Wyllie v Firmin
[2022] NZHC 527
•21 March 2022
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2021-463-000046
[2022] NZHC 527
UNDER the Land Transfer Act 2017 IN THE MATTER
of an application for removal of a caveat and for an order for possession of a property
BETWEEN
CORNELIA FRIEDERIKE MARIA WYLLIE and ABIGAIL JUTTA LATHAM
Plaintiffs
AND
TIMOTHY RICHARD FIRMIN
Defendant
Cont/…
Hearing: 18 November 2021 Appearances:
H Thompson for Ms Wyllie and Ms Latham as executors of the Will of Anthony Lawrence Firmin
S Iorns for Timothy Firmin
Judgment:
21 March 2022
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 21 March 2022 at 4.30pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
McMahon Butterworth Thompson, Auckland Upper Hutt Law Ltd, Upper Hutt
S Iorns, Barrister, Wellington Copy to: Mr JA Porter
WYLLIE & LATHAM v FIRMIN [2022] NZHC 527 [21 March 2022]
CIV-2021-463-000069
UNDER Section 21 of the Administration Act 1969 IN THE MATTER
of an application to remove and replace the executors of the estate of Anthony
Lawrence Firmin
BETWEEN
TIMOTHY RICHARD FIRMIN
Plaintiff
AND
ABIGAIL JUTTA LATHAM and CORNELIA FRIEDERIKE MARIA
WYLLIE as executors of the estate of Anthony Lawrence Firmin Defendants
Introduction
[1] The executors of the will of Mr Anthony Lawrence Firmin (“Tony”)1, two of his six children, have filed an application to remove a caveat lodged by their brother, Mr Timothy Richard Firmin (“Timothy”), over a property that their father, Tony, and mother, Jutta Firmin, occupied and managed during their lifetime as an orchard (“Caveat Application”).
[2] Timothy opposes that application, claiming that the caveat ought to be sustained because he has a right of first refusal to acquire the property at market valuation (determined by registered valuation). Timothy has brought separate proceedings asserting that this right of first refusal to acquire the property was a testamentary promise made to him by Tony or, alternatively, was a term of the will.
[3] Ordinarily a testamentary promises claim will not support a caveat. But in this case Timothy’s interest in the land is recorded on the caveat in terms of the right of first refusal and does not rely on it being a testamentary promise.
[4] In addition to opposing the Caveat Application, Timothy has brought an application seeking the removal of the executors by way of summary judgment. The executors are Timothy’s sisters, Ms Cornelia Wyllie and Ms Abigail Latham. Timothy relies on s 21 of the Administration Act 1969 and submits that it would be expedient for the executors to be removed including as a result of their bringing the application to lapse the caveat and for vacant possession when it is clear that there is a serious question to be tried.
[5] Timothy submits that the executors have disregarded legal advice which strongly urged Cornelia to renounce her role as executor from the outset and urged them to obtain a further valuation if they were unhappy with the first valuation obtained.
1 I refer to the members of the Firmin family by their first names to avoid confusion and do not intend any disrespect in doing so.
[6] In the Caveat Application, in addition to removal of the caveat, the executors seek orders for vacant possession of the property as Timothy is still residing at the property. The executors say they require vacant possession so that they can carry out repairs and sell the property to give full effect to the will. Whether an order for vacant possession ought to be made depends on the position reached in respect of the caveat and regarding the position of the executors. I therefore consider this question following consideration of whether the caveat ought to be removed and the position of the executors.
Issues
[7]The issues are:
Caveat Application
(a)Is it reasonably arguable that Timothy has a right of first refusal to purchase at market value?
(b)If so, is the alleged right of first refusal an interest in land capable of supporting a caveat?
Application to remove executors
(c)Is it expedient for the executors to be removed?
(d)Do the executors have a reasonably arguable defence to the application for their removal and replacement with an independent executor?
Application for order for possession
(e)Given the answers to the above, is it appropriate to make an order for possession?
Factual chronology
[8] Before setting out the chronology, I record that the evidence did not include a complete set of correspondence between the parties or their lawyers. However, the evidence is sufficient for both the Caveat Application and the application to remove the executors as neither requires the respective applicant to prove their case to the civil
standard. This is because the outcome of the application to remove the caveat depends only on whether Timothy has a reasonably arguable interest in the property and the application to remove the executors depends on whether it is expedient. I discuss the relevant legal principles further below but first set out a summary of the relevant factual background as far as the evidence filed discloses.
[9] Tony and Jutta Firmin had six children. They purchased an orchard in Whakatāne in the 1970s. In the 1980s the land was subdivided, with a portion sold to the neighbours to clear the mortgage and a section gifted to one of the children, Abigail Latham.
[10] Tony passed away on 29 February 2020, having survived his wife, Jutta, by only seven weeks and two days.
[11] The will left by Tony was dated 28 February 2020. Cornelia and Abigail were appointed as Tony’s executors and trustees. The will is straightforward. In summary, the effect is to equally distribute the estate amongst his children, after allowing for a gift of $1,000 to the Mountainside Lutheran Church of Auckland. An adjustment is required to take account of the gift of land to Abigail which Tony and Jutta had made approximately 23 years ago referred to above.
[12] The most substantial asset in the estate is the property at 1B Luxton Road, Awakeri in the eastern Bay of Plenty over which the caveat has been lodged. It is a rural property of approximately 3.5 hectares where Tony and Jutta lived and carried on a feijoa orchard and winemaking business.
[13] The day before Tony died his lawyer, Mr Peter Marshall, visited him in hospital to re-sign the will (as only one witness had witnessed the earlier signing). At this meeting Mr Marshall took Tony through a letter by Mr Marshall dated 28 February 2020. The letter refers to recent discussions including a meeting on 12 February 2020. The letter attaches a copy of an earlier letter by Mr Marshall dated 3 February 2020 and notes that the comments in the 28 February 2020 letter refer to the paragraphs in the earlier letter. The 28 February 2020 letter needs to be understood against the background of the earlier letter.
[14] The 3 February 2020 letter was longer and dealt with a number of matters including Jutta’s estate, Tony’s will and ongoing arrangements for the operation of the orchard business. The letter discussed enduring powers of attorney for Tony, recording that Mr Marshall’s firm also acts for Abigail and Cornelia so a lawyer from another firm would need to attend to the necessary documents if they were to be appointed.
