Hills v Public Trust HC Auckland CIV 2008-404-2217

[2010] NZHC 400

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-404-2217

BETWEEN  KATHLEEN WINNIFRED HILLS

Plaintiff

ANDPUBLIC TRUST First Defendant

ANDTHOMAS IAN GANNON Second Defendant

ANDALEXANDRIA CATHERINE MEDCALF Third Defendant

ANDDOUGLAS GWILLIAM HILLS Fourth Defendant

ANDDONALD ROSS EAGLE Third Party

Hearing:         7-11 September 2009

Counsel:         S Grant and N Cervin for the plaintiff

H Fulton for the first defendant

S Judd for the second defendant
C Townsend for the third and fourth defendants
T Chubb for the third party

Judgment:      15 March 2010 at 3 p.m.

JUDGMENT OF POTTER J

In accordance with r 11.5 High Court Rules

I direct the Registrar to endorse this judgment with a delivery time of 3 p.m. on 15 March 2010.

HILLS V PUBLIC TRUST AND ORS HC AK CIV 2008-404-2217  15 March 2010

Solicitors:            Taylor Grant Tesiram, P O Box 4039, Auckland 1141

Davenports, P O Box 47500, Ponsonby, Auckland 1144

Foley & Hughes, P O Box 6829, Auckland 1141

Meredith Connell, P O Box 2213, Auckland 1140

Copy to:             S Grant, P O Box 4338, Auckland 1140

S R G Judd, P O Box 3320, Shortland Street, Auckland 1140
T Chubb, P O Box 1128, Auckland 1140

C Townsend, P O Box 47345, Ponsonby, Auckland 1144

H Fulton, P O Box 5577, Wellesley Street, Auckland 1141

TABLE OF CONTENTS

Introduction  [1] The parties

Plaintiff  [3]

First defendant  [4] Second defendant  [5] Third and fourth defendants  [6]

Third party  [7]

Chronology  [8] Second amended statement of claim  [9] Credibility  [10]

First cause of action: Family Protection Act 1955  [17] Legal principles  [20] Issues        [27] The deceased’s estate  [29] Financial positions of the beneficiaries  [33] Family relationships  [34] Kathleen’s relationship with Norah Hills and

the care of Norah Hills  [37] Wills          [52] The Norah Hills Family Trust  [57] Variation of the trust deed  [66] Australian funds  [78] Memorandum of wishes  [82] Did the plaintiff attempt to financially pressure
the deceased?  [87] Testamentary capacity  [93] The deceased’s mental capacity when the memorandum

of wishes was executed on 9 June 2003  [99] Allegation of forgery  [108] Support received by Kathleen from her parents

during her adult life  [109]

Summary and conclusions  [122] Second cause of action against second defendant:

wrongful conduct, breach of trust and undue influence

Pleadings  [126] NHF Trust           [136] (a)  Breach of trustee’s duty to account  [139] (b) Distribution exceeded amount of trust fund  [147] (c) Preferring beneficiaries  [152] Conflict of interest           [159] Mishandling by Mr Gannon of personal funds

of the deceased  [164] Observations  [166] Removal of trustees  [176] Will         [185] Conclusion  [187]

Third cause of action against second, third and fourth

defendants: conversion  [188] Summary of results  [201] Costs      [202]

Introduction

[1]      The  plaintiff,  Kathleen  Winnifred  Hills  (“Kathleen”),  is  one  of  the  three children of Norah Alexandra Charlotte Hills (“the deceased”), who died at Auckland on 22 July 2005.  She was aged 83 years.

[2]      In these proceedings Kathleen, pursuant to the second amended statement of claim, seeks orders:

(1)      For further provision from the estate of the deceased under the Family

Protection Act 1955 (“FPA”) for her proper maintenance and support;

(2A)Removing of the second defendant Thomas Ian Gannon as a trustee of the Norah Hills Family Trust (“NHF Trust”) which was established on

12 May 1997;

(2B)     Appointing an independent trustee of the NHF Trust;

(2C)That  Mr  Gannon  make  such  payments  as  are  necessary to  the  NHF Trust  and  the  estate  of  the  deceased  to  redress  any  loss  to  them resulting from his conduct;

(2D)That  the  sums  of  $3405.45  and  $6658.07  paid  to  the  NHF Trust  be paid to the estate of the deceased;

(2E)     That Mr Gannon pay the costs of the proceeding against him.

(2F)     That a sum equal to $100,000 net of any gift duty or other tax, plus interest since 4 December 2003 be transferred from the estate to the NHF Trust and paid to the plaintiff;

(2G)    That a sum equal to $10,000 plus interest since 11 July 2005 be paid

to the plaintiff before distribution of the estate;

(2H)    For a declaration that Mr Gannon’s conduct was wrongful in relation

to   alleged   mismanagement   of   the   NHF   Trust   property   and   the deceased’s personal property;

(3)For delivery up by the second and third defendants of certain goods claimed by Kathleen to be her property and the property of two of her children, which she alleges have been converted by the second, third and  fourth  defendants  to  their  own  use,  or  alternatively,  payment  of compensation for their value.

The parties

Plaintiff

[3]      Kathleen, a daughter of the deceased, was aged 54 at the time of the hearing. She acknowledges that she is not in need and brings her claim under the FPA under the “support” head of s 4.

First defendant

[4]      The  Public  Trust  is  the  administrator  of  the  estate  of  the  deceased  under probate granted at Auckland on 18 December 2007.   The Public Trust sought, and was  granted,  leave  to  be  discharged  from  participation  in  the  hearing. After  the conclusion of the hearing, counsel for the Public Trust filed a memorandum, dated 28 September 2009, essentially for the purpose of clarifying that the Public Trust is a party to the proceedings primarily on account of the first cause of action (the claim under  the  FPA)  and  the  fourth  cause  of  action  (a  claim  under  the  Law  Reform (Testamentary Promises) Act 1949 which has since been discontinued), and that as administrator of the estate of the  deceased it is  not, and has  not, been involved in claims against the second defendant Mr Gannon and the third party Mr Eagle.

Second defendant

[5]      Thomas  Ian  Gannon  is,  and  has  at  all  material  times  been,  a  trustee  of  the NHF Trust. Prior to appointment of the Public Trust he was one of the executors and trustees  under  the  will  of  the  deceased,  dated  27  August  2000.  He  was  also  an attorney with Mr Eagle appointed by the deceased under enduring power of attorney, dated  2  October  2000. He  was  a  longstanding  friend  of  the  deceased  and  her husband, who predeceased Norah Hills.

Third and fourth defendants

[6]      Alexandria   Catherine   Medcalf   (“Sandra”)   and   Douglas   Gwilliam   Hills (“Douglas”)  are  the  other  two  children  of  the  deceased  and  the  siblings  of  the plaintiff.

Third Party

[7]       Donald Ross Eagle is a co-trustee with Mr Gannon of the NHF Trust.  Prior

to appointment of the Public Trust he was, with Mr Gannon, an executor and trustee under the will of the deceased.   He was also, with Mr Gannon, an attorney for the deceased  under  enduring  power  of  attorney.   He  was  a  longstanding  friend  of  the deceased and her husband.

Chronology

[8]      A chronology of principal events will assist in understanding the background

to these proceedings.

·    12  July  1996:  Douglas  William  Hills,  the  husband  of  Norah  Hills  dies  in Australia.

·July  1996:  Norah  Hills  stays  with  Douglas  and  Leanne  Hills  for  a  week following her return from Australia.

·July 1996: Kathleen stays  with Norah Hills briefly at the home of Douglas and Leanne Hills and then for a period at the home of Norah Hills, 12 Toru Street, Te Atatu.

·7  November  1996:  Norah  Hills  executes  a  will  prepared  by  John  Holmes, leaving  her  estate  in  favour  of  her  three  children  equally,  subject  to  her chattels being given to Sandra for distribution.  Mr Eagle and Mr Gannon are appointed trustees.

·7  November  1996:  Norah  Hills  grants  an  enduring  power  of  attorney  in relation  to  property  in  favour  of  Mr  Eagle  and  Mr  Gannon  jointly  and severally.  It provides that the authority of the attorneys shall not be revoked if Norah Hills becomes mentally incapacitated.

·    November 1996: Kathleen moves out of 12 Toru Street, Te Atatu.

·    12 May 1997: Norah  Hills  establishes  the  NHF  Trust. Mr  Eagle  and  Mr

Gannon are appointed trustees.  Norah Hills is appointed an advisory trustee.

·16 September 1999: Norah Hills suffers a heart attack while at the home of her sister, Patricia Dixon.   Kathleen moves into Toru Street to care for  her mother upon her release from hospital.

·6  August  2000:  Norah  Hills  executes  a  power  of  attorney  in  favour  of Kathleen and Sandrine (Sandi) Anderson and gives instructions regarding a new will to Sandi Anderson.

·    10 August 2000: Norah Hills executes a will prepared by Sandrine Anderson.

It appoints David de Silva, Lenore Kent and a third person to be appointed by

Sandrine Anderson, as executors and trustees. Details of the provisions are set out in [55].

·27 August 2000: Norah Hills makes  a  new  will  prepared  by  John  Holmes which essentially replicates her 7 November 1996 will.  It appoints Mr Eagle

and Mr Gannon as executors and trustees.  It gives Sandra her household and personal  chattels  with  a  request  that  she  distribute  them  in  such  manner  as Norah  Hills  may  have  indicated  to  her.  The  residuary  estate  is  divided between her three children.

·30  August  2000:  Norah  Hills  signs  a  statement  that  the  enduring  power  of attorney in relation to property dated 7 November 1996 in favour of Mr Eagle and Mr Gannon is not revoked.

·19  September  2000:  The  trust  deed  of  the  NHF  Trust  is  varied  to  vest  the power of appointment of new trustees in the trustees for the time being or the survivor  of  them,  subject  to  consultation  with  and  the  concurrence  of  the settlor (Norah Hills) as advisory trustee.  (The power of appointment of new trustees had previously been vested in Norah Hills by the trust deed dated 12 May  1997.)         The  variation  also  provided  for  the  powers,  discretions  and authorities  of  the  trustees  to  be  by  unanimous  decision  (previously  by  a majority).

·    19 September 2000: Norah Hills transfers to the NHF Trust the property at 12

Toru Street, Te Atatu. The trustees of  the NHF Trust enter into  a deed  of acknowledgment of debt in favour of Norah  Hills for the sum of $184,000 payable upon demand. The liability arose from the transfer of 12 Toru Street to the Trust. The debt was immediately reduced by deed of forgiveness of debt by the sum of $27,000, to $157,000. The sum of $157,000 remained owing to Norah Hills by the NHF Trust at the date of death.

·    28  September  2000:  Norah  Hills  revokes  the  power  of  attorney  granted  to Sandrine Anderson and Kathleen.

·2 October 2000: Norah Hills grants a new enduring power of attorney to Mr Eagle and Mr Gannon in relation to property.   It replicates the provisions of the 7 November 1996 power of attorney.

·20  October  2000:  Sandi  Anderson  on  behalf  of  Kathleen  writes  to  John Holmes, solicitor for Norah Hills, that “... it would be appropriate for her to have  a  guaranteed  tenure  with  her  mother  for  2-3  years  with  the  right thereafter to review that in light of her mother’s needs”.   The letter suggests that Kathleen be paid $600 a week which  could  be subject to deduction  of $150 per week occupation rental.  Mr Holmes is asked to submit the proposal for the consideration by the trustees of the NHF Trust.

·2 November 2000: By letter to Sandi Anderson, Mr Gannon as a trustee of the NHF Trust, declines the proposal on behalf of the Trust.

·    November 2000: Kathleen moves out of 12 Toru Street.

·    January/February 2003: Norah Hills is diagnosed with bowel cancer.

·    April 2003: Norah Hills enters the Arran Court Rest Home.

·9 June 2003: Norah Hills executes a memorandum of wishes requesting the trustees of the NHF Trust to make a distribution of $100,000 from the capital

of the Trust to each of Sandra and Douglas and recording previous financial assistance and other gifts to Kathleen.  (The full text of the memorandum of wishes is set out at [82]).

·18  June  2003:  Dr  John  C  Caldwell  issues  a  certificate  that  he  examined Norah Hills on 9 June 2003 “with regards to competency to make decisions regarding her estate”.   He certifies: “I am satisfied that she is competent to make legal decisions regarding her estate”.  (The full text of this certificate is set out at [83]).

·    September  2003:  Norah  Hills  pays  for  a  travel  package  for  Douglas  and Leanne  Hills  to  attend  the  NRL  in  Australia  at  a  cost  of  approximately $4,800.

·    31 December 2003:  Sandra and Douglas  each  receive  $100,000  from  the

NHF Trust.

·January 2004: The deceased’s home at 12 Toru Street, Te Atatu is sold; the sale price is $312,000.

·    22 July 2005: Norah Hills dies at Arran Court Rest Home.

