Peter Kelly removed as executor of the Mary Thibeault estate/missing pieces remain (CAN)

We reported this morning, Peter Kelly is being removed as executor of the Mary Thibeault estate effective October 1.

That’s also the date that Kelly must provide a full accounting of the estate while it was in his control. In January, the court will review that accounting.

But the accounting won’t be complete unless it fully addresses several issues, including:

The missing $161,587.13. As we detailed in our investigation of the estate, after Mary Thibeault died, Peter Kelly removed over $160,000 from Thibeault’s personal bank account, placing the money in the control of himself and his son.

There are a few issues here. Primary is, well, the money isn’t there. There’s a notion that Thibeault’s heirs have received the money they’re due—apparently, since publication of our article Kelly has paid the non-profit organizations named as heirs the money they were due if Kelly’s inventory of the estate was correct.

But the inventory Kelly submitted to the court on August 19, 2005 is not correct. That inventory was supposed to document all of Thibeault’s property and cash at the time of her death, on December 4, 2004. But the inventory does not reflect the $160,000+ that Kelly removed after her death.

So, if in the accounting Kelly returns the missing money to the estate, the heirs will be due another $160,000, on top of what they’ve already received. Most of the heirs—all of the people and two of the non-profits—were to receive five percent of the estate, so if the full $160,000 is returned, they’re due another $8,000 or so each. Two of the non-profits were to receive 10 percent of the estate, so in this instance they’ll be due about another $16,000 each.

Relatedly, how does Kelly cover his tracks on the missing money? He could, and I’m guessing probably will, file a revised inventory that accounts for the money he later removed. This wouldn’t be the kind of revised inventory that is typical in probate cases, where the executor discovers a bank account that no one knew existed or some property that eluded the grief-torn family members of the deceased right after death, and the executor is properly catching up where there was no ill intent. Rather, if Kelly files a revised inventory, he’s admitting that the previous inventory was incorrect, and it looks a lot like it was incorrect not because of some oversight, but because Kelly was purposefully not disclosing the money he removed. That, in turn, raises the question: Did Kelly knowingly swear to a false court document, the inventory?

The Kearney Lake property. The Coast first reported on the Thibeault estate on March 24, 2011, in an article headlined “Peter Kelly’s failure of will.” At that time, we still had not uncovered the missing $160,000, but we raised issues of the long delay in resolving the estate, and especially about a tiny property that Thibeault owned at her death. The small lot was just 7,500 square feet and assessed at $3,500, and sits in the scrub land back behind Kearney Lake.

When we published that article, we raised issues about a possible conflict of interest for Kelly: the property may not be worth much in and of itself, but it is a possible access route for developing large parcels farther back into the woods. As mayor, Kelly had voted on issues related to the larger parcel, and we questioned whether he should have recused himself. So I asked Kelly about it directly, at a Tuesday night city council meeting, and he declined comment. But the next day Kelly called me at my office. Here’s how I reported it in 2011:

Wednesday morning, Kelly called back to explain Thibeault’s property. “That land is being donated to the municipality for parkland, so that’s why you caught me off-guard [the previous night],” he said. “When I spoke to the lawyer, it’s in the process of being done, so there’s no—it’s going to go to the municipality as parkland. It’s going to them. It was always the intent to go to them in memory of [Mary Thibeault] and that’s in the process of being done.”Wouldn’t such a donation have to be approved by all the other heirs?

“It would come out of my portion, as I understand it,” answered Kelly.

“That was already planned,” said Kelly of the parkland donation. “It’s already in the process of being worked on, and will be going to them as was the intent.”

When did it become the intent?

“That was a year or two ago, but it hasn’t gone because the estate’s not closed yet, so it’s not yet done.”

The Coast contacted officials in the city’s planning and real estate departments, but none were aware of a possible donation of Thibeault’s land. “A donation would first have to be reviewed by the planners,” said Peter Stickings, manager of real estate “and then approved by city council.”

In the intervening year and a half, I’ve occasionally checked back with the city to see if there’s been any mention of a parkland donation from the Thibeault estate. There hasn’t.

Kelly told us in 2011 that the parkland contribution would “come out of my portion.” But according to the cheque register for the estate, which we examined for this year’s investigation, Kelly has paid himself what he considers to be the full amount he is due from the estate—$25,000. Also, as of this writing, the Kearney Lake parcel has not been liquidated by the estate—it’s still in Thibeault’s name, ad as administered by Kelly. So how does he contribute parkland “from his portion” of the estate?

