Phillips Family Trust

[2019] NZHC 422

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-280

[2019] NZHC 422

UNDER

Section 52 of the Trustee Act 1956 and the High Court’s inherent jurisdiction

IN THE MATTER

of The Phillips Family Trust

ELLEN CAROLINE PHILLIPS and CATHERINE ANN ATCHISON

Applicants

Hearing:	On the papers
Counsel:	AJ Steele for applicants
Judgment:	13 March 2019

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on 13 March 2019 at 10 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Martelli McKegg, Auckland

Re Phillips Family Trust [2019] NZHC 422 [13 March 2019]

Introduction

[1]                 The applicants are the current trustees of the Phillips Family Trust. Prior to the current trustees being appointed, the original trustees made advances to the daughter of one of the trustees.

[2]                 The advances have now been repaid, but the mortgage remains registered on the title to the daughter’s property. She now wants to sell the property. A difficulty has arisen given the mortgage remains in the name of the original trustees (both of whom are now deceased), such that the new trustees cannot take steps to remove it.

[3]The new trustees accordingly seek the following orders:

(a)leave be granted to commence the proceedings by way of originating application without notice;

(b)service of the proceeding is dispensed with; and

(c)the Court vest the mortgage registered on the title of the daughter’s property in the name of the current trustees, pursuant to s 52 of the Trustee Act 1956 (Act) or the Court’s inherent jurisdiction.

Further background

[4]                 The trust was settled by Diane Cowie Turner. The original trustees were Beatrice Valda Phillips and Lynley Cowie Wilson. Ms Phillips died on 6 April 2017 and Ms Wilson on 18 August 2006. Copies of their respective death certificates have been produced in evidence before the Court.

[5]                 The applicants are the current trustees of the trust. One of them, Ms Atchison, is a partner in an Auckland law firm. She has sworn an affidavit in support of the application, setting out the background to it.

[6]                 As noted above, advances were made from the trust to Ms Phillips’ daughter, secured by a registered mortgage on the daughter’s property in Auckland. The certificate of title for that property has been produced in evidence, and shows the

trust’s mortgage, registered in the names of Ms Phillips and Ms Wilson as original trustees.

[7]                 Ms Atchison explains that the mortgage has since been fully repaid but prior to their respective deaths, the trustees did not arrange for the mortgage to be discharged from the title. That fact is now hampering sale of the property. The trustees are agreed that the mortgage needs to be removed from the title, but unless and until it is vested in their names, they cannot take any steps in that regard.

Discussion

[8]                 I am satisfied it is appropriate for leave to be granted for the proceedings to be commenced by originating application. The expediency inherent in the originating application procedure is entirely suited for proceedings of this sort. Leave is accordingly routinely granted by this Court for proceedings similar to these to be commenced by way of originating application.

[9]                 I am also satisfied that service on other parties may be dispensed with. All that is occurring is that a mortgage currently registered on the title of a property in the names of original trustees, who are now deceased, is to be vested in the names of the existing trustees. Nothing in substance changes. The new trustees will still be required to deal with and consider any potential discharge of the mortgage in accordance with their duties as trustees. Plainly, however, unless the mortgage is vested in them, they cannot take any steps in this regard.

[10]              Finally, and as will be evident from the above discussion, I am also satisfied it is appropriate to make the vesting orders sought. The application is, as Ms Atchison explains in her affidavit, mechanical in nature, and she deposes there is not any person who objects or who is likely to object to the vesting orders sought.

Result

(a)I therefore make the following orders:

(b)Leave is granted to the applicants to commence these proceedings by way of originating application.

(c)Service on any third parties is dispensed with.

(d)Pursuant to s 52 of the Trustee Act 1956 and/or the Court’s inherent jurisdiction, the Court vests mortgage C219757.4 registered on Certificate of Title NA58D/937 in Ellen Caroline Phillips and Catherine Ann Atchison.

[11]I make no order as to costs.

Fitzgerald J