Price v Price

[2020] NZHC 2572

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2020-425-56

[2020] NZHC 2572

UNDER

the Trustee Act 1956

BETWEEN

MARK ALLAN PRICE, as executor and trustee of the estate of Verna Price

Plaintiff

AND

DAVID ANTHONY PRICE

Defendant

Hearing:	Determined on the papers
Counsel:	K A Menlove for Plaintiff
Judgment:	1 October 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 1 October 2020 at 11.30am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 1 October 2020

PRICE v PRICE [2020] NZHC 2572 [1 October 2020]

[1]    The plaintiff, Mark Allan Price (Mark), is the trustee of his mother’s estate (the late Verna Price). The defendant, David Anthony Price (David), is Mark’s father. David was, until recently, a trustee of his late wife’s estate (Verna Price). Mark’s mother died nearly 10 years ago and probate was granted of her estate in October 2011. It is safe to assume that administration of the estate was concluded long ago and Mark and David’s roles as executors has concluded.

[2]    The original executors and trustees were David and Mark. Mark explains that, as a result of David unfortunately losing capacity,  he was removed as a trustee on  17 August 2020 under s 43 of the Trustee Act 1956 (the Act). No replacement trustee has been appointed. I will return to that issue at the conclusion of this judgment.

[3]    Mark explains the estate owns a property at 125 Broughton Street, Gore (the property). The property is presently registered in the name of David and Mark as executors.

[4]    While the deed of removal of David was effective to remove him as a trustee, the remaining trustee needs to seek a vesting order under s 52 of the Act to enable the registration of the transfer of the property from the names of David and Mark to David alone. This is because David lacks mental capacity to sign an Authority & Instruction form to enable registration of the transfer of the property to Mark.

[5]    While the medical certificate produced to the Court is from December 2019, it records that David’s mental incapacity is due to a health condition and that is likely to continue indefinitely.

[6]    To give effect to the vesting order and to deal with issues as to service and representation, Mark seeks the following orders:

(a)an order that David need not be served with the proceedings;

(b)an order that David does not need to be represented by a litigation guardian;

(c)that leave be granted for the use of the originating application procedure; and

(d)a vesting order.

Use of originating application procedure

[7]    It is a well-established practice that applications of this kind may be commenced by way of originating application. Leave is required because the originating application procedure cannot be used as of right under rr 19.2 – 19.4 of the High Court Rules 2016. It is nonetheless in the interests of justice that this procedure be used in this case, and I grant leave accordingly.

Service and litigation guardian

[8]    Rule 4.30 of the High Court Rules requires David to have a litigation guardian because of his lack of capacity, unless the Court directs otherwise.

[9]    I am satisfied in this case it is unnecessary to appoint a litigation guardian. The evidence is that David would not understand the proceedings if they were served on him, and service would likely only cause him distress. For the same reasons, I direct that David not be served with the proceedings.

Vesting order

[10]   That leaves the issue of the vesting order. Under Mark’s mother’s Will, David enjoyed a life interest in the residue and upon David’s death, after some gifts to grandchildren, the balance of the estate is to be divided equally between Mark and his sister, Miriam. I assume from the Will of Mark’s mother, there are only two children but that will need to be confirmed as I outline below.

[11]   The deed removing David as a trustee records the continuing trustee (Mark) did not seek the appointment of another trustee, believing he was able to complete the duties of the estate’s ongoing management and final distributions under his mother’s Will. It records the estimated value of the estate is $42,500.

[12]   I am told nothing of the relationship between Mark and his sister, Miriam (again, assuming he only has one sibling). The Court is always reluctant to place sole control of an estate in the hands of one trustee who is also a beneficiary. In making this observation, I do not intend in any way to question Mark’s motives. If Miriam confirms she is  happy for Mark to be the sole trustee of their mother’s  estate,  then  I will make an order vesting the property in him as trustee. If, for any reason, Miriam would feel more comfortable with there being a second trustee, then one is to be nominated and that person’s consent conveyed to the Court by way of memorandum and an order appointing the additional trustee will be made. Miriam’s consent to her brother being sole trustee can also be confirmed by memorandum along with confirmation that she is Mark’s sole sibling – if there are other siblings their position should also be advised or it may be simpler to have a second trustee. Again, I take this step only to avoid creating the appearance of a situation where Mark has sole control of a fund ultimately for joint benefit.

Associate Judge Lester

Solicitors:
Sheddan Pritchard Law, Gore