Hayes v Hayes

[2020] NZHC 569

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-00401

[2020] NZHC 569

UNDER

Part 19 of the High Court Rules and the Trustee Act 1956

IN THE MATTER

of the Hayes Family Trust

BETWEEN

HILTON ROSS HAYES and

SW TRUST SERVICES LIMITED

Applicants

AND

ELIZABETH MILLIGAN HAYES

Respondent

Hearing:	On the papers
Judgment:	19 March 2020
Reissued:	20 March 2020

JUDGMENT OF KATZ J

This judgment was delivered by me on 19 March 2020 at 3:00pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Simpson Western, Auckland

HAYES v HAYES [2020] NZHC 569 [19 March 2020]

Introduction

[1]                  Hilton Ross Hayes and SW Trust Services Limited are the trustees of the Hayes Family Trust (“Trust”). They seek orders vesting the title of a trust property in their names as the current trustees of the Trust.

Background

[2]                  The Trust was settled by deed dated 11 June 2002. The settlors of the trust were Hilton Ross Hayes and Elizabeth Milligan Hayes (husband and wife). The trustees were the two settlors, together with SW Trust Services Limited. The beneficiaries of the trust are Tracey Michelle Graham and Darryn Nikolai Hayes, the children of the settlors. The settlors each had the power to appoint trustees and remove trustees that they had appointed.

[3]The trust property comprised five properties, namely:

(a)The property situated at unit B 59-61 Bank Street, North Auckland, comprised in title Identifier NA104C/357.

(b)The property situated at unit C 59-61 Bank Street, North Auckland, comprised in title Identifier NA104C/358.

(c)The property situated at 7A Piemark Drive, North Auckland, comprised in title Identifier NA96C/228.

(d)The property situated at 41 El Dorado Leader, South Auckland, comprised in title Identifier SA21D/1174.

(e)The property situated at 9 Francis Street, South Auckland, comprised in title Identifier SA85/258.

[4]                  At the same time as settling the trust, Ms Hayes transferred her powers of appointment and removal to Mr Gary Graeme Simpson to exercise if she died or was permanently unable to use them. On or about 8 June 2015, Ms Hayes was diagnosed as having lost capacity. By way of deed of removal dated 3 March 2020, she was

removed as a trustee of the Trust by Mr Simpson and Mr Hayes. Ms Hayes, however, remains on the certificate of title of the property, which gives rise to the present application. The applicants seek:

(a)leave to bring the application as an originating application;

(b)an order dispensing with service on Ms Hayes; and

(c)a vesting order in respect of the trust property.

Leave to bring the application as an originating application

[5]                  This proceeding cannot be commenced by way of originating application as of right, pursuant to rr 19.2-19.4 of the High Court Rules. However, 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. It is well established that in a case like this, where there is in reality no opposing party, an originating application is appropriate.1 Such permission may be sought without notice, as is done here.2 In my view, it is appropriate to grant leave to bring the proceeding by way of originating application.

Leave to dispense with service

[6]  The established test is that service can be dispensed with for an ex-trustee in these circumstances where it would “serve no useful purpose”. Having considered the medical evidence relating to Ms Hayes’ capacity  I  am  satisfied  that  service  on Ms Hayes would serve no useful purpose.

[7]                  The orders sought do not change any of the beneficiaries’ rights and do not affect the obligations owed by the trustees to all beneficiaries. Likewise, they do not affect the entitlements that beneficiaries have with respect to the Trust or Trust

1      Re Mitchell [2020] NZHC 260 at [19]; Webb Farry Trustee Services Ltd v  Pringle  [2020] NZHC 256 at [11]; Sunde v Sunde [2019] NZHC 325; Re Hamertons Trustee Services Ltd [2018] NZHC 2720; Macpherson v Macpherson [2018] NZHC 240; and McKean v McKean [2017] NZHC 2212.

2      High Court Rules 2016, r 19.5.

Property.    It is not therefore necessary to serve them. I further note that the beneficiaries have provided written consent to the vesting order.

The vesting order

[8]                  Section 52(1) of the Trustee Act 1956 permits the vesting of land or interest therein in any such person, in any such manner and for any such estate or interest as the court may direct. Section 52(1)(b)(i) permits this where a trustee entitled to or possessed of land, either solely or jointly with another person, is under disability.3 Given Ms Hayes’ mental condition she has already been removed as a trustee. Accordingly, it is appropriate to now make orders vesting the relevant trust property in the remaining trustees. No beneficiaries’ rights will be affected by doing so.

Orders

[9]I make the following orders:

(a)leave is granted to bring the application as an originating application;

(b)service of the proceedings on Elizabeth Milligan Hayes and the beneficiaries of the Hayes Family Trust is not required; and

(c)vesting the properties comprised in title identifiers NA104C/357; NA104C/359; NA96C/228; SA21D/114; and SA85/258, currently registered in the names of Hilton Ross Hayes, Elizabeth Milligan Hayes, and SW Trust Services Limited, in the names of the current trustees, Hilton Ross Hayes and SW Trust Services Limited.

Katz J

3      Trustee Act 1956, s 2(2) provides that “[f]or the purposes of this Act a person shall be deemed to be under a disability while he is not of full age or full mental capacity.”