Roblin v Roblin
[2019] NZHC 374
•7 March 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-419-000254
[2019] NZHC 374
BETWEEN GRANT DALE ROBLIN
Plaintiff
AND
IAN STUART ROBLIN
Defendant
Hearing: 21 February 2019 Appearances:
D O’Neill for Plaintiff
No appearance by or for Defendant
Judgment:
7 March 2019
JUDGMENT OF HINTON J
This judgment was delivered by me on 7 March 2019 at 4.15 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
David O’Neill, Barrister, Hamilton Cooney Law, Cambridge
GRANT DALE ROBLIN v IAN STUART ROBLIN [2019] NZHC 374 [7 March 2019]
[1] This judgment follows a formal proof hearing of an application to remove a trustee under s 51 of the Trustee Act 1956.
Background
[2] The plaintiff, Grant Roblin and the defendant, Ian Roblin, are brothers. They have no other siblings.
[3] Their mother, Janet Roblin, died on 24 July 2017. Their father had pre-deceased their mother.
[4] Mrs Roblin’s last will, dated 27 February 1995, appointed the two brothers as her executors and trustees and left the residue of her estate equally to them. Probate was granted on 17 October 2017.
[5] Mrs Roblin’s assets comprised bank accounts of approximately $180,000 (which have been equally distributed) and a property at 16 Sutton Crescent, Hillcrest, Hamilton.
[6] The Hillcrest property has three levels, which are each self-contained. Ian Roblin and his partner occupy the top floor. Ian has lived there for about 30 years. Mrs Roblin occupied the middle floor.
[7] In 2006, when Mrs Roblin started to suffer from Alzheimer’s, Grant Roblin and his wife moved into the ground floor of the Hillcrest property, in order for the two sons to take turns looking after their mother. Mrs Roblin became progressively worse to the point where her floor needed to be locked to keep her in it.
[8] Before their mother died, Grant Roblin made it clear to Ian that after their mother died, he would want the property sold. Ian was strongly of the view that they should stay in the house for the rest of their lives.
[9] It seems as a consequence of this strong difference of opinion, the two brothers’ relationship became toxic.
[10] After their mother died, Grant says he suggested to Ian that the value of the property was about $800,000 and that Ian could buy him out for $400,000. According to Grant, Ian thought that reasonable and more or less agreed to proceed on that basis. This was in about late-2017. Grant understood from Ian that Ian’s partner was going to receive money from an estate, which was then going to be the source of funds for a buy-out. So far as Grant is aware, Ian would not be able to borrow money and does not otherwise have the necessary capital. However, Grant then found out that Ian’s parents-in-law were both still alive, and he realised that the buy-out was not going to happen. He says he waited some time before coming to that view.
[11] Also subsequent to Mrs Roblin’s death, various people started to occupy the middle floor that she had previously occupied. Grant does not know whether these people have been invited by Ian or by Ian’s partner, but says they are there without his permission and that these people have caused numerous problems. These have included police presence on at least one occasion, strangers arguing on the driveway, loud noise at night, burglary, assault, a stranger lying naked and incoherent on the floor and a drug raid. Details of these matters are set out in an affidavit filed by Grant Roblin, which he confirmed in oral testimony.
[12]None of these people, so far as Grant is aware, is paying any rent.
[13] Further still, Grant Roblin annexes photographs of damage caused to parts of the property, particularly a window lock having been removed and a door lock broken. He says the property is deteriorating as a consequence. It did not strike me that there was a great deal to this particular point.
Correspondence from lawyers and service of proceedings
[14] Tompkins Wake have been the solicitors acting for Grant and Ian, as executors and trustees. That firm has written to Ian on at least two occasions, being 14 February 2018 and 7 May 2018, and had no reply to either letter.
[15] The February 2018 Tompkins Wake letter records their understanding that Ian had agreed to purchase Grant’s entitlement of a half share in the Hillcrest property. They say Grant was frustrated at there being no commitment as to when that would
happen. They ask Ian to contact them either to formalise the agreement or so that alternative options in respect of the property can be considered. As I say, they had no reply.
