Walker v Walker; the Estate of Ngaere Joy Walker, late of Mortdale

Supreme Court of NSW|2015-11-27|Before: Slattery J

Judgment

Ngaere Joy Walker died on 2 November 2011. Probate of her last will dated 13 July 2011 was granted to two of her sons, Jonathan and Stephen as executors on 22 August 2012. Jonathan and Stephen Walker are both equal residuary beneficiaries of the deceased's will. A third brother Andrew Walker, received a legacy of $50,000 under the will.
Disputes have now broken out between the two executors, Jonathan and Stephen. Jonathan has now commenced proceedings for relief under Probate and Administration Act 1898, s 75 seeking orders that Stephen be removed as executor of their mother's estate.
The Summons sought orders: (1) that the grant of probate to Jonathan and Stephen be revoked; (2) an order that estate accounts be filed; (3) an order appointing the plaintiff, Jonathan, as administrator of the deceased's estate; (4) an order remitting the matter to the Registrar in Probate to determine an appropriate grant of probate; (5) in the alternative, an order that probate be granted to Jonathan; and (6) an order that Stephen produce to Jonathan certain jewellery of the deceased for the purposes of valuation.
Despite the unfortunate nature of this litigation between two brothers administering their mother's estate, the Court was much assisted by the careful presentation of the case by the disputing parties. Mr A.M. Gruzman of counsel appeared for the plaintiff, Jonathan, and Mr M. Lawson for the defendant, Stephen.
The parties referred to one another by their first names, as much as they did by their respective roles in the proceeding as plaintiff and defendant. The parties' brother Andrew took no part in the proceedings. Without intending any disrespect to any party the Court will also refer to the parties in this way.

Summary of the Parties' Contentions

Before trial the parties were at issue about two principal matters: (a) alleged loan advances the deceased and her late husband had made to Jonathan; and (2) the deceased's jewellery. Jonathan contended that for many years he had sought Stephen's co-operation to finalise the distribution of the deceased's estate but that he had been met with demands from Stephen which had to be satisfied before Stephen would agree to give joint instructions to Mr Hayward to disburse the remaining funds in the controlled monies account. In the meantime no distribution of the estate's funds was possible.

The Alleged Loans to Jonathan

Stephen alleges two groups of loans were made to Jonathan: one group before the death of Ngaere's husband Roland in August 2009; and the other group after Ronald's death.
Stephen, Jonathan and Andrew's father died on 30 August 2009. By the time of Ngaere's death his estate had been fully administered except for the transmission of the jointly owned real property he owned with the deceased. The first group of Stephen's demands related to monies that their father, Ronald, is said to have given to Jonathan during his lifetime. Jonathan says that transactions during their father's lifetime are not a reason to delay administration of their mother's, the deceased's, estate. Jonathan contends that monies allegedly loaned by their father to Jonathan cannot be recovered by the deceased's estate, as loans by the father directly to Jonathan do not constitute any part of their mother's estate and that he does not have to account for them to Stephen.
Stephen's second group of loan demands relate to various loans that is said that the deceased, Ngaere, made to Jonathan after Ronald's death. Stephen said that these loans had not been repaid. The deceased did advance money to Jonathan during her lifetime by cheques she signed. Stephen contended that there is no evidence that these monies were gifts, or that they were received outside of a Power of Attorney conferred on Jonathan in 2003. Jonathan says that these monies were gifts and there is no evidence supporting Stephen's contention that they were loans.
And among all these allegations Stephen raised concerns over Jonathan's dealings with the deceased's funds under the 2003 Power of Attorney.

The Jewellery

The second main issue relates to the deceased's jewellery. Jonathan says that Stephen removed the deceased's jewellery after her death and has disposed of part of it without either accounting to the estate for the proceeds of its sale and without accounting to the estate for what he has done with the jewellery. This issue is less complex and will be dealt with below before the issue of the alleged loans to Jonathan.

Relief Sought

Jonathan now seeks Stephen's removal as joint executor and a consequential order revoking the grant of probate and appointing Jonathan as administrator with the will annexed (cum testamento annexo) or alternatively, he seeks a new grant of probate to the plaintiff as executor. Jonathan's case is that Stephen's refusal to co-operate in distributing the estate is unreasonable in the circumstances and warrants Stephen's removal as executor. Jonathan says that the unreasonableness is demonstrated by Stephen's: (1) demands for an accounting in respect of alleged loans made by their father, Ronald, and monies advanced by the mother that were plainly gifts; and (2) Stephen's refusal to account for their mother's jewellery that he has taken.
Moreover, Jonathan submits that because these proceedings had to be brought because of Stephen's actions that Stephen should now pay Jonathan's costs of the proceedings and indemnify the estate against any consequential costs of this litigation. Alternatively, Jonathan submits that his costs should be paid out of Stephen's share of the estate. Jonathan further submits that if the Court were of the view that Stephen should be removed but that an independent executor rather than Jonathan should be appointed as administrator to finalise the estate, then the cost of appointing and remunerating that administrator over and above the cost of the executors in finalising the estate should be paid out of Stephen's share of the estate.

Issues One Reduced before Trial

Stephen's case may be shortly summarised. In written submissions filed just before the hearing on 26 November 2015, Stephen expressed himself as finally, and recently, satisfied with Jonathan's response (provided in his affidavit of 19 November 2015) to questions that he (Stephen) claimed that he had been asking of Jonathan since 24 April 2012, concerning the sums of money that had been paid to Jonathan by the deceased and her late husband. Stephen declared in his submissions of 26 November 2015 that he no longer believed that Jonathan was indebted to the estate and wished to co-operate in the writing of final cheques with Jonathan to finalise the estate.
But Stephen continued to contend that he had not removed jewellery from the estate and had not failed to account for it and that Jonathan's case in relation to the jewellery must fail.
Stephen declared in his 26 November submissions that he would follow the Court's directions as to how these final distribution cheques should be drawn. Stephen also submitted in his 26 November 2015 submissions that he was agreeable to the revocation of the grant of probate to him and Jonathan and for an order to be made that the solicitor, Mr Hayward be granted letters of administration cum testamento annexo with a view to the rapid finalisation of the estate. But Stephen expressed the hope nevertheless that the estate might be able to be spared such additional expense by the Court still permitting the estate to be finalised by the plaintiff and the defendant themselves.

