Perpetual Trust Limited

[2023] NZHC 514

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-90

[2023] NZHC 514

UNDER

the Trusts Act 2019

IN THE MATTER

of an application by PERPETUAL TRUST LIMITED and TRACEY SUSAN CUSIEL

as trustees and executors of the Estate of Francis Henry McDonald

Applicants

IN THE MATTER

of an application by TRACEY SUSAN CUSIEL and ROSEMARY CATHERINE

HELEN MARSH as trustees and executors of the Estate of Doreen Joyce McDonald Applicants

On the papers
Appearances:	I M Mitchell for the Applicants
Judgment:	14 March 2023

JUDGMENT OF GENDALL J

Background

[1]    Francis Henry McDonald (Francis) died on 21 May 1998, leaving a will. Probate has been granted of that will effectively now to the first-named applicants Perpetual Trust Limited and Tracey Susan Cusiel. Those first-named applicants are the administrators of the estate of the late Francis.

[2]    Tracey Susan  Cusiel   (formally   Loader)   (Tracey)   has   succeeded Doreen Joyce McDonald  and  Laurence  Killoh  Cooney  who,  along  with Perpetual Trust Limited, originally received the grant of probate of the will of the late

PERPETUAL TRUST LIMITED and CUSIEL and CUSIEL and MARSH [2023] NZHC 514 [14 March 2023]

Francis. Tracey has thus been appointed as a replacement trustee of Francis’ estate along with Perpetual Trust Limited by a Deed of Replacement of Trustee and Appointment of Trustee dated 30 July 2012.

[3]    As a result, it is those first-named applicants, Perpetual Trust Limited and Tracey, who are now the administrators of Francis’ estate.

[4]    Doreen Joyce McDonald (Doreen) who had been married to Francis, died after her late husband on 20 May 2014, leaving a will. Probate of this will has been granted. Tracey and Rosemary Katherine Helen Marsh (Rosemary), the second-named applicants, who were appointed under this will as trustees and executors of Doreen’s estate. They are the administrators of Doreen’s estate.

[5]    Under his will, Francis left his estate to Doreen as his widow and upon her remarriage or death that residue was to be divided equally between his stepdaughters Rosemary and Susan Julie Loader (Susan) and his granddaughter, Susan’s daughter, Tracey.

[6]    Prior to Doreen’s death, it seems extensive steps had been taken to locate Susan but these were unsuccessful. Subsequent to Doreen’s death on 20 May 2014, further steps were taken in an endeavour to locate Susan, but these were also unsuccessful.

[7]    Under the will of the late Francis, essentially the majority of his estate was to be held upon trust to pay the net annual income to his widow Doreen, during her life or until her remarriage, and upon her death or remarriage the residuary estate was to be divided into three shares with one such share for Tracey, a one-third share for Rosemary, and the last one-third share for Susan. As I have noted, Susan and Rosemary are his stepdaughters and Tracey his granddaughter. So far as the estate of Francis’ widow Doreen is concerned, in her last will dated 7 August 2008 Doreen left to her daughter Susan those items of her furniture and personal belongings that were not gifted later in her will, together with a one-half share in the balance of her residuary estate. Other provisions in Doreen’s will related to gifts of personal items to specific individuals and, finally, the other one-half share in her residuary estate was left to her other daughter, Rosemary.

[8]    According to significant evidence which is before the Court, both prior to the death of Doreen and subsequently, an extensive range of steps were taken in an endeavour to locate Susan, but without success.

This application

[9]    On 3 March 2023 the two sets of applicants noted above respectively as trustees and executors of the estates of the late Francis and the late Doreen, filed a without notice application in this Court for an order allowing distribution of the share of Susan in the respective estates as a missing beneficiary.

[10]   In particular, the order sought in the without notice application from this Court is for:

1.2.1 declaring that reasonable measures have been taken to bring to the notice  of  SUSAN   JULIE   LOADER   (AKA   STAFFORD AKA HOFFMAN) a potential Beneficiary in both the estate of FRANCIS HENRY MCDONALD (deceased) and the estate of DOREEN JOYCE MCDONALD (deceased) as evidenced by the Affidavits filed herein.

[11]   Effectively, both applicants file the present application seeking a declaration to enable the respective trustees to finally distribute funds in the estates of the respective deceased.

[12]   Specifically, pursuant to s 136 of the Trusts Act 2019, the respective applicants seek those orders I outline above to establish that reasonable measures have been taken to bring to Susan’s notice her interest as beneficiary in the respective estates without success. It follows from this that, although not specifically outlined in the without notice application before me, it is presumed the applicants will then wish to distribute the funds in the respective estates amongst the remaining beneficiaries whose whereabouts are currently known.

