Geddes

[2020] NZHC 1640

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-412-000043

[2020] NZHC 1640

UNDER

Section 52 of the Trustee Act 1956

IN THE MATTER

of an application by WILLIAM LINDSAY GEDDES and JANETTE THELMA

MAWSON for an order vesting land in them in their capacity as the trustees of the Estate of WILLIAM HAMILTON GEDDES

Applicants

Hearing:	Determined on the papers
Counsel:	E J H Dalton for Applicants
Judgment:	10 July 2020

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 10 July 2020 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

An application by W L GEDDES and J T MAWSON for an order vesting land in them in their capacity as the trustees of the Estate of WILLIAM HAMILTON GEDDES [2020] NZHC 1640 [9 July 2020]

The application

[1]    The applicants are the present trustees of the estate of William Hamilton Geddes (Bill). They are seeking an order vesting a one-half share interest in a property at 10C Forfar Street, Mosgiel, Dunedin (the Forfar Street property) in their names in reliance upon s 52 Trustee Act 1956.

[2]    The applicants also apply on a without notice basis for orders of a procedural nature that:

(a)they be granted leave to bring this proceeding under Part 19 High Court Rules;

(b)dispensing with service on any person; and

(c)dispensing with the appointment of a litigation guardian for a former trustee, Thelma Agnes Geddes (Thelma).

Background

[3]    Bill died on 6 July 2016. Probate of his last will was granted on 11 September 2017 to his wife, Thelma, and son, William Lindsay Geddes (William). Under the will the executors/trustees were to hold the estate on trust to provide investment income to Thelma until her death. The residue was then to be divided equally to Bill’s children with substitutionary gifts to the grandchildren. Bill and Thelma had three children, namely the applicants and David John Geddes. All of the children are living and consent to this application.

[4]    At the time of his death, Bill owned a one-half share of a property at 23A Ashworth Street, Alexandra as tenants in common with Thelma. The Ashworth Street property was transferred into the names of William and Thelma as the executors/trustees of the estate.

[5]    In 2017, Thelma granted an enduring power of attorney in relation to property in favour of her three children.

[6]    In 2018, the Ashworth Street property was sold, and the Forfar Street property was purchased by Thelma and by Thelma and William as trustees of Bill’s estate as tenants in common. The Forfar Street property was purchased so Thelma could be closer to her family as her health was then deteriorating. Thelma resided in the Forfar Street property from March 2018 until April 2020.

[7]    By April 2020, Thelma was no longer able to live alone safely, and she moved into a residential care facility. The evidence satisfies me that by April 2020 Thelma was mentally incapable of making decisions regarding her personal care and welfare or in relation to her obligations as a trustee of the estate.

[8]    By Deed dated  9  June  2020 William  removed Thelma  as  a  trustee under  s 43(1)(f) of the Trustee Act 1956 and in her place the second-named applicant was made a trustee of the estate.

[9]    Since Thelma is no longer residing in the Forfar Street property the applicants are selling it but are unable to do so while Thelma remains registered as a trustee on the title. The inability to settle an agreement for the sale of the Forfar Street property will be a frustration and will result in ongoing costs and loss of income. For that reason, the applicants seek an order vesting the property in them under s 52 Trustee Act 1956. All of the children of Bill and Thelma consent to the application.

Discussion

[10]   This proceeding is not one that can be commenced by originating application as of right pursuant to rr 19.2 – 19.4 of the High Court Rules. The Court may, in the interests of justice, permit any proceeding not mentioned in rr 19.2 – 19.4 to be commenced by originating application. Permission may be sought on a without notice basis. Here, there is no opposing party and no need for detailed pleadings or interlocutory steps. The originating application procedure is appropriate, and I so order.

[11]   I am satisfied that Thelma is an incapacitated person for the purposes of r 4.29 High Court Rules 2016. Under r 4.30 an incapacitated person must have a litigation guardian appointed as his or her representative in any proceeding unless the Court

otherwise orders. Whilst the Court must proceed cautiously before dispensing with the appointment of a litigation guardian I am satisfied that it is appropriate in this case. I am satisfied that Thelma was lawfully removed as a trustee and therefore has no basis to argue the Forfar Street property should not vest in the applicants. The logical persons for appointment as Thelma’s litigation guardians are her children who all support this application. Furthermore, the relief that is sought is limited to the making of a vesting order and does not otherwise impact on Thelma’s interests. I do not see that the appointment of a litigation guardian will serve any useful purpose. In those circumstances, I make an order under r 4.30 that no litigation guardian be appointed.

[12]   I also dispense with service of the proceeding. The application is consented to by all of the children of Bill and Thelma and does not affect the substantive rights of any person under the will.

[13]   Under s 52(1)(a) Trustee Act 1956 the Court has the power to vest land in the applicants in the circumstances of this case. Once the Court accepts that Thelma has been validly removed as a trustee it must follow that the continuing trustees must be able to deal with the Forfar Street property in accordance with their duties. To ensure this is so I am satisfied that the vesting order sought is appropriate.

[14]   For completeness, I note that as there is no application to remove and replace Thelma as an administrator,1 I asked counsel for submissions on whether the proposed sale of the Forfar Street property involves the exercise of powers of executors rather than trustees. I was provided with detailed submissions that satisfy me following the sale of the Ashworth Street property and the investment of the proceeds Thelma and William ceased to be executors of Bill’s estate and an order removing Thelma as an executor is not necessary.

1      Administration Act 1969, s 21.

Orders

[15]I make orders as follows:

(a)this proceeding may be commenced by originating application under Part 19 High Court Rules 2016;

(b)service of the proceeding on any person is dispensed with;

(c)I dispense with the appointment of a litigation guardian in respect of Thelma Agnes Geddes;

(d)under s 52 of the Trustee Act 1956 the interest of William Lindsay Geddes and Thelma Agnes Geddes as trustees of the estate of William Hamilton Geddes as to a half share in the property at 10C Forfar Street, Mosgiel, Dunedin (comprised  in  Record  of  Title  807822,  Lot  1,  DP 517226) vests in the applicants as the continuing trustees of the estate of the said William Lindsay Geddes; and

(e)no order for costs is sought or made.

O G Paulsen Associate Judge

Solicitors:
Solomons, Dunedin