Andrew Wilson Family Trust

[2020] NZHC 2734

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-295

[2020] NZHC 2734

IN THE MATTER

of the Trustee Act 1956

BETWEEN

AR TRUSTEES (WILSONA) LIMITED and LINDA MAREE CRAWFORD PENNO

as trustees of the ANDREW WILSON FAMILY TRUST

Applicants

Hearing:	(Determined on the papers)
Counsel:	A G W Logan for Applicants
Judgment:	16 October 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 16 October 2020 at 3.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 16 October 2020

RE ANDREW WILSON FAMILY TRUST [2020] NZHC [2734] [16 OCTOBER 2020]

[1]    The applicants, as trustees of the Andrew Wilson Family Trust (the Trust), apply on a without notice basis for orders that assets of the Trust be vested in them.

[2]    The application originally came before Associate Judge Paulsen who identified issues to be addressed by the applicant. The matter was adjourned to a telephone conference on 20 October 2020 and his Honour anticipated that if material was provided to the Court earlier, the application could be dealt with on the papers.

[3]    Having reviewed the supplementary material provided by the applicants, I am satisfied there is now sufficient material before the Court to allow the application to be dealt with on the papers. The telephone conference scheduled for 20 October 2020 is vacated.

[4]    The Trust was settled in 2004. Andrew John Wilson was the settlor and he was also one of the original trustees.

[5]    The applicants explain that as a result of Mr Wilson unfortunately losing capacity as a result of having a stroke, he was removed as trustee pursuant to s 43 of the Trustee Act 1956 (the Act) by Deed dated 10 June 2020. Under the Deed, Linda Maree Crawford Penno was appointed replacement trustee.

[6]    There is a report from Dr Hillary Gray (a registered GP) before the Court, both as to Mr Wilson’s capacity at the time of his stroke, or at least shortly thereafter. This evidence  was  obtained  to  determine  whether  Ms Penno  should  be  appointed  Mr Wilson’s property manager and welfare guardian (she was so appointed by the Court). An  updating medical  report  referring to  an  assessment  of Mr Wilson  on 7 October 2020 is also produced. Dr Hillary’s report confirms that Mr Wilson is mentally incapable of acting as a trustee. The report concluded that Dr Hillary did not see Mr Wilson’s condition changing so that he may regain full capacity. Consistent with that is the (albeit layman’s) view of the director of AR Trustees (WilsonA) Ltd that Mr Wilson’s condition has, if anything, deteriorated of late.

[7]I am satisfied that the evidence shows that s 43 was properly invoked.

[8]    While the Deed of Removal  and  Appointment  was  effective  to  remove  Mr Wilson as trustee and appoint Ms Penno as replacement trustee, the present trustees need to seek a vesting order under ss 52 and 59 of the Act to enable the registration of the transfer of a residential property and shares, into the names of the applicants. This step is necessary because Mr Wilson lacks the capacity to sign the appropriate transfer documents.

[9]    The Trust owns a property at 7 Tuawera Terrace, Clifton, Christchurch and shares in a company. Section 52 of the Act is relied on for the vesting of the residential property and s 59 of the Act in relation to the shares.

[10]   To give effect to the vesting order and to deal with issues as to service and representation, the applicants apply for the following procedural orders:

(a)An order permitting this proceeding to be commenced by way of the originating application procedure.

(b)An order dispensing with service.

(c)An order that Mr Wilson does not need to be represented by a litigation guardian.

Use of originating application

[11]   Leave is required for this proceeding to be commenced by way of originating application as an application for a vesting order is not one that may be commenced as of right under pt 19 of the High Court Rules 2016. Applications for vesting orders such as these are now routinely made by way of originating application. Vesting order applications have been characterised as administrative in nature and that is often the case.  In straightforward uncontested applications such as this, it is appropriate that  a cost efficient and practical procedure be adopted.

[12]   Accordingly, leave is granted for the originating application procedure to be used.

Litigation guardian and service

[13]   As Mr Wilson is incapacitated, r 4.30 of the High Court Rules requires him to have a litigation guardian unless the Court directs otherwise.

[14]   I am satisfied that in this case it is unnecessary to appoint a litigation guardian. Given the evidence as to Mr Wilson’s incapacity, such would serve no real purpose and may cause him distress.

[15]   Accordingly, there is an order dispensing with the appointment of a litigation guardian.

[16]   Similarly, I am satisfied there is no need for any other party to be served. The final  beneficiaries  of  the  Trust  are  Mr  Wilson’s  children  and   grandchildren. Mr Wilson’s children have consented to the application. I do not see that anything would be gained by the service of Mr Wilson’s grandchildren, some of whom are minors.

[17]   Accordingly, there is an order dispensing with the need for the application to be served.

Vesting order

[18]   The substantive orders sought are a vesting order in respect of the property at 7 Tuawera Terrace, Clifton, Christchurch and in respect of the shares in a company called “Sundancer International Limited”.

[19]   Given that I am satisfied that Mr Wilson was appropriately removed as trustee and replaced by Ms Penno as trustee, vesting orders are necessary to allow the continuing trustees to carry out their duties as trustees.

[20]   AR Trustees (WilsonA) Ltd replaced as trustee a company called Allot Reeves & Co Trustees Ltd in 2016 albeit that Allot Reeves is still on the title. Hence, the vesting order sought seeks that the property be vested in both the applicants.

[21]   Accordingly, there is an order vesting the property situated at 7 Tuawera Terrace, Clifton, Christchurch being the land comprised and described in Record of Title CB691/96, Canterbury Land Registration District and being an estate in fee simple containing 519 square metres more or less being Lot 2 Deposited Plan 18543 in the names of AR Trustees (WilsonA) Limited and Linda Maree Crawford Penno. This order is made under s 52 of the Trustee Act 1959.

[22]   For the same reasons, there is a further order that the ordinary shares in the registered company Sundancer International Limited are vested in AR Trustees (WilsonA) Limited and Linda Maree Crawford Penno. This order is made pursuant to s 59 of the Trustee Act 1956.

[23]No orders as to costs are sought and so none are made.

Associate Judge Lester

Solicitors:
Mortlock McCormick Law, Christchurch

Copy to counsel:
B G Walker, Barrister, Christchurch