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…

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.

Continue reading Katrina Trust

Details

AGLC: Katrina Trust [2018] NZHC 438
Case: [2018] NZHC 438
Decision Date: 14 March 2018

CaseChat Overview and Summary

In the matter of the Katrina Trust, Colin McGlashen and Christopher Patrick Eisdell Moore, as trustees, sought to remove Gaie McGlashen, a fellow trustee, from her position due to her progressive dementia rendering her incapable of acting as a trustee. The applicants sought leave to proceed by originating application, an order dispensing with service, and orders to remove Gaie McGlashen as a trustee and vest title to trust property in the continuing trustees. The court granted leave to proceed by originating application, dispensed with service, and removed Gaie McGlashen as a trustee, vesting title to trust property in the continuing trustees. The court found that the inherent jurisdiction allowed it to remove a trustee without appointing a new one, as there was no requirement for more than two trustees. The applicants did not seek a new trustee because they did not consider it necessary, and the settlor consented to the orders sought.

The legal issues the court had to decide were whether the applicants could proceed by originating application, whether service was required, and whether the court should exercise its inherent jurisdiction to remove Gaie McGlashen as a trustee without appointing a new one. The court held that the substantive applications were properly brought by originating application, and service was not required because Gaie McGlashen was mentally incapable and the settlor consented to the orders sought. The court found that it had the inherent jurisdiction to remove Gaie McGlashen as a trustee without appointing a new one, as there was no requirement for more than two trustees, and it was not necessary in the interests of the beneficiaries to have three trustees.

The court exercised its inherent jurisdiction to remove Gaie McGlashen as a trustee without appointing a new one, as she was mentally incapable and the settlor consented to the orders sought. The court found that it was not necessary to appoint a new trustee, as there was no requirement for more than two trustees, and the applicants did not seek a new trustee. The court held that the inherent jurisdiction allowed it to make an order removing Gaie McGlashen as a trustee and vesting title to trust property in the continuing trustees. The court found that the orders sought would not adversely affect the interests of beneficiaries, and the settlor consented to the orders sought.

In conclusion, the court granted leave to proceed by originating application, dispensed with service, and removed Gaie McGlashen as a trustee, vesting title to trust property in the continuing trustees. The court exercised its inherent jurisdiction to remove Gaie McGlashen as a trustee without appointing a new one, as there was no requirement for more than two trustees, and it was not necessary in the interests of the beneficiaries to have three trustees. The court found that the orders sought would not adversely affect the interests of beneficiaries, and the settlor consented to the orders sought. The applicants have leave to submit for sealing an order in an appropriate form that will facilitate vesting of title in the continuing trustees.

Orders