[13]   The grounds outlined in this application are effectively that despite extensive efforts, the respective applicants have been unable to ascertain the whereabouts of Susan, and that all other persons who may be potentially affected by the granting of the orders sought have consented to this application.

[14]   In support of this application, the branch manager of Perpetual Trust Limited, Lose Tania Fraser (Ms Fraser) has filed an affidavit sworn by her on 27 February 2023. In addition, Tracey has herself filed an affidavit in support of the application, sworn 2 March 2023. Counsel for the executors and trustees of both estates, Ms I M Mitchell of Cunningham Taylor solicitors Christchurch, has also filed a memorandum in support dated 2 March 2023.

[15]   Tracey as I note is the daughter of Susan and granddaughter of Francis and Doreen.

[16]In her 2 March 2023 affidavit, significantly Tracey deposes:

5.My mother [Susan] was 18 at the time of my birth, but separated from my father, her husband, when I was an infant. I lived with my maternal grandmother Doreen and her husband FRANCIS HENRY MCDONALD (“Francis”) from approximately the age of three. My mother moved to Australia …

6.My childhood was spent mostly in Methven on my grandparents’ farm. …

7.Susan (who had gone to Australia sometime before, initially) was very good at remembering birthdays and Christmas for family members. She also regularly communicated with me during my teenage years, and particularly when I was about 16 years old because there were issues over my schooling.

8.My grandmother [Doreen] was very protective of me. I had a stable childhood. My grandmother would not allow me to travel to Australia with Susan, or to visit her as she knew there was a possibility that there would be issues when I was a child regarding me returning to New Zealand.

9.I last saw Susan when I was 23. …

10.Susan stayed with me (when I was 23) for approximately three nights and her behaviour was very erratic. I recall that Susan’s behaviour was so erratic that we contacted Sunnyside Hospital (Hillmorton). … In the week that Susan was here, she turned my life upside-down.

11.I have had no contact since that time which is now over 30 years ago.

…

13.I was aware Susan had been registered as a missing person. 2008/2009 I was verbally advised by the Australian Police that contact had been made but Susan refused to have contact with her family. Susan’s name was removed from the Missing Persons Register.

14.I was aware that investigations  were  being  made  through Perpetual Trust Limited to locate my mother as she was a Beneficiary in the Estate of my grandfather  Francis  and  I,  along  with Perpetual Trust Limited, am an Executor of that Estate. …

15.I am aware that an affidavit is to be sworn by Ms Fraser, detailing the investigations made over a lengthy period of time, my grandfather having died on 21 May 1998.

16.As well as the investigation through the Salvation Army Family Trace Service (“SAFTS”), and the investigations completed by Pat Coady of Corporate Risks (1997) Limited, I have personally visited an address in Melbourne on 8 January 2019 which had been provided by my half-brother, Carl [Susan’s son], on 2 April 2018.

17.I made enquiries at each flat at the address and left messages in each letterbox when I was unable to speak with occupants of the properties, requesting any information regarding my mother.

18.No confirmation was received that Susan had ever lived at the address and no further information arising from the messages I left in the letterboxes was subsequently received.

19.Given the passage of time since the last contact and the extensive investigations which have been made, I ask that the Court now make orders in relation to the Estates of both my grandparents, to enable the distribution of the shares held in trust for my mother, SUSAN JULIE LOADER.

20.I have recently been visiting Melbourne and  my  aunt, ROSEMARY CATHERINE HELEN MARSH. I have appraised my aunt of the steps we are taking to finalise both Estates and she has consented to same. …

[17]   As to the affidavit of Ms Fraser, filed in support of this application, on behalf of Perpetual Trust Limited, she deposes that:

6.Prior to the death of Doreen, steps had been taken to locate Susan.

7.Our records note that in September 2003, the Trustees approved a payment of $2,500.00 to Doreen as travel expenses for her to travel to Melbourne in an attempt to contact Susan.

8.A file note records that Tracey contacted the Australian Police regarding her mother Susan, who had been registered a “missing person”. Tracey is to swear an Affidavit in support of the Application made to enable the distribution of the estate of both Francis and Doreen, her grandparents.

9.ANNEXED and marked “C” is a letter from the Salvation Army Family Tracing Service (“SAFTS”) dated 8 July 2009 to Doreen, confirming they could provide no definitive information on the location of Susan.

10.Perpetual Trust Limited engaged Corporate Risks (1997) Limited (Mr Coady). ANNEXED and marked “D” is an email report dated 26 July 2016.   Further reports from Mr Coady were received on    10 October 2017 …, 9 April 2018 …, and 1 May 2018.

…

15. Over the years various leads have been explored by both SAFTS and Corporate Risks … with no evidence or responses providing any information regarding Susan or her whereabouts.

