McKay v Beattie - [2016] NZHC 1332

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-455 [2016] NZHC 1332

UNDER the Trustee Act 1956

IN THE MATTER

of the JC Beattie Family Trust

BETWEEN

ALAN BEVIN MCKAY AND SUZANNE ISOBEL GORDON

Plaintiffs

AND

ALAN COLVIN BEATTIE Defendant

Appearances: G Clarke for the Plaintiffs

Judgment:

20 June 2016

(Determined on the papers)

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to vesting orders and service

Introduction

[1] The plaintiffs, Alan McKay and Suzanne Gordon, as current trustees of the JC Beattie Family Trust (the Trust) seek an order vesting the following trust property currently held by Alan Beattie, the defendant:

(a) title to a half share in the property at 2/135 Johnson Road, Christchurch (the property) jointly held by Mr McKay and the defendant; and

(b)4,499 shares in Beatties Service Station Ltd (the shares) held jointly by Mr McKay and Mr Beattie.

MCKAY v BEATTIE [2016] NZHC 1332 [20 June 2016]

[2] These orders are sought because Mr Beattie, a retired trustee of the Trust and in whose name the property and the shares are currently jointly registered, is mentally incapable of exercising his powers and duties as a trustee.

Background

[3] On 21 January 2002 Janice Beattie, the wife of Mr Beattie, settled the Trust.1

Mr Beattie and Mr McKay were named as trustees. The named discretionary beneficiaries of the Trust are Mr Beattie, the three children of Mrs and Mrs Beattie and any grandchild or more remote issue of the settlor. On the same date a second trust was created named the AC Beattie Family Trust whereby Mr Beattie was the settlor and appointer and the trustees where Mrs Beattie and Mr McKay. However, given Mrs Beattie’s passing in 2012, Mr McKay is now the sole trustee of that trust.

[4] The trustees of each trust were joint legal owners of the following trust property:

(a) the property; and

(b) the shares.

[5] Upon the death of Mrs Beattie, the half share in the property jointly held by her and Mr McKay transferred to Mr McKay as the sole remaining trustee, as did her interest in the shares. The other half share of the property remained jointly owned by Mr Beattie and Mr McKay as trustees of the Trust, as did the 4,499 shares.

[6] Mr Beattie continued living in the property after Mrs Beattie’s passing. Sadly however, due to his deteriorating mental and physical health it became apparent that he was no longer able to care for himself and in or around January 2015 he moved into the Ballarat Care Home.

[7] Dr Nigel Gilchrist, a specialist in internal medicine, assessed Mr Beattie on 1

April 2016 and concluded:

(a) Mr Beattie lacks mental capacity to carry out the role of Trustee including decision making relating to property and to instruct others including solicitors in regard to his Trust property.

(b) Mr Beattie is an incapacitated person as defined under r 4.29 High

Court Rules.

(c) Mr Beattie would not have the ability to understand High…

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 McKay v Beattie

Details

AGLC: McKay v Beattie [2016] NZHC 1332
Case: [2016] NZHC 1332
Decision Date: 20 June 2016

CaseChat Overview and Summary

In the case of McKay v Beattie, the plaintiffs, Alan McKay and Suzanne Gordon, sought vesting orders from the court to transfer the title of a half share in a property and shares in a company from Alan Beattie, the defendant, to Suzanne Gordon, a replacement trustee. The defendant, Alan Beattie, was previously a trustee of the JC Beattie Family Trust but had been found to be mentally incapable of exercising his duties as a trustee. The plaintiffs argued that the defendant was no longer capable of understanding the nature of the proceedings and that there would be no purpose in serving him with the proceedings.

The court considered the legal issues regarding service and representation of the defendant in the proceedings. The plaintiffs applied for orders that the defendant not be served with the proceedings, not be represented by a litigation guardian or other representative, and that notice of the proceedings be dispensed with. The court found that there was no purpose in serving the defendant with the proceedings as he lacked the mental capacity to understand the proceedings and could not make any decisions with regard to them. Additionally, the court held that since the defendant had been validly removed as trustee due to his mental incapacity, there could be no basis to oppose his interest in the property vesting in the replacement trustee. The court also found that appointing a litigation guardian for the defendant would serve no purpose and that the vesting orders sought were limited to giving effect to the lawful change of trustees and did not otherwise impact the defendant's wellbeing or interests.

The court granted the plaintiffs' application for vesting orders, transferring the title of the half share in the property and the right to transfer the shares in the company to Suzanne Gordon. The court also allowed the plaintiffs to recover their expenses related to these proceedings out of the trust property of the JC Beattie Family Trust.

Orders