CDT 12 Limited v Millar
[2019] NZHC 606
•27 March 2019
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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV 2018-441-91
[2019] NZHC 606
UNDER the Trustees Act 1956 and the Court’s inherent jurisdiction IN THE MATTER OF
the Miller Ashurst Grandchildren’s Trust
BETWEEN
CDT 12 LIMITED as Trustee of the Miller Ashurst Grandchildren’s Trust
Plaintiff
AND
MEGAN JANE MILLAR as Trustee of the Miller Ashurst Grandchildren’s Trust
First Defendant
NAPIER INDEPENDENT TRUSTEES
LIMITED as Trustee of the Miller Ashurst Grandchildren’s Trust
Second DefendantLORRAINE ASHURST as Trustee of the Miller Ashurst Grandchildren’s Trust
Third Defendant
On the papers Judgment:
27 March 2019
JUDGMENT OF MALLON J
Introduction
[1] The plaintiff (CDT) applies for an order removing itself and the second defendant (Megan Millar) as trustees of the Miller Ashurst Grandchildren’s Trust (the Trust) and appointing the New Zealand Guardian Trust Company Limited (NZGT) as the sole trustee. It also seeks an order vesting the trust assets in NZGT.
CDT 12 LIMITED v MILLAR [2019] NZHC 606 [27 March 2019]
[2] The orders are sought because it is alleged that the present trustees are not validly appointed, Megan Millar has inappropriately taken Trust funds, and Megan Millar and a former validly appointed trustee (Napier Independent Trustees Limited (NITL)) have not cooperated to rectify the matter.
[3] The orders are sought under sections 51 and 52 of the Trustee Act 1956 and the Court’s inherent jurisdiction.
The facts
[4] The Trust was established by deed on 10 May 2007 by Mr Ian Miller and Ms Ashurst as settlors (the Deed of Trust). The couple had been married or in a de facto relationship for some time before that date. Mr Miller, Ms Ashurst and NITL were the original trustees of the Trust. Mr Miller, Ms Ashurst, and the grandchildren of Mr Miller and Ms Ashurst were beneficiaries under the Trust. Mr Miller’s children were not beneficiaries.1
[5] The Deed of Trust provided that: the statutory power of appointment of trustees was vested in the trustees; the trustees could appoint additional trustees at any time; and the trustees could appoint an advisory trustee at any time. It further provided that the powers of the trustees could only be exercised by unanimous decision of the trustees. The Deed of Trust contemplated the possibility that the Trust might be left with one trustee at some point, because it provided that in such a situation the trustee could not apply the Trust fund to his or her benefit.
[6] In about 2010, Mr Miller and Ms Ashurst separated. As part of the separation, Ms Ashurst retired as trustee of the Trust on 29 June 2010, renounced any powers of appointment under the Trust Deed, and disclaimed any present or future beneficial entitlement under the Trust. Shortly thereafter Mr Miller died, leaving NITL as the sole remaining trustee.
[7] Under the will, Mr Miller’s four surviving children, Aaron Millar, Kirsty Maree Hinton, Terene Dickson and Megan Millar, received a small bequest. Mr Miller
1 It is unclear on the material before me whether Ms Ashurst had any children but any such children were also not beneficiaries.
gave his property at Nelson Crescent to the Trust. He also set out his wishes for the Trust. This included that the name of the Trust be changed and that Megan Millar (his daughter) and Helen Millar (his sister) be appointed as trustees of the Trust. It also included his wish that the assets of the Trust be made available for the use and benefit of Mr Miller’s children during their lifetimes, with the properties owned by the Trust to be retained to provide ultimately for the maintenance and education of his grandchildren.
[8] In accordance with these wishes, by Deed dated 7 April 2011, NITL as the sole remaining trustee appointed Helen Millar and Megan Millar as trustees, along with NITL which was continuing as a trustee. As recorded in the Deed, NITL made these appointments pursuant to the power to appoint new trustees vested in the trustees under the Deed of Trust.
