Phillips v Cogger

[2024] NZHC 3184

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2024-442-000042

[2024] NZHC 3184

IN THE MATTER

of Sections 4B and 21 of the Administration Act 1969

AND

IN THE MATTER

of an application by Daniel James Phillips for orders removing and replacing the executor of the estate of Dayal Patrick Phillips

BETWEEN

DANIEL JAMES PHILLIPS

Applicant

AND

DAVID SIME COGGER

Respondent

Hearing:	On the papers
Counsel:	Mr Phillips in person Mr Cogger in person
Judgment:	31 October 2024

JUDGMENT OF RADICH J

[1]    Daniel Phillips (Mr Phillips) is a beneficiary of the estate of his late father, Dayal Patrick Phillips (the deceased), along with Mr Phillips’ sister Rebecca Engel. Mr Phillips has applied, through an originating application, for the removal of the respondent, David Cogger, as the executor and trustee of the estate of the deceased

PHILLIPS v COGGER [2024] NZHC 3184 [31 October 2024]

and for his appointment as replacement executor and trustee under s 21 of the Administration Act 1969.1

[2]    Initially, Mr Cogger indicated an intention to oppose the application and filed a notice of opposition. Since then, he has withdrawn his notice of opposition and said he will abide the ultimate decision of the Court. He has asked, however, that the Court have regard to points made in a memorandum filed by him on 9 October 2024.

[3]    When the proceeding was called in the Judge’s Chambers List on 21 October, it was agreed that I would determine the application on the papers.

Background

[4]    The deceased passed away on 23 October 2019.  He left a valid will dated   21 September 2010. In the will, Mr Cogger and Phillip Cox were appointed as executors. Gifts of items of property were made to beneficiaries, including Mr Phillips and Ms Engel. Shares and life insurance policy proceeds were given to the deceased’s wife at the time the will was made, Suzan McCall, as was the remainder of the estate. The will provided that if Ms McCall did not survive the deceased, then the remainder of the estate was to become the property of Mr Phillips and Rebecca Engel.

[5]    The deceased’s marriage to Ms McCall was dissolved in 2014. Accordingly, under s 19 of the Wills Act 2007, dispositions to her are void.

[6]    In 2018, the deceased created, and saved on his laptop, an unsigned electronic document. It was in the form of a will  but was not  validly  executed.  Previously, Mr Cogger and Mr Cox had applied to the Court to have the purported will validated under s 14 of the Wills Act. It would have bequeathed to Rohan Dobson, the deceased’s partner at the time of his death, all shares owned by him, his share in a residential property and, potentially, a life insurance payment to the value of approximately  $500,000.    The  residue  of  the  estate  would  then  have  gone  to

1      I granted leave to bring the proceeding by way of originating application on 2 September 2024 in

Phillips v Cogger [2024] NZHC 2503 [Leave and preservation decision].

Mr Phillips and to Rebecca Engel as tenants in common. The application to have the unsigned document validated as a will was declined by Doogue J on 8 October 2020.2

[7]    The executors had found the purported will on the deceased’s laptop. The story of how they came to do so is a little unusual. The 2010 will contained the following provision:

2.2.   My trustees are charged with organising my funeral arrangements, and arrangements for my wake in accordance with my wishes as set out in the most recent version of the funeral arrangements document held on my Laptop personal computer. The various access passwords will be advised to my solicitors from time to time.

2.2.1.  The windows desktop has a FilesPersonal folder, within which there is a sub-directory of Dayal, and within that a sub-directory of LastWill Etc.

2.2.2.     My will and funeral wishes are the most recently dated files with the names of

2.2.2.1.YYYYMMDD PhillipsDayal LastWillVx.doc

2.2.2.2.and YYYYMMDD DayalFuneral Wishes Etc.doc

[8]    The provision led to a desire by the named executors to access the deceased’s laptop. The deceased had not, however, given his passwords to his solicitors and there was no record of them. Doogue J described what happened next:

[18] [Mr Cox] consulted with [Mr Cogger], and they agreed that the most practicable way to unlock [the deceased’s] computer was to go to the funeral home and use [the deceased’s] fingerprint on the biometric scanner to unlock the computer. On 26 October 2019, [Mr Cox] opened [the deceased’s] computer in the presence of a worker at the funeral home. [Mr Cox] found and copied the file referred to as the purported will. The computer then remained in his exclusive custody.

[9]    Following Doogue J’s decision, Mr Cogger alone was granted probate of the 2010 will on 10 November 2021. Mr Cox had refused to prove the will. As it stands, Mr Cogger is the sole executor of the estate.

[10]   In the time since the purported will was declared invalid, relationship property proceedings in the Family Court have affected the substance of the estate.

2      Estate of Phillips [2020] NZHC 2644.

Grounds for the application

[11]   Mr Phillips and Ms Engel are unhappy with the administration of the estate, by Mr Cogger and Mr Cox together before probate was granted, and by Mr Cogger alone after probate was granted. They believe that Mr Cogger is not acting neutrally or in their best interests as beneficiaries. They believe the estate’s accounts should be reviewed. Mr Cogger is said to have:

(a)Failed to transmit the deceased’s 50 per cent share in a residential property in Christchurch into his name, and, consequently has failed to receive rental income for the estate. Ms Dobson is said to have been dealing with the property and collecting the rental income since Dayal’s death.

