Harvey v Harvey

[2021] NZHC 1771

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-002531

[2021] NZHC 1771

UNDER

the Administration Act 1969

IN THE MATTER OF

an application for letters of administration

BETWEEN

SHANNON MAREE HARVEY

Applicant

AND

JATUPORN HARVEY

Respondent

Hearing:

29 April 2021

Appearances:

J B Murray for the Applicant

G J Thwaite for the Respondent

Judgment:

14 July 2021

Reissued:

16 July 2021

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 14 July 2021 at 3.30pm Pursuant to Rule 11.5 of the High Court Rules and

re-delivered by me on 16 July 2021 in accordance with High Court Rules 2016, r 11.10

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:

Vallant Hooker & Partners, Auckland Gregory J Thwaite, Auckland

HARVEY v HARVEY [2021] NZHC 1771 [14 July 2021]

Introduction

[1]    Shannon Maree Harvey (Shannon), the applicant, seeks letters of administration appointing Robert Maurice Harvey (Robert), Shannon’s uncle, as administrator of a will dated 19 November 2014 (2014 will) of Graham Trevor Harvey (Graham), Shannon’s father. Graham died at Auckland on 28 March 2020.

[2]    Shannon also seeks permission to commence this proceeding by originating application and an order requiring the respondent, Jatuporn Harvey (Jatuporn), who was Graham’s wife when he died and is the sole residuary beneficiary under the 2014 will, to produce the original 2014 will.

[3]    Dawn Wong, who was appointed executrix and trustee of the 2014 will, has renounced her right to probate of the 2014 will.

[4]    Jatuporn opposes the appointment of Robert as administrator of Graham’s will. Jatuporn abides the Court’s decision on the application to commence the proceeding by originating application. Jatuporn opposes any order that she produce personally the original of the 2014 will which, she says, she has never held.

Relevant background

[5]    In 2001, Graham and Jatuporn were married in Thailand. They returned to live in New Zealand. This was Graham’s second marriage.

[6]    Graham had two daughters, Shannon and Kelly-Ann, from his first marriage, which was dissolved in July 1998.

[7]    During his working life, Graham built up his wealth through a furniture company, Forhomes Furnishers and Flooring Ltd (Forhomes), and related investments. He also invested in the bloodstock industry. Over time, Forhomes was renamed Forhomes Investments Ltd and much of Graham’s wealth, including his home in Danica Esplanade, Te Atatū Peninsula, was consolidated into the company.  As at   11 March 2011, 199,000 of the 200,000 shares in Forhomes were held in Graham’s name.

[8]    Robert, who was Graham’s only sibling and who believes he has a reasonably good knowledge of Graham’s financial affairs over the years, states that he believes that Graham’s estate, including property in Jatuporn’s name, could be worth a substantial amount.

[9]    Jatuporn says Graham’s estate consists principally or exclusively of shares in Turners Automotive Group, which she estimates to be worth about $90,000. That estimate is on the basis that the shares in Forhomes and the Danica Esplanade property are not part of Graham’s estate.

[10]   Shannon says Graham told her and Kelly Ann that he would transfer 5,000 shares in Forhomes to each of them when they turned 21 in 1992 and 1993 respectively. However, Graham appears to have retained the shares in his own name and, for a time, to have paid his daughters the income earned on those shares. Shannon says she and Kelly-Ann continued to receive annual payments of income until about 2008.

[11]   In 2008, Graham became ill. Jatuporn says he had mercury and lead poisoning for which he received chelation therapy treatment. However, the cause of death on Graham’s death certificate was listed as progressive supranuclear palsy.

[12]   At least from the time Graham became sick, Graham’s relationships with his daughters and Robert became strained.1 Whether that was because the daughters and Robert chose to stay away or because Graham wanted them to stay away or because Jatuporn insisted that they stay away is unclear. Whatever the reasons, it is common ground that from the time Graham became ill, he had little contact with family members other than Jatuporn, who devoted herself to his care.

[13]   In July 2012, Robert was assured by a doctor caring for Graham that Graham was receiving excellent care from Jatuporn. In the same month, Jatuporn wrote to Age Care Concern, who had been in touch following an inquiry from Shannon, advising

1      There is some dispute in the evidence as to the state of the relationships between Graham and Jatuporn on the one hand and Shannon and Kelly Ann and Robert on the other hand after Graham and Jatuporn first married. I do not consider that dispute bears materially on the present application.

that Graham wanted to be left alone and that she and he did not want support from his family.