Applicable Legal Principles

The applicable law in relation to the revocation of probate may be briefly stated. The Court's Probate jurisdiction includes the jurisdiction to revoke a grant of probate previously made: Bates v Messner (1967) SR (NSW) 187. The proper basis of a revocation for the grant of probate was recently described in Mavrideros v Mack (1998) 45 NSWLR 80; [1998] NSWCA 286, where Sheller JA, with whom Priestley and Beazley JJA agreed, said (at pgs 101 - 102) as follows: "The principles to be applied are stated in the decision of this Court in Bates v Messner. In that case, the appeal was from a decision of Myers J dismissing an application for the revocation of a grant of probate made to the respondent. Sugerman JA at 189 quoted from the judgment of Jeune P in In the Goods of Loveday [1900] P154 at 156 and said the principle there stated had been consistently followed and no doubt cast on its correctness in point of principle. Jeune P in the passage quoted said: 'After all, the real object which the court must always keep in view is the due and proper administration of the estate and the interests of the parties beneficially entitled thereto; and I can see no good reason why the court should not take fresh action in regard to an estate where it is made clear that its previous grant has turned out abortive or inefficient. If the court has in certain circumstances made a grant in the belief and hope that the person appointed will properly and fully administer the estate, and if it turns out that the person so appointed will not or cannot administer, I do not see why the court should not revoke an inoperative grant and make a fresh grant.'"
In Bates v Messner Asprey JA had described the essential basis of the exercise of the Court's jurisdiction to revoke a grant of probate in the following terms: "'... that the essential basis of the exercise of the court's inherent jurisdiction to revoke a grant of probate is that emphasised by Jeune P, namely, that the real object which the court must always keep in view is the due and proper administration of the estate in the interests of the parties beneficially entitled thereto on the part of the person to whom and by whose oath as to the faithful performance of his duties the court has been induced to entrust the office of executor. [..]'"
Interpreting Asprey JA's statement in Bates v Messner, Sheller JA said in Mavrideros v Mack (at p 109): "The question was, to adapt the language of Asprey JA at 192, whether the due and proper administration of an estate had either been put in jeopardy or had been prevented either by reasons of acts or omissions on the part of the executor or by virtue of matters personal to him, for example, mental infirmity, ill health, or by virtue of the proof of other matters which established that the executor was not a fit and proper person to carry out the duties he had sworn to perform".
The Court's discretion to remove an executor includes removal on the basis of gross misconduct or unjustified delay and ineffective co-operation among joint executors and includes also a persistent failure to pass accounts.
Disputes that arise where money is said to be owed by one executor to the estate can create special problems. In Rutter v McCusker [2008] NSWSC 269 Palmer J held while the appointment of a debtor to the estate as executor of itself does not create a conflict of interest for that executor, an actual conflict arose when the debt was disputed and may well then justify revocation of the grant.
Stephen did not deny that the administration of the deceased's estate had been delayed by the disputes between the brothers. But he contended that the delay could not be attributed to any of his conduct. He said the delay had not been caused by his dealings with the deceased's jewellery and that he was perfectly justified to investigate transactions between Jonathan and the deceased, Ngaere, and between Jonathan and their father, Ronald.
Disputes remain between the parties mainly in relation to costs. The residue of the dispute is dealt with below. But first it is necessary to see how the procedural steps taken just before the trial reduced the issues.

Directions before trial and some procedural steps at trial

When the Court held a pre-trial directions hearing on 5 November 2015 Stephen was maintaining that Jonathan had still not provided an adequate explanation for the cheque transactions in dispute. To attempt to reduce the issues the Court made the following direction (Direction 8): "8. To the extent that the defendant wishes to challenge the application of funds by the plaintiff whilst the plaintiff was acting as the deceased's attorney: (a) the defendant shall by 5pm on Monday 9 November 2015 identify any transaction over $2,000 entered into by the plaintiff which the defendant will challenge at hearing ("the questioned moneys"); (b) in response to the list provided in (a), the plaintiff will provide by 5pm 20 November if he has not already done, so an explanation on affidavit as to what was done with the questioned monies and the circumstances in which the questioned monies were obtained from the deceased or other family member; (c) the defendant is at liberty to pursue criticism of the plaintiff of questioned moneys amounts less than $2,000 but will do so at his own risk as to costs and the Court notes that unless he is substantially successful in challenging such amounts less than $2,000 he will be required to explain at the end of the proceedings why he should not pay the plaintiff's costs on the indemnity basis on that issue. (d) if the defendant wishes to pursue any items of less than $2,000 he should take the same course in respect of items more than $2,000."
In relation to the jewellery dispute, the orders made at the same time required Stephen to provide a verified list of any jewellery disposed of since the death of the deceased, together with his own estimate of the value of the jewellery disposed of by Stephen.
Jonathan provided on affidavit of 19 November 2015 in response to Direction 8. Jonathan's affidavit addressed each of the payments that Stephen sought to investigate and assisted in resolving the payments dispute. As earlier indicated, in his submissions just before trial Stephen submitted that he "is willing to accept the explanation that the plaintiff has now given of the circumstances surrounding each of the disputed payments in order to finalise the estate. He now accepts that the plaintiff is not indebted to the deceased's estate".
Stephen submits that as Jonathan has now explained the transactions about which he held concerns, there is no reason why the two of them cannot finalise the estate. Stephen also indicated he was agreeable to Mr Hayward being appointed to administer the deceased's estate but that it would be inappropriate to revoke the probate and only remove Stephen as executor.
But when the proceedings were called on for hearing on 27 November, the parties were still at issue about the jewellery question. The plaintiff, Jonathan, was satisfied with the completeness of the jewellery inventory provided on 13 November 2015. The defendant, Stephen, claimed the value of the jewellery was $9033. Jonathan disputed this valuation. The jewellery was always in Stephen's possession after the deceased's death. Jonathan sought to have the jewellery valued. The Court suggested that on the morning of the trial that if this still remained an issue the parties could attempt to value the jewellery straight away, during a short adjournment the Court could afford whilst the Court read the correspondence and the evidence in the proceedings. The jewellery was readily accessible, so that this was a practical solution. Although the jewellery appeared in the schedule of times Stephen had served to be to be "disposed of", in fact it was in the possession of a person known as "Max", who was in the Court room during the hearing.
The adjournment turned out to be productive. During the break the parties managed to agree that the full inventory of the deceased's jewellery was worth $10,000. Moreover, it was further agreed that two items that the plaintiff had already received had a value of $500. These were an ivory necklace and earrings and an amber necklace and earrings of the deceased.
The parties were asked to give estimates of their respective costs of the proceedings. On the indemnity basis and inclusive of GST, the defendant estimated his costs at $55,000 and the plaintiff estimated his costs at $70,000. This differential was to be expected as the plaintiff, Jonathan, had incurred the expenses of launching these proceedings. The Court raised with the parties at the conclusion of the argument whether in relation to costs, if a costs order were made, whether the parties wanted the Court to consider the making of a gross lump-sum costs order under Civil Procedure Act 2005, s 98 (4)(c).

Orders on 27 November 2015

The Court indicated to the parties in the course of argument on 27 November 2015 that the reduction in issues which had occurred meant there was little point in granting relief of removing one of the executors, as there was by then only a few steps to complete in the administration of the estate. The estate's real estate had been sold. There was cash in Mr Hayward's account ready for distribution. The grant of relief revoking the probate and appointing one or other brother as executor would merely generate further expense which would be a burden on the small remaining fund in the estate. All that really had to be done was to quarantine sufficient funds to cover any orders for costs that the Court might make as a result of the contest on 27 November 2015 and then to put in place machinery to allow the balance of the estate to be distributed.
The parties co-operated in two main ways to this end. First, they both indicated they were content for Mr Hayward to act as the estate's solicitor to take the final steps to distribute the estate. And secondly, they both agreed that the maximum amount they would each claim as their costs in the litigation would be $70,000 inclusive of GST.
This allowed the Court to make orders directing the parties jointly as executors to authorise the payment from estate assets the sum of $70,000 to be deposited into each of their respective solicitor's trust accounts a total of $140,000 was thereby set aside. Thereafter the parties were directed to jointly instruct Mr Hayward to proceed to administer the balance of the estate with a view to it being finalised by mid December 2015, subject of the payment of his fees. The proceedings were mentioned before the Court on 14 December 2015 and it was indicated that those steps had been taken.
The Court had indicated that given the history of this matter that it was unlikely to appoint either brother to administer the estate alone and that an independent administrator such as Mr Hayward would be more appropriate.
The parties also agreed upon another matter that had divided them. Stephen agreed to relinquish his position as trustee of the trust fund created under the deceased's will for the benefit of Andrew. It was accepted that Jonathan would continue to act as Andrew's trustee of the fund in the Commonwealth Bank.
All that now remains is for this Court to deal with the costs issue. But as the applicable law makes clear, that does involve some analysis of the evidence the parties have adduced.

