of the estate are limited to landholdings. Mrs Walker also had Māori landholding interests, but they do not form part of the assets of the estate. The assets of the estate involve three main categories of land:
(a)a residential property in Brewer Street, Blenheim;
(b)bare land known as Okoha at Port Gore; and
(c)shares of other land at Port Gore.
[6] The co-executors are currently deadlocked and cannot act unanimously in administering the estate. The deadlock arises because of divergent economic and personal interests. The initial solicitors for the estate were unable to advance probate. The current solicitors took over from August 2019 in accordance with a document signed by all three siblings recording their instructions in relation to the administration of the estate. This recorded that they would cooperate in the administration of the estate, but acknowledged that the solicitors might need to apply to the Court to remove the executors if the disagreements continued.
[7] The applicant explains in her affidavit that the disagreements have continued, and the executors remain deadlocked. A third party is occupying the Brewer Street property as a consequence of arrangements made by Ms Marie Hart, one of the
respondents. This has been without the consent of the applicant and Ms Hart has not responded to requests to provide an account of any rental income. There is a concern about the state of the dwelling. The applicant proposes that this property be sold. She also explains she would like the opportunity to purchase the Okoha property. She also proposes that the interest in the remaining Port Gore land be transferred to the three siblings.
[8] In April 2021 the new solicitors for the estate proposed that the Public Trust be appointed as professional trustee with the existing executors retiring, but no executor completed the proposed deed of retirement.
[9] No steps have been taken to administer the estate in the meantime. The estate’s solicitors costs remain unpaid and their bill is accruing interest.
Approach to application
[10]Section 21 of the Administration At 1969 provides:
21 Discharge or removal of administrator
(1)Where an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.
(2)The administrator so removed or discharged shall, from the date of that order, cease to be liable for acts and things done after that date.
(3)Upon any administrator being discharged or removed as aforesaid (whether or not any other administrator is appointed) all the estate and rights of the previous administrator or administrators which were vested in him or her or them as such shall become and be vested in the continuing administrator or administrators (including any administrator appointed under subsection (1)) who shall have the same powers, authorities, discretions, and duties, and may in all respects act, as if he or she or they had been originally appointed as the administrator or administrators.
(4)This section shall, with all necessary modifications, extend to the case where an administrator dies, and the powers and authorities hereby conferred may be exercised and shall take effect accordingly.
(5)Nothing in this section shall restrict section 8.
[11] The proper approach to an application of s 21 has been addressed by the Court of Appeal in Tod v Tod1 and Frickleton v Frickleton.2 Both decisions adopt the approach set out by Heath J in Farquhar v Nunns by reference to the following factors:3
(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.
(b)This jurisdiction involves a large discretion which is heavily fact dependent.
(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration but ultimately the question is as to what is expedient in the interests of the beneficiaries.
(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.
(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.
[12] The testator’s selection of the executor is important,4 but the interests of the beneficiaries must always be the focus.5
Application in the present case
[13] I have outlined the factual circumstances relevant to the present case above. I agree that it is appropriate to make orders under s 21 to have the existing executors removed, and have Mr Murdoch appointed as the sole executor in their place. The executors are currently deadlocked, the assets of the estate are not being properly administered and the only way to resolve the position is to make the orders sought. I note that such orders were contemplated by the joint instructions given by the three existing executors, and that no steps have been taken to oppose this application.
1 Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145.
2 Frickleton v Frickleton [2016] NZCA 408.
3 Farquhar v Nunns [2013] NZHC 1670 at [13] (footnotes omitted).
4 Tod v Tod, above n 1, at [27](a); Frickleton v Frickleton, above n 2, at [31]; Crick v McIlraith
[2012] NZHC 1290 at [19]–[20].
5 Frickleton v Frickleton, above n 2, at [33].
Other orders
[14] The application included an application for an order directing that title in the estate’s properties be vested in Mr Murdoch as sole executor. I am unsure whether that order is strictly necessary. The order appointing him sole executor may have that effect in any event. But for the avoidance of doubt I duly make that order.
[15] In the submissions in support of the application counsel made reference to directions being given for the sale of properties. That is also referred to in the affidavits. I do not apprehend that that was formally part of the application or that such orders or directions are necessary. Mr Murdoch as sole executor has the authority to deal with the assets of the estate as he thinks appropriate. If there is any need to further apply to the Court there is an ability to do so.
[16] The applicant also sought certain costs orders, and addressed this in her affidavit. In particular:
(a)She sought a direction that the costs of this application be paid from the assets of the estate. I agree that that direction is appropriate and it is duly made.
(b)The applicant also sought that the cost of this application should be awarded on a category 2 basis to be fixed by the Registrar. That order is also appropriate. Costs are accordingly awarded to the applicant on a 2B basis, to be fixed by the Registrar.
(c)Finally the applicant sought an order that the actual and reasonable costs of this application should be allocated as to a one third share to each of the two respondents. I do not apprehend that the Court has jurisdiction to make that order, which is effectively an order that the assets of the estate be distributed other than as normally required. But the direction that the costs of this application be met by the estate, together with a costs award in the applicant’s favour, go some way in addressing what the applicant seeks. It is true that the difference between the costs award, and the actual legal expenditure involved in
this application will effectively be shared by all three parties as beneficiaries. But that is so in respect of all necessary costs of the estate. I note that the written instructions signed by each of the parties referred to above recorded that the costs of the application would be charged against the estate. Accordingly I do not make that order.
[17] For the avoidance of doubt I record that the orders are not intended to have any impact on the Māori landholding interests which do not form part of the estate.
Cooke J
Solicitors:
Lundons Law, Blenheim for the Applicant
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