Re McKenzie (As Executors in the Estate of Gilmor)

[2019] NZHC 128

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV 2019-442-004

[2019] NZHC 128

UNDER

Part 19 of the High Court Rules and section 76 of the Trustee Act 1956

IN THE MATTER OF

an application for distribution of shares of missing beneficiaries

BETWEEN

WAYNE MERVYN McKENZIE, DAVID WILLIAM FARNSWORTH and GRAHAM

WALLACE ALLAN as Executors in the estate of KEITH EDGAR GILMOR Applicants

Teleconference:	12 February 2019 at 9.30 am
Counsel:	G W Allan for Applicants
Judgment:	12 February 2019

JUDGMENT OF MALLON J

[1]                 Keith Edgar Gilmor died on 14 August 2006. He left a will in which he made gifts to a number of people. The trustees have successfully located most of the people to whom the gifts were made. The estate has accordingly been distributed with the exception of three gifts: a gift of $800 to Leo Hopson; a gift of $2,000 to June Parker; and a gift of $500 to Douglas John White. The trustees have been unable to locate these three beneficiaries.

[2]                 The trustees seek orders enabling the funds held in Pitt & Moore’s trust account in Mr Gilmor’s name be distributed, after deducting costs, to the residuary beneficiaries named in the will. The residuary beneficiaries are, in five equal parts, the Society for the Prevention of Cruelty to Animals (Auckland) Inc; the Society for the Prevention of Cruelty to Animals Inc (Nelson branch); the New Zealand Red Cross

RE McKENZIE [2019] NZHC 128 [12 February 2019]

Society; the Royal New Zealand Foundation for the Blind; and the Salvation Army (the residuary beneficiaries).

[3]The orders are sought under s 76 of the Trustee Act 1956. Section 76 provides:

76       Distribution of shares of missing beneficiaries

(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 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

...

(4)In making any order under subsection (3), the court may–

…

(d) provide that the order shall not be acted on for such period or except on such conditions as may be specified in the order or that the effect of the orders shall during a period so specified be advertised in such manner and form as may be specified in the order; and

…

(8) Any order made under this section  may  direct how the costs of the  order and of advertising under or for the purposes of the order shall be borne.

…

[4]The trustees have made enquiries to locate the three beneficiaries:

(a)For June Parker, they have made enquiries with the deceased’s family, through Wayne McKenzie (the deceased’s nephew and one of the trustees) and the electoral roll. The trustees also carried out a historical search of the title for the residential address provided for Ms Parker as noted in the will, but her name does not appear on the title. The trustees located a June Parker in Te Awamutu but enquiries with her advised she was not the person named in the will. More recently, in October 2018, an advertisement was placed in the NZ Herald, at a cost of $358.21.

(b)For Douglas White, they have made enquiries with the deceased’s family (as for Ms Parker) and the electoral roll. The will provided an address for Mr White of Pigeon Valley, Wakefield. A letter was sent to Mr White but was returned to sender.

(c)For Leo Hopson, the address in the will was simply “of Waitara”. The trustees have made enquiries with  the  deceased’s  family  (as  for  Ms Parker) and the electoral roll.

[5]                 The money to pay the gifts to Mr Hopson, Ms Parker and Mr White has been held in Pitt & Moore’s trust account. With interest, there is now a fund of $5,000. Having regard to the relatively modest amounts involved, the enquiries that have been made and the length of time that has elapsed since the deceased’s death, the trustees propose to pay these funds, after payment of the costs of the application and Pitt & Moore’s fees for dealing with this matter, to the five residuary beneficiaries.

[6]                 Mr Allan, one of the trustees and the solicitor who has made the application, explained that no advertisement has been placed to find Mr Hopson or Mr White. This is primarily because of the cost relative to the size of the gift. It is also because it is unclear in which community the advertisement should be placed in light of the returned letter from Mr White’s former address and the lack of success in finding  Mr Hopson and Mr White in the electoral roll.

[7]                 Mr Allan understood that an advertisement in the “Will Notices” of the Law Talk was no more than about $100. He undertook to seek to place a notice in this section of Law Talk for the missing beneficiaries and not to distribute the funds held in the name of the estate for a specified period after the placing of that notice.

[8]                 In these circumstances I am satisfied that the funds held in Pitt & Moore’s trust account in Mr Gilmour’s name may be distributed, after deducting costs, to the residuary beneficiaries named in the will. This distribution is subject to the missing beneficiaries not responding to the notice referred to [7] within the time specified in that notice, and the distribution is not to be made until the specified time has expired. The specified time period in the notice is to be two months. If there is any difficulty with placing the advertisement in Law Talk as envisaged in [7], the trustees have leave to return to the Court for further direction. I make orders accordingly.

[9]                 I also make the associated orders that the trustees’ originating application can be made on a without notice basis and that, other than the advertisement in [7], no further steps are required of the executors to locate the missing beneficiaries.

Mallon J