Applicable Principles - Orders for Costs when the Result is Agreed

The applicable legal principles may be shortly stated. The exercise of the Court's discretion to make an order for costs when the parties either have consented to a grant of final relief or have otherwise agreed upon the outcome of the proceedings is informed by principles stated in two leading cases. The first is a statement by Hill J in Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 at 201; (1993) 116 ALR 523 at 530: "(1) Where neither party desires to proceed with litigation the court should be ready to facilitate the conclusion of the proceedings by making a cost order … (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial … This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (4) In a particular case it might be appropriate for the court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation … (5) Where the proceedings terminate after interlocutory relief has been granted, the court may take into account the fact that that interlocutory relief has been granted … [Footnotes omitted]".
The second statement of principle is that by McHugh J in Minister for Immigration & Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-5; 143 ALR 1 ("Lai Qin") at 3: "In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. [Footnotes omitted]".
Based on Lai Qin's case, each party now submits that it is entitled to and order for costs against the other. Each alleges the other has acted unreasonably and that had there been no agreement about the form of final relief that he would nevertheless have succeeded. The parties cannot both be right. But they could each fail to make good their contentions.

Issue One - The Estate Jewellery

By early March 2012 Jonathan and Stephen had both instructed Mr Hayward they wished to make application for a grant of probate. The issue of what was to happen about the jewellery arose almost immediately. This issue can be considered on its own first. In contrast, the issue of the alleged loans to Jonathan needs to be considered in the wider context of the application for probate and the estate's administration.
Ngaere's funeral had been in early November 2011. On 16 March 2012 Jonathan emailed Stephen. He immediately contended "Mum's jewellery is part of the estate". But in a somewhat hostile opening he said, "I haven't seen the collection since you appropriated it". Jonathan elaborated that he appreciated there were a number of pieces of the deceased's jewellery that Stephen wanted for Stephen's daughter Jessica but pointed out "I have no problem with that but their value is still part of the estate…". Jonathan then said that the only piece that he could recall that he would like for himself is the "amber necklace that I bought for mum in Gibraltar". He then asked for a digital picture of the collection to jog his memory about what was in it, obviously with a view to seeing if there were any other items that he might want.
At this stage Jonathan had no pressing interest in having the jewellery valued. He merely said of the various pieces of jewellery in this 16 March 2012 email "What do you reasonably think they are worth?" There was no further email about the jewellery in March 2012.
Jonathan was here taking the position on the jewellery issue that: (1) he wished to receive the amber necklace; (2) he was willing for Stephen to receive the balance of the deceased's jewellery subject to his receiving photos to remind him if there is anything else he wanted; and (3) Jonathan and Stephen should include the jewellery on the list of assets in the application for probate, because the jewellery was an estate asset.
But the brothers were in conflict by 19 March 2012. On that day Jonathan emailed Stephen in the context of other disagreements saying "I am not administering the estate with you". This email also features in the narrative of communications about the alleged loans. It also sharpened the tone of their subsequent exchanges about the jewellery.
On 9 April 2012 Stephen advised Jonathan that in his view the jewellery was not part of the estate assets. He explained that the deceased had said "her jewellery should go to Jessica [Stephen's daughter] (in front of you [Jonathan]) it was therefore given to her [Jessica] at that moment and therefore should not be included in the estate assets". But despite the fact that the jewellery had been given to his daughter Jessica, Stephen said that he had no difficulty in offering to provide Jonathan with the amber necklace that Jonathan wanted.
On 10 April 2012 Jonathan wrote to Stephen repeating his request for digital photographs of the deceased's jewellery and again asserting that he thought he only wanted the "amber necklace" and perhaps some earrings. But misunderstandings then emerged about what jewellery the deceased had promised to Jessica. Jonathan said in this email, "Mum asked me whether I minded if she gave the rings she usually wore (i.e. on a daily basis) to Jessica. I said I didn't mind even though her jewellery was originally intended for me". But Jonathan was firm that the deceased had only given Jessica the rings and not all the jewellery.
Stephen accepted this position, at least temporarily. In an email Stephen sent to Jonathan on 24 April he summarised "my list of estate assets", as including "mum's jewellery".
It might be thought a logical consequence of Stephen's indication of his agreement that the jewellery was part of the estate that it might be at least useful for the jewellery to be valued, or alternatively its value agreed. That is how Jonathan interpreted what was being said to him. On 15 May he wrote to Stephen, "The jewellery will have to be valued by a jeweler. You will have to organise this. The cost should be borne by the estate". Though also somewhat abrupt Jonathan's intent was clear. The abruptness is perhaps accounted for by Stephen's email of 7 May shortly before, in which he had estimated the jewellery to be worth only $4,000, a figure much lower than Jonathan had expected.
But Stephen took a different tack. Whilst not disputing that the jewellery should now be treated as part of the estate, as he had agreed on 24 April 2012, in an email on 16 May he said "Since only estimates are required I see no pressing need to get all the jewellery valued by a jeweler".
Writing back on 16 May Jonathan insisted that "The jewellery has to be valued by an independent accredited jeweler", mainly as he explained, because Jonathan had not seen the collection "in its entirety for years" and that "carrying out this function is part of your duty as a joint executor of the estate since the collection is in your possession". As a practical matter Jonathan's position was reasonable in this case as he had not himself seen the jewellery for years. It is true as Stephen said that an estimate was all that was required for probate purposes but Jonathan had no means to reach an agreed estimate without access to the jewellery.
On 21 May 2012 Stephen sent Jonathan the requested digital photographs of the deceased's jewellery. But Stephen kept maintaining that as applications for probate only required estimates of value "I see no pressing need to get all the jewellery valued by a jeweler". He suggested obtaining a valuation at the time of distribution of items from the estate if required.
But when he examined the photographs of the jewellery Jonathan was even more inclined to dispute a valuation of only $4,000. He said "…it would appear that you have forgotten to photograph mum's four rings which are in themselves worth about $4,000". Jonathan suggested his estimated value was $10,000, so proposed "…let's put a median value of $7,000" minus the rings which he said brought the total value back up to $10,000.
Then on 23 May, expressing concern that further delay was occurring and "to avoid further argument" since "you obviously refuse to have the collection valued for reasons unfathomable to me" Jonathan agreed to a valuation of $7,000 of all the jewellery for probate purposes.
The same day Jonathan reiterated his position "I do not refuse to get the jewellery valued. It is just an unnecessary cost as the probate application form…states that an estimate is sufficient. He again proposed sorting out any remaining disagreement about value when it came to distributing the jewellery and other assets. Ultimately that too was a reasonable position. Stephen was not refusing outright to have a valuation. He was agreeing that one could take place if still required later.
By June 2012 Jonathan and Stephen had at least agreed upon an estimated value for the deceased's jewellery for probate purposes in the sum of $7,000. They later included this figure in the inventory for assets of the application for probate.
The jewellery issue then went to sleep for a long time. In an email of 20 May 2013, which was largely dealing with the issue of the sale of the deceased's house, Stephen mentioned that the jewellery had a value attributed to it of $7,000.
A few days later on 22 May 2013, again in the context of discussions about selling the house, Jonathan asked Stephen "have you had the jewellery independently valued yet?"
This, perhaps predictably, produced a strong reaction. On 27 May 2013 Stephen wrote back to Jonathan expressing misgivings that the jewellery had been included among estate assets at all. He wrote in the following terms: "No valuation has occurred because I haven't been able to bring myself to do it, which is also why you selected whatever you wanted on 05DEC2012. However, after going back over the matter, I have just noticed that, in your email dated 23MAY2012, you stated Mum gave her jewellery to Jessica. This was after you stated that Mum gave her rings to Jessica on 10APR2012. Therefore, the jewellery should never have been included in the estate assets as it was gifted to my daughter as Mum's only grand-daughter. I have always claimed that Mum said her jewellery should go to Jessica. So with your confirmation of this I therefore consider this item closed as Mum's wishes have been acted upon. Jessica will receive the gift when she turns 18."
Stephen gave some short oral evidence about the jewellery issue. The Court asked him why he had denied the need for a jewellery valuation. His answer was that the application for probate only required "an estimate" the value, so he did not think that a full valuation was necessary. Moreover, he says that a valuation would cost approximately $3,500. This seemed to be an afterthought and a rationalisation for not agreeing to the valuation, as Stephen agrees that he did not point out to Jonathan at the time that a valuation would be that expensive.
Stephen contends that this history shows that he neither removed the jewellery from the estate, nor deliberately failed to account for it. Moreover, Stephen says that the informal arrangement that existed about the jewellery between he and Jonathan clearly reflected the deceased's express wishes that Jonathan should keep the amber necklace that he had given to his mother, the deceased, and that the balance of the jewellery should be given to Stephen's daughter. But Jonathan insists that the jewellery be treated as an estate asset. And he has in his favour that Stephen agreed for a period that it was an estate asset.
The continuing dispute about the jewellery was the fault of both sides, who have taken positions which were reactive to one another. Neither side can be said to be unreasonable and the other side reasonable. On this issue the litigation cannot be said to be the fault of one party or the other. Jonathan was justified in asking for some objective valuation of the jewellery rather than an estimate, as he had not seen it for years. Stephen agreed to a deferred valuation but baulked at giving one after some distributions had occurred.