[14]   On 31 January 2013, Graham executed a new will in which he appointed Robert as executor and trustee of his estate, just as he had appointed Robert his executor in a previous will dated 23 March 2000. In the new will, Graham left all of his residuary estate to Jatuporn. He made no provision for Shannon or Kelly-Ann.

[15]   On 25 February 2013, lawyers acting on Graham’s instructions advised Robert that he and his family were not welcome to make uninvited visits to Graham and that trespass notices would be issued if they did not discontinue their uninvited visits. Shannon says she received a similar latter. Shannon also says that during one of the few times she was able to make to see her father, he told her to leave him alone.

[16]   On 19 November 2014, Graham executed the 2014 will, which revoked all previous wills and appointed Dawn Wong as executrix and trustee of the will. In the 2014 will, Graham again left all of his residuary estate to Jatuporn and made no provision for Shannon or Kelly-Ann.

[17]   Jatuporn says that by November 2017, Graham was the sole shareholder in Forhomes and transferred all of the shares to her. She says the document was signed by Graham in the presence of a witness and that the Companies Office was advised. However, she provides no contemporaneous documents, stating that she prefers to keep the documentation confidential as it concerns the private affairs of herself and her late husband.

[18]   Jatuporn registered the transfer of the shares in Forhomes and the appointment of herself as director with the Companies Office in July 2019.

[19]   By letter dated 8 August 2019, Mr Murray, solicitor and counsel for Shannon and Kelly-Ann, wrote to Jatuporn about the registration of the transfer of shareholding and the change of director and raised questions about Graham’s capacity to sign the share transfer and to appoint Jatuporn as director.

[20]   Further correspondence between Mr Murray and Mr Thwaite, solicitor and counsel for Jatuporn, ensued. Mr Murray also contacted the Companies Office and asked it to investigate.

[21]   In December 2019, the Companies Office advised Mr Murray that it had received documentation from the company evidencing the transfer of 200,000 shares from Graham to Jatuporn in November 2017 and the appointment of Jatuporn as director by Graham in July 2019. The Companies Office advised that no further action was envisaged.

[22]Graham died on 28 March 2020.

[23]   On 25 April 2020, Mr Murray wrote to Mr Thwaite about whether some provision might be made for his clients from their father’s estate. Mr Murray also raised the claims of Kelly-Ann and Shannon to shares or income from the shares of Forhomes. No substantive response was received.

[24]   In June  2020,  Mr  Thwaite  confirmed  the  existence  of  the  2014  will.  Mr Thwaite subsequently provided Mr Murray with copies of pages of the 2014 will.

[25]   On 14 July 2020, Shannon and Kelly-Ann filed a caveat against the grant of probate of Graham’s will in the High Court at Wellington.

[26]   In October 2020, Mr Murray wrote to Dawn Wong advising that Shannon and Kelly-Ann would be bringing claims under the Family Protection Act 1955 against Graham’s estate and seeking information about the estate’s assets and liabilities.

[27]   On 20 November 2020, Mr Thwaite wrote to the Public Trustee on behalf of Jatuporn and invited the Public Trustee to administer Graham’s estate.

[28]   On 23 November 2020, Dawn Wong renounced her right to probate of Graham’s will.

[29]On 22 December 2020, Shannon commenced the present proceeding.

Application for permission to commence proceeding by originating application

[30]   I consider the application to be appropriate and that it is in the interests of justice to grant permission. There is no opposition to this application. The issues are not complex. Relevant evidence has been filed by affidavit. I grant permission accordingly under r 19.5 of the High Court Rules 2016.

Application to appoint Robert as administrator

[31]Shannon and Jatuporn accept that the 2014 will is Graham’s last will.

[32]   With the renunciation by Dawn Wong of her rights as executor of the 2014 will, it is apparent that someone needs to be appointed as administrator of the 2014 will.

Submissions of counsel for Jatuporn

[33]   Mr Thwaite submits that Robert is not the correct person for appointment as administrator. He says Robert has no entitlement to appointment under the High Court Rules 2016, is not qualified and has no ability to undertake the role, was removed as executor of Graham’s will by the decision to appoint Ms Wong as executrix, will be unable to be neutral as among members of the Harvey family and is personally hostile to Jatuporn. Mr Thwaite also raises issues about Shannon which he says make it inappropriate for Shannon to be involved in the appointment of the administrator of the 2014 will.

