Public Trust v Thomasen HC Auckland CIV 2009-404-3702

[2010] NZHC 2058

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-3702

IN THE MATTER OF     WILLIAM JULE THOMASEN

BETWEEN  PUBLIC TRUST Applicant

ANDLYNETTE ROSE THOMASEN Respondent

Hearing:         6 October 2010

Appearances: A J Steele and C C Mansell for Applicant

G C Jenkin for Respondent

Judgment:      13 October 2010

JUDGMENT OF BREWER J

This judgment was delivered by me on 13 October 2010 at 2.15 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

SOLICITORS

Martelli McKegg Wells & Cormack (Auckland) for Applicant

Bruce Dell Law (Auckland) for Respondent

COUNSEL GC Jenkin

PUBLIC TRUST V THOMASEN HC AK CIV-2009-404-3702  13 October 2010

Introduction

[1]      William Jule Thomasen died on 23 October 2008 at the age of 81.  Over the course of his life he married three times and had seven children by his first two wives.  He married his third wife in 1977 and their marriage endured some 31 years, ending only upon his death.  Mr Thomasen left a will.  It is dated 7 April 2003.  In it he appointed his wife to be the sole executrix and beneficiary.

[2]      Mr Thomasen had two surviving sons, Charles (born to his first wife) and William (born to his second wife).  They were estranged from Mr Thomasen, as is made evident by clause 3.4 of his will which provided as follows:

I wish to record that I make no provision for my son CHARLES WILLIAM THOMASEN  nor provision for the children of my second marriage namely WILLIAM MICHAEL THOMASEN and KAY ELIZABETH THOMASEN.  They have caused me financial loss and they have been no end of trouble to me, they are an embarrassment, they have shown me no affection, nor have I seen them for many years.

[3]      Mr Thomasen's estate was not large.   It consisted of a joint interest in the matrimonial home in which Mr Thomasen and Mrs Thomasen had lived together for

17 years.     The  home  had  a  QV  of  $645,000  as  at  1 September  2006  and Mrs Thomasen deposes that its current market value is in the vicinity of $500,000. There was a joint savings account with $20,000, a joint cheque account with $1,161, a motor car valued at approximately $8,000, and a Rolex wrist watch which might possibly approach $6,000 in value.

[4]      The estate paid funeral expenses of $10,000 and solicitors' fees of $1,077.25.

[5]      The house and the bank accounts passed to Mrs Thomasen by survivorship. Mrs Thomasen never applied for probate of her husband's will because, on legal advice, there appeared to be no practical need to do so and having paid the funeral expenses and the other debts of the estate there seemed to be no point in expending further money on obtaining probate.

[6]      Mrs Thomasen is now 62 years of age.  She deposes that she has no savings and works as a receptionist for a modest wage.

[7]      However, Messrs Charles and William Thomasen ("the sons") believe that they are entitled to a share of their father's estate.  The sons are aged 54 and 50 years respectively and each deposes that he is relatively impecunious and in poor health. They have commenced proceedings under the Family Protection Act 1955 in the Family Court.  However, they have a problem.  The only assets still owned by the estate are the car and the Rolex watch.  These assets are insufficient to satisfy their claims.   Mrs Thomasen has no incentive to gain probate and even if she did she would not take action against herself under the Property (Relationships) Act 1976 to claw back for the estate Mr Thomasen's share of the jointly owned assets.

[8]      The sons have approached the Public Trust.  They have persuaded the Public Trust  to  instruct  the  sons'  lawyer  to  apply  for  the  Public  Trust  to  supplant Mrs Thomasen as the administrator of the estate.  If the Public Trust succeeds, it will then instruct the sons' lawyer to make application under the Property (Relationships) Act 1976, with the object of refreshing the estate so as to make it a pecunious target for the Family Protection Act proceedings.

The Application

[9]      The  Public  Trust's  application  that  it  be  appointed  executor  of  the  late

Mr Thomasen's estate is made alternatively under s 19(1) of the Administration Act

1969 or s 80 of the Public Trust Act 2001.  Much of the written and oral argument of the parties discussed the jurisdiction of the Court under s 19(1).  However, it is only s 80 which I need address.   That is because s 6(1) of the Public Trust Act 2001 provides:

The provisions of the Trustee Act 1956 and the Administration Act 1969 are to be read and applied—

(a)       so as not to affect any of the express provisions of this Act; and

(b)      as subordinate to the provisions of this Act.

