Scott v Scott - [2020] NZHC 2549

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV 2020-485-526

[2020] NZHC 2549

IN THE MATTER OF Section 52 of the Trustee Act 1956

AND

IN THE MATTER OF

Part 18 of the High Court Rules

BETWEEN

RONDA MARY SCOTT and INDEPENDENT PROFESSIONAL TRUSTEES LIMITED

Applicants

AND

TREVOR ALAN SCOTT

Respondent

On the papers

Counsel:

A K O Henderson for Plaintiffs/Applicants

Judgment:

29 September 2020

JUDGMENT OF MALLON J

Introduction

[1] The applicants, Ronda Mary Scott and Independent Professional Trustees Limited (IPTL), apply for a vesting order under s 52 of the Trustee Act 1956. They also apply for related procedural orders.

Background

[2] The vesting order relates to the assets of the T A and R M Scott Family Trust (the Trust). The Trust was created pursuant to a Deed of Trust dated 11 March 1998. The settlors of the Trust are Trevor Alan Scott and Ronda Mary Scott. Mr and

SCOTT v SCOTT [2020] NZHC 2549 [29 September 2020]

Mrs Scott were also appointed as trustees of the Trust, along with Horwath Trustee Services (Wellington) Limited (Horwath), which is now known as IPTL.

[3] Mr Scott was diagnosed with Alzheimer’s in 2011. His condition has continued to deteriorate. On 7 August 2017 Dr Stephen Watson, a doctor whose scope of practice includes the assessment of a person’s mental capacity, assessed Mr Scott. His opinion was that Mr Scott was mentally incapable to manage his property affairs and to make decisions regarding his personal care and welfare. On 10 September 2020 Dr Alexandra Fox, whose scope of practice includes the assessment of a person’s mental capacity, assessed Mr Scott. Her opinion was that:

Mr Scott is mentally incapable to nominate his power to remove and appoint trustees as Settlor of the Trust to another person by Deed and to participate in court proceedings and/or understand the nature of court documents. He did not demonstrate capacity to comprehend and retain information pertaining to the Trust and was unable to verbally communicate his choices/wishes in regards to this.

Mr Scott’s mental incapacity is due to a health condition, Alzheimers type dementia and has marked cognitive impairment, that is likely progressive in nature and will continue indefinitely.

[4] Clause 12.01 of the Trust Deed provides that the settlors have the power to remove and wholly discharge any trustee without needing any cause. Clause 12.05 of the Trust Deed provides:

If a Settlor dies or ceases to have legal capacity to nominate another person and has not made a nomination by Deed or Will, the surviving Settlor can exercise those powers personally by Deed or Will.

[5] On 17 September 2020, by Deed dated 17 September 2020, Ronda Scott exercised her power to remove Mr Scott as trustee of the Trust. The Deed also provided that the trust fund shall vest in the continuing trustees, Mrs Scott and IPTL, as trustees of the Trust on the terms of the Trust Deed and were…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Scott v Scott

Details

AGLC: Scott v Scott [2020] NZHC 2549
Case: [2020] NZHC 2549
Decision Date: 29 September 2020

CaseChat Overview and Summary

The applicants, Ronda Mary Scott and Independent Professional Trustees Limited (IPTL), sought a vesting order under Section 52 of the Trustee Act 1956 concerning the assets of the T A and R M Scott Family Trust. The Trust, created by a Deed of Trust dated 11 March 1998, was set up by Trevor Alan Scott and Ronda Mary Scott, who were also appointed as trustees, along with Horwath Trustee Services (Wellington) Limited, now known as IPTL. The primary legal issue was whether the Court should grant a vesting order to transfer the Trust's assets to the continuing trustees following the removal of Mr. Scott due to his incapacity.

The Court had to decide if it was expedient to vest the Trust’s assets in Ronda Scott and IPTL. The applicants argued that Mr. Scott's diagnosis of Alzheimer's disease rendered him incapable of managing the Trust's affairs. The Court considered medical opinions confirming Mr. Scott's incapacity and the provisions of the Trust Deed, which allowed Ronda Scott to remove Mr. Scott as a trustee and nominate herself and IPTL as the continuing trustees. The Court concluded that it was expedient to make the vesting order to facilitate the sale of the Cuba Street property and to ensure the Trust's assets were managed appropriately.

Mallory J granted the vesting order, vesting the properties in Ronda Mary Scott and Independent Professional Trustees Limited as trustees. The Court also made consequential procedural orders, treating the proceeding as an originating application, granting leave to bring the proceeding as such, dispensing with service of the application on any party, and determining that the application would be decided on the papers.

Orders