[16] In the 7 May 2018 letter, Tompkins Wake note that they have not heard from Ian. They express concern as to advice from Grant of unknown tenants living at the property and the Police being called to the property. They note Grant’s non-approval of the tenants. They express concern about insurance in these circumstances and refer to Grant wanting to see the property sold so that he can receive his share of the estate. They refer to possible Court action to either have Ian removed as executor, or to make application to force a sale of the property, and the costs that will be incurred if that is necessary. They ask for a meeting to be arranged.
[17] These two letters were sent to Ian Roblin at the Hillcrest property. Given there is only one letterbox, and given the unknown and varying tenants, I was concerned that these letters may not necessarily have been received by Ian Roblin. In giving evidence, Grant Roblin said that he did not receive mail himself via the letterbox and had to rely on email, although he believed that was because Ian’s partner was removing mail from the letterbox and throwing it out. However, my concern regarding receipt of the Tompkins Wake correspondence has been addressed by Grant Roblin confirming that he personally handed to Ian the two letters to which I have referred.
[18] There was then a third letter to Ian Roblin dated 3 July 2018 from Cooney Law, solicitors, advising that they act for Grant, and giving notice that if Ian does not accede to the request that the house be sold, then they have instructions to issue proceedings to remove Ian as an executor and trustee, and if necessary, to also seek costs.
[19] Grant says he did not hand that letter to Ian, but in any event, Ian was then served by Stephen Anthony West on 25 September 2018 with the proceedings. In his affidavit of service, Mr West confirms that he served the documents on Ian Roblin at Mainline Sheetmetals, 209 Ellis Street, Hamilton, and that Ian identified himself and accepted service.
[20] There was no appearance by Ian Roblin at the hearing. His name was called twice before the hearing proceeded.
[21] Grant Roblin confirmed that he had received no contact from his brother since just after Ian was served with the documents, when Ian said something along the lines of, “I am not going to sell the house and that is that”. Grant said he told him it would be in the hands of a Judge and Ian did not like that.
Law
[22] The key question is whether Ian Roblin should be removed as a trustee of his mother’s will trust and an independent trustee appointed in his place.
[23] Under s 51 of the Trustee Act 1956 and the Court’s inherent jurisdiction, the Court can remove or discharge trustees, and it can appoint a replacement trustee.
[24]The test is one of expediency. The Court said in Harsant v Menzies: 1
Expediency is a lower threshold than necessity and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness is not required to be established.
[25]The particular facts and circumstances are all important.
[26]Relevant guiding principles are:
(a)The Court’s duty to see estates properly administered and trusts properly executed.
(b)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given considerable weight.
(c)The welfare of the beneficiaries is the “litmus” test.
1 Harsant v Menzies [2012] NZHC 3390 at [55].
(d)Hostility as between administrators/trustees and beneficiaries is not by and of itself a reason for removal. Such hostility assumes relevance if and when it risks prejudicing the interests of the beneficiaries.
[27] In Harsant v Menzies, the Court formed the view that it was expedient to remove and replace the trustees. In that case, the Court looked to the terms of the will trust which directed the trustees to sell and convert the property as and when the trustees thought fit. The Court said that, although the timing was left up to the trustees’ discretion, the law was that the property had to be sold or converted within a “reasonable” period, traditionally regarded as 12 months.
[28] A trustee may be justified in extending that period in light of s 14 of the Trustee Act, which says realisation might be deferred by a trustee, as long as he or she does not postpone for longer than is reasonably necessary to permit prudent realisation.
[29] More normally (as here), there is no specific direction to sell, but the obligation of executors and trustees is still to gather in and realise the assets. In the absence of agreement between the beneficiaries, or alternative direction in the will, that requires the trustees to sell within a reasonable period. Obviously, a sale to one beneficiary is open, but that also should be on reasonable terms and within a reasonable period.
[30]In Kain v Hutton, the Court of Appeal said:2
… mere incompatibility between trustees and beneficiaries is not enough … 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 …
(citations omitted)
[31] In Bond v Platun, cited by counsel, I held that the same principle must apply to incompatibility between trustees.3
2 Kain v Hutton [2007] NZCA 199, [2007] 3 NZLR 349 at [267].
3 Bond v Platun [2016] NZHC 3038.
[32] Section 51 was used in Naresh v McCluskie to remove the first trustee because he was incapable of functioning as a trustee and the second trustee because he had no understanding of his obligations as a trustee and had no intention of complying with the terms of the trust.4 These trustees were replaced by the Public Trustee.