[15] At paragraph 7, under the heading “Firmin Family Trust”, the 3 February 2020 letter says that amongst the documents that Tony had recently provided there was a copy of a trust deed signed in 1994. The letter records however that no income was received, no debts were owed and no assets were held by the trust. Mr Marshall writes that recently Tony had contemplated reviving the trust but Mr Marshall sets out issues with doing so and recommends that unless there are good reasons to do so, Tony should not revive it at that time.
[16] The 3 February 2020 letter further records that Tony would like to replace Petra with Thomas (Timothy’s younger brother) as a joint executor with Cornelia for Tony’s will and Tony’s concern about ongoing arrangements for the operation of the orchard business. The letter states that Timothy has been assisting with the orchard in recent times (especially while Tony was looking after Jutta) and that Timothy had been supportive and active with the orchard work without pay for the last year or so. The letter records that Tony considers Timothy is owed about $20,000 in relation to this work, to be paid at a time when the business can afford it. The letter states that Tony would prefer one or other (or a combination) of family members formally take over the operation of the business. Mr Marshall suggests this could involve a sale of the business and then a formal lease of the land. The letter further states “[w]e have received a few emails from Abi and Cornelia recently which touch on some of the details mentioned above – but we aren’t inclined to get into issues on your behalf until you are well enough to instruct us on them”.
[17] The 28 February 2020 letter records in relation to paragraph 7 of the 3 February letter (relating to the Firmin Family Trust) but under the heading now "[t]he orchard business and land”:
7. You agree that Trust is not an appropriate vehicle to establish and use just now for the orchard business. However you are clear that:
i.with your own health challenges you don’t see yourself being able to continue to take a leading role in the running of or work on the orchard;
ii.you do wish to be able to remain living in the orchard homestead.
After much thought about alternative structures, your preference is to keep things simple and offer the orchard for sale:
·First to Tim,
·But if he is unable to afford it or does not wish to do so then to any other child or combination of children of yours
at a fair market value (to be determined by registered valuation) and subject to a life interest for you to remain living in the home at no cost.
If such a sale proceeds, then you do not consider there should be any separate or additional value in the business conducted by White Goose Limited – and the orchard business should simply pass with the land on settlement.
Your overall intention here is to achieve fairness amongst all of your children so that no one feels aggrieved or taken advantage of – hence the reference to a registered valuation approach.
[18] The letter records that Tony has reconsidered the amount owed to Timothy and that the fair amount in all the circumstances is $10,000.
[19]The letter further states under the heading “Communications and Disclosure”:
You have earlier indicated you are happy with full transparency amongst the family and so I intend copying this report and attachments to Tom to circulate it and so everyone knows how things are being approached at this time by you.
[20] Following the meeting, Mr Marshall emailed Thomas as he had held the enduring power of attorney for Tony since 14 February 2020, replacing Petra (who lived in Hong Kong at the time) and Cornelia (who lived in Vanuatu). Mr Marshall’s email attached the letter of 28 February 2020, referring to it as an “updating report”. The email said that Tony had confirmed that the updating report reflected his instructions at present and that he had Tony’s authority to circulate it to Thomas and the other children. Mr Marshall sent the email at 7.02pm and asked Thomas, as Tony’s attorney, to forward the email and the attachments including the letter and will to the other siblings as soon as possible.
[21] Mr Marshall also made a file note of his visit to Tony on 28 February 2020 in which he recorded (amongst other matters) that he took Tony through the section headed ‘[t]he orchard business and land’ referred to above and Tony confirmed that Peter had correctly recorded his approach and wishes.
[22] Sadly, Tony passed away at 3am the following morning, 29 February 2020. Thomas had not yet seen Mr Marshall’s email but forwarded it to his siblings at
8.08 am that morning as requested.
[23] Prior to obtaining probate, Mr Marshall advised Cornelia to renounce her role as executor for a number of reasons including that she may have a conflict of interest arising from previous dealings between Cornelia and her business interests and her parents and their business interests. Cornelia, however, did not agree to renounce her role.
[24]In August 2020 Mr Marshall wrote to the executors as follows:
We understand Tim has indicated a desire to purchase the orchard property.
·When the valuation comes to hand he should be copied in to see if he wishes to and is able to proceed at the assessed value.
·If not – we recommend other family be invited to purchase at that price and otherwise the property be marketed for sale.
[25] The executors obtained a valuation from Brian Phipps at Bay Valuation Services on 16 September 2020. This valuation assessed the value of the orchard at
$800,000 (“BVS valuation”).
[26] Following circulation of the valuation to the beneficiaries, Cornelia sent an email to her siblings on 23 September 2020 as follows:
Dear Siblings,
My role as the executor is to ensure that the beneficiaries are all treated fairly. Dad wanted us to get a market valuation. To deny a tender process is to deny the rights of every beneficiary to know what is the current market value of 1B Luxton road. If there is an offer by tender that exceeds Brian (sic) valuation – this would benefit all. It does not stop Tim putting forward an offer as to what he thinks is a fair price to pay the estate.
The letter of instruction included the phrase if he (Brian) required any further clarification, he was to write to us both. He did not. His valuation was inclusive of GST and included items that are part of the FAR not the land and buildings.
I have not gone to the estate lawyer but offered a simple and cost less option to move this forward and to benefit all. As executors we have this responsibility.
Regards Cornelia
[27]Abigail replied to Cornelia on the same day copying in her siblings as follows:
Dear Cornelia
1. …
2. …
3.The valuation methodology is stated in the WILL and DAD’s report, ref the letter of instruction. The valuation was requested in these exact terms.
4.It is not up to the estate to question valuation methodology as stated in the WILL.
5. …
6.It is not up to the estate lawyer to provide any approximations, they are not valuers, nor is what the WILL states.
7.You have taken legal advice – you are entitled to take legal advice on your own matters and pay for that.
8.Your own enquiries including rateable valuations are your own concern and not relevant to instruction.
9.We were not instructed to get rateable valuations, but engage a professional independent valuer to do fair market value.
10. NO tender process agreed to.
11.The report and WILL clearly outline the process: 1. Fair market valuation. 2. Tim first option to buy. Simple.
…
I am deeply disappointed that once again, we are back to wasting time and money making the lawyers rich in order to progress estate matters on what has been a simple and agreed instruction and process. This is not helpful or fair.
Regards Abi
[28] One of the other siblings, Ms Giselle Firmin, also replied to Cornelia on the same day saying:
I’m sorry, but I disagree completely with the notion of a tender process. The will states ‘market value’, and there does not seem to be any alternative interpretation, or doubt about what Dad meant.