[9] Mr Miller’s children instructed Carlile Dowling to act for them in a claim under the Family Protection Act 1955 (FPA claim). The FPA claim was settled. Pursuant to this settlement the following occurred:
(a)By Deed dated 23 November 2012, Helen Millar and NITL retired as trustees of the Trust, and CDT was appointed as a trustee, along with Megan Millar, the continuing trustee.
(b)By Deed dated 13 April 2013, CDT and Megan Millar as trustees varied the Deed of Trust to, amongst other things, include the four surviving children of Mr Miller as beneficiaries;
(c)The Nelson Crescent property was sold pursuant to an agreement dated 4 April 2013;
(d)By Deeds dated 16 April 2013 and 6 May 2013, the proceeds from the Nelson Crescent property were distributed to the four surviving children and Courtney Quinn, the sole child of Mr Miller’s deceased son.2
2 Megan Millar’s share is in the form of a 10 year interest-free loan.
[10]Since then, CDT and Megan Millar have been acting as trustees of the Trust.
[11] On 16 May 2014 CDT and Megan Millar signed a resolution authorising Megan Millar to act as sole authorised signatory on the Trust’s bank account with the Co-operative Bank. On 16 September 2014 CDT and Megan Millar resolved to borrow up to $60,000 to be used for maintenance and renovations of the Trust’s other property at Henley Crescent. The funds borrowed were secured by a mortgage and a personal guarantee from Megan Millar. The terms of the lending were varied in accordance with a resolution signed by Megan Millar and CDT on 9 July 2015.
[12] In early 2016 CDT became aware that rates on the Henley Crescent property were in arrears. Mr Morgan, a director of CDT, says in his affidavit that CDT investigated this and became aware of payments drawn on the Trust’s account which CDT had not approved. Mr Morgan says Megan Millar was asked to explain these payments but did not do so. He says CDT took over the management of the Trust’s accounts and subsequent investigations revealed that Megan Millar had claimed expenses relating to the Trust property when the work was carried out on Megan Millar’s property rather than the Trust property.
[13] Mr Morgan says that in considering what to do about the situation with Megan Millar it became aware of an issue with her appointment as trustee and its own appointment. The issue concerned the requirement under s 45(3) of the Trustee Act that, except where only one trustee was originally appointed, a trustee cannot be discharged unless there is either a trustee corporation or at least two individuals to act as trustees to perform the trust. CDT’s view was that this requirement was not met when Ms Ashurst was discharged from the trust.
[14] On 17 January 2018 CDT wrote to NITL setting out its view that Helen and Megan Millar had not been validly appointed and that this in turn meant that CDT and Megan Millar had not been validly appointed. It proposed that NZGT be appointed. NITL responded on 22 January 2018 setting out why it did not agree with CDT’s interpretation of s 45(3). CDT responded on 7 February 2018 with reasons why it did not agree with the arguments advanced by NITL. It proposed that the position could be regularised by NITL and Ms Ashurst retiring and appointing NZGT. Failing that it
would apply to the High Court for NZGT to be appointed. Further communications ended with NITL advising it disagreed and did not propose to do anything more.
[15] On 8 November 2018 CDT commenced the present proceeding against Megan Millar, NITL and Ms Ashurst. The proceeding sought an order under s 51 of the Trustee Act that NZGT be appointed in substitution of all existing trustees. This order was sought on the basis that Megan Millar had misconducted herself by taking trust funds without authority and she and CDT could no longer work together. CDT required the Court’s assistance because CDT and Megan Millar were not validly appointed, and NITL had declined to assist with the appointment of a replacement trustee. The proceedings also sought an order vesting the Trust’s property in the NZGT.
[16] The material filed in support of the proceedings provided written and signed consents to the orders sought from NZGT, Ms Ashurst, Aaron Millar, Kirsty Maree Hinton and Terene Dickson (that is, Mr Miller’s surviving children other than Megan Millar), and Mr Miller’s adult grandchildren. Megan Millar was served with the proceedings but has taken no steps. NITL filed an appearance reserving rights but does not oppose the orders.
Appointment of NZGT under s 51
[17] CDT’s application to appoint NZGT as the sole trustee of the Trust in substitution for all existing trustees of the Trust is made pursuant to s 51 of the Trustee Act. Section 51 relevantly provides:
51 Power of court to appoint new trustees
(1)The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.