[10]     Section 80 of the Public Trust Act gives this Court very little discretion.  It provides (relevantly):

(1)       Public Trust may apply for an order to administer with the will annexed in any case where—

(a)      a person dies testate; and

(b)application for probate or letters of administration with the will annexed is not made in New Zealand within 3 months after the date of the person's death.

(2)       The  Court  must  make  the  grant  applied  for,  unless  the  person entitled to probate or letters of administration with the will annexed either—

(a)applies for probate or letters of administration with the will annexed; or

(b)       satisfies the Court that the delay in making the application has been and still is unavoidable or accidental.

[11]     Mr Jenkin, acting for Mrs Thomasen, submits that s 80 is not available to the Public Trust because there has been no delay.  There has been no delay, he submits, because there is no obligation on Mrs Thomasen to seek probate.

[12]     In support of this submission, Mr Jenkin relies on Ruocco v Wright.[1]    That case concerned an application by an ex partner of the deceased as guardian ad litem of her two children (being also children of the deceased).  The application was made pursuant to s 19(1) of the Administration Act 1969.  In that case all of the assets of the estate had been jointly owned and had passed by survivorship.  Chisholm J held:

[18]     While the defendant has undoubtedly omitted to obtain probate for more  than  the  statutory period,  I have  not  been  persuaded  that she has neglected or refused to do so in terms of the s 19(1).  As a matter of law all the  assets  in  the  estate  have  long  since  passed  to  the  defendant  by survivorship  and  there  is  nothing  left  in  the  estate.    There  can  be  no suggestion that the defendant has acted unlawfully.    Under those circumstances the defendant was, and is, under no legal obligation to obtain probate.   Indeed, an application for probate would involve unnecessary expense without achieving any worthwhile purpose.

[1] Ruocco v Wright HC Christchurch CIV-2008-409-311, 16 December 2008, Chisholm J.

[13]     This case is different to Ruocco v Wright in two determinative respects.  The first is that s 80 of the Public Trust Act does not have the same threshold test as s 19(1)  of  the  Administration  Act.    The  second  is  that  the  estate  of  the  late Mr Thomasen has not been fully administered.

[14]     In this case, the prerequisites of s 80(1) have been established.  Therefore, the Court must make the grant applied for by the Public Trust unless Mrs Thomasen can satisfy me that the delay in making the application has been and still is unavoidable.

[15]     On a plain reading of the section, "delay" refers to not making application for probate within three months.  The words "has been and still is unavoidable", again on plain reading, mean that the Public Trust is entitled to its order unless the unavoidability had arisen during the three months period and was still operative at the time of the hearing of the Public Trust's application.

[16]     Mrs Thomasen cannot satisfy me as to these matters.   There has been and there is still nothing stopping Mrs Thomasen from applying for probate except that it is not in her interests to do so.  There are two assets of the late Mr Thomasen's estate which because of the lack of probate are still the legal property of the estate, namely the car and the watch.   Mrs Thomasen is, of course, the equitable owner of these items but without probate she cannot give herself legal title to them.

[17]     Accordingly, I grant the Public Trust's application for an order to administer with will annexed the estate of the late Mr Thomasen.  However, I am surprised that the Public Trust has decided to proceed in this case.  On the material before me the sons' case has little or no merit.

[18]     The Public Trustee, to pursue its stated intention, would have to obtain leave under s 88(2) of the Property (Relationships) Act in order to apply for an order determining the estate's just share in the relationship property.  Section 88(2) of the Property (Relationships) Act provides:

The personal representative of the deceased spouse or partner may, with the leave of the Court, apply for an order under section 25(1)(a).  The Court may grant leave only if it is satisfied that refusing leave would cause serious injustice.

[Emphasis added]

[19]     The asset that would be under consideration in such application would be the former matrimonial home in which Mrs Thomasen has resided for 17 years during a marriage of 31 years.  The home is of modest worth and Mrs Thomasen's age and

financial situation make it highly unlikely that an award would be made under the Family Protection Act.  If there was an award, it would surely be a token one.  Under those circumstances the law supports the testator's view that his paramount duty was to his widow.  Accordingly, I do not see how the Public Trust could establish that there would be serious injustice in terms of s 88(2) if leave to bring a claim under the Property (Relationships) Act was refused.

[20]     I will not make an order for costs in favour of the Public Trust and costs will therefore lie where they fall.

Brewer J