Stuart v Pieters
[2014] NZHC 1760
•28 July 2014
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2013-470-559 [2014] NZHC 1760
UNDER the Administration Act 1969 and the
Trustee Act 1956
IN THE MATTER
of the Estate of JOHN RICHARD PREBBLE
BETWEEN
PATRICK CHARLES STUART Applicant
AND
MANDY JEANNE PIETERS First Respondent
KATHLEEN ANN PREBBLE Second Respondent
STEPHEN MARK PREBBLE and DIANE PATRICIA MCCALMAN as trustees of Harry's Trust
Third Respondents
THE PUBLIC TRUST Fourth Respondent
Hearing: 24 July 2014 Counsel:
G Brittain for Applicant
First Respondent in person
Second and Third Respondents have taken no steps
AA Hopkinson for Fourth Respondent
ST Scott for infant beneficiariesJudgment:
28 July 2014
JUDGMENT OF BREWER J
This judgment was delivered by me on 28 July 2014 at 4:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
STUART v PIETERS [2014] NZHC 1760 [28 July 2014]
Introduction
[1] This matter came before me as an application by the administrator of the estate of John Richard Prebble. In the course of the hearing, the parties reached agreement on an alternative means of achieving the aims both of the administrator and of the first respondent. This judgment gives effect to the agreement.
Background
[2] Mr Prebble died intestate on 24 October 2008. The applicant, a solicitor, was appointed administrator of his estate.
[3] Without going into further detail, the estate consists now of cash held by Mr Stuart in the approximate sum of $17,000 and a loan of approximately $393,000 to the third respondents in their capacity as trustees of a Trust settled by the deceased and called Harry’s Trust.
[4] The only asset of Harry’s Trust is a property at 235 Tim Road, Pahoia. The first respondent, who was the de facto spouse of the deceased, and their two children live at the property.
[5] The property has a registered valuation of $620,000. There is a first mortgage to ASB Bank in the sum of $257,000. The first respondent has been making the payments on the ASB Bank mortgage and has reduced the principal sum by some $30,000. There has been an intermittent history of default under the mortgage, but at the hearing Ms Pieters assured me that mortgage payments are up to date currently.
[6] The two children of Ms Pieters and the deceased are beneficiaries of Harry’s Trust. Ms Pieters is not. The loan advanced by the deceased to the Trust is interest free and repayable upon demand. However, it can be seen that the Trust has no equity in the property. Indeed, if the property were sold at the registered value there would be only about $300,000 (following deduction of commission and costs) left after repayment of the ASB Bank loan. Harry’s Trust, therefore, is technically insolvent.
[7] Pursuant to s 77 of the Administration Act 1969, Ms Pieters is entitled to a prescribed amount of $155,000 from the estate. This sum accrues interest at the statutory rate of 7.5 percent per annum. As at 24 July 2014, the accrued interest was
$67,011.15, making a total entitlement of $222,011.15. Assuming that, on the sale of the property, $300,000 could be returned to the estate then the cash available would be approximately $317,000. Once Ms Pieters’ share was paid, the residue would be in the region of $95,000. Under the Administration Act, that residue would be split between Ms Pieters as to one-third and the two children as to the remaining two- thirds. It can be seen then that Ms Pieters’ share in the estate is by far the greater part. The children would be entitled to something like $10,000 each.
[8] During the hearing, Ms Pieters, who has been in conflict with the applicant, hence the applications, told me that all she wants is for the property to be in her own name. She would be able to refinance the ASB Bank mortgage and with the property in her name the administration of the estate would come to an end.
[9] Against the financial background I have set out, this seemed to me to be a desirable end point. Of course, while I could direct the assignment of the estate’s loan to the Trust, I could not direct the trustees to transfer title of the property to Ms Pieters. But it did seem to me that against the insolvency of the Trust, the trustees might be happy to do so. I adjourned the hearing to enable Ms Pieters to contact the trustees and for the parties to consider the matter generally.
[10] Upon reconvening the hearing, Ms Pieters advised me that the trustees would be co-operative. Counsel for the children, Mr Scott, recognised that the assignment of the estate’s debt to Ms Pieters – subject to a Trust for the children’s shares – would be in the best interests of the children. The property is their home and in this way they would be able to continue living there.
[11] Mr Hopkinson for the Public Trust, of course, had no objection either.
[12] Mr Brittain produced draft orders. There are some ancillary orders which need to be addressed. The first is that the applicant sought an order pursuant to s 75 of the Trustee Act 1956 barring Ms Pieters from bringing a claim against him in
respect of the administration of the estate. This is a reflection of the acrimony which had developed between the parties. I canvassed this with Ms Pieters who consented to the order being made.
[13] A similar order was sought in relation to the deceased’s mother, the second respondent. The underpinning for the application was that at one stage the second respondent had talked of making a claim. The second respondent has, however, taken no steps in the proceeding. The understanding of counsel is that the second respondent has no desire to make any claim.
[14] I now make the following orders:
(a) Mandy Jeanne Pieters is barred from bringing a claim against Patrick Charles Stuart in respect of the administration of the estate of John Richard Prebble, pursuant to s 75 of the Trustee Act 1956.
(b)Kathleen Ann Prebble is barred from bringing a claim against the estate of John Richard Prebble, pursuant to s 75 of the Trustee Act
1956.
(c) Patrick Charles Stuart shall distribute the cash on hand in the estate of John Richard Prebble to Mandy Jeanne Pieters, after first meeting all remaining expenses and liabilities of the estate of John Richard Prebble, in part satisfaction of Mandy Jeanne Pieters’ entitlement to the estate of John Richard Prebble under s 77 of the Administration Act 1969.
(d)The balance of Mandy Jeanne Pieters’ entitlement to the estate of John Richard Prebble under s 77 of the Administration Act 1969 shall be satisfied by Patrick Charles Stuart assigning to Mandy Jeanne Pieters absolutely 68 percent of the debt owed to Patrick Charles Stuart as administrator of the estate of John Richard Prebble by Stephen Mark Prebble and Diane Patricia McCalman as trustees of Harry’s Trust,
pursuant to an agreement for sale and purchase dated 20 December
2006 and a deed dated 21 December 2006 (“the debt”).
(e) Mandy Jeanne Pieters is appointed as trustee for the children, Jedi Johnny Junior Prebble and Charli Anne Prebble, in respect of the children’s entitlement to the estate of John Richard Prebble under s 77 of the Administration Act 1969.
(f) The entitlement of Jedi Johnny Junior Prebble and Charli Anne Prebble to the estate of John Richard Prebble under s 77 of the Administration Act 1969 shall be satisfied by Patrick Charles Stuart assigning to Mandy Jeanne Pieters absolutely 32 percent of the debt, and Mandy Jeanne Pieters shall hold that chose in action on statutory trust in favour of Jedi Johnny Junior Prebble and Charli Anne Prebble pursuant to s 78 of the Administration Act 1969.
(g)A declaration that the amount presently due in respect of the debt is the sum of $393,275.90.
(h)Patrick Charles Stuart shall remove caveat 9136394.1 lodged by him against certificate of title identifier 205514.
Brewer J
Solicitors/Counsel: Chris Rejthar & Associates (Tauranga) for Applicant
First Respondent in person
Cooney Lees Morgan (Tauranga) for Fourth Respondent
Beach Legal (Mount Maunganui) for infant beneficiaries
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