Mitchell v Mitchell

[2020] NZHC 260

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-273

[2020] NZHC 260

UNDER

FLEUR NINA MITCHELL AND ALLAN BROOKE MITCHELL (JUNIOR) AS

TRUSTEES OF THE 899 TRUST
First Applicants

FLEUR NINA MITCHELL AND ALLAN BROOKE MITCHELL AS TRUSTEES OF THE A B MITCHELL NO 3 FAMILY

TRUST

Second Applicants

Hearing:	On the papers
Counsel:	R Thompson for the Applicants
Judgment:	25 February 2020

JUDGMENT OF GORDON J

This judgment was delivered by me on 25 February 2020 at 3 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           David Hugh Rishworth, Auckland Counsel:     R Thompson, Auckland

RE THE 899 TRUST AND THE A B MITCHELL NO 3 FAMILY TRUST [2020] NZHC 260 [25 February 2020]

[1]    The applicants, Fleur Nina Mitchell and Allan Brooke Mitchell (Jnr) as trustees of the 899 Trust and the A B Mitchell No 3 Family Trust (the Remuera Trust), seek orders under the Trustee Act 1956 and the inherent jurisdiction of this Court vesting the realty assets of the two Trusts in them as continuing trustees.

[2]    They also seek associated orders permitting commencement of this proceeding by way of originating application and dispensing with service of the proceeding.

Background

[3]    Mrs Mitchell’s husband is Allan Mitchell. He has the same Christian and middle names as their son, who is one of the applicants. This judgment will therefore refer to Mrs Mitchell’s husband as Brooke (Snr) and her son as Brooke (Jnr).

[4]    In her affidavit Mrs Mitchell deposes that Brooke (Snr) has severe and irreversible dementia. That statement is based on the clinical opinion of a neurologist whose evidence I refer  to  further  below.  Brooke  (Snr)  was  a  co-settlor  with  Mrs Mitchell and was a trustee since the settlement of both trusts up until his removal referred to below.

[5]    Alan Graham Towers was the accountant for the Mitchell family and its businesses for many years. He was a co-trustee for both the 899 Trust and the Remuera Trust. Mr Towers died on 24 January 2019.

The 899 trust

[6]    The 899 Trust was settled on 4 July 2005. By Deed of Retirement of Trustee and Appointment of New Trustee dated 13 August 2014, Kendall Wakeman Trustee Services Ltd retired as trustee and Alan Towers was appointed as trustee. It seems that change of trustee was not then recorded on the title for the property the 899 Trust owns at 899 Whangaparaoa Road.

[7]    By resolutions and deeds executed in December 2019, Mrs Mitchell removed Brooke (Snr) as a trustee of the 899 Trust and appointed Brooke (Jnr) as a trustee of the 899 Trust.

The Remuera Trust

[8]The Remuera Trust was settled on 6 April 2000.

[9]    By resolutions and deeds executed in January and February 2020, Mrs Mitchell removed Brooke (Snr) as a trustee of the Remuera Trust and appointed Brooke (Jnr) as a trustee of the Remuera Trust.

The Mitchells’ children

[10]   Mrs Mitchell and Brooke (Snr) have four children – Brooke (Jnr), James Robert Mark Mitchell, Geoffrey Charles Andrew Mitchell and Sarah-Jane Frances Mitchell. They are all aged over 20. There are no grandchildren at this stage.

[11]One of the children, James, is married to Kirstin Jane Mitchell.

[12]   Geoffrey was born with a chromosomal abnormality and lives with the associated disability. Mrs Mitchell is his welfare guardian and also his property manager under orders made in the Family Court.

Consent of the beneficiaries of the trusts to orders dispensing with service on them

[13]   The beneficiaries of the 899 Trust are Mrs Mitchell, Brooke (Snr) and the four children. Mrs Mitchell and Brooke (Snr) are the final beneficiaries and so too, if neither of them survives to vesting date, are their four children and any grandchildren.

[14]   The beneficiaries of the Remuera Trust are Mrs Mitchell, Brooke (Snr) and their four children, plus any of their spouses and any grandchildren.

[15]   The four children, and Mrs Mitchell’s daughter-in-law have all consented to orders dispensing with service on them of the proceeding and the applications.

Application

[16]   Having regard to the foregoing, Mrs Mitchell and Brooke Mitchell (Jnr), as continuing trustees, seek an order vesting the realty assets of the two trusts in them.

[17]   Before turning to the matter of the vesting orders, there are prior matters I must address.

Should permission be granted to commence the proceedings by way of originating application?

[18]In my judgment of Sunde v Sunde,1 I addressed this issue saying:

[11]              This proceeding is not of a kind that can be commenced by way of originating application as of right, pursuant to rr 19.2–19.4 of the High Court Rules 2016. However, the Court may, in the interests of justice, permit any proceeding not mentioned in rr 19.2–19.4 to be commenced by originating application. The Court’s permission may be sought without notice.

