Rosinger v Sachs

[2021] NZHC 3022

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001802

[2021] NZHC 3022

UNDER

Sections 6 and 19 of the Administration Act 1969 and Part 19 of the High Court Rules 2016

IN THE MATTER OF

the Estate of JOSELYN SHEBA SACHS

BETWEEN

EDAN-JASON ROSINGER

Applicant

AND

BASIL ALTER SACHS

Respondent

On the papers:	27 October 2021
Appearances:	W Andrews for the Applicant
Judgment:	9 November 2021
Reissued:	15 November 2021

JUDGMENT OF WALKER J

This judgment was delivered by me on 9 November 2021 at 3 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

ROSINGER v SACHS [2021] NZHC 3022 [9 November 2021]

Introduction

[1]                 This originating application for orders granting letters of administration and probate of the will of Joselyn Sheba Sachs (the Will) comes before me on the papers.

[2]                 The applicant, Edan-Jason Sebastian Rosinger (Jason), is the son (and only child) of Ms Sachs.

[3]                 The respondent is the sole remaining executor of the Will. He has been served with this application but has taken no steps.1

[4]                 Joselyn Sachs died on 27 August 2020 in Israel after illness. Her will dated 12 November 2019 provided for the appointment of her brother Basil Sachs, together with her solicitor, Christopher Lord, and accountant Sam Chan, as executors and trustees of her estate.

[5]                 Mr Lord and Mr Chan have renounced their roles by deeds of renunciation dated 18 February 2021 and 3 March 2021 respectively.

[6]                 The only beneficiaries of the Will are Jason and Mr Sachs. Jason is the primary beneficiary. It is not clear to me what the value of the estate is. Jason is not currently privy to this information because his uncle has not disclosed it despite request. There is some suggestion that significant sums may be held in bank accounts in Ms Sachs’s name.

[7]                 There is another relevant consideration. Ms Sachs also settled a family trust called the JS Sachs Family Trust (the Trust). Jason is the final beneficiary of the Trust. Mr Sachs is a discretionary beneficiary. At the time of Ms Sachs’s death, the trustees were Mr Lord, Mr Chan and Mr Sachs. Both Mr Lord and Mr Chan have resigned as trustees.

1      An affidavit of service has been filed. It has not been affirmed or sworn at this stage due to COVID-19 Alert Level 3. It has been filed in accordance with the COVID-19 protocol with an accompanying memorandum from counsel.

[8]                 Clause 13 of the trust deed provides there must be at least two trustees, one of whom must be an independent trustee. At present, there is only one remaining trustee—Mr Sachs—meaning that he has no power to manage the Trust.

[9]                 Clause 14 of the trust deed provides that the power of appointment of new trustees after Ms Sachs’s death, if not provided for in the Will, vests with the administrators of her estate. A power of appointment is not provided for in the Will.

[10]            The Trust (or more properly, the trustees of the Trust) own real property in New Zealand and South Africa. There is evidence that the properties are not being maintained; rates are not being paid and the properties are at risk.

[11]            As the power of appointment of new trustees is not provided for in the Will, the order sought on this application would then have the collateral effect of resolving an impasse as to the operation of the Trust. The new executors/administrators will enable appointment of new trustees to the Trust.

Background

[12]            Mr Sachs is Jason’s uncle. The evidence from family members is that they are close. Mr Sachs was also close to his sister and has taken her death badly.

[13]            Mr Sachs has failed or neglected to instruct the estate’s solicitors to apply for probate causing unnecessary delay and expense. He has taken various shifting positions, changed instructions and been unpredictable in his attempts to deal with the estate. He disputes invoices from accountants and solicitors and appears to have convinced himself that they are setting about to ‘bankrupt’ the estate. It is implicit that the renunciation by Mr Lord and Mr Chan came about because of Mr Sachs’s refusal to engage appropriately with them.

[14]            The grounds for the application are two-fold: that Mr Sachs lacks competency to be able to discharge the responsibilities of executor and trustee of the estate and there are special circumstances which make it expedient to bypass him and grant letters of administration and probate to the applicant and Leigh Denise Judd, solicitor and partner of Pidgeon Judd.

[15]The applicant seeks orders:

(a)granting letters of administration and probate to the applicant and Leigh Denise Judd;

(b)bypassing the appointment of Basil Sachs as executor when probate is granted; and

(c)for leave to commence the proceeding by way of originating application.

