FL Trustees 2012 Limited v Moore - [2019] NZHC 1588

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-35

[2019] NZHC 1588

UNDER Part 18 of the High Court Rules

AND

the Trustee Act 1956, section 52

BETWEEN

FL TRUSTEES 2012 LIMITED, MICHELLE GAYLENE MOORE and

WILLIAM JOHN MOORE as trustees of the Valerie Moore Family Trust

Plaintiffs

AND

VALERIE MARGARET MOORE

Defendant

Hearing: 9 July 2019

Counsel:

MP Ward-Johnson for plaintiffs

Judgment:

9 July 2019

(ORAL) JUDGMENT OF FITZGERALD J

Solicitors: Fenton McFadden, Te Puke (R McFadden)

FL Trustees 2012 Limited & Ors, as trustees of the Valerie Moore Family Trust v Moore [2019] NZHC 1588 [9 July 2019]

Introduction

[1] Mrs Valerie Moore was settlor and a trustee of the Valerie Moore Family Trust (the Trust). She was removed as a trustee when she became incapable of continuing to act as a trustee due to dementia. The new trustees now apply under s 52 of the Trustee Act 1956 (the Act) to vest trust property currently held by Mrs Moore and the first-named plaintiff (FL Trustees) in them instead.

Background

[2] The following background is taken primarily from the affidavit evidence of Mr McFadden, a director of FL Trustees and a solicitor who has previously acted for Mrs Moore.

Mrs Moore settled the Trust in 2012. The trust deed relevantly provides that:

(a)Mrs Moore has the sole power of appointment and removal of trustees;

(b)The beneficiaries of the Trust are Mrs Moore herself (as a preferred beneficiary), her children, her grandchildren, and her great- grandchildren; and

(c)There were two trustees, namely Mrs Moore and FL Trustees.

[4] Mrs Moore and FL Trustees are the registered proprietors of two parcels of land, which they hold as trustees of the Trust.

[5] Sadly, Mrs Moore has in recent times developed dementia. A General Practitioner, Dr John Almond, assessed her on 30 November 2017 and concluded that Mrs Moore lacked mental capacity with respect to both personal care and welfare, and property. He issued two Health Practitioners Certificates to that effect, which activated a power of attorney in relation to property in favour of Mrs Moore’s daughter Michelle and her son William, and a power of attorney in relation to personal care and welfare in favour of William.

[6] Given these developments, FL Trustees considered the position as to Mrs Moore’s ability to continue as appointer and trustee under the Trust’s trust deed. At this time, Michelle and William also agreed to be appointed as new trustees of the Trust.

[7] In light of Mrs Moore’s condition, a deed of retirement and appointment of new trustees was drawn up and executed by FL Trustees which records as follows:

(a)Mrs Moore ceased to hold her power of appointment by virtue of cl 12.2.1 of the Trust’s trust deed, which provides the appointer ceases to hold office when she becomes mentally incapable;

(b)The power of appointment accordingly passed to the continuing trustee, FL Trustees, as a result of the operation of s 43(1)…

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 FL Trustees 2012 Limited v Moore

Details

AGLC: FL Trustees 2012 Limited v Moore [2019] NZHC 1588
Case: [2019] NZHC 1588
Decision Date: 9 July 2019

CaseChat Overview and Summary

In the case of FL Trustees 2012 Limited and others, as trustees of the Valerie Moore Family Trust v Moore, the court was asked to determine whether the property held by the trustees should be vested in the new trustees, Michelle and William Moore. The case arose after Mrs Valerie Moore, who had settled the trust in 2012, became incapable of continuing to act as a trustee due to dementia. The court was required to decide if the property held by Mrs Moore and the first-named plaintiff, FL Trustees, should be vested in the new trustees instead. The legal issues involved interpreting the trust deed, determining Mrs Moore's capacity to act as a trustee, and whether the new trustees could be appointed and the property vested in them.

The court found that Mrs Moore was indeed mentally incapable, as confirmed by two Health Practitioners Certificates. This incapacity triggered the trust deed's provision that Mrs Moore would cease to hold her power of appointment and be retired as a trustee. The court held that the power of appointment passed to the continuing trustee, FL Trustees, pursuant to section 43(1) of the Trustee Act 1956. The court also found that Michelle and William were appropriately appointed as new trustees, and the property should vest in them. The court exercised its discretion not to appoint a litigation guardian for Mrs Moore, as it would have been an empty charade given her condition.

In conclusion, the court granted the vesting orders, vesting the property in the new trustees as requested. The orders effectively transferred the property from Mrs Moore and FL Trustees to Michelle, William, and FL Trustees as the continuing trustees. This decision ensures that the new trustees can properly carry out their duties and manage the trust property in accordance with the law.

Orders