Stotter

[2023] NZHC 1032

AND  [        ]

Defendant

 

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2023-463-25

[2023] NZHC 1032

UNDER

the Land Transfer Act 1952 sections 132 and 133, and
the Land Transfer Act 2017, Clause 8 of Schedule 1, and
the High Court Rules 2016, rule 19.2(1)

IN THE MATTER OF

an application seeking the removal of

“no survivorship” notations from the titles of SA6D/186 and SA6D/187

BETWEEN

JUDITH REEDER STOTTER and MICHAEL JOHN HALE

as Trustees of the EDS and JRS TRUSTS Applicants

Hearing:	On the papers
Appearances:	James W McDougall for the Applicants
Judgment:	5 May 2023

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Removal of “no survivorship” notations from titles]

This judgment was delivered by me on 5 May 2023 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Holland Beckett (J W McDougall), Tauranga, for the Applicants

STOTTER and HALE [2023] NZHC 1032 [5 May 2023]

Introduction

[1]                  The applicants, Judith Reed Stotter and Michael John Hale, as the surviving trustees of the Judith Reeder Stotter Trust (JRS Trust) and the Edgar Donald Stotter Trust (the EDS Trust), have made a without notice application to the Court for the following orders, pursuant to ss 132 and 133 of  the  Land  Transfer  Act  1952  (LTA 1952), and s 8 of the Land Transfer Act 2017 (LTA 2017):

(a)orders directing the Registrar-General of Land to remove the “no survivorship” notations from the records of title for the following properties owned by the two Trusts:

(i)the land and dwelling situated at 14 Parkcliff Road, Tikitere, Rotorua, record of title reference RT SA6D/186 Lot 19 DP South Auckland 10729 (14 Parkcliff Road Property); and

(ii)the empty section situated at 12 Parkcliff Road, Tikitere, Rotorua, record of title reference RT SA6D/187 Lot 20 DP South Auckland 10729 (12 Parkcliff Road Property); and

(b)dispensing with advertisement of the application.

Background

Parties

[2]                  Mrs Stotter (Mrs Stotter) and Mr Hale (Mr Hale) are the surviving trustees of the JRS Trust and the EDS Trust. Mrs Stotter was married to Mr Edgar Donald Stotter (Mr Stotter) until Mr Stotter’s death on 4 September 2022. Mr and Mrs Stotter had two children together – Craig Donald Stotter (Mr Craig Stotter) and Joanne Heidi McIntosh (Mrs Mackintosh). Craig Stotter is separated from his former spouse and has two children -Samuel Rolfe Stotter and Sophia Louise Stotter. Mrs Mackintosh is married to Timothy John Mackintosh (Mr Mackintosh) and they have two children – Alice Jane Mackintosh and George Donald Mackintosh.

[3] The family tree is attached to the memorandum of Mr James McDougall, counsel for the applicants, dated 19 April 2023 and filed in support of the originating application. The family tree is relevant as members of the family are beneficiaries under the JRS Trust and the EDS Trust as noted below at [4].

The JRS Trust and the EDS Trust

[4]                  The JRS Trust and the EDS Trust (the Trusts) are mirror trusts, both of which were settled by separate deeds on 1 September 1992. Particulars of the Trusts are as follows:

JRS TRUST	EDS TRUST
Settlor	Judith Stotter	Edgar Stotter
Original trustees	Judith Stotter, Edgar Stotter and Michael Hale	Judith Stotter, Edgar Stotter and Michael Hale
Current Trustees	Judith Stotter and Michael Hale	Judith Stotter and Michael Hale
Original Beneficiaries	Edgar Stotter, Craig Stotter and Joanne Mackintosh	Judith Stotter, Craig Stotter and Joanne Mackintosh
Current	Craig Stotter, Samuel Stotter,	Judith Stotter, Craig Stotter,
Beneficiaries	Sophia Stotter, Joanne	Samuel Stotter, Sophia Stotter,
Mackintosh, Timothy	Joanne Mackintosh, Timothy
Mackintosh, Alice Mackintosh	Mackintosh, Alice Mackintosh and
and George Mackintosh	GeorgeMackintosh
Date of distribution	1 September 2072	1 September 2072

Notations on records of title

[5]                  Three original trustees, being the applicants together with the late Mr Stotter, are recorded as the registered  proprietors  for  each  of  the  Properties,  with  the  “no survivorship” notations.

[6]                  The “no survivorship” notations were part of an historical legal practice intended to indicate to any persons interested in the property that the registered

proprietors of that property are trustees. As a result Mr Stotter’s death, there are now only two registered proprietors, the surviving trustees, on the records of title who are alive, being the applicants.

Legal principles

[7]The relevant statutes are the LTA 1952 and the LTA 2017.

Land Transfer Act 1952

[8]                  Sections 130 and 131 of the LTA 1952, now repealed, provided that a registered proprietor of a property may authorise the Registrar to note the words “no survivorship” on the property’s record of title.

[9]                  Section 1321 of the LTA 1952 provides that, upon entry of the notation “no survivorship” it will not be lawful for any joint registered proprietors to transfer the property without obtaining the “sanction of the High Court” in circumstances where the number of registered proprietors seeking to transfer the property are fewer than the number then registered.

[10]              Section 133 of the LTA 19522 provides for the procedure to obtain a Court order removing a “no survivorship” notation:

(a)the Court may, “if it deems requisite”, require the application to be advertised in the Gazette and a local newspaper;

(b)the Court may give directions for the transfer of the property to any new proprietor or order the removal of the “no survivorship” notation from a record of title “as the Court thinks just for the protection of the persons beneficially interested” in the property; and

(c)the Registrar-General must give effect to the Court’s orders, if granted.

