Hobbs v Hobbs
[2020] NZHC 1564
•3 July 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-000265
[2020] NZHC 1564
UNDER Part 19 of the High Court Rules and the Trustee Act 1956 and the Administration Act 1969 IN THE MATTER
of an application by Doreen Lesley Hobbs for an order removing Yvonne Noeline Hobbs as executrix and trustee of the will of the late Warren Thomas Ernest Hobbs, the
appointment of Doreen Lesley Hobbs as
executor/executrix and trustee in her stead, and the vesting of estate property in Doreen Lesley Hobbs
BETWEEN
DOREEN LESLEY HOBBS
Applicant
AND
YVONNE NOELINE HOBBS
Respondent
Hearing: Determined on the papers Counsel:
A C Hughes-Johnson QC for Applicant
Judgment:
3 July 2020
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 3 July 2020 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
HOBBS v HOBBS [2020] NZHC 1564 [3 July 2020]
Introduction
[1] Warren Thomas Ernest Hobbs (Warren) died at Christchurch on 13 January 2017. He was survived by his wife, Yvonne Noeline Hobbs (Yvonne), his daughter Doreen Lesley Hobbs (Doreen) and, another daughter Karen Fleming.
[2] Warren died leaving a last will dated 31 March 2015. Probate of the will was granted to Yvonne on 11 February 2017.
[3] Warren and Yvonne each owned a one-half interest in a property at Vancouver Crescent, Christchurch.
[4] Under Warren’s will, Yvonne was entitled to all of Warren’s personal chattels and to reside during her life-time in the Vancouver Crescent property or any substitute property purchased for it. Yvonne was also granted a life interest (including the right to the use of capital as necessary) in the residue of the estate. Upon the death of Yvonne the residue shall go to Doreen. If Doreen predeceases Yvonne the residue will go to Doreen’s children. Doreen has two children aged 30 and 14 years respectively.
[5]Since probate was granted, Warren’s estate has been dealt with as follows:
(a)all personal chattels have gone to Yvonne;
(b)Yvonne is no longer residing in the Vancouver Crescent property. She is in a rest home. The Vancouver Crescent property is the subject of a conditional agreement for sale and purchase and there is a likelihood it will need to be transferred in the near future; and
(c)The residue (cash investments) is being held in accordance with
Warren’s will and being applied for the benefit of Yvonne.
[6] The only persons with any possible interest under Warren’s will are Yvonne, Doreen and Doreen’s children. Warren’s other daughter, Karen Fleming, was excluded from any provision under the will and took no action against the estate.
[7] Yvonne has developed a dementing illness which is progressive, and which has a negative impact on her cognition to the extent that she is no longer able to understand the implications of her current situation, or the impact of these on her health and welfare. She is mentally incapable of making decisions regarding the conduct of the affairs of Warren’s estate.
The application
[8]Originally, Doreen applied for orders:
(a)that this proceeding be commenced by originating application under Part 19 of the High Court Rules 2016;
(b)that service of the proceeding on any person be dispensed with;
(c)that Yvonne be removed as executrix and trustee of the will of Warren;
(d)that Doreen be appointed as the executrix and trustee of Warren’s will in
substitution for Yvonne;
(e)that the interest of Yvonne (as executrix of the estate of Warren) as to a half-share in the property at 72 Vancouver Crescent, Christchurch (comprised in Record of Title Identifier CBA1/1119 in the Land Registration District of Canterbury, being Lot 4 on Deposited Plan 21640) vest in Doreen in her capacity as executrix and trustee of Warren’s will; and
(f)that the reasonable costs of this application be paid from the assets of
Warren’s estate.
[9] After considering the application, I issued a minute raising some matters with Counsel. Relevantly, without intending any reflection on Doreen, I identified the tension between the requirement to provide for Yvonne’s needs and the interest Doreen has in the residue of the estate. I asked Counsel how this could be managed. Mr Hughes-Johnson has filed a memorandum suggesting that if the Court considers it
necessary the concern could be addressed by appointing Mark Tutty, a partner at MDS Law, as a co-executor/trustee along with Doreen. Mr Tutty consents to such appointment.
Discussion
[10] This proceeding cannot be commenced by way of originating application as of right pursuant to rr 19.2 – 19.4 of the High Court Rules 2016. The Court may, in the interests of justice, permit any proceeding not mentioned in those Rules to be commenced by originating application. Such permission may be sought without notice. It is appropriate that leave be granted. There is no opposing party to the application and no need for particularised pleadings or interlocutory applications. Leave to bring the proceeding under Part 19 is granted.
[11] I dispense with service of the proceeding. The only persons with any interest in the estate are Yvonne, Doreen and Doreen’s children (whose interest is contingent upon Doreen predeceasing Yvonne). Importantly, this application does not affect the substantive rights or interests of Yvonne or Doreen’s children under the will.