[12]              In Jones v HW Broe Ltd, McGechan J considered an application for leave to use the originating application procedure on an ex parte basis, discussing the rationale underlying r 19.5 as follows:

The … originating application procedure was designed as a genuine exception, and as an expedient for cases where there was in reality no opposing party, avoiding clumsy and unnecessary use of a full statement of claim and notice of proceeding. It was not intended for routine use in cases where there was another likely party with contrary interests.

[19]   I am satisfied that it is appropriate this proceeding should commence by way of originating application.2

Should orders dispensing with service of the proceedings be granted?

[20]   The applicants seek an order that service on Brooke (Snr), as removed trustee, and the beneficiaries be dispensed with.

[21]   First in respect of the beneficiaries, I have already noted that they have given their consent.

[22]   In terms of service on Brooke (Snr), I am also satisfied that service should be dispensed with. There is an affidavit from a neurologist, Kiri Brickell who says that Brooke (Snr) has severe and irreversible dementia. There is no treatment and it will

1      Sunde v Sunde [2019] NZHC 325.

2      See, for example, Re Hamertons Trustee Services Ltd [2018] NZHC 2720; Macpherson v Macpherson [2018] NZHC 240; and McKean v McKean [2017] NZHC 2212.

continue to progress. The cause of the dementia is underlying Alzheimer’s disease. His dementia has aggravated a paranoia which can be reasonably easily triggered.  Dr Brickell concludes that Brooke (Snr) is not competent to make any informed decisions relating to his personal care and welfare, or to the management of his property; that it would be detrimental to him to attempt to consult with him or inform him about these proceedings, with no corresponding advantage; and he is also not competent to make any informed decisions relating to his role as a trustee of various family trusts.

[23]   In reaching my conclusion regarding service on Brooke (Snr) I have applied the test adopted in a number of similar cases, namely that service on him would serve “no useful purpose”. 3

Should the trust property be vested in Mrs Mitchell and Brooke (Jnr) as the continuing trustees?

[24]   Vesting the realty assets of the 899 Trust in the first applicants, as continuing trustees, gives effect to the removal of Kendall Wakeman Trustee  Services  Ltd, Alan Graham Towers and Brooke (Snr) as trustees.

[25]   In terms of the Remuera Trust, vesting the realty assets of that trust in the second applicants, as continuing trustees, gives effect to the removal of Alan Graham Towers and Brooke (Snr) as trustees.

Orders

[26]I order that:

(a)The applicants may commence this proceeding by way of a without notice originating application;

(b)Service of the proceedings on the beneficiaries of the 899 Trust and the Remuera Trust is not required;

3      Docherty v Docherty [2013] NZHC 1885, Grazier v Grazier [2014] NZHC 3058 at [14], McKean v McKean, [2017] NZHC 2212, at [12] as cited in Re Hamertons Trustee Services Ltd [2018] NZHC 2720, at [7], Sunde v Sunde, above n 1.

(c)The interests of the 899 Family trust in 899 Whangaparaoa Road, Manly (Certificate of Title NA1500/22) now vests in Fleur Nina Mitchell and Allan Brooke Mitchell (Jnr);

(d)The interest of the Remuera Trust in the following properties:

(i)75 Miro Street, Ohakune PT SECT 2 BLK XIX TN OF OHAKUNE;

(ii)86 Seddon Street, Raetihi, SECT 71 TN OF RAETIHI;

(iii)68 Seddon Street, Raetihi (31 Queen St) LOT 2 D 5862;

(iv)29 Queen Street, Raetihi PT SECT 79 TN OF RAETIHI;

(v)82-84 Seddon Street, Raetihi LOT 1 DP 11658;

(vi)54 Ward Street, Raetihi LOT 3 DP 4678;

(vii)70-74 Seddon Street, Raetihi LOT 1 DP 3709;

(viii)39-41 Seddon Street, Raetihi SECT 47 TN OF RAETIHI;

(ix)47-53 Seddon Street, Raetihi LOT 1 DP 12336;

(x)135 Seddon Street, Raetihi LOT 2 DP 4399;

(xi)11 Railway Road, Raetihi LOT 15 DP 58873;

(xii)13 Railway Road, Raetihi LOT 16 DP 58873;

(xiii)3 Railway Road, Raetihi LOT 11 DP 58873;

(xiv)5 Railway Road, Raetihi LOT 12 DP 58873;

(xv)7 Railway Road, Raetihi LOT 13 DP 58873;

(xvi)9 Railway Road, Raetihi LOT 14 DP 58873;

(xvii)715 Tararu Road, Thames PT E 13 ML 1009;

(xviii)78 Seddon Street, Raetihi LOT 2 DP 52012;

now vests in Fleur Nina Mitchell and Allan Brooke Mitchell (Jnr).

(e)Costs of and incidental to the application as they relate to the 899 Trust to be met by the 899 Trust funds; and

(f)Costs of and incidental to the application as they relate to the Remuera Trust to be met by the Remuera Trust funds.

Gordon J