1      Still in effect, pursuant to clause 8 of Schedule 1 of the LTA 2017.

2      Still in effect, pursuant to clause 8 of Schedule 1 of the LTA 2017.

Land Transfer Act 2017

[11]              The ability to add the “no survivorship” notation is not continued under the LTA 2017, but cl 8 of Schedule 1 of the LTA 2017 provides that ss 132 and 133 of the LTA 1952 still apply.

Authorities

[12]Mr McDougall has referred the Court to four authorities: Sell v Registrar-

General of Land,3 Re McCullough;4 Re Osborne,5 and Re Vujcich.6

[13]              It is not necessary  in  this  judgment  to  review  the  authorities  cited  by  Mr McDougall in support of the application in detail. Suffice to say all the authorities cited support the granting of the application. Mr McDougall submits, which I accept, that the circumstances of the present case are similar to those in Re McCullough, Re Osborne and Re Vujcich, in that all those cases deal with the removal of the “no survivorship” notation from the record of title in circumstances where one or more of the trustees have either retired or are deceased.

Grounds upon which the orders are sought

[14]              Mr McDougall makes the following submissions as to the grounds supporting the application:

(a)as the Court has identified in previous decisions, there is no longer a useful purpose in retaining the “no survivorship” notations which can stifle a trust’s efficient administration. In all three cases referred to at [12], the Courts have granted the orders for the removal of the notations and the applicants in the present case apply for orders for substantially the same reasons as put forth by the applicants in those three cases;

3      Sell v Registrar-General of Land [2013] NZHC 1219.

4      Re McCullough [2019] NZHC 1999.

5      Re Osborne [2021] NZHC 391.

6      Re Vujcich [2022] NZHC 1814.

(b)by virtue of s 132 of the LTA 1952, due to Mr Stotter’s death, the applicants are not otherwise able to transfer or otherwise deal with the properties without orders of the Court, as a number of surviving registered proprietors are fewer than the proprietors then-registered on the records of title;

(c)the applicants seek the orders on the basis that the retention of the notations serve no useful purpose, they are a undue impediment to the efficient administration of the Trusts, and the removal of the notations are in the best interests of the current beneficiaries of the Trusts;

(d)the Trusts were initially settled for the benefit of the settlors, Mr Stotter and Mrs Stotter, with their children also identified as beneficiaries. The current beneficiaries of the EDS Trust are Mrs Stotter, her two children, Mr Mackintosh, and her four grandchildren. The current beneficiaries of the JRS Trust are Mrs Stotter’s two children, Mr Mackintosh, and four grandchildren;

(e)the deeds establishing the EDS Trust and the JRS Trust give the applicants, as trustees, the full discretionary power to transfer or otherwise deal with any real property owned by the respective Trusts;

(f)the applicants are to settle the sale of the 14 Parkcliff Road Property by 31 May 2023. If the applicants are unable to do so, due to the “no survivorship” notation on the Property’s record of title, the applicants will be in breach of the sale and purchase agreement and consequently the beneficiaries, including Mrs Stotter, will be likely to suffer financial loss;

(g)the 12 Parkcliff Road Property, remains listed on the market for sale. For the same reasons as the 14 Parkcliff Road Property, the applicants seek the ability to transfer or otherwise deal with the Property in the future.

(h)the current beneficiaries are aware of the material aspects and circumstances surrounding the application and Mrs Stotter’s children have sworn affidavits in support of the application on behalf of themselves as well as their children (being Mrs Stotter’s grandchildren);

(i)in the circumstances, the advertisement of the application is not necessary under s 133 of the LTA 1952.

Affidavits in support

[15]The following affidavits have been filed in support of the Application:

(a)affidavit of Judith Reeder Stotter;

(b)affidavit of Michael John Hale;

(c)affidavit of Joanne Heidi Mackintosh;

(d)affidavit of Craig Donald Stotter;

and all the affidavits are dated 19 April 2023, except the affidavit of Mr Craig Stotter which is dated 17 April 2023.

[16]              It is clear from reading the affidavits that Mrs Stotter’s two children and her grandchildren are all supportive of the application and supportive of her desire to sell the Properties and move to a retirement village.

Result

[17]              Having considered the application, the memorandum of Mr McDougall in support, the authorities discussed at [12], and the affidavits referred to at [15], I am of the view that the orders sought in the application should be granted. The reasons for this are:

(a)The LTA 2017 has not continued the ability of transferors or persons registered as joint proprietors in any land, estate or interest to enter the words “no survivorship” upon the instrument evidencing their title. It is clear therefore that Parliament has decided there is no further need for such notation.

(b)There is no useful purpose to be served in continuing the notation in respect of the titles to the Properties. The applicants wish it to be removed.

(c)The effect of the notation remaining may be stifling, as s 132 of the LTA 1952 will require the sanction of the High Court for the transfer or other dealing with the land, estate or interest in question.

(d)The trust deeds of the JRS Trust and the EDS Trust each give the trustees full discretionary power to transfer or otherwise deal with any real property owned by the respective Trust.

(e)The beneficiaries of the JRS Trust and the EDS Trust indicated their support for the application for removal of the notation.

(f)There is no prejudice to any beneficiary.

Orders

[18]I make the following orders:

(a)The Registrar-General of Land is directed to remove “no survivorship” notations from the records of title for the following properties owned by the two Trusts:

(i)The land and dwellings situated at 14 Parkcliff Road, Tikitere, Rotorua, with record of title RT SA6D/184, being Lot 19 DP South Auckland 10729; and

(ii)The empty section situated at 12 Parkcliff Road, Tikitere, Rotorua, with record of title RT SA6D/187, being Lot 20 DP South Auckland 10729; and

(b)advertisement of the application is dispensed with;

(c)costs are reserved.

…………………………….. Associate Judge Taylor