·18  December  2007:  Probate  of  Norah  Hills’  will  dated  27  August  2000  is granted to the Public Trust.

Second amended statement of claim

[9]           On  the  first  day  of  the  hearing  7  September  2009,  Ms  Grant,  counsel  for Kathleen,  presented  a  draft  second  amended  statement  of  claim  (“the  statement  of claim”).               After  counsel  had  conferred  I  allowed  the  amended  pleading  but  noted objections by defence counsel to paragraphs 21(c), 22, 23, 27 (second defendant) and the prayer for relief D in the third cause of action (third and fourth defendants).  My minute of 7 September 2009 at [11] refers.

Credibility

[10]     I heard the principal witnesses in this case give evidence over a period of five days.  I have perused all their affidavits and briefs of evidence.

[11]     I  address  at  [34]  the  matter  of  family  relationships.  The  dissension  and animosity  among  the  plaintiff,  Kathleen,  and  her  sister  and  brother,  Sandra  and Douglas,  were  clearly  evident  in  the  evidence  each  gave. Their  evidence  lacked objectivity and was frequently self-serving.   I did not find them credible or reliable witnesses.

[12]     Kathleen was prepared to challenge the credibility of other witnesses while not ensuring they were available for cross-examination on the matters on which she impugned their credibility.  Examples are referred to in [47]-[50] and [103]-[104].

[13]     Further,  Kathleen’s  enmity towards  Mr  Gannon  was  obvious.   Incidents  in May 2006 (“Herald” advertisement) and December 2008 (Animates Store, Albany) show the depth of her animosity towards him.  I do not need to detail those incidents; they will be known to the parties involved in this proceeding.  Her evident animosity tainted Kathleen’s evidence on a number of topics relating to Mr Gannon.

[14]     Mr  Gannon  was  a  defensive  witness.   While  through  his  solicitor,  Mr Holmes,  he  had  acknowledged  that  some  of  his  conduct  in  relation  to  the  bank accounts of the deceased around the time of her death, was inappropriate, he was at times evasive in answers to questions.   His sympathies clearly lay with Sandra and Douglas and not with Kathleen.

[15]     Mr Eagle too, had fallen victim to the dysfunction within the Hills’ family, although he tried to give his evidence in a factually accurate and objective way.

[16]     Thus    in    reaching    my    findings,   I   have  relied    significantly   on the documentation and written material in the case and the evidence of witnesses with some  measure  of  independence  from  the  parties  to  the  proceedings.   I specifically exclude the Insurance Report exhibited to Mr Eagle’s affidavit.  It contained hearsay evidence which was not verified.  I placed no reliance on it.

First cause of action: Family Protection Act 1955

[17]     In the first cause of action Kathleen pleads that in terms of the FPA adequate provision  has  not  been  made  available  from  the  deceased’s  estate  for  her  proper maintenance and support. She seeks an order for further provision out of the estate including the chattels. In submissions in reply dated 6 October 2009 at paragraph 131, her counsel assesses that the further provision should be at least $117,000 plus one-third of the value of the chattels.

[18]     In  her  affidavit  dated  10  June  2008,  Kathleen  states  her  claim,  which essentially repeats the pleading in the first cause of action, as follows:

I  believe  that  inadequate  provision  has  been  made  available  from  the deceased’s estate for my proper maintenance and support, for the following reasons:

(a)Both  Douglas  Gwilliam  Hills  and  Alexandra  Catherine  Medcalf received   a   distribution   of   $100,000.00   each   on   or   about   12 December 2003 from the NHF Trust during the deceased’s lifetime. I   received   no   equivalent   distribution   nor   any   other   significant monetary gifts from the deceased or the NHF Trust, other than small loans from the deceased and my father in 1974 ($2-3,000) and 1985 ($10,000), which I repaid within two years of each loan.

At  the  time  of  the  first  loan  in  1974,  Douglas  Gwilliam  Hills received  a  car  from  his  parents  and  Alexandra  Catherine  Medcalf received the equivalent value in cash;

(b)      At  the  time  of  the  second  loan  in  1985,  my  parents  gave  Douglas

Gwilliam Hills and Alexandra Catherine Medcalf $10,000 each.

(c)       I cared for the deceased, including living with her and devoting my whole  time  and  attention  to  her  for  a  period  of  6  weeks  when  my father died in 1996 and between 1999 and about December 2000.

(d)Both Douglas Gwilliam Hills and Alexandra Catherine Medcalf are well provided for:

(i)Douglas  Gwilliam  Hills  owns  a  house  and  recreational property with his wife;

(ii)      he has a job as a courier;

(iii)     Alexandra  Catherine  Medcalf  owns  a  house  and  a  beach house with her husband, who is an airline pilot.

(e)When  the  deceased  went  into  a  rest  home  in  2003,  the  deceased’s personal and household effects were taken from the family home and distributed  by  Douglas  Gwilliam  Hills  and  Alexandra  Catherine Medcalf but no items were given to me;

(f)       Douglas Gwilliam Hills and Alexandra Catherine Medcalf interfered

in  the  relationship  between  the  deceased  and  me,  attempted  to prevent  me  from seeing the  deceased and  did  not  advise  me  when the deceased was dying.

(g)       At the time that the deceased signed the last will, she was confused and ill.

(h)Douglas Gwilliam Hills, Alexandra Catherine Medcalf, and John Robin Holmes, of Auckland, Lawyer, who drafted the will, unduly influenced the deceased in the making of the last will by pressuring her to leave all her  personal  and  household effects  to  Alexandra

Catherine Medcalf and not providing for a payment of the equivalent

of $100,000 to me to equalise the payments made to my siblings by the NHF Trust in 2003.

[19]     It will be seen that as well as making a claim for further provision from her mother’s  estate,  Kathleen  alleges  undue  influence  by  Mr  John  Holmes  and  her brother and sister in relation to the division of chattels and in not providing $100,000 for her by way of equalisation.

Legal principles

[20]     The  legal  principles  that  apply  to  a  claim  under  the  FPA  and  which  are applicable in this case, are clearly established and are not in dispute.

[21]     The plaintiff’s claim is founded on s 4(1) of the FPA which provides:

If any person (referred to in this Act as the deceased) dies, whether testate or intestate, and in terms of his or her will or as a result of his or her intestacy adequate  provision  is  not  available  from  his  or  her  estate  for  the  proper maintenance  and  support  of  the  persons  by  whom  or  on  whose  behalf application may be made under this Act, the Court may, at its discretion on application so made, order that any provision the Court thinks fit be made out of the deceased’s estate for all or any of those persons.

[22]     In Little v Angus[1]  the Court of Appeal stated the principles:

[1] Little v Angus [1981] 1 NZLR 126 (CA) at 127.

The  principles  and  practice  which  our  Courts  follow  in  Family  Protection cases are well settled.  The inquiry is as to whether there has been a breach of moral duty judged by the standards of a wise and just testator or testatrix; and, if so, what is appropriate to remedy that breach.  Only to that extent is the will to be disturbed.  The size of the estate and any other moral claims on the  deceased’s bounty are highly relevant.   Changing social  attitudes  must have their influence on the existence and extent  of moral duties.   Whether there has been a breach of moral duty is customarily tested as at the date of the testator’s death; but in deciding how a breach should be remedied regard is had to later events.

In  Williams  v  Aucutt[2]   the  Court  of  Appeal  examined  the  meaning  of “…  proper maintenance and support” as used in s 4.   Richardson P delivering, the judgment of four of the five members of the Court, said:[3]

[2] Williams v Aucutt [2000] 2 NZLR 479

[3] At [52].

…  we  reject  the  argument  that  the  Court  must  expressly  find  a  need  for proper maintenance and support.  The test is whether adequate provision has been   made   for   the   proper   maintenance   and   support   of   the   claimant. “Support” is an additional and wider term than “maintenance”.  In using the composite expression, and requiring “proper” maintenance and support, the legislation recognises that a broader approach is required and the authorities referred to establish that moral and ethical considerations are to be taken into account in determining the scope of the duty.  “Support” is used in its wider dictionary sense of “sustaining, providing comfort”.  A child’s path through life is supported not simply by financial provision to meet economic needs and contingencies but also by recognition of belonging to the family and of having been an important part of the overall life of the deceased.  Just what provision will  constitute proper support in this latter respect is a matter of judgment in all the circumstances of the particular case.

[23]     Blanchard J in a separate, though concurring judgment, said:[4]

[4] At [68].

… It is to be remembered that the Court is not authorised to rewrite a will merely because it may be perceived as being unfair to a family member, and

it is not for a beneficiary to have to justify the share which has been given. Rather,  it  is  for  a  claimant  to  establish  that  he  or  she  has  not  received adequate provision for proper maintenance and support.

[24]     Blanchard J continued:[5]

[5] At [69] and [70].

We  are  not  concerned  in  this  appeal  with  a  claimant’s  need  for  proper maintenance.   It  is  conceded  that  there  is  none.   The  claim  is  for  proper support in the form of recognition both of membership of the family of the deceased  and  of  contributions  by  way  of  assistance  to  and  support  of  the deceased.   Such a claim is one capable of being brought under the Act.   In part  it  seeks  support  from  the  estate  in  return  for  support  which  has  been rendered, albeit without any promise of return such as would fall within the Law  Reform  (Testamentary  Promises)  Act  1949. The  question  remains, however,  whether  a  need  for  proper  support  is  made  out  in  the  particular circumstances.   It is not to be assumed that merely because a claimant, no matter  what  his  or  her  personal  substance,  has  been  a  dutiful  child  of  the deceased,  it  will  necessarily  be  appropriate  to  order  some  provision  or further provision …

It  is  not  for  the  Court  to  be  generous  with  the  testator’s  property  beyond ordering such provision as is sufficient to repair any breach of moral duty. Beyond that point the testator’s wishes should prevail … As I have said, the Court’s power does not extent to rewriting a will because of a perception that it is unfair.  Testators remain at liberty to do what they like with their assets and  to  treat  their  children  differently  or  to  benefit  others  once  they  have made such provisions as are necessary to discharge their moral duty to those entitled to bring claims under the Family Protection Act.

[25]     That statement of Blanchard J was  approved  by  the  Court  of  Appeal  in

Auckland City Mission v Brown.[6]

[6] Auckland City Mission v Brown [2002] 2 NZLR 650 at [33].

[26]     In   Vincent   v   Lewis[7]    Randerson   J   helpfully   summarised   the   relevant principles, which have application in the circumstances of this case:[8]

[7] Vincent v Lewis (2006( 25 FRNZ 714; [2006] NZFLR 812 (HC).

[8] At [81].

(a)       The test is whether, objectively considered, there has been a breach

of moral duty by [the testatrix] judged by the standards of a wise and just testatrix.

(b)Moral duty is a composite expression which is not restricted to mere financial needs but includes moral and ethical considerations.

(c)Whether  there  has  been  such  a  breach  is  to  be  assessed  in  all  the circumstances of the case including changing social attitudes.

(d)The  size  of  the  estate  and  other  moral  claims  on  the  deceased’s bounty are relevant considerations.

(e)       It is not sufficient merely to show unfairness.  It must be shown in a broad sense that the applicant has need of maintenance and support.

(f)       Mere  disparity  in  the  treatment  of  beneficiaries  is  not  sufficient  to establish a claim.

(g)       If a breach of moral duty is established, it is not for the Court to be generous with the testator’s property beyond ordering such provision

as is sufficient to repair the breach.

(h)The Court’s power does not extend to rewriting a will because of a perception it is unfair.

(i)Although the relationship of parent and child is important and carries with it a moral obligation reflected in the Family Protection Act, it is nevertheless an obligation largely defined by the relationship which actually exists between parent and child during their joint lives.

Issues

[27]     The   primary  issue   for   the   Court   to   determine   is   whether,   objectively considered, there has been a breach of moral duty to Kathleen by the deceased in the provisions she has made by her will dated 27 August 2000, judged by the standards of a wise and just testatrix.

[28]     If such a moral breach has been established then the Court must consider the nature and extent of the award necessary to remedy that breach of moral duty.

The deceased’s estate

[29]     The assets and liabilities at the date of death of the deceased are detailed in an affidavit of the Public Trust as executor, dated 30 June 2009, which in turn refers to

an affidavit of Daniel Martin Virtue, accountant, dated 27 May 2009.  There appears

to  be  no  dispute  about  the  figures  provided  by  the  Public  Trust. However,  the affidavit  of  Mr  Gibbons,  General  Manager  of  the  Public  Trust,  refers  to  the  four cheques  written  and  negotiated  in  the  last month before  the  deceased’s  death  (and after her death) involving a potential sum of about $30,000, which is not included in the Public Trust’s figures.

[30]     At the date of death the deceased’s assets comprised the balance of the loan she made to the NHF Trust on the transfer of 12 Toru Street, $157,000, together with advances to the Trust of $439,191, a total of $596,191. Known liabilities are stated

to be the cost of this proceeding and administration costs which are not quantified.

