Hannagan v Hannagan

[2024] NZHC 542

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2024-412-25

[2024] NZHC 542

IN THE MATTER

of the B I Aitken Family Trust and the Estate of Beverley Aitken

BETWEEN

MARY LOUISE HANNAGAN, Trustee

Applicant

AND

MARY LOUISE HANNAGAN and PAUL

STAFFORD O’NEILL, as trustees of the B I Aitken Family Trust and proposed administrators of the estate of Beverley Irene Aitken

Respondents

Hearing:	(On the papers)
Counsel:	G A Paine for Applicant
Judgment:	14 March 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Directions as to service and appointment of Contradictor)

HANNAGAN v HANNAGAN [2024] NZHC 542 [14 March 2024]

[1]                  This proceeding concerns the estate  of  the  late  Beverley  Irene  Aitken  (Ms Aitken) and her Family Trust (the B I Aitken Family Trust) (the Trust). The Trust contains approximately $500,000.00 and the estate approximately $122,000.00.

[2]                  Ms Aitken died in November 2021. I am told that Ms Aitken’s Will left her entire estate to her two sisters who predeceased her. There is no gift over. Whether that means Ms Aitken died intestate or whether it means her Will can be admitted to probate so that the appointment of trustees and executors takes effect (albeit there will be a failure of the gifts so that ultimately there is an intestacy), is something I have not considered. Whether the point will be of significance is yet to be seen.

[3]                  The applicant, Ms Hannagan, and Mr Paul O’Neill are trustees of the Trust and I assume they are named as executors in Ms Aitken’s Will. I say ‘assume’ because the Will has not been produced.

[4]                  The  significance  is  that  pursuant  to   cl 21  of  the  Trust  Deed   (dated   20 February 2002), if no-one else named in cl 21 is alive to take up the role of advisory trustee, then the executor of Ms Aitken’s Will, if they elect to take up the office, becomes the advisory trustee. The significance of being advisory trustee is that under cl 23 of the Trust Deed the advisory trustee may appoint additional discretionary beneficiaries. Accordingly, the status of the Will and of the executors is important to whether cl 23 of the Trust Deed can apply.

[5]                  If the executors named in the Will of the late Ms Aitken  are  other  than Mary Hannagan and Paul O’Neill, then counsel, Mr Paine, is to advise me immediately.

[6]                  The primary beneficiary under the Trust was the late Ms Aitken and the secondary beneficiaries were her two late sisters. Accordingly, at the moment there are no beneficiaries of the Trust or the estate.

[7]                  It is clear the situation needs to be resolved. It is equally clear, however, that in the event there is an intestacy which is not resolved in the manner proposed by  the applicant, that there are other relatives of the late Ms Aitken who stand to take under the intestacy. However, it does not seem efficient to direct there be a full tracing exercise at this stage and all those potential beneficiaries served. Rather, I consider it better the Court appoint a Contradictor to assist the Court in respect of the various issues.

[8]                  Mr Paine may want to consider whether this is an appropriate case for the trustees to seek a blessing order given it appears the trustees are contemplating a final distribution of the estate.

[9]Accordingly, the following orders are made:

(a)There are directions as to service in terms of paragraph 1(i) of the application dated 7 March 2024. I note in Mr Paine’s memorandum, it is  suggested  that  Rebecca   Clarke,   Michael   Hannagan   and David Hannagan be served, but that is not what is sought in the application.

(b)I appoint Jim Guest, Barrister of Dunedin, as Contradictor. The Court has sent a copy of the papers to Mr Guest who has accepted appointment. Mr Guest’s fees will be paid from the Trust.

[10]              It seems to me the primary issue in relation to the Trust is whether the executors of Ms Aitken’s estate are able to elect to take up the role of advisory trustee and if so, how they will exercise their power under cl 23 of the Trust Deed.

[11]              The proceeding will be reviewed at a telephone conference by me at 3:00pm on Thursday 23 May 2024.

Associate Judge Lester

Solicitors:

Staley Cardoza Lawyers, Dunedin

Copy to counsel:
G A Paine, Barrister, Dunedin

Copy to Contradictor:

J C D Guest, Barrister, Dunedin