Issue Two - Monies Allegedly Paid for the Benefit of Jonathan

The correspondence relevant to this issue commences before the deceased's death. On 6 July 2011 Jonathan forwarded an email entitled "as per our conversation" to Stephen providing him with customer access details and a password together with full account, name and address details in respect of his mother's account that he was operating as her attorney.
But shortly after their mother's death Stephen wrote to Jonathan in a way that presaged trouble ahead. He had just read the will and no doubt would have noted that he and Stephen were the executors appointed under the will and said he wished to advise Jonathan of the following: "As joint executor and trustee of mum's will I no way agree and have ever (sic) agreed to any application for probate at this stage. I have only agreed to arrangements regarding mum's funeral. I also wish to request that any correspondence on matters regarding mum's will an estate be in written form. I do not agree to anything unless in writing. We can get together at a date after the funeral to discuss issues regarding the will and estate".
This was the first of a series of grudging steps in which Stephen only agreed to progress slowly in estate administration because of distrust of his brothers. In response to this email from Stephen, Jonathan replied the same night explaining what the probate process was about.
After the funeral Jonathan indicated in an email on 7 November 2011 to Stephen: "I strongly recommend that we hand over to mum and dad's solicitor of the last twenty years, Mr Bernie Hayward, to conduct the whole process as an independent third party".
There was obviously sufficient disagreement between the two brothers about money allegedly received by Jonathan from Ngaere and Robert. So they decided to hold a face-to-face meeting to try and sort things out.
Each of the plaintiff and the defendant gave short evidence of no more than about 10 minutes as to their discussions with one another at two meetings between them. The Court permitted this evidence to be adduced solely for the purpose of ascertaining what each side would have said at a hearing on the issue were the trial to have proceeded to a full contest but not so the Court could determine which of the versions was correct. The first meeting took place and Gloria Jean's Coffee in November 2011, only a short time after their mother's funeral. The second meeting was held at the offices of Mr Hayward in December 2012. The parties' versions of these two meetings may now be shortly summarised.

The First face-to-face Meeting at Gloria Jean's Coffee - 9 November 2011

The plaintiff's version of the first meeting on 9 November 2011 was detailed. Jonathan says that he told Stephen that he was not at any stage acting under a power of attorney in any of the transactions with his parents' financial affairs in which he participated.
Jonathan says that this first meeting only concerned transactions between their father's death and their mother's death. He says that before this meeting he printed out bank statements from about six weeks after their father had died, until a time about a month after their mother went into a nursing home. He says that these bank statements showed all the cheques that had been drawn in this period. He says that he showed them all to Stephen because he had the impression by then that there were problems arising between them about financial issues.
Jonathan says that it was self-evident at this first meeting that the cheque numbers that showed on the bank statements corresponded with the cheque numbers in the cheque-book stubs. Jonathan says that he had annotated the bank statements to show the purpose of each of the payments. He says from recollection that most of them were for bills and some were gifts either to him (Jonathan), or to Stephen. Jonathan says he took Stephen through all of this material, including various payments that only showed up as having been made online, rather than by cheque. But he says when he had gone through it all that Stephen said to him "this is not good enough". Jonathan recalls that his response to that was simply to say "that's all you get when you pay online".
Jonathan says he gave a great deal of information to Stephen on this occasion. He says he gave a summary Excel spread sheet breakdown of the relevant expenditure contained in the bank statements. He says he went to these lengths, because there was a question about matters including ATM withdrawals and some cash withdrawals.
Jonathan elaborated. He said at this first meeting that, he went through the bank statements and explained where the cheques had all gone. He says that he gave over the receipts for any bills that had been paid. Moreover, he says that he gave Stephen an Excel spread sheet breakdown of where their mother's money had gone over the 86 weeks between their father's death and her going into a nursing home. Jonathan says that he explained to Stephen on this occasion all of their mother's finances for that period. According to Jonathan he said he was not involved in the financial affairs of their parents up until their father died other than physically to pay the bills from time to time as requested. He says that by the time of their father's death their mother did not know much about the basic family finances. Jonathan says that often their father's death he had to piece their parents' financial situation together and explain to their mother where she was financially. This account of the first meeting is largely consistent with the position Jonathan took in the email correspondence between the brothers.
Jonathan's account is that after his father's death his mother had asked him to pay particular bills as required. Sometimes their mother paid the bills and sometimes Jonathan paid them and sought reimbursement. Jonathan claims that he showed his brother cheque stubs for this period, some of which were in their mother's handwriting and some of them in Jonathan's handwriting, there being no pattern as to who drew the cheques.
In addition to paying bills for the parents, Jonathan concedes that he did receive some financial benefits from his mother: she offered to provide air-conditioning and a hot water system for Jonathan and his family. This was apparently in exchange for the services Jonathan had provided to her in organising and lodging their father's probate application. According to Jonathan, their mother said that she had not wanted to spend money on lawyers but preferred to have Jonathan undertake the necessary steps to lodge the application for Probate. In exchange she offered to provide air-conditioning for Jonathan's house, because he and his wife had a new baby and it was hot. Jonathan says he undertook the Probate application.
Jonathan says that he would pay a number of bills for her over several months, including for the installation of the air-conditioning, and then he would be reimbursed by his mother for all the bills that he had paid, sometimes in one cheque. Jonathan says he paid for all their mother's outgoings including utilities, telephone, Optus cable television and the like.
Jonathan says that at this first meeting he took Stephen through each transaction for that period after their father's death and whilst their mother was still alive. He then showed Stephen the cheque stubs, to demonstrate how they corresponded with the entries in the Excel spread sheet and the bank statements. But Jonathan did not leave any original documents with Stephen on this occasion.
Stephen gives quite a different account of this first November 2011 meeting. His recollection of the meeting at Gloria Jean's was not as detailed as that of his brother Jonathan. In response to the question whether anything was said to him by Jonathan at the meeting "about him paying any sums of money out of your parents' bank account either under, or not under, a power of attorney", Stephen said "I would have asked that they be in writing". But he could not recall anything along that subject being discussed.
Stephen thought the first meeting took about half an hour. He concedes that there was discussion with Jonathan about the cheque butts which were shown to him. But Stephen says that the cheque butts were all in a plastic bag. He says that they "were taken out in front of me quickly, flicked through and put straight [back] in the [plastic] bag". Stephen's evidence gives the impression that there was not a detailed examination of the cheque butts on this occasion. But he concedes being shown transaction information in some form.

