Estate of MacDonald

[2025] NZHC 373

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-000838

[2025] NZHC 373

UNDER

the Trusts Act 2019 and Part 18 of the High Court Rules 2016

IN THE MATTER

of the Estate of ALICE MAY MACDONALD

BETWEEN

JOHN CAMERON MACDONALD of

Wellington, Company Director, SHONA MARIE CAMERON THODEY of Sydney,

Australia, Retired, DAVID INGLIS

THODEY of Sydney, Australia, Company Director and DEREK JOHN CRAZE of Nelson, Retired Chartered Accountant as trustees of the Estate of ALICE MAY MACDONALD

Applicants

AND

LYNDA FIONA CAMERON MORAN, ALICE CATH MORAN, CAMERON JOHN

MORAN as Beneficiaries of the Estate of ALICE MAY MACDONALD

First Respondents

AND

JENNIFER ELAINE BECK and CASTLE

TRUSTEES LIMITED as new Trustee to be appointed of the Estate of ALICE MAY MACDONALD

Second Respondents

Hearing:

(On the papers)

Counsel:

T J Brown and B F Maguire for Applicants J E Beck for First Respondents

W A Anglin for Second Respondents

Judgment:

4 March 2025

Re Estate of A M MacDonald [2025] NZHC 373 [4 March 2025]

JUDGMENT OF LA HOOD J

[1]                 The trustees of the estate of Alice May MacDonald (Alice) seek orders under ss 112 and 114 of the Trusts Act 2019 (the Act) removing them as trustees of the estate and appointing a professional trustee, Castle Trustees Limited (Castle Trustees), and a solicitor, Jennifer Beck, as trustees in their place.

[2]                 In the event the Court considers the trust is required to have a minimum of four trustees, the trustees also seek an order under s 130 of the Act varying the power of the trustees to appoint trustees.

Background

[3]                 Alice died at Wellington on 19 July 2021 and left a will dated 29 October 2010 (the will).

[4]                 Alice was survived by her three children  by  her  late  husband,  namely  John MacDonald (John), Shona Thodey (Shona) and Lynda Fiona Cameron Moran (Fiona). In terms of grandchildren, John and Shona both have three children and Lynda has two children.

[5]                 The estate has been administered through the distribution of gifts and legacies. Clause 9 of the will provides for the residue of the estate to be divided equally between Alice’s children as follows:

(a)one part to John’s Family Trust;

(b)one part to Shona; and

(c)the final part to Fiona as follows:

As to the remaining equal part to hold the same on trust to allow my daughter LYNDA FIONA CAMERON MORAN to have the free use, income occupation and enjoyment of it during her lifetime PROVIDED THAT my trustees may apply such part or parts of the capital of this part in or towards

Fiona’s maintenance and support as my trustees in their absolute and uncontrolled discretion consider to be necessary or desirable for her welfare AND on the death of my daughter Fiona to divide what remains of the capital and income of such part among such of her children as are living at her death and attain the age of thirty (30) years and if more than one in equal shares.

[6]                 With respect to the residue, equal parts have been distributed to John and Shona and the third equal part is held on trust for Fiona. Each of those shares is

$1,036,439.75. A sum of $250,000 has been retained for expenses and administration costs, the remainder of which will be distributed in accordance with the terms of the will as to the residue. Once the $250,000 has been distributed, the only share of the estate held in trust will be Fiona’s life interest.

[7]                 Given this situation, John, Shona, David and Derek wish to retire as trustees and propose that in their place Castle Trustees, a professional trustee, be appointed along with Jennifer Beck, who is Fiona’s solicitor.

[8]                 Although the trustees consider their retirement and appointment of new trustees is permissible under the will, as the will does not specify a requirement for a minimum number of trustees, the trustees have brought this application because they consider there is a degree of ambiguity in cl 2.2 of the will.

