Littleton v Kelly

[2016] NZHC 1107

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2016-470-82 [2016] NZHC 1107

BETWEEN

DIANNE VALERIE LITTLETON

Plaintiff

AND

VALERIE ALICE KELLY Defendant

Hearing:	On the papers
Counsel:	K Cotter for Plaintiff
Judgment:	1 June 2016

JUDGMENT OF WHATA J

This judgment was delivered by me on 1 June 2016 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors: Lyon O’Neale Arnold Lawyers, Tauranga

LITTLETON v KELLY [2016] NZHC 1107 [1 June 2016]

Introduction

[1]      The applicant, Dianne Valerie Littleton, is the daughter of the respondent, Valerie Alice Kelly.  Mrs Kelly is a co-executor trustee with Mrs Kelly of the estate of Brian Kelly.  Mrs Kelly has been diagnosed as mentally incapable with poor short term memory and lack of insight into her condition and is considered to have progressive Alzheimer-like dementia.1

Amendment of prayer of relief

[2]      In her Statement of Claim, Ms Littleton made an application for the removal of Mrs Kelly pursuant to s 51 of the Trustee Act 1956, which states:

51       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—

…

(c)      Is a [mentally disordered person] within the meaning of [the Mental Health (Compulsory Assessment and Treatment) Act 1992], or whose estate or any part thereof is subject to a [property order] made under the [Protection of Personal and Property Rights Act 1988]; or

…

[3]      I convened a teleconference with Mr Cotter, counsel for Ms Littleton, on 26

May 2016. Mr Cotter and I were in agreement that the relief sought is more appropriately found in s 21 of the Administration Act 1969 (the Act). During the

1      Medical certificates dated 20 January 2014 and 29 April 2016.

teleconference it was agreed that Mr Cotter would file a memorandum of counsel with a draft order.

[4]      The memorandum of counsel was filed on 31 May 2016. Ms Littleton now seeks to amend the Prayer for Relief in her Statement of Claim and asks that the Court enter an order pursuant to s 21 of the Act removing Valeria Kelly as co- trustee/co-executor of the Estate of Brian William Kelly and allowing her to serve as sole executor/trustee of the Estate.

Frame

[5]      Section 21 of the Act provides:

21       Discharge or removal of administrator

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

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

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

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

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

[6]      This  Court  has  previously  held  that  the  criterion  in  s  21(1),  that  the administrator “becomes incapable of acting as administrator or unfit to so act”, is made out where an executor/trustee has been suffering from dementia.2

Decision

[7]      As stated above, Mrs Kelly is considered to have progressive Alzheimer-like dementia. The applicant’s siblings, David and Paul, consent to the application.3   That being the case, given Mrs Kelly’s incapacity, it is appropriate that she be removed, pursuant to s 21 of the Act.  Furthermore, given the consent of the siblings, being the other beneficiaries under the will, I make a further order allowing Dianne Valerie Littleton to remain as sole executor/trustee of the estate of Brian William Kelly.

[8]      For completeness, I dispense with service on Mrs Kelly, as it would serve no useful purpose.  In this regard, I respectfully adopt the approach taken by Associate Judge Osborne in Grazier v Grazier4  and rely on the inherent jurisdiction of the Court to regulate the process and proceedings of the Court.

Orders

[9]      Pursuant to s 21 of the Administration Act 1969, this Court orders:

[a]       Valerie Alice Kelly is removed as co-executor/co-trustee of the Estate of Brian William Kelly; and

[b]       Dianne  Valerie  Littleton  is  name  the  sole  executor/trustee  of  the

Estate of Brian William Kelly.

2      Holmes v Holmes [2015] NZHC 2576.

3      As set out in memoranda of consent filed with the application.

4      Grazier v Grazier [2014] NZHC 3058.