After the First Meeting - November 2011 to November 2012

The main themes of this period may be shortly stated. Stephen submits that because the cheques aggregated to a substantial sum that he, as one of the executors of the deceased's estate, had an obligation to investigate what had happened to these monies. Stephen was of the view that these monies had been improperly applied from the deceased's joint account with her husband for the benefit of Jonathan and had to be repaid. In pursuit of the investigation, Stephen requested Jonathan on a number of occasions to provide information relating to these transactions on the deceased's joint account.
The payments that Stephen ultimately wished to investigate were represented in a number of cheques drawn from the St George Bank Ltd cheque account that the deceased jointly operated with her late husband. These are particularized in Annexure B to Stephen's affidavit of 31 August 2015. But as will be seen from the historical narrative below, Stephen's requests for financial information were for a long time very non-specific.
Stephen contends that Jonathan did not reply to his verbal and written requests for information or documents relating to the questioned transactions. Jonathan says that he did reply and gave an adequate account.
Directly after the first meeting at Gloria Jean's Stephen foreshadowed a broader financial enquiry. On 14 November 2011, and in response to Jonathan's pre-meeting 7 November 2011 email suggesting that Mr Hayward conduct the administration of the estate, Stephen put the brakes on progress saying "at this stage I do not agree to an application for probate pending the outcome of my informal enquiry into mum's financial accounts. I have discussed this with Bernie Hayward and he stated that there is no rush regarding the matter of probate". Stephen referred to the "productive discussion" at Gloria Jean's and thanked Jonathan for the information provided thus far and then foreshadowed "therefore I will proceed with my enquiry and, as per our discussion, look forward to your co-operation which will only serve to expedite this process". This indicates that there was some disclosure of documents concerning these transactions at the Gloria Jean's meeting.
There must have then been some other specific disagreement, because on 15 November 2011 Stephen emailed saying, "I apologise as I was out of line". But he foreshadowed the continuation of his general enquiry into monies advanced Jonathan saying "I will continue my enquiry with the intention of applying for probate once complete". The position he seemed to be taking was that he would not co-operate in the application for probate until his enquiry into the financial transactions involving the deceased and his brother Jonathan was complete.
Little more happened in 2011. But on 6 March 2012 Stephen emailed Mr Hayward and copied in Jonathan under the heading "Authority to Apply for Probate for the Estate of N.J. Walker" saying "as previously discussed I now wish to apply for probate as joint executor of my late mother's estate".
Not surprisingly therefore on 12 March 2012 an employee of Mr Hayward, Ms Crystal Cheng, emailed both Stephen and Jonathan saying "I gather that both of you would like our office to handle the estate". Jonathan replied to this the same day with some basic information about the financial affairs of the estate. But Stephen replied on 16 March 2012: "As stated in the email sent to Bernie [Mr Hayward] (dated 11 November 2011) I have only agreed to your office handling the probate. I have never agreed to hand over the handling of the estate to your office. Also I do not agree to the items listed (or not) as part of the estate by Jonathan. I will seek independent legal advice on this matter and get back to you…"
Jonathan appeared perplexed by this statement. On 16 March 2012 Jonathan enquired as to what Stephen meant by Mr Hayward not being able to handle the estate. On Thursday, 18 March 2012 Stephen replied saying "I only agreed to Bernie Hayward and Associates handling the application for probate and we will jointly administer the estate. Once again I do not agree with the list of estate assets".
Jonathan's reply email of 19 March 2012 contains an important statement that Jonathan made, which is relied upon in Stephen's case. This statement must be seen in context. In response to Stephen's persistent view that Mr Hayward would not be involved in estate administration but "we will jointly administer the estate" on 19 March 2012 Stephen said the following: "For the sake of transparency & accountability the administering of the estate should be undertaken by an independent 3rd party; namely Mr Hayward. I am handing over to Mr Hayward, I am not administering the estate with you."
Jonathan anticipated difficulty in being able to secure co-operation with Stephen. Thus his words "I am not administering the estate with you" were not renunciation of probate or a refusal to execute Jonathan's duties as executor. They were merely a statement that the day-to-day administration of the estate should be done through a lawyer rather than continue to be negotiated between the two brothers.
But Stephen misinterpreted what his brother had said. In an email on 30 March 2012 Stephen referred back to the statement "I am not administering the estate with you" and asked "…is it still your wish to refuse to co-operate as joint executor of the estate of N.J. Walker?" This seemed to be attributing to Jonathan a refusal to co-operate in executorship at all.
But that was not what Jonathan was saying. In an email of 8 April Jonathan made clear, "there is no question regarding my acceptance of appointment as joint executor and trustee for the estate of our late mother N.J. Walker". Jonathan went on in this very detailed email to accuse Stephen as having "shown no compunction in subjecting me to a sustained onslaught of raging anger, verbal abuse, threats and accusations. You have given me no reason to believe that this ongoing attack will cease". This detail was the basis of Jonathan's position of reluctance to administer the estate with Stephen without the intervention of Mr Hayward. After accusing Stephen of bringing "complication and delay into what should otherwise have been fairly straight-forward" he said to Stephen "state clearly what your objection is to Mr Hayward administering the estate on our behalf".
The response to this 8 April email that Jonathan received was an email from Stephen on 9 April. Referring to Jonathan's detailed allegations to justify his "verbal abuse statement", Stephen commented "overall that is quite a well written fabrication".
On 10 April Jonathan again asked Stephen for his "objection" to Mr Hayward administering the estate for both of them.
On 24 April Stephen replied to this in the following terms: "I do not object to Mr Hayward administering the estate. However, I do not agree at this present time to ensure that I am afforded the opportunity to request an audit as advised by my solicitor"
Objectively read this statement seems to mean that at the end of the day Stephen would not be objecting to Mr Hayward administering the estate but was withholding his agreement "at this present time" so that an audit could be undertaken. Stephen then listed a series of reasons for this, alleging general misconduct by "the attorney", a reference to Jonathan. The alleged misconduct includes matters such as: "the attorney has not provided verifiable records accounting for the $100,000 in cheque withdrawals"; and again Stephen alleged "the attorney [Jonathan] denied any knowledge of $20,000 in ATM and cash withdrawals even though he was responsible for the principal's accounts and the principal did not know how to use an ATM"; and again "the attorney [Jonathan] admitted to receiving a lump sum payment in the order of at least $50,000" and there were other detailed allegations rounded off with a statement "the attorney has in no way provided adequate financial records". Stephen cited these incidents as constituting "questionable activity" and he then concluded "for the sake of transparency and accountability an independent audit of the estate must occur as a matter of due process".
It was at this point that the parties then returned the issue of the jewellery in their email correspondence. Apart from sparing references in emails, the brothers only returned to the issue of estate administration in about September 2012.
But on 5 July 2012 Stephen reiterated to Ms Cheng, the solicitor with carriage of estate affairs assisting Mr Hayward, "In light of what has transpired thus far my decision regarding the completion of administration of the estate will be pending an initial inquiry as to the estate's accounts upon obtaining access". The substance in this communication to Ms Cheng is clear: Stephen was withholding his co-operation in administration of the estate until there had been an inquiry into the estate accounts.
Stephen returned to this subject on 8 September 2012. On 8 September 2012 Stephen declared to Jonathan by email, "Now that probate has been granted I will conduct an inquiry into the estate in light of what has transpired". He requests in this email that Jonathan as joint executor agree to accessing the bank's financial records for the purposes of the inquiry and says "I also request you provide to me your financial records kept and maintained by you in your capacity as power of attorney". This was the beginning of a series of requests that led ultimately to a second meeting in December 2012 between the two brothers at Mr Hayward's office. Jonathan responded the following day, protesting that he had already "co-operated in good faith" by providing a great deal of information including, as he said: password access on 6 July 2011 permitting Stephen to view two previous years' of account records available until the application for probate commenced; an annotated transcript of the deceased's bank accounts during the meeting at Gloria Jean's; and, the online banking receipts for bills paid from six weeks after their father's death until 13 May 2011, together with an accounting break down for the same period on an excel spreadsheet. On 10 September 2012 Jonathan provided supplementary information to Stephen based on his inquiries from the bank.
This produced a curious response from Stephen. He declared "this is an inquiry into your conduct as power of attorney". He declared he wished to make similar queries "independent to your actions and seek your agreement where required". He then said the following: "So that there is no confusion as to your co-operation…as joint executor I offer you the opportunity to agree to obtain all financial records available for the purpose of my inquiry into the estate in light of what has transpired. Do you agree? A definitive yes or no is sufficient."
This was hardly a reasonable answer to the supply of information Jonathan had already undertaken. Stephen was in effect demanding that all the information be obtained again from the banks, but without specifying which information that Jonathan had already supplied was said to be unreliable or why it was thought to require to be produced again.
But this standoff prevented the administration of the estate from proceeding. On 21 September Jonathan instructed Crystal Cheng to proceed with the administration of the estate and the dispersal of assets. Two days later on 23 September Stephen instructed her "I do not agree to B.Hayward and Co administering the estate of N.J. Walker [at] this estate". Stephen explained the stance he was taking to Jonathan in a parallel email to Jonathan saying, "I doubt your sincerity" and then drawing the line in the sand, "Unfortunately I will not agree to settling the estate until I finalise my inquiry into the estate assets in light of your conduct".
Jonathan appeared mystified as to what he was alleged to have done wrong. Looking at the correspondence the allegations Stephen was making against him were hardly clear. In an email of 24 September expressed his exasperation with Stephen's calls for a general inquiry on the basis of "what has transpired". Jonathan said to Stephen "You repeatedly refer to 'what has transpired' as if some matter with a factual basis has been established. What is it that has supposed to have transpired?"
Later the same day Stephen replied to explain what he meant by "what has transpired". He then repeated the general allegations made in his email of 24 September: citing the attorney's [Jonathan's] statements about possibly purchasing a car for himself from the principal's [the deceased's] funds and about purchasing dental work for Jonathan's partner from the deceased's funds; citing Jonathan's alleged refusal to account to him [Stephen] for his [Jonathan's] actions under the Power of Attorney; citing the alleged misuse of the principal's money to repair a car mainly used by the attorney.
But at least progress had been made by 24 September about the quality of Stephen's access to the estate's financial records. Stephen declared in this email that he did have access to all the estate's bank records and would therefore "proceed with my inquiry without delay". Stephen seems to have had enough information to do analysis of the transactions he was challenging, at least those transactions after Ronald's death. Nothing of relevant substance took place before the second meeting between the brothers at Mr Hayward's office.

