Elaine Everitt Family Trust

[2019] NZHC 316

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2018-419-000364

[2019] NZHC 316

UNDER

Section 52 of the Trustee Act 1956 and Part 18 of the Court Rules

IN THE MATTER OF

An application for a vesting order in respect of land

AND

Elaine Dorothy Everitt and Brenda MacCormack as trustees of the Elaine Everitt Family Trust

Plaintiffs

Hearing:	On the papers
Judgment:	1 March 2019

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 01 March 2019 at 2.15pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:
Purnell Jenkinson Oliver, Thames

Elaine Dorothy Everitt and Brenda MacCormack as trustees of the Elaine Everitt Family Trust [2019] NZHC 316 [1 March 2019]

Introduction

[1]                 The applicants, Ms Elaine Everitt and Ms Brenda MacCormick, as trustees of the Elaine Everitt Family Trust (Trust), seek an order pursuant to s 52 of the Trustees Act 1956 vesting a property at 2/73 Randwick Crescent Moera, Lower Hutt (Identifier WN53C/335) (the Lower Hutt Property) in them as trustees.

[2]                 By affidavit sworn on 23 October 2018, Ms Everitt sets out the background to the application and exhibits relevant documents including historical and the current certificates of title to the property and the Trust Deed for the Trust.

[3]                 By affidavit sworn on 19 September 2018, Dr Malcolm McKercer has attested that Stephen Ernest Kahu Tauwhare, whom the application concerns, suffered a ruptured cerebral aneurism on 11 May 2009 and has little or no mental capacity, and that Dr McKercher does not believe there is any prospect of Mr Tauwhare regaining capacity in the future. Dr McKercher says Mr Tauwhare does not have any capacity to look after himself or make decisions regarding his legal or personal affairs.

Facts

[4]                 Ms Everitt entered into a relationship with Mr Tauwhare in 2005. Prior to their relationship Ms Everitt purchased the Lower Hutt Property.

[5]                 Ms Everitt wished to transfer the ownership of the Lower Hutt Property into a trust and established the Trust by way of trust deed dated 21 November 2005. At the inception of the Trust the two trustees were Ms Everitt and Mr Tauwhare.

[6]                 On 24 November 2005 Ms Everitt in her personal capacity entered into an agreement with Ms Everitt and Mr Tauwhare in their capacities as trustees of the Trust, for the sale and purchase of the Lower Hutt Property.

[7]                 On 30 November 2005, ownership of the Lower Hutt Property was transferred to Ms Everitt and Mr Tauwhare in their capacity as trustees.

[8]                 In January 2008 Ms Everitt and Mr Tauwhare entered into a loan agreement with Kiwibank, and personally borrowed $176,000 in their joint names. This loan was secured by way of a registered mortgage over the Lower Hutt Property.

[9]                 In 2008 Ms Everitt and Mr Tauwhare were married. However, in early 2009 they separated, and on 25 March 2009 they signed a Separation Agreement. This agreement stated that Ms Everitt would assume sole responsibility for repaying the Kiwibank loan facilities.

[10]             On 16 April 2009, in accordance with the process required under the Trust Deed, Mr Tauwhare signed a deed retiring as trustee and appointing Ms MacCormick as the new trustee of the Trust. Mr Tauwhare further signed an authority and instruction form, authorising the removal of his name as a registered proprietor of the Lower Hutt Property. Ms Everitt and Ms MacCormick also signed an authority and instruction form on 21 April 2009, anticipating the transfer of the Lower Hutt Property into their names, as trustees of the Trust.

[11]             Around this time Ms Everitt was trying to negotiate a new loan with the Bank of New Zealand so that she could repay the sum owed by her and Mr Tauwhare under the Kiwibank loan. However, Ms Everitt was made aware that repaying the Kiwibank loan would incur a large break fee which she could not afford. Accordingly, Ms Everitt deferred further action on repaying the Kiwibank loan early and having Mr Tauwhare removed from the title to the property.

[12]             On 11 May 2009 Mr Tauwhare suffered a ruptured cerebral aneurysm and as a result was permanently incapacitated. Following this event, the register of properties was never updated, meaning that Mr Tauwhare remains a registered proprietor of the Lower Hutt Property.

[13]             The applicants now desire to correct the register of properties so that the Lower Hutt Property can be borrowed against in order to repay the Kiwibank loan.

[14]             In a minute dated 05 February 2019, I granted orders dispensing with service, and declining to make further orders for representation, or appointment of a litigation guardian.

Analysis

[15]             The current issue for determination is whether this Court should grant orders vesting the Lower Hutt property jointly in Ms Everitt and Ms MacCormick as trustees of the Trust, pursuant to s 52 of the Trustee Act 1956.

[16]Section 52 of the act provides:

(1)Subject to the provisions of subsections (2) and (3), in any of the following cases, namely—

…

(b)where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person—

(i)is under disability;

the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.

[17]             I am satisfied that s 52(1)(b)(i) of the Trustee Act applies to the present circumstances. The current certificate of title for the Lower Hutt property shows that Mr Tauwhare’s name remains on the register for the Lower Hutt Property, bringing him within s 52(1)(b) as a trustee possessed of any land.

[18]             On the basis of Dr Malcom McKerchar’s affidavit I am also satisfied that   Mr Tauwhare is under a disability in terms of s 52(1)(b)(i) of the Trustee Act.

[19]             Prior to Mr Tuwhare suffering the cerebral aneurism, he was removed as a trustee in accordance with the Trust Deed, and Mr MacCormick was appointed in his place.

[20]             Given these circumstances it is appropriate that I make an order vesting the Lower Hutt Property in the trustees of the Trust. The vesting order will ensure that refinancing arrangements concerning the mortgage of the property can be arranged.

Orders

[21]I make the following order:

a) The property at 2/73 Randwick Crescent Moera, Lower Hutt, being Lot 2 Deposited Plan 85756 (Identifier WN53C/335) is vested in Ms Elaine Everitt and Ms Brenda MacCormick as trustees of the Elaine Everitt Family Trust.

G J van Bohemen J