M I Clifford Trust no.2
[2017] NZHC 1888
•10 August 2017
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2017-409-518 [2017] NZHC 1888
UNDER Part 19 of the High Court Rules and
section 46 and section 52 of the Trustee
Act 1956IN THE MATTER OF
An application for an order vesting the interests of a trustee under a disablity in the M I Clifford Trust No 2
ANNE COWLISHAW RUTHERFORD and DEIDRE COWLISHAW WOOD Applicants
Hearing: (On the papers) Counsel:
A V Foote and B S Williams
Judgment:
10 August 2017
JUDGMENT OF NICHOLAS DAVIDSON J
Background
[1] The M I Clifford Trust No. 2 (“Trust”) owns 24 properties, held in the name of two of the three trustees.
[2] The applicants, Anne Cowlishaw Rutherford (“Anne”) and Deidre Cowlishaw Wood (“Deidre”) are two of the trustees, and the third is Mary Ida Clifford (“Mary”) who has Alzheimer’s type dementia and lacks the mental capacity
for trusteeship.
Re M I Clifford Trust No 2 [2017] NZHC 1888 [10 August 2017]
[3] Anne is not a registered proprietor, but Mary and Deidre are. On the Titles Mary Ida Clifford is recorded as “Ida Mary Clifford (also known as Mary Ida Clifford)”. The difficulty is that given Mary’s medical condition the titles cannot be transferred to Anne and Deidre without the Court’s assistance. The applicants seek orders removing Mary as a trustee and vesting land in the name of Deidre and Anne as remaining trustees. Procedural orders are sought to achieve this.
Analysis
[4] There is no need to rehearse in detail Mary’s mental health. Dr John Geddes, consultant physician and a specialist geriatrician, has assessed Mary as mentally incapable because she lacks the capacity to foresee the consequences of decisions in relation to her personal care and welfare, and to foresee the consequences of the failure to make such decisions. Her condition is likely to continue indefinitely. The prognosis is of progressive cognitive impairment due to Alzheimer’s type dementia. Dr Geddes says that Mary is not capable of fulfilling any roles on any relevant Trust or Board.
[5] High Court Rule 7.46(3) permits a Judge of this Court to allow an application without notice, in particular where the application relates to a “routine” matter. That is the case here.
[6] It is appropriate to dispense with service on the beneficiaries as the order will not change any of their rights or entitlements under the Trust, and it does not alter the position of Anne as a trustee, but rather the names in which the various properties are held. There is recent authority to this effect.1
[7] Section 46 of the Act is invoked but I do not think it has application as it
relates to a trustee’s application for discharge. There is no such application here.
[8] The Trust Deed in question is silent as to removal of a trustee so the
remaining trustees cannot effect Mary’s removal. However, this Court has the power to remove trustees under its inherent jurisdiction and in the case already cited where
1 Godfrey v McCormick [2017] NZHC 420.
he did so.2 The main guide for the Court in exercising this power is the welfare of the beneficiaries.3
[9] There is supportive authority for the orders sought, where the Court made a vesting order under s 52 of the Act, after removing a trustee under s 46 of the Act.4
Section 52(2) of the Act provides:
52 Vesting orders of land
(1) Subject to the provisions of subsections (2) and (3), in any of the following cases, namely - …
(b) where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person –
(i) is under disability …
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.
(2) Where any such order is consequential on the appointment of a trustee, the land or interest therein shall be vested for such estate as the Court may direct in the persons who on the appointment are the trustees.
Conclusion
[10] The removal of the trustee and vesting does not alter the beneficiaries’ rights or entitlements and is simply to remove a trustee who lacks capacity and to vest Trust property in the name of existing trustee (Anne). This is clearly in the best interests of the Trust and its beneficiaries.
Disposition (in the form of the Draft Order with minor amendments)
[11] After reading the notice of originating application dated 1 August 2017 for:
(i) leave to bring application as an originating application;
2 Hunter v Hunter [1938] NZLR 520.
3 Hunter v Hunter, above n 2, at 529.
4 SWL Trustee Company Limited v Marshall [2015] NZHC 132.
(ii) dispensing with service; (iii) removing a trustee;
(iv) vesting orders under section 52 Trustee Act 1956;
the affidavit of Deidre Cowlishaw Wood dated 24 July 2017, and memorandum of counsel in support dated 1 August 2017, this Court orders:
(1) That the application proceed under Part 19 of the High Court Rules. (2) That service of the application is dispensed with.
(3) Mary Ida Clifford is removed as a trustee of the M I Clifford Trust
No. 2.
(4) The land comprised in Unit 1, Deposited Plan 66515, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB39A/459, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(5) The land comprised in Unit 2, Deposited Plan 66515, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB39A/460, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(6) The land comprised in Unit 3, Deposited Plan 6615, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB39A/461, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(8) The land comprised in Unit 2 and Accessory Unit 9-10, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/690, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(9) The land comprised in Unit 3 and Accessory Unit 11, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/691, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(10) The land comprised in Unit 4 and Accessory Unit 12, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/692, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(11) The land comprised in Unit 5 and Accessory Unit 13, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/693, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(12) The land comprised in Unit 6 and Accessory Unit 14, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/694, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(13) The land comprised in Unit 7 and Accessory Unit 15, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/695, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(16) The land comprised in Unit 12 and Accessory Unit 18, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/698, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(17) The land comprised in Unit 13 and Accessory Unit 19, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/699, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(18) The land comprised in Unit 21 and Accessory Unit 20, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/700, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(19) The land comprised in Unit 22 and Accessory Unit 21, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title title as CB44B/701, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(20) The land comprised in Unit 23 and Accessory Unit 22, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/702, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(23) The land comprised in Unit 26 and Accessory Unit 25, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/705, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(24) The land comprised in Unit 27 and Accessory Unit 26, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/706, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(25) The land comprised in Unit 28 and Accessory Unit 27, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/707, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(26) The land comprised in Unit 29 and Accessory Unit 28, Deposited Plan 77239, a stratum in freehold estate, Canterbury Registry, described in certificate of title CB44B/708, be vested in Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
(27) The land comprised in certificate of title CB45A/1177 being section
413 Town of Christchurch, being 1012m2 more or less, be vested in
Anne Cowlishaw Rutherford and Deidre Cowlishaw Wood.
required.
……………………………………………..
Nicholas Davidson J
Solicitors:
Duncan Cotterill, Christchurch
0