KIRKWOOD v KIRKWOOD [2019] NZHC 2559

KIRKWOOD v KIRKWOOD [2019] NZHC 2559 [8 October 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-600206[2019] NZHC 2559UNDER the Administration Act 1969IN THE MATTER OF an application to discharge administratorBETWEEN SHAUNA LYNNE KIRKWOODApplicantAND DONALD ALEXANDER KIRKWOODRespondentOn papersJudgment: 8 October 2019JUDGMENT OF DOBSON J[1] This proceeding involves a dispute between siblings as to the administration oftheir mother's estate.[2] The deceased, Elizabeth Kirkwood, died on 18 October 2017 and probate ofher will was granted to her daughter, Rowena Heather McKenzie (Rowena), and herson, Donald Alexander Kirkwood (Donald), on 11 January 2018.[3] The major asset in the estate, the deceased's former residence, was sold on9 November 2018. However, distribution of the estate has been held up because ofdifferences between Donald and his sisters as to amounts allegedly required to be takeninto account before equal distribution in accordance with the probated will could bemade to the four children of the deceased.[4] The Law Store in Porirua had been acting in the estate but, on 2 October 2018,it wrote to Rowena and Donald, advising them of amended and additional terms ofengagement. Those terms stated that, "due to the matter being exasperated", theprevious estimate provided of $7,000 to complete administration of the estate wouldbe insufficient, and a further $5,000 plus GST and disbursements would be required.[5] The letter required Rowena and Donald to acknowledge that they agreed tothose new terms of engagement by signing underneath the following paragraph:We, ROWENA KIRKWOOD & DONALD KIRKWOOD consent to theamended and additional terms of engagement and confirm our instructions toundertake the further work necessary.[6] Following the sale of the deceased's residence on 9 November 2018, The LawStore sent Donald emails that day, and again on 16 November 2018, seekinginstructions from him and his consent to pay outstanding invoices from estate fundsso that distribution of the estate could be calculated. No response to those emails wasreceived.[7] The Law Store sent a further email to Donald on 21 November 2018,requesting that he provide instructions urgently so that the estate could be distributed.The email noted that, while there may be issues outstanding regarding some estatechattels, those issues did not directly affect distribution of the estate funds and therewould be no advantage to the estate in having The Law Store provide further assistancein sorting out those issues as that would only reduce estate funds. Firm instructionswere requested on this issue as well.[8] On 11 December 2018, The Law Store sent the following email to Donald:1I refer to your email of 29 November 2018 ... specifically to the sentence:"You stated that you would disengage with us, if, I sought independent legaladvice, having sought such, I now expect you to disengage from our dispute...".I however note your subsequent instructions to pay the invoice for theOpen2View photos taken for the sale of the Family Home, which has nowbeen paid. This is a direct contradiction to your statement referred to above.1 Emphasis added.Therefore, before I provide advice to the both of you, as the estate lawyer, onissues that I understand are outstanding and how those issues maybe or shouldbe resolved I ask that you Donald urgently provide your firm instructions inrelation to The Law Store continuing to act for the estate and for you asexecutors.I note that Rowena has no objection to The Law Store acting for the estate.Nevertheless, we will not be able to continue to act for the estate in the eventyou Donald terminates [sic] your instructions, as that would create a conflictof interest for us.I look forward to your urgent instructions.[9] Two days later, on 13 December 2018, Rowena emailed The Law Store,advising:Failure to provide instruction from Donald leaves me in a position todisengage from The Law Store. Please provide your final account in detail ofthe work completed and statement of the Trust fund accounts.[10] The Law Store replied that day, stating that a final invoice on the estate matterwould be provided, along with a statement of account. ·It is perhaps unfortunate thatThe Law Store did not advise the executors to apply to the High Court for directions.If they had done so, the extent of effort required to resolve the dispute may have beenless.[11] However, instead there followed a spate of correspondence between Donaldand Mr Harrigan, a lawyer in Australia who was admitted in both Australia andNew Zealand. He had been instructed by Ms Shauna Kirkwood (Shauna), another ofthe four siblings, who resides in Australia.[12] Amongst these communications was a letter dated 18 December 2018 in whichMr Harrigan invited Donald to voluntarily withdraw as an executor so as to reducefurther unnecessary costs to the estate and advising he seek independent legal advice.[13] Donald responded the following day, stating that he had followed all legaladvice received to date and suggesting that it would be appropriate for Rowena tovoluntarily relinquish her role as executor.[14] On 21 January 2019, Shauna filed an application with supporting affidavit fororders that Donald be removed as an administrator and that she be appointed in hisplace, citing his refusal to take the steps reasonably required of the executors. Therewere some procedural defects in that application and an amended application was filedin early April 2019.[15] Since service of the amended application, Donald has traded criticisms andrecriminations with his sisters as follows:• an affidavit sworn by Rowena on 16 August 2019, which explained herdealings with assets from their mother's estate and supported criticismsthat had been made by Shauna in her application to remove Donald as anexecutor;• informal communications from Donald to the Court and (in terms ofdirections earlier made by me) a relatively extensive affidavit sworn on6 September 2019 responding in part to Rowena's 16 August 2019affidavit; and• an affidavit in reply sworn by Shauna on 18 September 2019.