(2)In particular and without prejudice to the generality of the foregoing provision, the court may make an order appointing a new trustee in substitution for a trustee who—
(a)has been held by the court to have misconducted himself in the administration of the trust;
…
[18]CDT submits the criteria in s 51 are satisfied because:
(a)Megan Millar has misconducted herself in the administration of the Trust and will not cooperate with the Trust;
(b)the trustees were invalidly appointed, CDT is unable to rectify the matter by itself and NITL, the remaining validly appointed trustee, will not assist to rectify the matter; and
(c)without the cooperation of all relevant parties, the Trust’s property cannot be transferred to a new trustee without a Court order.
[19] I start first with whether CDT and Megan Millar were validly appointed. This issue arises because of s 45 of the Trustee Act. That section is concerned with the retirement of a trustee by consent. It provides:
45 Retirement of trustee
(1)Where there are 2 or more trustees—
(a)if one of them by deed declares that he is desirous of being discharged from the trust; and
(b)if his co-trustees and such other person (if any) as is empowered to appoint trustees by deed consent to the discharge of the trustee, and to the vesting of the trust property in the co-trustees alone—
then, subject to the provisions of subsection (3), the trustee desirous of being discharged shall be deemed to have retired from the trust, and shall by the deed be discharged therefrom under this Act without any new trustee being appointed in his place.
(2)Any assurance or thing requisite for vesting the trust property in the continuing trustees alone shall be executed and done.
(3)Except where only 1 trustee was originally appointed, a trustee shall not be discharged under subsection (1) unless there will be either a trustee corporation or at least 2 individuals to act as trustees to perform the trust.
[20] Section 45 is one of the provisions in Part 4 of the Trustee Act. That Part also contains provisions: for appointing replacement trustees (s 43); concerning evidence
on which a purchaser of land can rely concerning the appointment of a new trustee (s 44); enabling a trustee to be discharged from the trust with the assistance of the Court when the trustee’s co-trustees refuse or neglect to appoint, or to consent to the appointment of, a replacement trustee (s 46); providing for trust property to vest in new or continuing trustees (s 47); providing that a trustee corporation may be appointed as a sole trustee even if the trust provides for the appointment of two or more trustees, and providing that any other corporation may act as a trustee unless forbidden by the trust deed (s 48); providing for advisory trustees (s 49); and providing for the remuneration of custodian trustees (s 50).
[21] Of particular interest for present purposes is s 43, which contains a parallel requirement to s 45(3). That section is as follows:
43 Power of appointing new trustees
(1)Where a trustee (whether original or substituted, and whether appointed by the court or otherwise)—
(a)is dead; or
(b)remains out of New Zealand for the space of 12 months during which no delegation of any trusts, powers, or discretions vested in him as such trustee remains in operation under section 31; or
(c)desires to be discharged from all or any of the trusts or powers reposed in or conferred on him; or
(d)refuses to act therein; or
(e)is unfit to act therein; or
(f)is incapable of so acting; or
(g)being a corporation, has ceased to carry on business, is in liquidation, or is dissolved, then—
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, or the personal representatives of the last surviving or continuing trustee, may by deed appoint a person or persons (whether or not being the person or persons exercising the power) to be a trustee or trustees in the place of the first-mentioned trustee.
(2)On the appointment of a trustee or trustees for the whole or any part of trust property—
(a)the number of trustees may be increased; and
(b)a separate set of trustees may be appointed for any part of the trust property held on trusts distinct from those relating to any other part, and whether or not new trustees are or are to be appointed for other parts of the trust property; and any existing trustee may be appointed or remain one of the separate set of trustees; or if only 1 trustee was originally appointed, then 1 separate trustee may be so appointed for the first-mentioned part; and
(c)it shall not be obligatory to appoint more than 1 new trustee where only 1 trustee was originally appointed, or to fill up the original number of trustees where more than 2 trustees were originally appointed; but, except where only 1 trustee was originally appointed, a trustee shall not be discharged under this section unless there will be either a trustee corporation or at least 2 individuals to act as trustees to perform the trust; and
(d)any assurance or thing requisite for vesting the trust property, or any part thereof, jointly in the persons who are the trustees shall be executed or done.
