Judena Family Trust - [2020] NZHC 2119

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-203

[2020] NZHC 2119

UNDER the Trustee Act 1956

UNDER

Part 19 of the High Court Rules

IN THE MATTER

AND

of THE JUDENA FAMILY TRUST

IN THE MATTER

of an application by DARRELL BRYCE HOLLINSHEAD and STEVEN BRUCE

THOMPSON as trustees of the JUDENA FAMILY TRUST for vesting orders Applicants

Hearing: On the papers

Counsel:

M Phillipps for the Applicants

Judgment:

21 August 2020

JUDGMENT OF GORDON J

This judgment was delivered by me on 21 August 2020 at 10 am, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Vicki Ammundsen Trust Law Ltd, Auckland

Re THE JUDENA FAMILY TRUST [2020] NZHC 2119 [21 August 2020]

Introduction

[1] The applicants, Darrell Hollinshead (Darrell) and Steven Thompson, as trustees of the Judena Family Trust (the trust) seek an order under s 52 of the Trustee Act 1956 (the Act) vesting two properties owned by the trust in them as continuing trustees.

[2] They also seek associated orders permitting commencement of this proceeding by way of originating application and dispensing with service of this proceeding.

Background

[3] Darrell is the settlor and a trustee of the trust settled by a deed dated 31 August 2006 (the trust deed). The other two trustees named in the trust deed are Darrell’s father, Peter Hollinshead (Peter) and a long-standing friend of Darrell’s, Steven Thompson.

[4] Peter was removed as a trustee of the trust by a deed dated 28 July 2020 pursuant to powers in the trust deed. This followed an assessment of Peter by Dr Joshua Perrett, on 15 July 2020. Dr Perrett’s opinion is that Peter is not competent to manage affairs in relation to property or finances. This mental incapacity is due to dementia which is likely to continue indefinitely.

[5] The trust is the owner of two properties at 4 Pokuru Road and 16 Pokuru Road, Te Awamutu (the trust properties). The trust properties remain registered in the names of the three original trustees.

[6] The applicants wish to transfer the trust properties to themselves as continuing trustees of the trust. As a result of his incapacity, Peter is unable to effect a transfer and the applicants therefore seek orders vesting the two properties in their names.

[7]The trust deed provides that the minimum number of trustees is two.

[8] The trustees have entered into an agreement for sale and purchase of the property at 16 Pokuru Road, Te Awamutu. The settlement date was scheduled for

22 July 2020. The applicants require the order so they can transfer the title to the purchasers and settle the sale.

[9] Before turning to the matter of the vesting order, there are prior matters I need to address.

Should permission be granted to commence the proceeding by way of originating application?

[10] This proceeding is not of a kind that can be commenced by way of originating application as of right,…

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: [2020] NZHC 2119
Decision Date: 21 August 2020

CaseChat Overview and Summary

In this case, Darrell Bryce Hollinshead and Steven Bruce Thompson, as trustees of the Judena Family Trust, applied for vesting orders to transfer two properties owned by the trust to themselves as continuing trustees. The application was heard by Gordon J in the High Court of New Zealand. The primary legal issue was whether the court should allow the proceeding to be commenced by way of an originating application and dispense with service on the other trustees and beneficiaries. The court considered whether the proceeding could be initiated without notice, if service on the incapacitated trustee should be dispensed with, and if the beneficiaries needed to be served.

The court found that the proceeding could be initiated as an originating application in the interests of justice, as it involved no opposing party with contrary interests. Dispensing with service on the incapacitated trustee was appropriate as he was unable to understand or participate in the proceedings. Service on the beneficiaries was also unnecessary as the orders did not affect their rights. The court then addressed whether the trust properties should be vested in the applicants. Given the incapacity of one trustee, the court concluded that vesting the properties in the continuing trustees was appropriate. The court made orders permitting the proceeding to be commenced by way of an originating application, dispensing with service on the incapacitated trustee and beneficiaries, and vesting the properties in the continuing trustees.

The court ordered that the proceeding could commence by way of an originating application without notice, service on the incapacitated trustee and beneficiaries could be dispensed with, and the trust properties be vested in the continuing trustees. The court also authorized the transfer of the properties and directed that the costs be met from the trust's funds.

Orders