Dempsey v Dempsey - [2020] NZHC 2251

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001416

[2020] NZHC 2251

UNDER Part 19 of the High Court Rules and the Trustee Act 1956

IN THE MATTER

of the DEMPSEY FAMILY TRUST

BETWEEN

MARY LYNNE DEMPSEY and SARAH JANINE KATZ

Applicants

AND

EDWIN FRANCIS DEMPSEY

Respondent

Hearing: On the papers

Judgment:

1 September 2020

JUDGMENT OF VENNING J

This judgment was delivered by me on 1 September 2020 at 9.00 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Simpson Western, Auckland

DEMPSEY v DEMPSEY [2020] NZHC 2251 [1 September 2020]

Introduction

[1] The Dempsey Family Trust (the Trust) was settled by Edwin Francis Dempsey (Ted) and Mary Lynne Dempsey (Lynne) in 2011. The original trustees were Ted, Lynne and their daughter Sarah Janine Katz (Sarah).

[2] The applicants are the current trustees of the Trust. They have made the following applications:

(a)a without notice interlocutory application seeking:

(i)permission of the Court to commence a proceeding by way of an originating application under Part 19 of the High Court Rules; and

(ii)an order dispensing with service of the originating application on Ted;

(b)a substantive originating application seeking a vesting order pursuant to s 52(1)(b)(i) of the Trustee Act 1956, vesting property registered in the names of the applicants and the respondent as trustees of the Dempsey Family Trust in the applicants as remaining trustees, following the removal of Ted as a trustee.

Background

[3] The settlors’ intention in establishing the Trust was to provide for both of them during their life and three of their five children after their deaths. The principal beneficiaries of the Trust are Ted, Lynne, and three of their children, Geoff, Christopher, and Tim. Their needs are greater than Ted and Lynne’s other two children, Simon and Sarah. Tim’s two children are also beneficiaries. Neither Geoff nor Christopher have children.

[4] The principal property of the Trust is a property at Kawau Island currently in the name of Ted, Lynne and Sarah as trustees. In addition the Trust has investments

held through the Milford Unit Trust PIE Funds. It owes a debt to Christopher, which is recorded by an acknowledgement of debt.

[5] Unfortunately Ted’s health has deteriorated to the point where he has lost mental capacity. He was assessed by Dr Alexander Joseph Srzich on 18 February 2020. Dr Srzich concluded that Ted was mentally incapable because he was not wholly competent to manage his own affairs in relation to his property. Ted suffers from a dementia, most likely a combination of Alzheimers disease and cerebrovascular disease. He is now severely cognitively impaired. His condition will not reverse and his cognition will not improve. Ted is currently in a secure dementia unit.

[6] Prior to the deterioration in his health Ted appointed Sarah as his attorney pursuant to an enduring power of attorney in relation to property dated 1 November 2017.

[7] Following Dr Srzich’s assessment, Sarah removed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dempsey v Dempsey

Details

AGLC: Dempsey v Dempsey [2020] NZHC 2251
Case: [2020] NZHC 2251
Decision Date: 1 September 2020

CaseChat Overview and Summary

The applicants, Mary Lynne Dempsey and Sarah Janine Katz, sought an interlocutory application without notice and a substantive application for a vesting order from the High Court of New Zealand. The applicants are the current trustees of the Dempsey Family Trust, which was settled by the applicants and the respondent, Edwin Francis Dempsey, in 2011. The original trustees were Ted, Lynne, and Sarah. The applicants seek permission to commence a proceeding under Part 19 of the High Court Rules and to dispense with service of the originating application on Ted due to his incapacity. They also seek a vesting order under the Trustee Act 1956 to vest property registered in their names and Ted's name as trustees of the Dempsey Family Trust in their names as remaining trustees, following the removal of Ted as a trustee.

The legal issues before the court were whether permission should be granted to commence the originating application under Part 19 of the High Court Rules without notice and whether service of the originating application on Ted should be dispensed with. The court also needed to determine whether it was appropriate to make a vesting order under the Trustee Act 1956. The court considered the settlors' intention in establishing the Trust, the principal property of the Trust, and Ted's health condition and incapacity. The court accepted that permission should be granted to commence the originating application under Part 19 as the application can properly be decided on the affidavit evidence and it is in the interests of justice for permission to be granted. The court also accepted it is appropriate to make an order dispensing with service of the originating application on Ted as service would likely confuse and upset him. The court held that it is appropriate to make the substantive order sought, vesting the land situated at 8 Elizabeth Point Road, Kawau Island in the names of Mary Lynne Dempsey and Sarah Janine Katz.

The court granted permission to commence the originating application under Part 19 of the High Court Rules without notice and dispensed with service on the respondent and any other party. The court also made an order pursuant to s 52(1)(b)(i) of the Trustee Act 1956 vesting the land situated at 8 Elizabeth Point Road, Kawau Island in the names of Mary Lynne Dempsey and Sarah Janine Katz.

Orders