Waiwiri v Thomson (aka Hayes)

[2020] NZHC 3052

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2020-470-106

[2021] NZHC 3052

UNDER

Part 19 of the High Court Rules and section 52 of the Trustee Act 1956

IN THE MATTER

of an application seeking vesting orders in respect of Trust property

BETWEEN

NICOLA ANNE WAIWIRI, WAYNE RUSSELL JONES DESMOND LESLIE KITE

MAXWELL THOMAS KIMBALL GRAY AND PETER PHILIP BUTLER as Trustees of the Estate of ROGER KEITH
THOMSON
Applicants

AND

CAROL ELIZABETH THOMSON (Also known as CAROL ELIZABETH HAYES

Respondent

Hearing:	On the papers
Appearances:	R Adams for the Applicants
Judgment:	18 November 2020

JUDGMENT OF MUIR J

This judgment was delivered by me on Wednesday 18 November 2020 at 3.45 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:…………………………

Solicitors:

Adams law, Tauranga       [email protected]

WAIWIRI v THOMSON [2021] NZHC 3052 [18 November 2020]

Introduction

[1]                 The applicants, who are the Trustees of the estate of the late Roger Thomson (Mr Thomson) seek a vesting order in respect of a one half share in a property at 5 Torbin Place, Papamoa (the property) together with associated orders:

(a)permitting the application to be brought under Part 19 of the High Court Rules 2016;

(b)dispensing with service of the application and affidavits; and

(c)directing that the respondent not require a litigation guardian as her representative pursuant to r 4.3 of the High Court Rules.

Background

[2]                 Mr Thomson’s estate comprises one asset only, a half share in the property. The other half share is owned by the respondent on her own account.

[3]                 The terms of Mr Thomson’s will (the will) provided for the appointment of the applicants (apart from solicitor Mr Peter Butler), together with Mrs Thomson as trustees and executors. Mrs Thomson was left a life interest in the estate’s half share in the property with the residue passing to Mr Thomson’s children by a former marriage, Ms Nicola Waiwiri and Mr Grant Thomson.

[4]                 Mrs Thomson’s personal affairs are managed by her son from a former marriage, Mr Wayne Jones.

[5]                 Mrs Thomson has advanced dementia with no prospect of recovery. Affidavit evidence in support of the application includes a report from psychiatrist Dr Andrew Wilkinson dated 20 August 2020 confirming Mrs Thomson does not have the ability to discharge her functions as trustee, being unable to understand the tasks required of her nor perform them. He describes her as having very poor memory and being disoriented in time and place.

[6]                 By Deed of Removal and appointment dated 25 August 2020 Mrs Thomson was removed as a trustee of the estate by the remaining trustees on the basis of her ongoing incapacity.1 Mr Peter Butler, solicitor of Mt Maunganui, was appointed in her stead.

[7]                 Mrs Thomson requires full time residential care and is incurring significant costs which she does not have the means to meet without access to her equity in the property. The trustees and Mr Jones are agreed that the appropriate course is for the property to be sold. Although the Enduring Power of Attorney exercised by Mr Jones permits him to act on Mrs Thomson’s behalf in relation to the half share in the property which she owns in her own right, he cannot act for her in her capacity as trustee. The residuary beneficiaries of the estate consent to the application. There are no other parties whose interests would be affected by the relief sought.

Application to commence by way of originating application and dispensation of service

[8]                 The application is not one which, in terms of rr 19.2 to 19.4 of the High Court Rules, is expressly authorised to be commenced by way of originating application. Leave may, however, be granted for this to occur where the interests of justice require it (r 19.5).

[9]                 In respect of applications for vesting orders under s 52 of the Trustee Act 1956 (the Act) this Court routinely grants leave to commence proceedings by way of originating application, particularly where the application is uncontentious.

[10]I also dispense with service of the application and affidavits noting:

(a)the consent of the residuary beneficiaries;

(b)Ms Waiwiri’s confirmation that Mr Jones similarly seeks a sale of the property in order to allow better care of his mother and that his agreement as attorney will be necessary in respect of the half share owned by Mrs Thomson in her personal capacity; and

1      Authority for which is contained in s 43(1)(f) of the Trustee Act 1956.

(c)the fact that no useful purpose can be served by engagement with   Mrs Thompson.

[11]I note also:

(a)the intended orders under s 52 of the Act in no way derogate from  Mrs Thomson’s life interest under the trust; and

(b)the appointment of an independent trustee, Mr Butler, who can be expected to be particularly mindful of the respective interests of life and residuary beneficiaries.

Litigation guardian

[12]              Mrs Thomson is an incapacitated person within r 4.29 of the High Court Rules. This being the case, r 4.30 requires her to have a litigation guardian as her representative in any proceeding unless the Court orders otherwise.

[13]              Although a Court must proceed cautiously before granting an order that an incapacitated person need not be represented by a litigation guardian, where a trustee is properly removed for lack of mental capacity, vesting orders are, in the usual case available, and the Court adopts the position that the appointment of a litigation guardian will typically serve no useful purpose.2

[14]              In this case Mrs Thomson was properly removed as a trustee for incapacity on the basis of medical evidence and a vesting order is now necessary to bring the registered position into conformity with the current named trustees.

[15]              Again  the  fact  that  the  vesting  order  does  not  otherwise  impact   on  Mrs Thomson’s rights under the trust and the appointment of Mr Butler as a replacement trustee are relevant considerations. In my view, no useful purpose would be served by requiring the appointment of a litigation guardian and I dispense with the appointment accordingly.

2      Wagner v Wagner [2018] NZHC 3120 at [15] – [16]; McKay v Beattie [2016] NZHC 1332, (2016)

4 NZTR 26,009 at [15] – [18].

Substantive application

[16]              The substantive application is for a vesting order under s 52 of the Act. I am satisfied that this application should be granted noting again, in particular:

(a)Mrs Thomson’s removal as trustee;

(b)the consent of the residuary beneficiaries;

(c)the requirement that a vesting order be made in order to facilitate a sale of the property; and

(d)the necessity of such a sale to provide for Mrs Thomson’s ongoing support.

Result

[17]I make orders:

(a)Permitting the application be brought under Part 19 of the High Court Rules.

(b)Dispensing with service of the application and affidavits.

(c)Directing that the respondent does not require a litigation guardian as her representative pursuant to r 4.3 of the High Court Rules 2016.

(d)Vesting a one half share in the tile to the property at 5 Torbin Place, Papamoa (more particularly described as that parcel of land containing 580 square metres more or less being Lot 26, Deposited Plan 330121 and comprised and described in the Freehold Register under identifier 123523 South Auckland Registry) in the names of Nicola Anne Waiwiri, Wayne Russell Jones, Desmond Leslie Kite, Maxwell Thomas Kimball Gray and Peter Philip Butler.

Muir J