Wason v Wason

[2017] NZHC 1453

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2017-409-000349 [2017] NZHC 1453

UNDER	the Trustee Act 1956
IN THE MATTER	of an application for orders under section 52 of the Act
BETWEEN	MURRAY DAVID WASON Applicant
AND	JOAN BEVERLEY WASON Respondent

Hearing:	27 June 2017 (Determined on the papers)
Counsel:	H C Carey for Applicant
Judgment:	28 June 2017

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

as to vesting orders and service

Introduction

[1]      The applicant (Mr Wason) and the respondent (Mrs Wason) are married. Together they settled the M & J Wason Family Trust (the Trust) and appointed themselves as trustees. Mrs Wason has since been removed as a trustee due to her mental incapacity. Mr Wason applies for an order vesting the Trust’s property in the new trustees.

[2]      Mr  Wason  seeks  permission  to  commence  this  proceeding  by  way  of originating application. He also seeks an order that service of the application be

dispensed with.

WASON v WASON [2017] NZHC 1453 [28 June 2017]

Background

[3]      Mr and Mrs Wason settled the Trust in August 2004. It was established to ensure the orderly succession of the family farm’s ownership following their death or separation. They appointed themselves as trustees, together with Worcester Trustee Services Limited (Worcester). The beneficiaries of the Trust are Mr and Mrs Wason

and the Dene Wason Family Trust.

[4] Cant	The rbury 8 (a)	Trust’s  property  is  the  farm  known  as  Russells  Flat,  Sheffield, 173 (the Properties), which is comprised of: All that parcel of land containing 4.0471 hectares or thereabouts being
Rural Section 40741, comprised and described in Certificate of Title CB33B/555, Canterbury Registry;
(b)	One half share of the parcel of land containing 40.4686 hectares or thereabouts being Rural Section 7439, comprised and described in
Certificate of Title CB3C/1299, Canterbury Registry;
(c)	One half share of the parcel of land containing 45.3248 hectares or
thereabouts being Rural Section 18378, comprised and described in Certificate of Title CB430/11, Canterbury Registry;
(d)	One half share of the parcel of land containing 16.1874 hectares or thereabouts  being  Rural  Section  14700  and  Rural  Section  18484,
comprised    and    described    in    Certificate    of    Title    CB443/110, Canterbury Registry;
(e)	One half share of the parcel of land containing 21.0437 hectares or thereabouts being Rural Section 18924, comprised and described in
Certificate of Title CB8F/845, Canterbury Registry;
(f)	One half share of the parcel of land containing 4.4996 hectares or
thereabouts being Rural Section 19806, comprised and described in Certificate of Title CB10F/196, Canterbury Registry;

 

e

(g)One half share of the parcel of land containing 20.2342 hectares or thereabouts being Rural Section 10684, comprised and described in Certificate of Title CB12K/445, Canterbury Registry;

(h)One half share of the parcel of land containing 8.0937 hectares or thereabouts being Rural Section 12527, comprised and described in Certificate of Title CB1C/1222, Canterbury Registry;

(i)One half share of the parcel of land containing 20.2342 hectares or thereabouts being Rural Section 10683, comprised and described in Certificate of Title CB22B/540, Canterbury Registry;

(j)       The  interest  of  the  trustees  in  all  that  parcel  of  land  containing

21.1925 hectares or thereabouts being Lot 7 DP 364179, comprised and described in Certificate of Title 261129, Canterbury Registry; and

(k)      The  interest  of  the  trustees  in  all  that  parcel  of  land  containing

21.5350 hectares or thereabouts being Lot 6 DP 364179, comprised and described in Certificate of Title 261128, Canterbury Registry.

[5]      Mrs Wason developed dementia in 2016. Dr Hanger, Specialist Geriatrician, assessed Mrs Wason in December 2016. He considers that Mrs Wason did not have the understanding or capacity to sign any enduring power of attorney documents. He considers that her condition is likely to be indefinite.   Based on this, the family applied to the Family Court for orders under the Protection of Personal Property Rights Act 1988. On 18 January 2017, the Court appointed Dene Wason as Mrs Wason’s property manager and Karen Wason as her welfare guardian. These orders were temporary and expired on 18 April 2017.

[6]      At this point, Mrs Wason was disqualified from acting as trustee of the Trust, pursuant to clause 25.1 of the Trust Deed.

[7]      By  deed  on  25  May  2017  (the  Deed),  Mr  Wason  and  Worcester  (the

Continuing Trustees) appointed Karen and Dene Wason as trustees of the Trust (the

New Trustees). The Deed vests the Trust’s property in the New and Continuing

Trustees.