If the tender process provides a higher price than market value, it would be unreasonable to expect Tim to pay this. Not fair on him.
Likewise, if the tender price is lower, it’s not fair for 5 children to accept this.
I can’t understand why you are suggesting this. I also don’t think, that the chn should need to consider this proposal, because what was stated in the will is clear AND fair to all.
If I’m being a dimwit, pls correct me, but I’m having difficulty seeing/understanding your reasoning.
Love G
[29]Early the following morning, Cornelia replied:
Dear All,
As Abi has pointed out there is the will and last testament and there are the lawyers notes.
No where in the will does it say that Tim is to get first option. No where in the will does it say a registered valuer in calculating the value of 1 B Luxton Road.
The lawyers notes makes suggestions to gain a valuation but this is up to the executors to be ethically diligent and for legal interpretation we will refer back to the estate lawyer. The executors have discussed prior to this that the intending purchaser get his or her own valuation. Instead we have paid for this out of the estate funds. If anyone wishes to use this valuation for the bank then they will have limited themselves to a lower figure.
The tools left for me to decide what the market forces are is to consider a valuer, auction, tender and history, offers and discussions with Dad. One sets the terms of tender. Not any tender is accepted and I will offer to Tim first option as per Dads wishes (not will) to honor his promise to Tim to have first option. However he has left the executors to be diligent in establishing the true market value. It does not mean I take any offer but Tim has the option to match a realistic market price.
What the property would sell for if it was publically listed? Dad has had a valuation done in the past and refused an offer of $680,000. I am also rejecting this valuation. This valuation has errors which could be attributed to clarifications he received on site and not by corrected email. In effect Brian says the value of land and buildings is
$680,000. Read the valuation and note that the valuer has included GST on a property that is in personal names. Deduct the GST and fees, deduct the FAR’s and you will realize the net. The instructions were clear – market value of land and buildings.
[30]Petra responded:
Hi Cornelia,
Glad to see you acknowledge it’s our parents wishes to offer sale to Tim first. Whether or not it’s in the Will, or in the notes, we all can agree that was their wishes and that is established.
Good that you intend to honour that.
In my opinion that if you go ahead to tender, any person could put in any offer. It is not an accurate method of determining market value for a number of reasons.
… P
[31]Still on 24 September 2020, Cornelia replied:
Dear Petra
May I allay everyone’s concerns.
The tender process is the fairest option of establishing a current market value.
…
I asked Abi to put some figures on paper as to the various scenario arising from the valuers report before it went out to family. The report was distributed prior to a full discussion, which we are now having. Without the figures there are some misconceptions. Let me try and clarify the numbers.
Brian the valuer suggests the property is worth $680,000. All properties listed by the valuer sold on or above their rateable value. All properties were rated as land and buildings. A google view shows the lay of the land in each of these properties which has been compared to 1 B. Therefore it is right to question the valuation of
$680,000 and not a figure closer to the rateable value of $810,000. Please feel free to do your own market search and digest what is being presented. I have as a duty as an executor and I have an interest as a beneficiary.
…
Personal sales are GST free and in this case it is not the White Goose Company that is selling it. The property has been defined as lifestyle and not commercial. No need to add or subtract GST of 15%. Dad knew what the value of the property was. He stuck to his guns and above all wanted fairness to all.
…
[32]Petra responded the same day saying:
Dear Cornelia,
My concerns are not allayed, sorry. I don’t agree with tender process, or using a real estate agent for a private family sale, for reasons already explained.
My opinion stands that the registered valuation price of 800k should be offered first to Tim, then if he declines it, the rest of the family as per our parents wishes.
I don’t know why you keep deducting GST and saying 680k when the property is in private names, and it’s not a business selling it. Perhaps the GST question needs to be raised with the lawyer/accountant.
P
[33] A few hours earlier, on 24 September 2020, Abigail wrote to her other siblings/beneficiaries, without including Cornelia in the correspondence, saying:
Subject: Valuation 1A Luxton Road etc
Hi all,
I have not included Cornelia in this email, as I do not wish to argue with someone who is not listening, nor continue a discussion that is not heading anywhere positive. Time to take a breather.
I just wanted to advise:
1.I have forwarded the main thread of just Cornelia and my responses to the lawyer and asked him to act on behalf of the estate in resolving this matter including (sic)
2.My concern about the co-executor not following agreed process, the legal advice, the Will and accompanying report and acting in an uneven handed manner.
3.I do not support, and do not approve her ‘valuer’ conducting a valuation on 1B Luxton Road. This is outside agreed process.
4.Cornelia did not ask me to “put some figures on paper as to the various scenario arising from the valuers report before it went out to family”. Our very brief discussion when I asked if we could forward valuation was that she wanted a couple of days to look over it properly.
I appreciate that you all are supporting Mum and Dad’s wishes and proper process.
Hopefully Cornelia can take some time and space to reflect and do the right thing, the right way.
Abi
[34] Following the above correspondence, on 6 October 2020 Cornelia and Abigail sent Timothy a “Letter of Invitation”. In the letter they invited Timothy to make an offer to purchase the property for market value. The letter stated:
Your offer should be current market value plus GST if applicable. We advise that your offer will be considered in line with other current market indicators which may or may not include the process of tender. You will be given first option to meet those market indicators with a counter offer acceptable to the estate beneficiaries. We would expect a settlement date on or around the 15th November 2020.
[35] Timothy appears to have forwarded a copy of the Letter of Invitation to Petra on 10 October 2020 as on 11 October 2020 Petra sent an email to Timothy, copied to Giselle and Thomas, saying:
I’m not sure how to interpret all that. My opinion is the same as before, registered valuation should be the price.
Market indicators are just that, “indicators”. Wish you all the best Tim, hope you can buy it.
[36] On 16 October 2020 Timothy provided the executors with a written offer to purchase the property for $800,000 plus GST on the basis of the BVS valuation, subject to finance.
[37] On 17 October 2020 Timothy lodged a caveat over the property. The estate or interest claimed in the caveat is described as follows:
Pursuant to an offer to purchase the affected Record of Title by the caveator on 16 October 2020 (triggering the event), made pursuant to a right of first refusal afforded to the Caveator.
