Dransfield v Dransfield
[2018] NZHC 1072
•16 May 2018
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2018-419-000065
[2018] NZHC 1072
UNDER the Trustee Act 1956 IN THE MATTER OF
Vesting orders (s 52)
BETWEEN
KEITH DRANSFIELD
Applicant
AND
JANET DRANSFIELD
Respondent
Hearing: 16 May 2018 Appearances:
S F Saud for the Applicant
No appearance for the Respondent
Judgment:
16 May 2018
Reissued:
17 May 2018
JUDGMENT OF JAGOSE J
This judgment is delivered by me on 16 May 2018 at 2.00 pm pursuant to r 11.5 of the High Court Rules.
.....................................................
Registrar / Deputy Registrar
Solicitors:
Beattie Rickman Legal Services Limited, Hamilton
DRANSFIELD v DRANSFIELD [2018] NZHC 1072 [16 May 2018]
Introduction
[1] The parties, Keith and Janet Dransfield, were settlors and trustees of the Dransfield Family Trust (the “Trust”) established by deed dated 16 March 2005 (the “Deed”).
[2] Properties in the Hamilton suburb of Pukete and in Waihi are registered in Keith’s and Janet’s names as trustees of the Trust (the “properties”). By the present application, Keith seeks to have the properties transferred from him and Janet to him and BRL Trustees 2018 Limited (“BRL”), as respectively former and current trustees of the Trust.
Background
[3] By deed dated 13 April 2016, Janet gave Keith enduring powers of attorney – exercisable in the event of her mental incapacity – over her personal care, welfare and property (the “EPOAs”).1
[4] Janet regrettably suffers cognitive impairment secondary to dementia. A health practitioner, Dr Sheryl Larsen, certified she had assessed Janet on 15 December 2017, to ascertain her mental capacity in terms of the EPOAs. In Dr Larsen’s opinion, Janet was mentally incapable for the purposes of the EPOAs, because she was not wholly competent to manage her own affairs in relation to her property.
[5] Given Janet’s mental incapacity, by deed of 9 February 2018, Janet was removed as trustee and replaced as trustee by BRL, in terms of the Deed’s clause 13.2.
[6] On 9 April 2018, Lang J granted Keith leave to commence this originating application under s 52 of the Trustee Act 1956, for an order vesting the properties in himself and BRL as trustees of the Trust.2 Section 52(1)(sb)(i) relevantly permits such vesting orders where a trustee entitled to possession of land “is under disability”.
1 The evidence in support of the application omitted the EPOAs. At my request, to ensure they dealt with the properties, the applicant’s counsel, Ms Saud, procured copies for my inspection.
2 Leave was necessary because the application is not expressly identified as one permitted to be brought by originating application: HCR 19.2.
Section 52(3) explains, where there is joint entitlement, the land is vested in the other person who remains entitled, either alone or together with any other person the Court appoints.
[7] In response to Keith’s application to dispense with service of the proceeding,3 on 2 May 2018, Edwards J directed the application be served on any other beneficiaries, which she was told was only Keith and Janet’s daughter, Kathryn Jane Dransfield.
The Trust’s beneficiaries
[8] The Deed defines the Trust’s “Final Beneficiaries” as meaning “the children now or hereafter born to” Keith and Janet, and principally defines its “Discretionary Beneficiaries” – in addition to Keith and Janet, and the Final Beneficiaries – as the Final Beneficiaries’ spouse, children, or grandchildren. The Deed defines ‘children’ to “include children by legal adoption as well as natural born children”.
[9] Kathryn’s affidavit sworn 4 May 2018 acknowledges service of the proceeding’s documents, which she read and considered, in conjunction with full discussion with Keith. Kathryn gives her “full support” to the application.
[10] Kathryn also explains, at the time the Trust was settled, she was Keith and Janet’s only child, by whom she had been adopted at six months of age.
[11] It is unfortunate the Deed identifies the Final Beneficiaries as “the children now or hereafter born to” Keith and Janet, which undermines the earlier definition of ‘children’ as including “children by legal adoption as well as natural born children”. The definition of ‘Final Beneficiaries’, strictly construed, would exclude Kathryn, as not ‘now or hereafter born to’ her parents.
[12] If anything turned on the point here, I would have construed the definition of ‘Final Beneficiaries’ as “now [of] or hereafter born to” Keith and Janet, for consistency with the earlier definition of ‘children’, and recognising Kathryn’s adoption by Keith
3 In reliance on Cunningham v Cunningham [2016] NZHC 1075 and Pickmere v Pickmere [2017] NZHC 2110.
and Janet at the time the Trust was settled. It seems unlikely Keith and Janet would have intended to acknowledge prospective adopted children of Final Beneficiaries as Discretionary Beneficiaries, while entirely excluding their own adopted child as beneficiary (whether Final, or Discretionary).
[13] However, for present purposes, if Kathryn is a beneficiary, she supports the application. If she is not, there is no evidence anyone else has an interest in the properties, or otherwise is required to be served.
Vesting orders
[14] I am satisfied – from the evidence of Janet’s removal as trustee, her continuing registered proprietorship of the properties, and her replacement by BRL – it is appropriate to make the orders sought.
[15] I order the properties contained in certificates of title SA12A/480 (Lot 17, DP 14035) and SA70C/164 (Lot 2, DP 88911) in the South Auckland Land Registration District are vested in Keith Dransfield and BRL Trustees 2018 Limited.
Postscript
[16] My original judgment at [5] recorded Keith in part exercised his powers under the property EPOA to remove and replace Janet as trustee. That would not have been possible,4 and I misunderstood the position. After discussion with counsel, I recalled and reissue my judgment in this form.
—Jagose J
4 Godfrey v McCormick [2017] NZHC 420, [2017] 3 NZLR 198 at [8] and following.
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