Neiman
[2023] NZHC 2633
•21 September 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2023-485-617876
[2023] NZHC 2633
IN THE ESTATE OF BRENDON MARK NEIMAN, of
Wellington, Company Director Deceased
Hearing: On the papers Counsel:
B J Williams
Judgment:
21 September 2023
JUDGMENT OF McQUEEN J
[Redacted]
[1] This matter concerns the estate of the late Mr Brendon Neiman (the deceased), who died on 1 September 2023. Mr Neiman is survived by his wife, Ms Diane Whitfield-Neiman, from whom he was separated, and their two children aged 16 and 17 years. It also appears that at the time of his death, Mr Neiman was in a de facto relationship.
The application
[2] Pursuant to ss 5 and 6(2) of the Administration Act 1969, Mr Michael Markham (the applicant) has, without notice, applied for orders that:
(a)letters of administration on intestacy ad colligenda bona1 of the estate of the deceased be granted to him; and
1 Meaning ‘to collect the goods’—a phrase used to describe the granting of letters of administration to deal with specified property when that property might be endangered by delay—the purpose of
NEIMAN, of Wellington, Company Director v [2023] NZHC 2633 [21 September 2023]
(b)he be entitled to charge the estate reasonable fees for undertaking the role of administrator.
[3] Mr Markham seeks temporary administration of the estate, other than for distributing the estate and defending any legal proceedings brought against the estate.
[4]The grounds on which such orders are sought are:
(a)the deceased died wholly intestate;
(b)Ms Whitfield-Neiman, who is the surviving spouse of the deceased, has a beneficial interest in the estate and has the right to apply for letters of administration of the estate if she elects Option B under s 61(3) of the Property (Relationships) Act 1976 (the PRA);
(c)Ms Whitfield-Neiman is not able to make an election because she does not have sufficient information about the relationship property and not all of that information can be ascertained without an administrator being appointed;
(d)the deceased’s surviving children are minors;
(e)the deceased’s estate includes a number of companies of which he was either a majority shareholder and/or sole director that are still currently trading (the Brendon Motors companies);
(f)the applicant is the accountant of the deceased and has knowledge of the deceased’s affairs and companies and, therefore, is appropriately placed to manage the deceased’s affairs; and
(g)special circumstances exist making it expedient to grant letters of administration of the estate of the deceased to the applicant, instead of Ms Whitfield-Neiman.
the grant is to collect and preserve assets. It is generally a limited grant and ceases on the issue of a full grant to persons entitled to deal with the whole estate.
[5]The application is advanced without notice on the basis that:
(a)other persons who have an equal or higher entitlement to apply have been given notice of or have consented to the application; and
(b)requiring the applicant to proceed on notice would cause undue delay.
[6]The grant is intended to be limited in time until:
(a)Ms Whitfield-Neiman obtains a grant of administration herself; or
(b)another person applies for and is granted letters of administration of the deceased’s estate; and
(c)Mr Markham is discharged or removed under s 21 of the Administration Act 1969.
[7] The application is supported by affidavits from Mr Markham and Ms Whitfield-Neiman.
The applicant—Mr Markham
[8] Mr Markham deposes that he is a chartered accountant, who was known to the deceased, and acted as an accountant for the deceased’s business interests, in his role as a director of Kendons Chartered Accountants Ltd (PKF Kendons). PKF Kendons have been the accountants for the Brendon Motors companies since 2017. Mr Markham says he has background knowledge and understanding of how those companies operate.
[9] Mr Markham has made inquiries as to whether the deceased had a will and has been unable to locate such a will. He is satisfied that the deceased died intestate. Mr Markham records that to the best of his knowledge at this point, the gross value of the deceased’s estate does not exceed $10 million, and that it includes:
(a)cash contained in various bank accounts;
(b)shareholdings in the Brendon Motors companies;
(c)personal chattels; and
(d)shareholder current accounts.
[10] The deceased was also a trustee and discretionary beneficiary of two discretionary trusts, one of which owns the property in which he lived.
[11] Mr Markham records that there are special circumstances justifying an immediate grant of administration because:
(a)the deceased’s estate includes a number of companies which he was managing and are currently still operating;
(b)where the deceased was either a sole director or majority shareholder, those companies need to be managed by someone to ensure they can continue to operate, repay debts, make payroll, and stay viable; and
(c)a manager is required to preserve those companies, and therefore, the deceased’s estate.
[12] Mr Markham records that he personally has no conflicts of interest which would prevent him from acting as a temporary administrator, but notes that one of his senior colleagues at PKF Kendons, Ms Ali Reynolds, has family members who are shareholders and/or directors in two of the deceased’s companies. Ms Reynolds has been involved with the Brendon Motors companies and the deceased for the last 20 years and has strong relationships and knowledge of the companies.
