Moleta v Moleta - [2020] NZHC 2680

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000858

CIV-2019-404-001469 [2020] NZHC 2680

UNDER Part 18 of the High Court Rules 2016

BETWEEN

DELLISSE MOLETA

Plaintiff

AND

DELLISSE MOLETA sued as executor and

trustee of the estate of Janette Dianna Moleta First Defendant

JOLENE SCHOLLUM
Second Defendant

LORRAINE MOLETA

Third Defendant

Hearing: 22 July 2020

Appearances:

Peter Napier and Nicholas Coyle for the Plaintiff James Little for the First Defendant

Rebecca Davies for the Second Defendant Greg Kelly for the Third Defendant

Judgment:

13 October 2020

JUDGMENT OF MOORE J

This judgment was delivered by me on 13 October 2020 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

MOLETA v MOLETA & ORS [2020] NZHC 2680 [13 October 2020]

Contents

Paragraph Number

Introduction.............................................................................................................. [1]

The issue................................................................................................................... [7]

Factual background................................................................................................. [8]

Testamentary instruments..................................................................................... [28]

Procedural history................................................................................................. [32]

Legal principles...................................................................................................... [60]

Application for removal of trustee....................................................................... [61]

Section 33A of the Trustee Act 1956.................................................................... [66]

Discussion and analysis

Application to remove......................................................................................... [68]

Section 33A application....................................................................................... [97]

Result.................................................................................................................... [102]

Costs...................................................................................................................... [107]

Introduction

[1] By her last Will, Janette Moleta (“Janette”) named her daughter Dellisse Moleta (“Dellisse”) as sole beneficiary and executor and trustee (“administrator”)1 of her estate.

[2] The estate is primarily comprised of three of residential properties Janette owned either solely or with Dellisse.

[3] Two of Janette’s other daughters, Jolene Schollum (“Jolene”) and Lorraine Moleta (“Lorraine”), have made claims in the Family Court for further provision under the Family Protection Act 1955 (“the FPA claims”). Dellisse has, in her personal capacity as the sole beneficiary under the Will, filed a notice of defence to those claims.

[4] After Jolene and Lorraine’s claims were filed, Dellisse brought a claim in this Court against the estate alleging that various estate properties are held on constructive trusts for her (“the constructive trust claim”). The FPA claims have been transferred to this Court and consolidated with the constructive trust claim. If Dellisse’s constructive trust claim is proved in respect of any or all of the estate properties, these will become unavailable to meet the other sisters’ FPA claims in the event those claims are successful.

[5] Lorraine and Jolene complain that Dellisse’s conduct throughout the litigation has been characterised by delays, failures to make adequate disclosure, changes of legal representation and egregious conflicts of interest. As a consequence, Lorraine, supported by Jolene, has brought an application for Dellisse’s removal as executor and/or trustee of Janette’s estate and the appointment of an independent executor and trustee in the form of a senior Auckland practitioner. This course is opposed by Dellisse.

1 For convenience I use the term “administrator” interchangeably with trustee and executor/executrix even though there is, of course, a clear difference and distinction between the terms.

[6] Correspondingly, and subsequent to the filing of Lorraine’s application for removal, Dellisse, in her capacity as trustee and executor, was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Moleta v Moleta

Details

AGLC: Moleta v Moleta [2020] NZHC 2680
Case: [2020] NZHC 2680
Decision Date: 13 October 2020

CaseChat Overview and Summary

In Moleta v Moleta, the High Court was asked to decide whether the daughter appointed by her mother as executor and trustee of her estate, Dellisse, should be removed from those roles and replaced by an independent practitioner. This followed Dellisse’s initiation of a claim in the High Court against the estate, alleging that various estate properties were held on constructive trusts for her. The Court was also asked to consider whether Dellisse should be directed to take a neutral stance in the proceedings and otherwise abide by the Court’s decision on all substantive matters in dispute. Lorraine and Jolene, Dellisse’s sisters, brought the application for removal, alleging that Dellisse had been responsible for delays and failures to make adequate disclosure, changes of legal representation and egregious conflicts of interest. They sought an order that Dellisse be replaced by an independent executor and trustee, Mr Christopher Darlow. Dellisse opposed the application, arguing that the appointment of an independent trustee would be costly and erode the estate. The Court found that the application for removal should be granted. The Court was not satisfied that Dellisse would act in accordance with the duties of even-handedness and independence necessary in these circumstances. Dellisse’s lawyers would necessarily be driven by her instructions and reliant on the correctness and completeness of the information she provided them. The Court found that Mr Darlow would be appointed to replace Dellisse. The Court dismissed the application for directions under s 33A of the Trustee Act. In the Court’s view, the directions which would have been appropriate had the s 33A application succeeded were that Dellisse maintain a neutral stance in the proceedings between her, as plaintiff, and Jolene and Lorraine as defendants with the estate, that she abide the decision of the Court on all substantive matters in dispute and otherwise limits her involvement to providing the Court with such assistance as it might direct. Orders were also sought that she be indemnified from the trust property for costs incurred. The Court was not prepared to make an order that Mr Darlow adopts a neutral stance in the proceedings. It also followed that the Court was not prepared to direct Mr Darlow to abide the decision of the Court on all substantive matters in the dispute or limit his involvement to providing the Court with such assistance as it might direct. Those would be decisions for him to make. The Court granted Lorraine’s application to remove Dellisse as executor and trustee of Janette’s estate. Christopher Darlow was appointed executor and trustee of Janette’s estate. Mr Darlow was authorised to sell any one of the estate properties if required to pay his fees. Lorraine, as applicant on the application for removal, was entitled to costs.

Orders