Lee v Archer
[2012] NZHC 3551
•19 December 2012
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2012-409-002048 [2012] NZHC 3551
BETWEEN SUSAN MARGARET LEE Plaintiff
ANDBRODIE JANE ARCHER Defendant
Hearing: 3 December (and Judgment 7 December 2012) Appearances: J M Kirkland for Plaintiff
S P Rennie for Defendant
Judgment: 19 December 2012
JUDGMENT OF ASSOCIATE JUDGE MATTHEWS
[1] On 7 December 2012 the Court released a judgment recalling a grant of Letters of Administration in the estate of the late Kenneth Cummings to the defendant, who is his daughter. The order was made because I found that Ms Archer had sworn an affidavit which was false in a material respect. She had sworn that at the time of her father’s death he was not in a de facto relationship. The evidence established that he was in a de facto relationship with the plaintiff.
[2] Shortly after the judgment was released, the solicitor for Ms Archer sent an email to the case officer at the Christchurch Registry asking that publication of the judgment be stayed on the ground that the matters contained in it are “family orientated and are inherently private”, that the findings have implications for parties outside of the judgment, and that a stay of the orders including a stay pending appeal was under contemplation.
[3] Given the time at which this email was received, 4.37 pm on 7 December, the case officer drew it to my immediate attention. It was too late in the day to refer it to
SUSAN MARGARET LEE V BRODIE JANE ARCHER HC CHCH CIV-2012-409-002048 [19 December
2012]
counsel for the plaintiff, and given the nature of the proceeding I made an interim order staying publication until further order of the Court. I indicated that application could be made on one day’s notice to set aside the order.
[4] Counsel for Ms Lee then filed a memorandum asking that the stay order be lifted. I issued a Minute on 13 December directing that the memorandum would be treated as a formal application to set aside the stay and that any response by the defendant, Ms Archer, was to be filed and served by 5.00 pm on 14 December.
[5] Counsel for Ms Archer filed a memorandum on 14 December, and an affidavit by her in support. By way of background, counsel cites the steps in relation to the stay on publication which I have set out. However, he then proceeds to advance submissions on the law relating to a stay of execution of the judgment, which is quite another matter. No further grounds were advanced in support of the application to stay publication. I will deal with this stay first, and review the grounds in the original email.
[6] Although I agree with Mr Rennie that this case arose in the context of family issues, it also raised the important issue of whether Letters of Administration should be set aside if based on an affidavit which was false, as well as the factual issue of whether, in fact, the affidavit was false in a material respect.
[7] Mr Rennie says that the findings made by the Court have implications for parties outside the judgment. No specific details of this allegation are made. Under the Administration Act Ms Lee, as the de facto partner of the deceased, will be entitled to one-third of the residue of the estate, and Ms Archer, and the deceased’s son, will be entitled to the remaining two-thirds. The son of the testator is not a party to this litigation, but no information was put before me which suggests any way in which his interests may be adversely affected by publication, nor was any other person identified who might have been affected by publication.
[8] The third ground advanced by Mr Rennie was that an appeal was in contemplation. No basis upon which this may be affected by publication was given to me; nor has any submission been made suggesting that if the judgment of this
Court were reversed on appeal damage may have been caused by publication of the judgment of this Court in the meantime.
[9] In summary, the entire case for Ms Archer in support of a stay on publication was contained in three lines of an email and she has not taken the opportunity to expand on the claims made.
[10] I am not satisfied that grounds are made out to stay publication, and the interim order I made on 7 December is revoked.
Stay of enforcement of judgment pending appeal
[11] Ms Archer has appealed to the Court of Appeal against the judgment of this Court. An appeal does not operate as a stay. The Court may order a stay of enforcement on application.[1]
[1] Rule 20.10 High Court Rules
[12] Power to grant a stay is also given to this Court, and to the Court of Appeal, by r 12 of the Court of Appeal (Civil) Rules 2005.