[13] Mr Markham sets out his professional qualifications, prior work experience and community roles. He confirms that if appointed, he will faithfully administer the deceased’s estate in accordance with the law and offers to file an inventory and account of the deceased’s estate should the Court require it.
[14] If appointed, Mr Markham proposes to charge the estate his standard hourly rate ($400/hour), plus office expenses, goods and services tax, and disbursements.
Ms Whitfield-Neiman
[15] Ms Whitfield-Neiman has provided an affidavit in support of Mr Markham’s application. She confirms that she is the deceased’s surviving spouse, and that they separated amicably in January 2021, although they did not formally divorce. She confirms that she and the deceased had two children together. Ms Whitfield-Neiman says that the deceased entered a de facto relationship with a Ms Lizette Standish following their separation.
[16] Ms Whitfield-Neiman indicates that she has taken legal advice and has been informed that pursuant to s 61 of the PRA, she must make an election as to whether she:
(a)makes an application for division of relationship property (Option A); or
(b)refrains from making such an application and takes what she is beneficially entitled to on the deceased’s intestacy or will (Option B).
[17] Ms Whitfield-Neiman indicates that given the size and nature of the deceased’s estate, she has been advised that it may take some time to determine what would be the best option for her. She says also that she has been told there is information broadly relating to the deceased’s personal and business affairs, held by the deceased’s lawyers, Gibson Sheat, that may be relevant to her election, but that this information cannot be disclosed to her without an administrator appointed to make that decision.
[18] Ms Whitfield-Neiman has also been advised that she has priority to seek the grant of administration for the deceased’s estate as although she and the deceased had separated, their marriage has not been dissolved, and because the deceased’s subsequent de facto relationship is a “short duration” relationship. She has been advised that her election under the PRA could affect her priority to seek the grant of administration, as if she were to choose Option A under s 61(2) of the PRA, she would
no longer be eligible to seek the grant of administration. She says that her lawyer will also be advising her on this aspect, and this is another reason why there would be a significant delay in applying for a grant of administration if she was still to have priority to do so.
[19] Ms Whitfield-Neiman therefore consents to Mr Markham’s application for a grant of temporary administration for the deceased’s estate.
Memorandum of counsel
[20] Mr Williams, counsel for Mr Markham, has filed a helpful memorandum in relation to Mr Markham’s application.
[21] Mr Williams outlines the relevant provisions of the Administration Act. He notes that s 6 generally deals with the discretion of the Court as to which person should be granted administration of a deceased’s estate. The default position is set out in subs (1), which is that where the deceased dies wholly intestate, as is the case here, administration shall be granted to one or more persons beneficially interested in the estate of the deceased if they make an application.
[22]This is subject to s 6(2) of the Administration Act, which provides:
Where by reason of the insolvency of the estate or other special circumstances the court thinks it necessary or expedient to do so, it may—
(a)grant administration to such person or persons as it thinks expedient notwithstanding that some other person is appointed an executor or that, apart from this subsection, some other person would by law be entitled to a grant of administration:
(b)grant probate to 1 or more of the executors appointed by a will, notwithstanding that some other person or persons may also be appointed as an executor or executors.
[23] The present application relies on s 6(2)(a), namely that there are special circumstances that mean the Court should grant letters of administration to someone other than the person entitled to the grant by law.
[24]Section 6(4) of the Administration Act also relevantly provides:
Before determining to exclude from any such grant any person who, apart from this section, would by law be entitled to, or be included in, the grant, and wishes to have, or to be so included in, the grant, the court shall have regard to his or her competency and solvency, his or her ability effectively to administer the estate, the rights of all persons interested in the estate, and any changes in circumstances between the making of the will (if any) and the time when the court is asked to make the grant.
[25] Mr Williams submits that it is not necessary to undertake a competency assessment as Ms Whitfield-Neiman consents to the application and because this assessment is usually pursued when the person entitled to the grant is being excluded against their choice. Mr Williams also says that it is not necessary to require security from Mr Markham to give security as contemplated by ss 6(5) to 6(7), given Mr Markham’s professional responsibilities as an accountant.
[26] Mr Williams notes that r 27.35 of the High Court Rules 2016 sets out the priority of those who are able to seek letters of administration if a person died wholly intestate. It relevantly provides:
(1)If a person has died wholly intestate, the right to apply for letters of administration of that person’s estate is determined in accordance with the order of priority set out in subclause (3).
(2)Subclause (1) is subject to section 6 of the Administration Act 1969.
