IN THE COURT OF APPEAL OF TONGA
Court of Appeal, Nuku'alofa

CA 05/2002

Fonua

v

Taufateau

Burchett and Tompkins JJ, and Ward CJ
15 July 2003; 25 July 2003

Wills – executor's duties – obligation to beneficiary

The appellant was the first of three defendants to a claim to property passed under a will. He was one of two executors of the will. The other executor was the wife of the plaintiff/respondent. The third defendant was the son of the deceased. An interlocutory decision not to strike out the respondent's claim for damages against the appellant was made. The trial judge granted special leave to appeal. The appellant's case was that he had no legal duty to 'settle the plaintiff's claim' and that the respondent suffered no damage as a result of any act or omission of the appellant as executor of the deceased's estate.

Held:

1. The appeal must be based on the documents before the court below at the time of hearing. The position of an executor was that he had a duty to the testator and the beneficiaries to execute the will. That required him to comply with the directions given in the will and to implement its provisions.

2. The executor had no duty to the respondent to resolve any disputed ownership. His duty was to the beneficiaries and did not extend to the respondent and there is nothing revealed in the pleadings that could establish any such duty to him.

3. The appeal was allowed with costs and the case against the appellant was struck out.

Cases considered:
Kolo v Bank of Tonga [1997] Tonga LR 181

Counsel for appellant: Dr Harrison QC
Counsel for respondent: Mr Tu'utafaiva

Judgment

[1] This is an appeal from an interlocutory decision not to strike out the respondent's claim for damages against the appellant, special leave having been granted by the trial judge.

[2] The appellant is the first of three defendants to a claim to property passed under a will. He is one of two executors of the will. The other executor is the wife of the plaintiff/respondent. The third defendant is the son of the deceased.

[3] The background can be stated from the judgment:

"Before the court is an application by the first defendant to strike out the plaintiff's claim... The grounds advanced are that the statement of claim discloses no reasonable cause of action against the first defendant and that it is frivolous and vexatious or otherwise an abuse of the process of the court. The second and third defendants have taken no part in the interlocutory argument.

The first defendant is a barrister and solicitor practicing in Auckland, New Zealand. He made a will for Tevita Fauonuku (the "deceased") who was a Tongan subject then resident in Grey Lynn, Auckland. The will is dated 30 November 2000. It appoints the first defendant and the deceased's married daughter, Palu Taufaeteau, as trustees and executors.

It appears from the court records that the deceased died on 1 January 2001 and that probate was granted to him in the High Court in Auckland on 6 July 2001. Probate was then resealed in the Supreme Court of Tonga on 24 July 2001.

The deceased had properties in Auckland and in Tonga. The present proceeding relates to a building in Tonga. The relevant paragraphs in the deceased's will read as follows:

"5. I direct that my real properties in Tonga (the town allotment in Khyber-pass road and the bush allotment in Nualei) be vested in my son Tevita Fauonuku absolutely.

6. I direct that my business (retailed shop) in Tonga be vested in and run by my son Tevita Fauonuku and my daughter Mele Peaufa."

It is accepted that the reference to 'Khyber-pass road' ... is intended to be a reference to "By-Pass Road" ... [in] Nuku'alofa.

The relevant paragraphs in the statement of claim read as follows: 

"5. The deceased's estate consists of properties in New Zealand and also at By-Pass Road, Pahu, Tongatapu.

6. The plaintiff had notified the first defendant and Palu that he (plaintiff) is the owner of the following properties situated on the deceased's town allotment at By-Pass Road in Pahu.

(a) double storey building at the front of the property.

(b) residential house at the back of the property.

(c) cement water tank.

(d) garage at the rear of the double storey building.

7. The properties referred to in the immediately preceding paragraphs were built by the plaintiff on the deceased's town allotment pursuant to an agreement with deceased.

8. Palu has acknowledged the interest of the plaintiff in the properties he is claiming but the first defendant is not doing anything to settle the plaintiff's claim against the estate of the deceased.

9. The failure or refusal by the first defendant to settle the plaintiff's claim is a breach of his duties as one of the executors and trustees of the deceased's will.

10. As a result of the first defendant's failure or refusal to settle the plaintiff's claim the plaintiff is deprived of the use of his properties."

[4] Other matters were dealt with by the learned judge in relation to jurisdiction of the court but, in this court, the appellant's case is that he has no legal duty to 'settle the plaintiff's claim' and that the respondent has suffered no damage as a result of any act or omission of the appellant as executor of the deceased's estate.

