Holmes v Holmes

[2015] NZHC 2576

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-000313 [2015] NZHC 2576

IN THE MATTER

of the Administrators of the Estate of

ARTHUR HENRY CLIVE HOLMES

BETWEEN

MURRAY BRIAN HOLMES AND DEBORAH FAITH BUCHANAN Applicants

AND

MELVA JOYCE HOLMES Respondent

Hearing:	14 October 2015
Appearances:	Michael Talbot on instructions from Peter Gorringe for the Applicants No appearances for the Respondent
Judgment:	20 October 2015

JUDGMENT OF MOORE J

This judgment was delivered by me on 20 October 2015 at 3:00pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

HOLMES & ANOR v HOLMES [2015] NZHC 2576 [20 October 2015]

Introduction

[1]      Murray Brian Holmes and Deborah Faith Buchanan seek orders that:

(a)       Melva Joyce Holmes be discharged as administrator of the estate of

Arthur Henry Clive Holmes; and

(b)      each of the applicants be appointed as administrators in her place.

[2]      On 29 September 2015 Hinton J granted leave to commence this proceeding by way of originating application and also ordered that service on Mrs Holmes be dispensed with.

Background

[3]      Arthur Holmes died on 12 May 1987.  Probate of his last will was granted on

28 July 1988.

[4]      He was married to the respondent, Mrs Holmes.  They had no children.  The will appointed Mrs Holmes and Mr Holmes’ brother, Brian Holmes, as executors and trustees.  Brian Holmes has since died.

[5]      The will provided for Mrs Holmes to have a life interest in a farm at Piopio in the  South  Waikato.    The  farm  is  in  four  titles  and  is  held  by  four  registered proprietors in quarter shares.  The estate owns one quarter; Mrs Holmes owns one quarter in her own right and a nephew and his wife (Colin Holmes and Helen Holmes) own a quarter each.   The four parties have traded as a partnership since

1983.  In practice, the farm has been managed by Colin and Helen Holmes.

[6]      In April 2010 a niece of Mrs Holmes, Deborah Buchanan (“Mrs Buchanan”) who is one of the applicants, was granted a power of attorney by Mrs Holmes over Mrs Holmes’ property as well as her care and welfare.

[7]      In an affidavit sworn on 31 August 2015 Mrs Buchanan described her relationship to Mrs Holmes.  Mrs Holmes is her paternal aunt. As a child she spent a great deal of time with Mrs Holmes and described her as almost being like a mother. After her husband died Mrs Holmes spent a good deal of time at Mrs Buchanan’s home.   Mrs Holmes has been something of a grandmother to Mrs Buchanan’s children.  Days before Mr Holmes died Mrs Buchanan promised him that she would take care of Mrs Holmes.

[8]      Mrs Buchanan kept that promise and over the last three to four years has spent considerable time with Mrs Holmes helping her with appointments, looking after her property and ensuring her well-being and best interests are attended to.

[9]      Over   recent   years   Mrs   Holmes’  mental   capacity   and   cognition   has deteriorated.   She now resides in a retirement village in Hamilton having moved there after she fell and broke her hip earlier this year.  Mrs Buchanan observes that Mrs Holmes has no short term memory and is unable to perform even basic daily tasks.   She has dementia and requires 24 hour care.   In Mrs Buchanan’s opinion Mrs Holmes is unable to perform her role as an administrator of the estate.   A medical certificate attached to Mrs Buchanan’s affidavit reveals that Mrs Holmes is mentally incapable.  She lacks the capacity to understand the nature of decisions and foresee their consequences.  This is due to Alzheimer’s dementia which the doctor noted would continue indefinitely.

[10]     Furthermore,  Mrs  Buchanan  has  indicated that  if  served  with  the papers connected to this application it would be likely Mrs Holmes would become confused and upset.  Mrs Buchanan said that in that event she would expect Mrs Holmes to refer the problem to her.  It was no doubt for this reason that Hinton J directed that service on Mrs Holmes was to be dispensed with.

[11]     As earlier mentioned, the will provided for two executors and trustees.  There was also a provision for a substitute appointment of a Murray Kaye, a solicitor, should Mrs Holmes pre-decease her husband.   However, there was no substitution provided for Brian Holmes. A codicil made on 5 May 1987 changed the solicitor for Murray Holmes but again no reference was made to a replacement for Brian Holmes.

Thus Mrs Holmes has simply remained as sole executrix and trustee since Brian Holmes’ death in 2013.   The Murray Holmes named in the codicil is the same Murray Holmes who is the applicant in the present proceedings.