Administration Act 1969

[34]   Section 6(1) of the Administration Act 1969 provides that, in granting letters of administration, the Court shall have regard to the rights of all persons interested in the estate and, in particular, administration may be granted to a devisee or legatee.

[35]Robert is not a devisee or legatee, but Jatuporn is.

[36]   Section 6(2) of the Administration Act provides that, where by reason of any special circumstances the Court thinks it necessary or expedient to do so, the Court may grant administration to such person or persons as it thinks expedient.

High Court Rules 2016

[37]   Rule 27.25 of the High Court Rules provides that, where an executor has renounced probate of a will, the Court may grant letters of administration to the person entitled to them according to the priority in r 27.26.

[38]   Robert does not come within any of the priorities listed under r 27.26(3). Jatuporn would come within the third priority: the ultimate residuary beneficiary under a will that disposes of the whole residue.2

Discussion

[39]   The Court of Appeal has confirmed, albeit in the context of an application for the discharge or removal of an administrator, that:3

(a)The starting point is the Court’s duty to see estates properly administered;

(b)The jurisdiction involves a large discretion which is heavily fact- dependent;

(c)The wishes of the testator (evidenced by the appointment of a particular executor) are to be given consideration, but ultimately the question is what is expedient in the interests of the beneficiaries;

(d)Expedience is a lower threshold than necessity and imports considerations of suitability, practicality and efficiency; and

2      High Court Rules 2016, r 27.26(3)(a).

3      Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22]; citing with approval Farquhar v Nunns

[2013] NZHC 1670 at [13].

(e)Hostility as between administrators and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if it risks prejudicing the interests of the beneficiaries.

[40]   While the circumstances of removal can be somewhat different from those where only the appointment of an administrator is at issue, I consider that these principles are also generally applicable to an application under s 6 of the Administration Act.

[41]   The only application before me is that from Shannon which seeks the appointment of Robert as administrator of Graham’s will. Despite her right to seek appointment under s 6(1) of the Administration Act and under r 27.26(3) of the High Court Rules, Jatuporn does not seek appointment as administrator. I consider that position to be appropriate in view of the possible challenges that may be made to the will as I discuss below.

[42]   While Robert does not come within any of the priorities identified in r 27.26, that does not exclude a grant of administration to him, given the broad discretion conferred by s 6(2) of the Administration Act. However, under s 6(1) of that Act, in making any such grant, I must have regard to the interests of all persons interested in the estate. That clearly means the interests of Jatuporn as the sole residuary beneficiary.

[43]   On one view, there are sound grounds for appointing Robert as administrator. He is Graham’s only sibling, he has known Graham all of their respective lives and Graham appointed Robert as his executor under the will Graham executed on 31 January 2013 and under an earlier will Graham executed on 23 March 2000 before Graham’s marriage to Jatuporn. Robert has also offered to perform the role either at no cost to the estate or at a very modest rate of $95 plus GST per hour if he considers he should charge for his time because of the volume of work. In all of these respects, I am satisfied it would be expedient to appoint Robert as administrator. I do not regard the fact that Graham appointed Dawn Wong as executrix under the 2014 will as constituting evidence of a deliberate decision to exclude Robert from that role.

[44]   I consider Mr Thwaite’s submissions about Robert’s qualifications and ability to perform the role to be inappropriate and without foundation. Many people perform the role of executor without having any formal qualifications. Robert has a Bachelor of Commerce degree, as well as considerable experience as an accountant. The other criticisms Mr Thwaite makes concerning Robert’s understanding of legal issues associated with the estate are not well made. Like any other administrator, Robert could be expected to seek appropriate legal advice on such issues.

[45]   I also consider that the objections that Mr Thwaite raises concerning Shannon’s involvement in the appointment of the administrator to be of little consequence. It is the Court who appoints the administrator. The identity of the applicant is essentially immaterial, as are the nature and merits of any claim that an applicant may have to the estate. Those latter questions will be addressed as and when any claims may be made against the estate. I also consider that the other objections that Mr Thwaite raises to the appointment of Robert, notably the actions of Mr Murray on behalf of his client, and the conduct of Shannon and Kelly-Ann towards Jatuporn are inappropriate and without merit.

