Harkness Henry Trust Management Limited - [2019] NZHC 2480

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-179

[2019] NZHC 2480

UNDER The Trustee Act 1956

IN THE MATTER

of the Ross Hamilton Sandford Trust

IN THE MATTER

of an application by Harkness Henry Trust Management Limited

BETWEEN

HARKNESS HENRY TRUST MANAGEMENT LIMITED

Applicant

Hearing: On the papers

Counsel:

KJ Matena for applicant

Judgment:

1 October 2019

JUDGMENT OF FITZGERALD J

[As to originating application for orders for removal of trustee, variation to Trust Deed and vesting land]

This judgment was delivered by me on [ ] at [ am/pm], pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Harkness Henry, Hamilton (S Rawcliffe)

Re Harkness Henry Trust Management Limited [2019] NZHC 2480 [1 October 2019]

[1] The applicant (HHTM) applies by way of originating application for an order removing Graeme Clark Sandford (Mr Sandford) as a trustee of the Ross Hamilton Sandford Trust (the Trust); vesting property held by the Trust in the name of HHTM as the remaining trustee; and varying the Trust Deed to give the power of appointment and removal to HHTM.

[2] The basis upon which the orders are sought is that in January 2019, Mr Sandford was determined to be mentally incapable and his enduring powers of attorney (in respect of property and personal care and welfare) were activated.

[3] Six out of the seven beneficiaries of the Trust have formally consented to the orders being made. The remaining beneficiary has been served with the relevant papers but has not filed any notice of opposition or taken any other step in the proceeding.

Factual background – more detail

[4] The Trust was created by Trust Deed by the settlor, Ross Hamilton Sandford, Mr Sandford’s brother. At the time the Trust was settled, the trustees were Mr Sandford and Ross Sandford himself.

[5]The beneficiaries of the Trust include:

(a)Ross Sandford, as primary beneficiary;

(b)Stella Sandford (Ross Sandford’s wife);

(c)Any of Ross Sandford’s children; and

(d)Any of Ross Sandford’s grandchildren.

[6] The Trust Deed was varied on 2 October 1998 to permit the Trust to have a minimum of one trustee.

[7] Ross Sandford passed away on 8 August 1999. By his will, he appointed his brother, Mr Sandford, and a partner of Harkness Henry Lawyers, Mr Warren Scotter, as the executors of his estate. Pursuant to the terms of the Trust Deed, upon Ross Sandford’s death, the power of appointment and removal of trustees devolved to his executors, namely Mr Sandford and Mr Scotter.1

[8] HHTM was appointed as a trustee of the Trust by way of a Deed on 15 October 1999. The Deed noted that HHTM was appointed a new trustee in place of Mr Ross Sandford. That then meant Mr Sandford and HHTM were the trustees of the Trust, which remains the position today.

[9] Sadly, by January 2019, Mr Sandford had been determined to be mentally incapable. Medical certificates invoking Mr Sandford’s powers of attorney (in respect…

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.

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Details

Case: [2019] NZHC 2480
Decision Date: 1 October 2019

CaseChat Overview and Summary

The High Court of New Zealand considered an application by Harkness Henry Trust Management Limited (HHTM) to remove Graeme Clark Sandford as a trustee of the Ross Hamilton Sandford Trust, to vest property held by the Trust in HHTM as the remaining trustee, and to vary the Trust Deed to grant HHTM the power of appointment and removal. The application was made on the basis that Mr. Sandford had been determined to be mentally incapable in January 2019, rendering him unfit to perform his duties as trustee. Six out of the seven beneficiaries had formally consented to the orders being made, and the remaining beneficiary had not opposed the application.

The court examined whether it had jurisdiction to remove a trustee and to vary the Trust Deed. It found that while the Trustee Act 1956 did not provide for the statutory removal of a trustee, the court had inherent jurisdiction to do so when it was in the welfare of the beneficiaries and the protection of trust property. The court also found it appropriate to vary the Trust Deed to give HHTM the power of appointment and removal, as this was not a variation of the Trust itself, but of an administrative provision.

In conclusion, the court made orders removing Graeme Clark Sandford as a trustee of the Ross Hamilton Sandford Trust, vesting the property identified by Certificate of Title 282797 in the name of HHTM as the remaining trustee, varying the Trust Deed to give HHTM the power of appointment and removal, and that the reasonable actual costs of the application be met by the Trust fund.

Orders