Re Hamertons Trustee Services Ltd - [2018] NZHC 2720

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2018-463-91

[2018] NZHC 2720

IN THE MATTER of the G. R. Reid Family Trust

UNDER

Part 19 of the High Court Rules, the Trustee Act 1956 and the inherent jurisdiction of the High Court

BETWEEN

HAMERTONS TRUSTEE SERVICES LIMITED and FOCUS TRUSTEE

COMPANY LIMITED

Applicants

Hearing: On the papers

Counsel:

A A M Kershaw for applicants

Judgment:

19 October 2018

JUDGMENT OF KATZ J

This judgment was delivered by me on 19 October 2018 at 3.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Hamertons Lawyers Limited, Whakatane

HAMERTONS TRUSTEE SERVICES LIMITED and FOCUS TRUSTEE COMPANY LIMITED [2018] NZHC
2720 [19 October 2018]

Introduction

[1] The applicants, Hamertons Trustee Services Ltd and Focus Trustee Company Ltd, seek orders removing George Reid as trustee of the G R Reid Family Trust and vesting title in the property of the G R Reid Family Trust in the continuing trustees. In addition, the applicants seek associated orders that service of the proceedings on Mr Reid be dispensed with, and leave to commence the proceeding by way of an originating application.

Background

[2] Mr Reid settled the G R Reid Family Trust (“the Trust”) by deed dated 17 February 1977. The Trust owns an undivided one-half share in a property in Whakatane (being the land contained in Certificate of Title SA 26D/1174 and Certificate of Title SA 26D/1180) as well as other assets.

[3] The discretionary beneficiary of the Trust during Mr Reid’s lifetime is his wife, Mrs Reid. After his death, the discretionary beneficiaries are Mrs Reid and Mr Reid’s children. The final beneficiaries are the children of Mr Reid, with a gift over to their children in the event a child has died prior to vesting day.

[4] The current trustees of the Trust are Mr Reid, Hamertons Trustee Services Ltd and Focus Trustee Company Ltd. The power of appointment is vested in Mr Reid during his lifetime. Mr Reid is currently in poor health and suffers from dementia. On 6 October 2017, Dr McKevitt examined Mr Reid and found that he lacked the capacity to comprehend or make decisions about his own welfare. That incapacity was due to dementia. More recently, on 13 August 2018, Dr March wrote a report recording that Mr Reid suffers from dementia, Parkinson’s and fragility. He considered Mr Reid totally lacks competence to manage his own affairs. There is no power of removal of trustees in the Trust Deed.

[5] Mrs Reid has confirmed in a memorandum of consent, dated 23 August 2018, that she consents to the orders sought in the application.

Should leave be granted to commence the proceedings by way of originating application?

[6] The current proceeding is not of a kind that can be commenced by way of originating application as of right pursuant to rr 19.2 to 19.4 of the High Court Rules 2016. However, the Court may, in the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Hamertons Trustee Services Ltd

Details

AGLC: Re Hamertons Trustee Services Ltd [2018] NZHC 2720
Case: [2018] NZHC 2720
Decision Date: 19 October 2018

CaseChat Overview and Summary

In the High Court of New Zealand, Hamertons Trustee Services Ltd and Focus Trustee Company Ltd applied for orders to remove George Reid as trustee of the G R Reid Family Trust and vest title in the property of the trust in the continuing trustees. The applicants sought leave to commence the proceedings by way of an originating application, and for service of the proceedings on Mr Reid and the beneficiaries of the trust to be dispensed with. The trust owns a property in Whakatane and other assets. The discretionary beneficiary during Mr Reid's lifetime is his wife, and the final beneficiaries are his children. The current trustees of the trust are Mr Reid, Hamertons Trustee Services Ltd, and Focus Trustee Company Ltd. The power of appointment is vested in Mr Reid during his lifetime, but he is currently in poor health and suffers from dementia, rendering him unable to act as a trustee.

The court found that the proceeding could proceed by way of an originating application. Service on Mr Reid should be dispensed with due to his mental incapacity, and there was no need to serve the beneficiaries as the orders sought were purely administrative in nature and would not affect their rights under the trust deed. The court also found that it was appropriate to rely on its inherent jurisdiction to remove Mr Reid as a trustee, rather than also order substitution of a new trustee, as there were two continuing trustees. The court granted the orders sought by the applicants, removing Mr Reid as trustee and vesting the relevant trust property in the remaining trustees. Leave was granted to bring the proceedings by way of an originating application, and service of the proceedings on Mr Reid and the beneficiaries of the trust was not required.

Orders