Re Holland

[2019] NZHC 1146

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV 2019-470-000034

[2019] NZHC 1146

IN THE MATTER

of the Trustee Act 1956

AND

IN THE MATTER

of an application by William Beau Holland of Tauranga, solicitor, for orders as to how the trustee of the Estate of Valerie Clarice Laycock may distribute the Estate

 Applicant

Hearing:	07 May 2019
Appearances:	J Sparrow for Applicant
Judgment:	23 May 2019

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 23 May 2019 Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:

Holland Beckett, Tauranga

Estate of Valerie Clarice Laycock [2019] NZHC 1146 [23 May 2019]

Introduction

[1]    William Beau Holland applies to the court on behalf of the executors and trustees of the estate of Valerie Clarice Laycock for an order pursuant to s 76 of the Trustee Act 1956 that the trustees and executors of the estate may distribute the deceased’s estate as if a named beneficiary, Euan Laycock, has never existed.

Facts

[2]    Valerie Laycock died on or about 29 November 2014. The deceased left a valid will  dated 13 July  2006, for which probate was granted by the  High Court on      23 February 2015. In her will, the deceased appointed William Beau Holland and John Douglas Patterson, both of Holland Beckett Law, as trustees and executors of her estate. Under the will, the deceased left the residue of her estate to be split equally amongst her two sons, Brent Laycock and Euan Laycock, and also left each son a specific oil painting by her late husband.

[3]    Holland Beckett Law are administering the estate on behalf of the trustees and executors. In accordance with the deceased’s will, Brent Laycock received his half share of the residue of the estate on 23 October 2018.

[4]    Since the deceased’s death in 2014, the trustees and executors have been unable to locate Euan Laycock in order to distribute his portion of the residue, amounting to

$11,896.31 (less legal fees and administration costs). The only information that Holland Beckett Law were able to obtain was that Euan Laycock was born in Auckland on 17 July 1958, that when he was last heard from he may have been in the South Island and that he had been convicted of theft in both Nelson and New Plymouth.

[5]    Given the scant information available regarding Euan Laycock, Holland Beckett Law engaged a private investigator in an attempt to locate him. Mr Ron McQuilter at Paragon Investigations made inquiries as to the location of Euan Laycock but was unsuccessful in locating him. Mr McQuilter however, informed Holland Beckett Law that:

(a)An individual who had flatted with Euan Laycock in 2013 believed that Euan Laycock had said he was going to try and get to Australia;

(b)A prior address for Euan Laycock in Gore in 2014 was uncovered;

(c)The most recent address for Mr Euan Laycock was a vacant lot in Napier;

(d)Euan Laycock is not currently bankrupt but has been bankrupt on three previous occasions;

(e)Euan Laycock has been sought after by creditors as recently as October 2018; and

(f)Euan Laycock does not have a presence on social media.

[6]    In an affidavit sworn on 22 March 2019, Mr Holland stated that he considered further steps to search for Euan Laycock, including the publication of advertisements, would be unsuccessful and would rapidly deplete the remaining estate funds. Accordingly, the applicant seeks has filed an originating application seeking an order that the estate be distributed as if Euan Laycock had never existed, pursuant to s 76 of the Trustee Act 1956. If such an order were to be granted, Brent Laycock would receive the remaining funds in place of Euan Laycock. The oil painting that was to be gifted to Euan Laycock under the deceased’s will has not been located.

Analysis

[7]    The applicants commenced proceedings by way of originating application, pursuant to Part 19 of the High Court Rules 2016.1 The application was filed without notice in reliance on r 7.43A.2 Under r 7.46, upon receiving a without notice application the court must determine if the application can properly be dealt with without notice.3 There are various circumstances where a judge may be satisfied that

1      Rule 19.2(x) and 19.7.

2      Rule 7.43A(c).

3      Rule 7.46(2).

a without notice application can properly proceed, including where an enactment explicitly permits it.4 I am satisfied that this application can be determined without notice. The enactment under which the order is sought, s 76 of the Trustee Act 1956, explicitly permits the application to be made without serving notice upon any person, unless otherwise ordered by the court.5 I see no need for any such order in this case.

[8]Section 76 of the Trustee Act 1956 provides that:

(1) Where any property is held by a trustee and the property or any part thereof cannot be distributed because the trustee does not know whether any person who is or may be entitled thereto is or at any material date was in existence, or whether all or any of the persons who are members of any class who are or may be entitled thereto are or at any material date were in existence, or because the trustee does not know whether any such person is alive or dead or where he is, the trustee may publish such advertisements (whether in New Zealand or elsewhere) as are appropriate in the circumstances calling upon every such person and every person claiming through any such person to send in his claim within a time to be specified in the advertisements, not being less than 2 months in any case from the date on which the advertisement is published. Where the trustee is in doubt as to what advertisements should be published under this subsection, he may apply to the court for directions in that regard.