[12] I consider no purpose would be served appointing a litigation guardian for Yvonne under r 4.30 High Court Rules 2016.1 This proceeding is to remove Yvonne as an executor/trustee for want of capacity. Once it is accepted that Yvonne lacks capacity it is appropriate that she be removed, and it follows, also as a matter of course, that any trust property should vest in the replacement trustee/s. I cannot see that a litigation guardian is required.
The statutory provisions
[13]Section s 21 of the Administration Act relevantly provides:
21 Discharge or removal of administrator
(1)… where it become expedient to discharge or remove an administrator, the court may discharge or remove that administrator,
1 Cade v Cade [2016] NZHC 1624; McPherson v McPherson [2016] NZHC 332; Smith v Walsh
[2019] NZHC 3476.
and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.
(2)The administrator so removed or discharged shall, from the date of that order, cease to be liable for acts and things done after that date.
(3)Upon any administrator being discharged or removed as aforesaid (whether or not any other administrator is appointed) all the estate and rights of the previous administrator or administrators which were vested in him or her or them as such shall become and be vested in the continuing administrator or administrators (including any administrator appointed under subsection (1)) who shall have the same powers, authorities, discretions, and duties, and may in all respects act, as if he or she or they had been originally appointed as the administrator or administrators.
…
[14]In Tod v Tod,2 the Court of Appeal, said in relation to s 21:
[22] In his judgment in Farquhar v Nunns, Heath J set out the principles counsel for the plaintiff submitted applied in that case. We consider those principles have equal application here:
(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.
(b)This jurisdiction involves a large discretion which is heavily fact-dependent.
(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration, but ultimately the question is as to what is expedient in the interests of the beneficiaries.
(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.
(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.
…
(citation omitted)
2 Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145.
[15] The Court has power, both under s 51 of the Trustee Act 1956 and in its inherent jurisdiction, to remove and replace trustees. Section 51(1) provides that the Court may appoint a new trustee when it is “expedient” to do so, and it is found “inexpedient, difficult or impracticable to do so without the assistance of the court.” The Court may make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees. It has been noted that the Court’s power to remove a trustee under s 51(1) of the Trustee Act essentially mirrors s 21 of the Administration Act.
[16] Clearly it is expedient to remove Yvonne as executrix/trustee of Warren’s estate. She is incapable of performing her duties and there is a need to replace her in the interests of the estate and the beneficiaries. It is appropriate also that Doreen be appointed to replace Yvonne. She is a logical appointment being the family member closest to Warren. This could be considered consistent with Warren’s intentions under his will which provides Doreen was to be his sole executrix and trustee in the event Yvonne predeceased him. However, Doreen has not predeceased Yvonne and given the tension to which I earlier referred I consider that it is prudent to appoint both Doreen and Mr Tutty as co-executors and trustees.
[17] Section 52(1)(b)(i) of the Trustee Act 1956 provides the Court with the power to vest land in such persons that it may direct where a trustee entitled to or possessed of any land or interest therein, either solely or jointly with any other person, is under a disability. Once it accepted that Yvonne is to be removed as an executrix/trustee it must follow that the replacement co-executors/trustees can deal with the trust assets in accordance with their duties. I am therefore satisfied that the vesting order sought is appropriate.
Orders
[18]I make orders as follows:
(a)this proceeding may be commenced by originating application under Part 19 High Court Rules 2016;
(b)service of the proceeding on any person is dispensed with;
(c)I dispense with the appointment of a litigation guardian in respect of Yvonne Noeline Hobbs;
(d)Yvonne Noeline Hobbs is removed as the executrix/trustee of the estate of Warren Thomas Ernest Hobbs late of Christchurch who died on 13 January 2017;
(e)Doreen Lesley Hobbs and Mark Tutty are appointed as the co- executors/trustees of the will of Warren Thomas Ernest Hobbs in substitution for Yvonne Noeline Hobbs;
(f)the interest of Yvonne Noeline Hobbs (as executrix/trustee of the estate of Warren Thomas Ernest Hobbs) as to a half share in the property at 72 Vancouver Crescent, Christchurch (comprised in Record of Title Identifier CBA1/1119 in the Land Registration District of Canterbury, being Lot 4 on Deposited Plan 21640) vests in Doreen Lesley Hobbs and Mark Tutty in their capacity as co-executors/trustees of Warren’s will; and
(g)the reasonable costs of this application are to be paid from the assets of
Warren’s estate.
[19] I thank Mr Hughes-Johnson for his helpful and thorough submissions in response to my enquiries.
O G Paulsen Associate Judge
Solicitors:
MDS Law, Christchurch
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