The Second face-to-face Meeting at Mr Hayward's Office - December 2012

A second face-to-face meeting took place between the brothers. This second meeting was concerned with the subject of cheques and payments that had taken place before their father's death, in contrast to the first meeting which had discussed transactions before his death. The second meeting took place at Mr Hayward's office on 6 December 2012. According to Jonathan, Mr Hayward did not actively intervene in this discussion but acted in the role of counsel to each side to help facilitate the discussion.
At this second meeting, according to Jonathan, Stephen was questioning Jonathan's possible misuse of his power of attorney by drawing cheques before their mother's death. But according to Jonathan's evidence in these proceedings and his emails to Stephen, he only had their parents' powers of attorney from 2003 as a contingency, in case either parent became incapacitated. Jonathan explained that neither parent became incapacitated before their father's death and he therefore did not need to draw cheques using the power of attorney before then.
Jonathan further says that if Stephen was concerned about him writing cheques using the power of attorney then he, Jonathan, was interested to see the cheques that Stephen apparently held and upon which his suspicions seemed to have been based. Soft copies of the cheques were said to be on Stephen's computer. But according to Jonathan, Stephen refused on this occasion to attempt to start up his computer, using the excuse of "security reasons". According to Jonathan this demonstrated that Stephen did not have any hard evidence to show that he, Jonathan, had ever misused his power of attorney.
A cheque for a lump sum of $15,000, drawn in 2005 before the death of either parent, attracted Stephen's particular attention. Jonathan explained about this cheque that it was to cover the expenses of a trip which Jonathan took to accompany his mother to New Zealand to see her own family for the last time, to join a large family reunion. Their father did not come on this journey. He was too ill to travel. Jonathan says that the deceased wanted him to organise all the travel and the bills and to ensure that adequate respite care was arranged for their father, whilst they were away. He says that their mother said to him of these arrangements, Jonathan, "I don't want any problems. We won't mention it to Stephen". They travelled to Ponderoa and to Auckland together.
According to Jonathan's version there never was an occasion at this meeting or otherwise where the two brothers together went through the cheques drawn in respect of transactions before their father's death. This period of transactions was discussed at their second face-to-face meeting but not in a context of examining individual transactions.
But according to Jonathan, another transaction did receive closer scrutiny from Stephen. Jonathan says that Stephen rang him at one stage and asked him whether he had ever been given any money. Jonathan says that he replied and said "yes" that he had been given $50,000, in two lots of $25,000, by their parents, as the deposit on the purchase of a new house. Jonathon explained, that their parents had told him [Jonathan] that they had given the same gift to Stephen and that when Jonathan came to buy a house they would treat him equally. Jonathon says that this is supported by the 2005 wills of the parents that each gave $25,000 Jonathan; but by the time of the 2009 wills this gift had been taken out of the wills because the advance to buy the house had by then been made.
Stephen's version of this second meeting is short. He denied that there was any conversation at the time of the second meeting about whether or not any transactions that Jonathan had undertaken were under a power of attorney. Otherwise he did not give much evidence about this second meeting.

