Warren v Coote

[2013] NZHC 3099

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV 2013-488-464 [2013] NZHC 3099

BETWEEN  DIANNA MIGHT WARREN and JULIE BLANCHE COOTE

Plaintiffs

ANDJAMES TERENCE COOTE Defendant

CIV 2005-488-22

IN THE ESTATE OF         TERENCE MIGHT COOTE

Hearing:                   22 November 2013 (by telephone) Counsel:      A J Robinson for Plaintiffs

A R Gilchrist for Defendant

Judgment:                22 November 2013

JUDGMENT OF HEATH J

This judgment was delivered by me on 22 November 2013 at 3.30pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Eastland Lega, Gisborne
Vlatkovich & McGowan, Whangaparaoa
Counsel:

A R Gilchrist, Auckland

WARREN and COOTE v COOTE [2013] NZHC 3099 [22 November 2013]

An adjournment application

[1]      Mr J T Coote has applied to the Court to remove his sisters (Ms J B Coote and  Ms  D  M  Warren)  as  administrators  of  the  estate  of  their  late  father, Mr T M Coote.  In the alternative, an order is sought removing all three persons as administrators and appointment of the Public Trust in their stead.1

[2]      Following   a   telephone   conference  on   23  August   2013,   the   removal application was set down for hearing at 11.45am on 28 November 2013, as part of the Duty Judge List in Auckland.   To date, compliance has been made with the timetabling directions that I made for that hearing.

[3]      During the course of the case management conference on 23 August 2013, Mr Robinson, for Ms Coote and Ms Warren, signalled that a further proceeding was likely to be brought following from a Deed of Arrangement dated 13 February 2012. Notwithstanding Mr Robinson’s submission that the removal application should be delayed pending determination of that proposed proceeding, I considered the former should be set down for hearing with the issue being reconsidered if the further proceeding were issued meantime.  The new proceeding was filed on 11 November

2013.2

[4]      Mr Robinson renews his application for adjournment of the removal hearing, pending resolution of the new proceeding.  Mr Gilchrist, for Mr Coote, opposes.

Background3

[5]      The late Mr T M Coote died on 24 December 2004.  Mr Coote’s wife had predeceased him.   He left a Will dated 7 October 2004.   Probate of that will was granted in favour of his three children, Mr J T Coote, Ms Coote and Ms Warren, on

19 January 2005.  Since then, they have administered the estate.

1      This application is brought in the probate proceeding: CIV 2005-488-22.

2      Warren and Coote v Coote CIV 2013-488-464.

3      This summary is taken from the Statement of claim in CIV 2013-488-464.  Mr Coote may not agree with all of its content.

[6]      One of the assets of the estate was a large farm property in Pataua North, in Northland.  It was held in a number of titles.  In the period between 2005 and 2012 the administrators sold some of the land, and realised other assets.  The majority of the estate was distributed to themselves in accordance with the terms of the Will.

[7]      By 2006, about $940,000 was held in the estate solicitor’s trust account.  In addition, there were three adjacent lots each with beach frontage and a further three lots on the inland side of Pataua Road North.  From February 2006, arrangements were put into place to enable the land to be dealt with for the benefit of the three children. This culminated in the Deed of Arrangement of February 2012.

[8]      Ms Warren and Ms Coote contend that their brother was guilty of equitable fraud in that (in brief and incomplete terms) he took steps to enable subdivision of the land that he was to receive without telling his sisters about it.  Yet, the Deed of Arrangement was premised on the then value of the land, without regard to its potential subdivision.  As a result, the fresh proceeding makes allegations of breach of fiduciary duty, unconscionable bargain and misrepresentation.4

Analysis

[9]      The question is whether, as Mr Robinson submits, it is appropriate for the removal application to be deferred pending determination of the equitable fraud claims.

[10]     Mr Robinson contends that there is no reason why the identity of personal administrators should change while the new proceeding is prosecuted.  On the other hand, Mr Gilchrist, for Mr Coote, submits that an order deferring resolution of the removal applications will have the effect of freezing distribution of remaining funds under the Deed of Arrangement, without any application having been directed to that specific topic.  That is because the present administrators will not be able to agree on distribution.

[11]     In my view, the application for removal should proceed.  It is independent of the equitable fraud claims.   However, the way in which those claims are couched will necessarily be relevant to determination of the removal application.

[12]     Mr Coote should not be deprived of the opportunity to argue, notwithstanding the issue of the fresh proceeding, that the circumstances justify removal of administrators, on either of the bases advanced.5

[13]     No prejudice will be caused to Ms Warren and Ms Coote.  If Mr Gilchrist’s application were unsuccessful, either on the merits or because it is premature, Mr Robinson will be able to seek costs against the background of his unsuccessful application for an adjournment.

[14]     The application for an adjournment is refused.  The removal application will be heard at 11.45am on 28 November 2013 in Auckland, as previously directed.

[15]     I reserve costs on the adjournment application.  They shall be dealt with by the Judge who hears the removal application.

P R Heath J

Delivered at 3.30pm on 22 November 2013