Mason v Stocker
[2022] NZHC 564
•24 March 2022
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2021-425-000066
[2022] NZHC 564
UNDER the Trustee Act 1956 IN THE MATTER
of an application by Lyndall Dianne Mason and Cargill Trustees Limited, as trustees of the A M Stocker Family Trust for a vesting order
BETWEEN
LYNDALL DIANNE MASON and CARGILL TRUSTEES LIMITED as
trustees of the
A M Stocker Family Trust Applicants
AND
ALWYN MARY STOCKER and JULIETTE SARAH EVANS
Persons for whom the Application is about
Hearing: On the papers Counsel:
C Officer and P Walker for Applicant
Judgment:
24 March 2022
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 24 March 2022 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
MASON v STOCKER [2022] NZHC 564 [24 March 2022]
[1]There are applications before the Court:
(a)for leave to commence a proceeding seeking a vesting order1 by way of originating application under Part 19 High Court Rules 2016; and
(b)vesting a property situated at 54 Sydney Street, Invercargill (Identifier SL12A/899, Southland Land Registration District), in the names of Lyndall Dianne Mason and Cargill Trustees Limited as the current trustees of the A M Stocker Family Trust.
The facts
[2] Alwyn Mary Stocker (Alwyn) and Charles Ferguson Stocker (Charles) were a married couple with two children namely, Juliette Sarah Margaret Evans (Juliette) and Lyndall Dianne Mason (Lyndall).
[3] Alwyn and Charles established two trusts called the A M Stocker Family Trust and the C F Stocker Family Trust. Both were established by Deeds of Trust dated 5 March 1993. This application concerns the A M Stocker Family Trust (the Trust).
[4] Alwyn was the settlor of the Trust. The original trustees were Alwyn, Charles and Lyndall. By Deed dated 22 September 1994, Juliette was appointed as an additional trustee of the Trust. The termination date of the Trust was 1 July 2021. Upon termination, the trustees were to hold the trust fund in equal shares for Lyndall and Juliette if they were living (which was the case).
[5] Charles died on 20 February 2007 and Alwyn, Juliette and Lyndall continued as trustees of the Trust until Alwyn retired as a trustee by Deed of Retirement dated 16 January 2015.
[6] Since 2015, Alwyn has lost capacity to manage her own affairs. She has been in residential care since 2016. She was assessed by a medical practitioner in 2016 and again in 2021 and found to be mentally incapable due to dementia.
1 Trustee Act 1956, s 52.
[7] Juliette has also lost capacity to manage her own affairs. She is now subject to an order for the appointment of a property manager under s 31 Protection of Personal and Property Rights Act 1988.
[8] As a result of these developments, Lyndall was left as the only trustee with capacity to administer the Trust. Acting in reliance upon ss 92, 103 and 104 of the Trusts Act 2019 and cl 27 of the Trust Deed, Lyndall removed Juliette as a trustee of the A M Stocker Family Trust on 18 June 2021. Lyndall also appointed Cargill Trustees Ltd (Cargill) as a trustee. Cargill is a trustee company associated with the law firm Walker Murdoch Law.
[9] As the Trust has now terminated in accordance with its terms, Lyndall and Cargill wish to wind up its affairs and distribute the Trust’s assets. However, there is a problem. The Sydney Street property remains registered in the names of Alwyn, Juliette and Lyndall. While the Trusts Act 2019 simplified the process for divesting and vesting trust property in the trustees of a trust,2 advantage cannot be taken of those provisions in circumstances where Alwyn resigned as a trustee prior to the commencement of the Trusts Act.3 For that reason, it has been necessary for the current trustees to apply to the Court for a vesting order under s 52 of the Trustee Act 1956.
Leave to use the originating application process
[10] This is not a proceeding that can be brought by way of an originating application as of right under r 19.2 or 19.3 of the High Court Rules. However, r 19.5 permits the Court to authorise use of the originating application procedure where to do so is in the interests of justice. The interests of justice mean securing the just, speedy and inexpensive determination of proceedings.4 I am satisfied this is a case where there is no need for particularised pleadings and interlocutory procedures, such as discovery. The application is also straightforward and suitable for determination summarily.
