McComb v Ewers

[2015] NZHC 3146

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2015-470-181 [2015] NZHC 3146

UNDER	Section 52 of the Trustee Act 1956
BETWEEN	LINDA KAYE MCCOMB, NEW ZEALAND TRUSTEE SERVICES LTD AND COLIN RAYMOND EWERS Applicants
AND	JENNIFER MARGARET EWERS Respondent

Hearing:	On the Papers
Counsel:	C J Kelly for Applicants
Judgment:	10 December 2015

JUDGMENT OF WHATA J

This judgment was delivered by Justice Whata on

10 December 2015 at 10.00 a.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Garth Mathieson, Mt Maunganui

MCCOMB v EWERS [2015] NZHC 3146 [10 December 2015]

[1]      This judgment concerns an application for:

(a)       Vesting order under s 52 of the Trustee Act 1956.

(b)Interlocutory  application  without  notice  seeking  directions  as  to service and procedure.

Background

[2]      The Juvena Trust was established by deed on or about 30 May 1995.  Jennifer Margaret Ewers is the sole remaining surviving settler of the trust.   She has been medically assessed as mentally incapable because she is not wholly competent to manage her own affairs in relation to her property.   She has developed dementia which  has  worsened,  as  such  that  she  has  difficulty  with  her  memory  and

understanding and her judgment is poor.1

[3]      The deed of power and appointment and removal was initially given to the settlers and on one of them passing, to the survivor settler.  Relevantly clauses 18.3 and 18.4 state:

18.3Death of Survivor:  On the death of the survivor of the Settlors the power of appointment of new trustees shall be vested in such person or persons as the survivor may nominate.

18.4Death of Settlors:  If at any time there is no person having the power of  appointment  under  Clauses  18.1  and  18.3, then the  power  of appointment shall be vested in the executors and administrators of the Estate of the Settlor the said RAYMOND GEORGE EWERS.

[4]      No other clause deals with mental incompetence of the sole surviving settlor.

The frame

[5]      Section 43(1)(f) states:

43       Power of appointing new trustees

(1)       Where  a  trustee  (whether  original  or  substituted,  and  whether appointed by the Court or otherwise)—

1      As set out in Health practitioner’s certificate of mental incapacity executed by Andrew Mark

Wilkinson on 5 October 2015.

(a)       Is dead; or

(b)       Remains out of New Zealand for the space of 12 months during which no delegation of any trusts, powers, or discretions   vested  in  him  as   such  trustee  remains  in operation under section 31 of this Act; or

(c)       Desires to be discharged from all or any of the trusts or powers reposed in or conferred on him; or

(d)       Refuses to act therein; or

(e)       Is unfit to act therein; or

(f)       Is incapable of so acting; or

(g)       Being a corporation, has ceased to carry on business, is in liquidation, or is dissolved, then—

the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustees for the time being, or the personal representatives of the last surviving or continuing trustee, may by deed appoint a person or persons (whether or not being the person or persons exercising the power) to be a trustee or trustees in the place of the first-mentioned trustee.

[6]      Section 52 also relevantly states:

52       Vesting orders of land

(1)      Subject to the provisions of subsections (2) and (3) of this section, in any of the following cases, namely—

(a)       …

(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

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)      …

(3)      Where any such order relates to a trustee entitled or formerly entitled jointly with another person, and that trustee is under disability or out

of the jurisdiction of the  Court or cannot be found, or (being a corporation) has ceased to carry on business or is in liquidation or has been dissolved, the land, interest, or right shall be vested in the other person who remains entitled, either alone or with any other person that the Court may appoint.

Argument

[7]      Mr Kelly submits on behalf of the applicants that:

(a)       Mrs Ewers is unfit to act and incapable of so acting;

(b)Section 43 provides that the surviving or continuing trustees for the time being may by deed, appoint a person or persons to be a trustee or trustees in place of the first mentioned trustee;  and

(c)      The  continuing  trustees,  Mrs  McComb  and  New  Zealand  Trustee Services Ltd, have exercised their powers under s 43 so as to appoint Mrs McComb’s brother, Mr Colin Raymond Ewers, as an additional trustee.

(d)Land registered under the Land Transfer Act 1952 is an exception to s 47 of the Trustee Act dealing with vesting of assets.

(e)      LINZ refuses to accept the use of an enduring power of attorney for the purposes of transfer with the effect that the only option appears to be application under s 52 of the Trustees Act 1956.

(f)       All final beneficiaries approve the vesting.

Assessment

[8]      I have had the benefit of an affidavit by Linda Kaye McComb attaching a copy of the Juvena Trust Deed, a copy of a deed dated 1 May 2015 appointing the New  Zealand  Trustee  Services  Ltd  and  Ms  McComb  as  a  trustee.    A medical certificate from Dr Andrew Mark Wilkinson dated 5 October 2015 as to Ms Ewers mental incapacity, a copy of a deed of appointment of Mr Colin Raymond Ewers as a

trustee  in  place  of  Ms  Ewers,  and  a  copy  of  an  enduring  power  of  attorney appointing Ms McComb are also provided.

[9]      I am satisfied from this material that Ms Ewers is under a disability for the purpose of s 52(1)(b)(i).  I am also satisfied that all persons with an interest in the trust approve of the vesting, or in Ms Ewers case, is unable, through incapacity to approve the vesting.  I am satisfied that, in this last respect, that Ms McComb does not oppose the vesting pursuant to the power of attorney.

[10]     In those circumstances I make the following orders:

(a)      The  proceedings  be  commenced  by  originating  application  and otherwise conducted in accordance with Part 19 of the High Court Rules.

(b)      Dispensing with service on Jennifer Margaret Ewers.

(c)      The title to property at 81 Denny Hulme Drive, Mount Maunganui, Tauranga (Identifier SA59D/475) is now vested in the joint names of Linda Kaye McComb, New Zealand Trustee Services Limited and Colin Raymond Ewers.