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 to enter into and sign any documents necessary to transfer the assets and liabilities of the Trust into their sole names.

[6]                 The Trust’s assets including four properties: a Cuba Street property; a Leeds Street property; a Ghuznee Street property; and  a Raumati Beach property.    On     5 August 2020 Mrs Scott and IPTL entered into an agreement to sell the Cuba Street

property. The settlement date for the sale is the later of 30 September 2020 or five working days after the date on which the trustees obtain a vesting order to enable the transfer of title to be executed and to advise the purchaser of that.

[7]                 Mr and Mrs Scott and Horwath, in their capacities as trustees of the Trust, are the registered proprietors on the titles of the four Trust properties. An order vesting the properties in the continuing trustees is sought as a consequence of Mr Scott’s removal as trustee. An order is required urgently in respect of the Cuba Street property.

Assessment

[8]                 Section 52 empower the Court to make an order vesting land or interest in the land. The jurisdiction arises in a number of situations. They include when land is vested in a trustee and it appears to the Court to be expedient to make the order. I am satisfied it is expedient to make the order. It is consequential on the need to remove Mr Scott as a trustee because of his incapacity. I am also satisfied on the evidence that Mr Scott lacks the capacity to participate in the proceedings.

[9]                 The application for a vesting order has been made as an interlocutory application for summary judgment accompanied by an interlocutory application without notice. Typically, applications for vesting orders under the Trustee Act are made as originating applications with leave of the Court. Typically also, directions are made dispensing with the need for service on an incapacitated trustee.1 The procedure that has been adopted has put before the Court all the relevant information that would have been put forward under the originating application jurisdiction. In the circumstances, I will treat the summary judgment application and supporting application and affidavit as though it had been brought as an originating application and for directions.

1      See, for example, Re Macleod [2020] NZHC 2420; Re The Judena Family Trust [2020] NZHC 2119; Riley v Jeffries [2020] NZHC 2008; Willis v Willis [2020] NZHC 1995; Re Gordon [2020] NZHC 1981; Lawrence v Lawrence [2020] NZHC 1698; Re Mitchell [2020] NZHC 1638; and Re Williams [2015] NZHC 2206.

Result

[10]            I make an order vesting the following properties in the applicants, Ronda Mary Scott and Independent Professional Trustees Limited, as trustees:

(a)304/116 Cuba Street, Wellington being a stratum in freehold estate comprising Unit 304 on Deposited Plan 88455 described in the Record of Title WN55B/695;

(b)50/8P Leeds Street, Te Aro, Wellington being a stratum in freehold estate comprising Unit 50P and Accessory Unit L3 on Deposited Plan 86371 described in Record of Title WN54A/530;

(c)6/22 Ghuznee Street, Wellington being a stratum in freehold estate comprising Unit 6, a 1/8th share in Accessory Unit 3A and a 1/8th share in Accessory Unit 3B on Deposited Plan 82925 described in Record of Title WN49C/446; and

(d)4 Hulme Way, Raumati Beach, Raumati being an estate in fee simple of 551 m2 more or less being that Lot 19 on Deposited Plan 355999 described in Record of Title 234987.

[11]            I make consequential procedural orders permitting the proceeding to be treated as an originating application, granting leave to bring the proceeding as an originating application, dispensing with service of the application on any party (and in particular on Trevor Alan Scott), and determining that the application is to be decided on the papers.

Mallon J