[38] On 6 November 2020 the executors wrote to the beneficiaries advising that they had received Timothy’s offer but that their due diligence had shown a wide discrepancy in appraisals for the property ranging from $800,000 to $1.6 million. I note that the executors have not provided any evidence of an appraisal or valuation valuing the property at $1.6 million.2
2 A copy of the 6 November 2020 correspondence is not included in the evidence but is pleaded in Timothy’s statement of claim in the testamentary promises claim (CIV-2021-463-56), a copy of which is annexed to Timothy’s affidavit. No statement of defence had been filed at the time of the hearing but Abigail responds to the allegations in the statement of claim in her reply affidavit. Abigail does not respond to this paragraph and so I proceed on the basis that this is undisputed.
[39] On 26 November 2020 Mr Marshall, as lawyer for the executors, sent a letter rejecting Timothy’s offer and making a counter offer of $935,000 plus GST. The letter said the executors had carried out the due diligence referred to in the Letter of Invitation and that:
Accordingly, a range of options have been examined, including requesting the valuation carried out in September to be corrected and updated. The current conservative average estimated market value of all the options is $935,000 plus GST.
[40] If Timothy did not accept the counter offer, the letter said an invitation would then be made to all of Tony and Jutta’s other children to make an offer to purchase on the same terms. If more than one offer was received, the executors advised that they would invite higher offers before negotiating a sale. The letter further advised that if the counter offer was not accepted by Timothy, the executors were putting Timothy on notice that he would need to vacate the property by the end of February 2021.
[41]Timothy asked the executors to justify the basis for the counter offer at
$935,000.
[42] There appears to have been further correspondence at this stage between lawyers for Timothy and for the executors as on 10 December 2020 Mr Marshall emailed Cornelia and Abigail:
I’m not sure you appreciate the seriousness of the matters raised in Mr Carruthers letter [lawyer for Timothy] – much of which as I have mentioned is not unexpected. At this stage, that for the reasons touched on there, I expect there may be fair to good prospects of success for an application for your removal as executors. Associated with that may be real risks of personal liability for damages and/or costs.
…
I repeat the advice that if the registered valuation is considered faulty, that fault should be verified by proper valuation evidence (ie another registered valuation).
·Reliance by executors on assumption or opinion of non- experts over a registered valuation is very risky and cannot be advised.
·Our strong advice is to obtain another valuation – whether it supports the executors assessment of value or not, it will be useful in guiding the executors next course of action from here on.
[43] Mr Marshall’s letter then proposed the executors obtain another registered valuation and ask the original valuer to update his valuation. Following that, the executors were advised to offer to sell the property to Timothy at a purchase price being the midpoint between the two valuations.
[44] There was further correspondence between Mr Marshall and the executors on 17 and 18 December 2020 with Mr Marshall writing to Abigail and Cornelia on the evening of 18 December 2020:
Below is my short email exchange with Tim’s lawyer this afternoon.
I have your 3 emails from this afternoon – which do not serve to clarify anything.
·The immediate focus is on trying to sensibly manage the sale of the orchard.
·Your responses complicate things by introducing other complaints about the condition of the orchard, Tim being rent free etc etc.
·Raising such things now when they have effectively been put to one side/accommodated by you till now is only going to:
oEscalate and complicate matters.
oPossibly give rise to complaints about poor executor management.
[45] Mr Marshall then proposed a reply to Timothy’s lawyers which suggested advising that the executors were arranging another registered valuation and inviting the initial valuer to update his valuation and that the executors would then offer to sell the orchard at the midpoint between these valuations. The executors do not appear to have accepted this advice.
[46] Mr Marshall confirms in his affidavit that his retainer was terminated in December 2020.
[47] On 21 December 2020 the executors emailed their siblings providing an update on the sale of the property. The update recorded that Timothy had made an offer of
$800,000 inclusive of GST and the White Goose Company assets subject to finance. The update confirmed that this offer was not accepted and that the executors counter offered for $935,000 plus GST on 4 December 2020, which Timothy had asked to be
justified. I note the dates in the update are not consistent with copies of the correspondence in evidence.
[48]The update then records that the executors had received an offer from Petra for
$935,000 plus GST with no assets of White Goose Company included, on an as is where is basis and conditional on finance.
[49] The report says the executors were prepared to sign Petra’s offer on behalf of the beneficiaries and that it was being checked by their legal representative. The report confirms that Petra’s offer is first in line and has met the executors’ reserve. The executors expressly record that they are not required to provide a registered valuation to justify their reserve. The report encouraged the beneficiaries to prepare a back-up or better offer by 15 January 2021.
[50] The report does not refer to the further term of sale recorded in Petra’s offer that:
The purchaser acknowledges that within 2 working days after the date of this agreement, the vendor will offer the property for sale to Tim Firmin on the same terms. This agreement is conditional on Tim Firmin not accepting the offer made to him within 5 working days after the date of this agreement.
[51] Petra’s offer did not go unconditional. Abigail explains in her reply affidavit (although Petra did not in her affidavit) that Petra subsequently withdrew her offer because of Timothy’s caveat and legal proceedings and because Petra was unable to sell her Auckland property within the intended timeframe.
[52] The next correspondence in evidence is a letter dated 15 April 2021 from new lawyers for the executors, Mr Thompson from McMahon Butterworth Thompson, making a further offer to sell the property to Timothy at the same price as the counter offer of $935,000.
[53] On 26 May 2021 Mr Thompson then wrote to lawyers for Timothy giving notice to vacate the property by Monday, 5 July 2021.
[54] On 1 June 2021 Timothy’s lawyers wrote to Mr Thompson expressing disappointment at Mr Thompson’s letter of 26 May 2021 “which is of no assistance to what already is a volatile and complex situation” and continuing “[t]his is something you are well aware of as we have canvassed at length via telephone conversations”. Timothy’s lawyer, Mr Iorns, then requested that an Agreement for Sale and Purchase be forwarded recording the terms as proposed in the April letter.
[55] On 9 June 2021 Mr Thompson responded that the April 2021 offer had expired but that if Timothy presented them with an offer on those terms the executors would consider it. The letter recorded that the notice to vacate would not be withdrawn until a binding contract was entered into on terms acceptable to the executors.
[56] On 24 June 2021 Timothy’s lawyer sent a letter attaching an offer to purchase the property for $775,000 together with a copy of a valuation dated 10 June 2021 obtained by Timothy for banking purposes valuing the property at that price. This valuation was $25,000 less than the original valuation provided by BVS to the executors.