[5] The learned judge correctly stated the principle that no party should have his claim denied without a hearing except where the claim is so hopeless that it cannot possibly succeed and concluded:

"The court is always reluctant to strike out a plaintiff's claim if the apparent defects are capable of remedy by appropriate amendment to the pleadings. Despite having misgivings about the plaintiff's cause of action as pleaded, I do not consider that it can fairly be said that the proceedings are frivolous and vexatious or an abuse of the court process. Nor am I prepared to hold that they do not disclose a reasonable cause of action. It may well be possible to remedy the apparent defects by appropriate amendment and I am prepared to allow the plaintiff that opportunity."

He then gave the plaintiff 21 days to file an amended statement of claim.

[6] That amended claim has been filed. In light of the judge's expressed misgivings, Mr Harrison suggests this court should look at the new pleading to see whether, even after amendment, there is any more substance to the claim. Mr Tu'utafaiva for the respondent urges the court to consider this application solely on the material which was before the judge at first instance. We agree that the appeal must be based on the documents before the court below at the time of the hearing.

[7] This appeal hinges on the suggestion that an executor has a duty to settle the plaintiff's claim. It should be remembered that the plaintiff is not a beneficiary under the will and he does not dispute the clause purporting to settle the town allotment in Pahu on the third defendant. It should also be mentioned that the appellant was one of two executors. His co-executor was the wife of the respondent and, although in the same position as the appellant, the respondent has not sued her (or has 'opportunistically omitted' to do so as Mr Harrison puts it).

[8] The position of an executor is that he has a duty to the testator and the beneficiaries to execute the will. That requires him to comply with the directions given in the will and to implement its provisions.

[9] Paragraph 5 of the will directed that the town allotment on By-Pass Road should be vested in the third defendant. There were submissions before the court below and before us as to the ability of the testator to make such a bequest. The third defendant is the son named in the will and is the deceased's heir under the Land Act. Under that Act, the property will only vest in the heir, if he makes application within one month of the death of the holder. It is then granted by the Minister of Lands under the provisions of the Act. The nature of land tenure in Tonga means that the deceased had no title that he could pass to his son. The power to grant the title lies with the Minister of Lands only. In those circumstances, the bequest was unenforceable and must be taken only as an expression of his wish. In any event, it appears that, by the time probate was granted in New Zealand, the month had expired and the third defendant had applied for the allotment under the Land Act. 

[10] However, as we have stated, there is no dispute over the title to the town allotment. The issue in this case relates to the buildings on that land. In the absence of any further provision, they will pass to the holder of the land but, as they do not accrete to the land; Kolo v Bank of Tonga, [1997] Tonga LR 181, they may be subject of ownership claims by others. Equally they may also be bequeathed separately from the land.

[11] Paragraph 6 of the will could be taken as such a bequest. It relates to a retail business that appears to be conducted in one of the buildings on that land. The plaintiff claims those buildings were built by him on the land in accordance with an agreement between the deceased and himself and are his property. The statement of claim alleges the double storey building is occupied by the second defendant on lease from the third defendant.

[12] The pleadings state that the respondent advised the appellant of his claim to the buildings on this land and it is suggested the duty to the respondent arises from that. The defence filed by the appellant admitted such advice was given but points out that the third defendant disputes it in relation to the double storey building. Mr Tu'utafaiva, for the respondent, submits that, when the appellant realised there was a dispute over the ownership of that building, it "is an issue that he has not settled but should be settled ... It is the duty of the appellant to settle that issue."

[13] The duty on the appellant was to ensure the terms of the will were carried out. The fact that he was advised there was a claim to the building imposes no obligation on the respondent. If, as the respondent claims, he owns the buildings, he should bring an action, as he has, against the holder of the land upon which the buildings are placed and the tenant.

[14] It would be different if he had, for example, filed a caveat. Had that been done, the executor would have been under an obligation, if the dispute were not resolved, to seek an order from the court but, short of such a step, he has no duty to the respondent to resolve any disputed ownership. His duty as we have stated is to the beneficiaries and does not extend to the respondent and there is nothing revealed in the pleadings that could establish any such duty to him.

[15] As the learned judge pointed out, the power to strike out a claim is one that should be used sparingly and only in the clearest case but, when such a case arises, the defendant is entitled to an order. This was such a case and the claim against the first defendant should have been struck out.

[16] We have reached our decision without considering the amended claim. However, we would add that we have read it and we do not consider that the additional matters advance the case in relation to the appellant from the situation disclosed in the original pleading. 

[17] The appeal is allowed with costs. The case against the appellant is struck out with costs.