[31]     On  the  basis  of  the  information  provided  by  the  Public  Trust  there  were liabilities of approximately $1200 at the date of death.   As at 30 June 2009, funds held by the Public Trust, either on call with the Public Trust or on term deposit with ASB  Bank,  totalled  $607,924.46,  essentially  representing  the  amounts  owing  and repaid  by  the  NHF  Trust.         Thus,  division  of  the  cash  assets  of  the  estate  in accordance  with  the  last  will  of  the  deceased  would  result  in  $180,000-$200,000 being  available  to  each  of  the  three  residuary  beneficiaries,  Kathleen,  Sandra  and Douglas.

[32]     The  Public  Trust  states  that  jewellery  and  other  personal  items  that  are  in dispute are held by Douglas and Sandra and that the Public Trust has requested the return of these items for safe-keeping.

Financial positions of the beneficiaries

[33]     The evidence is that Kathleen, Sandra and  Douglas  were  all  reasonably comfortably placed  financially  at  the  time  of  Norah  Hills’  death.   Kathleen  seeks further provision from the deceased’s estate on the basis of the “support” head in s 4. She  does  not  claim  that  further  provision  is  required  for  her  proper  maintenance. Neither Sandra nor Douglas claims need.  Thus, while there was detailed evidence as to the financial situations of the three siblings at the date of death, it is necessary to do no more than record the situation in general terms.

Family relationships

[34]    The evidence is clear that there was considerable animosity between the three siblings.         Sandra,  in  a  reply  to  a  question  in  cross-examination  by  Ms  Grant, Kathleen’s counsel, about the relationships said: “… we don’t have a relationship at all”.       She  went  on  to  confirm  that  was  true  of  the  relationship  between  her  and Douglas and any other combination, stating: “… if it wasn’t for what is happening now I would not expect to have seen Douglas at all”.  That evidence encapsulates the general  tenor  of  the  evidence  about  the  lack  of  any  real  relationship  between  the siblings.

[35]     As I listened to the evidence in Court and reviewed it following the hearing, I was  reminded  of  the  observations  of  Wild  CJ  in  Re  Meier  (deceased)[9]  which  was cited with approval in Auckland City Mission v Brown:[10]

[9] Re Meier (deceased) [1976] 1 NZLR 257 at 258.

[10] At [15].

Though  conduct  and  family  relationships  may  in  some  cases  well  have relevance I think it appropriate in this case to recall that from the early days of the family protection jurisdiction the Court has disapproved attempts by litigants  to  blacken  each  other’s  character  –  See,  for  example,  Hoffman  v Hoffman[11] Allegations and counter-allegations about petty incidents which occurred  years  before  the  date  of  death  are  generally  unlikely  to  advance anyone’s  case  and  when,  as  in  this  case,  it  is  sought  to  support  them  by affidavits from neighbours they may merely deepen rifts in the family and dishonour the memory of the testator.

[11] Hoffman v Hoffman (1909) 29 NZLR 425 at 428 per Sim J.

[36]     There was in this case much evidence about alleged incidents, many of them petty, which did little to advance the plaintiff’s, or anyone’s, case.  I do not propose

to traverse the evidence about these matters in any detail.   Inevitably such evidence does  dishonour  the  memory  of  the  deceased  as  was  observed  by  Wild  CJ  in  the above  passage.        But  it  was  also  apparent  from  the  evidence  that  Norah  Hills maintained  a  good  relationship  with  each  of  her  children,  notwithstanding  the difficulties presented by the animosity between them which inevitably impacted on her relationship with each of them.

Kathleen’s relationship with Norah Hills and the care of Norah Hills

[37]     Kathleen moved in and lived with her mother at Toru Street in 1996 after her father died for a period of approximately eight to twelve weeks and between about October  1999  and  November  2000  after  Norah  Hills  suffered  a  heart  attack  in September  1999.        The  evidence  was  that  on  the  whole  these  arrangements  were satisfactory.   Sandra stated in a letter to Sandi Anderson dated 30 September 2000 concerning the second period when Kathleen lived with her mother at Toru Street:

A previous attempt at these living arrangements had proved unsatisfactory. But for several months this year, this form of a living arrangement has been mutually beneficial.

(The letter went on to express Norah Hills’ insistence that Kathleen not be involved

in her personal or financial matters.)

[38]     Kathleen filed a number of affidavits from friends and from Patricia Dixon, Mrs Hills’ sister, and Kathleen’s daughter Rachael, that were supportive of the care Kathleen provided to her mother and their positive relationship.  (Neither Mrs Dixon nor Rachael was available for cross-examination as requested by the defendants, for health reasons.)

[39]     However, when Kathleen sought through Sandi  Anderson  to  formalise  the arrangement whereby she lived at 12 Toru  Street  and  cared  for  her  mother, suggesting that she be paid $600 per week as a caregiver against which $150 could

be deducted for occupation rental, this was declined by Mr Gannon on behalf of the

trustees.  He noted that Norah Hills had full tenure of the home at 12 Toru Street for

as long as she wished to reside there, and the trustees believed that because Norah

Hills paid all expenses relating to her living and gave money to Kathleen from time

to time, she was being adequately rewarded.

[40]     Kathleen  moved  out  of  12  Toru  Street  in  November  2000. There  was conflicting  evidence  about  the  circumstances  under  which  Kathleen  left  the  Toru Street home after each of the two occasions when she lived there with her mother.  It was principally directed at whether Norah Hills asked her to leave.

[41]     This,  of  course,  was  not  Kathleen’s  view  of  the  matter.   In  a  letter  to  her mother, Kathleen explained her reason for leaving in November 2000:

The  events  over  the  last  few  weeks  have  me  believing  now,  that  my remaining with you in your home is not in your best interests.   For over a year  now  we  have  been  happy  together  and  I  am  reluctant  to  let  you  go, regardless of the comments made to you by others that you are a hindrance to my life.

[42]     The letter concluded:

In  actual  fact  the  bitch  in  me  says  fuck  them  all.   Your  loving  daughter always …

[43]     Following  Kathleen’s  departure  from  the  home  in  November  2000  (for whatever reason), Norah Hills continued to live there without a caregiver until she was  diagnosed  with  bowel  cancer  in  early  2003  and  was  admitted  to  hospital, following which she moved into the Arran Court Rest Home.

[44]     The evidence was that Douglas and his wife Leanne provided regular support

to Norah Hills.   This was confirmed by Sandra and also by Mr Eagle who stated in evidence that Doug was “… good to his mother, he was closest.  … I know he would visit her a lot.  I wouldn’t say daily”.  Mr and Mrs Gannon also gave evidence to this general effect.

[45]     It is clear that Sandra also provided  support  for  Norah  Hills. She  held  a power of attorney in relation to Norah Hills’ personal care and welfare and although she had health issues herself, she visited her mother regularly, and faithfully attended

to matters relating to her mother’s care and welfare, including assisting with locating

a suitable rest home when it became clear that Norah Hills could no longer live alone following her hospitalisation in early 2003.

[46]     In  summary,  all  three  siblings  contributed  in  their  own  way  to  the  care  of their mother.   However, Kathleen’s relationship with her mother deteriorated while Norah  Hills  was  in  the  Arran  Court  Rest  Home  where  she  lived  from  April  2003 until her death.

[47]     A letter dated 6 November 2008 from Eve Cotterill, a staff member at the rest home, states that she recalls vividly an incident where Norah Hills was taken out by Kathleen and that upon Norah Hills’ return she was visibly upset.  Ms Cotterill was asked to talk to her in her room.   She said she could not decipher what may have happened but what came out of the conversation was that: “… Norah was frightened of Kathleen and did not want to be alone with her again.  (Norah’s words not mine)”. She said she returned the next morning with the clinical manager of the rest home, to confirm  Norah  Hills’  expressed  wishes  that  she  would  not  go  out  alone  with Kathleen again.  Arrangements were accordingly implemented by the rest home.  Ms Cotterill  states  that  Kathleen’s  visits  became  very  sporadic  and  Kathleen  was  not happy  with  her  mother’s  wishes.      Ms  Cotterill  further  states  that  at  Norah  Hills’ request Kathleen was prohibited from visiting her at all at a later point.

[48]     According  to  Ms  Cotterill  the  arrangements  put  in  place  by  the  rest  home were also requested and confirmed by Sandra (who was responsible for Norah Hills’ care and welfare).

[49]     Kathleen’s  response  in  evidence  to  Ms  Cotterill’s  statement,  was  that  Eve Cotterill was lying and that the reason she would lie would be that “someone would have asked her to”.   But Kathleen did not seek to have Ms Cotterill made available for cross-examination to put to her Kathleen’s assertion that she was lying when she recounted these events.

[50]     Ms Cotterill had no reason to lie about the incident.  Her proper concern was the care and welfare of Norah Hills and she obviously took to heart and implemented

arrangements  to  meet  the  concern  expressed  by  Norah  Hills  about  visits  from Kathleen,  and  being  alone  with  Kathleen.          The  evidence  is  consistent  with  other evidence to which I shall refer shortly, about the concerns of Norah Hills in relation to the financial pressure Kathleen was putting on her.

[51]     In the plaintiff’s closing  submissions  reference  was  made  to  Lynn  Eagle’s evidence that Norah Hills never put down any of her family or grandchildren to her.

It  was  submitted  that  pejorative  references  about  Kathleen  consistently came  from Mr  Gannon  and  from  Sandra  and  Douglas.   I  have  no  difficulty in  accepting  that when Mrs Eagle was chatting to Norah Hills, as she described it, Norah Hills did not put down any of her children or grandchildren.   As I have said above, the evidence was  that  she  maintained  a  reasonably good  relationship  with  each  of  her  children, although  they  did  not  get  along  with  one  another.                   But  Mrs  Eagle  was  not  in attendance at the rest home when the events described by Ms Cotterill occurred.  The events she described were a matter of fact about which Mrs Eagle can have had no direct  knowledge. Ms  Cotterill’s  evidence  did  not  adopt  pejorative  language  or expression.

Wills

[52]     The affidavit of Mr Gibbons of the Public Trust provides information about the previous wills of the deceased held by the Public Trust.   It is not necessary to refer to the provisions of wills prior  to 1996,  except to note that they consistently provided for the residuary estate of the deceased to be divided equally between her three children if her husband did not survive her.

[53]     The  provisions  of  the  deceased’s  three  most  recent  wills  require  further mention.

[54]     On 7 November 1996 the deceased executed a will prepared by John Holmes, which appointed Mr Eagle and Mr Gannon executors and trustees, gave her personal and household items to Sandra with a request that she distribute them in such manner

as the deceased may have indicated to  her,  and  divided  the  residue  of  the  estate

equally between her three children, Kathleen, Sandra and Douglas with provision for

a gift over to grandchildren should any child not survive her.

[55]     On 10 August 2000 the deceased signed a will prepared by Sandi Anderson.

By it she appointed David de Silva, Lenore Kent and a third person to be appointed

by  Sandrine  Anderson  to  be  executors  and  trustees. This  will  makes  specific bequests to the children and grandchildren of Kathleen and to the children of Sandra; bequeaths  a  dinner  set  to  Sandra  and  three  diamond  rings  to  Kathleen;  gives  her personal chattels to Kathleen to be distributed in accordance with written instructions to  be  prepared  by Norah  Hills;  gives  Kathleen  the  right  of  occupancy  of  12  Toru Street,  Te  Atatu  for  a  period  of  six  months after  her  death  (acknowledging  the emotional  and  physical  support provided  by  Kathleen  during  her  lifetime);  and divides  the  residuary  estate  between  the  three  children,  Sandra,  Kathleen  and Douglas. The will directs that any debt owing at the date of death by the NHF Trust is forgiven.

[56]     On  27  August  2000,  the  deceased  made  her  last  will  and  testament,  which appointed  Mr  Eagle  and  Mr  Gannon  as  executors  and  trustees. The  will  was prepared by John Holmes.   It  gives  her  household and personal  chattels to Sandra with  a  request  that  she  distribute  them  in  such  manner  as  Norah  Hills  may  have indicated to her.   The residuary estate is divided between the three children.   This will replicated the provisions of the 1996 will.

The Norah Hills Family Trust

[57]     Because the plaintiff’s claim for further provision from the deceased’s estate

is based significantly on the deceased’s failure to provide by her will for payment to Kathleen  out  of  the  estate  of  a  sum  equivalent  to  the  $100,000  (plus  interest) distributed  to  Sandra  and  Douglas  by  the  NHF  Trust  in  December  2003  so  as  to equalise payments to the three siblings, it is important to consider the NHF Trust and its history.

[58]     The NHF Trust was established by deed of trust dated 12 May 1997.  Norah

Hills was the settlor and Mr Eagle and Mr Gannon were appointed as trustees.   Mr

Holmes described them as “two close and longstanding friends of Mrs Hills and her husband”.  Norah Hills was appointed advisory trustee.

