Katrina Trust

[2018] NZHC 438

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA TE ROTORUA-NUI-Ā-KAHU ROHE

CIV-2018-463-12

[2018] NZHC 438

UNDER

Part 19 of the High Court Rules; the Trustee Act 1956 and the inherent jurisdiction of the Court

IN THE MATTER

of the Katrina Trust

BETWEEN

COLIN McGLASHEN and CHRISTOPHER PATRICK EISDELL MOORE

Applicants

Hearing:	On the papers
Appearances:	AAM Kershaw for the Applicants
Judgment:	14 March 2018

JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 14 March 2018 at 4:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Ms AAM Kershaw, Hamertons, Solicitors, Whakatane

RE KATRINA TRUST [2018] NZHC 438 [14 March 2018]

[1]    There are applications for leave to bring a proceeding by originating application, for an order dispensing with service and, in the substantive application, for orders removing Mrs Gaie McGlashen as a trustee of the Katrina Trust and vesting title to trust property in the continuing trustees. The applicants are the other trustees of the Katrina Trust.

[2]    The substantive applications are properly brought by originating application. Leave is granted to proceed by originating application.

[3]    As to service, the only parties who might be served are, Mrs McGlashen, the settlor of the Trust, Mr Donal McGlashen, and the beneficiaries of the Trust.

[4]    I am satisfied that service is not required. The evidence establishes that Mrs McGlashen is suffering from progressive dementia and that she is mentally incapable. Mr Donal McGlashen, Mrs McGlashen’s husband, as settlor, consents to all of the orders sought in the application. Service on beneficiaries is not required because the orders sought will not adversely affect the interests of beneficiaries.

[5]    An application for an order for removal of Mrs McGlashen is made because there is no provision in the trust deed for removal of trustees. I am satisfied that the order should be made and for the reason already recorded in respect of Mrs McGlashen’s dementia. Unfortunately she is no longer capable of acting as a trustee. The evidence in this regard is from a medical practitioner together with what is implicit in the consent from Mr Donal McGlashen.

[6]    The application is for an order that Mrs McGlashen be removed without appointment of a new trustee. Section 51 of the Trustee Act 1956 makes provision for the Court to remove a trustee, but that power can only be exercised if the Court also appoints a new trustee.1 The applicants do not seek an order for appointment of a third trustee because they do not consider it is necessary and because there is no requirement in the trust deed for more than two trustees. In consequence, the applicants submit that the Court should exercise its inherent jurisdiction (or inherent power) to remove Mrs McGlashen.

1      KAMG v STG [2013] NZHC 1767 at [73].

[7]    The Court does have power, within its inherent jurisdiction, to make an order removing Mrs McGlashen.2 I am also satisfied that the jurisdiction should be exercised in this case given the circumstances already recorded. I am also satisfied that it is not necessary in the interests of the beneficiaries for there to be three trustees.

[8]    Mrs McGlashen, and the applicants, are the registered proprietor of several pieces of land, or interests in land, which are Trust assets. On Mrs McGlashen’s removal as a trustee it is appropriate to make a further order, pursuant to s 52 of the Trustee Act 1956, vesting the land or interests in land in the applicants as continuing trustees.

Result

[9]There are the following orders:

(a)Granting leave to proceed by originating application.

(b)Dispensing with service of the proceeding on Gaie McGlashen, Donal McGlashen and the beneficiaries of the Katrina Trust

(c)Removing Gaie McGlashen as a trustee of the Katrina Trust.

(d)Vesting title to the land or interests in land contained and described in the following certificates of title in the continuing trustees, Colin McGlashen and Christopher Patrick Eisdell Moore; namely, certificates of title 303859; NA128C/466; SA50D/423; SA50D/424; SA50D/425; SA50D/426; SA50D/427; SA50D/428; SA50D/937; SA50D/938; SA50D/939; SA50D/940; SA56A/565.

2      Authorities are noted in KAMG v STG, above n 1, at [76]-[84], and with a conclusion at [85] that the jurisdiction includes power to order the removal of a trustee although it was not exercised in that case. An order pursuant to the inherent jurisdiction removing a trustee was made in McCallum v McCallum [2017] NZHC 1218; see [13]-[16] and [21].

[10]   In respect of order (d), the applicants have leave to submit for sealing an order in an appropriate form that will facilitate vesting of title in the continuing trustees.

Woodhouse J