(3)Where a trustee has been removed under a power contained in the instrument creating the trust, a new trustee or new trustees may be appointed in the place of the trustee who is removed, as if he were dead, or, in the case of a corporation, as if the corporation had been dissolved, and the provisions of this section shall apply accordingly.
(4)The power of appointment given by subsection (1) or any similar previous enactment to the personal representatives of a last surviving or continuing trustee shall be and shall be deemed always to have been exercisable by the executors for the time being (whether original or by representation) of that surviving or continuing trustee who have proved the will of their testator or by the administrators for the time being of that trustee without the concurrence of any executor who has renounced or has not proved:
provided that a sole or last surviving executor intending to renounce, or all the executors where they all intend to renounce, shall have and shall be deemed always to have had power, at any time before renouncing probate, to exercise the power of appointment given by this section, or by any similar previous enactment, if willing to act for that purpose and without thereby accepting the office of executor.
(5)Where a sole trustee is or has been originally appointed to act in a trust, or where, in the case of any trust, there are not more than 3 trustees either original or substituted and whether appointed by the court or otherwise, then and in any such case—
(a)the person or persons nominated for the purpose of appointing new trustees by the instrument, if any, creating the trust; or
(b)if there is no such person, or no such person able and willing to act, then the trustee or trustees for the time being—
may, by writing, appoint a person or persons (whether or not being the person or persons exercising the power) to be an additional trustee or additional trustees, but it shall not be obligatory to appoint any additional trustee, unless the instrument, if any, creating the trust, or any statutory enactment provides to the contrary:
provided that an additional trustee or additional trustees shall not be appointed under this subsection without the consent of—
(a)the trustee or trustees for the time being; or
(b)the court.
(6)Every new trustee appointed under this section as well before as after all the trust property becomes by law, or by assurance, or otherwise, vested in him, shall have the same powers, authorities, and discretions, and may in all respects act as if he had been originally appointed a trustee by the instrument, if any, creating the trust.
(7)The provisions of this section relative to a trustee who is dead include the case of a person nominated trustee whether sole or otherwise in a will, and who dies before the testator; and those relative to a continuing trustee include a refusing or retiring trustee, if willing to act in the execution of the provisions of this section.
(8)The provisions of this section relative to a person nominated for the purpose of appointing new trustees apply whether the appointment is made in a case specified in this section or in a case specified in the instrument, if any, creating the trust, but where a new trustee is appointed under this section in a case specified in that instrument, the appointment shall be subject to the terms applicable to an appointment in that case under the provisions of that instrument.
(9)In this section the term trustee does not include a personal representative as such.
[22] In Jasmine Trustees Ltd v Wells & Hind, a first instance decision in the United Kingdom, Mann J held that “individuals” in a similarly worded provision of the Trustee Act 1925 (UK) did not include a body corporate.3
[23] CDT submits that if this interpretation of “individuals” in s 45(3) of the New Zealand provision was followed, it would mean that Ms Ashurst was not discharged when she retired as a trustee on 29 June 2010. That is because her retirement left the Trust with two trustees, Mr Miller and NITL. NITL is a limited liability company. It is not a “trustee corporation” which has the specific definition provided in s 2 of the
3 Jasmine Trustees Ltd v Wells & Hind [2017] EWHC 38 (Ch), [2007] 3 WLR 810.
Act.4 If “individuals” does not include a body corporate then the Trust did not have at least two individuals when Ms Ashurst retired.
[24] CDT submits that this would mean that all subsequent actions of the Trust were invalid. It says this would include the appointment of new trustees which must be made with the unanimous approval of all trustees. That is, when Mr Miller died, Ms Ashurst and NITL were required to appoint the replacement trustees. Instead, NITL alone made the appointments of Helen and Megan Millar. CDT submits that, since those appointments were invalid, its appointment was invalid because it was made by trustees who were not validly appointed.