[9]                 This is because cl 2.2 contemplates John, Shona and David continuing as trustees and in the event that Derek and Peter pre-decease Alice or are unable or unwilling to act as trustees. It provides:

If both DEREK JOHN CRAZE and PETER WALLACE PHILLIPS shall predecease me or are unable or unwilling to act as my trustees then my son JOHN CAMERON MACDONALD, my daughter SHONA MARIE CAMERON THODEY and my son- in-law DAVID INGLIS THODEY, on completion of their executorship, shall appoint a fourth trustee of my estate to administer the ongoing trusts and I express the wish that the fourth trustee be a solicitor.

[10]                The trustees say the intent of the stipulation that there shall be a “fourth” trustee appointed alongside John, Shona and David (along with a wish that the fourth trustee be a solicitor) is that there be an independent trustee appointed alongside John, Shona and David. But they acknowledge that the clause could also be read to mean

that there must be at least four trustees of the estate. Given this ambiguity, orders are sought from the Court under ss 112 and 114 of the Act.

[11]              Castle Trustees has filed a memorandum of counsel confirming they do not oppose the orders sought.

[12]              Shona and the trustees of the John MacDonald Family Trust are represented and have filed a memorandum of counsel confirming they consent to the orders sought.

[13]              Jennifer Beck, in her capacity as counsel for Fiona and her two children, has filed a memorandum confirming that they consent to the orders sought. Ms Beck has also confirmed that she does not oppose the orders sought appointing her as trustee.

Decision and orders

[14]              Pursuant to ss 112 and 114 of the Act the Court has the power to make an order removing a trustee and/or to appoint a new trustee whenever it is necessary or desirable to do so and it is difficult or impractical to do so without the assistance of the Court, or in the case of appointment, provided it is not an appointment of an executor or administrator.

[15]              I accept the trustees’ submission that the Court can and should make orders under ss 112 and 114 of the Act because:

(a)The estate has been administered and the trustees are now acting in the capacity as trustees of the estate.

(b)Because of the ambiguity, it is appropriate for the Court to make the order for removal and appointment so as to provide certainty.

(c)Given the ambiguity, it would be difficult or impractical to remove the trustees and appoint new trustees without the Court’s assistance.

[16]I therefore make the following orders:

(a)An order under s 112 of the Act that John, Shona, David and Derek are removed as trustees of the estate.

(b)An order under s 114 of the Act appointing Castle Trustees and Jennifer Beck as trustees of the estate.

[17]              In addition, given the ambiguity in cl 2.2, for the avoidance of doubt, I accept that it is appropriate for the Court to also make an order under s 130 of the Act varying cl 2.2 as follows:

…on completion of their executorship, shall appoint [removal of “a fourth trustee” and replacement with] an alternative trustee of my estate to administer the ongoing trusts and I express the wish that the [removal of “a fourth trustee” and replacement with] alternative trustee be a solicitor. For the avoidance of doubt, this clause 2.2 does not impose any requirement to maintain a minimum number of trustees of my estate.

[18]              In accordance with s 130(1)(a), I accept the submission that it is appropriate to make that order for the proper management or administration of the trust because: the trustees wish to retire; to require a minimum of four trustees is burdensome; any replacement trustees required to meet a minimum requirement of four trustees will likely have to be professional trustees, increasing the administration costs of the trust; the proposed new trustees include an independent trustee and a solicitor; and it is not necessary for the proper management or administration of the trust property that there be a minimum of four trustees.

[19]              In accordance with s 130(1)(b) and (c), the variation does not alter a beneficiary’s interest under the trusts created by the will, nor does it involve a power to distribute trust property to a beneficiary.

[20]I also therefore make the following additional order:

(a)An order under s 130 of the Act to vary or extend the powers of the trustees under the trusts created by the will in the manner set out at [17] above.

La Hood J

Solicitors:

Saunders Robinson Brown, Christchurch for Applicants Jenny Beck Law, Dunedin for First Respondents

Will Anglin, Barrister and Director of Castle Trustees Limited