[59]         The trust deed is in standard form for family trusts of that era.  Norah Hills’ children are defined as the “final beneficiaries” and they are included along with the settlor and a number of   other   persons   and   entities   within   the   definition   of “discretionary beneficiaries”.  The trustees are given broad powers and discretions in the administration of the trust, including the discretion to pay or apply any part of the capital of the trust fund for such one or more of the discretionary beneficiaries who are then living, as the trustees in their discretion may determine.  The trust fund is to

be held upon trust for the final beneficiaries or any child of the final beneficiaries living at the vesting day which is defined as the period of eighty years from the date

of the deed or such earlier day as the trustees may by deed appoint.

[60]     The statutory power of appointment of new trustees is vested in the settlor, Norah Hills, during her lifetime.

[61]     The  deed  provides  for  limitation  of  liability  and  indemnity  of  trustees,  in standard terms.  No trustee is to be liable for any loss suffered by the trust fund or by any  beneficiary  not  attributable  to  that  trustee’s  own  dishonesty  or  to  the  wilful commission or omission by that trustee of an act known by that trustee to be a breach of trust.  Trustees are entitled to be indemnified out of the trust fund for any personal liability which that trustee may incur in carrying out the trusts provided by the trust deed.

[62]     The  deed  of  trust  was  prepared  by  John  Holmes  who  had  been  acting  as solicitor for Norah Hills from the end of 1996.  She was introduced to Mr Holmes by Mr Gannon who had been a client of Mr Holmes for several years prior to that date. Norah Hills, Mr Eagle and Mr Gannon executed the trust deed.

[63]     The possibility of a family trust had been contemplated from the time Mr Holmes started to act for Norah Hills. In a letter to her dated 25 October 1996 he said:

You have a concern that as you get older you may be the subject of “tug of war”  between  your  children,  particularly  your  daughters.  You  want  to maintain   your   independence   as   long   as   possible   and   minimise   the opportunity for interference in your finances, where and how you live, and the control and use of your assets generally.

[64]     Mr Holmes addressed  a  number  of   options   to   achieve   that   objective, including the possibility of formation of a family trust, but recorded that the question

of  a  family  trust  would  be  left  aside  “until  the  political  picture  has  become  a  bit clearer”  (referring to  superannuation  surcharge,  asset  testing and  health  charges  as well as the possibility of the reintroduction of estate duty).

[65]     Mr  Holmes  says  in  his  affidavit  dated  3  July  2009  that  he  was  consulted again by Norah, Tom and Don in May 1997 because of “… ongoing concerns about Kathleen pressuring her mother into lending or giving her money”.  The NHF Trust was formed with the intention that it receive the bulk of Norah Hills’ financial assets.

Variation of the trust deed

[66]     By  deed  of  variation  dated  19  September  2000  the  NHF  Trust  deed  was varied to vest the power of appointment of new trustees in the trustee or trustees for the time being of the trust deed rather than in the settlor (Norah Hills) as had been provided under the trust deed.  The trust deed was also amended to provide that the trustees in relation to their powers of discretions and authorities under the trust deed were to act by unanimous decision rather than by a majority, as had been authorised by the trust deed.

[67]     John Holmes explains in his affidavit that he considered it would be prudent

to consult a family law specialist before taking the proposed steps to vary the trust deed and to transfer to the NHF Trust the property at 12 Toru Street, Te Atatu which was Norah Hills’ home.   He says the purpose of consulting a family law specialist was  to  review  the  proposal  and  to  minimise  the  prospect  of  a  subsequent  legal challenge.   He  therefore  arranged  for  Norah,  Mr  Eagle, Mr  Gannon,  and  Douglas, along with himself, to meet with Barry MacLean on 30 August 2000.   Mr Holmes states in relation to the meeting with Mr MacLean:

To the best of my recollection there was no attempt by either Douglas or by Tom to influence Norah in respect of these transactions – my recollection is that Norah took an active part in the discussions at the meeting with Barry MacLean  and  that  both  she  and  Don  were  fully  in  agreement  with  the decisions taken at the meeting.

[68]     However,  Mr  Eagle  said  in  evidence  that  Tom  did  all  the  talking  and  that neither he nor Norah Hills had anything much to say.

[69]     Mr MacLean by letter to Mr Holmes dated 4 September 2000 recorded:

The problem which Mrs Hills sought to resolve was the pressure being put on  her  by  family  factions  to  dispose  of  her  chattels  or  other  assets  either during her lifetime, or by her will on her death.   Of particular concern was her  daughter’s,  Kathleen’s,  influence  particularly  since  the  involvement  of Sandi  Anderson  whom  Kathleen  had  taken  Norah  to  see  resulting  in  the revocation of the power of attorney and new will which Norah executed.

[70]     He  noted  that  while  nothing  could  completely  insulate  Mrs  Hills  from pressure from her family, the family trust option seemed to be the best alternative. He did not recommend pursuing an option which had been considered, under s 25 of the Personal Property Securities Act 1999 (“PPPR Act”).   He advised that a better way of resolving the problem was to use the already established family trust to hold Norah Hills’ assets.   He recommended that the trust deed be altered so that Norah Hills no longer had the power of appointment of new trustees although remaining as an advisory trustee or being one of the trustees.

[71]     He  recommended  that  Norah  Hills  see  an  appropriately  qualified  medical practitioner   prior   to   executing   any  relevant   documents   so   as   to   prevent   any subsequent  challenge  based  on  her  mental  capacity. He  provided  the  name  of  a psychogeriatrician in Takapuna.   He further advised that there was no necessity to advise either Kathleen or Sandi Anderson of the proposed alterations, so preventing the  possibility of  Norah  Hills  being  put  under  pressure  to  change  her  instructions and/or solicitor or causing further family disharmony.

[72]     Mr  Holmes then prepared the documentation to vary the trust deed as recommended by Barry MacLean, to transfer the  property at 12 Toru Street to the NHF Trust (at government valuation), to record the indebtedness of the  Trust  to

Norah Hills for the amount of the purchase price ($184,000) and to reduce that debt

by $27,000 by deed of forgiveness of debt to $157,000.

[73]     On 8 September 2000, he sent  these  documents  to  Norah  Hills  care  of  Mr

Gannon, together with a copy of Mr MacLean’s letter of 4 September.  He stated:

I am sure  that  the steps  which we  are taking now should take  a lot of the family pressure off you, so that you can leave Don and Tom to look after your major assets for you.

[74]     He copied that letter to Mr Gannon, noting the need to have a doctor confirm

Norah Hills’ mental capacity before or just after signing the documents.

[75]     He stated in the letter to Mr Gannon that he hoped the account he enclosed would  cover  the  entire  transaction  “…  provided  we  do  not  strike  any  ‘spoiling tactics’ from the other side”.

[76]     The documents forwarded by Mr Holmes were subsequently signed by Norah

Hills, Mr Eagle and Mr Gannon, witnessed, dated 19 September 2000 and returned

to Mr Holmes.

[77]     At about the same time as Norah Hills made the will dated 10 August 2000 with  Sandi  Anderson  which  is  referred  to  at  [55]  above,  she  had  executed  an enduring power  of  attorney dated  6  August  2000  in  favour  of  Kathleen  and  Sandi Anderson and revoked the power of attorney in favour of Mr Eagle and Mr Gannon. This was advised to John Holmes by letter from  Sandi Anderson dated 11 August 2000.  In that letter Ms Anderson also inquired as to whether the property at 12 Toru Street had been transferred to the Trust and about funds in a Westpac bank account. This letter appears to have prompted the above described activity towards the end of August.           Norah Hills executed the will dated 27 August 2000 which replicated the provisions of her 1996 will.   On 30 August she signed a statement that she had not revoked  the  enduring  power  of  attorney in  relation  to  property dated  7  November 1996 in favour of Mr Eagle and Mr Gannon, and that it continued in full force and effect.  The variation of the trust deed and the transfer of the Toru Street property to the Trust were completed on 19 September.   It was contemplated that other assets would be transferred to the Trust; this was left with the trustees to implement.

Australian funds

[78]     On  9  August  2000  Sandi  Anderson  wrote  to  the  Westpac  Bank  in  George Street,  Sydney  about  an  amount  she  stated  to  be  approximately  $A150,000,  in  an account  in  the  name  of  Norah  Alexandra  Hills  which  Mrs  Hills,  she  said,  was considering  having  remitted  to  New  Zealand.   On  4  September  she  forwarded  the power  of  attorney  in  favour  of  herself  and  Kathleen  Hills  and  requested  that  the funds be remitted in Australian dollars to her trust account.

[79]     Before Westpac acted on that instruction, Mr Eagle was in Sydney.  He said

he  called  at  the  Westpac  Bank  in  George  Street  for  the  purpose  of  introducing himself  to  the  bank  as  Norah  Hills’  attorney.          The  bank  informed  him  of  the communications from Sandi Anderson and provided him with a copy of the enduring power of attorney in favour of herself and Kathleen Hills.  He immediately sent a fax dated 18 September 2000 to Mr Gannon with a copy of that power of attorney stating “Hope we haven’t missed the boat … everything on hold at Bank until have checked legal position for both parties”.

[80]     Mr  Holmes  then  sent  a  fax  to  Westpac,  advising  the  bank  that  it  was  the intention  to  transfer  these  funds  to  the  NHF  Trust  and  attaching  advice  signed  by Norah Hills that she had not revoked the power of attorney in favour of Mr Eagle and Mr Gannon dated 7 November 1996.

[81]     Westpac subsequently advised both Ms Anderson and Mr Holmes that they could not comply with the conflicting instructions from the attorneys.   Norah Hills signed  a further power  of attorney in favour of  Mr Eagle and Mr Gannon dated 2 October  2000.     Eventually  on  25  March  2003  Norah  Hills  instructed  the  bank  to close  the  account  and  transfer  the  proceeds  to  the  account  of  the  NHF  Trust  at Westpac, Karangahape Road, Auckland, which was done.

Memorandum of wishes

[82]     On 9 June 2003 Norah Hills executed a memorandum of wishes addressed to

Mr Gannon and Mr Eagle as trustees of the NHF Trust.  It stated as follows:

NORAH HILLS FAMILY TRUST MEMORANDUM OF WISHES

TO TOM GANNON AND DON EAGLES, TRUSTEES

As  Settlor  of  the  Norah  Hills  Family  Trust  established  by  Deed  dated  12

May 1997 I record my wishes as follows:

1.        This memorandum is for your guidance and is confidential to you.  It

is  not  intended  to  limit  the  discretionary  powers  which  you  have under the Trust Deed.

2.I  am  conscious  that   my   daughter  Kathleen   has  had   a   greater provision  by  way  of  gifts  both  from  my  late  husband  and  myself than my other two children, Sandra and Doug have had.  We helped Kathleen  with  considerable  cash  payments  towards  the  cost  of construction  of  her  house  at  Whangaparoa  and  have  given  her financial assistance and other gifts on many occasions, but Doug and Sandra did not ask for or receive any financial assistance from us.

3.        The income from the trust is more than sufficient for my needs and I would like you to consider making a distribution of $100,000 from the capital of the trust to each of Sandra and Doug at this stage.

4.        I record  that   most  of  my  assets  are  now  vested  in  the  trust.

Assuming my home is worth around $200,000, total trust assets are

in  the  region  of  $750,000,  reducing  to  $550,000  following  the distribution  to  Doug  and  Sandra  which  I  have  requested  you  to consider.   Upon  my  death  I wish  the  remaining  assets  of  the  trust fund to be distributed equally among my three children.  Should any of the children die before me then I wish the share of that child to go to his/her children.  I record that I have made similar provision in my will for distribution of assets which I still hold in my own name.

DATED this 9th  day of June 2003.

“N A Hills”  “V M Trainor”

Norah Alexandra Hills  Viki Marie Trainor

117 Divich Ave

Te Atatu South

[83]     A certificate was completed by Dr John C Caldwell who regularly attended at the Arran Court Rest Home where Norah Hills was then resident, as follows:

18 June 2003

TO WHOM IT MAY CONCERN: Re:

Norah Hills, Female

Age: 81y 8m, DOB: 15/10/1921, NHI No: UNKNOWN Aaron Court Rest Home

McLeod Rd, Henderson

Telephone: unknown

The above lady was examined by me on 9.6.03 with regard to competency to make decisions regarding her estate.

On   discussion   today   and   subsequently   at   her   residence   she   appeared orientated time/place/person and was well aware of the legal ramifications of her decision-making.

Her MMSE score today was 25/30 which equates to being within the normal range.

I am  satisfied  that  she  is  competent  to  make  legal  decisions  regarding  her estate.

Yours faithfully

“J C Caldwell”

DR JOHN C. CALDWELL

[84]     Payments to Sandra and Douglas of $100,000 each were made from the NHF Trust bank account on 4 December 2003.