[25] CDT’s submission raises two issues. First, whether this Court should follow Jasmine Trustees Ltd in interpreting s 43(2)(c) and s 45(3). If this Court should follow that interpretation then the second issue is whether NITL’s appointment of Helen and Megan Millar was invalid, and in turn whether CDT’s appointment is invalid.
[26]The reasoning that found favour in Jasmine Trustees Ltd was as follows:
(a)In the nineteenth century there was no theoretical bar to companies being trustees. There was, however, a practical obstacle where a trust had two or more trustees because a company could not be a joint tenant of property with a natural person.5 This obstacle was removed by the Bodies Corporate (Joint Tenancy) Act 1899 (UK) which provided that a “body corporate” was capable of holding property in joint tenancy as if it were an “individual”.
4 Section 2 defines “trustee corporation” as meaning “Public Trust or the Māori Trustee or any corporation authorised by any Act of the Parliament of New Zealand to administer the estates of deceased persons and other trust estates”.
5 This seems to have been so even though s 19 of the Interpretation Act 1889 (UK) provided that “person” includes “any body of persons corporate or unincorporated”. A body corporate’s inability to co-own land in joint tenancies stemmed from the inability to apply the rules of survivorship to legal personalities without legislative intervention.
(b)At this time the relevant statutory provision did not refer to trust corporations, other body corporates or to “individuals”. Instead it referred to “trustees”.6
(c)The Trustee Act 1925 (UK) altered the wording of the relevant provision. Section 37(1)(c) provided that a trustee was not discharged from a trust “unless there will be either a trust corporation or at least two individuals to act as trustees to perform the trust”. A trust corporation was defined as meaning the public trustee or a corporation either appointed by the court in any particular case to be a trustee or entitled by the rules made under the Public Trustee Act 1906 (UK) to act as a custodian trustee.7
(d)Mann J considered there was no “clear and consistent policy reason” for the change in the legislation from “trustees” to “individuals”.8 It created “curious anomalies” if “individuals” did not include a body corporate (that was not a trust corporation as defined).9 However, the natural meaning of “individuals” did not include companies; elsewhere in the Act there was reference to “person” demonstrating that the draftsman was conscious of the distinction between the terms; and the change from the wording in this Act from the predecessor legislation discussed above indicated that the change in wording must have been deliberate.
[27] I understand that no New Zealand court has decided whether Jasmine Trustees Ltd should be applied in interpreting s 43(2)(c) or s 45(3).10 It has been said that the decision “casts a shadow of doubt over a large number of trustee decisions” in New
6 Section 31(3) of the Conveyancing and Law of Property Act 1998 (UK) provided that, except where there was only one trustee appointed, a trustee was not discharged from the trust “unless there was originally at least two trustees to perform the trust”. Section 10(2) of the Trustee Act 1893 (UK) was in similar terms.
7 The Public Trustee Act 1906 (UK) created the office of public trustee and provided for the licensing of custodian trustees
8 Jasmine Trustees Ltd v Wells & Hind, above n 3, at [30].
9 Above.
10 See Oldfield v Oldfield [2019] NZHC 492 for a recent example where the Judge determined it was not necessary to decide the issue. Greenpeace of New Zealand Inc v Electoral Commission [2014] NZHC 2135, [2014] 3 NZLR 802 at [101] to [108] held that “individual” meant natural persons but in a different context to the present.
Zealand where there has been some enthusiasm for corporate trustees.11 The issue is therefore an important one. The proceeding before me is, however, not an ideal one for determining the issue. That is because I am considering the matter in an uncontested “on the papers” hearing and therefore without the benefit of full argument.
