Re Hetrick - [2017] NZHC 472

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-001191 [2017] NZHC 472

Under the
Application pursuant to section 52 of the

Trustee Act 1956 by vesting order

In the matter of

The Marshall Family Trust

JOHN PHILIP HETRICK Applicant

Hearing: On the papers

Counsel:

A L Worrill for the Applicant

Judgment:

16 March 2017

JUDGMENT OF NATION J

Introduction

[1] On 8 March 2002, Vivienne Jewel Marshall (Mrs Marshall) and her husband Murray Flint Marshall (Mr Marshall) settled a Trust appointing themselves and Mr Hetrick as trustees. The Trustees held a three-quarter share in a property at 75A Wychbury Street, Christchurch. Mr Marshall has died and Mrs Marshall now lacks capacity to carry out her role as trustee.

[2] The applicant, John Hetrick, as the remaining trustee, initiated proceedings to have the title to the interest of the Marshall Family Trust (the Trust) in the property at 75A Wychbury Street, Christchurch, vested in him. He also sought an order allowing him to proceed by way of a without notice originating application.

[3] The person holding title to the remaining one-quarter share in 75A Wychbury

Street is a daughter of Mr and Mrs Marshall, Susan Marion Marshall. Another

Re Marshall Family Trust & Hetrick [2017] NZHC 472 [16 March 2017]

daughter, Anne Louise Marshall, is attorney for her mother under an Enduring Power of Attorney (EPA).

[4] The discretionary beneficiaries of the Trust are now Mrs Marshall, the four children of Mr and Mrs Marshall and their children or remoter issue, and partners or spouses of discretionary beneficiaries.

Procedural requirements

[5] It is appropriate for these proceedings to be brought by way of originating application. Leave is granted accordingly.

[6] I am satisfied that, having regard to the medical evidence of Dr Winter, it is appropriate in this case for service on Mrs Marshall to be dispensed with. In Dr Winter’s professional opinion, Mrs Marshall has very limited cognitive function and does not have the capacity to make any decisions concerning aspects of her personal care, either related to health or financial matters.

[7] I am satisfied that service on Mrs Marshall would serve “no useful purpose”. In reliance upon the inherent jurisdiction of the Court to regulate its own process and proceedings, an order will be made dispensing with service on her.1

[8] I am also satisfied that there is no need for this application to be served on the beneficiaries of the Trust. The application is being made to formally recognise the identity of those who are now to act as trustees and their right to hold title to the Trust’s property. The rights of the beneficiaries under the trust deed will not be affected.

The appointment of a new trustee

[9] In a minute issued on 12 December 2016, I noted that:

[4] Clause 8.1 of the trust deed requires that there be at least two trustees. Counsel for the applicant has suggested there is no need to appoint an additional trustee because Mr and Mrs Marshall’s…

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 Hetrick

Details

AGLC: Re Hetrick [2017] NZHC 472
Case: [2017] NZHC 472
Decision Date: 16 March 2017

CaseChat Overview and Summary

The applicant, John Philip Hetrick, applied to the High Court of New Zealand under section 52 of the Trustee Act 1956 for an order vesting the interest of the Marshall Family Trust in him and for an order allowing him to proceed by way of an originating application without notice. The trust was settled by Vivienne Jewel Marshall and her husband Murray Flint Marshall on 8 March 2002, with the trustees being themselves and Mr Hetrick. The trustees held a three-quarter share in a property at 75A Wychbury Street, Christchurch. Murray Marshall has since died, and Vivienne Marshall lacks the capacity to act as trustee. Susan Marion Marshall, the daughter of the Marshalls, holds title to the remaining one-quarter share in the property, and Anne Louise Marshall, another daughter, is attorney for her mother under an Enduring Power of Attorney (EPA).

The court needed to decide whether the application should proceed by way of an originating application, whether service on Vivienne Marshall and the beneficiaries of the trust should be dispensed with, and whether a new trustee should be appointed. The court also needed to determine whether the attorney under an EPA could exercise the power of appointment of new trustees under a trust deed. The court concluded that the application should proceed by way of an originating application, and that service on Vivienne Marshall and the beneficiaries of the trust should be dispensed with. The court held that the attorney under an EPA cannot exercise the power of appointment of new trustees under a trust deed because the power is subject to fiduciary duties owed to the beneficiaries. The court therefore appointed Anne Louise Marshall as a trustee in substitution for her mother.

The court granted the applicant's application for a vesting order under section 52(1)(b)(i) of the Trustee Act. The court ordered that notice of the proceedings be dispensed with, that Vivienne Jewel Marshall be removed as trustee from the Marshall Family Trust, and that Anne Louise Marshall be appointed as a trustee in her place, jointly with John Philip Hetrick. The court also ordered that the three-quarter interest in the property at 75A Wychbury Street, Christchurch, previously held in the names of Murray Flint Marshall, Vivienne Jewel Marshall and John Philip Hetrick, be vested in John Philip Hetrick and Anne Louise Marshall. The court made no order as to costs.

Orders