(3)The order referred to in subclause (1) is as follows:
(a)the first in priority is persons having a beneficial interest in the estate, according to the order of priority set out in subclause (4):
(b)the second in priority is the Attorney-General, if he or she claims bona vacantia on behalf of the Crown:
(c)the third in priority is a creditor of the deceased, or any person who, even though having no immediate beneficial interest in the estate, may have a beneficial interest in the event of an accretion to it.
(4)Persons having a beneficial interest in the estate are entitled to a grant of administration in the following order of priority:
(a)the surviving spouse or civil union partner or de facto partner entitled to succeed on the intestacy, if paragraph (b) does not apply and his or her beneficial interest in the estate is not affected,—
(i) in the case of a surviving spouse, by section 12(2) of the Matrimonial Proceedings Act 1963 (as applied by section 191(3) of the Family Proceedings Act 1980); or
(ii) in the case of a surviving spouse or a surviving civil union partner, by section 26(1) of the Family Proceedings Act 1980; or
(iii) in the case of a surviving de facto partner, by section 77B of the Administration Act 1969; or
(iv) in every case, by the choice of option A under section 61 of the Property (Relationships) Act 1976:
(b)in a case of the kind referred to in section 77C of the Administration Act 1969 (succession on intestacy if intestate dies leaving a spouse or a civil union partner and 1 or more de facto partners, or 2 or more de facto partners), a surviving spouse, surviving civil union partner, or surviving de facto partner entitled to succeed on the intestacy, if his or her beneficial interest in the estate is not affected in any of the ways stated in paragraph (a)(i) to (iv):
(c)the children of the deceased (including any persons entitled by virtue of the Legitimation Act 1939 or the Status of Children Act 1969) or, failing them, the issue of a child who has died during the lifetime of the deceased:
(d)the parent or parents of the deceased:
(e)brothers and sisters of full or half blood, or, failing them, the issue of any such brother or sister who has died during the lifetime of the deceased:
(f)grandparents:
(g)uncles and aunts of full or half blood, or failing them, the issue of an uncle or aunt who has died during the lifetime of the deceased.
[27] Mr Williams notes that r 27.35 is subject to s 6 of the Administration Act but says he refers to the priority order to enable the Court to assess the reasonableness of Mr Markham being appointed and the relevance of Ms Whitfield-Neiman’s consent.
[28]Mr Williams submits that:
(a)Ms Whitfield-Neiman has priority to seek letters of administration of the deceased’s estate if she elects option B under the PRA;
(b)special circumstances exist which make it expedient to grant the letter of administration to the applicant on a temporary basis; and
(c)Ms Whitfield-Neiman has consented to the application.
[29] Mr Williams says that Ms Whitfield-Neiman’s priority is not affected because:2
(a)there is no decree of separation in effect (in terms of s 191(3) of the Family Proceedings Act 1980);
(b)there is no separation order in effect (in terms of s 26(1) of the Family Proceedings Act 1980; and
(c)no election of Option A has been made under s 61(2) of the PRA.
[30]He also says Ms Whitfield-Neiman holds the highest priority as:
(a)her and the deceased’s children are minors; and
(b)Ms Standish is not eligible under s 77B of the Administration Act as she and the deceased were in a relationship of short duration.3
[31] Mr Williams further submits that special circumstances exist which make it expedient to bypass the order of priority and grant the letters of administration to the applicant on a temporary basis, being:
(a)the temporary grant prevents the value of the deceased’s estate, namely the Brendon Motor companies, from being diminished by having someone familiar with the business and suitably experienced appointed to run them; and
2 Pursuant to r 27.35(4)(a) of the High Court Rules. I record that although Ms Whitfield-Neiman says she and the deceased were not formally divorced, her evidence does not address expressly whether a separation order or decree exists.
3 Mr Williams acknowledges that s 77B(2) contemplates further circumstances in which a surviving de facto partner in a relationship of short duration might be eligible to succeed – but says to his knowledge they do not apply and in any event do not affect the special circumstances that warrant an interim grant to protect the estate. I record that no evidence is presently before the Court about these matters.
(b)it allows an administrator, properly advised by solicitors, to disclose relevant information to Ms Whitfield-Neiman so that she can make a properly informed decision about her election under the PRA— resolution of this issue will ultimately determine whether she is able to seek full letters of administration at some point in the future.
[32] Mr Williams relies on r 27.4 of the High Court Rules to support the without notice nature of the application. He notes that Ms Whitfield-Neiman supports the application and emphasises the urgent need to grant letters of administration so that the Brendon Motors companies can be properly operated, and Ms Whitfield-Neiman can obtain all the information she needs in order to make the election contemplated by the PRA, thus allowing her also to assess whether she wishes to seek the grant of letters of administration.
