Stewart and Strathaven Family Trust

[2014] NZHC 1768

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-476-000046 [2014] NZHC 1768

IN THE MATTER OF	Section 51 of the Trustee Act 1956
AND
IN THE MATTER OF	an application by ALEXANDER JAMES STEWART of Timaru, Retired, for an order appointing trustees to the STRATHAVEN FAMILY TRUST

Date:	29 July 2014
Appearances:	K A Thomas for Applicant
Judgment:	29 July 2014

JUDGMENT OF DUNNINGHAM J

[1]      This is an application under s 51 of the Trustee Act 1956 to appoint trustees to the Strathaven Family Trust, as the trustees appointed under the deed of trust are now deceased.

[2]      The Strathaven Family Trust was created by deed of trust dated 1 April 1994. The original trustees were Violet Jane Stewart (Mrs Stewart), the applicant’s mother, and  Andrew Bruce Rodger  Brown  (Mr  Brown),  Mrs  Stewart’s  solicitor.     The discretionary   beneficiaries   are   Mrs   Stewart,   the   applicant,   and   his   sister, Anna Elizabeth Stewart.

[3]      The   assets   of   the   trust   comprise   a   residential   home   located   at

10 Pukatea Street,  Timaru  (Pukatea  Street  property)  and  funds  in  an ANZ  bank account, which represent the accrued rental income from the Pukatea Street property.

STEWART and THE STRATHAVEN FAMILY TRUST [2014] NZHC 1768 [29 July 2014]

[4]      The settlor of the trust deed, Valerie Josephine Nolan, was empowered to appoint new trustees under clause 13 of the trust deed.   When the settlor was no longer able to exercise that power of appointment, it was to be vested:

… in the person or persons as the Settlor may be (sic) deed (revocable or irrevocable) or by will nominate for the purpose and if there is no such person capable of or willing to exercise such power then in the administrator or the executors or trustees for the time being of the Settlor provided that if there is no administrator, executor or trustee able to or willing to act then the statutory provisions of the Trustee Act 1956 for the appointment or removal of trustees shall apply.

[5]      As is explained in the applicant’s affidavit, following Mrs Stewart’s death in

1998, the applicant’s sister became a trustee, and the Pukatea Street property was transferred to her and Mr Brown, as the duly appointed trustees at that time.

[6]      The  applicant’s  sister  died  on  31  July  2007  and  Mr  Brown  died  on

16 December 2009.

[7]      Mr Brown did not appoint a trustee to replace him on his death.  The settlor died on 17 April 2007 and there was no record of her appointing a trustee or trustees in her lifetime, nor has a will been located for her.

[8]      The applicant is the personal representative of the continuing trustee, his sister, and he could therefore rely on s 43(1) of the Trustee Act 1956 to be appointed a trustee.  However, the deed of trust requires two trustees to be trustees at any time. Mr Brown has no personal representatives.

[9]      Accordingly, the applicant seeks the Court’s assistance to appoint himself and another trustee as trustees so that they can deal with the trust’s assets.  He notes that until new trustees are appointed, there is no way in which to dispose of the Pukatea Street property, nor can the rental income held in the ANZ bank account be accessed or distributed.

[10]     For   completeness,   the   applicant   is   the   sole   remaining   discretionary beneficiary of the trust, so no other parties have needed to be served with this application.

Section 51 of the Trustee Act

[11]     The application is made under s 51 of the Trustee Act 1956 which provides:

51       Power of Court to appoint new trustees

(1)       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.

[12]     I am satisfied that reliance on s 51 is appropriate as it provides the Court with a practical mechanism for resolving situations such as this.  The power in s 51(1) is able to be invoked to appoint a trustee when no existing trustee remains.   In the present case, as outlined in the applicant’s affidavit, there is no surviving trustee, and the powers contained within the trust deed to appoint a replacement trustees are insufficient to enable the appointment of two trustees, as is required by the terms of the trust deed.

[13]     In    the    circumstances,    it    is    expedient    to    appoint    the    applicant, Alexander James Stewart, and his solicitor, Karin Annette Thomas, as trustees of the Strathaven Family Trust, and it would  be impracticable to endeavour  to do this without the assistance of the Court.

[14]     Accordingly, I order:

(a)       Alexander James Stewart and Karin Annette Thomas are appointed as trustees of the Strathaven Family Trust.

Solicitors:

Aoraki Legal Ltd, Timaru