[28] Against that context, I consider it is sufficient for present purposes to note my view that it is not inevitable that s 45(3) would be interpreted in the same way as its equivalent provision was in Jasmine Trustees Ltd. This is because:
(a)In the United Kingdom the position between 1899 and 1925 was that a body corporate could be a trustee along with a natural person under the relevant statutory power for retiring and appointing trustees. As is acknowledged in Jasmine Trustees Ltd, there is no apparent rationale for why Parliament would have provided for this in 1899 only to close it back up two decades later. The amended wording therefore seems not to have been motivated by any need to address any mischief that arose from the former wording. That is not a strong position from which to favour a narrow meaning of “individual” which gave rise to “curious anomalies”.12
(b)A similar history arose in New Zealand albeit that the period during which a body corporate could be a trustee along with one natural person was longer. Under the equivalent New Zealand provisions it was open from 1905 to 1956 for a body corporate to a be a trustee along with a natural person.13 No reason is apparent for why Parliament would have
11 Luke Dixon “Retirement of Trustees” [2014] NZLJ 278.
12 For example, one anomaly identified in Jasmine Trustees Ltd at [27] was a hypothetical case of there being two natural person trustees and one body corporate trustee where one of the natural persons dies. The body corporate and natural person continuing as trustees could then do everything trustees can do, except neither could obtain their discharge without there being two natural persons (or a trust corporation) being among their successors. It made no sense for a natural person and a body corporate to act as trustees for as long as they wanted to but not to allow that same situation if one wanted to be discharged.
13 The Trustee Amendment Act 1901 inserted the predecessor provisions to the current ss 43(2)(c) and 45 into the Trustee Act 1883. It used the word “trustee” instead of individual. Section 20 of the Law of Property Act 1905 enacted in New Zealand the provisions of the Bodies Corporate (Joint Tenancy) Act 1899 (UK) and made it so that body corporates could co-own land with natural persons in joint tenancies. The Trustee Act 1956 introduced the word “individuals” in the provisions relating to retiring and replacement trustees (ss 43 and 45).
wished to have closed off what was the position in this country for over 50 years. Rather, the Trustee Act 1956 (NZ) adopted the wording of the 1925 UK Act to give New Zealand the benefit of UK cases and text books modified to suit New Zealand circumstances.14
(c)It is not clear that the use of “person” in other parts of the Trustee Act 1956 (NZ) meant that “individual” must have been used in order to exclude body corporates from that term. An alternative view is that “individual” was chosen to align with the use of this term in the Bodies Corporate (Joint Tenancy) Act 1899 (UK) and/or that it was a way of distinguishing between a trust corporation (as defined), who could be a sole trustee in all cases, and all other trustees. Certainly, the Act contemplated that body corporates could be trustees (s 48) but, unless they were a trustee corporate, they could not be the sole trustee.
(d)The legislation was amended in the UK by the Trusts of Land and Appointment of Trustees Act 1996 (UK). The UK position now is that “individuals” has been changed to “persons”, thus negating the effect of the finding in Jasmine Trustees Ltd. The proposed new Trustee Act will also amend the position if enacted by leaving it up to the trust- creating document whether there needs to be a certain minimum number of trustees. There is no mention of the word “individuals” and provisions dealing with numbers of trustees simply use the word “trustees” indicating that body corporates may be trustees unless a contrary intention is expressed in the deed. This confirms that no legislative purpose has been discerned for the meaning of “individuals” adopted in Jasmine Trustees Ltd, or at least that the purpose was not one that should prevail.
14 Law Commission Review of Trust Law in New Zealand: Introductory Issues Paper (NZLC IP19, 2010) at [4.32].
(e)The edition of Pettit on Equity published prior to the enactment of the Trusts Land and Appointment of Trustees Act 1996 (UK) said this of the UK provision:15
It will be observed that the latter part of s 37(1)(c) states that a trustee will not be discharged unless there will be as trustees ‘either a trust corporation or at least two individuals’. Prima facie the word ‘individual’ is not apt to include a corporate body, and on that basis if, for example, the trustees comprise two corporate trustees (neither of which is a trust corporation) and two individual trustees, it would at first sight seem that if one of the individual trustees desired to be discharged from the trust under s 36, the appointment of a third corporate trustee (not being a trust corporation) to replace him would be ineffective because there would not then be either a trust corporation or at least two individuals to act as trustees to perform the trust. It is submitted that such an unsatisfactory result could and should be avoided by adopting a purposive approach and giving a slightly strained, though not unprecedented, meaning to ‘individual’ as including, in this context, a corporate body. Thus Lord Templeman, giving the advice of the Privy Council in Société United Docks v Government of Mauritius in a different context referred to the argument ‘that a different result should follow … because section 3 … referred to the right of “the individual”. But no logical distinction’, he continued, ‘can be drawn between the individual protected by section 3 and “the person” protected by the remaining sections … Both expressions include a corporation where the context so allows, as it does in the present instance’ If ‘individual’ is so construed in s 37(1)(c) there would be a consistent application throughout the 1925 property legislation of the principle that beneficiaries should have the protection of two trustees (whether natural or artificial legal persons) unless the sole trustee is a trust corporation.
