Bamford v Ives

[2020] NZHC 994

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2020-442-15

[2020] NZHC 994

UNDER THE

Trustee Act 1956

IN THE MATTER

of an originating application without notice for removal of trustee and vesting order

BETWEEN

ANTHONY JOHN DEAN BAMFORD

First Applicant

LINDA LORRAINE BAMFORD

Second Applicant

AND

YVONNE ELLEN IVES

Respondent

Hearing:	On the papers
Appearances:	L J Miller for the Applicants
Judgment:	14 May 2020

JUDGMENT OF COOKE J

[1]By application dated 20 March 2020 the applicant seeks orders that:

(a)These proceedings be permitted to be commenced by originating application.

(b)Service of the proceedings on the respondent or any other person be dispensed with.

(c)The respondent be removed as a trustee of the Ives Family Trust.

BAMFORD v IVES [2020] NZHC 994 [14 May 2020]

(d)Title in a particular property owned by the Trust be vested in the continuing trustees under s 52 of the Trustee Act 1956.

[2]        The  application  is  supported  by  an  affidavit  from  the  first  applicant,  Mr Anthony Bamford and a memorandum of counsel.

[3]        The underlying issue is that the respondent suffers from dementia and is said to lack capacity to continue to act as trustee. An application is accordingly made to have her removed as a trustee, and that solely the applicants as remaining trustees continue to administer the Trust. Orders under s 52 are then required to amend the registered title for Trust property. The first applicant is a solicitor of Nelson and acts as a professional trustee, and the second applicant is a legal executive who also acts in that capacity.

[4]        The order set out in paragraph [1](a) above is routinely granted in cases of this kind and is duly made here.

Dispensing with service

[5]        I am prepared to make an order dispensing of service or the giving of notice on any other person, but not without some reservation, and I have decided that certain further steps are necessary.

[6]        My reservation arises from the fact that the memorandum of counsel refers to their being a history of disagreement within the family in relation to the administration of the Trust. Counsel advises, however, that all of the children of the respondent agree that the applicants are the appropriate trustees, and should continue as the only trustees. Counsel also advises that appointing one or more family member would potentially exacerbate existing family tensions in the context of the primary need to attend to the respondent’s care and wellbeing.

[7]        In those circumstances it would have been appropriate for the affidavit evidence to have addressed those questions, and provided some evidence of the relevant agreement of the affected beneficiaries of the Trust, for example by way of signed consent forms. I am prepared to give such directions because of the information

conveyed in the memorandum of counsel to the Court, and given the proposed remaining trustees are independent professional trustees who also have professional and ethical obligations to the Court. In those circumstances I am prepared to accept that what is set out in the memorandum of counsel can be accepted as accurately describing the position for the Court. But I have decided that steps need to be taken to advise the children of the respondent of this judgment, and to give them leave to apply.

[8]        Accordingly the directions sought outlined in paragraph [1](b) above are granted, but I make the further orders referred to in [16] below.

Removal of trustee, and orders under s 52

[9]        The substantive orders sought are the removal of the respondent as trustee on the grounds that she is no longer capable to act in that role, together with orders under s 52 in relation to the registered title of the Trust property.

[10]      As to the first matter, the application depends on the inherent jurisdiction of the Court, with reliance placed on the scope of that jurisdiction as described in Clarke v Karaitiana,1 Wallace v Naknok,2 and Godfrey v McCormick.3

[11]      There are statutory powers vested in the Court to make orders appointing new trustees “in substitution for in addition to an existing trustee” if a person has become mentally disordered (s 51) and under s 43(1) a person authorised to appoint trustees under a Trust Deed may do so if a trustee is “incapable” or “unfit to act”, and that power may be exercised by the remaining trustees if the appointor is not willing or able to act. However in the present case the application is advanced on the basis there should not be a new trustee, and that only the remaining two trustees continue to act in that role. For that reason the provisions may not strictly apply, and reliance on the inherent jurisdiction arises.

1      Clarke v Karaitiana [2011] NZCA 154, [2011] NZAR 370.

2      Wallace v Naknok [2012] NZHC 382, (2012) 3 NZTR 22-005.

3      Godfrey v McCormick [2017] NZHC 420, [2017] 3 NZLR 198.

[12]      I accept the Court has inherent jurisdiction to remove a trustee who is no longer capable of acting without replacing that trustee in accordance with the statutory powers.

[13]      I also accept that the respondent should be treated as not capable of continuing to act as a trustee. Again I do so with some hesitation. The evidence that the respondent is not capable is limited, and primarily provided in the form of a copy of a letter from Dr Michael Ball of Nelson Hospital dated 19 August 2019 that the respondent suffers from dementia and lacks the capacity to understand “the nature of decisions about all aspects of her care and welfare”. With applications of this kind it would usually be more appropriate to have fuller evidence, for example an affidavit from a medical practitioner qualified to assess the trustee’s capacity to act in a role of a trustee. But I am nevertheless prepared to accept that the respondent is not able to continue to act as trustee because of her dementia in light of the letter from Dr Ball, as well as the evidence from Mr Bamford that the respondent’s diagnosis prevents her from performing her duties as trustee, and that he does not believe the respondent even has the capacity to retire as a trustee. That combined with the information in the memorandum of counsel that there is agreement that the applicants are the appropriate trustees and should continue as the only trustees is sufficient to satisfy me that such orders are appropriate, and I duly make the order referred to in [1](c) above. But again the position should be made subject to the further orders set out in [16] below.

[14]      Finally once such orders are made the position is not fully remedied because the respondent will remain registered on the title of property owned by the Trust. It is recognised in those circumstances that vesting orders are required under s 52 of the Trustee Act 1956.4 In the present case the position is further complicated by the fact that when previous trustees retired in 2005 and were replaced by the applicants, the retiring trustees were not removed from the title.

[15]      I accordingly make orders that the property at 31 Devon Street, Stoke, being contained in record of title 115292 be vested in Anthony John Dean Bamford and

4      See Godfrey v McCormick, above n 3 and Locker v Browning [2018] NZHC 1127 at [12]–[15].

Linda Lorraine Bamford as continuing trustees in accordance with s 52 of the Trustee Act 1956.

[16]      Given the concerns I have referred to above, it seems to me appropriate to stay the effect of the Court’s substantive orders for a short period while the children of the respondent are given notice of this Court’s judgment and have the opportunity to apply to vary or discharge the orders made. Accordingly I give the following directions:

(a)That the applicants provide a copy of this judgment to Yvonne Ellen Ives, Kathrine Ann Ives, Lincoln James Ives and Jane Louise Ives in a way that ensures that they have due notice of it by no later than 5 pm 22 May 2020.

(b)That each of those persons, and the applicants, have leave to apply to vary or discharge the orders referred to in paragraphs [8], [13] and [15] above, with any such application to  be  filed  and  served  by 5  pm 29 May 2020.

(c)That the orders referred to in paragraphs [13] and [15] herein are stayed until 5 pm 25 May 2020, and if any application is made in accordance with the leave reserved in paragraph [16](b) above, that the orders are further stayed until any such application is determined by the Court.

(d)That any application made in accordance with leave reserved above should be referred by the Registrar to me.

Cooke J

Solicitors:
Isherwood Le Gros Ltd, Nelson