[85]     The  background  to  the  memorandum  of  wishes  and  the  payments  made pursuant to it, is described by John Holmes in his affidavit:

a)        A file note of Mr Holmes dated 19  December  2002  records  a discussion  with  Mr  Gannon  on  17  December.   It  refers  to  “the bad daughter” harassing Norah Hills  again  and  the  proposal  that  Norah Hills should move to a retirement village.   It also records that Norah Hills was intending to change her will to cut out the “bad daughter” (identified by Mr Holmes in evidence as a reference to Kathleen, but because he could not remember the christian name of the daughter he referred to her by description).   The note records Mr Holmes’ advice that it would be better for the trustees to assess how much property the daughter had received from Norah Hills over the years and to provide a direction to the trustees to take this into account when distributing from  the  Trust  to  Norah  Hills’  children.   The  note  also  records  Mr Holmes’ advice that this was “a family issue better left to them to sort it out”.

b)Mr Holmes’ letter dated 2 May 2003 reporting to Mr Gannon about a telephone discussion with Norah Hills the previous morning.  He says:

“She was in good form – quite clear in her recollection and discussion with me”.  The letter continues:

I mentioned that you [Mr Gannon] had told me that she had been concerned that Kathleen had had some advantage over the other two children through gifts etc.  She agreed that that was  so  and  added  that  while  Kathleen  was  living  with  her she thought that it was possible she had taken some of her crystal.  I said that she could provide in her will that gifts or loans to Kathleen during her lifetime could be offset against Kathleen’s share of the estate.  However, I think that she felt that that would be too difficult to work out.   Her concern is more  directed  to  ensuring  that  Kathleen  cannot  get  more than her 1/3 share of the estate when it is administered”.

He  raises  matters  concerning  the  Toru  Street  house  vacated  about  a month prior by Norah Hills.  He asks that Mr Gannon pass on a copy of  the  letter  to  Mr  Eagle  and  that  they  advise  their  views  about  a memorandum   of   wishes   for   the   trustees   to   meet   Norah   Hills’ concerns.

c)        A handwritten file note dated 15 May 2003 which records:

“Discussion TG

-     NH can’t recall my phone call

-     Still thinks she needs to change her will

-     Wants to cut out sister

-Fretting    over    criminal    granddaughter reverting to family name

Agreed to meet her with Tom

d)A  letter  to  Norah  Hills  from  Mr  Holmes  dated  22  May  2003, addressed  to  her  at  the  Arran  Court  Rest  Home. It  refers  to  a discussion  at  a  meeting  held  with  Norah  Hills,  Mr  Eagle  and  Mr Gannon and Mr Holmes at the Arran Court Rest Home on Tuesday 20 May 2003.  The letter covers the following matters:

i)        Summarises the provisions of  Norah  Hills’  will  dated  27

August 2000 and encloses a copy.

ii)       Records the desirability of Norah Hills and Sandra making up

a list of personal possessions (the more valuable or important

ones) with an indication as to who is to get what.  Also that it would be a good idea to give away some of the items to family members in preparation for sale of the house.

iii)Notes    that    Norah    Hills’    assets,    apart    from    personal possessions,  are  currently  settled  in  the  Trust  and  that  the assets  comprise  about  $550,000  in  cash  investments  and  the house with a value of, say, $200,000.   It is recorded that the trust  still owes  Norah  Hills  $157,000  in respect  of  the  house sale  and  that  resumption of a  gifting  programme  would  be appropriate.

iv)      The letter continues:

You  said  that  you  wanted  all  assets  remaining  in both your personal estate and in the trust at the date of  your  death  divided  equally  between  the  three children  (with  provision  for  grandchildren  should any of the kids happen to die before you).  However, first  you  wanted  to  arrange  a  distribution  from  the trust to Doug and Sandra as an acknowledgement of the  fact  that  Kathleen  had  had  a  lot  of  financial support and gifts of items from both Doug (your late husband) and yourself over the years, while Sandra and Doug have not received any gifts of substance. You indicated that you felt that $100,000.00 each at this stage would be appropriate and that the balance could   then   be   split   equally   between   all   three. Clearly, there are sufficient  assets in the trust for a gift  of  this  sort  to  be  made  while  still  leaving  you sufficient income     and capital for your own requirements.

We agreed that I would draw up a memorandum of wishes for  you  to  sign  for this  purpose.   Once  you are satisfied with the form of this, we can arrange for you  to  visit  the  geriatric  specialist  on  the  North Shore, to confirm that you have got full capacity to make a decision of this sort, without the influence of others.   I would add that I was quite satisfied from our  discussion  that  you  had  a  complete  grip  on  all these issues and I am sure there will be no problem in that respect.

e)        The letter concludes by enclosing a draft memorandum of wishes for

Norah Hills to consider. Mr  Holmes  suggests  that  she  hold  the

memorandum of wishes until she had a chance to discuss it with Tom and Don and with any of her children she thought appropriate.

[86]     Mr Holmes says in his affidavit that a copy of the memorandum of wishes signed  by Norah  Hills  was  subsequently forwarded  to  him.   He  says  Norah  Hills’ decision  to  request  the  trustees  of  the  NHF  Trust  to  distribute  $100,000  each  to Sandra and Douglas arose from her concern to ensure equality of financial benefit to her three children.

Did the plaintiff attempt to financially pressure the deceased?

[87]     Kathleen denies attempting to financially pressure the deceased at any time. She points to the proposal of Mr Gannon in February 2000 that the Australian funds

in  the  Westpac  Bank  in  Sydney should  be  divided  three  ways  and  put  in  separate accounts in the names of the three children and her response that her mother might need the money for her care and welfare. It was submitted that when Mr Holmes states in  his affidavit  of  3  July  2009  that  in  August  2000  Norah  Hills  was  “still coming under pressure from Kathleen with respect to her financial affairs and that Tom and Don wished to take further steps to remove or alleviate that pressure”, it was likely that  it was in fact Sandi Anderson’s letter of 11 August 2000 (refer [77]),which triggered the consultation with Mr Holmes in August 2000, a possibility which Mr Holmes accepted in answer to cross-examination.

[88]     I consider there is considerable evidence that Kathleen did attempt to apply financial pressure to the deceased.  John Holmes said in evidence that “right from the outset  one  of  the  reasons  she  was  introduced  to  me  from  1996  onwards”  was concerns “about Kathleen harassing her”.  Mr Holmes explained in evidence that his use of the expression “tug of war” (refer [63]), was to state neutrally the concerns expressed about Kathleen putting financial pressure on the deceased.

[89]     Mr Gannon gave evidence of the deceased’s consistent concern about financial pressure from Kathleen. Mr Gannon  was  portrayed  by  Kathleen  as manipulating her mother  and engineering decisions and conduct by her mother which were detrimental to her and  favourable  to  Sandra  and  Douglas. But  John

Holmes also gave evidence of the deceased’s concern about financial pressure from Kathleen.                  Also  Barry  MacLean  (to  whom  Mr  Holmes  referred  Norah  Hills  for independent  advice  before  the  trust  deed  was  varied  and  she  transferred  the  Toru Street property to the Trust), clearly refers in his reporting letter of 4 August 2000 (refer [69]), to the deceased’s concern about financial pressure from Kathleen.  This was  a  matter  specifically  discussed  at  the  meeting  at  Mr  MacLean’s  office  on  30

August 2000 when Norah Hills attended with Mr Holmes, Mr Gannon and Mr Eagle.

[90]     Although Mr Eagle spoke of   the financial pressure from which Norah Hills sought protection as being from all family members, he accepted that at the meeting

in  Mr  MacLean’s  office,  the  concern  about  pressure  from  Kathleen  had  been discussed.  The question was put to Mr Eagle: “At the meeting on 30 August 2000 at Barry MacLean’s office Norah Hills spent a lot of time complaining about Kathleen Hills  and  about  the  pressure  she  was  putting  on  her?   He  replied:  “She  did  speak about it”.

[91]     While  there  can  be  little  doubt  that  Norah  Hills  was  concerned  about  the disharmony among her children, I consider the evidence is clear that it was pressure applied  by  Kathleen  to  assist  her  and  her  family  financially  that  was  a  principal concern  of  Norah  Hills  in  taking  the  steps  she  did  to  establish  the  NHF  Trust,  to transfer her assets to it and to place them under the control of two longstanding and trusted  friends,  Mr  Gannon  and  Mr  Eagle,  so  as  to  distance  decisions  about  and management of her financial affairs from her children.

[92]     The steps taken by Kathleen in August 2000 to have her mother advised by her own solicitor, Sandi Anderson, are, I consider, consistent with Kathleen wanting

to gain control and authority in relation to her mother’s affairs.  While the evidence was  that  Kathleen  was  not  present  while  Norah  Hills  gave  instructions  to  Ms Anderson in relation to her will (which were detailed, and carefully recorded by Ms Anderson), she was waiting for her mother outside Ms Anderson’s office.  This was at a time when she was living with her mother, and she took her mother to and from the appointments with Ms Anderson.   Although Kathleen said in evidence that she was not aware her mother had previously given a power of attorney to Mr Eagle and Mr  Gannon,  this  has  to  be  doubted  given  the  involvement  of  Mr  Eagle  and  Mr

Gannon since 1996 with the affairs of Norah Hills as attorneys, and from 1997 as trustees of the NHF Trust.  Be that as it may, in August 2000 Norah Hills executed a power of attorney in favour of Kathleen and Sandi Anderson which she revoked less than two months later, on 28 September 2000, confirming on 30 August 2000 that the power of attorney dated 7 November 1996 in favour of Mr Eagle and Mr Gannon

was not revoked.

Testamentary capacity

[93]     The statement of claim pleads at paragraph 20(g) that at the time the deceased signed  the  last  will  she  was  confused  and  ill.  This  particular  is  identical  to  the statement at (g) in Kathleen’s affidavit of 10 June 2008 (refer [18]).  The particulars pleaded  at  paragraph  20(h)  are  the  same  as  set  out  in  Kathleen’s  affidavit  at  (h). They allege undue influence on the deceased by Douglas, Sandra and John Holmes in  making  the  last  will  by  pressuring  the  deceased  to  leave  her  personal  and household effects to Sandra “… and not providing for a payment of the equivalent of $100,000 to me to equalise the payments made to my siblings by the NHF Trust in 2003”.

[94]     The deceased’s last will is dated 27 August 2000.   That is the will of which the Public Trust was granted probate on 18 December 2007.

[95]     As  Mr  Gibbons,  the  General  Manager  of  the  Public  Trust,  states  in  his affidavit  dated  30  June  2009,  there  has  been  no  application  to  recall  probate  or further allegations based upon lack of testamentary capacity.  Mr Gibbons states that having  considered  relevant  evidence,  particularly the  affidavits  of  Sandi  Anderson and John Holmes, there is no indication the deceased lacked testamentary capacity in August 2000 or indeed, says Mr Gibbons, in the years following.  Mr Gibbons says: “The  plaintiff’s  own  affidavits  indicate  her  mother  had  capacity,  both  when  her lawyer S Anderson took instructions for and had executed the will 10.8.00 as well as the last will 17 days later and which had followed a family consultation”.

[96]     Ms Anderson did not find  Norah  Hills  evidencing  lack  of  testamentary capacity when she attended her on 10 August 2000.  She states in her affidavit dated

16  October  2008  that  she  discussed  the  will  with  Mrs  Hill  for  an  hour  to  satisfy herself that it properly recorded Mrs Hills’ instructions.  She states that in relation to matters in her will: “… Mrs Hills seemed to be able to fully comprehend what was going on …”.  She further states in relation to the subsequent meeting on 4 October 2000 which was attended by Sandra as well as Kathleen: “I made no mention of Mrs Hills being a confused old lady and certainly that was not how I perceived her”.

[97]     It would be very surprising if seventeen days after the deceased executed the will  with  Sandi  Anderson,  when  Norah  Hills  executed  her  last  will  and  testament dated  27  August  2000,  she  was  “confused  and  ill”.           There  is  no  evidence  of intervening  illness  or  deterioration.  That  was  certainly  not  how  Mr  Holmes perceived Norah Hills to be when he attended her in relation to the will.

[98]     Further, the allegation of undue influence in failing to provide by the will for payment of an equivalent of $100,000 to equalise the payments made to Sandra and Douglas from the NHF Trust in 2003 makes no sense.   When Norah Hills executed her last will on 27 August 2000 no such payments had been made, nor is there any evidence that they were in contemplation.   They were not made until 2003.   If the deceased had wished to equalise those payments she would have needed to make a new will or execute a codicil to her last will to make further provision in favour of Kathleen.   She had ample opportunity to do so in the period of approximately two years that elapsed between execution of the memorandum of wishes on 9 June 2003 and  her  death  in  July  2005;  and  also  between  the  date  when  the  payments  of $100,000 were made by the Trust to Sandra and Douglas in December 2003 and her date of death.  She did not take any such step.