After the Second Meeting - January 2013 to July 2014

In the first quarter of 2013 the parties were involved in discussions to facilitate the sale of the estate's real estate, communications that were not especially acrimonious although terse at times. Then in April and May there were disagreements between the parties about setting up joint bank account with the Commonwealth Bank to invest the $50,000 which the deceased had provided to be held on trust for their brother Andrew. But in the midst of this correspondence Stephen declared his attitude to Jonathan in no uncertain terms on 1 May 2013: "There is absolutely no trust between us. As a result, I will do anything within my power to ensure due process is followed and I am satisfied that my family is protected from you. I want nothing more than to get the house over with so that we can turn our backs and walk away from the moral void that you are."
Other allegations of a similar kind that indicate Stephen's attitude. On 15 May 2013 he emailed Jonathan again "Once I am satisfied my family and I are protected from you then things will proceed to the next step" and then again on the same day Stephen wrote to Crystal Cheng, "At this stage I do not agree to distribution of the remainder of the estate, as there is still the matter of my expenses and the other estate assets. Let's just sell the house first and then I will decide the course of action then". Stephen is making it clear to the solicitor, Ms Cheng, and to Jonathan that only he will decide when estate administration proceeds.
In lengthy emails in reply in May 2013 Jonathan protests that Stephen is trying to "hold the estate to ransom by having the proceeds of the sale deposited into Mr Hayward's trust account and then do nothing with the account perversely refusing to complete distribution in a continued attempt to extort further concessions from me". And Jonathan expresses some mystification as to what Stephen means by his "family needing protection from me".
On 20 May 2013 Stephen turns up the heat. In an email of that date he declares he will "always fall back to due process as I feel you are trying to force me to agree to your demands. This only increases my suspicion of you and my caution". This same email declares: that Stephen "will not be bullied by you [Jonathan]"; that "you [Jonathan] have utterly disgraced the principles that mum and dad stood for"; and Stephen must exercise extreme caution because of Jonathan's "Machiavellian imagination". Whatever Stephen thought of his brother's conduct, getting on with the analysis of the documents that had been given to him and the access that he had to financial accounts was the way to resolve things rather than inflaming relationships with florid correspondence such as this.
In his letter of 27 May 2013 Stephen makes the position clear that he contemplates what he might or might not do in relation to blocking distribution from the estate: "I see no reason why I would block distribution, at this stage, as I have been reimbursed my expenses and pursuing your prosecution, although highly desirable, would more than likely be unsuccessful due to insufficient evidence as seems to be the case in crimes of this nature"
But the saga went on. Between June 2014 and January 2014 the brothers were occupied with debate about the selection of suitable agents for sale and the auction of the house and aspects of the trust set up for Andrew. The discussions were terse and frequent but without particular significance for the present dispute. While the brothers were preoccupied with marketing the estate's real estate, little seems to have happened concerning the analysis of Jonathan's alleged use of the power of attorney or any transactions between himself and his parents.
But estate administration restarted in earnest in early February 2014. On 11 February 2014 Stephen authorised Mr Hayward's firm to distribute the remainder of the estate "as per the will". The same day Jonathan authorised Mr Hayward's firm to do the same. But just before these authorizations were given, in what appears to have been December 2013 Stephen raised again his allegations concerning Jonathan's receipt of large sums of money "from the estates of" their parents. Stephen seemed really to have meant the receipt of monies from their parents, during their lifetime, rather than from their estates. Stephen referred back to the meeting in the presence of Mr Hayward that was held on 6 December 2012 and said to Jonathan, "I am willing to deem this an accrued loan from the estate that must be repaid. You may end this matter immediately by agreeing to return a sum of $100,000 to the estate within 28 days as repayment of the loan in full." This was effectively demanding that monies paid to Jonathan all be treated as loans.
But Stephen provided Jonathan with an alternative. He explained in the same December 2013 email that if Jonathan disagreed with "this judgment" [of Stephen], then as joint executor Stephen requested that Jonathan provide all records and account for all cheques and monies he had received from the estates of the parents "during your tenure as sole power of attorney". But Jonathan had already explained long ago that he had not undertaken transactions actually using the power of attorney.
Stephen made this a high-stakes demand. He said to Jonathan in the December email that "failure to provide this information (in full) within 28 days will result in an application for your removal as joint-executor on grounds that: you refuse to act in the interests of the estate and beneficiaries; you have failed to account to myself as co-executor; and, there is a conflict of interest which prevents the proper administration of the estate."
Stephen had by then acknowledged the receipt of considerable information from Jonathan. This demand was still non-specific. If there were particular transactions that were of concern to Stephen or even by then particular classes of transactions that were of concern to him, then they no doubt could have been identified and presented to Stephen so that he could specifically address the transactions or classes of transactions of concern. But Stephen's email did not offer Jonathan that opportunity in an estate administration that had been going on for two years. Instead Jonathan was faced with a blanket demand for everything.
Then in email after email from mid-February 2014 Stephen asserted to Jonathan that "it is your responsibility to account from monies received by you during your tenure as sole power of attorney". Once again the demands were unspecific.
Then between March and June 2014 this issue went quiet. Finally in June 2014 issue of distributions from the estate came to the fore. Jonathan gave his authorisation for distributions from the estate and the payment of certain professional fees and expenses. But when Stephen was asked for his part of their joint instructions to allow distributions from the estate he wrote to the estate's solicitor on 30 June 2014 stating, "Now I am more than happy to distribute the estate but I'm still prevented from doing so due to the lack of accountability at the hands of the other co-executor during his tenure as sole PoA [Power of Attorney]. Can I make this any clearer?" Please feel free to remind the other co-executor of his responsibility."
But by July 2014 the correspondence directly between the brothers seems to have ceased and correspondence commenced that involves a lawyer on at least one side or the other. Perhaps this is not surprising as the correspondence directly between the two brothers had been so unproductive.

