Beattie v Hopgood

[2019] NZHC 3276

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2019-425-000105

[2019] NZHC 3276

IN THE MATTER

of the Estate of Philip Henry Koch

AND

IN THE MATTER

of Section 21 of the Administration Act 1969

BETWEEN

JOSEPH GEORGE BEATTIE

Applicant

AND

OWEN WILLIAM HOPGOOD

Respondent

Hearing:	Determined on the Papers
Counsel:	G L Wilkin for Applicant
Judgment:	12 December 2019

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 12 December 2019 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules

Solicitors:

AWS Legal, Invercargill cc:

Michael Nidd, Farry & Co, Dunedin Mr E A Hopgood, Wanaka

Mr C W Hopgood, Dunedin

BEATTIE v HOPGOOD [2019] NZHC 3276 [12 December 2019]

Introduction

[1]Joseph George Beattie (Joseph) seeks orders:

(a)that this proceeding be commenced by way of originating application;

(b)dispensing with service on any other party;

(c)that Owen William Hopgood (Owen) be discharged as an administrator of the estate of Philip Henry Koch (Philip).

[2]        I have previously made directions joining Owen as a respondent and requiring service upon Mr Michael Nid, a Dunedin solicitor, who I understand is authorised to accept service on behalf of Owen’s welfare and property managers. I also required an up-to-date medical certificate concerning Owen’s capacity. I have now received confirmation that Mr Nid was served with the proceedings and the medical certificate.

Background

[3]        Philip died on 27 November 2014. Probate of his last will was granted to Owen and Joseph on 19 March 2015.

[4]        Philip was married to Blanche Koch (Blanche), who survived him. Philip’s will appointed Owen and Joseph as executors and trustees. They are both Philip’s nephews. Under the will, Philip’s estate was divided into two equal parts, with one- half for Blanche and the other half for Owen and Joseph as tenants in common in equal shares.

[5]        Blanche died on 9 March 2019 and Probate of her last will was granted on     9 March 2019. Whilst her will appointed Owen and Joseph as executors and trustees, for reasons relating to Owen’s capacity Joseph was appointed sole executor.

[6]        This takes me to the reason for this application. Owen has had a series of strokes and intracerebral haemorrhages and is no longer competent to make decisions regarding his personal care, welfare and property. Both a welfare guardian and

property manager have been appointed to look after his affairs. Mr Nid has accepted service of the proceedings on their behalf and they can be taken to be aware of them.

[7]        There is before the court a certificate dated 25 October 2018 of a Dr Wendy Busby, a Consultant Physician and Geriatrician of the Southern District Health Board, confirming that Owen is unable to competently make decisions due to recurrent strokes and intracerebral haemorrhages and that his impairment is likely to continue.

[8]        There is a more recent certificate of a Dr Burlow, dated 12 November 2019, which states that Owen has been a patient since October 2018 and that he is not competent to make any decisions concerning his personal welfare or property, that he has suffered cerebral-vascular events and these have significantly impaired his cognition.

[9]        Philip’s estate was made up of term deposits and a property which has been sold. The estate is in funds held in a solicitor’s trust account on interest-bearing deposit amounting to $343,080.79. The amount is ready for distribution in accordance with Philip’s will, but this cannot be done in circumstances where Owen is unable to authorise the distribution.

Administrative matters

Originating application

[10]      This application does not raise difficult issues, is unopposed and does not require particularised pleadings or interlocutory steps. It is suitable to be commenced by way of originating application. I grant leave to make application in that way.

Litigation guardian

[11]      Owen is an incapacitated person for the purposes of the proceedings. Given Owen’s incapacitated status, r 4.30 requires him to have a litigation guardian unless the court orders otherwise. This application relates to a routine matter and arises for the sole reason of Owen’s disability and his interests are not affected. All that is occurring is that he is being removed as an executor of Philip’s estate, which is a

position and responsibility he is incapable of fulfilling. The appointment of a litigation guardian will serve no purpose. In those circumstances, an order will be made dispensing with the requirement of a litigation guardian.

Service

[12]      Service on Owen would serve no purpose, but his welfare and property guardians have been served and voiced no objection to the application. Given my findings that Owen is an incapacitated person and that no litigation guardian need be appointed, I consider an order dispensing with service upon him personally is appropriate.

Administration Act 1969

[13]Section 21 of the Administration Act 1969 relevantly provides:

21       Discharge or removal of administrator

(1)Where an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.

(2)The administrator so removed or discharged shall, from the date of that order, cease to be liable for acts and things done after that date.

(3)Upon any administrator being discharged or removed as aforesaid (whether or not any other administrator is appointed) all the estate and rights of the previous administrator or administrators which were vested in him or her or them as such shall become and be vested in the continuing administrator or administrators (including any administrator appointed under subsection (1)) who shall have the same powers, authorities, discretions, and duties, and may in all respects act, as if he or she or they had been originally appointed as the administrator or administrators.

(4)This section shall, with all necessary modifications, extend to the case where an administrator dies, and the powers and authorities hereby conferred may be exercised and shall take effect accordingly.

(5)Nothing in this section shall restrict section 8.

[14]      I take guidance from the decision of Wylie J in Allen v Morgan,1 referred to in Holmes v Holmes.2 In Allen, Wylie J observed that the word “expedient” in s 21 imports considerations of suitability, practicality and efficiency. In any given case, whether the court will remove an executor or administrator will depend on whether that is a suitable, practical and efficient means of advancing the interests of the estate and its beneficiaries. The court has an inherent jurisdiction to remove and appoint new trustees. This is ancillary to the court’s overriding concern that trusts be properly administered.

Decision

[15]       I am satisfied that the orders sought should be made. Philip’s estate has now been converted into cash and is ready for distribution. This administrative step is being held up by Owen’s incapacity. The court should intervene to resolve this unsatisfactory situation. I cannot see any point in appointing a replacement administrator at this late stage.

Result

[16]There will be orders that:

a)This application be dealt with as an originating application;

b)Service of the application is dispensed with;

c)I dispense with the appointment of a litigation guardian for Owen William Hopgood;

d)Owen William Hopgood is discharged as an executor and administrator in the estate of Philip Henry Koch.

[17]No order for costs is sought or is made.

1      Allen v Morgan [2015] NZHC 1139.

2      Holmes v Holmes [2015] NZHC 2576.

[18]      A copy of this judgment is to be served forthwith upon Mr Michael Nidd of Farry and Co.

[19]      Leave is reserved to apply to seek further directions or orders as may be necessary.

O G Paulsen Associate Judge