Trustees Executors Limited

[2015] NZHC 1329

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-370 [2015] NZHC 1329

UNDER	Section 52 of the Trustee Act 1956
IN THE MATTER OF	The Ngaere Gillespie Family Trust
BETWEEN	TRUSTEES EXECUTORS LIMITED AND DEBORA-DALE YOUNG Applicants

Hearing:	On the papers
Counsel:	G F Kelly for the Applicants
Judgment:	11 June 2015

JUDGMENT OF MALLON J

Introduction

[1]      The applicants seek orders vesting title to land held by a trust in the present trustees of the trust and associated orders.   The application relates to the Ngaere Gillespie Family Trust (the Trust).   The orders sought arise because Ngaere Elsa Gillespie, the settlor of the Trust and one of the two trustees named in the trust deed, is no longer competent to act.

The facts

[2]      The Trust was established pursuant to a deed of trust dated 2 June 1993.  The trustees appointed were Ngaere Gillespie and The Trustees Executors and Agency Company of  New  Zealand  Limited  (Trustees  Executors).   The  beneficiaries  are Ngaere  Gillespie,  her  husband  (who  died  in  2011),  her  daughter  (Debora-Dale Young) and other relatives.  Clause 7.6 of the trust deed provides Ngaere Gillespie, as settlor, with the sole power during her lifetime to remove trustees and to do so

with or without appointing another trustee.   Clause 7.7 provides that the settlor

In re Trustee Executors Limited [2015] NZHC 1329 [11 June 2015]

during  her  lifetime  has  the  power  to  appoint  further  beneficiaries.    Clause  7.8 provides that Trustees Executors has the power after Ngaere Gillespie’s death to appoint Debora-Dale Young to be a co-trustee.

[3]      Ngaere Gillespie is now 85 years old.  She resides in a rest home.  She was referred to Dr Jane Walton, a consultant geriatrician and general practitioner at the request of Trustees Executors.  The purpose of the referral was to assess whether Ms Gillespie was capable of continuing her role as trustee.   Dr Walton provided her assessment on 9 February 2015.  Her view was that Ms Gillespie was not capable. She noted that Ms Gillespie did not appear to be surprised by this conclusion and was not upset about it.

[4]      Following  this  assessment,  by  a  deed  dated  18  February  2015,  Trustee Executors appointed Debora-Dale Young as trustee in the place of Ms Gillespie. This appointment was made pursuant to s 43 of the Trustee Act 1956.  Ms Young is also Ms Gillespie’s sole attorney, pursuant to an enduring power of attorney in relation to property signed on 13 July 2011.

[5]      The principal asset of the Trust is a house at 3 Penning Road, Auckland.  Title to the property is registered as to an effective 85 per cent share in Trustees Executors and Ms Gillespie, and as to an effective 15 per cent share in Ms Young, her husband and Wylie McDonald Trustees No 1 Limited.  The 85 per cent share held by Trustees Executors and Ms Gillespie is in their capacity as trustees of the Trust.

The application

[6]      The application is brought because the property interest held by the Trust needs to now vest in the new trustee (Ms Young) and the continuing trustee (Trustees Executors).   As  Ms  Gillespie is  assessed  as  incapable of acting as  trustee,  and therefore incapable of effecting the transfer, the trustees ask the Court to exercise its power under s 52(1)(b)(i) of the Trustee Act 1956. That section provides:

52       Vesting orders of land

(1)      Subject to the provisions of subsections (2) and (3), in any of the following cases, namely—

...

(b)       where  a  trustee  entitled  to  or  possessed  of  any  land  or interest therein, whether by way of mortgage or otherwise, or  entitled  to  a  contingent  right  therein,  either  solely  or jointly with any other person—

(i)       is under disability; or

...

(2)       Where  any such  order is consequential on the appointment of a trustee, the land or interest therein shall be vested for such estate as the court may direct in the persons who on the appointment are the trustees.

(3)       Where any such order relates to a trustee entitled or formerly entitled jointly with another person, and that trustee is under disability or out of  the  jurisdiction  of  the  c  or  cannot  be  found,  or  (being  a corporation) has ceased to carry on business or is in liquidation or has been dissolved, the land, interest, or right shall be vested in the other person who remains entitled, either alone or with any other person that the court may appoint.

[7]      The named beneficiaries consent to the vesting order.  Ms Young’s husband, who is the successor attorney under the power of attorney, also consents to the vesting order.   Trustees Executors has changed its name since its appointment as trustee.   Accordingly, the application seeks that the vesting order reflect its new name.

[8]      The trustees also seek an order, pursuant to the Court’s inherent jurisdiction,

to remove Ms Gillespie of her powers under clauses 7.6 and 7.7 of the trust deed.1

That order is also sought because of Ms Gillespie’s incapacity.  The trustees apply for an order that those powers now vest in Trustees Executors and Debora-Dale Young, during Ms Gillespie’s lifetime.

[9]      I  am  satisfied  that  it  is  appropriate  to  make  the  orders  sought.    The application is properly supported by evidence.   The grounds are made out for the orders.  All potentially affected parties are aware of the proceeding and consent to the vesting orders.  The orders in relation to clauses 7.6 and 7.7 appropriately vest in

the trustees as a result of Ms Gillespie’s incapacity.

1      Tarasiewicz v Titford [2013] NZHC 3466 at [76] to [86]; Davidson v Israel [2012] NZHC 631 at

[26]; Lance v Lance [2014] NZHC 2846; and Andrews and Horrocks v Andrews [2015] NZHC
759.

Orders

[10]     Accordingly I make the following orders:

(a)      Leave  is   granted  to   commence  the  proceeding  by  originating application.

(b)      Service of the proceeding is dispensed with.

(c)      Title to the land at 3 Penning Road, Auckland, certificate of title NA21B/1044 is vested in the names of Debora-Dale Young and Trustees Executors Limited as to a 17/20th share.

(d)This  vesting  replaces  the  references  on  the  title  to  “The Trustees Executors and Agency Company of New Zealand Limited and Ngaere Elsa Gillespie as to a 1/2 share”, “Trustees Executors Limited and Ngaere Elsa Gillespie as to a 1/4 share”, and “Trustees Executors Limited and Ngaere Elsa Gillespie as to a 1/10 share”.

(e)      The settlor’s powers in clauses 7.6 and 7.7 of the trust deed are vested in Trustees Executors Limited and Debora-Dale Young as trustees of the trust during the settlor’s lifetime.

Mallon J