Smith v Smith - [2021] NZHC 1042

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2019-454-38

[2021] NZHC 1042

UNDER the Administration Act 1969

IN THE MATTER

of the Estate of Veronica Kathleen Smith

BETWEEN

THOMAS MICHAEL SMITH

Plaintiff

AND

PAUL KENNETH SMITH

Defendant

Hearing: 22 April 2021

Appearances:

D P O’Neill for plaintiff Defendant in person

Judgment:

11 May 2021

INTERIM JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] The late Mrs Veronica Smith died on 7 August 2017 leaving a will dated 26 February 2016. Mrs Smith had four children, the defendant, Paul Smith, the plaintiff, Thomas Smith, and two daughters who do not feature in this litigation.

[2] Mrs Smith’s will was a straightforward document. It appointed Paul as the executor and trustee of her estate. It provided that, having paid any debts that she might have had at the time of her death and her funeral and estate administration expenses, Paul was to distribute the residue equally between himself and Thomas. Mrs Smith explained why she was excluding her daughters. Finally, she recorded the powers she was intending to confer on Paul as her executor and trustee. These entitled Paul to retain the assets without any express temporal limitation.

SMITH v SMITH [2021] NZHC 1042 [11 May 2021]

[3] Although this point was not raised during the course of the hearing, it might be thought that there is some inconsistency in the will in the sense that Paul, as the executor and trustee, was entitled to retain the assets, but at the same time obliged to divide them between himself and his brother. The answer to that point is, I think, clear. The powers conferred on Paul as the executor and trustee apply only during the currency of his executorship and trusteeship, and cannot override the fundamental obligation of every executor to gather in and distribute the estate in accordance with the terms of the will.

[4] This Court granted probate to Paul in relation to the administration of the estate on 23 September 2017.

[5] It is common ground that the most significant asset in the estate is Mrs Smith’s former home in Levin. Neither party asserts that whatever other assets may exist are of great (economic) value.

[6] The administration of the estate was not completed as at the date of the commencement of this proceeding on 24 June 2019, nearly two years after Mrs Smith’s death. Nor did it appear to be any closer to completion as at the date of the hearing, another two years on.

[7] Thomas applies for an order removing Paul as executor and trustee of the estate, and the appointment of an independent executor and trustee. Initially, Thomas proposed the Public Trust. However, apparently, the Public Trust, when approached about the matter, required that a substantial amount of money be deposited with it before it was prepared to accept appointment. Thomas was not in a position to fund that. Accordingly, he has, through his solicitors, approached…

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.

Continue reading Smith v Smith

Details

AGLC: Smith v Smith [2021] NZHC 1042
Case: [2021] NZHC 1042
Decision Date: 11 May 2021

CaseChat Overview and Summary

In Smith v Smith, the High Court was asked to decide whether Paul Smith should be removed as the executor and trustee of his mother's estate and replaced with an independent party. The late Veronica Smith had appointed Paul as the executor and trustee of her estate in her will. The plaintiff, Thomas Smith, argued that Paul had not discharged his responsibilities as executor and trustee and sought his removal. The legal issues before the Court were whether Thomas could establish that Paul had no defence to his application and whether it was expedient to remove Paul as executor and trustee.

The Court considered the evidence and submissions made by both parties. It noted that the administration of the estate had been significantly delayed, with little progress made in nearly four years since Veronica's death. The Court also considered Paul's bankruptcy and the level of hostility between the brothers, but ultimately found that the lack of progress in the administration of the estate was the most significant factor. The Court concluded that Thomas was entitled to summary judgment for an order removing Paul as executor and trustee and appointing an alternative administrator.

However, before issuing the final judgment, the Court required Thomas to arrange for the proposed replacement, Mr Douglas Rowan, to file formal notification of his willingness to accept appointment, the terms upon which he proposes he should be appointed, and comprehensive information about his background and relevant experience. Once this material was received and found satisfactory, the Court would issue the final judgment removing Paul as executor and trustee and appointing Mr Rowan in his place. Costs were reserved for later determination.

Orders