Pauling v Pauling

[2019] NZHC 1389

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2019-435-10

[2019] NZHC 1389

UNDER

Section 52 of the Trustee Act 1956

BETWEEN

JEFFERY JAMES PAULING PAULINE ANN SHEEHAN JAQUY PAULING

AS TRUSTEES OF THE PAULING FAMILY TRUST
Applicants

AND

NATALIE VIOLA PAULING

First Respondent

AND

TROY DANIEL JAMES PAULING

Second Respondent

Hearing:

on the papers

Counsel:

G F Kelly for the Applicants

K H Lawrence for the Respondents

Judgment:

18 June 2019

JUDGMENT OF CULL J

[1]                 The applicants, the trustees of the Pauling Family Trust (the Trust), apply for orders that proceedings be commenced by originating application for directions as to the conduct of the proceeding and as to service, and for a vesting order under s 52 of the Trustee Act 1956 (the Act).

[2]                 The application for vesting orders involves two steps: orders removing the names of Natalie Viola Pauling (the first respondent) and Troy Daniel James Pauling

PAULING v PAULING [2019] NZHC 1389 [18 June 2019]

(the second respondent) from the title to the property at 1 Vivian Street, Masterton, and vesting the title in the names of the applicants.

[3]                 The basis for these orders is that the Pauling Family Trust was settled by Natalie Pauling on 18 November 1997, when the original trustees were Natalie Pauling and John William Kershaw.

[4]                 On 7 December 2001, the original trustees signed a Deed of appointment in removal of trustees (“the 2001 Deed”) purporting to replace John Kershaw with Troy Pauling as trustee. The property at 1 Vivian Street, Masterton, acquired on 29 January 2002, was registered in the names of the first and second respondents as trustees in reliance on the 2001 Deed.

[5]                 Subsequently, it was discovered that the 2001 Deed had no effect, because the Trust deed did not confer a power on the trustees of appointment and removal of trustees. That meant that Troy Pauling was never a trustee of the Trust.

[6]                 To regularise the trusteeship, the applicants, the second respondent, and John Kershaw have signed a Deed of appointment, removal and confirmation of the trustees of the Trust. This Deed, called the Deed of confirmation, removes Natalie Pauling and John Kershaw as trustees and replaces them with the applicants. The Deed clarifies that Troy Pauling is not, and never has been, a trustee of the Trust.

[7]                 In this current application, the applicants wish to vest the title to the property in their names as trustees of the Trust. Troy Pauling has consented to this application.

[8]                 However, Natalie Pauling has been found to suffer from Alzheimer’s Disease and is incapable of comprehending or signing documentation relating to the trusteeship. Annexed to the affidavit of Jeffery Pauling, one of the applicants, is a health practitioner’s certificate of mental incapacity for enduring power of attorney in relation to property. This is a certificate from Dr Helen Clayson, certifying that on 14 June 2018 she examined Natalie Pauling to ascertain her mental capacity. Although the assessment was done for the purposes of invoking the enduring power of attorney, Dr Clayson records that Natalie Pauling has been formally diagnosed with

Alzheimer’s Disease which is now in an advanced stage. She is unable to understand any complex issues, is not capable of making any decisions regarding property, and would not be able to understand the consequences of any decisions. Further, Dr Clayson has certified that Natalie Pauling is mentally incapable because she is not wholly competent to manage her own affairs in relation to her property.

[9]                 Although the diagnosis of Alzheimer’s Disease has not been provided to the Court, I am satisfied that Natalie Pauling is unable to give authority for a transfer of the title to the property in the names of the applicants as trustees, by reason of her mental incapacity. As such, s 52(1)(b)(i) of the Act has been met, in that I am satisfied that Natalie Pauling is under a disability.

[10]Accordingly, I make the orders:

(a)Removing the names of Natalie Viola Pauling and Troy Daniel James Pauling, the first and second respondents respectively, from the title to the property at 1 Vivian Street, Masterton; and

(b)Vesting the title in the names of the applicants Jeffery James Pauling, Pauline Ann Sheehan, and Jaquy Pauling.

[11]              In making these orders, I grant the order that the proceedings be commenced by originating application, I am dispensing with service on the first and second respondents, dispensing with service on the discretionary beneficiaries of the Pauling Family Trust, and not making an appointment of a litigation guardian for the first respondent in the circumstances.

Cull J