Hughes

[2018] NZHC 3420

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-838

[2018] NZHC 3420

IN THE MATTER OF	Section 52 Trustee Act 1956
AND
IN THE MATTER OF	an application by Murray Roy Hughes of Whanganui, as Trustee of the Walker Family Trust, for a Vesting Order

Hearing:	on the papers
Judgment:	19 December 2018

JUDGMENT OF CULL J

[1]    The applicant, Murray Hughes, applies for orders under Part 18 of the High Court Rules 2016 for orders that service of the proceedings on Kathleen Martha Walker, the former trustee, be dispensed with, on the basis that Kathleen Walker lacks the capacity to understand the nature and purpose of these proceedings, and that the person who holds enduring powers of attorney for Kathleen Walker is one of the trustees in whom it is sought that the property vest.

[2]    Orders are then sought under s 52 of the Trustee Act 1956, vesting the property at 2A Devon Road, Springvale, Whanganui, in the joint names of Murray Hughes and Kylie-Anne Maree Briggs, the current trustees of the trust. An order removing Kathleen Walker as a trustee is also sought.

[3]    By deed date of 25 February 2004, Kathleen Walker, the defendant, established a trust known as the Walker Family Trust. The trust deed named the settlor, Kathleen Walker and Murray Hughes as trustees.

HUGHES AS TRUSTEE OF THE WALKER FAMILY TRUST [2018] NZHC 3420 [19 December 2018]

[4]    Kathleen Walker, the settlor, trustee and appointor, has been mentally incapacitated since 7 November 2017, and suffers from cognitive decline and senile dementia, lacks mental capacity, and is unable to act as a trustee. Because of her incapacity, the trustees are unable to deal with real estate owned by the trust.

[5]    By deed date of 5 October 2018, Murray Hughes, as the continuing trustee, appointed a daughter of Kathleen Walker, Kylie-Anne Maree Briggs, as an additional trustee, pursuant to s 43 of the Trustee Act.

[6]    Murray Hughes now brings these proceedings, as it will be necessary for the trust’s interests in the Devon Road property, to vest in the names of the continuing trustee and the new trustee, in order to realise the principal trust asset and manage the liabilities of the trust.

[7]    On the initial filing of these proceedings and the application for directions as to service, Grice J directed a senior lawyer be nominated to act in the interests of Kathleen Walker, with service being effected on the nominated lawyer, who was directed to provide a report to the Court on Ms Walker’s mental capacity and present circumstances.1

[8]    Ms Lisa Hansen, barrister, was appointed and attended on Ms Walker and the rest home manager of Kapiti Rest Home, where Kathleen Walker now resides. From the information she gathered, Ms Hansen reported that Kathleen Walker lacks full mental capacity and is unlikely to regain it. From Counsel’s report and the report of Kathleen Walker’s GP, it is clear that, while in good physical health, Kathleen Walker has significant and progressive dementia, lacks competence to manage her affairs for a property, lacks competence to continue to act as a trustee, and will not recover competence. Ms Hansen recommended that Kathleen Walker be removed as trustee and the Devon Road property vest in the remaining trustees.

[9]    Kylie-Anne Briggs is Kathleen Walker’s daughter and is one of her three children, who all consented to the appointment of their sister as an additional trustee.

1      Hughes v Walker HC Wellington CIV-2018-485-838, 8 November 2018 (Minute of Grice J).

Their consents are attached to the affidavit filed by Murray Hughes in support of the statement of claim.

[10]   Kylie-Anne Briggs described to Ms Hansen the reason for the trust needing to sell her mother’s Devon Road property, as the rates and insurance costs have increased and there are limited funds in her mother’s account to cover these costs. In addition, Kylie-Anne Briggs said she had to occupy the property every few weeks as a condition of the insurance policy. She reported that she found the regular travel from Paraparaumu Beach to Whanganui was causing her stress and strain.

[11]   I am satisfied that it is appropriate that Kathleen Walker be removed as a trustee, because she lacks the capacity to undertake the role or to understand the nature and purpose of these proceedings. I note her daughter, Kylie-Anne Briggs, as the appointed replacement trustee, holds enduring powers of attorney for her mother. It is also appropriate that an order is made, vesting the trust property in the current trustees of the trust.

[12]I therefore make the following orders:

(a)Service of the proceedings on the defendant, Kathleen Martha Walker, is dispensed with.

(b)Kathleen Martha Walker is removed as a trustee.

(c)The property at 2A Devon Road, Springvale, Whanganui, contained in Certificate of Title WN21B/158, is to be vested in the joint names of Murray Roy Hughes and Kylie-Anne Maree Briggs, being the current trustees of the Walker Family Trust, under s 52 of the Trustee Act.

Cull J