Strang v Strang - [2016] NZHC 2203

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2016-425-000094 [2016] NZHC 2203

UNDER the Trustee Act 1956

IN THE MATTER

of an application for a Vesting Order

BETWEEN

NORMA HELENE STRANG AND RUSSELL THOMAS SMITH Plaintiffs

AND

MURRAY VERNON STRANG Defendant

Hearing: On the papers

Appearances:

S N McKenzie for the Plaintiffs

Judgment:

16 September 2016

JUDGMENT OF ASSOCIATE JUDGE OSBORNE AS TO VESTING ORDERS AND SERVICE

Introduction

[1] The plaintiffs, Norma Strang and Russell Smith, as current trustees of the Strang Family Trust (the Trust) seek an order, along with various other administrative orders, vesting in them a residential property at 129 Panton Street, Invercargill (the property) owned by the Trust. These orders are sought because the defendant, Murray Strang, in whose name an interest in the property is currently registered, has been removed as a trustee of the Trust as a result of his becoming mentally incapable of exercising his powers and fulfilling his duties. For simplicity
the parties will be referred to by first name.

STRANG v STRANG [2016] NZHC 2203 [16 September 2016]

[2] Norma and Murray are married. Together they settled the Trust on 19

February 2002. Norma, Murray and Russell were named as trustees of the Trust. The final beneficiaries of the Trust are any children of Norma and Murray and the discretionary beneficiaries are the children, any of their children, and Norma and Murray themselves.

[3] Murray suffers from dementia. He currently resides in Clare House Rest Home. On 12 July 2016 his mental state had deteriorated to such an extent that his enduring power of attorney was invoked. Norma is appointed as Murray’s attorney for his personal care and welfare and personal property matters.

[4] On 22 August 2016, due to Murray no longer having mental capacity to carry out his obligations as trustee Norma exercised her power under the terms of the trust deed to remove him as a trustee of the Trust.

[5] The Trust has subsequently entered into an agreement for sale and purchase of the property. Settlement is currently pending. As Murray is no longer mentally capable he is unable to sign the required legal documentation to transfer the property on settlement date. Nor is he able to sign an authority and instruction form to have the property registered in the names of the remaining trustees only. Land Information New Zealand has also made it clear that an attorney under an enduring power of attorney cannot sign an authority and instruction form on behalf of a trustee who has lost capacity.

[6] The plaintiffs have therefore been required to come to court and apply for an order to have the property solely vested in their names. I will return to the consideration of the vesting order in a moment, but firstly I will deal with some administrative matters.

[7] The plaintiffs have commenced this proceeding under pt 18 High Court Rules. Rule 18.4 provides that to commence a proceeding under this part the plaintiffs must file a…

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 Strang v Strang

Details

AGLC: Strang v Strang [2016] NZHC 2203
Case: [2016] NZHC 2203
Decision Date: 16 September 2016

CaseChat Overview and Summary

In Strang v Strang, Norma and Russell, as trustees of the Strang Family Trust, sought a vesting order for a residential property in Invercargill. Murray, who had been a trustee, was removed due to mental incapacity. The property was under sale, and Murray's incapacity impeded the signing of necessary documents. The court had to determine whether the plaintiffs could proceed without serving Murray and if a litigation guardian was required for him.

The legal issues involved the applicability of the Trustee Act 1956, the necessity of a litigation guardian under the High Court Rules, and the validity of dispensing with service on Murray. The court considered Dr. Malcolm McKerchar's evidence about Murray's mental state, concluding that Murray was indeed incapacitated under rule 4.29. Given Murray's incapacity and the straightforward nature of the application, the court found no purpose in appointing a litigation guardian, as suggested in Docherty v Docherty. The court also held that serving Murray and other beneficiaries was unnecessary due to their consent.

The court granted the plaintiffs' requests, allowing the proceedings to be handled on their evidence alone. It ruled that Murray was incapacitated, did not need a litigation guardian, and that service on him and other beneficiaries could be dispensed with. Finally, it ordered the property's interest to be vested in Norma and Russell.

Orders