Further Attorney's Correspondence before trial - July 2014 to November 2015

On 21 August 2014 Jonathan's solicitors wrote to Stephen complaining that there has been "an impasse in resolving the finalisation of your late mother's estate". Jonathan's solicitors indicated that they wish to "move forward and resolve the same" including "any concerns you may have concerning the estate funds" without the parties expending "on our estimate more than $80,000 each on legal fees in contested litigation". This was a bleak but accurate prediction of the litigation that was yet to come. However, striking an optimistic note, Jonathan's solicitors said "accordingly we look forward to your cooperation in bringing this matter to finality".
Then Jonathan's solicitors asked for a list of what Stephen thought should be addressed. In polite language they said to back to Stephen, "Please forward to us a list of any matters that you believe required to be addressed by our client so that we may maintain proper instructions and hopefully, all matters can be resolved in the near future, and your relationship with our climb can be restored."
Stephen replied in a letter of 1 September 2014 addressed to Jonathan's solicitor. But in the reply he returned to familiar demands, "There is no impasse". He simply requested that "his co-executor account for all monies received during his tenure as sole power of attorney". He pointed out that Jonathan had refused to supply this account on multiple occasions. Stephen declares, "I want nothing more than to finalize this matter also." But asserts that Jonathan "has prevented timely administration of the estate through his own refusal to cooperate" he then adds that "the amount remaining in the estate has been retained to cover the outstanding monies that your client refuses to account for". The bottom line of Stephen's 1 September letter is "your client may end this matter immediately by simply agreeing to repay all monies received from the estate."
Jonathan's solicitors responded on 8 September 2014. Their response was a defining moment. They took a position which they did not thereafter vary and which was ultimately accepted by Stephen just before the trial. Jonathan's solicitors noted that Stephen's request for an account was "for all monies received during [Jonathan's] tenure as sole power of attorney". Jonathan's solicitors' 8 September reply clearly stated "no such receipts exist for the period referred to. Our client is not acting as power of attorney for either of your parents during the period. Our client was acting under direction from your father who often requested that our client pay multiple bills for him. All receipts from the post office were handed to your father. Our client was acting under direction from your father who often requested that our client pay multiple bills for him. All receipts from the post office were handed to your father." The letter went on to explain that after their father's death that Jonathan also did not act as their mother's attorney. The letter pointed out that Jonathan had acted under direction to pay her mother's bills and that all receipts for that period had been supplied to Stephen already. The letter made clear that Jonathan's first actions as the deceased's attorney did not occur until after she started to deteriorate in hospital and her subsequent admission to the nursing home. The letter explained that the power of attorney executed in 2003 was only executed as a precautionary move in the event that either parent became incapable of dealing with their affairs. The letter then gave a full account of the expenditure in 2005 resulting in a deposit of $15,000 into Jonathan's account, expenditure related to the trip to New Zealand, a matter already dealt within these reasons. Much of what was being asserted in this letter had been said before by Jonathan, mostly in writing.
Stephen points out in submission that the explanation is at odds with the explanation that Jonathan maintains in his most recent affidavit. This is not correct. Jonathan's position has been consistent since at least the time of this letter. Indeed as the earlier narrative shows, Jonathan had given much the same explanation in the prior email exchanges.
Stephen replied quickly, maintaining in an undated letter sent shortly after 8 September 2014 that his concerns about monies that may be owed to the estate had not been allayed. He stated "your client has not addressed my concerns". He asserted further in this letter, "your client has neglected to account for the numerous cheques received by him during his tenure as sole power of attorney." Then for the first time Stephen attached a list of the cheques that he was complaining about, entitled "A schedule of unaccounted for cheques received by JJW", which covers a series of cheques between April 2007 and February 2011. Stephen deemed each of the 21 cheques to be loans
But somewhat surprisingly that letter did not evoke a meaningful response from Jonathan. Stephen was at last limiting his claim to a specific number of transactions. A short letter of response would probably have gone a considerable way towards explaining these transactions and may ultimately have had a similar effect to the orders that the Court made at the directions hearing on 5 November 2015, orders that ultimately eliminated this issue.
After this there was correspondence between solicitors. Then the proceedings were commenced by Summons in June 2015. Four months later they came on before the Court for directions then hearing. The $2,000 limit that the Court placed on cheques that could be questioned meant that there were only 11 cheques still in dispute by November 2015. Eight of them were dated before Ronald Walker's death and covered the period April 2007 to July 2009. Jonathan's November 2015 affidavit shows that all of those cheques were signed by his late father, Ronald and not by him, a matter which he, Jonathan, had long asserted. The last three cheques of the 11 in total were all signed by the deceased, Ngaere Walker, between December 2009 and December 2010. These cheques after the Ronald's death demonstrated that Jonathan did not sign using the Power of Attorney.
In my view Jonathan is somewhat to be criticized for not giving this information earlier in the tabular form that it was served pursuant to the Court's directions. On the other hand his position is understandable and not unreasonable. He had asserted the effect of this information many times during the administration of the estate. He had reason to believe that Stephen actually already had some of the cheques in question, when he [Stephen] was requesting even more information. But in my view that conduct is far less significant than Stephen's conduct in promoting the dispute between these parties, leading to the necessity for someone to bring proceedings to resolve the impasse, either by removing one of the executors, or removing both of them and appointing an administrator.
In addition to the comments already made during the narrative above, my principal reasons for placing more responsibility at the feet of Stephen for his unreasonable conduct requiring the commencement of these proceedings are the following. Firstly, Stephen conducted truculent and aggressive correspondence for approximately 2.5 years that did not really take on board what his brother Jonathan was saying to him.
Secondly, Jonathan had at all times taken a position about the non-use of the Power of Attorney which was shown to be correct.
Thirdly, the material which the email evidence shows was handed over at the first Gloria Jean's meeting should have been enough for Stephen to see that the Power of Attorney probably had not been used between the time of Ronald's death and Ngaere going into the nursing home, sufficiently to verify that much of what Jonathan was saying about his non-use of the Power of Attorney was probably correct.
Fourthly, Jonathan had provided Stephen with Ngaere's account password and other details, to give him access to Ngaere's account on 6 July 2011, several months before she died. Stephen was therefore in a position to do his own substantial investigations of the period before her death from that account access.
Fifthly, Stephen persisted in making vague requests for information to Jonathan which were difficult to answer and would have required unnecessary work to be done on his part.
Sixthly, Stephen's real complaint to question these cheque transactions prior to Ngaere's death (totaling some $79,875) was an inquiry that could not be conducted in the administration of Ngaere's estate. To question these transactions by legal means Stephen would have had to bring proceedings, which may well have been out of time, for a review of the Power of Attorney issued to Jonathan under Powers of Attorney Act 2003, s 36. The three cheques that Stephen was complaining about, said to be signed by Ngaere Walker after Ronald's death, amounted to $25,000. These are probably the only sums that he had any hope of succeeding on a power of attorney contest generated out of the administration of his mother's estate.

Application of the Costs Principles

Neither party desired to proceed with this litigation. The Court should therefore be ready to facilitate the conclusion of the proceedings by making, or not making, a costs order. The Court cannot now endeavor to determine the case on the merits to decide what might have happened at a hypothetical trial. Credit would have been in issue in this case. Among other things the Court would have had to decide what was or was not said between the two brothers at the meetings of November 2011 and December 2012.
Nor indeed can it be predicted what would have been the outcome of the proceedings. The Court's jurisdiction to revoke a grant of probate is a broad discretionary jurisdiction informed by the practicalities of what is in the best interest of the estate at the time. As appears from these reasons, despite the continuing intractable problem of Stephen and Jonathan's failure to be able to co-operate with one another, the Court has nevertheless taken the view that there is no point in revoking the probate. The Court has instead made orders to facilitate the final administration of the estate.
But it is possible to determine whether one or other of the parties has acted so unreasonably that the other party should have the costs of the action. In making this determination the Court is entitled to look not only at the period of litigation but at pre-litigation conduct. Here both periods are influential in the Court's decision. Analysis can conveniently be divided by reference to the jewellery issue and the money alleged to benefit Jonathan.
As to the jewellery issue, the Court's earlier analysis shows that both parties were equally responsible for the misunderstandings and the disagreements that arose. They both took not unreasonable positions. Neither in my view was better or worse in this than the other. If the jewellery issue alone were considered on its own the Court would leave each party to bear its own costs of the proceedings.
The monies allegedly loaned to or paid for Jonathan's benefit had a more complex history. And on this issue the analysis above shows that although Jonathan's conduct was not entirely above criticism it should still be assessed as reasonable. But it was the persistent, unreasonable conduct of Stephen led to this litigation. Moreover the disagreements on this issue were so great that they in my view largely accounted for the continuing deadlock between the parties and the need to commence some litigation to resolve the deadlock. The Court has had to go through the parties' disagreements in some detail for this analysis. But a clear picture has emerged.
The Court's analysis shows that in my view some order for costs in Jonathan's favour is appropriate. But the Court is not prepared to make an order for costs entirely in his favour. Account must be taken of the parties' conduct in the jewellery issue and the fact that in respect of the monies allegedly paid for Jonathan's benefit that Jonathan was potentially capable of avoiding what happened but did not. In the result the Court has reached the view in these circumstances that the defendant should pay two sevenths of the plaintiff's costs of the proceedings.

Orders

For the reasons indicated the Court makes the following orders: 1. Order that the defendant pay two sevenths of the plaintiff's costs of the proceedings. 2. Note the agreement of the parties that the plaintiff's costs are no more than $70,000 inclusive of GST. 3. Subject to agreement between the parties as to the quantum of the plaintiff's costs or alternatively subject to proof and determination by the Court of his actual expenditure on legal costs, the plaintiff is entitled to deduct two sevenths of his legal costs from the funds held in the defendant's solicitor's trust account. 4. Grant liberty to apply in relation to the implementation of these orders.

Amendments 29 February 2016 - Headings- format 07 June 2016 - [133] "before dated Ronald Walker's death" changed to "dated before Ronald Walker's death" [134 "In my view Stephen" changed to "In my view Jonathan" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2016

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Judgment (20 paragraphs)

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Cases Cited (7)

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