Relatedly, tax records aren’t public record in Nova Scotia, but there’s no evidence in any of the documents filed with the court that the estate has paid property taxes on the parcel for over seven years. Granted, the taxes due won’t be much. I haven’t bothered to calculate them, but it will be far less than $1,000 for the entire seven years, I think. Still, I’ve seen plenty of properties go to tax sale because of non-payment of taxes, in much less than seven years. And often these properties are tied to estates, just as Thibeault’s is. So why hasn’t the city started tax sale proceedings against the property? I’ve asked that very question to city staff today, and they said they’ll get back to me tomorrow.

US bank account. I’m told that Thibeault had both Canadian and US citizenship, and that she collected US social security payments. In the court record, there is a letter from Kelly to Thibeault’s sister, Patricia Richardson. Kelly was responding to an earlier letter from Richardson to the court, complaining about the long delay in resolving the estate.

As you are aware,” Kelly told Richardson in the letter, “you have received your allocation of the estate both here and in the States other than your appropriate share of those that predeceased as per Mary’s instructions [emphasis added].”

In all the records reviewed by The Coast—that is, the public court documents and the bank records of the estate and Thibeault’s personal bank account—nowhere is there any record that any Thibeault property in the United States was sold or otherwise liquidated to become part of the estate. (In fact, one piece of Thibeault’s US property—a trailer in Florida—appears to have been simply sold by the trailer park owner as abandoned property, but that’s an issue for another day.)

So what was Kelly referring to when he said that Richardson had “received [her] allocation of the estate both here and in the States”?

I have suspicions that Thibeault had significant property in the United States at the time of her death, including a US bank account into which her Social Security payments were placed. I stress that I haven’t yet been able to prove that. But if such an account existed, what happened to it?

Whatever the answer to that question, it’s clear that the story about the Thibeault estate is a long, long way from its final chapter.

Related Stories

  • A Trust Betrayed: Peter Kelly and the estate of Mary Thibeault

    Halifax mayor Peter Kelly has failed in his role as executor of Mary Thibeault’s will, leaving her affairs in limbo over seven years after her death as he negotiates with heirs to secretly repay the $145,000 he received.
    • by Tim Bousquet
    • Feb 16, 2012
  • Peter Kelly’s failure of will

    The Halifax mayor is executor of his friend Mary Thibeault’s estate, but more than six years after her death her elderly heirs are still waiting for her estate to be settled; an heir himself, he may have violated city council’s conflict of interest rule.
    • by Tim Bousquet

Attribution:

Missing pieces in the Thibeault estate
There are still a lot of unanswered questions and contradictory statements from Peter Kelly.
Tim Bousquet
September 19, 2012
The Coast
http://www.thecoast.ca/RealityBites/archives/2012/09/19/missing-pieces-in-the-thibeault-estate  

Additional coverage:

BREAKING NEWS:  Peter Kelly removed as executor of the Mary Thibeault estate
Halifax mayor fails to appear for the court hearing
Tim Bousquet
September 19, 2012
The Coast
http://www.thecoast.ca/RealityBites/archives/2012/09/19/breaking-news-peter-kelly-removed-as-executor-of-the-marty-thibeault-estate

Supreme Court Justice Peter Rosinski has removed Peter Kelly as executor of the Mary Thibeault estate.

Thibeault was a family friend of Kelly. She died in 2004 at the age of 91, leaving her estate to 18 heirs, including Kelly, and naming Kelly as the executor. But over seven years have passed and the estate remains unresolved. As The Coast reported earlier this year (see “A trust betrayed,” February 16), one reason for the delay is that after Thibeault died, Kelly removed over $160,000 from Thibeault’s personal bank account, placing the money in his and his son’s control. After removing the money, Kelly submitted an inventory of the estate at the time of Thibeault’s death to the court, but neglected to account for $160,000 he had removed.

This summer, some of the heirs—Gregory Oldfield, Elizabeth Herritt, Catherine Ivany, Raymond Ivany and Phillis Brunt, all of the Halifax area, and Sharon Mahoney and Peter Halleran of Newfoundland—petitioned the court to have Kelly removed as executor.

Wednesday’s hearing dealt with that petition. The hearing lasted just 10 minutes, as lawyers representing Kelly and the heirs had submitted a consent agreement to the court, spelling out the terms for Kelly’s removal. Rosinsky approved the agreement without question.

Kelly did not show up for the hearing. He has been represented by lawyer Harry Thompson, but Thompson’s associate Bianca Krueger appeared in court. The heirs were represented by Lawrence Graham. Thompson and Graham signed the agreement.