(b)Failed to secure estate assets, such as heirlooms, furniture, art and a vehicle. These alleged failures are said to have resulted in Ms Dobson removing valuable items to Australia without the knowledge or permission of the estate or the beneficiaries.

(c)Failed to communicate to the beneficiaries a settlement offer made to the estate by Ms Dobson that could have, if accepted, avoided relationship property proceedings in the Family Court.

(d)Failed to communicate with the beneficiaries in other ways, causing “significant delays”.

(e)Failed to be transparent about the estate’s expenses or distributions.

(f)Potentially, preferred his own interests over those of the beneficiaries, including by charging for his services when the applicants did not agree to him doing so, when the will did not enable him to do so, and when the Court did not provide directions for him to do so.

[12]   The beneficiaries are concerned also with the way in which Mr Cogger has used the deceased’s laptop. In the earlier will validation proceedings, Mr Cogger gave

evidence in which he said that there were a number of files with similar naming conventions to the one he ultimately chose to present to the Court as the purported will, but “did not pay any attention to them”.3 Mr Cogger did not have the computer examined forensically to ascertain when and where it had been accessed, or if the date on the document had been modified and, if so, by whom.4 In her judgment, Doogue J said:5

… I am nonetheless concerned about the manner in which the purported will was loosely selected by [Mr Cogger], the fact that Dayal’s computer and the history of the document were not forensically assessed, and finally that the document has all the hallmarks of a work in progress.

[13]   The beneficiaries wish to have the laptop assessed. They have real concerns about potential acts and omissions relating to the draft 2018 will. On 2 September 2024, I granted a preservation order over the laptop after the beneficiaries received word that Mr Cogger was refusing to provide the laptop to them and had had the laptop delivered to an IT company with the intention of instructing the deletion of certain material on the laptop and the transfer of remaining data to a different hard drive.6 The laptop is presently in the custody of the Wellington High Court. The IT company delivered it to the Court in accordance with the terms of the preservation order and a representative of the company has confirmed that it is presently in the same state as it was when it was received by the company.

[14]   Finally, the beneficiaries are concerned that Mr Cogger has indicated that, contrary to their wishes, he is proposing to place unresolved matters in the hands of the Public Trust.

Mr Cogger’s position

[15]   Mr Cogger does not oppose the application and abides the Court’s decision. He filed a memorandum on 9 October 2024 in which he made a number of points for the Court to consider. They include the following:

3 At [35].

4 At [36].

5 At [41].

6      Leave and preservation decision, above n 1.

(a)He does not accept the allegations that Mr Phillips has made against him and has said that he has at all times done his best to fulfil his duties.

(b)He recognises that the relationship has broken down between him and Mr Phillips.

(c)He is concerned about content on the laptop including allegedly objectionable and intimate imagery and has said that he had relied upon the Victims’ Rights Act 2002 when he had decided to withhold it from being given to Mr Phillips.

[16]   Mr Cogger said “I will abide the direction of the Court but in doing so make no admissions that allegations made by the applicant are founded”.

[17]   The next day, 10 October, Mr Cogger filed a further memorandum which said simply that, in order to avoid doubt, he was not opposing the application and would abide the directions of the Court. When he appeared in the Judge’s Chambers List on 21 October, Mr Cogger said that, despite that, he asked the Court to take into account the terms of his 9 October memorandum. I have done so.

The removal jurisdiction

[18]Executors are deemed to be administrators under the Administration Act.7

[19]Under s 21 of the Act, the Court may discharge or remove an administrator:

(a)who is absent from New Zealand for 12 months without leaving a lawful attorney;

(b)who desires to be discharged from the office of administrator;

(c)who becomes incapable of acting as administrator or unfit to so act; or

(d)where it becomes expedient.

7      Administration Act 1969, ss 2 and 41.

[20]   Under s 21, the Court may appoint “any person” to be administrator in their place, “on such terms and conditions in all respects as the court thinks fit”.

[21]   Two recent decisions of the Court of Appeal have affirmed the principles that should guide the Court in the exercise of its powers to remove an administrator under s 21:8

(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.

(b)The 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. As the Court of Appeal said in Tod v Tod, “the courts will not readily replace an executor selected by a deceased to manage his or her estate”.9 Ultimately, however, 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 reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.

[22]   The Court of Appeal has since reinforced two important features of these principles. The first is that the interests of the beneficiaries must always be the focus.10

8      Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22]; and Frickleton v Frickleton [2016] NZCA 408, [2017] NZLR 154 at [29].

9      At [27(a)].

10     Frickleton v Frickleton, above n 8, at [33].

The second is that mere incompatibility between trustees and beneficiaries is not enough to justify removal in itself:11

… any incompatibility must be at such a level that the proper administration of the trust is seriously adversely affected and it has become difficult for a trustee to act in the interests of the beneficiary

[23]   Finally, as has been reinforced in the cases to which I have referred, expedience is the focus of the Court’s jurisdiction under s 21 of the Act. As was said in Crick v McIlraith:12

The term “expedient” imports considerations of suitability, practicality and efficiency. In the context of estate administration the use of the term “expedient” therefore demands an overarching question—will removal of the administrator be a suitable, practical and efficient means of advancing the interests of the estate and of its beneficiaries?