[57] Mr Thompson responded on 30 June 2021 rejecting the offer and describing it as “$160,000 less than the price which [Timothy] indicated, on 1 June, that he is willing to pay”. The letter continued to rely on the earlier notice to vacate and finished by saying it was in “the general best interests of beneficiaries of the estate to obtain vacant possession so that overdue maintenance can be carried out before a decision is made regarding the future of the property, which may involve selling or renting it on the open market”.
[58]Timothy did not vacate the property in accordance with the notice to vacate.
[59] On 9 July 2021 the executors filed an application to remove Timothy’s caveat together with orders for vacant possession.
[60] On 19 July 2021 Timothy filed proceedings (CIV-2021-463-56) pleading four causes of action:
(a)a claim for an order enforcing a testamentary promise of a right of first refusal to purchase the property at market value being $775,000 including GST; or
(b)in the alternative, orders revoking probate and declaring the relevant portion of Mr Marshall’s letter of 28 February 2020 as a codicil to Tony’s will pursuant to s 14 of the Wills Act; and
(c)a testamentary promises claim for unpaid wages of $24,617.04; and
(d)a claim for a “following order” in respect of the orchard pursuant to s 49(3)(a) of the Administration Act.
[61] On 27 July 2021 Mr Thompson sent an open letter to Timothy’s lawyers (stating that it would be shared with other beneficiaries) which included under the heading “[T]he only material dispute is over market value”:
“It is plain that substantially the most significant issue between the parties is the value of the property at 1B Luxton Road, Awakeri”.
[62] Mr Thompson’s letter went on to say that the valuation of $775,000 relied on by Timothy was a valuation obtained for mortgage lending purposes which “often set the value of properties below that obtainable by arm’s length sale on the open market” and that the “executors believe that Ms Mikkelson’s valuation understates the true market value of the property by at least $175,000”.
[63]Mr Thompson’s letter then stated:
“By way of a cross-check, the executors advise that they have received an unsolicited arm’s length expression of interest for the property of
$950,000 plus GST, if any”.
[64] The letter said the executors would still be prepared to accept an offer from Timothy of $935,000 provided it was received by 6 August 2021, was only subject to finance and settlement was within a reasonable time.
[65] Timothy’s lawyer, Mr Iorns, replied on the same day asking Mr Thompson to supply “by return the arm’s length offer” Mr Thompson had referred to. Mr Thompson responded that he did not refer to a letter offer, but only an expression of interest and that he was instructed it was an oral enquiry. Mr Iorns then replied seeking full details of the oral enquiry.
[66] Abigail confirms in her affidavit in reply that the verbal offer came from Mr Thomas Beyer.
[67] In his affidavit dated 3 September 2021, Thomas records that Mr Beyer is Cornelia’s business partner, annexing earlier emails from Cornelia confirming this. Thomas further records that he understands Mr Beyer has had issues with the FBI and Vanuatu Banking that have been reported in the media, attaching copies of the reports.
[68] Cornelia filed an affidavit on 16 November 2021 (her first and only affidavit in respect of either application) and does not dispute those matters.
General principles regarding caveats
[69] The right to lodge a caveat is provided by s 138 of the Land Transfer Act 2017 with the interest claimed required to fall within the interests described in that section.
[70] As s 138(1)(a) makes clear, the interest in land does not have to be registerable, but a lesser right, such as a personal or contractual right is not enough.3 The caveator must show an entitlement to a beneficial interest in the land under the caveat.4
[71] A caveat must contain a description of the estate or interest claimed by the caveator (which must be stated with sufficient certainty) and details of how the estate or interest claimed is derived from the registered owner. 5
3 See commentary in DW McMorland and others Hinde McMorland & Sim Land Law in New Zealand (online ed, LexisNexis) at [10.009]–[10.010].
4 Guardian Trust & Executors New Zealand Ltd v Hall (No.2) [1938] NZLR 1020 (CA) at 1025; and Philpott v NZI Bank Ltd (1989) 1 NZConvC 190,246 (CA), [1990] ANZ ConvR 242 at 246.
5 Land Transfer Act 2017, s 138(3) and Land Transfer Regulations 2018, sch 2.
[72] In applications both to remove and sustain caveats, under ss 142 and 143 of the Land Transfer Act 2017, the onus is on the caveator to show a reasonably arguable case for the interest claimed.6
[73] The principles governing an application that a caveat not lapse are settled, with the Court of Appeal providing a helpful summary in Philpott v Noble Investments Ltd:7
[26] The applicable legal principles which governed the application to sustain the caveats, and which now govern this appeal, are as follows:
(a)The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;
(b)It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;
(c)The summary procedures involved in applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained — either because there is no valid ground for lodging it in the first place, or because such a ground no longer exists; and
(d)When an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.
[74] From the above, it is clear that the caveator must only establish a reasonably arguable case. They are not required to make out their claim on the balance of probabilities as counsel for the executors appears to submit. As the Court of Appeal stated above, a caveat will only be removed if it is “patently clear” that the caveat cannot be maintained.
[75]In this case the interest claimed in the caveat is described as follows:
Pursuant to an offer to purchase the affected Record of Title by the Caveator on 16 October 2020 (triggering event) made pursuant to a right of first refusal afforded to the Caveator.
6 Sims v Lowe [1988] 1 NZLR 656 (CA) at 660.
7 Philpott v Noble Investments Ltd [2015] NZCA 342 (footnotes omitted). Recently approved in Melco Property Holdings (NZ) 2012 Ltd v Hall [2021] NZCA 184 at [19] and [36]; and Wallace v Studio New Zealand Ltd [2021] NZCA 392 at [40].
[76] The next step is to consider whether it is reasonably arguable that Timothy has a right of first refusal as the executors submit that it is not reasonably arguable that he does.
Is it reasonably arguable that Timothy has a right of first refusal to purchase at market value?
[77] From the evidence outlined above, in my view, it is reasonably arguable that Timothy has a right of first refusal to purchase the property at market value. The four sisters appear to confirm in their email correspondence in September 2020 that Timothy had been promised a right of first refusal.
[78] In Thomas’s affidavit sworn on 9 November 2021 he states that he specifically asked Tony about the property on a trip to his mother’s grave with Tony on 13 February 2020, less than two weeks before Tony died. Thomas’s evidence is that Tony “confirmed and reiterated that the property was to go to Tim as the first option to purchase”.
