Neverman v Hudson

[2015] NZHC 2065

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-257 [2015] NZHC 2065

IN THE MATTER	of the Trustee Act 1955
IN THE MATTER	of an application for appointment of new trustee
BETWEEN	JOHN GORDON NEVERMAN Plaintiff
AND	JOHN ELLIOT HUDSON Defendant

Hearing:	On the Papers
Appearances:	J G Neverman for Plaintiff
Judgment:	28 August 2015

JUDGMENT OF WHATA J

This judgment was delivered by Justice Whata on

28 August 2015 at 1.30 p.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Neverman Bennett, Hamilton

NEVERMAN v HUDSON [2015] NZHC 2065 [28 August 2015]

[1]      I have before me an application without notice for appointment of a new trustee.   The settlor, Peter van der Hulst has  been diagnosed as suffering from evolving dementia.   His solicitor, Mr Neverman makes the application seeking to appoint Elliot John Hudson, who currently has a power of attorney in relation to Mr van der Hulst’s affairs.   He also seeks leave to proceed byway of originating application.

Background

[2]      Mr Neverman has provided a detailed affidavit in support of the application. It records the following relevant matters:

(a)      In his capacity as Peter’s solicitor he has met with Peter several times this year, beginning in February to discuss his personal and trust asset planning  matters.   At  these  meetings  it  was  agreed,  among  other things,  that  Elliot  should  be  appointed  as  his  attorney  for  both personal care, welfare and property.

(b)Peter  has  recently  been  diagnosed  as  suffering  from  evolving dementia, and as such he is mentally incapable of making or communicating decisions about his properties.  While there is no medical certificate as such, the medical notes record among other things that:

Peter’s dementia has worsened and he is increasingly confused and aggressive.   He has no insight into his impairment.   Dr Fussell has activated his EPOA.   On 5th June he was admitted via the CAT team to OPR1.  The team is recommending secure long term care.  Peter has potential to   become   an   unsafe   wanderer.      Needs   very   close supervision and prompting of his personal care needs.  Staff need to have strategies to deal with his lack of insight, anger, paranoia and aggression.

(c)       Elliot was appointed with enduring power of attorney on 25 March

2009 in relation both to his property and to his personal care and welfare.

(d)      The net assets of Peter van der Hulst Trust (the Trust) as recorded at

2014 amount to $2,764,676 and the annual income of the Trust before tax  was  in  the  last  financial  year,  $304,194.    The  current  bank balances are $753,457 and until a replacement trustee is appointed the accounts cannot be accessed.  His cost of care is currently $1,085 per week and until the banking accounts can be accessed the cost of care cannot be paid.

(e)      The only persons who might have an interest in the application are Peter’s wife, Anna, his children, Yvon, Frank and Elliot. All of whom have consented in writing to the removal of Peter as a trustee and the appointment of Elliot in substitution.

Procedure

[3]      I have reviewed each of the consents and I am satisfied they have been properly given.   For that reason, and for the reasons to follow, the application is uncontroversial and amenable to the originating application procedure.   Leave to proceed in this way is accordingly granted.

Assessment

[4]      Under s 51(1) of the Trustee Act 1956, the High Court may appoint a new trustee if it is expedient.   The physical incapacity of an existing trustee is a longstanding basis for removal.1

[5]      Given Mr van der Hulst’s incapacity, I am satisfied that it is expedient to remove him as a trustee and to appoint Elliot John Hudson in his place.   I am satisfied that Mr Hudson is suitable having regard to his neutrality as between the

beneficiaries and his pre-existing relationship with Mr van der Hulst.

1      In re Lemann’s Trusts (1883) 22 Ch D 633; In re Barber (1888) 39 Ch D 187; see also Garrow and Kelly Law of Trustees (7th ed, LexisNexis, Wellington, 2013) at 448.

[6]      For completeness I raised with Mr Neverman whether I ought to have regard to concerns about “any issue of any final beneficiary” who are discretionary beneficiaries under the will.  Mr Neverman responded:

2.1      Any issue of any final beneficiary would take the place of his/her parent if that parent died before being able to take his/her share as a discretionary beneficiary (see trust deed clause 10).

2.2      Any issue of any final beneficiary has been provided for under the attached Memorandum of Guidance made by Peter dated 13 April 2015. The current trustee and Elliot see no reason at this time to divert from these wishes.

[7]      It is unnecessary to repeat the contents of the memorandum in this judgment. I am content simply to record that the consent of this class of beneficiary is not needed.

Outcome

[8]      Accordingly I make an order pursuant to s 51 of the Trustee Act removing Peter van der Hulst as a trustee of the Peter van der Hulst Trust and appointing the defendant Elliot John Hudson as trustee of the trust in substitution of Peter.

[9]      I also make the following orders as sought:

(a)      Vesting the Trust’s assets and liabilities in NB Lawyers Trustees 9

Limited and Elliot John Hudson as trustees of the Trust;  and

(b)Granting to NB Lawyers Trustees 9 Limited and Elliot John Hudson jointly  all  powers  necessary  to  give  effect  to  the  appointment  of Mr Hudson as a trustee of the Trust.