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Removal of trustees, Trustees, Wills

Leave it in the sandpit

Central to the dispute in Roblin v Roblin is two brothers forced into co-trusteeship and co-ownership due to their joint appointment as executors and trustees of their mother’s estate.  The main asset of the estate is a property lived in by one brother and a number of unrelated parties, the terms of whose tenure was unclear.  Central to the hostility was differing views as to when the property would be sold and who would purchase it.  One brother had agreed to buy out the other.  However, there was uncertainty regarding the terms.

Points regarding the sale of the home included:

  • the property should generally be sold or converted within a year (the executor’s year): Harsant v Menzies
  • that year can be extended by the trustees when it is prudent to do so
  • there is an obligation on executors and trustees to gather in and realise assets and in the absence of agreement between the beneficiaries, or alternative direction in the will, the trustees must sell in a reasonable time

In this case one trustees’ refusal to cooperate in finalising the administration of the estate disqualified him from his continuing involvement as a trustee.  Another factor taken into account was his unilateral allowance of occupation of the property, which conflicted with his trustee duties.

Mere incompatibility is not grounds for removal (Kain v Hutton).  Hostility of itself is not a basis for removal unless the hostility risks prejudicing the interests of the beneficiaries.

However, where the trustees are hamstrung this does provide grounds for removal (McCartney v Cox).

It was considered expedient to remove the recalcitrant trustee.  While replacement was not necessarily required, given that the brothers were “at loggerheads” and that there were sufficient funds in the trust estate to meet the costs of a professional trustee, a substitute trustee was appointed.

Regarding sibling disharmony, also see Cundy v Cundy, which also relates to a dispute between siblings that required the assistance of the court to remove one sibling as executor.   As noted at [22]:

“It is the extent of animosity between the parties, and the resulting concerns about a lack of impartiality, that distinguish this case from Jackson v Jackson. Although the siblings were clearly estranged in that case, there does not appear to be the same level of discord as in this case. Court proceedings were not on foot and, unlike this case, there does not appear to have been any allegations of conflict made against the sibling seeking appointment as executor.

[24] Against the background of animosity and family disunity, I consider the welfare and best interests of all the beneficiaries requires the appointment of a neutral and independent third party to the role as executor.”

Of note as well in Cundy was the disparate views regarding the value of the estate, which ranged from $15,000 to $700,000.

References:

  • Roblin v Roblin [2019] NZHC 374
  • McCartney v Cox [2012] NZHC 1369
  • Harsant v Menzies [2012] NZHC 3390
  • Kain v Hutton [2007] NZCA 199
  • Cundy v Cundy [2019] NZHC 413

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