(3)Upon proof by affidavit of the circumstances, and of the inquiries that have been made, and of the results of inquiries and advertisements, and of the claims of which the trustee has received notice, and of the notices that the trustee has given to claimants under subsection (2), and of the action (if any) which the claimants have taken to enforce their claims, the court may order that the trustee may distribute the property or part thereof, subject to such conditions as the court may impose,—

(a)     as if every person and every member of any class of persons specified in the order (being all or any of the persons specified in the advertisements) is not in existence or never existed or has died before a date or event specified in the order; and

(b)    where as a consequence of the order it is not possible or practicable to determine whether or not any condition or requirement affecting a beneficial interest in the property or any part thereof has been complied with or fulfilled,

4      Rule 7.46(3)(d).

5      Trustees Act 1956, s 76(8).

as if that condition or requirement had or had not been complied with or fulfilled (as the court may determine).

[9]    In accordance with s 76, the order sought by the applicant may be granted where the court is satisfied upon the provision of affidavit evidence that the trustees and executors have carried out all reasonable inquiries to locate the missing beneficiary and have determined the validity of any claims made to the estate as a result of these inquiries.

[10]   Mr Holland’s affidavit states that the trustees and executors have made inquiries as to the location of Euan Laycock by way of engagement of a private investigator, and that the circumstances are as follows:

(a)Euan Laycock is a beneficiary under the will of Valerie Laycock but could not be located by Holland Beckett Law on the limited information provided to them;

(b)Holland Beckett Law engaged a private investigator who uncovered further details regarding Euan Laycock but were unable to locate him or a current address for him;

(c)No advertisements have yet been published in attempt to locate Euan Laycock;

(d)To publish advertisements now would not be cost effective as they would likely be unsuccessful and deplete the remaining assets of the estate; and

(e)No claims to the estate have been made.

[11]   Section 76(1) of the Trustee Act 1956 provides that where a trustee is unable to locate a person, the trustee may publish an advertisement calling upon them. The applicant has not published any such advertisements and submits that this is not a compulsory requirement under s 76. Although the publication of advertisements is not explicitly required, through the references to advertisements in ss 76(1) and (3) it

appears implicit that advertisements are expected as the minimum requirement to satisfy the court that adequate inquiries have been undertaken.6 This is consistent with the description of s 76 as being intended to flush out any potential claimants.7

[12]   However, I am of the opinion that to require the publication of advertisements in these circumstances would not be useful. If an investigator has been unable to locate Euan Laycock it is doubtful that an advertisement placed in the major newspapers would be productive, particularly in view of the information suggesting that Euan Laycock may have moved to Australia. The engagement of a private investigator goes beyond the minimum requirement of an advertisement and actively seeks out the missing individual.8 I agree with the applicant that to require an advertisement following the use of private investigators would be an inefficient use of the trust assets.

[13]   In accordance with s 76(3) of the Trustee Act, the applicant has provided affidavit evidence of the inquiries made by the private investigator and the outcome of those inquiries. The meagre information uncovered by the private investigator indicates that any further inquiries have a low chance of success. In addition, the size of the deceased’s estate is modest, substantial funds have already been spent trying to locate Euan Laycock and a lengthy time has elapsed since the deceased died. Each of these factors suggest that the executors have carried out all appropriate inquiries. Accordingly, I am satisfied that under these circumstances the trustees and executors have done all that can reasonably be required of them and have made all reasonable inquiries to locate Euan Laycock.

6      This position is consistent with the following cases.

Re McKenzie (As Executors in the Estate of Gilmor) [2019] NZHC 128. Where the addresses of the beneficiaries could not be obtained, and the amount of money involved was modest the Court held that the executors had carried out adequate inquiries and granted the order for distribution of the estate with the condition that the executors first place an advertisement in Law Talk and provide two months for any responses.

Young v Young [2013] NZHC 1396. The Court granted the order that the executors may distribute the estate as if one party never existed, following unsuccessful advertisements in newspapers in both New Zealand and Australia

7      Public Trust v Vincent HC Auckland CIV 2005-404-6291, 9 February 2006 at [16].

8      This is supported by the outcome in Re Lindwall [2017] NZHC 214. A private investigator was engaged in New Zealand and inquiries were made in the United Kingdom, Russia and China in an attempt to locate the beneficiary. No advertisements were placed. The Court held that the executors had carried out sufficient inquiries and granted the order sought to distribute the estate as if one party had not existed.

[14]   Accordingly, I grant an order pursuant to s 76 of the Trustees Act 1956 that the executors and trustees of the estate of Valerie Clarice Laycock may distribute the estate as if Euan Laycock never existed. For sake of clarity, Brent Laycock is to receive the share of the residue that was intended for Euan Laycock, subject to any appropriate deductions for legal fees and administration costs. No further steps are required of the executors to locate the missing beneficiary.

G J van Bohemen J