Lafferty v Lafferty

[2018] NZHC 3138

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-334

[2018] NZHC 3138

UNDER

Part 19 of the High Court Rules and section 52 of the Trustee Act 1956

IN THE MATTER

of an application pursuant to section 52 for a vesting order to be made

BETWEEN

BRENDON JOHN LAFFERTY AND

LEWISLEGAL TRUSTEES LIMITED AS TRUSTEES OF THE J B LAFFERTY

TRUST
Applicants

AND

JOAN BARBARA LAFFERTY

Respondent

Hearing:	On the papers
Counsel:	J Robinson for the Applicants
Judgment:	30 November 2018

JUDGMENT OF MUIR J

This judgment was delivered by me on Friday 30 November 2018 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:………………………….

Solicitors:
J Robinson, Lewis Lawyers, Cambridge.

LAFFERTY v LAFFERTY [2018] NZHC 3138 [30 November 2018]

Introduction

[1]    The applicants are the two remaining of the original three trustees of the       J B Lafferty Trust. They seek an order under s 52 of the Trustee Act 1956 vesting a property at 5 Mansfield Street, Cambridge in their names. The third trustee was Joan Lafferty (Joan) who is the mother of the first named applicant, Brendon Lafferty (Brendon). Joan was also the settlor of the Trust and has the sole power of appointment and retirement of trustees pursuant to the relevant Trust Deed. Joan is now severely disabled. She has advanced dementia together with heart disease and chronic obstructive lung disease. The medical evidence confirms that she does not have mental competence to sign any documents pertaining to the Trust property.

[2]    On 25 September 2000 Joan executed an enduring power of attorney in favour of Brendon. However, as deposed to by the Trust’s Solicitor Mr Makgill, Land Information New Zealand does not allow for a transfer to be signed under an enduring power of attorney for a trustee. That conforms with the advice this Court has received in many previous such cases.

[3]    Joan has now been removed as a trustee in exercise of the powers contained in cl 8.3 of the Trust Deed which provides that, in the event of incapacity, the Settlor’s powers may be exercised by her Attorney pursuant to any enduring power.

The applications

[4]The applicants seek orders:

[a]permitting the proceeding to be commenced by way of originating application;

[b]dispensing with service of the application; and

[c]substantive orders vesting the Trust’s Cambridge property in the applicants.

Discussion

[5]    I am satisfied that the matter is appropriately commenced by way of an originating application. Such permission is routinely given in cases such as the present having regard to the limited scope of the matters in issue and the absence of any requirement for interlocutories.

[6]    I am similarly satisfied that service may be dispensed with, both in respect of the respondent and the discretionary beneficiaries of the Trust. As to the respondent, I am satisfied that she does not have the capacity to understand the proceedings. I accept also that she may become distressed if service is effected on her. As to the discretionary beneficiaries, these include the first named applicant, his siblings and Joan’s eight grandchildren aged between 17 and 33. Brendon deposes that all of the discretionary beneficiaries are aware that the application has been made and the Trust’s solicitor Mr Simon Makgill in turn deposes that he believes all such discretionary beneficiaries consent to it.

[7]    The asset which it is proposed be vested in the continuing trustees has a valuation of $455,000. The Trust has no cash reserves. I agree that in that context, and having regard to the discretionary nature of the beneficiaries’ interest, service on them would be unduly burdensome and should not be required. In any event, the proposed orders do not affect the obligations that the trustees have to all beneficiaries or the rights on entitlements that the beneficiaries have in respect of the trustees or the Trust property. In addition, the beneficiaries have the added protection of an independent trustee.

[8]    I am also satisfied that the substantive orders vesting the property in the remaining trustees are appropriate in that they bring the registered position into conformity with the reality of the current trustee appointments in circumstances where the respondent’s incapacity prevents her from executing the documents otherwise necessary to do so.

Result

[9]I make orders:

[a]Granting permission to commence proceedings by way of originating application.

[b]Dispensing with service of the application on the respondent and the discretionary beneficiaries of the J B Lafferty Trust.

[c]Vesting the property situated at 5 Mansfield Street, Cambridge, being the property contained in Identifier SA30C/745, in the names of Brendon John Lafferty and Lewislegal Trustees Limited.

Muir J