[8]      Mrs Wason is incapable of authorising the transfer of the Properties. Mr

Wason therefore applies to the Court to make a vesting order. Leave to commence by way of originating application Originating application

[9]      Rules 19.2 to 19.4 High Court Rules 2016 deal with proceedings which can be commenced by way of originating application.   The current application is not among them.  The applicant is therefore not entitled to commence this proceeding by originating  application  as  of  right.  However,  the  Court  may,  in  the  interests  of justice, permit such a proceeding to be commenced by originating application.1   The applicant has sought leave as required by r 19.5.

[10]     In Jones v H W Broe Ltd, McGechan J considered an application for leave to use the originating application procedure on an ex parte basis.2  Without explicitly parsing “the interests  of justice”,  his  Honour discussed  the rationale underlying r 19.5 as follows:3

The … originating application procedure was designed as a genuine exception,  and  as  an  expedient  for  cases  where  there  was  in reality no opposing party, avoiding clumsy and unnecessary use of a full statement of claim and notice of proceeding. It was not intended for routine use in cases where there was another likely party with contrary interests.

[11]     The interests of justice support the granting of leave. This application merits the expediency afforded by the r 19.5 exception.

1      High Court Rules, r 19.5(1).

2      Jones v H W Broe Ltd (1989) 5 PRNZ 206 (HC).

3      At 207. I note that McGechan J’s comments were made in the context of an earlier version of the High Court Rules, referring to rr 239 and 458D. His Honour’s observations remain pertinent, however, to the present iteration of the Rules. As with its precursor, the safeguard of r 19.5 “was not intended to make the exception the rule”.

Service

[12]     I turn to the issue of whether service should be dispensed with. Having regard to the evidence of Dr Hanger and Mr Wason, I am satisfied that this is an appropriate case for service to be dispensed with.  Mrs Wason’s mental incapacity is such that she would not be able to rationally understand the nature or purpose of the proceedings, or to meaningfully participate in them.

[13]     Associate Judge Bell concluded in Docherty v Docherty that service would serve “no useful purpose.”4    I too am of that opinion in this case.  In reliance upon the inherent jurisdiction of the Court to regulate its own process and proceedings, an order will be made dispensing with service.5

[14]     I also conclude that there are no other persons who should be served with the proceedings as persons who are “interested in, or may be adversely affected by, the relief sought” by the applicant.6   In Wethey v Wethey, Nation J considered this issue in circumstances where an original trustee had been incapacitated by Alzheimer’s, and the continuing trustees sought vesting orders following his removal and replacement as a trustee.7   Nation J dispensed with service on a beneficiary residing in the United States who had vehemently opposed the appointment of new trustees and sought to be appointed in lieu of one of the new trustees.  His Honour held:8

The orders sought merely give effect to the appointments of trustees which have already been made. The information available does not suggest there is likely to be any challenge to those appointments or that such a challenge would be successful. The vesting of title in the presently appointed trustees will not change any of the beneficiaries' rights in respect of the appointments which have already been made. Nor will the vesting orders sought affect the obligations which the trustees have to all beneficiaries or the rights or entitlements  which beneficiaries  have  in respect  of the trustees  or Trust property.

4      Docherty v Docherty [2013] NZHC 1885 at [33]; cited with approval in Grazier v Grazier

[2014] NZHC 3058 at [14].

5      See IH Jacob “The Inherent Jurisdiction of the Court” (1970) Current Legal Problems 23 at 32 -

40.

6      High Court Rules, r 18.7(3).

7      Wethey v Wethey [2015] NZHC 493.

8 At [19].

[15]     Given that the current application is for an administrative step enabling the Trust to continue operating, this step would not in itself adversely impact upon any beneficiaries of the Trust.  As in the finding in Wethey v Wethey, I am satisfied that there is no need to serve the beneficiaries of the Trust or any other person. This matter may be dealt with on a without notice basis.

[16]     I am also satisfied that this application and the relief sought can be dealt with on the basis of the papers before the Court.

Vesting of property

[17]     Section 52(1)(b)(i) Trustee Act 1956 provides the Court with the power to vest  land  in  any  such  person  that  it  may  direct  where  a  trustee  entitled  to  or possessed of any land or interest therein, either solely or jointly with any other person, is under a disability.

[18]     Mrs Wason is registered as a proprietor of the Properties in her role as a trustee. However she has been replaced as trustee by the New Trustees. Given the need to ensure the New and Continuing can deal with the Properties in accordance with their duties, I am satisfied that the vesting order sought is appropriate.

Costs

[19]     Mr Wason has not sought any order as to costs.

Orders

[20]     I direct:

(a)      The applicant may commence this proceeding by way of a without notice originating application;

(b)      Service of this proceeding is dispensed with;

(c)      The properties known as Russells Flat, Sheffield, Canterbury 8173, detailed at paragraph [4] of this judgment, are vested in Murray David Wason, Worcester Trustee Services Limited, Karen Marie Wason and John Dene Wason; and

(d)      No order is made as to costs.

J G Matthews

Associate Judge

Solicitors:

Parry Field Lawyers, Christchurch