[16] As canvassed in minutes I have previously issued, disputes of this type overthe proper administration of the estate of a deceased person would generally lead to asubstantive hearing before the Court, most often including a measure of cross-examination of deponents on their competing contentions about the propriety of stepstaken or not taken in relation to the assets in the estate.[17] In this case, after receiving an indication of the usual process the Court wouldfollow, all involved have confirmed their wish that the outstanding issues in theirmother's estate be resolved on the papers.[18] I have accordingly reviewed all of the documents filed in relation to the disputebetween the siblings, which are listed in [14] and [15] above.[19] Donald's affidavit makes reference to a possible basis for a testamentarypromises claim in relation to the estate of their father, as well as oblique reference toa possible family protection claim for a disproportionate distribution from his mother'sestate on the basis of greater contributions to both his parents during their lifetimes.[20] Any such claims would now be out of time and the grievances cited by Donalddo not, on their terms, suggest any claims that would be likely to succeed, given allthe other circumstances that are revealed in his and other affidavits.[21] Donald also raises criticisms of dealings with estate assets by Rowena. Heraffidavit explains the steps taken and I am satisfied that there is not sufficient inDonald's concerns to warrant holding up completion of administration of the estate,pending another round of clarifications from Rowena.[22] Donald also records grievances at allegedly unequal dealings with personalpossessions and other chattels forming parts of the estates of both his parents.Ultimately, however, whilst he maintains the criticism of improper dealings by hissisters, he does not advance any reasonable basis for holding up completion ofadministration of the estate in order to pursue these complaints.[23] The affidavits reveal entrenched differences between Donald and his sisters. Iam satisfied that requiring a fuller airing of the mutual criticisms by way of a Courthearing would do nothing to heal those differences and, given the modest size of theestate, would be quite disproportionate in achieving a resolution.[24] I am satisfied that orders to complete administration of the estate are nowappropriate.[25] I treat the $1,000 loan, acknowledged by Donald in [13] of his affidavit andresponded to in [3](g) of Shauna's reply affidavit, as a separate financial transaction,not required to be accounted for in the financial statements of the estate.[26] As to Shauna's application to remove Donald as executor and that she beappointed in his place, it is my view that doing so at this point in the proceedingswould only serve to incur further unnecessary costs. I therefore decline to make theorders sought.[27] Another matter that has arisen is that of their mother's ashes. In her replyaffidavit dated 18 September 2019, Shauna, while acknowledging that her mother'sashes do not form property, requested that they, along with those of their father, begiven to Rowena. Rowena also claimed that Donald had kept their mother's ashes andwas refusing to discuss a joint occasion at which they might show their respects.[28] Donald responded by saying that his parents had stipulated their wishes, intheir respective wills, that their ashes be combined after they had both passed awayand he advised that they now reside together in his loving home.[29] In Elizabeth Kirkwood's will, she instructed:If I die before William, I would like my ashes to be kept until he dies so thatour ashes can be combined. At that time, I leave it to my children to decidewhat should happen to our ashes.[30] In light of the difficulty her children have had in co-operating following theirmother's death, it might seem overly optimistic at this point to hope they come to anagreement as to how best to afford their parents' ashes due respect. It is, however, notthe role of the Court to give directions on this particular issue, given that this is anapplication seeking discharge of an administrator. It is nevertheless hoped that, out oflove and respect for their parents, the parties might put aside their differences andarrange an appropriate ceremony or place to either scatter or inter their ashes.[31] An outstanding issue is Shauna's application that the costs she has incurred inpursuing the application for removal of Donald as an executor be charged to him byway of deduction from his share of the estate. For his part, Donald blames Rowenafor frustrating completion of the administration and denies that he should be liable forthe costs of the present application. From a review of all of the information on thefile, I am satisfied that Donald's conduct has been a major (but not the only) cause ofthe differences that have precluded a more orderly and efficient distribution of theestate. I direct that one half of the reasonable costs incurred by Shauna in bringing theproceeding is to be a charge against the estate, with the second half of those costs tobe deducted from Donald's share of the net residue.[32] I accordingly direct The Law Store to:(a) deduct its reasonable fees and disbursements as previously advised tothe beneficiaries;(b) pay Shauna's reasonable legal expenses in bringing the application forremoval of Donald as an executor, allocating one half of that sumequally to all beneficiaries and the second half to be deducted fromDonald's share;(c) account to all siblings for the balance.Dobson JSolicitors:Harrigan Lawyers, Forest Lake, Queensland for applicantThe Law Store, PoriruaCopy to:The respondent