With Rosinski’s approval, the agreement becomes a court order. It removes Kelly as executor and replaces him with Elizabeth Herritt, one of the other heirs. Additionally, the order requires that:

• Kelly must submit a full accounting of his administration of the estate by October 1, 2012.

• Kelly must appear before the registrar of probate for a formal review of his accounting of the estate. The review must be scheduled on or before January 15, 2013.

• Kelly “shall promptly respond to requests by [Herritt] for particulars or documentation relevant to his accounts…”

• Kelly is also ordered to “immediately deliver to [Herritt] the present balance in the estate bank account… [and] any and all other property of the estate in his possession.

Should Kelly not abide by the terms of the order, he could be charged with contempt of court.

Throughout The Coast’s coverage, we have noted several inconsistencies of Kelly’s handling of the Thibeault estate, including the disposition of a small piece of property behind Kearney Lake that Thibeault owned, how much money was actually in the estate when Kelly took it over, what happened to Thibeault’s mobile home in Florida and other issues. We’ll explore those issues with an update to this post later today.

But today’s court order requiring Kelly to give a full accounting of the estate should bring these issues forward, and if the accounting is accurate we expect many of our questions to be answered.

Still left unanswered, however, is another question: Why has there been no official investigation into Kelly’s handling of the estate? Neither the Halifax police department nor the RCMP have opened an investigation. The courts appear not to be interested to question Kelly about the incorrect inventory he submitted as a sworn court document. And finally, the last line of defence for making sure justice has been served—Justice minister Ross Landry—hasn’t touched the case.

Read the court order here:
Page 1
Page 2

Kelly removed as executor of Thibeault’s estate
Laura Fraser, City Hall Reporter
September 19, 2012
Herald News
http://thechronicleherald.ca/metro/137422-kelly-removed-as-executor-of-thibeaults-estate

Halifax Mayor Peter Kelly has been removed as the executor of the estate of Mary Thibeault, whose heirs allege he took more than $175,000 from the woman’s assets.

The mayor did not show up for court Wednesday morning, but his lawyer, Bianca Krueger, told the judge Kelly would not fight the request.

Instead, Elizabeth Herritt, one of the five heirs who applied in June to have Kelly dismissed, will take over the administration of the estate.

The relationship between Thibeault and Kelly spanned more than than 30 years. She depended on him throughout her life after they met during his boyhood. And in death, she named him executor of her estate and one of 18 beneficiaries.

One of the heirs who contested Kelly’s handling of the estate said in an interview Wednesday that he wouldn’t question the man’s devotion to Thibeault.

Greg Oldfield, Thibeault’s second cousin, said he would occasionally check in on his relative but that Kelly would have been the 91-year-old’s most consistent caregiver.

In her will, Thibeault left Kelly five per cent of her net worth; the same amount as her other relatives and friends.

If the accounts he provided to the court in August 2005 are accurate, Kelly would be entitled to about $25,000. As executor, he could pay expenses connected to the settling of the will using assets from the estate.

But five beneficiaries claim Kelly gave himself $175,000, the bulk of which was never recorded when he filed an inventory of assets with the court.

Lloyd Robbins, a lawyer who used to represent some of the heirs, wrote to Kelly’s solicitor in March 2011, tracing the path of the supposedly missing funds. Photocopied cheques and bank statements are in the court file.

Kelly’s solicitor wrote to Robbins in June 2011, saying he would refund $145,000 to the estate, provided they agreed to keep the matter private.

The remaining $30,000 in question would be considered the Bedford politician’s inheritance, but if, once the estate was settled, that figure conflicted with what he was left in the will, Kelly agreed to refund the difference.

There is no other correspondence to indicate whether that transfer ever happened.

The Halifax mayor wouldn’t comment on whether the money had been refunded, saying only that the matter was before the courts.

His lawyer also wouldn’t speak to the estate’s finances. Instead, Krueger said a financial accounting would be filed with the court, as ordered by the judge.

None of the heirs addressed the court Wednesday.

When reached by telephone, Oldfield said he was happy that the estate appeared almost settled, nearly eight years after Thibeault’s death.

He also said he believes the money has been returned to the estate, but he couldn’t say whether he or any of the other heirs would be entitled to a larger inheritance.

Kelly must file an affidavit with the Nova Scotia probate court by Oct. 1, giving them the details of his time as executor. He must also provide the courts with a financial account of the estate from the time of Thibeault’s death in December 2004 and his discharge Wednesday morning.

Kelly must meet with the probate court registrar for a formal review of his time as executor and the estate’s account, which is standard practice, by Jan. 15.

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