Sullivan v Pullar

[2020] NZHC 2399

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2010-441-142

[2020] NZHC 2399

UNDER

the Administration Act 1969

IN THE MATTER

of the Estate of Nan Rangitautiaki Sullivan

AND

IN THE MATTER

of an application to remove an administrator

BETWEEN

TE RANGIHIROA SULLIVAN

Applicant

AND

LOVIE HINERAUMOA PULLAR (NEE SULLIVAN)

Respondent

Hearing:	On the papers
Appearances:	M J Wenley for the Applicant
Judgment:	16 September 2020

JUDGMENT OF COOKE J

[1]By application dated 16 July 2020 the applicant applies for orders:

(a)Removing the respondent as the administrator of the Estate of Nan Rangitautiaki Sullivan.

(b)In the alternative giving directions as to the completion of the administration of the Estate.

(c)The costs of and incidental to this proceeding.

SULLIVAN v PULLAR [2020] NZHC 2399 [16 September 2020]

[2]        The application is supported by an affidavit from the applicant sworn 10 July 2020 and a memorandum of counsel in support of the application subsequently filed dated 7 September 2020.

Background

[3]        The proceedings have a longer background. The applicant and respondent are two of the three remaining executors of their mother’s estate. An originating application was first filed dated 4 December 2018 where the applicant sought the removal of the respondent as executor, together with an application for an order to transfer title in the Estate’s principal asset, a house in Napier, to the continuing trustees. That application was opposed by the respondent. After a series of case management conferences and additional considerations (such as the service on beneficiaries) the matter went to a settlement conference before the Associate Judge. At that settlement conference consent orders were made on 8 August 2019 in the following terms:

(a)That Francis Paranihia Sullivan ("Francis") shall have the first option to be exercised and settled by 20 September 2019 to purchase the property at 8 Davidson Avenue, Napier for the sum of $445,000.00 (being the valuation of $465,000.00 obtained less an allowance of

$20,000.00 for agent's commission) and upon settlement Francis shall be entitled to a credit for his share in the Estate.

(b)That if such option shall not be exercised by 20 September 2019 then the property shall be placed on the open market to be sold for a minimum price of $450,000.00.

(c)That the Applicant Te Rangihiroa Sullivan shall be entitled to be reimbursed from the Estate the costs of this proceeding which shall be fixed at $6,325.00 (GST inclusive) together with disbursements of Court filing fees of $400.00, sealing fee $50.00, setting down fee

$640.00 and service fees of $201.25. He shall also be entitled to be reimbursed from the Estate for administration costs paid by him.

(d)That the Administrators shall co-operate and execute all documents reasonably required to fulfil the foregoing orders.

(e)That the Applicant is given leave to apply further. Subject to any such application, the proceeding is to be discontinued (without issue as to costs) upon the winding up of the Estate.

[4]        The applicant explains in her affidavit that pursuant to the consent order the property was sold to Francis, and the Estate’s solicitors Carlile Dowling are holding approximately $387,400 for distribution to eight beneficiaries, and that following the distribution the administration of the Estate will be complete. He goes on to explain that that distribution has not occurred. The applicant says that the respondent asserts that the applicant’s brothers and sister owe a debt to the Estate for the use of the property which should be deducted from their entitlement. The applicant says that there was never any agreement to this, and that the siblings met mortgage rates and maintenance payments. But in any event, as a consequence, no distribution has taken place.

[5]        The application was served on the respondent on 16 July 2020. No opposition has been filed. The notice of application was to be called before the Court at a telephone conference at 3.15 pm on 7 September 2020. Prior to that conference counsel for the applicant advised that he had been in contact with counsel for the respondent, and that he had advised that he was not able to obtain instructions. Counsel suggested that the matter be advanced by and affidavit of service being filed and the Court dealing with the matter on the papers. I agreed to that course. An affidavit of service of the application and associated documents dated 7 September 2020 has subsequently been filed.

[6]        In the circumstances, and to ensure the respondent did not wish to be heard on the application, I subsequently asked the Registrar to contact the solicitor for the respondent to enquire whether she wished to be heard on the application. He indicated that he would take the weekend of 12–13 September to seek to obtain instructions. No communication with the Court subsequently transpired.

[7]        In those circumstances I accept it is appropriate to deal with the matter on the papers.

Assessment

[8]Section 21 of the Administration Act 1969 provides:

21       Discharge or removal of administrator

(1) Where an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.

…

[9]        The proper approach to the application of s 21 at has been addressed by the Court of Appeal in Tod v Tod1 and Frickleton v Frickleton.2 Both decisions adopt the approach set out by Heath J in Farquhar v Nunns by reference to the following factors:3

(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.

(b)This jurisdiction involves a large discretion which is heavily fact dependent.

(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration, but ultimately the question is as to what is expedient in the interests of the beneficiaries.

(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.

1      Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145.

2      Frickleton v Frickleton [2016] NZCA 408.

3      Farquhar v Nunns [2013] NZHC 1670 at [13] (footnotes omitted).

(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.

[10]      The testator’s selection of the executor is important,4 but there interests of the beneficiaries must always be the focus.5

[11]      Here the position is more straightforward as there is only the distribution of the estate to attend to. Moreover the parties have already been engaged in Court proceedings, a judicial settlement conference, with a settlement reflected in a consent order. The affidavit of the applicant indicates that there is now a further issue of disagreement between the respondent and the applicant.

[12]      It is the function of the administrators to make decisions and make the consequential distributions. The executors are required to act unanimously. The respondent’s stance means that there is a deadlock. The fact there is a disagreement does not mean that nothing should be done and the distribution should not occur.

[13]      It was possible for the issue of disagreement to be determined by the Court on appropriate application, but the respondent has made no application. Moreover she has not taken any steps to oppose this application that she be removed as administrator. Removing the respondent as administrator will mean that the applicant and his sister Erina Thrupp will be the remaining administrators, and they can complete the distribution of the Estate. A further sister was named as executor but she died in 2014.

[14]      Accordingly I grant the application for the order set out in [1](a) above. I do not grant the order in [1](c) as no opposition has been filed, but I direct that the applicant’s reasonable costs of this application can be met out of the assets of the estate.

Cooke J

4      Tod v Tod, above n 1, at [27](a); Frickleton v Frickleton, above n 2, at [31]; Crick v McIlraith

[2012] NZHC 1290 at [19]–[20].

5      Frickleton v Frickleton, above n 2, at [33].