[16]            The application is made under the Court’s inherent jurisdiction, ss 6 and 19 of the Administration Act 1969 (the Act) and r 19.5 of the High Court Rules 2016.

[17]            Section 6 of the Act provides a statutory discretion to bypass persons entitled to a grant of administration where by reason of special circumstances, the Court thinks it necessary or expedient to do so. The section reads:

6 Discretion of court as to person to whom administration is granted

(1)In granting letters of administration with or without a will annexed, or an order to administer with or without a will annexed, in respect of the estate of any deceased person or any part thereof, the court shall have regard to the rights of all persons interested in the estate of the deceased person or the proceeds of sale thereof, and, in particular, administration with a will annexed may be granted to a devisee or legatee; and any such administration may be limited in any way the court thinks fit:

provided that, subject to the provisions of subsection (2), where the deceased died wholly intestate as to his or her estate, administration shall be granted to some 1 or more persons beneficially interested in the estate of the deceased, if they make an application for the purpose.

(2)Where by reason of the insolvency of the estate or other special circumstances the court thinks it necessary or expedient to do so, it may—

(a)grant administration to such person or persons as it thinks expedient notwithstanding that some other person is

appointed an executor or that, apart from this subsection, some other person would by law be entitled to a grant of administration:

(b)grant probate to 1 or more of the executors appointed by a will, notwithstanding that some other person or persons may also be appointed as an executor or executors.

(3)A grant may be made under subsection (2) notwithstanding that any person excluded from the grant would be competent to take it.

(4)Before determining to exclude from any such grant any person who, apart from this section, would by law be entitled to, or be included in, the grant, and wishes to have, or to be so included in, the grant, the court shall have regard to his or her competency and solvency, his or her ability effectively to administer the estate, the rights of all persons interested in the estate, and any changes in circumstances between the making of the will (if any) and the time when the court is asked to make the grant.

(5)The court may, in its discretion, make any grant of administration (other than the probate of a will) conditional upon the person to whom the grant is made giving such security as the court may require for the due collection, getting in, and administration of the estate of the deceased:

provided that the court shall not require any trustee corporation, or any person obtaining administration to the use or for the benefit of the Sovereign, to give any such security.

(6)The court shall not exercise its powers under subsection (5) unless it is satisfied that, in the special circumstances of the case, the imposition of the requirement of security would be expedient having regard to the following matters:

(a)the value of the estate:

(b)the financial position of the proposed administrator:

(c)the extent of his or her interest (if any) in the estate:

(d)whether or not he or she is a creditor in the estate:

(e)whether or not there are any minor beneficiaries or beneficiaries under any other disability:

(f)such other matters as the court thinks relevant.

(7)It shall not be necessary in any motion for a grant of administration, or in any affidavit filed in support of such motion, to include any information for the purposes only of subsections (5) and (6) unless the court in a particular case expressly requires that information to be supplied.

[18]Section 19 of the Act provides:

19       Proceedings where executor neglects to prove will

(1)In any case where any executor named in a will neglects or refuses to prove the will, or to renounce probate thereof, within 3 months from the death of the testator, the court may, upon the application of any other executor or executors or of any person interested in the estate or of Public Trust or of the Māori Trustee or of any creditor of the testator, grant an order nisi calling upon the executor who so neglects or refuses to show cause why probate of the will should not be granted to that executor alone or with any other executor or executors or, in the alternative, why administration should not be granted to the applicant or some other person.

(2)Upon proof (whether by affidavit or otherwise) of service of the order, or upon the court dispensing with service of the order, if the executor who is so called upon does not appear or upon cause being shown, the court may make such order for the administration of the estate, and as to costs, as appears just.

(3)Where Public Trust or the Māori Trustee applies, and any executor is out of New Zealand, the court may exercise the power given by this section and grant administration to Public Trust or the Māori Trustee without first granting an order nisi calling upon any executor who is out of New Zealand to show cause.

(4)On the application of any executor who was out of New Zealand when the grant under subsection (3) without an order nisi was made, and who has not refused or renounced administration, the court may grant probate to that executor, or if Public Trust is one of the executors named in the will to Public Trust and that executor, in any manner and subject to any limitations or conditions that the court thinks proper.

(5)No application under subsection (4) shall be made until 14 days after notice in writing of the intention to apply has been left at the Office at Wellington of Public Trust or of the Māori Trustee, whichever received the prior grant.

