Fletcher v Fletcher

[2019] NZHC 511

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-17

[2019] NZHC 511

UNDER

the Trustee Act 1956 and the High Court’s Inherent Jurisdiction

BETWEEN

MURIEL MARJORIE FLETCHER

Applicant

AND

ROBERT ERNEST FLETCHER

Respondent

On the papers
Appearances:	S Gyenge for Applicant
Judgment:	5 April 2019

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 5 April 2019 at 5.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

FLETCHER v FLETCHER [2019] NZHC 511 [8 April 2019]

Introduction

[1]    Muriel Marjorie Fletcher (“Muriel”), her husband Robert Ernest Fletcher (“Robert”) and D Arnold Trustee Limited (“DATL”) are the trustees of the Murrob Family Trust (“the Trust”), established by a deed of trust dated 27 September 2002. In that capacity, they are the registered proprietors of a residential property at 14 Pirika Place, Papamoa near Tauranga; that is, the land contained in Record of Title Identifier SA68D/583 South Auckland, being Lot 32 on Deposited Plan South Auckland 87031 (“the Land”).

[2]    In a report dated 17 September 2018, Dr Diane Hanfelt-Goade, a registered medical practitioner, says that Robert suffers from a progressive advanced dementia due to multiple cerebral infarcts and vascular dementia. He is also suffering from brain haemorrhages resulting from strokes and falls. Robert is said by Dr Hanfelt- Goade to be no longer oriented to person, place or time. He is unable to give his full name or date of birth; lacks insight; has very poor short-term memory; does not remember conversations and cannot process new information. Dr Hanfelt-Goade’s opinion is that Robert is mentally incapable in that he lacks the capacity to make a decision about his personal care and safety, his day-to-day living requirements and his health-care.

[3]    Muriel seek orders removing Robert as a trustee of the Trust and vesting the Land in DATL and her as the remaining trustees.

Application for leave to commence the proceeding by originating application and directions as to service

[4]    This is not the type of proceeding that can be commenced by way of originating application as of right pursuant to rr 19.2 to 19.4 of the High Court Rules 2016. However, the Court may, in the interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application. Such permission may be sought without notice.1 Muriel seeks leave to bring this proceeding as an originating application under Part 19 of the High Court Rules 2016, and she has asked that the application be determined on the papers without service on Robert or any other person.

1      High Court Rules 2016, r 19.5.

[5]The final beneficiaries of the Trust are Muriel’s and Robert’s sons:

(a)Wayne Robert Fletcher (“Wayne”);

(b)Jeffrey David Fletcher (Jeffrey”); and

(c)Gavin Colin Fletcher (“Gavin”).

[6]The discretionary beneficiaries of the Trust are:

(a)Muriel and Robert;

(b)the final beneficiaries; and

(c)any child or grandchild of the final beneficiaries.

[7]    Wayne, Jeffrey and Gavin consent to the making of the orders sought and do not require service. There is no point in serving the proceeding on Robert. Moreover, because the proceeding does not involve any disputed questions of fact and there is no opposing party, it is not necessary in the interests of justice for there to be a particularised pleading or to follow the usual interlocutory steps involved in a civil proceeding.

[8]    I am satisfied, therefore, that it is appropriate that this proceeding proceed by way of originating application and that service of the proceeding be dispensed with.2

Removal of a trustee without substitution

[9]    There is authority for the removal of a trustee in s 51(1) of the Trustee Act 1956 which provides:

The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

2      See McKean v McKean [2017] NZHC 2212, (2017) 4 NZTR 27-019 at [10]; Re Hetrick [2017]

NZHC 472, (2017) 4 NZTR 27-006 at [5] and [6].

[10]   I am satisfied that, given Robert’s incapacity, the assistance of the Court to remove him is expedient. Since the other trustees remain competent to administer the Trust’s affairs, however, and there is no requirement in the trust deed for more than two trustees, the appointment of a new trustee is not sought. It follows that the power of removal in s 51(1) cannot apply.3 Nevertheless, the Court may exercise its inherent jurisdiction to order the removal of a trustee without substitution.4 This jurisdiction is ancillary to the Court’s principal duty to see that a trust is properly executed.5 The use of the power to remove is appropriate in this case.

Vesting of property

[11]   Section 52(1)(b)(i) of the Trustee Act permits the vesting of land or interest therein, in any such person or any such manner as the Court may direct, where a trustee entitled to or possessed of land, either solely or jointly with another person, is under disability. Section 2(2) of the Act provides that “a person shall be deemed to be under a disability while he [or she] is not of … full mental capacity”.

[12]   With the removal of Robert as a trustee, the Trust assets (including the Land) will remain in the ownership of the remaining trustees. No order of the Court is required for that purpose. An order vesting the Land in the current trustees is expedient, however, because the Registrar-General of Lands will not recognise their ownership of the Land, to Robert’s exclusion, without it. The Court is aware that the Registrar-General routinely accepts Court orders vesting properly identified land in trustees as sufficient proof of ownership to record appropriate changes to certificates of title.

Findings and orders

[13]I am satisfied on the affidavit evidence filed that:

(a)Robert no longer has the capacity to fulfil his duties as registered proprietor or to facilitate the transfer of the title in the Land to the Muriel and DATL.

3      Anderson v Anderson [2013] NZHC 1767, (2013) 3 NZTR 23-008.

4      Wallace v Naknok [2012] NZHC 382, (2012) 3 NZTR 22-005 at [7].

5      Hunter v Hunter [1938] NZLR 520 (CA) at 529; cited with approval in Powell v Powell [2015] NZCA 133, (2015) 4 NZTR 25-020 at [47].

(b)Robert should be removed as a trustee.

(c)The Land should be vested in the remaining trustees under s 52 of the Trustee Act.

[14]Accordingly, I order:

(a)The proceeding may be commenced by originating application under Part 19 of the High Court Rules 2016 and service of the proceeding on any person shall be dispensed with.

(b)Robert Ernest Fletcher is removed as a trustee of the Murrob Family Trust.

(c)Under s 52(1)(h) of the Trustee Act 1956, the land comprised in Record of Title Identifier SA68D/583 South Auckland, being Lot 32 on Deposited Plan South Auckland, shall be vested in Muriel Marjorie Fletcher and D Arnold Trustee Limited to be held by them as trustees of the Murrob Family Trust.

...................................................

Toogood J