Doyle v Doyle HC Auckland M384-98

[2001] NZHC 330

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY M384-98

UNDER The Trustee Act 1956

AND UNDER The Declaratory Judgments Act 1908

IN THE MATTER of the G H DOYLE FAMILY TRUST

BETWEEN BARBARA FLORENCE DOYLE, BARBARA SUZANNE DOYLE, ELZABETH CARMEN DANIELS (NEE DOYLE), BENJAMIN BRUCE DOYLE and GARY VAUGHAN DOYLE
Plaintiffs

AND NATALIE JANE DOYLE
Defendant

Date of Hearing: 3 May 2001

Counsel: Mr B M Stainton for the Plaintiffs
Mr C W Bright for the Defendant
Mr K F Gould for Mr R M Doyle

Date of Judgment: 3 May 2001

ORAL JUDGMENT OF GLAZEBROOK J

Introduction

[1] This is an application for the appointment of the Public Trustee as an independent co-trustee of the G H Doyle Family Trust. The existing trustee, the defendant in these proceedings, does not consent to the appointment but equally does not oppose the appointment.

[2] The application was anticipated in an order of this court of 10 July 2000 which provided that at any time after December 2000 (if no agreement for sale and purchase conditional or otherwise has been entered into by that date in respect of the Albany property) or otherwise after 31 March 2000, or upon the completed sale of the property, whichever is the earlier, the plaintiffs may apply to the Court for the appointment of an independent trustee as co-trustee of the trust. This order was a consent order and it is therefore in accordance with this consent order that the defendant trustee does not oppose the application for the appointment of the independent professional co-trustee.

[3] In addition I understand that all of the plaintiffs, being five of the contingent beneficiaries of the G H Doyle Family Trust, agree with this application and the appointment of the independent co-trustee and in addition, Mr Benjamin Doyle, one of the beneficiaries who holds the power of appointment, also consents to and indeed supports this application.

Facts and Discussion

[4] The disagreement in respect of this application is on behalf of Mr Roland Doyle (represented by Mr Gould) who was a person ordered to be served with this application and who is the person holding the power of appointment of trustees jointly with Mr Benjamin Doyle. As such there is a disagreement between the persons holding the power of appointment as to the necessity of the appointment at this stage.

[5] It is to be noted that there would need to be an appointment of an independent trustee at some stage in the future, given that the present sole trustee, as a contingent beneficiary of the trust, cannot exercise discretions relating to distribution that would be necessary in the event that the property sells. As such Mr Roland Doyle agrees that an independent trustee would need to be appointed at some time in the future. The argument is that this is not necessary at this stage and, if it is necessary in the opinion of the plaintiffs, then the payment of that independent trustee should come out of any share that the plaintiffs have of the trust or be paid by them personally rather than coming out of any share that Mr Roland Doyle would have in the trust.

[6] The argument on behalf of Mr Roland Doyle is that the test in s 5l of the Trustee Act has not been met in that it is not expedient to appoint a new trustee although it is certainly inexpedient, difficult or impracticable to do so without the assistance of the court given that the two parties who have the power of appointment have failed to agree on the appointment of a new trustee.

[7] Looking at whether in fact a new trustee and an independent trustee should be appointed, and I understand there is no opposition as to the identity of that independent trustee should I decide that a new trustee should be appointed, the trust has at present an income beneficiary as well as contingent capital beneficiaries. There is a substantial asset, being land in Albany, worth possibly over $5M, but this property is a unique property in the centre of Albany and there have been some ten years of attempts to sell this property without success so far.

[8] While the trustee has had real estate help and legal help I understand that she is not herself conversant with business matters and, in any event the land being unique and being development land, there are very complicated issues in terms of the sale of such land. As such the submission was that an independent trustee with the type of experience that the Public Trustee has through its Specialist Trustee Services Unit would be very useful help to the present trustee in terms of ensuring that the best use of the land is made and hopefully ensuring that a sale will take place, if indeed after consideration the trustees decide that that is in the best interests of the trust and the beneficiaries.

[9] The further background in respect of this trust and the family is that there have been numerous appearances before the court and numerous difficulties within the family which do not seem to show much sign of abating. As such an independent trustee in order to help the existing trustee, who is a family member, navigate these difficult issues within the family which obviously impinge on the administration of the trust would be of major benefit.

[10] In addition, the defendant trustee does not oppose the application and I understand is, while not consenting, prepared to abide by the decision of the court and will work with the Public Trustee in the administration of the trust if the Public Trustee is appointed.

[11] I understand from Mr Stainton that the costs of the Public Trustee do not include any commission on a sale and would only include collection commission on income it is involved in collecting. As I understand the position the income in any event is collected by the defendant trustee and is minimal, at best only covering the expenses related to the property.

[12] The hourly costs of the Specialist Trustee Services Unit which would be the administration unit in respect of this property would be $225 per hour and it is indicated that the sale of the property would cost approximately $5,000 on the basis of an estimate of hours involved (which obviously will depend very much on the difficulties that there are in respect of the sale and the complications that might arise).

[13] On the other hand the employment of specialist help with an asset of this unique nature seems to me to be something that would be prudent in any event for the defendant trustee in the circumstances. It would probably be necessary to supplement real estate and legal help with some more specialist help. If this specialist help can be combined with the trustee services and will alleviate possibly some of the family difficulties by having an independent trustee involved, then this is all to the better.

[14] Mr Gould’s concern was that the property, being a unique property, could be sold for something other than its “true value”. Of course there is often a view among property holders that, if they wait longer, then someone will recognise the “true value” of land. In these circumstances having an independent person who has no stake in the trust assessing this and, it might be said assessing this in the light of the interests of both the capital and income beneficiaries, would be a useful addition.

Decision

[15] As such the Public Trustee is appointed in terms of s 5l of The Trustee Act as a new trustee to serve alongside the defendant trustee. The defendant trustee should make available to the Public Trustee all the records of the trust and any other material relating to the trust that she has in her possession. The costs of the Public Trustee will be paid in the normal manner out of the trust.

[16] There is, however, one matter that has arisen out of the affidavit of Mr Benjamin Doyle which relates to a debt allegedly owed by the trust to Cream Properties Limited, a company of Mr Roland Doyle. If any major expense is to be incurred in respect of this debt by the Public Trustee then directions of the Court should be sought and Mr Roland Doyle served with a copy of any application for directions.

Costs

[17] Having heard some submissions on cost there remains one matter as to jurisdiction. The plaintiffs are to file and serve a memorandum on this topic by 5:00pm, Thursday 10 May 2001. Mr Roland Doyle is to file and serve a memorandum in reply by 5:00pm, Thursday 18 May 2001. Any memorandum filed by the parties is to be in respect of jurisdiction only. Until this is done costs are reserved.