The deceased’s mental capacity when the memorandum of wishes was executed on

9 June 2003

[99]     When Norah Hills was admitted to hospital and underwent surgery for bowel cancer on 3 March 2003 she was transferred to Waitakere Hospital for rehabilitation.

A  report  completed  by  Dr  Emily  Liu,  house  surgeon  for  Dr  J  Baskett,  consultant geriatrician, states:

Mrs Hills was found to have significant cognitive impairment with MMSE

of  14/30  on  admission,  improved  to  19/30. Cognistat  profile  done  by

Occupational    Therapist    showed    a   severe   memory    deficit    and moderate/severe   orientation   problem.        Mrs   Hills   also   demonstrated   a moderate/severe   disability   with   construction   and   calculation. Family reported that her memory has declined over a period of time.

[100]   The report notes that the family agreed at a meeting that Mrs Hills needed to

go into a rest home and that she was happy with that decision.  She was discharged into the care of the Arran Court Rest Home.

[101]   The  plaintiff  placed  considerable  emphasis  on  that  report  in  claiming  that when  Norah  Hills  executed  the  memorandum  of  wishes  on  9  June  2003  she  was suffering from dementia and memory loss.   The  plaintiff also referred to incidents when Norah Hills could not recall matters such as a telephone discussion with John Holmes and the contents of the will she made with Sandi Anderson (as recorded in the letter of Barry MacLean dated 4 September 2000).  Mr Holmes said he thought it was  recognised  by Mr  Gannon,  Mr  Eagle  and  presumably the  children  that  Norah Hills had some sort of dementia or memory loss.

[102] Thus the precaution was taken, as recommended by Mr Holmes, to ensure that Norah Hills had the mental capacity necessary to understand the dispositions she requested in the memorandum of wishes dated 9 June 2003. Dr John Caldwell who attended regularly at the Arran Court Rest Home provided the certificate, the contents of which are set out at [83]. As can be seen from the certificate, the deceased’s MMSE score had improved from that recorded while she was at Waitakere Hospital some two months earlier, and was 25/30 “… which equates to being within the normal range”. Dr Caldwell certified he was satisfied that Norah Hills was competent to make legal decisions regarding her estate and “… well aware of the legal ramifications of her decision-making”. The certificate specifically states that Dr Caldwell examined Norah Hills on 9 June 2003 which was the date the memorandum of wishes was signed, although the certificate is dated 18 June 2003.

[103]   It was submitted by the plaintiff that:

The fact that Dr Caldwell was not called to give evidence is of significance.

It can be inferred that he was not qualified to make the necessary assessment given the severe nature of Mrs Hills’ cognitive impairment.

[104]   I  do  not  accept  that  submission. Dr  Caldwell’s  certificate  was  clearly  in evidence, exhibited to the affidavit of Douglas dated 28 July 2008.   If the plaintiff wished  to  challenge  the  competency  of  Dr  Caldwell  to  give  the  certificate  or  his qualifications to do so,  as she sought to do, then it was for  her  to require him for cross-examination  so  that  her  challenges  to  his  qualifications  and  creditworthiness could be put to him.   This was not done.   In the absence of any such challenge Dr Caldwell’s certificate is evidence that Norah Hills’ MMSE score on the relevant day equated to being within normal range, that she appeared orientated in time, place and person  and  well  aware  of  the  legal  ramifications  of  her  decision-making. It  can properly be inferred that  Dr Caldwell explored those aspects with her to  reach the point of satisfaction to which he certifies.

[105]   The  plaintiff’s  submissions  referred  to  a  number  of  authorities  relating  to testamentary capacity.   They are not particularly relevant or helpful.   As the Public Trust noted, there has been no challenge to the last will and testament of Norah Hills dated 27 August 2000.

[106]   On the advice of Mr Holmes, the trustees of the NHF Trust, Mr Eagle and Mr Gannon, took reasonable steps to ensure that in giving instructions in relation to the memorandum of wishes dated 9 June 2003 and in executing it, Norah Hills acted of her own free will and had the capacity to do so.  In this context it is relevant to note that when Mr Holmes wrote to Norah Hills following the meeting with her at the rest home on 20 May 2003 and enclosed relevant documentation relating to the variation of the trust deed and the memorandum of wishes, he expressly urged that she should take  time  to  consider  and  consult  with  the  trustees  and  members  of  her  family  in relation to the proposed courses of action.   There is no evidence of any urgency or pressure  being placed  on  Norah  Hills.   Further,  while  the  memorandum  of  wishes was  signed  on  9  June  2003,  the  payments  to  Sandra  and  Douglas  were  not  made from  the  Trust  until  December  2003. Had  Norah  Hills  wished  to  recant  on  her earlier decision she had ample time to do so.

[107]   The  memorandum  of  wishes  is  rational  on  its  face.      A  certificate  was provided  by  Dr  Caldwell  relating  to  Norah  Hills’  mental  capacity  on  the  day  she executed  it.   There  is  no  evidence  of  urgency  or  pressure  having  been  applied  in

relation to the execution of the memorandum of wishes or its implementation.  Thus there is no evidential basis for the plaintiff’s challenge.

Allegation of forgery

[108]   On the last day of the hearing when Douglas was giving evidence Ms Grant, when cross-examining produced to the witness an affidavit sworn by Linda Morrell, document examiner, dated 11 September 2009 which contained a qualified opinion concerning the authenticity of the signature of Norah Hills on the memorandum of wishes.  I disallowed the evidence.  I provided the opportunity for counsel to provide submissions.     Having  considered  those  submissions,  including  an  application  for leave by the plaintiff to amend her pleading to include a claim that the memorandum of wishes dated 9 June 2003 is a forgery, I declined the application in a minute dated 17 September 2009. That minute sets out my reasons for doing so and confirmed my ruling disallowing the evidence of Ms Morrell.   The minute of 17 September 2009 speaks  for  itself. No  further  comment  is  required  here. There  was  no  evidence before the Court that the signature on the memorandum of wishes is not that of the deceased.

Support received by Kathleen from her parents during her adult life

[109]   The memorandum of wishes states at paragraph 2:

I am conscious that my daughter Kathleen has had greater provision by way

of gifts both from my late husband and myself than my other two children, Sandra  and  Doug  have  had. We helped Kathleen  with  considerable  cash

payments towards the cost of construction of her house at Whangaparoa and

have given her financial assistance and other gifts on  many occasions, but

Doug and Sandra did not ask for or receive any financial assistance from us.

[110]   There was considerable evidence, much of it conflicting, as to what financial assistance and other gifts had been provided to Kathleen on the one hand and Sandra and Douglas on the other, by the deceased and her husband prior to the date of the memorandum of wishes, 9 June 2003. Kathleen contended that she had received no equivalent distribution, nor any significant monetary gifts  from  the  deceased  other

than small loans of $2,000-3,000 (1974), $10,000 (1985) and $5,000 (1999) all of which she said she repaid within two years of each loan being made to her.

[111]   The only other item of specific support Kathleen identified was work to the kitchen in her house at Whangaparoa carried out by Mr Eagle.  Mr Eagle valued the cost of that work at about $1,000, which he said was paid to him by the late Mr Hills.

[112]   Kathleen disputed the statement in John Holmes’ letter to Norah Hills dated

22 May 2003 (which followed the meeting with her at the Arran Rest Home on 20

May 2003) that “… Sandra and Doug have not received any gifts of substance”.  She referred to items taken by Douglas from the property at 12 Toru Street according to a note   allegedly  prepared   by  Sandra   in   September   2000   (although   Sandra   was uncertain  in  answer  to  cross-examination  by Ms  Grant  that  the  note  was  hers;  she said “… there are things in it which aren’t right”).  Kathleen also referred to chattels at 12 Toru Street being divided between Douglas and Sandra when Norah Hills went into the rest home in  April 2003.   She referred  to a catalogue prepared  by Sandra which  identified  items  taken  by  her  and  that  Douglas  had  taken  some  items  also. Kathleen  maintained  that  when  Mr  Gannon  was  arranging  for  the  property  to  be cleared  of  chattels  he  did  not  even  speak  to  her  to  enable  her  to  remove  personal items.   However, Mr Gannon said that he wrote to Kathleen in the same way as he did to Sandra and Douglas, but received no response.

or given by the advisory trustee he is not liable by reason of following that advice or direction.

[155]   Under s 49(3)(d) if the responsible trustee is of the opinion that such advice

or  direction  conflicts  with  the  trusts  or  any  rule  of  law  or  exposes  them  to  any liability or is otherwise objectionable, he may apply to the Court for directions in the matter.

[156]   In this case, where Norah Hills was the advisory trustee and it was she who made  the  request  for  the  distributions,  where  the  trustees  took  all  reasonable  and proper  steps  to  ensure  that  Norah  Hills  was  properly advised  and  further,  that  she was seen by a doctor who certified as to her mental capacity, there can be no breach of trust by the responsible trustees, Mr Gannon and Mr Eagle.

[157]   I find that there are no breaches established which give rise to loss or damage

to either the Trust or the plaintiff under this head of claim.

[158]   It  is  relevant,  however,  to  refer  to  the  plaintiff’s  claim  that  the  Trust  has suffered  loss  because  of  costs  incurred  in  accounting  and  legal  fees  for  work  to correct  the  errors  alleged  to  have  been  made  by  the  trustees,  or  specifically  Mr Gannon.   At  Mr  Eagle’s  instigation,  Mr  Virtue  became  involved  in  preparation  of financial statements for the Trust.  The appointment was confirmed on behalf of the Trust by Mr Holmes in January 2006.  Presumably Mr Holmes had instructions from Mr  Gannon  (notwithstanding  his  earlier  opposition  to  Mr  Virtue  carrying  out  this function), to confirm instructions to Mr Virtue on behalf of the Trust.  It was thus the trustees’ decision to employ professional accountants to complete financial statement for  the  relevant  years. That  was  an  option  always  available  to  them. In  my assessment,  the engagement of Mr Virtue to bring  professional  expertise  and independence  to the preparation  of  financial  statements  for  the  Trust  became necessary and has been to the benefit of all concerned.   However, I do not consider that  Blackmore  Virtue  &  Owens’  fees  and  disbursements  for  attendances  arising from Kathleen’s instructions would be properly payable by the NHF Trust.

Conflict of interest

[159]   The  plaintiff  alleges  in  paragraph  24  of  the  statement  of  claim,  conflict  of interest  between  Mr  Gannon  and  Mr  Eagle  “to  the  detriment  of  the  beneficiaries under the Trust”.  But the conduct particularised, relates to the personal funds of the deceased.

[160]   Mr Judd, counsel for the second defendant, submitted that the plaintiff does not  have  standing  to  make  any  claims  in  respect  of  the  personal  affairs  of  the deceased.   He submitted that any claims alleging wrongdoing or seeking to recover loss in respect of Norah Hills’ personal funds or assets or in relation to the handling of  the  estate,  are  claims  that  would  have  to  be  brought  by  the  Public  Trust  as executor.  He noted that the Public Trust has elected not to bring any such claims.

[161]   I agree with counsel’s submissions.  Any alleged misconduct by Mr Gannon

in relation to the deceased’s personal bank accounts which resulted in loss to her and thereby  diminished  the  value  of  her  estate,  is  a  matter  for  the  Public  Trust  as administrator of the estate.  The plaintiff has no standing as one of three beneficiaries of  the  estate  under  the  will  of  the  deceased,  to  bring  such  an  action  against  the second defendant.

[162]   Likewise  the  new  issue  raised  by  the  pleading  in  paragraph  27  of  the statement  of  claim  which  alleges  breach  of  Mr  Gannon’s  duties  as  the  deceased’s attorney,  again  relates  to  the  deceased’s  personal  estate  in  respect  of  which  the plaintiff has no standing.  I would add that there is no evidence that the particularised actions of Mr Gannon were carried out in reliance upon or pursuant to the powers granted to him under the enduring power of attorney which was given in favour of him and Mr Eagle jointly and severally by the deceased.  Mr Gannon was a signatory on the deceased’s ASB account.   His authority to operate the account did not arise under the power of attorney.  Indeed Mr Gannon said in evidence that he understood the power of attorney only came into effect upon the deceased’s mental incapacity which  he  did  not  consider  was  the  situation  when  he  acted  to  carry  out,  what  he claimed to be her wishes, prior to her death.  Mr Gannon was not correct about that,

of course.  The enduring power of attorney stated that it would not be revoked if the deceased became mentally incapable.

[163]   The plaintiff cannot succeed under this head of  claim.   Further, there is  no evidence  that  the  estate  has,  or  will  suffer  any  loss  from  the  alleged  misconduct, subject to repayment by the NHF Trust of the funds referred to in [175] which were incorrectly credited to the Trust by Mr Gannon.

Mishandling by Mr Gannon of personal funds of the deceased

[164]   Notwithstanding  my  finding  that  the  plaintiff  has  no  standing  in  these proceedings in relation to the personal funds of the deceased, I propose to consider briefly  the  situation  in  respect  of  the  various  cheques  actioned  by  Mr  Gannon  to clarify the situation in relation to funds belonging to the NHF Trust, which in turn will serve to clarify the situation of funds belonging to the deceased’s estate.   I will also make some observations.

