PAUL WILLIAM WALLACE AND SAMUEL CHRISTOPHER WALLACE - [2024] NZHC 2629

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-485-602266

[2024] NZHC 2629

BETWEEN
PAUL WILLIAM WALLACE

Applicant

AND

SAMUEL CHRISTOPHER WALLACE

Respondent

Hearing: 10 September 2024

Appearances:

S C Munro for applicant Respondent in person

Judgment:

12 September 2024

JUDGMENT OF JOHNSTONE J

(removal of administrator)

This judgment was delivered by me on 12 September 2024 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Galbraiths Lawyers Ltd, Auckland

ESTATE OF ERIC WALLACE [2024] NZHC 2629 [12 September 2024]

[1] Eric William Wallace owned a property in Red Beach jointly with his son, Paul William Wallace, as tenants in common. Eric owned a 25/37th share, Paul a 12/37th share.

[2] Eric died on 4 June 2021. He had a will, but the executors named in his will died either before him, or before obtaining a grant of administration.

[3] Paul and his brother — Eric’s other son, Samuel Christopher Wallace — could not agree on the appointment of an administrator. Paul commenced proceedings seeking his own appointment. Sam opposed. They then agreed that the Court should appoint Sam as administrator, on terms requiring him to market the Red Beach property, and to sell it to the highest bidder.

[4]The Court made orders accordingly. However, the property has not been sold.

[5]By application dated 10 April 2024, Paul seeks orders:

(a)removing Sam as administrator, and appointing Paul in his place; and

(b)that within 21 days of the orders, Sam vacate the Red Beach property (Red Beach).

[6]Sam opposes Paul’s application.

The Court’s power to remove an administrator

[7] The Court’s power to remove an administrator is set out in s 21(1) of the Administration Act 1969 as follows:

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.

[8]In Farquhar v Nunns, Heath J set out the applicable principles, as follows:1

(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…

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.

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Details

Case: [2024] NZHC 2629
Decision Date: 12 September 2024

CaseChat Overview and Summary

Paul William Wallace and Samuel Christopher Wallace were involved in a dispute over the administration of their father Eric Wallace's estate. Eric had owned a property in Red Beach jointly with Paul, and after Eric's death, the brothers could not agree on who should administer the estate. Paul sought the court's intervention to remove Samuel as the appointed administrator and to have himself appointed instead, as well as an order for Samuel to vacate the Red Beach property within 21 days of the court's decision. The court was required to determine whether it had become expedient to remove Samuel as the administrator and, if so, whether Paul should be appointed in his place.

The court considered the statutory power to remove an administrator, set out in section 21(1) of the Administration Act 1969, which allows for the removal of an administrator under certain circumstances, including where it becomes expedient to do so. The court also considered the relevant principles in this regard, as outlined in Farquhar v Nunns, which emphasised the court's duty to see estates properly administered and trusts properly executed, and the need to consider the interests of the beneficiaries. The court found that it was indeed expedient to remove Samuel as administrator due to his failure to comply with the court's previous orders to sell the Red Beach property, despite having sufficient time to do so. The court did not accept Samuel's excuses for non-compliance and found that Paul had not obstructed or delayed the sales process. The court further found that Paul was appropriately motivated to achieve the best price for the property and was not compromised by his non-occupancy.

The court ordered that Samuel be removed as administrator and that Paul be appointed in his place. The court also ordered that Samuel vacate the Red Beach property by a specified date. Costs were awarded to Paul, as Samuel failed to provide a valid reason why the usual rule of costs following an unsuccessful party should not apply. Paul was reserved leave to apply further if needed in the administration of Eric's estate.

Orders