Thomas v Thomas

[2014] NZHC 2828

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2014-454-82 [2014] NZHC 2828

UNDER	Section 21 of the Administration Act 1969
IN THE MATTER OF	An application for Removal of Administrator
BETWEEN	ARTHUR GRAEME THOMAS AND MERVYN WALTER THOMAS Plaintiffs
AND	ALISTAIR JOHN SAMUEL THOMAS Defendant

Hearing:	13 November 2014
Counsel:	T C Montague for Plaintiffs A J S Thomas in person (accompanied by T Poole)
Oral Judgment:	13 November 2014

ORAL JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]      The plaintiffs and the defendant are brothers.  They are the surviving trustees in the estate of their father, the late Arthur William Thomas, who died in 1993.

[2]      By  his  last  will,  the  late  Mr  Thomas  left  a  life  interest  to  his  widow, Elfie May Thomas, and a gift to his daughter.  Subject to Mrs Thomas’ life interest, the residuary estate was left to the plaintiffs and the defendant as tenants in common in equal shares.

[3]      With her three sons, Elfie was also named as an executor and trustee of the late Mr Thomas’ estate.

[4]      Elfie died on 25 December 2012, leaving the plaintiffs and the defendant as the surviving trustees.

ARTHUR GRAEME THOMAS AND MERVYN WALTER THOMAS v ALISTAIR JOHN SAMUEL THOMAS [2014] NZHC 2828 [13 November 2014]

[5]      The  major  assets  in  the  estate,  reckoned  to  be  worth  approximately

$1,000,000, comprise an undivided half share in certain farm land, and a half share in the A W Thomas & Son farming partnership.  The other half of those assets is owned by the defendant, who is farming the land.

[6]      The plaintiffs now wish to proceed with the administration of the estate, but say that the defendant is refusing to cooperate.  They say that there was a need to register the transmission of the land from the names of Elfie and her three sons as the original trustees, into the names of the three sons as surviving trustees.  They also want the trustees, as owners of half of the relevant assets, to apply for an order for sale of those assets, so that they can receive their entitlement to a one third share (each) in the residuary estate.

[7]      The  plaintiffs’ evidence  is  that  the  defendant  has  refused  to  do  or  sign anything relating to the administration of his late father’s estate, notwithstanding his responsibilities as an executor and trustee named in his father’s last will.  They say that his response over the period since their mother’s death has simply been that he wants things to remain as they are (i.e. with him continuing to remain running the farm).   Of course that would mean his brothers not receiving their share of their father’s estate.  The plaintiffs also say that the farm is not an economic proposition, especially run by the defendant who is said to have some physical health difficulties. In the course of today’s hearing, Mr Montague also advised me that he is instructed that the bank have advised no further financial support will be provided for the farming    business.       The    bank    has    apparently   looked    to    the    plaintiff, Mr Mervyn Thomas, for the provision of further capital.

[8]      The plaintiffs, having unsuccessfully attempted to persuade the defendant to cooperate in the administration of the estate, now apply to the court for an order under s 21 of the Administration Act 1969 removing him as an administrator of the estate of the late Mr Thomas.  They ask for that order by way of summary judgment, saying that they believe the defendant has no defence to the claim.  They also seek an order appointing the Registrar of the High Court as agent to execute any documentation required to transfer assets belonging to the deceased from the joint names of the plaintiffs and the defendant, into the joint names of the plaintiffs as

executors.  They also seek an order for costs of an incidental to the court proceeding, on an indemnity basis.

[9]      The defendant has not filed any notice of opposition, affidavit, or statement of defence.   However, he has appeared in court on both occasions the matter has been called.  On the first of those occasions, I adjourned the matter for him to obtain legal  advice.     He  had  not  done  that  when  the  matter  was  called  again  on

23 October 2014.

[10]     Until today’s hearing, the only position put forward by the defendant in his appearances before the court was that he wanted things to “remain as they are”.

[11]     I initially had some concerns as to whether the defendant properly understood the  nature  of  the  proceeding,  and  what  his  brothers  are  asking  for.    However, Ms Poole,  his  caregiver  who  attended  the  court  hearing  with  the  defendant  on

23 October 2014, assured me that the defendant does understand the nature of the proceedings. Also, in a memorandum which I requested, Mr Montague subsequently confirmed Mr Montague’s instruction that the defendant has no history of mental illness or other issues which might suggest a possible lack of ability to understand the proceedings and make sensible and appropriate decisions in them.

[12]     I note too that in Mr Arthur Thomas’ affidavit in support of the application, at

paragraph [15], Mr Arthur Thomas described a discussion with the defendant on

25 March 2014, saying that his (i.e. the defendant’s) “attitude to me was that he would not do anything nor would he sign anything… He told me he could not afford to buy the estate’s interest in the farm and that all he wanted was for everything to remain as it is”.

[13]     That statement in particular confirms that the defendant fully appreciates the longer term issue, namely as to whether it will or will not be possible for him to remain on the farm.

[14]     With that evidence, and the advice provided by the defendant’s caregiver and by his brothers through Mr Montague’s memorandum, I am satisfied that this is not a case where any question of capacity arises.

[15]     It is clear to me that the defendant is well aware of what is going on, and is apparently of the belief that a refusal to cooperate with his brothers will somehow assist his aim of remaining farming the property, or at least defer the day when he has to deal with an application by his brothers for a sale of the farm.

[16]     As an executor and trustee, he is of course not permitted to take that position, and it is clear that he has neglected or refused to perform his duties as executor and trustee.  In those circumstances, I am satisfied that it is expedient to remove him as an administrator of the estate of his late father, and I make an order accordingly.

[17]     I record that in the course of today’s hearing, I invited the defendant to make any further submissions he might wish to make.  He declined that invitation, but I permitted Ms Poole to speak on his behalf.   Ms Poole told me that the defendant wants to stay on the farm until the date of his next birthday, which is in April 2015. She says that he is prepared to commence negotiating with his brothers after that.

[18]     The defendant should understand that today’s hearing, and the order that I have made removing him as administrator of his late father’s estate, will not immediately effect any sale of the farm.   If there is no agreement between the brothers, and the plaintiffs continue on the course they have signalled so far, there will need to be a separate application made to the court for the sale of the farm property. That is a matter for the plaintiffs to pursue if they see fit to do so.

[19]     In respect of the orders sought for indemnity costs, and an order appointing the Registrar of the High Court as agent to execute documents, the plaintiffs are directed to file and serve a memorandum within 14 days of the date of this judgment, setting out the claim for indemnity costs and evidence supporting that claim.  The memorandum should also set out the Court’s jurisdiction, with reference to case authority if appropriate, for the making of the order sought at paragraph (b) of the claim for relief in the statement of claim.

[20]     The defendant may file and serve a memorandum in reply, within 14 days

after his receipt of the plaintiffs’ memorandum.

Associate Judge Smith

Solicitors:

Todd Whitehouse, Levin for plaintiffs

A J S Thomas, Eketahuna in person