[46]   The real question is whether it is expedient to appoint Robert given the estrangement that developed between Robert and Jatuporn over the period of Graham’s illness. Whatever the reasons for that estrangement, the fact of the estrangement is admitted by both Jatuporn and Robert, even if Robert says he has never been hostile to Jatuporn. The fact of the estrangement is evidenced by the lawyer’s letter that Robert received in February 2013, which told him and his family, in effect, to stay away from Graham and Jatuporn and threatened the issue of a trespass notice if they did not.

[47]   While hostility between an executor and a beneficiary may not of itself be a reason for removal of an executor, it is clearly undesirable to appoint an executor or administrator with whom a beneficiary already has a difficult relationship, particularly when the administrator may have to take decisions that the beneficiary is likely to be consider to be adverse to his or her interests under the will.

[48]   Section 6(1) of the Administration Act requires the Court to have regard to Jatuporn’s interests when appointing an administrator. I do not consider that I would be acting in accordance with that requirement if I appointed an administrator whom Jatuporn not only opposes, but from whom she has been estranged for at least eight years.

[49]   In addition, Shannon and Kelly-Ann have clearly signalled an intention to bring Family Protection Act claims against the estate and have raised questions about whether they have rights to shares and income from shares in Forhomes and about the validity of the transfer of Graham’s shares to Jatuporn.

[50]   With respect to the Family Protection Act claims and the possible claims to shares in Forhomes, whoever is appointed administrator will need to act impartially between Jatuporn, as the residuary beneficiary, and the claimants. The administrator will also need to have the confidence of the respective parties that that he or she is acting impartially. Regardless of whether her view is well-founded, Jatuporn regards Robert as being aligned with his nieces.

[51]   With respect to the validity of the transfer of the shares, as Mr Murray says, the administrator may have to decide whether the estate itself should bring proceedings challenging that transfer under the Relationships (Property) Act 1976. In bringing any such proceeding, the administrator will inevitably be acting in a manner that Jatuporn will consider adverse to her interests. The purpose of the application will be to bring assets which Jatuporn considers to be her personal property back into the estate. If the application is successful, one consequence is that at least some of those assets may also be available to satisfy any Family Protection Act claims that Shannon and Kelly- Ann bring.

[52]   In these circumstances, I am satisfied that I would not be having proper regard to the interests of Jatuporn as residuary beneficiary, or that it would be expedient, to appoint Robert as administrator.

[53]Accordingly, I decline the application to appoint Robert as administrator.

Where to from here?

[54]   Mr Murray says that appointment of either the Public Trust Office or the Guardian Trust would entail unnecessary cost. Mr Murray also expressed reservations about adopting the procedure followed in Cundy v Cundy, where the Registrar was directed to confer with the New Zealand Law Society on the nomination of a suitably qualified solicitor to be appointed administrator of an estate.4

[55]   Although Mr Thwaite says in his written submissions that Jatuporn seeks the appointment of the Public Trust Office as administrator, in oral submissions he agreed that if I should decide not to appoint Robert, I should give counsel and the parties the opportunity to confer and try to reach agreement on the appointment of an appropriate administrator.

[56]   Accordingly, I defer making any decision on the appointment of an administrator until I have heard back from counsel. I also defer making any decision on the production of the original of the 2014 will.

[57]   I direct counsel to file, no later than 5 pm on 10 August 2021, a memorandum or memoranda on whether they have reached agreement or have been unable to agree on the appointment of an administrator and on the steps they consider should be taken in either eventuality. I also ask counsel to inform me whether an order is still required for the production of the original of the 2014 will, given that it is reasonably apparent from Jatuporn’s affidavits that the document, if it is still in existence, is held by Graham’s previous solicitors.

[58]   Subject to the availability of counsel, I propose to convene a telephone conference at 9 am on Thursday, 12 August 2021 to consider next steps.

Costs

[59]   In his written submissions, Mr Thwaite said Jatuporn seeks costs personally against Shannon. However, in oral submissions, Mr Thwaite accepted that it is usual for the costs of an application to be met from the estate.

4      Cundy v Cundy [2019] NZHC 413 at [28].

[60]I see no case for departing from the usual practice.

G J van Bohemen J