Prescott

[2025] NZHC 2043

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-002321

[2025] NZHC 2043

UNDER	the Trusts Act 2019 and the High Court Rules 2016
IN THE MATTER OF	an application by PETER-RICHARD PRESCOTT for appointment as a trustee Applicant

Hearing:	23 July 2025
Representation:	Applicant self-represented
Judgment:	24 July 2025

JUDGMENT OF JOHNSTONE J

(application for appointment as trustee)

This judgment was delivered by me on 24 July 2025 at 4pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Application by PETER-RICHARD PRESCOTT for appointment as a trustee [2025] NZHC 2043 [24 July 2025]

[1]Section 96 of the Trusts Act 2019 relevantly provides as follows:

1. Who may be appointed as trustee

   (1)Any person may be appointed as a trustee of a trust, unless the person is disqualified.

   (2)The following persons are disqualified from being appointed as a trustee:

   …

(b)      an undischarged bankrupt:

…

(3)Despite subsection (2)(b), an undischarged bankrupt may be appointed as a trustee with the consent of the court.

…

[2]                 Peter-richard Prescott was one of two trustees, appointed upon the creation of the Capricorn Trust, by deed dated 25 November 1997. And as the “Principal Family Member” of the Trust, he holds a power of appointment and removal of trustees.

[3]                 Mr Prescott wishes to re-appoint himself as a trustee. However, he is an undischarged bankrupt. In light of the above terms of s 96, he has brought an originating application seeking the Court’s consent.

Should the Court consent to Mr Prescott’s appointment?

Principles to which the Court must have regard

[4]                 Section 4 of the Trusts Act sets out principles to which every court exercising a power under the Act must have regard; that is, a trust should be administered in a way that is:

(a)consistent with its terms and objectives; and

(b)avoids unnecessary cost and complexity.

[5]                 The Court must therefore consider whether granting consent will meet these requirements.

Mr Prescott’s position

[6]Mr Prescott says consent should be granted because:

(a)In October 2008, as one of the Trust’s then trustees, he purchased property at 14A Target Road, Totara Vale (title identifier NA43C/1200) in October 2008. In April 2014, when he was no longer a trustee, the property was sold, purportedly by way of mortgagee sale.

(b)He has since learned that the sale was invalid, as no valid mortgage instrument had been executed.

(c)He considers his appointment to be in the best interests of the Trust’s beneficiaries, as his extensive involvement with the Trust and his knowledge of its affairs make him well-suited. He says he feels strongly inclined to act to preserve and protect beneficial interests that on the face of it have been misappropriated.

[7]                 Mr Prescott’s application is supported by affidavits sworn by his daughter, Lucinda Jane Rawson, and his son, Jason Richard Prescott, each of whom were appointed final beneficiaries of the Trust upon its creation in 1997. They say they have discussed the application with their father, and that they understand and endorse his endeavour to be appointed so as to take legal action against “the bank”. They say they have faith in their father to do what is in their interests as the beneficiaries of the Trust.

[8]                 The application is further supported by Mr Prescott’s affidavit outlining the basis on which he offers himself as a person of good moral character, worthy of appointment as a trustee. Amongst other things, his affidavit confirms, without providing full detail, that his bankruptcy was due to his inability to meet an award of Court costs. He considers the award should have fallen away after he enjoyed success on an appeal.

Assessment

[9]                 Prior to filing his application, Mr Prescott filed another, seeking pre-commencement discovery against ASB Bank Limited. Justice Venning dismissed the earlier application, awarding ASB costs.1 When giving reasons for dismissing  Mr Prescott’s prior application, Venning J explained that:

(a)Pre-commencement   discovery   was   unnecessary.    In    essence, Mr Prescott had sought confirmation that, when registering a mortgage, ASB did not have an executed deed of power of attorney.2 Yet ASB said it did not have such a deed, adding that it did not need one because the Trust’s then trustees registered the mortgage.3

(b)Mr Prescott had no standing to bring the application:

(i)not being a trustee at the time the loan was entered, or when the mortgage was executed, or when the property was sold;4 and

(ii)not being able, while an undischarged bankrupt, to appoint himself a trustee without the Court’s consent, which had not as yet been obtained.5

[10]             The Judge added that his observation that discovery was not needed for the claim to be prepared and pursued should not be taken as any suggestion the substantive claim might have merit.6

[11]             When hearing Mr Prescott’s application, I asked him whether Venning J’s costs award had been met. He said it had not. And I asked Mr Prescott whether the Trust has any property, other than its interest in the proceeding he intends to bring against ASB. He advised that it has only an old motorhome. I asked Mr Prescott why his son

1      Prescott v ASB Bank Ltd [2024] NZHC 2927.

2 At [13].

3 At [14].

4 At [17].

5 At [18].

6 At [20].

or daughter are not minded to pursue the action that they endorse him taking on their behalf. He said they are not directly aware of the history of the Trust and its dealings with the bank, in the way that he is. And further, they are apprehensive about coming to Court. He sees no need to ask them to be involved at this point.

[12]             Overall, I find Mr Prescott not to have demonstrated that consenting to his appointment as a trustee will be in the interests of justice. Nor am I assured that it will, in terms of s 4 of the Trusts Act, avoid unnecessary cost. This is because I consider that granting consent might enable him to pursue what may amount to a meritless proceeding, without having been constrained in his decision-making by the full disincentive of the possibility of an adverse costs award. I acknowledge that the bank would, upon receipt of a proceeding brought by Mr Prescott, be likely to apply for an order for security for costs. And that this might have the effect of limiting the expenditure of wasted costs. But at least some costs would be incurred before obtaining an order for security could be obtained, and if the bank were ultimately successful in the litigation, such preliminary costs would not likely be compensated. If the Trust’s beneficiaries are persuaded of the merit of Mr Prescott’s proposed action against the bank, they should be required to pursue it themselves.

[13]             On this basis, I consider the Court should not consent to Mr Prescott’s appointment, as doing so may contradict the need, in the administration of trusts, to avoid wasted costs.

Result

[14]Mr Prescott’s application is declined.

Johnstone J