Cornes v Hirst
[2023] NZHC 2293
•22 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1110
[2023] NZHC 2293
UNDER sections 112 and 114 Trusts Act 2019 and the inherent jurisdiction of the High Court AND UNDER
Part 19 High Court Rules
IN THE MATTER
of the BELLE STOREY TRUST
BETWEEN
KATHRYN MAY CORNES, GREGORY GRAHAM CORNES, JORDAN WILLIAM CORNES AS BENEFICIARIES OF THE BELLE STOREY TRUST
Applicants
AND
JANETTE JOY HIRST AND CODYMO TRUSTEES NO 2 LIMITED AS
TRUSTEES OF THE BELLE STOREY TRUST
Respondents
On the Papers Counsel:
M Phillipps for Applicants
A Steele for First Named Respondent Janette Hirst
B P Thomas for Second Named Respondent Codymo Trustees No 2 LimitedJudgment:
22 August 2023
JUDGMENT ISAC J
[Application for removal and appointment of trustees]
CORNES& ORS v HIRST & ANOR AS TRUSTEES OF THE BELLE STOREY TRUST [2023] NZHC 2293
[22 August 2023]
Introduction
[1] The applicants are the beneficiaries of the Belle Storey Trust. They apply by way of originating application for orders removing the current trustees, Ms Jannette Hirst and Codymo Trustees No 2 Limited, and for the appointment of Comac Trustees Limited in their place.
[2] No opposition to the originating application was filed. Helpfully, the parties were able to reach agreement and, in a joint memorandum of 18 August 2023, sought orders in terms of the application, with the costs in the proceedings to be reserved pending agreement between the parties or, failing agreement, to be determined by the Court. In a Minute of 21 August 2023, I made the orders set out at [12](a)–(d) of the memorandum and indicated that a judgment setting out the reasons of my decision would follow. I now provide my reasons.
Jurisdiction
[3]Section 112 of the Trusts Act 2019 provides:
112 Court may make order for removal
Whenever it is necessary or desirable to remove a trustee and it is difficult or impracticable to do so without the assistance of the court, the court may make an order removing a trustee.
[4] Pursuant to s 114 of that Act, whenever it is necessary or desirable to appoint a new trustee, and it is difficult or impracticable to do so without the assistance of the court, the court may make an order appointing a new trustee.
[5] The statutory power exists alongside the court’s power to remove trustees and appoint trustees under its inherent jurisdiction to supervise and intervene in the administration of trusts.1
[6] Recent decisions on s 112 of the Trusts Act indicate that the expression “necessary or desirable” involves a broad fact-specific assessment and is directed to
1 Trusts Act 2019, s 8; Re Setter (as trustees of Central Hawkes Bay Consumers Power Trust) [2021] NZHC 1603 at [36]; Holland (as trustees of the Tauranga Energy Consumer Trust) v Jonkers [2021] NZHC 3469 at [100]–[102]; Ruby v Ruby (as trustees of the A Ruby Trust) [2022] NZHC 282 at [35]–[36]; and Whale v Silich [2022] NZHC 3339 at [19].
ensuring the efficient and proper administration of trusts.2 The interests of the beneficiaries are central to the exercise of the discretion:3
… if [the Court is] satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.
[7] Having considered the affidavit of Gregory Cornes in support of the application, and having regard to the agreement reached by all parties, I was satisfied that it is desirable to remove the respondent trustees and to appoint Comac Trustees Ltdin their place. In particular, I make orders:
(a)removing Janette Joy Hirst and Codymo Trustees No 2 Ltd as trustees of the Belle Storey Trust;
(b)appointing Comac Trustees Ltd as trustee of the Belle Storey Trust;
(c)pursuant to s 116 of the Act, vesting the trust property including the 1/3 share in the property at 150 Point Chevalier Road, Point Chevalier NA1027/2014 being Lot 2 Block II DP 8345 and the 1/2 share in the property at 1/108 Ocean View Road, Northcote NA30D/558 being Unit A and Accessory Unit A1 DP 75053 in Comac Trustees Ltd as trustee of the Belle Storey Trust;
2 See for example Aksinya Enterprises Ltd v Bhagirath [2022] NZHC 3526 (the trustees failed to discharge their obligations, one due to incapacity, the others through wilful neglect); Whale v Silich, above n 1 (complete breakdown in the trustees’ relationship resulting in the proper execution of the trust being frustrated); K v K [2020] NZHC 3123 (trustee failed to fulfil his obligations and engage with the other trustee which caused detriment to beneficiaries); and Client Trustee Services Ltd v Khodaverdi [2023] NZHC 1772 at [19] (a trustee left the country, took no steps in running the trust and ignored attempts to contact her; terms of trust deed meant she could not be removed without her consent; the trust simply could not function).
3 Whale v Silich, above n 1, at [21], citing Letterstedt v Broers (1884) 9 App Cas 371 (PC) at 386, and Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154 at [33]. See also Miller v Cameron (1936) 54 CLR 572 at 580–581, applied in K v K, above n 2, at [100], where Dixon J said: “The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee.”
(d)that the parties are to confer on costs in the proceedings and within 10 working days file a joint memorandum confirming any agreement regarding costs;
(e)that if the parties are unable to agree on costs in the proceedings the applicants are to file a brief memorandum of costs within a further 10 working days and the respondents to file a brief memorandum in response within a further 10 working days, with the Court to determine the issue on the papers.
Isac J
Solicitors:
Vicki Ammundsen Trust Law Ltd, Auckland for Applicants
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