[19]            The powers under s 6 may be exercised notwithstanding that the person excluded would be competent to take the grant. Before excluding any person otherwise entitled, the Court is required to have regard to that person’s competency and solvency, his or her ability effectively to administer the estate, the rights of all persons interested in the estate, and any changes in circumstances between the making of the will (if any) and the time when the Court is asked to make the grant.

[20]            Competency is a broader concept in this jurisdiction than “soundness of mind”. It can include an inability to discharge the responsibilities of being an executor.2 The

2      See Re Hunter (Deceased) [1932] NZLR 911 (CA).

case law suggests that hostility or conflict of interest between executor and a beneficiary can result in the removal of an executor.3 Expedience imports considerations of suitability, practicality and efficiency.4

[21]            The testatrix’s autonomy in selection of her executor is not lightly to be set aside but the integrity of the administration of the estate is of paramount importance. The overarching question is therefore whether in the particular circumstances removal is a suitable, practical and efficient means of advancing the interests of the estate and beneficiaries where the integrity of the estate is at risk and the welfare of the beneficiaries compromised.5

Result

[22]            Rule 19.5(1) provides that the Court may permit a proceeding not specifically mentioned in rr 19.2–19.4 to be commenced by originating application in the interests of justice. I am satisfied that this is an appropriate case in which to grant leave to secure the just, speedy and inexpensive determination of this proceeding. I make that direction accordingly.

[23]            Having reviewed the affidavits from close family members, namely Jason, Sabrina Sachs, the adult daughter of the respondent who is a solicitor and Estelle Sachs, wife of the respondent, I am satisfied that the grounds for bypassing Mr Sachs as executor have been made out and the orders sought are both necessary and expedient. I consider that the integrity of the administration of the estate is at risk and the welfare of the beneficiaries is compromised. Although I grant the application under s 6 of the Act such that it is strictly unnecessary to rely on s 19, I dispense with service of an order nisi being satisfied that cause is shown. My reasons can be shortly stated.

[24]            First, the evidence is that Mr Sachs has not effectively advanced probate although it is well over a year since his sister died and though probate documents were

3      Teariki v O’Reilly [1992] NZFLR 534 (HC) at 536.

4      Crick v McIlraith [2012] NZHC 1290 at [18] in the context of removal of an administrator under s 21 of the Act.

5 At [18].

prepared by Ms Judd for signature on 24 May 2021. The evidence of family members is that Mr Sachs is not coping with his sister’s death which has been devastating for him, his health is ‘precarious’, he is unable to cope with the stress of such a role and a distrust of authority and professionals has led to intractable conflict and virtual paralysis. The evidence persuades me that Mr Sachs is presently unable to discharge the responsibilities of being an executor.

[25]            Secondly, it is clearly necessary that this impasse be resolved. This delay is costing the estate. As the primary beneficiary, Mr Rosinger has been left in a hopeless position. There is serious risk to property owned by the Trust.

[26]            Thirdly, a lack of competence (in the broadest sense of that word) is well illustrated by the changeable attitude displayed by Mr Sachs to the role. Jason gives evidence of various announcements by his uncle that he would renounce his role only to change his mind the following day. Sabrina Sachs deposes that at one family meeting she offered to be the executor after explaining that her father was inefficient in the role and increasing costs to the estate. She states:

My dad agreed on the basis that I sign a document that he wrote up which documented my responsibilities and his expectations of me.

…

My father signed the renunciation document before myself, Jason, my mother Estelle and sister Justine.

My father then dictated to me an email to be sent to Leigh Judd with instructions on his behalf.

The following day I called my father to check up on him and he said that I had performed a coup.

I later found out that my father contacted Leigh Judd and claimed that he had been coerced into signing the renunciation document and that his email had been hacked.

[27]            Fourthly, Jason is an interested person in the estate and primary legatee. The second proposed executor/administrator, Ms Judd, is an experienced solicitor and principal in the law firm Pidgeon Judd, with knowledge of the estate. This provides professional and independent oversight.

[28]            Subject only to undertakings from Jason and Ms Judd that they will faithfully carry out their obligations as executors and trustees, I make the orders in [15] above.

[29]            I further order that the reasonable costs of this application be paid out of the estate of the late Ms Sachs.

[30]Orders accordingly.

............................................................

Walker J