[79] Thomas says that he conveyed Tony’s wishes to Abigail later that day who was visibly upset on receipt of the information. Abigail’s evidence is that she does not recall this conversation. Thomas’s evidence in reply is that he finds it incredible that Abigail has no recollection of that conversation when aspects of it are referenced in Facebook Messenger conversations.
[80] Tony’s lawyer (and the executors’ first lawyer), Mr Marshall, says in his affidavit that any sale to Timothy was not a will instruction and that he was not aware of any testamentary promise. This is not however determinative of whether there has been such a promise in view of the siblings’ evidence.
[81] Mr Marshall says in his evidence that if the sale of the property had gone ahead prior to Tony’s death, that it would “have had a practical impact on the mechanics and implementation of Tony’s will, but not the intended outcome of achieving equality and fairness amongst his children”. Furthermore, Mr Marshall’s evidence is that completion of a sale to Timothy or any other family member would not necessarily have triggered a review or change to the will.
[82] This is important as Mr Marshall’s evidence is that neither Tony or Jutta had ever told him that they had promised that Timothy would receive any “benefit” after their deaths as a consequence of providing services to them. If a sale to Timothy on the basis of a registered valuation would not have required any adjustment to be made in the will, then the sale cannot have been regarded as a “benefit” as Mr Marshall’s evidence is clear that Tony told him that he wanted family arrangements to be fair between his children. If there was a benefit the will would have required amendment.
[83] Mr Marshall does say in his affidavit that if Tony had told him he wanted Timothy to have a right of first refusal when he died, he would have adjusted the will. This is a matter however that needs to be explored in a full hearing for the reasons that follow.
[84] Mr Marshall records in the 3 February 2020 letter that his firm also acts for Cornelia and Abigail. The letter further records that emails had been received from Abigail and Cornelia which touch on some of the details mentioned in the letter but that Mr Marshall is not inclined to get into these issues on Tony’s behalf until Tony is well enough.
[85] Prior to the 3 February 2020 letter, Cornelia sent an email to Mr Marshall on behalf of Thomas, Abigail and herself (dated 24 January 2020) setting out in confidence at the start of the email concerns that were being provided to Mr Marshall “to give him context in his professional guidance for Tony”. The email then recorded that there had been indications that a family member would challenge the wills to gain ownership by gifted arrangement, inheritance and part cash for services of support. The email also referred to witnessing bullying and verbal abuse of Tony by Timothy.
[86] This email was sent several days after the setting up of a chat group by Abigail on Facebook Messenger between Cornelia, Abigail and Thomas on 17 January 2020. Abigail’s first message in that group was:
Maybe a chat together on strategy so I or we don’t say something that is counterproductive. This is war.
[87] Abigail accepts in her evidence that this comment was made in response to what she saw as Timothy positioning himself to take over the property. She explains that it was an overreaction but says that she was very stressed at the time.
[88] Thomas’s evidence is that it was well known before Tony’s passing that the property was to be offered to Timothy and that there was sibling animosity directed towards Timothy as a result of this. This animosity culminated in the Facebook Messenger group referred to above. As a member of the group, Thomas says that he is disappointed that he did not call out the behaviour of the group earlier although his involvement was short lived as he was removed from the group by Abigail on 14 February 2020.
[89] The last message recorded by Cornelia prior to Thomas’s removal was “… I don’t believe Dad is foolish enough to sign over to Tim”.
[90] Although the executors point to the failure to refer to the right of first refusal in the will as showing there was no such right, it is not in my view determinative of whether there was such a right. As I say above, these are matters that are required to be examined in a full hearing.
Is the right of first refusal alleged capable of supporting a caveat?
[91] In Motor Works Ltd v Westminster Auto Services Ltd8 Tipping J considered whether a caveat ought to be sustained where it had been lodged to protect a right of first refusal.
[92] Motor Works concerned a lease containing a provision giving the lessee a right of first refusal to purchase the premises. The right was triggered if the landlord wished to sell the property. In that case the lessor was required to offer the premises to the lessee for the price the lessor was prepared to accept from any third party.
[93] Tipping J identified four stages in the progression from a mere right of first refusal to a contract:9
8 Motor Works Ltd v Westminster Auto Services Ltd [1997] 1 NZLR 762.
9 At 765.
(a)when all that exists is a bare right of pre-emption;
(b)when a triggering event occurs that requires an offer to be made to the person with the right of pre-emption;
(c)when an offer has been made pursuant to the right of pre-emption;
(d)when a contract results from the acceptance of such offer.
[94] Tipping J held that it was clear that at stage one ((a) above) there was no interest in land and that at the third and fourth stages ((c) and (d) above) there was such an interest. In Tipping J’s view the difficulties arise at stage two ((b) above) where an event has occurred requiring the vendor to make an offer but no such offer has yet been made. After discussion, his Honour held that a caveatable interest will arise at stage two when the court can order specific performance.10 Whether the Court can order specific performance will depend on whether the triggering event for the right of first refusal has occurred and whether there is certainty of terms.11
[95] In Motor Works the lessee declined a formal offer to sell both the two premises and the business for a stated price. The lessee had confirmed however that it was still interested in buying the premises alone. Tipping J allowed the caveat to lapse, as in his Honour’s view the lessee was back to being a holder of a bare right of pre-emption, stage one in his analysis, because Westminster Auto had made an offer to sell and Motor Works had refused it. However, Tipping J continued an interim injunction to protect Motor Works while the true construction of its right of first refusal was determined.
[96] In Botany Land Development Limited v Auckland Council12 the Court of Appeal confirmed the approach in Motor Works and held that the Council had an interest in the land sufficient to support a caveat arising from a right to an order for specific performance of the first refusal obligations owing to the Council.
10 At 766.
11 At 765–766. As Tipping J said in that case “[t]he Court cannot act without sufficient certainty of terms”.
12 Botany Land Development Limited v Auckland Council [2014] NZCA 61.
[97] In these proceedings Timothy claims he has a right of first refusal either as a testamentary promise or through a codicil to the will.
[98] But s 3(1) of the Law Reform (Testamentary Promises) Act 1949 (“TPA”) expressly states that a promise to make a testamentary provision for someone “whether or not the provision was to be of a specified amount or was to relate to specified real or personal property … be enforceable … as if the promise … were a promise for payment by the deceased in his lifetime of such amount as may be reasonable”.