Supplementary confidential memorandum
[33] Mr Williams has also filed a supplementary memorandum that raises, on a confidential basis, matters that Mr Williams considers should be put before the Court consistent with counsel’s overarching obligation to the Court to fully inform it of relevant matters. Mr Williams confirms that this supplementary memorandum has not been provided to any party beyond the Court.
[34] What is not confidential, and indeed has been mentioned by Ms Whitfield- Neiman in her affidavit, is that the deceased’s lawyers, Gibson Sheat, hold documents that may be relevant to the administration of the deceased’s estate. As legal privilege in the deceased’s documents passes to the deceased’s personal representative, any relevant documents cannot be disclosed as there is no one currently empowered to waive that privilege.
[35][Redacted]
[36][Redacted]
[37] I repeat that I am satisfied that, on an interim basis, the material addressed by this memorandum, as discussed in the previous two paragraphs, should be treated as
confidential in order for the personal representative of the deceased to address the privileged nature of the materials.
[38] Accordingly, the full and unredacted judgment in this matter is only to be provided to Mr Markham and his counsel. A redacted version of the judgment (omitting [35] and [36] above) is otherwise to be publicly available and is also to be provided to Ms Whitfield-Neiman and Ms Standish. I also make an order below that Mr William’s supplementary confidential memorandum, and the unredacted version of this judgment, are not to be accessed without the permission of a Judge, pursuant to r 5(2) of the Senior Courts (Access to Court Documents) Rules 2017.
Discussion
[39] On the basis of the information discussed above, I am satisfied that it is appropriate to make the orders sought. I consider that there are special circumstances which justify the granting of temporary administration to Mr Markham, an independent person, for the maintenance and management of the deceased’s estate, as well as the disclosure of information that will enable the granting of full administration.
[40]I reach this view despite there being no express evidence that:
(a)there is no decree or order of separation between the deceased and Ms Whitfield-Neiman;
(b)Ms Standish and the deceased had no children; or
(c)Ms Standish has not made a substantial contribution to the de facto relationship.
[41] Rather, I consider that the orders ought should be made without delay in order to preserve the estate. Given the information presently available and Ms Whitfield- Neiman’s consent, any question of Ms Standish’s eligibility to take a grant of administration (which is presently uncertain—as is her interest in so doing) is not a decisive matter.
[42] This is supported by the limited nature of the powers sought in the application, which mean that even if a beneficiary of the estate were to object to the orders I make, they are not prejudiced by the temporary appointment. Further, I intend to expressly reserve leave for further direction to be sought from the Court should that be required.
[43] I also agree with Mr Williams that (as contemplated under s 6 of the Administration Act) it is not necessary for a competency assessment to be undertaken in relation to Ms Whitfield-Neiman and nor is it necessary for Mr Markham to provide security.
[44] I accept that it was proper for this application to be made on a without notice basis in the circumstances. Nonetheless, I consider it necessary for the judgment (in redacted form) to be made available to both Ms Whitfield-Neiman and to Ms Standish given their respective actual or potential interests.
[45] I record that I expect Mr Markham to promptly address the issue relating to Ms Whitfield-Neiman’s access to relevant material held by Gibson Sheat.
[46]Accordingly, I make orders as follows:
(a)Letters of administration on intestacy ad colligenda bona of the estate of the deceased (the grant) are granted to Michael John Markham.
(b)The grant is limited to administering all of the deceased’s estate except for:
distributing the deceased’s estate; and
(ii)defending any legal proceeding brought against the deceased’s estate.
(c)The term of the grant is limited in time until:
(i)Ms Whitfield-Neiman obtains a grant of administration to herself; or
(ii)another person applies for and is granted letters of administration of the deceased’s estate; and
(iii)Mr Markham is discharged or removed under s 21 of the Administration Act 1969.
(d)Mr Markham is entitled to charge the estate reasonable fees for undertaking the role of administrator.
(e)Paragraphs [35] and [36] of this judgment are to be redacted. The redacted version of this judgment is to be publicly available in the usual way.
(f)The unredacted version of this judgment is to be made available only to Mr Markham and his counsel and they are to provide the redacted version of this judgment to Ms Whitfield-Neiman and to Ms Standish.
(g)Mr Williams’ supplementary confidential memorandum and the unredacted version of this judgment may not be accessed without the permission of a Judge, pursuant to r 5(2) of the Senior Courts (Access to Court Documents) Rules 2017.
(h)Leave is reserved to seek further direction from the Court should that be necessary.
McQueen J
Solicitors:
Gibson Sheat, Lower Hutt
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