2 Trusts Act 2019, ss 92, 103-112 and 116.
3 Trusts Act 2019, sch 1 cl 11.
4 Solar Bright Ltd v Martin [2019] NZHC 300 at [18] and [26].
[11] This application is concerned with what is a purely administrative matter. Alwyn retired as a trustee some years ago. I am satisfied she lacks mental capacity in relation to decisions concerning property and is in no position to sign documents necessary to transfer the Sydney Street property into the names of the current trustees. Similarly, while Juliette has an interest in the Trust as a beneficiary, I am satisfied that she was validly removed as a trustee due to incapacity and that her rights as a beneficiary are unaffected by this application.
[12] Given the state of Alwyn’s and Juliette’s heath it would be inappropriate and would serve no useful purposes to have the application served upon them. I did request that notice of the application be given to Juliette’s property manager and counsel confirms that this has been done, but he has not responded. In these circumstances it is appropriate, in my view, for the application for leave to proceed by way of an originating application be granted and I dispense with service.
Should there be an order vesting the property at 54 Sydney Street, Invercargill in the names of the new trustees?
[13] The position is similar to that which arose in Lewis v Lewis.5 In that case, Isac J noted that under s 116 of the Trusts Act 2019, the process of divesting and vesting trust property no longer required steps to complete transfer of legal title from one trustee to another. Under the s 116 process, applicants can notify the Registrar-General of Lands of the transfer under s 117 of the Act and there would be no need for the intervention of the Court. However, the transitional provisions in Schedule 1 of the Trusts Act apply where a trustee has resigned or been removed before the commencement date of the new Act, but the divesting and vesting of the Trust property has not been completed. That is the circumstance that has arisen in this case, where Alwyn retired as a trustee in 2016, but the title to the Sydney Street property remains in her name. As a result, cl 11(2) of Schedule 1 of the Trusts Act governs the present application and it provides:
(2)The divesting and vesting of trust property, and the satisfaction of any requirements to which the divesting and vesting are subject, must be completed as if this Act had not commenced.
5 Lewis v Lewis [2021] NZHC 585.
[14] Therefore, the applicants must seek a vesting order under s 52 of the Trustee Act 1956 as if that section remains in force. Relevant for present purposes, s 52(1)(b) and (h) of the Act provide:
(1)Subject to the provisions of subsections (2) an (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; or
…
(h) where land or any interest therein is vested in a trustee whether by way of mortgage or otherwise, and it appears to the court to be expedient---
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.
[15] The applicants submit the making of a vesting order is appropriate and necessary to ensure the Trust property is vested in the names of the current trustees, who must now wind up the Trust and distribute the assets. Given the present circumstances, I have no hesitation in making the order.6 I am satisfied that both Alwyn and Juliette have been validly removed as trustees. The order sought is necessary so as to ensure the Sydney Street property is correctly vested in the names of the trustees for the time being and so that the affairs of the Trust may be wound up. The making of such an order also benefits Juliette given her entitlement to share equally in the Trust’s assets along with Lyndall.
6 I am satisfied that an order can be made vesting the property directly in the names of the current trustees based on the broad power contained in s 52 and Alberts v Alberts [2012] NZHC 24; Parker v Parker [2014] NZHC 2248, Otway v Rogers [2014] NZHC 2171, Flynn v Flynn [2014] NZHC 2210; Re Godfrey Family Trust [2017] 3 NZLR 198 and Re Pagel Family Home Trust [2021] NZHC 3142.
Result
[16] The applicant is granted leave to commence this proceeding by way of originating application. I dispense with service of the application.
[17]The application for a vesting order is granted.
[18] There shall be an order that the property at 54 Sydney Street, Invercargill (Identifier SL12A/899, Southland Land Registration District) vest in the names of Lyndall Dianne Mason and Cargill Trustees Limited as trustees for the time being of the A M Stocker Family Trust.
[19]Leave is reserved to apply for further directions if necessary.
O G Paulsen Associate Judge
Solicitors:
Walker Murdoch Law Ltd, Invercargill
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