[99] In such a claim, a Court may in its discretion, instead of awarding a reasonable sum, make an order vesting particular property in the claimant. But this potential order does not give the claimant any interest in the property prior to the exercise of the Court’s discretionary jurisdiction.13
[100] Timothy’s proceedings further rely on s 14 of the Wills Act. This section provides that a Court may declare a will or a codicil to a will valid if the Court is satisfied the document expresses the deceased person’s testamentary intentions and it appears to be a will but is not executed in accordance with s 11 of the Wills Act.
[101] In Motor Works Tipping J held that the key determinant for whether a right of first refusal could support a caveat was whether specific performance could be ordered. With a right of first refusal based on a testamentary promise or on s 14 of the Wills Act specific performance could not be ordered until the Court exercises its discretion under either the TPA or the Wills Act.
[102] It appears reasonably arguable however that specific performance may be available on a contractual basis. As set out above, it is reasonably arguable that a promise was made by Tony to Timothy that he would have a right of first refusal to purchase at market value on the basis of a registered valuation and there is evidence that Timothy provided consideration for this promise through his assistance with the orchard (although the extent of this consideration is disputed).
13 See discussion in Wakenshaw v Wakenshaw [2017] NZCA 252 at [47].
[103] The description of Timothy’s interest on the caveat simply refers to the right of first refusal without indicating how the right of first refusal arises. No difficulty arises therefore in terms of the description on the caveat.
[104] A right of first refusal is a disposition of an interest in land and so is either required to be in writing by ss 24 and 25 of the Property Law Act 2007 or it must be reasonably arguable that Timothy can rely on the doctrine of part performance.14
[105] In T A Dellaca Ltd v PDL Industries, Tipping J set out the test for part performance of an oral contract:15
(a)Was there a sufficient oral agreement that would have been enforceable but for the Act?
(b)Has there been part performance of that oral agreement by the doing of something which:
(i)clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and
(ii)when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land and such as that alleged was in existence.
(c)Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?
[106] I have found above that it is reasonably arguable that Timothy had a right of first refusal at market value but it appears to be oral so Timothy may have to rely on the doctrine of part performance.
[107] On the basis of my findings above, Timothy would meet the first requirement from T A Dellaca that it is reasonably arguable that there is a sufficient oral agreement.
[108] As far as the second requirement is concerned, it is reasonably arguable that either the offer to purchase the property by Timothy on 16 October 2020 on the basis of the registered valuation obtained by the executors and in response to the letter of invitation sent by the executors on 6 October 2020 or the offer on 24 June 2021 based
14 Section 26 of the Property Law Act 2007 provides that s 24 does not affect the operation of the law relating to part performance.
15 T A Dellaca Ltd v PDL Industries [1992] 3 NZLR 88 (HC) at 109.
on the registered valuation obtained by Timothy are sufficient acts of part performance.
[109] The further term of sale in Petra’s offer to purchase, requiring the property first to be offered to Timothy at the price offered by Petra, may be further evidence of the oral agreement although that may depend on whether the executors added it into the contract or Petra.
[110] In any event, in my view it is reasonably arguable that the steps taken by Timothy would make it unconscionable for the executors to rely on the requirements of the Property Law Act that any agreement must be in writing, thus satisfying the third requirement in T A Dellaca.
[111] As was also held in Motor Works, specific performance can only be ordered if the terms are sufficiently certain.16 From the evidence of the siblings above, particularly the email correspondence between the siblings in September 2020, it appears reasonably arguable that the terms of the right of first refusal were that it would be triggered either when Tony chose to sell or on his death and it was to be at market value on the basis of a registered valuation.
[112] On that basis, I make an order below that the caveat not lapse until further order of the Court on condition that Timothy brings a claim in contract for a right of first refusal at market value (whether in the proceedings already filed or in separate proceedings) within 30 working days of this judgment.
Application to remove executors
[113] The application to remove the executors is brought pursuant to s 21 of the Administration Act 1969:
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
16 Motor Works Ltd v Westminster Auto Services Ltd, above n 8 at 766.
appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.
[114]The principles applying to the removal of executors are fairly well settled:17
(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.
(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 beneficiaries.
(footnotes omitted)
[115] The authorities make it clear that the Courts will respect the choice of executor made by the deceased but that the interests of the beneficiaries must be the primary focus.
[116]Timothy seeks summary judgment of this application.
[117] The principles applying to summary judgment are well settled and were set out by the Court of Appeal in Krukziener v Hanover Finance Ltd:18
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: … The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: … The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is not consistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: … In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: …
17 Farquhar v Nunns [2013] NZHC 1670 at [13] (and see [31] to [36]); approved in Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154 at [29]; and Tod v Tod [2015] NZCA 501 at [22].
18 Krukziener v Hanover Finance Ltd [2008] NZCA 187 at [26]–[27].
[27] Under r 141A the defendant need not file a statement of defence. The onus remains on the plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.
(citations omitted)
[118] For Timothy to succeed by way of summary judgment he must establish that it is expedient that the executors are removed and that the executors have no reasonably arguable defence.
Is it expedient to remove the executors?
[119]In my view it is expedient to remove the executors.
[120] The property that is the subject of the dispute is the main asset of the estate. Despite obtaining a registered valuation at the outset, they have refused to rely on that valuation and have instead sought to rely on appraisals or valuations that they have not provided copies or details of and on their own inexpert views as to value.
[121] The executors have received clear, sensible legal advice in respect of the sale of the property including that they ought to obtain a second registered valuation if they are not happy with the first or invite the original valuer to update its valuation. They have departed from that advice even while acknowledging initially that their father’s wishes were that Timothy would have the first option to purchase and that it should be at market value.
[122] Cornelia’s responses to her sisters in September 2020 as set out above are difficult to follow as her own sisters (and co-executor) pointed out at the time. As Petra asked, it is unclear why Cornelia referred to a valuation of $680,000 when the BVS valuation was $800,000.
[123]Understandably, Timothy sought further explanation as to how the value of
$935,000 for the executors’ counter offer had been arrived at when his initial offer was rejected. Abigail says in evidence that it is based on the price offered by Petra in December 2020 yet the counter offer was made by the executors in November 2020 prior to Petra’s offer being received. It may be that Petra had informally indicated that she would make that offer but Abigail does not say that in her evidence.
[124] Furthermore, although Petra made an offer for $935,000 it was conditional on finance and did not proceed.
[125] At around this time, the executors were cautioned by the estate’s initial lawyer of the real risk of their successful removal, and personal costs’ implications.