[165]   On 6 December 2005 Mr Foley wrote to Mr Holmes on behalf of Mr Eagle in relation  to  the  NHF  Trust  and  the  estate  of  the  deceased.   He  raised  a  number  of matters of concern including apparent irregularities in the handling of money of the late  Mrs  Hills.           Mr  Holmes  replied  on  3  May  2006. His  letter  explains  the considerable     delay   in replying for                  which Mr Holmes  generally accepted responsibility.   He said that the delay did not result from any unwillingness by Mr Gannon to address the issues raised.   Mr Gannon’s response through Mr Holmes to the matters raised may be summarised as follows:

a)        $511.90  drawn  in  cash  from  an  ASB  Bank  account  of  Mrs  Hills closed on 14 July 2005.  Mr Gannon confirmed that $455 of this was cash  in  a  box  delivered  by  Mr  Gannon  to  Mr  Eagle. He  said  the balance  of  $56.90  would  have  been  spent  on  purchases  for  Norah Hills but he could not account in detail.   (According to Mr Eagle, a further $50 has been located and the deficit is $6.90).  The $455 cash was  paid  by Blackmore  Virtue  & Owens  to  the  trust  account  of  Mr Holmes for the credit of the estate on 31 August 2005.

b)Mr  Eagle  obtained  from  ASB  Bank  Limited  copies  of  the  four cheques  drawn  on  Norah  Hills’  ASB  Omni  account. They  are  all dated 28 June 2005, drawn on an account in the name of “NA Hills & DW Hills”, signed by Mr Gannon and Douglas Hills and drawn on the bank  account  between  29  June  and  11  July  2005,  as  is  shown  in  a copy of  the  bank  statement  exhibited  to  Mr  Virtue’s  affidavit.   The cheques are in favour of:

i)        Douglas $10,000;

ii)       Sandra $10,000;

iii)      “DW Hills” $5,000;

iv)      Mr Gannon $14,560.

Mr  Eagle’s  concern  was  that  these  cheques  were  signed  by  Mr Gannon and Douglas but Douglas was not an authorised signatory on the  account,  the  authorised  signatories  being  Mr  Gannon,  Mr  Eagle and  Norah  Hills. Mr  Gannon’s  response  was  that  both  he  and Douglas believed that Douglas was an authorised signatory, as he was an  authorised  signatory  “on  most  of  the  ASB  accounts”. (Douglas was a signatory on only one ASB account).

c)        In  relation  to  iii),  the  $5,000  cheque  made  out  to  “DW  Hills”,  Mr Holmes  explained  on  behalf  of  Mr  Gannon  that  this  had  been  “the cause  of  considerable  concern”  because  initially  Mr  Gannon  was unable  to  recall  why  this  cheque  was  banked  to  his  (Mr  Gannon’s) account on 11 July 2005.  The explanation given was that the cheque was  incorrectly  made  out  “DW  Hills”  (DW  Hills  being  Mr  Hills senior  who  died  in  1996). Mr  Gannon  told  Douglas  to  bank  the cheque into his (Mr Gannon’s) account and he would write one of his own cheques as a contra and bank the proceeds in Norah’s Westpac account. The cheque was then  subsequently  banked  by  Leanne,

Douglas’ wife, into one of Mr Gannon’s bank accounts.   He said he was not aware of this and neither he nor Douglas followed the matter up.  He acknowledged that he would “now have to account to Douglas for this payment”.

Mr  Holmes  further  explained  that  the  transfer  of  $5,000  from  the Norah  Hills  Trust  bank  account  to  Norah  Hills’  personal  Westpac account on 6 July 2005 was a routine transfer to provide funds for her use and was not connected with the $5,000 cheque made payable to “DW Hills”.

d)In relation to iv), the cheque for $14,560 payable to Mr Gannon and banked to his account on 29 June 2005, Mr Gannon’s response was that  this  comprised  the  $10,000  the  deceased  wished  to  give  him together  with  “reimbursement  of  expenses”  but  he  was  “not  able  at this stage to list exactly what the expenses were …”.  He said that was not material because the entire payment had been refunded.

(This was obviously a  reference to Mr  Foley’s  advice that  a cheque for  $14,560 drawn on Mr Gannon’s  Premier  Call  account  at  ANZ Bank and payable to the Norah Hills Family Trust dated 1 July 2005 had been discovered in the box delivered by Mr Gannon to Mr Eagle. The cheque was banked by Blackmore Virtue & Owens to the account of the Norah Hills Family Trust on 26 August 2005.)

Mr Gannon stated through Mr Holmes that the reason for the refund was that Mr Gannon had realised there were no longer sufficient funds

in  the  ASB  account  to  make  the  remaining  $10,000  payment  to  Mr Eagle  and  he  considered  it  inappropriate  that  he  should  receive  a payment in advance of his co-trustee.

e)        Mr Gannon’s explanation for not approaching Mr Eagle in relation to the cheques and signature of them, was that Mr Eagle “was not at all that  readily  available”  and  he  therefore  sought  the  assistance  of

Douglas  whom  he  believed  was  an  authorised  signatory  on  the accounts  concerned.   Mr  Holmes’  letter  states:  “With  the  benefit  of hindsight he (Mr Gannon) accepts that it would have been appropriate to advise Don Eagle of  what he was doing –  although  I would note that this concerned Norah’s personal funds, not Trust funds”.

f)        $3405.45 withdrawn from the  deceased’s  ASB  Omni  account  3038-

0236768-00 when it was closed on 25 July 2005.   Mr Foley referred

to  advice  from  ASB  Bank  that  this  amount  had  been  paid  to  the Blackbridge Trust which was understood to be the family trust of Mr Gannon.  He said it would have been expected that these funds would have been paid into the trust account of Mr Holmes for the credit of the  estate  of  Mrs  Hills.   He  noted  that  on  27  July 2005  the  sum  of $3615.45  was  deposited  to  the  account  of  the  Norah  Hills  Family Trust.  He queried the $210 difference.  Mr Foley continued that if the amount  deposited  to  the  Norah  Hills  Family  Trust  included  the amount   withdrawn   from   Mrs   Hills’   account   and   paid   to   the Blackbridge  Trust  it  was  considered  “a  highly  irregular  way  of dealing with the funds of a deceased person”.

Mr  Holmes  replied  on  behalf  of  Mr  Gannon:  “With  the  benefit  of hindsight, again, Tom Gannon accepts that it was not appropriate to close  the  Omni  account  –  but  this  was  done  with  the  objective  of simplifying administration of Norah’s estate.  The subsequent deposit of  $3615.45  to  the  account  of  the  Family  Trust  incorporates  this withdrawal together with the sum of $210 which we note is explained by Sandra’s letter”.

g)        $6658.32 withdrawn from the deceased’s  Westpac  Elect  account which was closed about the same time.  This sum was deposited to the account of the Norah Hills Family Trust on 27 July 2005.

Mr Foley noted that Mr Eagle  did  not  sign  any  of  the  withdrawal forms for these transactions and that the funds should have been paid

to Mr Holmes’ trust account for the credit of the estate of Norah Hills.

Mr   Holmes   responded   on   behalf   of   Mr   Gannon   that   the   same comments applied to the closing of the Westpac Elect account as to the  closing of  the  Omni  account.   He  stated:  “Tom  Gannon  accepts that  this  account  should  have  been  closed  by  the  signature  of  both executors – and then only in the context of no application being made for probate”.

Observations

[166]   The  matters  addressed  in  the  correspondence  between  Mr  Foley  and  Mr Holmes, as summarised  above, are the subject of pleadings in the second cause of action which all relate to the personal funds of Norah Hills which now form part of her estate.   As I have concluded at [163] these matters are the responsibility of the Public  Trust  as  administrator  of  the  estate. However,  I  make  the  following observations.

[167]   Mr  Gannon  through  Mr  Holmes  in  the  letter  of  3  May  2006  accepts  that certain of his conduct was “not appropriate”.

[168]   Mr  Judd,  his  counsel  states  in  written  submissions  that  Mr  Gannon:  “has always accepted since 3 May 2006 [referring to Mr Holmes’ letter], that he should have done things differently in relation to some of the matters that he was requested to attend to by Mrs Hills”.   He continues: “There is, however, no evidence to caste any  doubt  whatsoever  on  the  fact  that  Mrs  Hills  did  indeed  request  the  second defendant to act as he did”.

[169]   I would observe that based on the file note prepared by Mr Gannon dated 26

June 2005 in relation to his visit to Norah Hills on that day, taken at face value, that appears to be so in respect of the payments of $10,000 to Douglas and Sandra and

the deposit of $5,000 into Norah Hills’ personal account to pay for accountancy and other expenses:

File Note:

While visiting Norah Hills on Sunday 22 June 05 Norah asked that I action the following on her behalf.

Give as a present to Douglas & Leanne for a trip to Australia $10,000.

To Sandra the same amount $10,000 to assist with medical expenses. That I deposit in Norah’s account as further sum of $5,000

Pay  the  accountancy  and  other  expenses  incurred  in  compiling  the  Tax

returns from 1998 through to 2004.

Pay Tom Gannon for work done for her and the Trust to the sum of $40.00

per week a suggested by the solicitor/accountant

This was requested in the presents (sic) of Douglas and Leanne Hills
Norah Hills

Tom & Noeline Gannon.

Signed be Norah Hills  “Norah Hills”

26/6/005

Note.  This is a personal gift from Norah not from the Trust.

[170]   Expansion of those directions to include $10,000 payments for Mr  Gannon and  Mr  Eagle  appears  to  rely  on  a  subsequent  note,  undated,  but  prepared  by  Mr Gannon some time after the funeral on 26 July 2005 (because he refers to payment of the undertaker etc) and before 11 August 2005 when a copy of the note was sent to Douglas.   A copy was left in the letter box of Mr Eagle on 29 August 2005.   This note reads:

Don.  Notes from talk with Norah. Norah wanted to see me urgently.

She had a fall and wanted to know what to do?

She  went  on  to  give  me  some  instructions  as  she  said  that  she  wanted  to change her will.

She insisted Pat was not to get anything.

Wanted to take Kathleen out of her will.

Want to pay out of her own account Douglas/Sandra/Don/Tom $10,000 and close the account in case Kathleen could get her money.

She  was  worried  about  Sandra’s  health  and  whether  she  could  pay  her

medical bills.

Talks about a lot of things & Doug.

I confirmed several times the above.

Talks about the IRD, told her I had fixed it up and would settle any bills etc and not to worry that was our job.

I  paid  Doug  &  Sandra  and  myself  from  the  ASB.        Douglas  signed  the cheque.  I mentioned to you at the funeral you had an Inheritance coming to you from Norah (it was to come out of the Trust working account after the

transfers were done.
Noeline said I should not take the money etc until you got your cheque so I

repayed mine a couple of days later. There are still some things to clean up.

The undertaker

The football Club

Cancel Norahs pension

Pay Herald cancel Telecom

Change Tax Ref for Trust a& Bridgecorp

A refund is due from the resthome

[171]   However, nowhere in these notes is there reference to payment to Douglas of

a further $5,000 which Mr Gannon says was to be a gift from Mrs Hills to pay for Douglas’ forthcoming trip to the Australian league finals.   It is strange that Norah Hills  would  have  instructed  that  a  further  gift  be  made  to  Douglas  when  she  had already instructed that a gift of $10,000 be made to him and Leanne “for a trip to Australia”, as recorded in Mr Gannon’s file note of his visit on 26 June 2005.  This $5,000 is in Mr Holmes’ trust account having been paid in by Mr Gannon during the course  of  the  hearing.        The  evidence  strongly  indicates  to  me  that  this  is  estate money.   I recommend that the Public Trust as executor should seek payment from Mr  Holmes  and  that  Mr  Holmes  should  pay  this  money  to  the  estate  as  soon  as possible, on Mr Gannon’s instruction.

[172]   I note that the various other irregularities appear to have been addressed by

Mr Gannon although not always in a logical or correct manner.  I refer to:

·Mr Gannon’s cheque for $14,560 having been credited to the account of the NHF Trust.  These are not and never were Trust funds.   If the estate has not been credited with these funds this must now be done.

·    $455 paid to the Trust account of Mr Holmes for the credit of the NHF Trust.

These are not and never were Trust funds and must be credited to the estate,

if this has not already been done.

·$3615.45  paid  to  the  account  of  the  NHF  Trust.   These  are  not  and  never were Trust funds and must be paid to the estate if this has not already been done.

·$6658.32  paid  to  the  account  of  the  NHF  Trust.   These  are  not  and  never were Trust funds and must be paid to the estate if this has not already been done.

[173]   It is not clear to me from the evidence whether the incorrect crediting by Mr

Gannon of these funds to the NHF Trust has been rectified.