[13] The Court should approach an application for a stay as an exercise in balancing the right of Ms Lee to obtain the benefit of the judgment under appeal against the need to preserve Ms Archer’s position should her appeal succeed.[2]
[2] Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA)
Factors to be taken into account in undertaking that exercise include the following:3
(a) whether the appeal may be rendered nugatory by the lack of a stay; (b) the bona fides of the applicant as to the prosecution of the appeal;
(c) whether the successful party will be injuriously affected by the stay; (d) the effect on third parties;
(e) the novelty and importance of questions involved;
(f) the public interest in the proceeding;
(g) the overall balance of convenience.[3]
[3] Keung v GBR Investment Ltd [2010] NZCA 396
[14] The Court may also consider the apparent strength of the appeal (fn 3 below). [15] In his submissions filed in support of the application for a stay Mr Rennie
relies on the factors in paragraphs (a), (c), (d) and (g). I deal with these in turn.
(a) Whether the appeal may be rendered nugatory by the lack of a stay
[16] Mr Rennie says the appeal would be rendered nugatory. He says that if the appeal succeeds Ms Archer will remain administrator. His argument to the Court of Appeal is whether, “in an unintentional false statement case, the grant must be recalled or whether there remained a principled basis for the Court to review all circumstances to secure the welfare of the beneficiaries”. All Mr Rennie says that is directed to whether the appeal would be rendered nugatory is that it would be. I do not agree. The judgment has recalled the grant of Letters of Administration. Ms Lee is entitled to apply for Letters of Administration, a right she has always had in
priority to the right of Ms Archer.[4] In her affidavit in opposition to this application
she says that she intends to apply as soon as this judgment is released. If a stay is not granted it may be assumed that Ms Lee will be appointed. If the appeal succeeds Ms Archer will be reinstated as administrator and will presumably resume office. I do not see that her appeal against the judgment of this Court will be rendered nugatory if enforcement of the judgment is not stayed.
(c) Whether the successful party will be injuriously affected by the stay
[4] Rule 27.35 High Court Rules; judgment under appeal [3]
[17] Mr Rennie says that Ms Lee does not allege any injurious affection, and notes, correctly, that there has not been any criticism of Ms Archer’s administration of the estate. However, Ms Lee was the long term de facto partner of the deceased. She has, as a matter of law, a prior right to that of Ms Archer to administer his estate. The evidence before me is that she is well-acquainted with his affairs and I am satisfied that she is capable of undertaking administration. She has been deprived of
her right to apply for office as administrator of his estate. However one looks at it, it
would be naive to think that Ms Lee is not injuriously affected, and I am satisfied that she is, and significantly so.
(d) The effect on third parties and (g) the overall balance of convenience
[18] Mr Rennie draws attention to [64] and [65] of the judgment where I have noted the evidence that Ms Archer has acted professionally throughout the administration of the estate and is, in the opinion of the solicitor for the estate, “the proper person to be administrator of the estate”. I noted that no complaint had been made about the administration, and that it is almost complete. I noted Ms Archer’s undertaking not to distribute the estate until either a compromise of the respective positions of Ms Archer and Ms Lee is negotiated or an appropriate direction is given by the Court. I noted that Ms Lee does not argue that Ms Archer lacks the qualities and ability to act as an administrator. In [66] I went on to discuss these factors and to decline Mr Rennie’s submission that notwithstanding the finding I made that Ms Lee was in a de facto relationship with the deceased, I should nonetheless allow Ms Archer to remain in office and not set aside the grant of administration in her favour.
[19] Mr Rennie relies on the same factors to support a submission that the due and proper administration of the estate, in the interests of all beneficiaries, is already secured. He says that a recall without a contemporaneous appointment will put that at risk.
[20] Analysis of this submission does not support that conclusion. First, Ms Archer is already out of office. An application for appointment by Ms Lee has been executed and is ready to file. No reasons are given why that process will put at risk the due and proper administration of the estate in the interests of all beneficiaries. Indeed, given Ms Lee’s intention to apply, it is perhaps surprising that she has not applied already, as at no point has the enforcement of the judgment been stayed (only its publication). However, a further brief period while the application for a grant in Ms Lee’s favour is made does not appear to be of any significant consequence.
