Cheyne v Cheyne

[2019] NZHC 2909

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2019-412-000100

[2019] NZHC 2909

UNDER

The Court’s Inherent Jurisdiction and Section 52 of the Trustee Act 1956

IN THE MATTER

of an application to remove a trustee and to vest property in the continuing trustees

BETWEEN

RAYWYN MARGARET CHEYNE and NICOLA MARGARET STANDRING as

Trustees of the Macetown Trust Applicants

AND

DESMOND JOHN CHEYNE

Respondent

Hearing:	Determined on the papers
Counsel:	F Barton and H Scott for Applicants
Judgment:	7 November 2019

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 November 2019 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Anderson Lloyd, Dunedin

CHEYNE and STANDRING as Trustees of the Macetown Trust v CHEYNE [2019] NZHC 2909 [7 November 2019]

[1]                 Raywyn Margaret Cheyne (Raywyn) and Desmond John Cheyne (Desmond) are husband and wife. Raywyn, Desmond and their daughter, Nicola Margaret Standring (Nicola), are presently the trustees of the Macetown Trust.

[2]                 The Macetown Trust was created by a Deed of Trust dated 21 September 1999. The beneficiaries of the Trust are Desmond and Raywyn, their children and grandchildren.

[3]                 The trustees hold two residential properties (the Trust properties) in trust namely:

(a)2 Everton Road, Dunedin (Computer Freehold Register OT7D/1179); and

(b)3 Adamson Drive, Queenstown (Computer Freehold Register OT5A/4).

[4]                 Desmond and Raywyn have been living at 2 Everton Road, Dunedin. Desmond is incapacitated. He suffers from mental and physical illnesses and needs to move to a new home that better suits his needs. A property has been found at the Chatsford Retirement Village but due to Desmond’s inability to act the trustees cannot exercise their powers to finance the purchase. The Trust Deed does not contain any provision to remove Desmond as a trustee. Raywyn and Nicola are therefore seeking the assistance of the court.1

[5]Raywyn and Nicola have applied for orders:

(a)For leave to bring this proceeding by way of originating application;

(b)Dispensing with service of the application on Desmond;

(c)Dispensing with the appointment of a litigation guardian in respect of Desmond under r 4.30 of the High Court Rules 2016;

1      Re Borich [2014] NZHC 780.

(d)Removing Desmond as a trustee;

(e)Vesting the Trust properties in them as continuing trustees.

[6]                 The evidence is that Desmond suffers from Vascular Dementia and several heart conditions. He wholly lacks competence to manage his affairs or to understand and carry out the role of a trustee. He has no prospect of regaining such capacity or capability and any person who might be appointed to represent Desmond would be incapable of explaining to him the nature of the advice or the purpose of this proceeding. Desmond will be unable to foresee the consequences of any orders that might be made by the Court and would react with confusion and anxiety if he was notified of the existence of these proceedings and be expected to participate in them.

[7]                 It is established practice that applications of this type, which are unopposed and do not require particularised pleadings or interlocutory steps, are suitable to be commenced by way of originating application. It is appropriate in the circumstances of this case to grant leave to do so. I order accordingly.

[8]                 Desmond is an incapacitated person within the meaning of r 4.29 of the High Court Rules. Given the evidence before the Court in relation to Desmond’s mental state, it is unnecessary, and it would be inappropriate, to direct service of this application on him. I dispense with service on Desmond.

[9]                 I have considered whether I should direct service on all the beneficiaries but do not consider that is required. The orders sought are administrative in nature and I note that a consent to the application has been filed by Desmond and Raywyn’s only other child, Blair Alister Cheyne.

[10]            Rule 4.30 of the High Court Rules 2016, requires Desmond to have a litigation guardian unless the Court orders otherwise. I am satisfied that it is unnecessary to appoint a litigation guardian. Raywyn and Nicola are already trustees and the purpose of the application is to make provision for his care. I am satisfied that the application is brought in the best interests of Desmond and that nothing would be gained from the appointment of a litigation guardian.

[11]            I am satisfied that Desmond is unable to carry out his role as a trustee. It is appropriate to make orders removing him as a trustee. Section 51 of the Trustee Act 1956 does not apply to this situation but the powers under that section co-exist with the Court’s inherent powers to remove and appoint trustees.2 His removal will relieve him of the burden of the trusteeship but also promote the efficient administration of the affairs of the Trust. The Court has inherent jurisdiction to remove a trustee without appointing another and in this case, I consider that appropriate.

[12]            Having decided to remove Desmond as a trustee, it must follow that an order should be made under s 52 of the Trustee Act vesting the Trust properties in Raywyn and Nicola as continuing trustees.

Orders

[13]I make the following orders:

(a)I grant leave for this proceeding to be by way of originating application;

(b)I dispense with service of the application on Desmond and the beneficiaries;

(c)Desmond is removed as a trustee of the Macetown Trust;

(d)The Trust properties at 2 Everton Road, Dunedin (Computer Freehold Register OT7D/1179) and 3 Adamson Drive, Queenstown (Computer Freehold Register OT5A/4) are to vest in Raywyn and Nicola as the continuing trustees of the Macetown Trust under s 52 of the Trustee Act 1956.

2      Powell v Powell [2015] NZCA 133 at [47].

[14]No costs were sought, and I do not make any order in respect of them.

O G Paulsen

Associate Judge