[18]   Amongst other things, Susan allegedly declined any contact with her family in New Zealand and at one time was registered as a missing person with the Australian police.

[19]   On 15 September 2018 and 19 September 2018, notices were placed in Western Australian newspapers (seeking the whereabouts of Susan), but no responses were received.

[20]   A report it seems was received dated 12 June 2019 from Missing Persons in Australia detailing searches undertaken by Queensland Covert Investigations without success.

[21]   A further report dated 7 June 2022 was received from Corporate Risks, an email dated 20 September 2022 with the results of searches of Births, Deaths, and Marriages registries in Western Australia, Queensland, and Victoria, for any record of marriage of Susan. These advised that no trace of any kind could be found.

Analysis

[22]   On the basis of all the material before the Court, I am satisfied that in the circumstances here the present application can properly proceed on a without notice basis.1

[23]   Turning now to the present application itself, it is brought pursuant to s 136 of the Trusts Act 2019. It is useful to set out this provision here in full:

1      High Court Rules 2016, Rule 7.46.

136Trustee may apply to court to allow distribution of missing beneficiaries’ shares

(1)The court may, on application by a trustee, make an order authorising the trustee to distribute trust property—

(a)as if a potential beneficiary or a class of potential beneficiaries does not exist or never existed or has died before a date or an event specified; and

(b)if, because of the order, it is not possible or practicable to determine whether any condition or requirement affecting a beneficial interest in the property or any part of it has been complied with or fulfilled, as if that condition or requirement had been or had not been complied with or fulfilled.

(2)The court may make an order only if it is satisfied that—

(a)reasonable measures have been taken to bring to the notice of the potential beneficiary or beneficiaries their potential beneficial interest or interests; and

(b)at least 60 days have passed since the last of those measures was taken; and

(c)no potential beneficiary with respect to whom an order is sought has come to the attention of the trustee as a result of those measures, or the claim of any such beneficiary may be disregarded in the circumstances.

[24]   The predecessor to s 136, being s 76 of the Trustee Act 1956, required advertising, usually done by way of newspaper advertisements. It is clear however that trustees now have greater flexibility as to how they try to notify potential beneficiaries. In terms of s 136, trustees do need to satisfy the Court though they have taken “reasonable measures” to bring that potential beneficial interest to the notice of a potential beneficiary.

[25]   It appears also that s 136 is intended to enable trustees to protect themselves from the risks of claims by people named as beneficiaries who simply cannot be located or whose existence cannot be established.

[26]   Although not specifically required under s 136, in the present case the applicants have advertised for Susan’s whereabouts in Western Australian newspapers, where it was understood she was living for some time. Also, there have been considerable attempts undertaken to search for Susan in Australia (where she has been

since Tracey was a child), both prior to Doreen’s death on 20 May 2014 and subsequently. This has included travel to Australia by Doreen whilst she was alive in an attempt to make contact with her daughter Susan, numerous contacts with the Australian police and the Salvation Army Family Tracing Service, engagement of investigators (Corporate Risks (1997) Limited) and obtaining reports from them in 2016, 2017, and 2018, missing persons reports undertaken by Queensland Covert Investigations, unsuccessful requests to the Australian Government (Department of Human Services), and searches with the Births, Deaths, and Marriages authorities, as well as pursuing and exploring a number of leads provided by both the Salvation Army and Corporate Risks (1997) Limited.

[27]   I do need to say that it does appear there is no evidence before me of searches being undertaken for Susan on social media, but I leave that aspect on one side here. What is clear is that other major searches over some time and private investigation services have been carefully undertaken.

[28]   In all these circumstances, I am satisfied first, that reasonable measures have been taken by the applicants as respective administrators of the estates of Francis and Doreen in effort to bring her potential beneficial interest in the estates to Susan’s notice, and secondly, that at least 60 days have passed since the last of those measures was undertaken. It follows, too, that no contact has been made by Susan with the applicants, nor has her whereabouts or position concerning her potential beneficial interest in the estates has come to the attention of the applicants as executors and trustees. I conclude that I am satisfied “reasonable measures” have been taken to bring to Susan’s notice as a potential beneficiary her interest in the estates of her late father Francis and her late mother, Doreen.

Result

[29]The application before me succeeds.

[30]   An order is now made as sought, declaring that reasonable measures have been taken to bring to Susan’s notice as a potential beneficiary in both the estate of Francis and the estate of Doreen, as evidenced by the affidavits filed in this proceeding.

[31]That effectively addresses the orders sought in the current application.

[32]   Leave is reserved, however, for the parties to approach the Court further, if some discussion as to further orders that may be required becomes relevant.

Gendall J

Solicitors:

Cunningham Taylor for the Applicants