Robertson v Robertson

[2020] NZHC 2659

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2020-412-86

[2020] NZHC 2659

UNDER

the Trustee Act 1956

IN THE MATTER

of an application for a vesting order

BETWEEN

DOUGLAS JAMES ROBERTSON, KELVIN ROSS ROBERTSON and DEAN AND KIRK TRUST COMPANY LIMITED

Applicants

AND

ANNIE MARIE ROBERTSON

Respondent

Hearing:	(Determined on the papers)
Counsel:	B K Coleman for Applicants
Judgment:	9 October 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 9 October 2020 at 2.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 9 October 2020

ROBERTSON v ROBERTSON [2020] NZHC 2659 [9 October 2020]

[1]    The  J  A  &  A  M  Robertson  Family  Trust  (the  Trust)  was  settled  on  18 November 1994. James  Alexander  Robertson  and  the  respondent,  Annie Marie Robertson (Annie) were the settlors and two of the original trustees.

[2]    Annie unfortunately has lost capacity and is unable to make decisions in respect of the Trust property. The applicants are, along with Annie, the present trustees of the Trust. While I am not told, I have assumed that the other settlor, James Robertson, has died. I note he was described in the 1994 Deed as “retired”. In any event, he is no longer a trustee.

[3]    The applicants have sworn a joint affidavit recording that they wish to sell the property owned by the Trust in Oamaru so income from the sale proceeds can be applied towards Annie’s care. With Annie no longer having capacity and with, again as I assume, Annie’s co-settlor no longer being alive, the applicants are left having to seek the assistance of the Court in respect of regularising the affairs of the Trust.

[4]    The application is on a without notice basis and below I identify the procedural steps to be addressed.

[5]    The application proceeds on the basis that the Trust Deed requires all decisions and resolution of the trustees to be unanimous. However, I note cl 22 of the Trust Deed, produced to the Court, provides:

22       Trustees’ majority decisions

If any dispute or different shall arise between the Trustees respecting any matter relating to the Trust Fund the decision of the majority of the Trustees, if there be more than two, shall be binding on the other Trustees provided that any Trustee may require the Trustees to record their disagreement and advise the person for the time being entitled to appoint new or further Trustees of the disagreement.

[6]    The term “Trust Fund” as used in cl 22 of the Trust Deed means the property held in the Trust.

[7]    The applicants seek an order that the Trust property in Oamaru be vested in them alone. They recognise the need for the property to be in their name in order for

them  to  sell  the  property.    A vesting order is sought pursuant to s 52 of the Trustee Act 1956 (the Act).

[8]    While the applicants’ case is predicated on Annie no longer having the capacity to carry out the duties of trustee, no application is made for her removal as a trustee, which would normally be the case.

[9]    Counsel refer to two authorities in the application; Winwood v Winwood,1 and McComb v Ewers.2 In each case, the trustee who had lost capacity had been removed under s 43 of the Act and replaced with a new trustee. As I have said, the applicants do not propose such a course here and s 43 would not be available given no replacement trustee is proposed.

[10]   While the Trust may be able to continue to operate on a majority basis, there does not seem any point in Annie remaining as a trustee.

[11]   I am satisfied the evidence as to lack of capacity demonstrates that Annie is not able to fulfil her duties as trustee.   Such is consistent with Annie having resided in   a residential care facility for some months. The evidence is she is incapable of residing in her own home.

[12]   I will return to the issue of removal of Annie as a trustee, once I deal with the procedural aspects of the application.

Procedural applications

(1)Leave to commence proceeding by way of originating application

[13]   Applications for vesting orders such as this, are now routinely made by way of originating application. Such applications have been characterised as administrative in nature and that is often the case. In cases such as this, it is appropriate that a cost efficient and practical procedure be adopted and leave is granted for the originating application procedure to be used in this case.

1      Winwood v Winwood [2015] NZHC 946.

2      McComb v Ewers [2015] NZHC 3146.

(2)Service

[14]   Directions are sought dispensing with service of the application on Annie and on any other person. This is coupled with a further application that there be no representation directed for Annie.

[15]   As Annie is in incapacitated, r 4.30 of the High Court Rules 2016 requires her to have a litigation guardian unless the Court decides otherwise. I am satisfied in this case it is unnecessary to appoint a litigation guardian. Such would serve no real purpose given the administrative nature of this application.

[16]   Accordingly, there is an order dispensing with the appointment of a litigation guardian.

[17]   Similarly, there is no need for any party to be served. The order will not affect the rights of the beneficiaries and I am conscious of the presence of a solicitors trustee company as one of the trustees.

[18]   There is an order dispensing with the need for the application to be served on the respondent (service on Annie would only cause her distress) and on any other person.

Removal of trustee

[19]   Under s 51 of the Act, the court may appoint a new trustee either in substitution for or in addition to an existing trustee. However, here because no replacement trustee is sought, the s 51 jurisdiction cannot be invoked. However, s 51 co-exists with the court’s inherent jurisdiction to remove and appoint trustees.3 The court has “an inherent supervisory jurisdiction to ensure that the terms of a trust are carried out.”4 The jurisdiction exists in parallel with the court’s statutory power under s 51 of the Act to appoint new trustees and derives from the court’s powers in equity to supervise Trusts for the welfare of beneficiaries.

3      Powell v Powell [2015] NZCA 133 (2018) 4 NZTR 25-020 at [47].

4      Kite v Hodge [2014] NZHC 3025 (2014) 3 NZTR 24-024at [40].

[20]   This inherent jurisdiction permits the court to make an order removing trustees where that step is necessary in order to protect the interests of the beneficiaries.5

[21]   Given Annie’s lack of capacity, there is no point her remaining as trustee and the remaining trustees having to invoke the majority provision whenever they wish to make a decision.

[22]   I am satisfied it is in the best interests of the Trust to remove Annie as a trustee and there is an order accordingly.

[23]   Having removed Annie as trustee, it follows that a vesting order is required under s 52 of the Act in relation to the Trust property.

[24]   Accordingly, there is an order vesting the land comprised and described as Certificate of Title OT15C/827, Otago Land Registry, being an estate in fee simple containing 1012 square metres more  or  less,  legally  described  as  Section  5  Block XCIV Town of Oamaru in the names of Douglas James Robertson, Kelvin Ross Robertson and Dean and Kirk Trust Company Limited.

Associate Judge Lester

Solicitors:
Dean & Associates, Oamaru

5      Miller v Cameron [1936] HCA 13, (1936) 54 CLR 572 at 580.