Hunter v Taylor
[2015] NZHC 922
•5 May 2015
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
CIV-2015-412-42 [2015] NZHC 922
UNDER the Trustee Act 1956 BETWEEN
CATHERINE GRACE HUNTER, JOHN ALEXANDER WILLIAMSON, JOHN GORDON RAYNER, EVELYN JOAN MCDOUGALL
Plaintiffs
AND
DOROTHY IRENE TAYLOR Defendant
Hearing: 5 May 2015
(On the papers)
Judgment:
5 May 2015
JUDGMENT OF MANDER J
[1] The plaintiffs are the trustees of the estate of Stanley James Taylor (the deceased). One of the plaintiffs, Evelyn Joan McDougall (Mrs McDougall) was appointed as trustee by deed under s 43 of the Trustee Act 1956 (the Act). She replaced the defendant, Dorothy Irene Taylor (Mrs Taylor) who was the wife of the deceased and who had been originally appointed as an executor and trustee of her husband’s will.
[2] Mrs Taylor was removed as a trustee and replaced by Mrs McDougall, a cousin of the deceased and close friend of Mrs Taylor, because of Mrs Taylor’s lack of mental capacity to act as trustee.
[3] The will of the deceased gave a life interest to Mrs Taylor in a property situated at 39C Ventry Street, Alexandra (the property),1 which was owned as tenants
in common as to one half shares by the deceased and Mrs Taylor.
1 Legal description being Unit F, and Accessory Unit F1, deposited plan 26273, OT18B/446.
HUNTER & ORS v TAYLOR [2015] NZHC 922 [5 May 2015]
[4] In accordance with the will, the deceased’s one half share in the property is now owned by the trustees and the other half share by Mrs Taylor personally. The will of the deceased provided for a life interest for Mrs Taylor’s use, occupation and enjoyment during her life. The will also provided that in the event of a sale of the property the proceeds were to be invested and the net income paid to Mrs Taylor during her life.
[5] In June 2012, Mrs Taylor moved from the property to become a resident at a residential facility in Fairlie because she needed 24 hour care. Subsequently, in July of that year, Mrs Taylor became a permanent resident at Sauthanjer Rest Home in Oamaru. This was because Mrs Taylor needed a secure facility as a result of her being assessed as requiring dementia 3 level of care. It is apparent that Mrs Taylor will not return to the property.
[6] As I have already observed, as a result of Mrs Taylor no longer having the mental capacity to make decisions and sign documents as trustee of the deceased’s will, the step was taken by the remaining trustees to remove Mrs Taylor as a trustee and replace her with Mrs McDougall. Mrs Taylor’s mental incapacity and inability to carry out the functions of a trustee was certified by a registered medical practitioner and specialist psychiatrist.
[7] The property has been left vacant since Mrs Taylor’s entry into the rest home. The property is incurring costs such as rates, insurance and maintenance upkeep. The trustees consider the best and most economic option for the benefit of Mrs Taylor and any final beneficiaries is to sell the property and invest both Mrs Taylor’s half share of the net sale proceeds and the trustees’ half share of the net sale proceeds to enable Mrs Taylor to be paid the income (or capital in the case of her own half share of the proceeds if required) so as to meet her needs and expenses.
[8] Mrs Taylor completed an Enduring Power of Attorney on 20 December 2010, prior to her losing mental capacity. Mr John Williamson and Mrs McDougall were appointed to act on Mrs Taylor’s behalf in respect of her property affairs in the event that she became mentally incapable.
[9] The trustees have placed the property on the market for sale. To enable the property to be transferred to a purchaser upon the completion of any sale, the attorneys of Mrs Taylor will complete the necessary documentation to effect the transfer of her half share of the property, which she owns personally, to the purchaser. However, a vesting order is required to vest Mrs Taylor’s interest as trustee in the property to the replacement trustee, Mrs McDougall. This is required so that the necessary documentation can be signed to enable the transfer from the trustees to a purchaser.
[10] As a result, the trustees have applied for a vesting order under s 52 of the Act to enable this to occur.
[11] Section 52 of the Act as relevant to the present circumstances provides as follows:
52 Vesting orders of land
(1) … in any of the following cases, namely -
(a) … where a trustee of any land or interest therein has been
appointed out of court under any statutory or express power:
...
the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.
…
[12] Associate Judge Matthews, on 4 May 2015, made orders dispensing with the service of the proceedings on Mrs Taylor, and the need for her to be represented by a litigation guardian or other representative. He further ordered that a notice of proceeding be dispensed with and that the matter be dealt with on the papers.2
[13] I have read the statement of claim for an order under s 52 of the Act and the affidavit of Mr John Williamson who was the lawyer for the deceased and
Mrs Taylor at the time of the completion of the deceased’s last will, and who acted
2 Hunter & Ors v Taylor HC Christchurch CIV-2015-412-42, 4 May 2015, minute of Associate
Judge Matthews.
for the executors and trustees of the deceased, and obtained probate. He has continued to act for them, and as one of the trustees is also one of the plaintiffs in this proceeding. I have also had the benefit of a memorandum of counsel in support of the application for directions in the name of the trustees’ solicitor, Ms Gillian Clarke.
[14] Having read the application and the accompanying materials, I am satisfied that a vesting order should be made to enable Mrs Taylor’s interest as trustee in the property to be vested in the name of the replacement trustee, Mrs McDougall. Accordingly, I make the following orders:
(a) An order under s 52 of the Trustee Act 1956 vesting Dorothy Irene Taylor’s interest as trustee in the land contained in OT18B/446 in the name of the replacement trustee, Evelynne Joan McDougall, so that the registered proprietors as to the one half share owned by the trustees shall be Catharine Grace Hunter, John Alexander Williamson, John Gordon Rayner and Evelynne Joan McDougall.
(b) That the costs of this application be met from the proceeds of sale.
Solicitors:
Checketts McKay Law Limited, Alexandra
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