[21] Secondly, Mr Rennie relies on the affidavit filed by Ms Archer to support a submission that there are real benefits in her continuing the administration, and using her existing knowledge and expertise, “rather than these being upset midstream”, as he put it. Ms Archer refers first to her late father’s business of trading in heavy machinery, and spare parts. She and her brother now manage these assets. Ms Archer continues to engage a boat builder who is working on a substantial renovation project on a boat owned by Mr Cummings, and she refers to completing a subdivision which was underway at the time of Mr Cummings’ death. In addition she deals with tenants, EQC, PAYE, GST, wages and so forth. She says she brings to bear on the administration her business acumen, the good working relationship she has with her brother, her existing knowledge and attendances relating to the completion of the subdivision, and the fact that she is available to give 15 to 30 hours of her time every week towards administration of the estate.
[22] In response to this Ms Lee says that she is very familiar with Mr Cummings’ business dealings and is confident she would be able to competently deal with and manage all aspects of the estate. She also points out that the statement of assets and liabilities produced by Mr G W Rountree, solicitor for the estate, and presented in evidence in this case, fails to list any stock on hand for Mr Cummings’ machinery business, yet Ms Lee now refers in detail to her involvement, and that of her brother, in dealing with these assets. This concern had already been raised by Ms Lee in her affidavit of 8 November 2012.
[23] Ms Lee says she has a good working relationship with Ms Archer’s brother and with the boat builder, both of whom she has known for some time. She is happy for Ms Archer to continue to assist her brother in establishing the value of items held by the business. She notes that wages are paid automatically, the subdivision is almost complete and there are two tenants with whom she is quite prepared to deal. She is aware of the EQC and insurance issues which are being dealt with. In all she says she is more than capable of dealing with all the financial matters relating to the estate.
Discussion
[24] As noted earlier, Mr Rennie describes Ms Archer’s statement in her affidavit as an unintentional false statement. Ms Archer was not cross-examined; nor was it necessary for Ms Lee to establish that the false statement made by Ms Archer was made intentionally. However, the Court cannot take a naive approach to this point. As recorded in the judgment, Mr Cummings and Ms Lee not only lived together at the time of his death, but had done so for years. In the judgment I traversed the numerous trappings of a de facto relationship between Mr Cummings and Ms Lee many of which would inevitably have been known to Ms Archer, with whom he had close and regular contact. At the very least, her statement in the affidavit was carelessly made. Exactly what Mr Rennie means by the phrase “unintentional false statement” is not immediately clear. Ms Archer must have intended to state that her father was not in a de facto relationship, so the only way it could be described as unintentional is if she did not know that her father was in a de facto relationship at the time of his death. If that is what Mr Rennie means, there is a sufficient basis in the evidence for the Court to view that claim with a degree of scepticism. Ms Archer may have been turning a blind eye to the facts which were squarely before her, but that does not entitle her to swear an affidavit, on which this Court will rely, that a certain state of affairs existed when, on any careful analysis by her, it should have been apparent that was not the case, or at the very least there was substantial reason to think otherwise.
[25] The absence of the substantial assets in the form of heavy machinery and spare parts from the statement of assets and liabilities produced by the solicitor for the estate is also of concern. There is no evidence of the value of these assets, nor where the proceeds of sale are being directed. There may well be a simple explanation for this omission, but it has not been proffered, even though raised by Ms Lee as long ago as 8 November 2012. This raises an element of concern about Ms Archer’s suitability as administrator, but on the evidence presently before me I do not put it higher than that.
[26] There is a further point which is, in my view, relevant to this application. There is in my view an element of public interest in this case, the protection of its
due processes from the consequences of the provision of false information, on which its officers will rely. Ms Lee has taken proceedings to establish that position and in my opinion the Court should be slow to accede to leaving in place the decision made by this Court on the basis of Ms Archer’s false statement.
[27] These three points, as well as the issues discussed in paragraphs [16] to [22] lead me to the clear view that a stay of enforcement of the judgment should not be ordered. The application is declined.
[28] Ms Lee is entitled to costs on a 2B basis with disbursements fixed by the
Registrar.
J G Matthews
Associate Judge
Solicitors:
Saunders & Co, Christchurch – [email protected]
Rhodes & Co, Christchurch – [email protected]
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