[174]   I make the following further observations.

·In answer to a question from the Court Mr Gannon acknowledged that he did not really differentiate much between money in Mrs Hills’ personal accounts and money in the NHF Trust.  He said: “… to me it was all the same money …”.  Similarly, he failed to appreciate and implement the essential distinction between the funds of another person on whose directions he was acting (Mrs Hills) and his own funds.  I refer to the payment to the Blackbridge Trust of $3405.45 on closure of an Omni account and the payment to his own account of  the  cheque  made  out  in  favour  of  “DW  Hills”.    Given  the  distinct responsibilities Mr Gannon carried as a trustee of the NHF Trust, Mrs Hills’ attorney (until her death), a signatory on her bank accounts and executor of her  estate,  it  was  necessary  for  Mr  Gannon  to  be  discriminating  in  the treatment  of the moneys he dealt with in each  capacity. The acknowledgements  by  Mr  Holmes  and  Mr  Judd  on  his  behalf,  indicate  he accepts this.

·Given the various positions of trust that Mr Gannon held for Mrs Hills and the  NHF  Trust,  it  was  quite  inappropriate  for  him  to  accept,  let  alone implement, directions from Mrs Hills (no matter how genuinely intended by her) to make a payment to him or to Mr Eagle for their personal benefits.

[175]   I emphasise that these are observations drawn from the evidence I have heard and considered.  They are intended to assist disposition, and hopefully finalisation of matters concerning the NHF Trust and the deceased’s estate.  They are not orders or directions of the Court and are not to be interpreted as such.

Removal of trustees

[176]   Paragraphs 25 and 29 of the statement of claim allege that there is a conflict between  Mr  Gannon  and  the  plaintiff  in  regard  to  the  administration  of  the  NHF Trust “by Mr Gannon” which is not in the interests of the beneficiaries.  The plaintiff says that Mr Gannon’s conduct has been such as “to create mistrust on the part of the plaintiff”, and she seeks the removal of Mr Gannon as a trustee.

[177]   Section  51  of  the  Trustee  Act  1956  vests  in  the  Court  a  wide  discretion  to appoint a new trustee or new trustees either in substitution for or in addition to any existing trustee or trustees.  Section 51 provides:

Power of Court to appoint new trustees

(1)         The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so   to   do   without   the   assistance   of   the   Court,   make   an   order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

(2)In particular and without prejudice to the generality of the foregoing provision, the Court may make an order appointing a new trustee in substitution for a trustee who –

(a)has been held by the Court to have misconducted himself in the administration of the trust; or

. . .

[178]   Counsel for Mr Gannon submitted that there is no justification for the Court

to  hold  that  he  has  misconducted  himself  in  the  administration  of  the  Trust  under s 51(2)(a)  and  that  it  is  not  expedient,  necessary  or  appropriate  to  remove  Mr Gannon  as  a  trustee  or  to  appoint  any new  trustees.   Counsel’s  submissions  noted that:

·The  remaining  balance  of  the  Trust  fund  is  approximately  $9,400  which should now be divided between the three beneficiaries in accordance with the wishes of Norah Hills.

·Mr  Gannon  has  acted  as  a  trustee  since  1997  and  there  is  no  evidence  to suggest that he has acted wrongly at any stage during that time.   Indeed he has carried out the bulk of the work in managing the Trust.

·Mr Gannon and his wife have been friends of Norah Hills for over fifty years and he has always acted in the best interest of Norah Hills.

[179]    In my view “mistrust on the part of the plaintiff” is not a basis that would justify removing  Mr  Gannon  as  a  trustee  of  the  NHF  Trust.   The  evidence  is  that there has been animosity between the plaintiff and Mr Gannon for a number of years, from at least 2000, and possibly earlier.

[180]   I have found there is no evidence of misconduct by the trustees, Mr Gannon and Mr Eagle, in relation to the NHF Trust (although I have made some observations critical of Mr Gannon in matters pertaining to Norah Hills’ personal bank accounts shortly before and after her death (refer [171]-[172] above).

[181]   However, I am concerned that the lack of confidence and trust that now exists between Mr Gannon and Mr Eagle may prejudice the efficient and effective ongoing administration, management and winding up of the NHF Trust.  In this respect I note the outstanding matter of the complaint to the Police made by Mr Eagle in December 2006 regarding the conduct of Mr Gannon in relation to the ASB Bank transactions, and Mr Eagle’s statement in his affidavit dated 22 July 2009 that he does not feel he and Mr Gannon could work together as trustees of the Trust.

[182]   I propose therefore to exercise the power vested in the Court by s 51 of the

Trustee Act to make an order appointing the Public Trust (subject to its agreement)

as  trustee  of  the  NHF  Trust  in  substitution  for  Mr  Eagle  and  Mr  Gannon. I contemplate that the Public Trust would then ensure (subject to all the powers and discretions  vested  in  the  trustee  by  the  trust  deed),  that  any  transfers  of  funds credited to the NHF Trust which belong to the estate of Norah Hills will be actioned, final accounts prepared, distributions made in equal shares to the beneficiaries and the NHF Trust wound up.

[183]   I shall make that order, pursuant to the powers vested in the Court by s 51, not in response to the plaintiff’s claims at paragraphs 25 and 29 of the statement of claim.  For the reasons given above, the plaintiff’s application will be declined.

[184]   I  propose  that  the  order  shall  take  effect  21  days  after  the  date  of  this judgment to provide the Public Trust with the opportunity to consider the proposed order and file a memorandum agreeing to accept appointment, if willing so to do.  If the  Public  Trust  is  unable  or  unwilling  to  accept  appointment  then  I  propose  to consider the appointment of an alternative independent trustee.  However, it seems to me that the Public Trust, now being the trustee  of the deceased’s estate  and being familiar with the relationship between the estate and the NHF Trust, is well placed to properly and effectively administer and manage both the estate and the NHF Trust in the interests of the beneficiaries.

Will

[185]   At  paragraph  26  of  the  statement  of  claim,  the  plaintiff  alleges  improper conduct  by  Mr  Gannon  in  relation  to  the  estate  of  the  deceased  prior  to  the appointment  of  the  Public  Trust  as  administrator  of  the  will.   The  plaintiff  has  no standing to bring this claim.  She is not the executor or administrator of the estate of Norah Hills.  At an earlier stage she may have had the right as “any person interested in the estate” to bring proceedings under s  19 of the Administration Act 1969 but that was not done, and the Public Trust has now been appointed.  Any loss that may have been suffered by delay in obtaining probate has been suffered by the estate of Norah Hills and is a matter for the Public Trust as administrator of the estate.

[186]   The Public Trust notes in counsel’s memorandum dated 28 September 2009

at paragraph 10 that the Public Trust was not invited to investigate claims against the second  defendant  and  third  party  and  that  those  now  presented  were  not  clearly identified at a suitable time during the pre-trial period.

Conclusion

[187]   The claims of the plaintiff numbered A-H in the second cause of action of the statement of claim are all dismissed.

Third cause of action against second, third and fourth defendants: conversion

[188]   The plaintiff pleads that she is the owner of a mahogany bedside table and a diamond  ring  (“the  plaintiff’s  goods”).  She  refers  to  requests  made  through  the solicitors  for  the  second,  third  and  fourth  defendants  for  the  delivery  up  of  these goods  which  they  have  failed  or  refused  to  do.   She  alleges  the  goods  have  been converted.

[189]   She  also  claims  on behalf  of  her  daughter  Renee  Gunbie  a  Senorita  tea  set which  she  alleges  was  a  gift  from  the  deceased  to  Renee.   She  further  claims  on behalf of her son, Steve Gunbie, Toby jugs of Churchill which she alleges were a gift from the deceased to Steve.   She states that Renee Gunbie and Steve Gunbie have “requested that the plaintiff recover the items … on their behalf”.  She further claims that the children’s goods have come into the possession of the second, third or fourth defendants and they have converted them to their own use.

[190]   A claim in respect of a Maori painting has been settled and is not pursued.

[191]   The only evidence available to the Court to establish ownership by Kathleen

of the plaintiff’s goods is her claim in her affidavit dated 20 April 2009 that these goods  were  given  to  her  by her  mother  during  her  lifetime.   The  third  and  fourth defendants  deny  any  knowledge  of  these  items.  There  appears  to  have  been  no response from Mr Gannon.

[192]   The  evidence  before  the  Court,  which  is  solely  the  evidence  of  Kathleen without   any   independent   verification,   does   not   provide   sufficiently   probative evidence  to  support  a  finding  of  ownership  which  would  support  a  claim  in conversion.

[193]   The plaintiff has no standing to make claims on behalf of her children, Renee and Steve Gunbie.  There is no evidence before the Court of assignment of any right

of action they might have in the children’s goods.   Additionally, the only evidence before the Court of the alleged inter vivos gifts by the deceased to Renee and Steve

of these items, is the evidence of the plaintiff in her affidavit dated 20 April 2009, which is disputed by Sandra.  The evidence is not sufficiently probative to support a finding of ownership which would support a claim in conversion in relation to the children’s goods.

[194]   I note, however, that in item 4 of the letter of Catherine Townsend dated 26

November 2008 to Naomi Cervin, the third and fourth defendants agree that a ring currently held  by Douglas  Hills  will  be  released  to  Kathleen  if  the  trustees  or  the Court direct.

[195]   It is not for the Court to direct.  The last will of the deceased dated 27 August

2000 provides in paragraph 3:

Specific gift

3.1I give to my daughter Alexandria Catherine Medcalf all articles of household   use   or   ornament   (excluding   cars)   and   all   clothing, jewellery, crystal, paintings and all other articles of personal use or ornament.

3.2Without imposing any trust I request her to distribute them in such manner as I may have indicated to her.

[196]   Pursuant to that provision, there is a specific gift of the items described,  in favour  of  Sandra.  She  is  requested  by  the  deceased  to  distribute  them  in  such manner as the deceased has indicated to her.  No trust is imposed in Sandra.   It is a matter entirely at her discretion, respecting any wishes her mother has conveyed to her.

[197]   It appears in relation to the engagement ring referred to at paragraph 4a. of the letter of Catherine Townsend dated 26 November 2008, that the deceased may have changed her mind on a number of occasions as to the preferred donee of this ring.   It is within the discretion conferred on Sandra that the ring be made available

to Kathleen as proposed in Ms Townsend’s letter.

[198]   I note that in paragraph 6 of the affidavit of Mr Gibbons of the Public Trust dated 30 June 2009, he states that jewellery and other personal items that are under dispute are held by Douglas and Sandra and that the Public Trust has requested that these items be returned to it as executor and trustee for safe-keeping.   Sandra may well  find  she  is  assisted  by  the  Public  Trust  in  carrying  into  effect  the  discretion vested  in  her  by  clause  3  of  the  deceased’s  will. All  relevant  items  should  be accumulated and distributed by Sandra pursuant  to clause 3 as soon as practicably possible.

[199]   For the sake of completeness  I refer to paragraph 26(e) of the statement  of claim  in  which  the  plaintiff  alleges  that  Mr  Gannon  improperly  distributed  a  ring belonging to the deceased to Jennifer Williams on 26 July 2005, without consultation with Mr Eagle.  It was not Mr Eagle with whom Mr Gannon was required to consult. The  ring  is  an  item  that  falls  under  clause  3  of  the  deceased’s  will.   Accordingly Sandra  carries  the  responsibility  and  discretion  in  relation  to  its  distribution. If Sandra  authorised  the  distribution  to  Jennifer  Williams,  then  the  distribution  has been properly made.

[200]   The plaintiff’s claims in the third cause of action are dismissed.

[201]   Summary of results

a)        The plaintiff’s claims in the first, second and third causes of action are all dismissed.

b)The  second  defendant’s  claims  against  the  third  party  fall  with  the plaintiff’s claims and are dismissed.

c)        There  will  be  an  order  pursuant  to  s  51  of  the  Trustee  Act  1956 appointing the Public Trust as trustee of the NHF Trust in substitution for  Mr  Eagle  and  Mr  Gannon.  This  order  will  take  effect  at  the expiration of 21 days from the date of issue of this judgment unless the Public Trust has filed a memorandum advising that it is unable or unwilling to accept appointment.

d)If necessary I will make orders for the transfer from the NHF Trust of funds which belong to the deceased’s estate as referred to at [172]. If the Public Trust as administrator of the estate requires such orders, leave is reserved to apply.

Costs

[202]   The  plaintiff  as  the  unsuccessful  party  is  liable  for  costs. I  will  receive memoranda as to costs, from the defendants within 28 days and from the plaintiff in reply within a further 14 days of the date of issue of this judgment.

[203]   Submissions as to costs must be limited to two A4 pages in the case of the defendants and four A4 pages in the case of the plaintiff.  I am concerned about the resources   and   time   that   disputes   over   this   comparatively  modest   estate   have consumed.

[204]   I will rule as to costs on the papers.