The wishes of the testator

[24]   I look first at the deceased’s wishes. Clearly, he wished for Mr Cogger to be his executor. He expressed that wish in his 2010 will and again in the draft 2018 will. In her decision, Doogue J explained that the deceased had known both Mr Cogger and Mr Cox for over 30 years.13

[25]She explained also that Mr Phillips and his father had a difficult relationship:

[9] [The deceased] and [Mr Phillips] had a turbulent relationship, and they became estranged in 2009. [Mr Phillips] painted a very dark picture of [the deceased] accusing him of being physically abusive, a narcissist, a compulsive liar, financially usurious, and a serial womaniser.

[26]   The 2010 will itself appears to suggest an element of tension between the deceased and his children:

4.1.4 Should the provisions of this my last will and testament be challenged by either my son DANIEL JAMES PHILLIPS or by my daughter REBECCA MARIE MARTINEZ (nee Drane) [as Ms Engel was then known] then any gifts made to them in this my last will and testament will be considered to be null and void and will not be made.

11     At [35] and [36] citing Kain v Hutton [2007] NZCA 199, [2007] 3 NZLR 349 at [267].

12     Crick v McIlraith [2012] NZHC 1290 at [18].

13     Estate of Phillips, above n 2, at [10].

[27]   Despite any tension, the deceased did  in  his  will  name  Mr  Phillips  and Ms Engel as the ultimate beneficiaries of his estate.

Discussion

[28]   It is expedient for Mr Cogger to be removed as executor. That is not a decision that is made lightly, given in particular that the deceased had chosen to appoint him. However, I see the position here as aligning with that in Crick v McIlraith in which Osborne J said that the removal of an executor was “clearly expedient” because in that case it would “remove an understandable and merited resentment and lack of confidence on the part of [the beneficiaries]”.14

[29]   Here, for a variety of reasons, some of which involve unusual events, there is a similarly understandable resentment and a lack of confidence on the part of the beneficiaries. It goes beyond mere incompatibility or hostility. It is not relevant in a proceeding such as this to determine whether or not any of the allegations made by Mr Phillips in relation to the administration of the estate are sustainable. They are firmly denied by Mr Cogger. However, whatever the case, the relationship is in a state of disrepair. There may well be issues that need to be assessed further. But that is not for me to say at this point. What can be said is that the appointment of a new administrator is a suitable, practical and efficient means of advancing the interests of the estate and of its ultimate beneficiaries.

[30]   The next question relates  to  who  Mr  Cogger’s  replacement  should  be.  Mr Cogger has suggested that it be a third party. The suggestion has some appeal. However, practically speaking, I am drawn to conclude that Mr Phillips should be appointed. The beneficiaries have nominated him. He is a lawyer and has given evidence to the effect that he is suitably qualified to perform the task of reviewing financial material relevant to the estate to enable its administration to be progressed appropriately. The estate, at one time, had assets in excess of $1 million. However, the balance of the estate’s funds at this stage appear to be approximately $50,000 only. This is not a case where the cost of appointing a professional executor would be appropriate. Residual estate issues need to be resolved in an expeditious and

14     Crick v McIlraith, above n 12, at [32].

inexpensive way: which can better be achieved through Mr Phillips acting as executor. He and Ms Engel are the ultimate beneficiaries under the will. The estate needs to be managed in their best interests. There is no information to suggest that Mr Phillips would not be able to act in his own best interests and those of his sister. His appointment as administrator is, as I see it, the appropriate course of action in terms of the just and proper administration of the estate from this point.

Result and orders

[31]The application is granted. I make the following orders:

(a)Pursuant to s 21 of the Administration Act 1969, the respondent David Sime Cogger is removed as the executor and trustee of the estate of Dayal Patrick Phillips and the applicant Daniel James Phillips is appointed as executor and trustee in his place.

(b)Pursuant to s 53 of the Act, the respondent is to immediately transfer all funds and assets of the estate to the applicant, including any cash, investments and any real property.

(c)Pursuant to s 53 of the Act, the respondent is to deliver electronically copies of all records of the estate to the applicant, including:

(i)Invoices;

(ii)Bank statements;

(iii)Financial statements and schedules;

(iv)A full inventory and schedule denoting location, disposal, sale and distribution of any assets;

(v)A full schedule of expenses, costs and disbursements paid by the estate since 23 October 2019;

(vi)Copies of all legal advice and correspondence with legal counsel engaged by the estate; and

(vii)All correspondence with the former executor Phillip Cox about the estate.

(d)The applicant may take charge of the laptop computer held by the High Court in Wellington that was the subject of a preservation order made by me on 2 September 2024. The preservation order is lifted accordingly.

(e)Any costs and disbursements of and incidental to this application are to be paid by the estate.

Radich J