[12]     The  application  is  for  the  appointment  of  two  administrators.    Counsel advises part of the rationale for that is in the event there are issues in dissolving the partnership, selling the farm or matters of that sort which may become complex it is obviously preferable for two administrators to be involved.   Furthermore, because Mr Holmes appointed two executors and trustees he may well have had a preference for that number.

[13]     A separate vesting order for the farm titles is not sought because s 21(3) of the Administration Act 1969 directs that vesting occur following discharge of the original administrator.

Administration Act 1969

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

“(1)      Where   an   administrator   …   becomes   incapable   of   acting   as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.

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

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

…”

[15]     Wylie J in Allen v Morgan, in circumstances very similar to the present, reviewed the wording of s 21 by reference to overall authorities. 1   He observed that the word “expedient” used in s 21 imports considerations of suitability, practicality and efficiency.2    He noted that in any given case the question will be whether the removal of an executor or administrator is a suitable, practical and efficient means of advancing the interests of the estate and its beneficiaries.  The Court has an inherent jurisdiction to remove and appoint new trustees.   This is ancillary to the Court’s overriding concern that trusts are properly executed.

Decision

[16]     I am satisfied that the orders sought should be made.

[17]   Mrs Holmes is plainly incapable of discharging her responsibilities as administrator of Mr Holmes’ estate and of carrying out Mr Holmes’ wishes.   Her removal is a suitable, practical and principled means advancing the interests of the estate and all of its beneficiaries.

[18]     I am also satisfied on the evidence that Murray Holmes and Mrs Buchanan should be appointed as administrators in Mrs Holmes’ place.   Mrs Buchanan is a logical appointment having regard to her long personal connection to Mrs Holmes and the family and also because she holds enduring powers of attorney for both Mrs Holmes’ property affairs and her personal care and welfare.  Mrs Holmes made these appointments in recognition of the close connection, love and trust she reposed in Mrs Buchanan.

[19]     Murray Holmes is also an appropriate and logical appointment.   As with Mrs Buchanan he is not only willing to be appointed administrator but he is also a member of the extended Holmes family and knew Mr Holmes who was his paternal uncle.  He has also had a close connection with Mrs Holmes who he visits as often as he can.   Additionally, Murray Holmes has experience in the management of commercial property and, having lived on farms all his life, he is knowledgeable of

farming matters.  I am satisfied that he is not only properly qualified to be appointed

1      Allen v Morgan [2015] NZHC 1139.

2      Crick v McIlraith [2012] NZHC 1290 at [18]; Hinde v Cramwell [2012] NZHC 63 at [21]-[27].

administrator but, as with Mrs Buchanan, I am satisfied that he is a fit and proper person to undertake that role.

[20]     Accordingly, I order that Murray Holmes and Mrs Buchanan be appointed as administrators in the place of Mrs Holmes.

[21]     The decision to appoint two administrators in the place of Mrs Holmes is a conscious  and  deliberate  one.    This  is  because,  as  noted  earlier,  there  may  be complex issues involving the dissolution of the partnership, selling the farm and other matters of that sort.   That this burden should be borne by two competent, willing and appropriately qualified administrators, is sensible.  Furthermore, it would appear that Mr Holmes, having appointed two executors and trustees, appears to have a preference for that number.

[22]     At the invitation of counsel I also intend to adopt the course followed by Wylie J in Allen v Morgan.3   There his Honour considered it appropriate to impose conditions in relation to filing a full inventory of the deceased’s estate and accounts if called upon by the Court.

[23]     I   thus   impose   the   following   conditions   that   Murray   Holmes   and

Mrs Buchanan:

(a)       are to file a full inventory of the deceased’s estate if called upon by to

do so by the Court; and

(b)are also to file a true and perfect account of the deceased’s estate if called upon by the Court showing, inter alia, the dates and particulars of all receipts and disbursements and showing which receipts and disbursements are, in their opinion, on account of capital and which are on account of income.

[24]     It would be quite wrong in the circumstances that Mrs Holmes be required to pay the costs of this application.  I thus make an order that the reasonable costs of

3      Allen v Morgan above n 1.

and  incidental  to  the  making  of  this  application  be  borne  by  the  estate  with disbursements as fixed by the Registrar.

[25]     Leave is reserved to the parties to seek such further or other orders as may be necessary to give effect to these orders.

Moore J

Solicitors:
Mr Gorringe, Hamilton