The executor allegedly committed misconduct and failed to distribute the estate
In a recent estate administration dispute, the High Court has clarified the rule on "expedient" grounds to remove an estate executor.
In Bateman v Whanga [2023] NZHC 2517, Roimata Whanga appointed his son, Rodney Whanga, as his estate's sole executor and trustee. Roimata passed away in 2018. In his will, he left his estate to six of his 11 children. Rodney was not named as a beneficiary.
Roimata's daughter, Harriet Bateman, brought an action to remove Rodney as an executor, alleging that he committed misconduct and failed to administer the estate properly. She claimed that in the four years since he obtained probate, Rodney lived in his father's house, failed to meet estate expenses, and failed to distribute the estate.
The main estate assets are two properties on Great South Road, Taupiri. Harriet contended that despite repeated urging by the beneficiaries, Rodney took no steps to administer the estate. He allegedly failed to transfer the Taupiri properties into his name as executor, gather on the broader estate assets, maintain the house and land, or pay rates on the properties. Harriet further alleged that Rodney lives in the house but does not contribute to estate maintenance or expenses.
The main issue in the case revolved around whether it was "expedient" to remove Rodney as the executor, as stipulated under s. 21 of the Administration Act 1969. With the consent of other beneficiaries, Bateman sought Rodney's removal, the appointment of her sister Maria Whanga-Pahi as executor, vacant possession of the Taupiri properties, and costs.
The court noted from the evidence that Rodney's relationship with his family appeared strained. The court found affidavits suggesting that Rodney had been abusive and threatening toward his family and had repeatedly refused requests to progress the administration of his father's estate.
Rodney argued that his father's will is the product of undue influence or manipulation by one or more of his siblings and that his father's true intention was to benefit all children. He contended that the will did not reflect his father's true wishes, and accordingly, he could not be criticised for having failed to distribute the estate under its terms.
The court explained that s. 21 of the Administration Act confers a broad discretion to discharge or remove an administrator where it is "expedient" to do so. The court cited case law stating that "expedient" requires suitability, practicality, and efficiency considerations. Furthermore, in the context of estate administration, the term "expedient" demands an overarching question—will removing the administrator be a suitable, practical, and efficient means of advancing the interests of the estate and its beneficiaries?
The court emphasised that in the exercise of its discretion, it must uphold its duty to see estates properly administered and trusts adequately executed. Further, the court's jurisdiction involves considerable discretion, which is heavily fact-dependent.
The court also noted that 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. Additionally, the court considered that hostility between administrators or trustees and beneficiaries is not a reason for removal. Still, hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.
The court found that Rodney failed to carry out his core duties to call in and distribute the estate's assets to the beneficiaries. It also appeared to the court that Rodney had neglected to ensure the proper maintenance of the house and land and was not inclined to undertake or fund the required work.
The court further found that Rodney's duties as executor and personal interests were hopelessly conflicted. He simultaneously sought to challenge the will but also relied on his appointment as executor under it. In the court's view, Rodney's personal interest in delaying or preventing the administration of the estate rendered him incapable of acting in accordance with the best interests of the beneficiaries.
Accordingly, the court concluded that it was appropriate to remove Rodney as executor and appoint Maria in his place.
