Guise v Guise

[2019] NZHC 3387

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2019-425-137

[2019] NZHC 3387

BETWEEN

GRAHAM THOMAS GUISE

Plaintiff

AND

DONALD ALEXANDER GUISE, GRAHAM THOMAS GUISE and JAN

ELIZABETH GUISE as trustees of the Donald Guise Trust

Defendants

Hearing:	18 December 2019 (On the papers)
Counsel:	R G R Eagles for Plaintiff
Judgment:	18 December 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 18 December 2019 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 18 December 2019

GUISE v GUISE [2019] NZHC 3387 [18 December 2019]

[1]                The parties to this proceeding are the original trustees of the Donald Guise Trust (“the Trust”). The Trust was established by a Deed dated 22 January 2009.

[2]                Donald Alexander Guise (“Donald”) was the settlor of the Trust. Donald, his daughter and his daughter’s children are the beneficiaries along with trusts of which they are beneficiaries and any charities nominated by the appointers, though none have been nominated.

[3]                I note that neither Graham Thomas Guise (“Graham”) or Jan Elizabeth Guise (“Jan”) are beneficiaries.

[4]                Graham is Donald’s brother. Graham is also the property manager and welfare guardian for Donald under orders of the Family Court. The fact that Graham holds those positions suggests Donald lacks capacity. Donald suffered in July 2013 what his medical practitioner describes as a devastating stroke. His medical practitioner confirms that Donald is unable to communicate or manage business or property affairs to any degree.

[5]                The Trust owns a property which has been essentially vacant since Donald’s stroke. Some of Donald’s chattels are still in the property. The trustees are confronting the need for decisions to be made about the property and ultimately having it cleared and, in all likelihood, sold. To put themselves into a position where they can deal with the Trust’s property, this application has been brought to have Donald removed as trustee of the Trust and the property vested in the remaining trustees.

[6]                Accompanying the application is an interlocutory application for directions as to service. It seeks that service be dispensed with so that the application can be dealt with on the papers.

[7]                As Donald is incapacitated, r 4.30 of the High Court Rules 2016 requires him to have a litigation guardian unless the Court orders otherwise. I am satisfied that in this case it is unnecessary to appoint a litigation guardian. In my view, nothing would

be gained from that appointment. Donald will remain a beneficiary of the Trust, indeed the terms of the Trust Deed are unaltered by this application.

[8]                It is clear from the medical evidence that Donald would not be able to understand the nature of this application. Nor, given Donald’s lack of capacity could it sensibly be suggested that he should remain as a trustee thereby leaving the Trust in a position where it cannot operate. I dispense with the need for a litigation guardian.

[9]                Similar considerations apply in relation to the issue of service. Donald’s daughter lives in Australia. Ultimately, getting the Trust into a position where it can operate will be to her benefit. Again, her rights in relation to the Trust are not altered by this application.

[10]            Accordingly, it is appropriate that there be an order that no other person be served. There are no grandchildren.

[11]            The application to remove Donald as a trustee is made under s 51 of the Trustee Act 1956 (“the Act”) or the Court’s inherent jurisdiction. Given no replacement trustee is sought for Donald, the s 51 jurisdiction cannot be invoked as the Court may appoint a new trustee either in substitution for or in addition to an existing trustee under s 51.

[12]            Section 51 co-exists with the Court’s inherent jurisdiction to remove and appoint trustees.1 The Court has an inherent supervisory jurisdiction to ensure that the terms of a trust are carried out.2 The jurisdiction exists in parallel with the Court’s statutory power under s 51 of the Act to appoint new trustees and derives from the Court’s powers in equity to supervise trusts for the welfare of beneficiaries.

[13]            This inherent jurisdiction permits the Court to make an order removing trustees where that step is necessary in order to protect the interests of beneficiaries. That step is necessary to here to restore the ability of the Trust to operate and is therefore in the interests of beneficiaries and will help ensure the security of the Trust property.

1      Powell v Powell [2015] NZCA 133, [2015] NZAR 1886 at [47].

2      Kite v Hodge [2014] NZHC 3025, (2014) 3 NZTR 24-024 at [40].

[14]            I am satisfied that it is in the best interests of the Trust and the beneficiaries to remove Donald as a trustee and there is an order pursuant to the Court’s inherent jurisdiction, removing Donald as a trustee of the Trust.

[15]            Under s 52 of the Act, the Court has the power to make vesting orders of land. Given what I have said about this application being necessary to permit the Trust to operate and having removed Donald as a trustee, it follows that a vesting order is appropriate.

[16]            Accordingly, there is an order vesting the property at 70 Rocks Highway, Riverton being an estate in fee simple being Lot 11 on Deposited Plan 3533 contained in Record of Title SL153/150 Southland Land Registration District in Graham Thomas Guise and Jan Elizabeth Guise as the continuing trustees of the Donald Guise Trust.

[17]No order as to costs is sought and so none is made.

Associate Judge Lester

Solicitors:

Eagles Eagles & Redpath, Invercargill