[33] In McCartney v Cox, the trust was hamstrung because one of the three trustees was absent and refused to engage in either the administration of the trust or the proceedings.5 He and his partner, who was a co-trustee, were both replaced by an independent trustee to administer the trust with the remaining independent trustee.
[34] Section 51(2) makes it clear that the power to replace trustees is not confined to the grounds listed in that subsection. Nor is the purpose of the power to punish the trustee. There is therefore no need to establish moral fault on the part of the trustee who is sought to be removed.
[35]As Miller J explained in Wilson v Pedersen:6
It is simply a matter of seeing that the trusts under the will are properly executed by trustees whose authority and willingness to administer them is beyond dispute. An honest difference of opinion or friction in personalities may suffice.
[36] In Gambrill v Whitfield, the High Court exercised its inherent jurisdiction to remove Mr Whitfield as trustee because he refused to participate in the administration of the trust, even though the trust was for his benefit.7 In fact, the Court saw no need to appoint a substitute trustee, as the remaining trustee was well capable of faithfully administering the trust by itself.
[37] In McCartney v Cox, the Court said that the trust was hamstrung by the absence of one of the trustees and the only way for the trust to make any decision was to have him removed. The Court said that in that case, the trustee had misconducted himself. An independent trustee was appointed.
4 Naresh v McCluskie [2009] NZCA 328.
5 McCartney v Cox [2012] NZHC 1369.
6 Wilson v Pedersen HC Wanganui CIV-2011-483-212, 27 October 2011 at [16].
7 Gambrill v Whitfield [2013] NZHC 885.
Analysis
[38] I am satisfied on the basis of the above authorities that this is a clear case where Ian Roblin needs to be removed as a trustee.
[39] The differences between himself and Grant Roblin go beyond mere incompatibility.
[40] Ian Roblin is refusing to co-operate or even to take part in finalising the administration of the estate. This applies particularly in terms of progressing a sale of the Hillcrest property, whether to himself or otherwise. It has now been 17 months since the grant of probate and no progress has been made, despite reasonable efforts on the part of Grant Roblin and the solicitors for the estate. That must disqualify Ian from continuing involvement as a trustee.
[41] Further, even in terms of day-to-day management of the property, Ian Roblin’s actions generally, especially with regard to unilaterally allowing people to occupy the middle floor, are in conflict with his duty as a trustee.
[42] The trust is therefore not only hamstrung, but Ian Roblin has misconducted himself in his role as a trustee.
[43] I am satisfied that it is expedient for Ian Roblin to be removed as a trustee under s 51 of the Act.
[44] While it is not always the case that an independent trustee is appointed in place of a trustee who has been removed, I consider that prudent in circumstances where the parties are close family who are at loggerheads. It is not wise to leave one brother in sole charge, especially where there is sufficient in the estate to meet the reasonable costs of a professional trustee.
[45] I have been provided by Mr O’Neill, counsel for the plaintiff, with a consent signed by Peter Joseph Fanning, solicitor, of Tompkins Wake, to be appointed as an independent executor/trustee in the estate of Mrs Roblin. I am satisfied that
Mr Fanning is an appropriately independent person and I accordingly appoint him as a trustee.
[46] The proceeding also sought an order for sale, but Mr O’Neill agreed that such an order is not currently required. The trustees clearly have the power to sell and I agree that they can properly exercise that power in the circumstances that apply here. It is up to them in what way and on what terms they do so, subject obviously to the normal trustees’ duties. I do, however, reserve leave to the plaintiff and Mr Fanning to come back to the Court if any further order is necessary, whether to implement a sale or otherwise.
[47] I suggest that not only the orders made in this judgment, but the judgment itself, be served on Ian Roblin so that he can see the Court’s agreement that a sale is appropriate and necessary.
Orders
[48] I therefore make orders removing Ian Stuart Roblin as trustee of the estate of Janet Marion Roblin and appointing Peter Joseph Fanning, solicitor, as replacement trustee.
Costs
[49] Mr O’Neill seeks costs, and clearly a costs order is appropriate in the circumstances. I order costs against Ian Roblin on a 2B basis. Mr O’Neill should submit a schedule of those costs. Further, if there are any difficulties with implementation of the sale, Mr Roblin needs to be on notice that a further costs order may follow.
---------------------------------------------------
Hinton J
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