Burke Family Trust

[2017] NZHC 1984

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2017-443-39 [2017] NZHC 1984

UNDER	the Trustee Act 1956
IN THE MATTER	of the Burke Family Trust
AND
IN THE MATTER	of an application for an order under s 52 of the Trustee Act 1956 for a vesting order

On the papers
Judgment:	18 August 2017

JUDGMENT OF ASSOCIATE JUDGE SMITH

Introduction

[1]      Elizabeth Frances Clegg, a trustee of The Burke Family Trust (the Trust), applies under s 52 of the Trustee Act 1956 (the Act) for an order vesting all land and property   of   the   Trust   in   the   current   trustees,   Elizabeth   Frances   Clegg, Helen Judith Burke, Cheryl Anne Foreman and NKS Trustees 2016 Ltd.  On 17 July

2017 I gave leave for the application to be commenced as an originating application, under Part 19 of the High Court Rules.

[2]      Ms Burke, Ms Foreman and NKS Trustees 2016 Ltd have all filed statements consenting to the order sought.

[3]      The application is made primarily because the certificate of title to a piece of land owned by the Trust at 3a Beach Street, Fitzroy, New Plymouth (being the land comprised in Certificate of Title TNF3/1375, Taranaki Land Registration District –

“the property”) still names a former trustee of the Trust, Peter Standish Burke, as one

RE THE BURKE FAMILY TRUST [2017] NZHC 1984 [18 August 2017]

of the registered proprietors.   Mr Burke suffers from dementia, and by deed dated

29 June   2017   made   between   his   daughters   (the   trustees   Elizabeth   Clegg, Helen Burke and Cheryl Foreman) and NKS Trustees 2016 Ltd (the new trustee), Mr Peter  Burke  was  removed  as  a  trustee  of  the Trust  pursuant  to  the  powers conferred on his daughters, as his fellow trustees, by s 43 of the Act.

Background

[4]      The  Trust  was  constituted  by  deed  dated  25  March  1999  (the  deed). Peter Burke was one of two trustees, the other was his wife Betty Burke. Betty died on 29 September 2014.

[5]      On  8  October  2014,   Peter  Burke’s   three  daughters  (Elizabeth Clegg, Cheryl Foreman   and   Helen   Burke)   were   appointed   as   new   trustees   with Mr Peter Burke.

[6]      Mr Burke’s dementia has been confirmed by his medical practitioner. In a report dated 8 June 2017, Dr Ian Price stated:

I am Peter’s General Practitioner and can certify, without any doubt, that he totally lacks mental capacity in matters related to personal health and welfare and matters related to property, on the basis of dementia.

[7]      In the deed establishing the Trust, the power of appointment of new trustees was initially given to Peter Burke and Betty Burke. Clause 8 of the deed provided:

8.        Power of Appointment and Removal of Trustees

(i)        The statutory power of appointment of new Trustees hereof shall during the lifetime of the said PETER STANDISH BURKE and BETTY MURIEL BURKE be vested in them solely and after the death     of     the     said     PETER     STANDISH     BURKE     and BETTY MURIEL     BURKE,     then     in     their     executors     or administrations and if at any time after their deaths there shall be no such executor or administrator able and willing to act then in the person or persons in whom the said statutory power is vested by the Trustee Act 1956.

(ii)       THIS     power     of     appointment     shall     entitle     the     said PETER STANDISH  BURKE  and  BETTY  MURIEL  BURKE  to remove any Trustee or Trustees and such power shall after their death be exercisable by any person having the power to appoint the new Trustees at the time PROVIDED THAT any person exercising

such power or removal shall forthwith upon the exercise of such power also appoint a new Trustee in place of any person so removed.

[8]      Clause 9 provided:

The person or persons in whom the said power is vested shall have power:

(a)       To appoint at any time or times additional Trustee or Trustees of all or any of the trusts hereof whether or not occasion shall have arisen for appointment of a new Trustee or Trustees.

…

[9]      Mr Peter Burke was the sole executor of the estate of his late wife Betty, and on her death he became the sole person in whom the power of appointment and removal of trustees was vested by cl 8 of the deed.

[10]     Section 43(1) of the Act provides that where a trustee is unfit to act in that capacity or is incapable of so acting:

…

the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustees for the time being … may by deed appoint a person or persons … to be a trustee or trustees in the place of the first-mentioned trustee.

[11]     Following Betty’s death Mr Burke was the only surviving person with power under the deed to appoint new trustees, and Dr Price’s certificate makes it clear that by June 2017 Mr Burke had become incapable of acting as a trustee of the Trust.  In those  circumstances  I  am  satisfied  that  Elizabeth,  Helen  and  Cheryl,  as  the continuing trustees, were entitled under s 43(1) of the Act to (by deed) appoint a trustee in place of Mr Peter Burke.

[12]     They did that by deed dated 29 June 2017 (the June 2017 deed), appointing NKS Trustees 2016 Ltd as new trustee in place of Mr Peter Burke.  Clause 4 of the June 2017 deed provided:

4.The Continuing Trustees (ie Elizabeth, Helen and Cheryl] declare that    all    the    real    and    personal    property    now    vested    in [Mr Peter Burke]  will  from  the  date  of  this  Deed  vest  in  [NKS Trustees 2016 Ltd] jointly with the Continuing Trustees upon the

Trusts  and  subject  to  the  powers  and  conditions  expressed  and implied in the [deed].

[13]     The continuing and newly appointed trustees of the Trust now seek orders under s 52 of the Trustee Act vesting the property in themselves so that it can be sold.

Vesting Orders

[14]     Section 52  of the Trustee Act 1946 materially provides:

52       Vesting orders of land

(1)       Subject to the provisions of subsections (2)  and (3), in any of the following cases, namely—

(a)       …

(b)       where  a  trustee  entitled  to  or  possessed  of  any  land  or interest therein, whether by way of mortgage or otherwise, or  entitled  to  a  contingent  right  therein,  either  solely  or jointly with any other person—

(i)       is under disability; or

…

the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.

(2)      …

(3)       Where any such order relates to a trustee entitled or formerly entitled jointly with another person, and that trustee is under disability or out of the jurisdiction of the court or cannot be found, or (being a corporation) has ceased to carry on business or is in liquidation or has been dissolved, the land, interest, or right shall be vested in the other person who remains entitled, either alone or with any other person that the court may appoint.

[15]     I am satisfied from the material before the Court that Mr Peter Burke is under a disability for the purposes of s 52(1)(b)(i) of the Act.  NKS Trustees 2016 Ltd has been appointed as a new trustee in his place.  The current trustees must be able to deal with the property (and any other assets of the Trust) in accordance with their

powers and duties.   I am accordingly satisfied that the vesting orders sought are appropriate.

Orders

[16]     An order is made vesting the property, and any other land or property held by the Trust, in the current trustees of the Trust,  namely Elizabeth Frances Clegg, Cheryl Anne Foreman, Helen Judith Burke and NKS Trustees 2016 Limited.

Associate Judge Smith

Solicitors:

Nicholsons, New Plymouth for the applicant