Official Assignee v Renney
[2013] NZHC 3353
•12 December 2013
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2008-463-564 [2013] NZHC 3353
BETWEEN THE OFFICIAL ASSIGNEE
Applicant
AND
LESLIE LEONARD RENNEY Defendant
Hearing: 12 December 2013 Appearances:
P V Cornege for Applicant
L L Renney in person
S L Kenyon (other estate trustee)Judgment:
12 December 2013
JUDGMENT OF KEANE J
Solicitors:
Crown Solicitor, Hamilton
THE OFFICIAL ASSIGNEE v RENNEY [2013] NZHC 3353 [12 December 2013]
[1] Leslie Renney was adjudicated bankrupt on 29 August 2011. The order was founded on a judgment debt for $83,769. As at 31 October 2012 the Official Assignee estimated that the total amount payable to creditors was $149,487 and interest and costs incurred brought the total then payable to $166,420. That sum is now likely to be greater.
[2] At the date of adjudication Renney was, with his niece, Samantha Kenyon, an executor and trustee of his mother’s will, dated 12 May 2008. He was also, apart from some specific bequests, her sole beneficiary. Her sole asset was her home, 38
Seddon Street, Rotorua. Mrs Renney had died on 24 July 2008 and, according to his statement of affairs, Mr Renney had been living in the property since July 2007. His shared responsibility with Ms Kenyon to administer the estate had begun, in a real sense, on the date probate was granted, 22 October 2008.
[3] At the date of adjudication also Mr Renney was, as an executor and trustee, subject to a consent order in the Family Court resolving a family protection claim brought by his sister, dated 17 May 2011, obliging him to pay her $40,000 within six months. If Mr Renney made that payment within time the property was to be transferred to him under their mother’s will as long as the estate had sufficient clear funds to meet estate fees, charges and the like. If he did not make that payment within time, the property was to be listed to be sold and no offer equal to or greater than the valuation amount, then $230,000, or any current market appraisal at that time if it were less, was to be rejected.
[4] The six month period expired at the end of 2011, after Mr Renney was adjudicated bankrupt. Mr Renney and Ms Kenyon then became obliged to market the property in terms of the order. The reality also was that Mr Renney had no other choice. On adjudication his beneficial interest in his mother’s estate vested in the
Official Assignee and his rights in the estate were extinguished.1 The Official
Assignee was then obliged to meet out of Mr Renney’s estate, perhaps only out of
his interest in his mother’s estate, claims on his estate in their due priority.2 Mr
1 Insolvency Act 2006, s 101.
2 Section 273.
Renney then came under a duty to assist the Official Assignee, to the best of his ability, to realise his assets to enable the distribution called for.3
[5] The Official Assignee has been unable to meet creditors’ claims because, since adjudication, Mr Renney and Ms Kenyon have not administered his mother’s estate consistent with their duty as executors and trustees, or in accord with the order of the Family Court. On 4 June 2013 an offer was made for the property for
$250,000, which they were obliged to accept under the Family Court order. They did not do so. Ms Kenyon attended for the purpose. Mr Renney did not.
[6] Accordingly, on 10 July 2013, the Official Assignee applied for an order under s 21(1) of the Administration Act 1969 removing Mr Renney as an administrator of his mother’s estate and appointing in his stead the Public Trust, which consents to the appointment.
[7] On 17 September 2013, in a telephone conference, an Associate Judge directed that, if Mr Renney wished to oppose the application, he was to file a notice of opposition and any affidavit in support by 15 October 2013. Mr Renney did not comply, but at the fixture given told me that on 15 October 2013 he had been frustrated by a Registry officer, who refused to accept his documents and told him he needed a lawyer. He did not then write to the Registrar in protest, or serve his documents on the Official Assignee or Ms Kenyon. He did not have any such documents with him at the fixture.
[8] Mr Renney told me, when I asked him, on what ground he could oppose the Official Assignee’s application. His ground was that the his mother’s property now has a greater market value than $230,000 and that, if the Family Court order were complied with, it will be sold at an under value. His related concern is that, after the Official Assignee has met all due claims made, he will be left with very little and without a home.
[9] The difficulty Mr Renney faces, very understandable though those concerns are, is that the most obvious reason why the property may have increased in value
3 Section 138(1).
beyond that set in the consent order is that the order was not complied with, as it anticipated, at the end of 2011. The market value may well have moved up since then, but Mr Renney is not entitled to the benefit. The other difficulty he faces is that he has debts due, including that to his sister, which are unable to be met in any other way.
[10] I am satisfied from my review of the lengthy correspondence filed in evidence, and from the sheer length of time that Mr Renney’s mother’s estate has remained unadministered, that he has no intention of administering it to his disadvantage. He has manifestly failed to comply with his duty to assist the Official Assignee to the best of his ability to realise his assets for the benefit of creditors. He has prevented that happening. If his mother’s estate is to be administered in the interests of his sister as well as himself, and in the interests of his creditors to whom the Official Assignee is accountable, it will be necessary that he cease to be an executor and trustee.
[11] It is therefore expedient, I am satisfied, to remove Mr Renney as an administrator of his mother’s estate under s 21(1) of the Administration Act 1969, and to appoint in his place the Public Trustee, as from the date of this decision.
There will be an order accordingly.
P.J. Keane J
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