Schaef v Schaef

[2019] NZHC 2369

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-542

[2019] NZHC 2369

UNDER

section 52 of the Trustees Act 1956

IN THE MATTER

of an application vesting land in the Applicants

BETWEEN

DEAN RICHARD BRIAN SCHAEF, PAUL HARRY WESTBURY AND DENIS FRANK WOOD

Applicants

AND

JACK BRIAN SCHAEF

Respondent

On the papers
Counsel:	R J H Scott for Applicants
Judgment:	19 September 2019

JUDGMENT OF ELLIS J

[1]    The trustees of the Schaef Family Trust (the Trust) own a property at 27 Grass Street, Wellington. Title is in the names of the three original trustees: Jack Brian Schaef (Jack), Paul Harry Westbury and Denis Frank Wood. The final beneficiaries are Jack’s two children, Dean Richard Brian Schaef (Dean) and Tonia Leigh Schaef (Tonia).

[2]    There is medical evidence before the Court to the effect that Jack is suffering from dementia and, since 2017, has no longer had capacity to manage his affairs. As

SCHAEF v SCHAEF [2019] NZHC 2369 [19 September 2019]

a consequence, Jack was removed as Trustee and Messrs Westbury and Wood took steps in accordance with the Trust Deed to appoint Dean in his stead.1

[3]    The three present trustees have now filed an originating application seeking an order vesting the Grass Street property in them. Ancillary to that they seek:

(a)leave to commence by way of originating application without notice to any other person;

(b)an order that a litigation guardian for Jack need not be appointed.

[4]An affidavit from Tonia supporting the application has also been filed.

[5]    It is appropriate for these proceedings to be brought by way of originating application. There is ample authority for that course.2 Leave is granted accordingly.

[6]    I am also satisfied that it is appropriate that the application be brought and determined without notice.3 As already recorded, the only final beneficiaries of the Trust are Dean (who is one of the applicants) and Tonia (who consents). I further accept that, in terms of r 4.30 of the High Court Rules, there is nothing to be gained by appointing a litigation guardian because Jack would be unlikely to understand either the nature of any advice received or the nature of the proceedings.

[7]    While there is no evidence as to the notification or consent of the discretionary (or “eligible”) beneficiaries,4 the substantive order sought is merely an administrative step enabling the Trust to continue operating and there can be no prejudice to them if the substantive order sought is made.

1      Clause 4.12.3 of the Trust Deed provides that the office of a Trustee shall be vacated if that Trustee is found to be of unsound mind. And while Jack is the named “Appointer”, cl 5.2 of the Deed also provides that where the Appointor is unable to act then the Power of Appointment is vested in the Continuing Trustees pursuant to s 43 of the Trustee Act 1956.

2      By way of recent example only see Re Hamertons Trustee Services Ltd [2018] NZHC 2720;

Macpherson v Macpherson [2018] NZHC 240 and Sunde v Sunde [2019] NZHC 325.

3      Which is effectively the same as an order dispensing with service.

4      Who include Jack, the Final Beneficiaries, their present or past spouses, their children, grandchildren and great grandchildren and “any person which is charitable according to New Zealand law”.

[8]    As to that substantive matter, s 52 of the Trustee Act 1956 empowers the Court to make vesting orders in cases such as this. Again, there is ample authority to that effect. In short, I am satisfied that:

(a)Jack is under a disability for the purposes of s 52(1)(b)(i);

(b)Jack is appropriately regarded as removed as a trustee in terms of the Trust Deed and Dean has been validly appointed in his stead;

(c)In order to enable the trustees to deal with Grass Street property in accordance with the Trust Deed it is necessary to make the vesting order sought.

[9]Accordingly, I make orders:

(a)Granting leave to bring the present application by way of originating application and without notice;

(b)Under s 52(1)(b)(i) of the  Trustee  Act  1956,  that  the  property  at 27 Grass Street, Wellington (being Part Lot 35 Deposited Plan 475 and Part Lot 1 Deposited Plan 801, Identifier WNE4/1224) currently registered in the names of Jack Brian Schaef, Paul Harry Westbury and Denis Frank Wood as trustees of Schaef Family Trust now vests in Dean Richard Brian Schaef, Paul Harry Westbury and Denis Frank Wood as trustees of Schaef Family Trust.

Rebecca Ellis J

Solicitors:

Lane Neave, Christchurch for Applicants