O'Brien v Best
[2019] NZHC 2275
•11 September 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2014-485-603896
[2019] NZHC 2275
UNDER Section 21 of the Administration Act 1969 IN THE MATTER
of the Estate of Florence Maureen Mends
BETWEEN
PAULA JAN O’BRIEN
Applicant
AND
PATRICIA DAWN BEST
Respondent
Hearing: 9 September 2019 Counsel:
J D Haig and J Sparrow for the Applicant
Judgment:
11 September 2019
JUDGMENT OF COOKE J
[1]By application dated 2 September 2019 the applicant applied for orders:
(a)removing the respondent, Patricia Dawn Best, as executor of the estate of Florence Maureen Mends; and
(b)seeking a mortgage interest (mortgage instrument 10802615.2) in favour of the respondent and the applicant as executors registered on the record title for the property located at 32 Main Road, Woodend (record of title identified 159460) is vested solely in the applicant and the respondent’s mortgage interest as an executor in the Property is disposed.
O’BRIEN v BEST [2019] NZHC 2275 [11 September 2019]
[2] The application was supported by an affidavit from the applicant sworn 3 September 2019. That affidavit exhibits formal consents to the application provided by the two beneficiaries of the estate, George Mends and Cheryl Mends. There is also an affidavit of service of the application on the respondent and a memorandum of counsel dated 2 September 2019.
[3] The application was first called before me in the Judge’s Chambers List on Monday 9 September 2019. I was advised there was an impending sale of the property subject to the mortgage interest. I requested counsel to consider a particular issue concerning the wording of order (b) above, and following an amendment I made the orders in the form set out in [12] below and indicated that reasons would follow. These are the reasons.
Background
[4] Mrs Florence Mends died in Nelson in September 2014 leaving a will, in respect of which probate was granted on 18 November 2014. The two executors were the applicant and the respondent. The residue of the estate was divided in equal half shares to the deceased daughter Ms Cheryl Mends, and her son Mr George Mends through a trust.
[5] The executors lent funds from the estate to Ms Cheryl Mends, and that loan was secured by a mortgage over her property at 32 Main North Road. Ms Mends subsequently sold the property, with settlement to take place on 11 September 2019. As part of settlement it was necessary that the mortgage be discharged, which requires the executors’ consent.
[6] Unfortunately the respondent has lost her mental capacity. The affidavit from the applicant appends a certificate from Dr Sue Genner confirming that the scope of her practice includes the assessment of a person’s mental capacity, and that on 10 January 2019 that she examined the respondent. She reports that she has progressive Alzheimer’s dementia which is moderately severe and that she has no insight into her own limitations. She indicates that in her opinion that the respondent is not wholly capable to manage her own affairs in relation to her property.
[7] The orders are sought on the basis of s 21 of the Administration Act 1969 and s 52 of the Trustee Act 1956.
Analysis
[8]Section 21 of the Administration Act 1969 provides:
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.
…
Section 52 of the Trustee Act 1956 provides:
52 Vesting orders of land
(1)Subject to the provisions of subsections (2) and (3), in any of the following cases, namely—
…
(b) where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person—
(i)is under disability; or
…
(f) where a deceased person was entitled to or possessed of any interest in land and his personal representative is under disability:
…
the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.
…
[10] The approach adopted by the Courts under these provisions is reasonably well established. Section 21 is frequently exercised when an executor has become incapable. In Tod v Tod the Court of Appeal approved the approach under s 21 identified by Heath J in Farquhar v Nunns.1 The starting point is the Courts duty to ensure that the estate is properly administered, and the jurisdiction involves a large discretion that is heavily fact dependent. The power in s 52 is also frequently exercised in the case of an incapacitated trustee.2
[11] I have little difficulty concluding that orders are appropriate in the present case, and that there is no need to give directions as to service. My only hesitation has been that the evidence of lack of capacity is perhaps not as fulsome as might be expected amounting to the provision of the standard form signed by a doctor. But the application is only to remove one of the two executors, and the beneficiaries have consented. Moreover the respondent has been served with the proceedings and has taken no steps. So the application does not involve anything controversial.
[12] For those reasons the orders were appropriate. The only issue that I raised was the formulation of the order encompassing was the concluding wording of order (b) in relation to discharging the respondent’s mortgage interest. I was not sure if that was necessary. As a consequence counsel reverted to me later in the day on 9 September with amended orders. This judgment should not be taken as a precedent to say that that orders originally sought were not appropriate, however. It was simply an issue that I raised which was addressed by amendment. Accordingly the orders that I made were that:
(a)Patricia Dawn Best be and is hereby removed as an executor of the estate of Florence Maureen Mends; and
1 Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145; Farquhar v Nunns [2013] NZHC 1670.
2 Godfrey v McCormick [2017] NZHC 420; Locker v Browning [2018] NZHC 1127; Murdoch v Murdoch [2019] NZHC 1643.
(b)Patricia Dawn Best’s mortgage interest (mortgage instrument 10802615.2) in the Property at 32 Main Road, Woodend (title reference 159460) as an executor is vested solely in Paula Jan O’Brien as executor
Cooke J
Solicitors:
Holland Beckett Law, Tauranga
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