Re Mead

[2019] NZHC 497

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-16

[2019] NZHC 497

IN THE MATTER

of the MEAD FAMILY TRUST

UNDER

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

BETWEEN

RAYMOND SAMUEL MEAD

First Applicant

AND

MICHAEL JAMES TONER

Second Applicant

On the papers
Appearances:	PJ Anderson for Applicants
Judgment:	20 March 2019

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 20 March 2019 at 10.00 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

MEAD FAMILY TRUST [2019] NZHC 497 [20 March 2019]

Introduction

[1]    The Mead Family Trust (“the Trust”) was settled by Raymond Samuel Mead and Yvonne Mead (“the Settlors”) on 6 May 1999. The trustees of the Trust were and remain the Settlors and Michael James Toner, a solicitor (together, “the current trustees”). In that capacity, they are the registered proprietors of a residential property at 28 Waitete Road, Waihi 3610 being the land comprised in Record of Title Identifier No. 244723, South Auckland Land Registration District, being Lot 5 on Deposited Plan 360185 (“the Land”), and other assets.

[2]    On 13 March 2015, Yvonne executed enduring powers of attorney both in relation to her personal care and welfare and her property rights in favour of her daughter, Jonette Yvonne Mead.

[3]    Yvonne’s age is not disclosed in the papers filed, but I am satisfied on the report of Dr Jessica Ussher, a general practitioner, dated 19 August 2018 that Yvonne suffers from severe dementia and that she is mentally incapable in that she lacks the capacity to make decisions about her personal care, welfare or finances. It follows that she is not capable of exercising her powers and duties as a trustee of the Trust.

[4]    The applicants seek orders removing Yvonne as a trustee of the Trust and replacing her as trustee with her daughter Jonette and vesting the Trust property in the new trustees. To facilitate the making of the substantive orders, the plaintiffs seek leave to commence the proceeding by way of an originating application and an associated order that service of the proceedings on Yvonne be dispensed with.

Application for leave to commence the proceeding by originating application and directions as to service

[5]    This is not the type of proceeding 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 interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application. Such permission may be sought without notice.1 The applicants seek leave to bring this

1      High Court Rules 2016, r 19.5.

proceeding as an originating application under Part 19 of the High Court Rules 2016, and they have asked that the application be determined on the papers without service on Yvonne or any other person.

[6]The discretionary beneficiaries of the Trust are:

(a)the Settlors; and

(b)the children, grandchildren and great-grandchildren of the Settlors and their spouses.

[7]    There is no point in serving the proceeding on Yvonne. Moreover, because the proceeding does not involve any disputed questions of fact and there is no opposing party, it is not necessary in the interests of justice for there to be a particularised pleading or to follow the usual interlocutory steps involved in a civil proceeding.

[8]    I am satisfied, therefore, that it is appropriate that this proceeding proceed by way of originating application and that service of the proceeding be dispensed with.2

Background

[9]    Clauses 14.1 and 14.5(e) of the deed of trust provide that the Settlors have the power to appoint and remove trustees, but it appears from the wording of clause 14.1 that such powers must be exercised jointly. Yvonne does not have the capacity to act in that manner, so the applicants ask the Court to intervene.

Removal of a trustee without substitution

[10]   There is authority for the Court to order the removal of a trustee under s 51(1) of the Trustee Act 1956, which provides:

The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

2      See McKean v McKean [2017] NZHC 2212, (2017) 4 NZTR 27-019 at [10]; Re Hetrick [2017]

NZHC 472, (2017) 4 NZTR 27-006 at [5] and [6].

[11]   I am satisfied that, given Mary’s incapacity, the assistance of the Court to remove her and appoint Jonette in substitution is expedient.

Vesting of property

[12]   Despite the removal of Yvonne as a trustee, the title to the Land will remain in the names of the current trustees without a formal transfer by Yvonne or an order of the Court. Section 52(1)(b)(i) of the Trustee Act permits the vesting of land or interest therein, in any such person or any such manner as the Court may direct, where a trustee entitled to or possessed of land, either solely or jointly with another person, is under disability. Section 2(2) of the Act provides that “a person shall be deemed to be under a disability while he [or she] is not of … full mental capacity”.

[13]   The Registrar-General of Land routinely accepts Court orders vesting properly identified land in trustees as sufficient proof of ownership to record appropriate changes to certificates of title.

Findings and orders

[14]I am satisfied on the affidavit evidence filed that:

(a)Yvonne no longer has the capacity to fulfil her duties as a trustee or registered proprietor or to facilitate the transfer of the title in the Land.

(b)Yvonne should be removed as a trustee and Jonette added as a new trustee in her place.

(c)The Land should be vested in the new trustees under s 52 of the Trustee Act.

[15]Accordingly, I order:

(a)The proceeding may be commenced by originating application under Part 19 of the High Court Rules 2016 and service of the proceeding on any person shall be dispensed with.

(b)Pursuant to s 51 of the Trustee Act 1956, Yvonne Mead is removed as a trustee of the Mead Family Trust and Jonette Yvonne Mead is appointed a trustee.

(c)Under s 52(1)(h) of the Trustee Act 1956, the land comprised in Record of Title Identifier No. 244723 South Auckland Land Registration District, being Lot 5 on Deposited Plan 360185, shall be vested in Raymond Samuel Mead, Michael James Toner and Jonette Yvonne Mead and held by them as trustees of the Mead Family Trust.

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Toogood J