(f)The purposive approach is the modern approach to statutory interpretation.16 Jasmine Trustees Ltd gave effect to the natural meaning of “individuals” when there was no discernible legislative purpose for a change from the historic position and it gave rise to “curious anomalies”.17 In contrast, the view expressed in Pettit on Equity quoted above favours a purposive approach.
15 Philip H Pettit Equity and The Law of Trusts (7th ed, Butterworths, London, 1993) at 333-334.
16 Ross Carter Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis NZ, Wellington, 2015) at 223-248.
17 Jasmine Trustees Ltd v Wells & Hinds, above n 3, at [30].
[29] I am therefore not persuaded that CDT is necessarily correct in its submission that the Trust was required to have two natural persons as trustees. The alternative view, that “individual” in ss 43 and 45 includes “body corporate”, seems to me to be the stronger one acknowledging, however, that I have not had full argument on the issue.
[30] Even if it were the position that two natural persons are required, I an also not necessarily persuaded that all Trust appointments from the time NITL appointed Helen and Megan Millar as new trustees are invalid. This is because s 43(1) contemplates a trustee acting alone in appointing replacement trustees. Specifically, it allows the person nominated in the trust deed to exercise the power of appointment “or if there is no such person or no such person is able and willing to act, then the surviving or continuing trustees for the time being” may make the appointment. Ms Ashurst expressly renounced her power of appointment when she signed the Deed dated 29 June 2010 following her separation from Mr Miller.
[31] It may therefore be that, even if the Jasmine Trustees Ltd interpretation were applied, all that would be needed to rectify the position would be for CDT and Megan Millar to appoint a third person as trustee. Here, however, there are difficulties. This is because CDT has raised with Megan Millar its concerns about the improper use of trust funds, Megan Millar has refused to engage with CDT about this and CDT considers it can no longer work with Megan Millar. She has also declined to take part in this proceeding. On this basis, I accept it is expedient to appoint a new trustee or new trustees, and it is difficult, or impracticable so to do without the assistance of the court. I also accept that NZGT should be appointed in the place of CDT and Megan Millar, and in the place of Mr Millar, Ms Ashurst and NITL if they have not been validly replaced by CDT and Megan Millar.
Order vesting all Trust assets in the new trustee
[32] CDT relies on s 52 of the Trustee Act and the Court’s inherent jurisdiction for an order vesting all trust assets in NZGT.
[33]Section 52 of the Trustee Act relevantly provides:
52 Vesting orders of land
(1)Subject to the provisions of subsections (2) and (3), in any of the following cases, namely—
(a)where the court appoints or has appointed a trustee of any land or interest therein, or where a trustee of any land or interest therein has been appointed out of court under any statutory or express power:
…
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)Where any such order is consequential on the appointment of a trustee, the land or interest therein shall be vested for such estate as the court may direct in the persons who on the appointment are the trustees.
(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.
[34]The plaintiff seeks orders that:
(a)pursuant to s 52 of the Trustee Act 1956, the property at 37 Henley Crescent, Napier, described in Record of Title Identifier HBC1/774 presently owned by Megan Jane Millar and CDT 12 Limited; and
(b)pursuant to the Court’s inherent jurisdiction, all of the other Trust assets, estates, interest and rights—
be vested in the NZGT as sole trustee of the Trust.
[35]I am satisfied it is appropriate to make this vesting order.
Result
[36] NZGT is appointed the sole trustee of the Trust. A vesting order in NZGT in terms of [35] is made. Costs on a 2B basis and disbursements are ordered and payable from the assets of the Trust.
Mallon J
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