Peters as Trustees of the Taka Perenara Peters Trust

[2012] NZHC 3051

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2011-488-803 [2012] NZHC 3051

BETWEEN  PAUL HENRY PETERS, VERONICA ROSE FLETT AND GENE EZZARD PETERS AS TRUSTEES OF THE TAKA PERENARA PETERS TRUST

Plaintiffs

Hearing:         15 November 2012

Counsel:         TJ Savage for Plaintiffs

PJ Magee for remaining beneficiaries

Judgment:      15 November 2012

ORAL JUDGMENT OF RODNEY HANSEN J

Solicitors:           Urlich McNab Kilpatrick, P O Box 633, Whangarei 0140 for Plaintiffs

(Email:  [email protected] )

Thomson Wilson, P O Box 1042, Whangarei 0140 for remaining beneficiaries

(Email:  [email protected] )

PAUL HENRY PETERS, VERONICA ROSE FLETT AND GENE EZZARD PETERS AS TRUSTEES OF THE TAKA PERENARA PETERS TRUST HC WHA CIV-2011-488-803 [15 November 2012]

[1]      The plaintiffs are the trustees of a trust which owns two properties left in trust to family members under the will of Taka Perenara Peters who died in January 1993. One of the properties is a residence at 24 Harbourview Road, Te Atatu, Auckland. The other is some twenty acres of land at Whananaki on which there are a number of houses.    The will established separate trusts which gave named family members rights of occupation.

[2]      In 1998, orders were made by Master Kennedy-Grant revoking the trust for the property at Te Atatu and vesting the assets of that trust on what is described as the “land trust”.  The order appointed new trustees for the land trust and made the following provision for the appointment of a replacement trustee:

2.In the event of one of the land Trustees dying or no longer wishing to be a land Trustee a meeting of descendants shall be convened by the Land Trustees for the appointment of a replacement land Trustee by those present.   Reasonable notice of such a meeting shall be given.

[3]      In 2006, three family members began a proceeding in this Court[1]  for the removal of the plaintiffs as trustees. A settlement was reached on 19 June 2007.  The agreement provided in part:

[1] CIV-2006-244-759.

1.        The trustees will call a special meeting of the trust within six weeks

of today’s date to recommend that:

1.1The terms of the trust are varied by consent to provide for the appointment of seven trustees;

1.2An application is made to this Court to vary the terms of the trust once the resolution in paragraph 1.1 has been passed.

2.Once the order in paragraph 1.2 has been granted that a further meeting  of  the  beneficiaries  is  called  to  vote  for  the  additional trustee.  A further meeting will be held within six weeks of the order being granted.

[4]      In  this  proceeding  the  plaintiffs  sought  an  order  to  give  effect  to  the settlement by varying the trust deed to provide for the appointment of four additional

trustees.

[5]      Bell AJ directed service of the proceeding and supporting documents on all adult living descendants of the deceased but dispensing with service on descendants who have not reached full age.  He directed that they may be represented by their parents.

[6]      When  the proceeding came back  before  Bell AJ,  he queried  whether  an application to vary the trust deed was the right solution.  He noted that the power under s 64A of the Trustee Act 1956 permits the Court to authorise variations where some beneficiaries are incapable of assenting or are within the other classes specified in s 64A(1).   But he noted it cannot give approval for adult beneficiaries.   The support of all is required. This is where a problem arose for the plaintiffs.

[7]      There is one beneficiary of the trust – Benedict Simmons – who has not been heard of for 26 years and cannot be contacted.  Accordingly, Bell AJ concluded that it would not be useful for the parties to seek orders under s 64A of the Trustee Act because, even if the Court were to approve a variation on behalf of those who do not have capacity, there could not be an effective variation because of the absence of the assent of the missing beneficiary.

[8]      It was agreed that the way in which the plaintiffs should proceed was to seek orders for the appointment of the additional four trustees under s 51 of the Trustee Act.   It was envisaged that the plaintiffs would give notices calling a meeting, inviting nominations and allowing all descendants to attend the meeting.  The four nominees who received the most votes would be proposed as new trustees to be appointed by the Court.

[9]      In order to achieve this outcome, Bell AJ gave directions for the filing and service of an amended statement of claim and for notice of the meeting to be given to all known descendants of the decease.

[10]     The meeting duly took place on 15 September 2012.  One of the plaintiffs, Veronica Flett, who acts as treasurer/secretary for the trust, has sworn an affidavit detailing  the  steps  taken  to  call  the  meeting  and  exhibiting  the  minutes  of  the meeting. The trustees who were chosen by a majority of the beneficiaries are:

Robyn Angela Peters

Frederick Irving Hugh Worters

Anne Mary Peters

Shelley Justine Peters

[11]     Section 51(1) of the Trustee Act gives the Court wide powers to appoint new trustees.  It provides as follows:

51       Power of Court to appoint new trustees

(1)       The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so  to  do  without  the  assistance  of  the  Court,  make  an  order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

[12]     I am satisfied that it is expedient to appoint the new trustees and that it is inexpedient, difficult or impracticable to do so without the assistance of the Court. The difficulty arises because of doubts whether the four additional trustees can be appointed by the trustees themselves at this point.

[13]     Section 43(2)(a) of the Trustee Act provides that, on the appointment of a trustee or trustees, the number of trustees may be increased.   Reading s 43 as a whole,  I  consider  it  clear  that  the  power  to  appoint  additional  trustees  can  be exercised  at  any time  after  the  appointment  of  a  trustee  or  trustees,  subject  to compliance with s 43(5) where there is a sole trustee or not more than three trustees. That would permit the appointment of the additional trustees with the consent of the trustees pursuant to s 43(5)(a).   However, for the avoidance of doubt and having regard to the reservations expressed by counsel,  I make an order appointing as additional trustees the beneficiaries named in [10] above who were elected at the meeting.

[14]     I reserve leave to the parties to apply for further orders.

[15]     I reserve the question of costs.  If orders in relation to costs are required, the parties may file memoranda.