[126] Instead they changed lawyers, issued proceedings, and claimed they had received an “unsolicited arm’s length expression of interest” in the property for
$950,000. As it turned out, this expression of interest was verbal and could not be described as unsolicited or arm’s length as it was from a business colleague of Cornelia’s, Mr Thomas Beyer, who was based in Vanuatu.
[127] The actions taken by the executors so far have meant that there has been considerable delay in selling the main asset of the estate and, therefore, considerable delay distributing the estate to the beneficiaries.
[128]As Associate Judge Johnston held in Smith v Smith:19
Expediency is a very general concept. A course of action may be expedient for a range of reasons; at one end of the spectrum because a respondent is unable to devote adequate time and attention to the job, and at the other end because he, she or it has acted fraudulently. From the cases it is clear that the issue of expediency is assessed from the perspective of the beneficiaries of the estate or trust as the case may be, whose interests are invariably at the forefront of the Court’s concerns. In Crick v McIlraith, Associate Judge Osborne (as he then was) put it this way:20
The term “expedient” imports considerations of suitability, practicality and efficiency. In the context of estate administration the use of the term “expedient” therefore demands an overarching question – will removal of the administrator be a suitable, practical and efficient means of advancing the interests of the estate and of its beneficiaries?
[129] Although the delays in this case are not in the same magnitude as in Smith v Smith, it appears that without a change of executor, the position of the beneficiaries will not be protected and the estate will not be administered efficiently. The removal of the executors will therefore “be a suitable, practical and efficient means of
19 Smith v Smith [2021] NZHC 1042 at [21].
20 Crick v McIlraith [2012] NZHC 1290 at [18].
advancing the interests of the estate and its beneficiaries” (as the test was described in
Crick v McIlraith referred to above).
Do the executors have an arguable defence?
[130] The executors oppose the application for their removal on the grounds that Timothy’s claim to a right of first refusal is weak and submit that unlike in Family Protection Act claims, there is no principle that an executor should take a neutral position in relation to testamentary promises claims.
[131] For the reasons outlined above I consider Timothy’s claim to a right of first refusal is reasonably arguable, not weak as the executors contend.
[132] Furthermore, by applying to remove the caveat and for orders for vacant possession, rather than just taking a position in relation to Timothy’s claim, the executors are taking steps to defeat his claim prior to it being determined by the Courts.
[133] Section 7 of the Administration Act provides for the temporary replacement of executors pending legal proceedings in relation to a will. The application for removal of the executors in this case is not pursuant to this section, instead relying on s 21 of the Administration Act. But the inclusion of s 7 in the legislation supports exercising the discretion to remove the executors in circumstances where proceedings have been brought seeking declarations in relation to the will that the executors’ actions are attempting to defeat.
[134] The executors further submit that any conflicts of interest that they may have are a distraction, counsel submitting that “in any event, an independent executor would be highly unlikely to pursue a contested, factually and legally complex claim against Cornelia or her company for an alleged debt of approximately $50,000”. This is not in my view a defence to removal on the basis of expediency. The beneficiaries deserve transparency in relation to any amounts owing and whether it is sensible to take steps to recover any debts. It is not clear from the evidence that there has been such transparency.
[135] In any event, I have not needed to rely on any alleged conflicts of interest in reaching a view on expediency as the actions taken by the executors in relation to the sale of the property are sufficient.
[136] In addition the executors attempt to rely on Timothy’s two-year occupation of the property since their parents’ death in January and February 2020. The reason for this, however, is because the sale of the property has not progressed. The proceedings brought by Timothy will determine how that sale is to be progressed (if they continue to be necessary) and so this does not provide a basis for the executors to oppose removal.
[137] The executors submit (and have said repeatedly in correspondence) that all they want to do is test the market and that they do not understand Timothy’s unwillingness to allow them to do so. But the actions of the executors and their failure to be transparent in relation to previous appraisals and offers would make it difficult for Timothy or the other beneficiaries to be able to trust that their testing of the market would be a fair process.
[138] The executors further oppose removal because until the estate is sold, it is without funds to pay an independent executor.
[139] A consent to act was provided by Mr John Porter just prior to the hearing. Mr Porter is a Wellington lawyer who appears to have significant experience as an executor and who is not aware of any grounds that would prohibit him from acting or conflicts of interest that would render it inappropriate for his appointment. Mr Porter records in his consent that he is aware that funds will not be available to pay his fees until the sale of the disputed property and that he is content with that. Again, therefore this does not provide a defence to removal.
Conclusion on application to remove executors
[140] For the reasons set out above, I consider that it is expedient to remove the executors and replace them with an independent executor. The executors have no reasonably arguable opposition that prevents that decision being reached on a summary basis.
Replacement executor
[141] No objection was raised to Mr Porter’s appointment as the executor at the hearing, but his consent was provided very close to the hearing. The orders below allow for any objection to Mr Porter being appointed being raised within five days of my judgment. Any alternative executor proposed will need to provide a consent and confirm that they agree to appointment in circumstances where their fees may not be paid until sale of the disputed property.
Application for order for possession
[142] Given the conclusions reached sustaining the caveat and removing the executors, it is not appropriate for any order for possession to be made at this time.
Results
[143]I make the following orders:
(a)The application to remove the caveat is dismissed, with the caveat to remain until further order of the Court on the basis that Timothy brings a claim in contract for a right of first refusal at market value (whether in the proceedings already filed or in separate proceedings) within 30 working days of this judgment.
(b)The application to remove the executors by way of summary judgment is granted with the effective date of removal five working days from the date of this judgment (unless objection is raised pursuant to (d) below when the effective date will be determined by further order of the Court).
(c)Mr John Porter is to be appointed to replace the current executors with the effective date of appointment five working days from the date of this judgment (unless objection is raised pursuant to (d) below when the effective date will be determined by further order of the court).
(d)Any objection to Mr Porter’s appointment is to be filed and served on behalf of the current executors within three working days of this judgment together with a signed consent from a proposed alternative. Timothy will then have three working days from service to file a memorandum in response and a decision will be made on the papers.
(e)The application for orders for vacant possession is dismissed.
Costs
[144] As Timothy has succeeded on both applications, I record my preliminary view that he is entitled to costs. I ask the parties to confer and attempt to agree costs, including whether the executors are to pay personally. If agreement cannot be reached, memoranda may be filed on behalf of Timothy within 25 working days of this judgment and on behalf of Ms Wyllie and Ms Latham within 35 working days.
Associate Judge Sussock
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