Re Amundson

[2015] NZHC 1271

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-865 [2015] NZHC 1271

IN THE MATTER

of the Wills Act 2007

IN THE MATTER

of the Estate of JOHN JOSEPH MCHUGH (Deceased)

BETWEEN

GEORGINA AMUNDSON, SAMUEL JOSEPH PIVAC, AND JONATHAN CHRISTOPHER RAOS

Applicants

Hearing:	4 June 2015
Appearances:	B M Stewart for Applicants Amundson and Pivac N P D Percy for Applicant Raos
Judgment:	8 June 2015

JUDGMENT OF WHATA J

This judgment was delivered by Justice Whata on

8 June 2015 at 4.30 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Simpson Western, Auckland

Kevin Mcdonald & Associates, Auckland

AMUNDSON & OTHERS [2015] NZHC 1271 [8 June 2015]

[1]      This matter comes to me as an interlocutory application on notice for orders appointing Lewis Thomas Grant as temporary administrator.  The wider background is that an application has been made for orders declaring a document to be a valid will.   Orders as to service were recently made directing that a number of persons needed to be served with the primary application.

[2]      All   parties  to   be  served   consent   to   the  appointment   of  an   interim administrator.

[3]      I turn then to examine the merits

Grounds for appointment

[4]      The reasons for the interlocutory application are stated as follows:

(a)      The substantive application seeks an order that the unsigned will of the  deceased  be  validated  as  the  last  will  and  testament  of  the deceased pursuant to s 11 of the Wills Act 2007.

(b)The substantive application is a legal proceeding touching the validity of a will of a deceased person, or for obtaining a grant of administration.

(c)       It is necessary for a temporary administrator to be appointed.

(d)Lewis  Thomas  Grant  is  an  expert  in  estate  administration  and consents to his appointment.

[5]      Affidavits by Christopher Desmond Western and Lewis Thomas Grant have been  filed in  support.   The former provides  context  to the immediate need  for urgency, which I will return to below.  The latter confirms his qualifications to act as an administrator (though he has not sworn faithfully to administer the estate).

[6]      Mr Western identifies that the deceased was the sole shareholder and director of  McHugh  Catering  Ltd,  which  owns  and  operates  a  restaurant  and  function business out of premises in Cheltenham, Devonport in Auckland. He notes that the deceased had authority to operate bank accounts for the company and made most of the decisions affecting the operation of the business.  The company presently has no director  and  no  ability to  appoint  a new director  as  the deceased  was  the sole shareholder.  He says that the filing of an annual return for the company is overdue and that the Registrar of Companies has given an extension of time for filing until 10

June 2015.   It is noted that if the company’s annual return is not filed then the

company is likely to be struck off the Register.

[7]       It is also noted that the company owns property which is tenanted.   The deceased   also   owned   another   commercial   property  which   is   also   tenanted. Mr Western says that management of these tenancies is required on an ongoing basis, that there are presently two tenants in properties owned by the estate who have defaulted in payment of rent and that steps need to be taken to enforce these leases. Another tenant has sought to sell her business which included an assignment of her lease, but no one had capacity consents to the assignment on the landlord’s behalf and the sale has fallen through.

[8]      Reference is also made to the fact that the deceased owned an interest in a racehorse which has created an ongoing cost to the estate and an offer was made for the sale of that interest to relieve the estate from ongoing cost, and to provide some small capital return.   The transfer of ownership cannot be completed until an administrator has been appointed.

[9]      Mr Western also refers to a number of creditors of the estate who remain unpaid, but notes that there are funds at the bank which could be used to pay these debts.

Jurisdiction

[10]     The application is made in reliance of s 7 of the Administration Act 1969 which states:

7        Administration pending legal proceedings

(1)       Where any legal proceedings touching the validity of the will of a deceased person, or for obtaining, recalling, or revoking any grant of administration, are pending, the Court may grant administration of the estate of the deceased to a temporary administrator, who shall, until he is discharged or removed under section 21 of this Act, have all the rights and powers of a general administrator, other than the right  of  distributing  the  balance  of  the  estate  remaining  after payment of debts, funeral and testamentary expenses, duties, and fees, and every such temporary administrator shall be subject to the immediate control of the Court and act under its direction.

(2)       The  Court  may,  out  of  the  estate  of  the  deceased,  grant  to  a temporary   administrator   appointed   under   this   section   such reasonable remuneration as the Court thinks fit.

[11]     There is sparse authority dealing with the prerequisites to the exercise of jurisdiction under s 7.  Dobbie’s Probate and Administration Practice1 states that it is an essential prerequisite that there must be a probate application actually pending, but is otherwise silent as to the principles to be applied.

[12]     Given this lacuna, I will, having regard to the interests of the persons with an interest in the estate, proceed on the basis that:

(a)      There must be a legal proceeding touching the validity of the will of a deceased person or the grant of administration;

(b)It must be necessary to grant an order for interim administration in order to preserve and manage the assets of the estate pending the resolution of the proceedings;  and

(c)      The proposed appointee must suitably qualified to perform the tasks of the administrator and must have sworn to faithfully administer the

estate.

1      Earles,  Douglas,  Kelly,  Kelly  Dobbie’s  Probate  and  Administration  Practice   (6th  ed, LexisNexis, Wellington, 2014) at 349.

Assessment

[13]     Given the consent of all affected persons to the appointment I am satisfied that:

(a)      There is in terms of s 7 legal proceedings concerning the validity of a will of a deceased person;

(b)On the evidence before me, an interim administrator is necessary in order to secure the proper management of the assets of the estate and in  particular  the  management  of  McHugh  Catering  Ltd  and  the various tenancies belonging to the estate.

(c)      Mr Grant is suitably qualified to act as an interim administrator given his extensive experience in equity, trusts and estate law.

[14]     I was initially concerned that largely unfettered powers of administration could prejudice the interests of affected persons.   But given their consent, I am content to make the orders sought subject to the formality of Mr Lewis swearing to faithfully administer the estate.

Orders

[15]     There shall be accordingly the following orders (subject to the lodgement of evidence as to Mr Lewis swearing to faithfully administer the estate):

(a)      Appointing  Lewis  Thomas  Grant  of  Auckland,  solicitor,  as  the temporary administrator of the deceased’s estate, subject to the immediate control of the Court in acting under his direction, until the resolution of the proceeding or he is discharged or removed under s 21 of the Administration Act 1969.

(b)That the temporary administrator, Lewis Thomas Grant, is to have all the rights and powers of a general administrator, other than the right

of distributing the balance of the deceased’s estate remaining after

payment of debts, funeral and testamentary expenses, duties and fees.

(c)      Authorise  payment  to  the  temporary  administrator,  Lewis Thomas Grant, of his reasonable costs and expenses in accordance with his usual charge out rate.

(d)Directing that the temporary administrator, Lewis Thomas Grant, be served with all documents in these proceedings, including a copy of

this judgment.

Costs

[16]     The costs of this application shall be paid by the estate, subject to their reasonableness being approved by the temporary administrator, or on further order of this Court.