Vujcich
[2022] NZHC 1814
•27 July 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-001217
[2022] NZHC 1814
UNDER the Land Transfer act 1952 IN THE MATTER
of the I & V A Vujcich Family Trust
BETWEEN
VIRGINIA ANN VUJCICH
Applicant
Hearing: (On the papers) Counsel
Aaron Foley for the Applicant
Judgment:
27 July 2022
JUDGMENT OF MOORE J
This judgment was delivered by me on 27 July 2022 at 10:30 am pursuant to Rule 11.5 of the High Court Rules.
Registrar / Deputy Registrar Date:
RE VUJCICH [2022] NZHC 1814 [27 July 2022]
Introduction
[1] Virginia Ann Vujcich, the applicant, is a 75 year old widow who wishes to sell the home she has lived in for more than 40 years. She wishes to move into smaller accommodation closer to her daughter.
[2] She has, however, encountered an obstacle. Land Information New Zealand (“LINZ”) will not accept any transfer of her property absent an order of this Court. This is due to two words which appear on the title. After the recitation of the registered proprietors’ names the words “no survivorship” appear.
[3] Mrs Vujcich seeks an order expunging those words in order to facilitate the transfer of the property.
Background
[4] The property in question is situated at 80 Jaemont Avenue, Te Atatu South, Auckland (“Jaemont”).1 Mrs Vujcich and her late husband, Ivan, bought Jaemont in 1981. From all accounts they were very happy there with Mrs Vujcich describing it as a lovely home where she and Ivan raised their family.
[5] In 2002, Jaemont was transferred to the trustees of the I & V A Vujcich Family Trust (“the Trust”). This transfer is recorded on the memorial to the title as a transfer to “Virginia Ann Vujcich, Stefan Anthony Vujcich and Peter Michael Joyce (no survivorship)”.
[6] Recently, Mrs Vujcich decided that she wanted to move nearer to where her daughter lives and works in East Auckland. She also wanted to realise some of the capital value of Jaemont to make her retirement “a little more comfortable”.
[7] For that reason, Jaemont was put on the market. A contract for its sale and purchase was entered into on 21 December 2021 with settlement on 31 August 2022. The sale price was $1,850,000.
1 Title Identifier NA1696/39.
[8] Having entered into the agreement, Mrs Vujcich learned that one of the trustees of the Trust, her former solicitor Mr Joyce, had died some months earlier. She instructed a new lawyer, Mr Foley, to deal with the conveyancing. It was through Mr Foley that she learned that LINZ have rejected any transfer on the grounds that the words on the title, “no survivorship”, operated as an impediment, absent a Court order.
[9] On 6 April 2022, by Deed of Appointment and Removal, Mr Joyce was removed as a trustee and Mr Foley was appointed in his place. This change, however, did not affect the registered proprietorship of Jaemont. That was prevented by the words “no survivorship”. The only way to remedy that appointment was, apparently, to apply to this Court for that notation to be removed from the title and thus permit Mr Foley to be substituted.
[10] As a consequence, on 19 July 2022, the trustees unanimously resolved to make a without notice application for an order to remove “no survivorship” from the title and to execute such documents as might be necessary to effect that purpose.
[11] There is some urgency to this application. The settlement date under the Agreement for Sale and Purchase of Jaemont is 31 August 2022. When the agreement to sell Jaemont became unconditional, Mrs Vujcich found a newer, more maintenance free property in Botany. She resolved to buy it. The settlement date for that property is 29 July 2022, approximately one month earlier than the settlement on Jaemont. Mrs Vujcich needs bridging finance to cover the period between the settlement of the new property and the settlement of Jaemont. Security will be required over both properties. That cannot be achieved without the order as sought.
Further information
[12] On 21 July 2022 the file was referred to me as Duty Judge. Having reviewed the material contained therein, I determined it was inadequate. I directed counsel to file a supporting memorandum to address the particular legal principles engaged and any case law which might assist.
[13] Furthermore, because the proposed orders might, conceivably, adversely affect the interests of other beneficiaries or parties, I directed counsel to identify any potential beneficiaries and obtain their views on the application.
[14] I record my gratitude to counsel for the helpful memorandum which has since been received and the further affidavit of Mrs Vujcich identifying the potential beneficiaries and annexing copies of express consents given by Mrs Vujcich’s daughter and two sons. Additionally, Mrs Vujcich has confirmed that each is a beneficiary of the Trust and that each is aware of the material aspects and circumstances surrounding the present application. Each is supportive of the application.
