Murray v Official Assignee in Bankruptcy of Anderson HC Auckland CIV-2010-404-003412 [2011] NZHC 709 (4 February 2011)

Last Updated: 26 July 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2010-404-003412}

IN THE MATTER OF ss 66 and 74 of the Trustee Act 1956

AND IN THE MATTER OF an application for directions by the Administrator and Trustee of the Estate of IAN DOUGLAS ANDERSON, Deceased

BETWEEN JAMES STEWART MURRAY Applicant

AND THE OFFICIAL ASSIGNEE IN BANKRUPTCY OF THE PROPERTY OF SCOTT CRAWFORD ANDERSON (BANKRUPT)

Respondent

Hearing: 4 February 2011

Counsel: D P H Jones QC for the Applicant

N A Farrands for Aztec Securities Ltd and Shenval Holdings Ltd

S E K Reeves in Person

Judgment: 4 February 2011

_{(ORAL) JUDGMENT OF DUFFY J}

Counsel: D P H Jones QC P O Box 1750 Shortland Street Auckland 1140 for the

Applicant

Solicitors: Morrison Kent P O Box 222 (DX CP18001) Shortland Street Auckland 1140 for

Aztec Securities Ltd and Shenval Holdings Ltd

_{S E K Reeves (in Person) P O Box 90150 Victoria Street West Auckland 1142}

MURRAY v THE OFFICIAL ASSIGNEE HC AK CIV-2010-404-003412 4 February 2011

[1] This is an application by James Stewart Murray, as administrator and trustee of the estate of Ian Douglas Anderson, for directions relating to the administration of the estate. The directions sought are as follows:

(a) The provisional agreement reached to settle the claim by Aztec Securities Limited and Shenval Holdings Limited (Aztec/Shenval) against the estate be implemented by the payment to Aztec/Shenval of the sum of $75,000 in full and final settlement of all claims against the estate;

(b) The outstanding legal fees of Simon Reeves, Barrister and Solicitor, totalling $35,149.76 be paid out of the estate in the first instance (subject to any direction by the Court covering apportionment of shares of individual beneficiaries); and

(c) The administrator takes such steps as are necessary to finalise the outstanding affairs of the estate, and provide a further report to the Court once all outstanding issues have been resolved or otherwise dealt with (such as they can be).

[2] The need for these directions is due to the fact that one of the persons with an interest in the administration of the estate (being Karen Linda Anderson) has not consented to the steps set out in the directions. All other persons with an interest in the estate are agreed to the steps being taken.

[3] The late Mr Anderson had three children, all of whom have an interest in his estate. They are Karen Linda Anderson, Craig Campbell Anderson, and Scott Crawford Anderson. Scott Anderson is now bankrupt and his affairs are under the control of the Official Assignee.

[4] Karen Anderson has been served with the application for directions and the supporting affidavit. An affidavit of service confirming this has been provided today. Ms Anderson has taken no steps to oppose the application. When the application was called today, she did not appear. She did file an application without

notice seeking Mr Murray’s removal as administrator last year. This suggests she would oppose any steps Mr Murray might take to resolve matters affecting the estate. But she has failed to comply with the directions White J made to advance that application. Given her absence today, her failure to oppose the present application and her failure to pursue her own application, I am satisfied that the present application can proceed unopposed.

[5] The material before me satisfies me that each of the directions Mr Murray has set out in the application for directions are appropriate and that the directions should be granted as sought, save for an additional direction relating to the treatment of the fees to be paid to Simon Reeves.

[6] The outstanding legal fees owed to Simon Reeves total $35,149.76. They were incurred when Karen and Craig Anderson instructed Mr Reeves to take steps to remove Scott Anderson from the role of administrator of the estate. This was necessary as Scott Anderson had misconducted himself in this role by improperly taking funds from the estate. Apart from Ms Anderson, everyone with an interest in the estate agrees that Mr Reeves should be paid his outstanding legal fees from the estate’s funds with the amount being taken from the interests payable to Karen Anderson and Craig Anderson. I queried whether this is a process which, in effect, attempts to garnishee the estate. It has been explained to me that it was the legal services provided by Mr Reeves which were responsible for the removal of Scott Anderson, and which prevented further depletion of the estate. It seems to me only proper, in such circumstances and when no one has objected to payment of Mr Reeves’ fees in the way suggested, that I should make the necessary order. His fees have been outstanding for approximately three years; the time limit for challenging the fees has expired.

[7] Mr Murray is to pay Mr Reeves from the estate. The payment is to be apportioned in the following way:

(i) The sum of $33,871.25 is to be deducted from the portion of the estate that would be paid to Karen Anderson;

(ii) The sum of $1,278.51 is to be deducted from the portion to

Craig Anderson.

[8] The reason for the apportionment in this way is that Mr Reeves’ legal fees and disbursements totalled $67,742.50. Payments of $32,592.74 have already been made by Craig Anderson in reduction of the account. The apportionment I have ordered is to redress the imbalance as a result of the payments that Mr Anderson has already made.

Duffy J