Legal principles
[15] The power to add the words “no survivorship” on the Register is derived from s 130 of the Land Transfer Act 1952 (“the former Act”) which provided:
“130 Transferor may apply for entry of “No survivorship” on register
Upon the transfer of any land, estate, or interest under this Act to 2 or more persons as joint proprietors, the transferor may insert in the memorandum of transfer or other instrument the words “No survivorship”, and the Registrar shall note the same in the register, and also enter the said words upon any certificate of title issued pursuant to that transfer.”
[16] Sections 132 and 133 set out how joint proprietors, if their number was reduced below the number authorised by the “no survivorship” notation, might obtain the “sanction” of the High Court to transfer or otherwise deal with their interest in the land.
[17] The former Act has since been repealed by the Land Transfer Act 2017 (“the 2017 Act”). There is no equivalent to s 130 in the 2017 Act.
[18]However, in discussing the provisions in the former Act, Fogarty J in
Sell v Registrar-General of Land observed:2
“The function of the “no survivorship” notation is to alert persons dealing with the Land Registry to the fact that the registered proprietors are trustees. The “sanction” of the court is intended to be limited to changes in the number, and so identity of the proprietors.”
[19] The present case is factually similar to that which confronted Associate Judge Lester more recently in Re McCullough.3 There the trustees wished to sell a property subject to the “no survivorship” notation and purchase a replacement property as part of a relationship property dealing.4 The proposal in Re McCullough was to regularise the identity of the registered proprietors of the trust’s land by confirming the applicants, as the trustees and registered proprietors of the two properties in issue, through the removal of the “no survivorship” notation.5 As Associate Judge Lester observed:
“[18] At the same time, it is clear from Re Bayly that the “no survivorship” notation will not be removed if such were to have adverse consequences for present or future beneficiaries.
[19] The efficacy of the use of the “no survivorship” notation as a means of protecting beneficiaries can be summed up by the fact that the ability to add such a notation is not contained under the Land Transfer Act 2017. It is for that reason that this application is dealt with under the Land Transfer Act 1952.
[20] The great majority of family trusts function perfectly well without the presence of a “no survivorship” notation. In other words, the protection of beneficiaries is not as a general rule seen as turning on the presence of the notation.
[21] Mr Brendan Callaghan confirmed the “no survivorship” notation was placed on the certificate of titles in issue as a matter of standard practice at that time within his firm. Accordingly, there is no suggestion that there is any particular circumstance in this case which led to the solicitor who established the Trust thinking the “no survivorship” notation was required to protect the beneficiaries.
[22] While the surviving settlor of the Trust has the power to remove and appoint trustees, there must nonetheless be a minimum of two trustees. Of course, there are five trustees at present, including two professional trustees, but even assuming they were removed no individual can take over the Trust.
2 Sell v Registrar-General of Land [2013] NZHC 1219 at [37].
3 Re McCullough [2019] NZHC 1999.
4 At [11].
5 At [15].
[23] The function of the “no survivorship” notation is to alert persons dealing with the Land Registry to the fact that the registered proprietors are trustees. Given the makeup of the present trustees, that the properties are held on trust will be obvious to anyone who reads the certificate of title.”
[20] More recently, Brewer J in Re Osborne Family Trust saw no difficulty in removing the notation in the context of a trust where one of the trustees had died and another had resigned.6 He did so on the basis that the 2017 Act had not continued the ability of transferors or persons registered as joint proprietors of any in land “no survivorship”.7 Plainly, Parliament, in repealing those parts of the former Act, had determined that there was no further need for the notation.8 He was satisfied that the deed establishing the Osborne Family Trust gave the trustees the full discretionary power to transfer or otherwise deal with any real property owned by the trust and that there was no prejudice to any beneficiary in removing the notation.9
Should the “no survivorship” notation be removed?
[21] I am satisfied that the notation “no survivorship” should be removed. My reasons follow.
[22] First, the statutory imprimatur which formerly existed under the former Act has been removed. As Brewer J observed in Re Osborne Family Trust that is a statement by Parliament that there is no further need for caution.
[23] Secondly, I am satisfied that the deed itself provides the necessary discretionary powers to transfer or otherwise deal with any real property owned under the Trust.
[24] Thirdly, the Trust was formed primarily for the benefit of the settlors including Mrs Vujcich. The proposed sale of Jaemont and the purchase of the new property are purposes consistent with the intentions of the settlors.
6 Re Osborne Family Trust [2021] NZHC 391 at [2].
7 At [4].
8 At [5].
9 At [5].
[25] Finally, all identifiable beneficiaries consent to and are supportive of the application and there is no apparent prejudice to any beneficiary.
Result
[26] Accordingly, I make orders in terms of the application dated 19 July 2022 sanctioning the removal of the endorsement “no survivorship” from Computer Freehold Register Identifier NA1696/39 in the North Auckland Land Registration District.
Moore J
Solicitors:
Just Lawyers (NZ) Limited, Auckland
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