Wells v Marshall - [2023] NZHC 136

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2022-412-118

[2023] NZHC 136

UNDER pt 19 of the High Court Rules 2016 and s 52 of the Trustee Act 1956

IN THE MATTER

of the D B Wells Family Trust

BETWEEN

DAPHNE BRONWYN WELLS AND LUCAS & LUCAS TRUSTEES NO 2 LIMITED

Applicants

AND

GRAEME BRUCE MARSHALL

Respondent

Hearing: On the papers

Appearances:

J C Callander for Applicants

No appearance by or for Respondent

Judgment:

9 February 2023

JUDGMENT OF MANDER J

[1] On 11 June 2020, the applicant Daphne Bronwyn Wells, a trustee of the D B Wells Family Trust (the Trust), removed the respondent, Graeme Marshall, as a trustee pursuant to a power reserved to her under the deed of that Trust.

[2] The Trust owns a property situated at 23 Edna Street, Ocean View, Dunedin (the Property). A copy of the Deed of Removal and land transfer forms relating to the ownership of the Property were forwarded to Mr Marshall’s lawyer on 11 June 2022. Mr Marshall has not challenged the validity of his removal as a trustee, but neither has he attended to the execution of the relevant documentation necessary to vest the

WELLS v MARSHALL [2023] NZHC 136 [9 February 2023]

Property in the remaining trustees. This state of affairs is said to have impeded the proper administration of the Trust.

[3] The remaining trustees have now brought proceedings to vest the Property solely in themselves as the continuing trustees of the Trust.

Background

[4] The Trust was established by deed dated 18 April 2005. Its settlor was Ms Wells’ mother, and the beneficiaries are herself, her four adult children and her three grandchildren. The original trustees were Ms Wells, her then de facto partner, Mr Marshall, and Cook Allan Gibson Trustee Company Ltd. In 2005, Ms Wells sold her property at 24A Gladstone Road to the Trust for $440,000. The Trust’s purchase of this property was recorded as a debt back to her. In 2022, the original trustee company retired as a trustee and was replaced by the other applicant, Lucas & Lucas Trustees No 2 Ltd.

[5] In 2011, the Trust sold Gladstone Road and purchased 23 Edna Street. To facilitate that purchase and restructure other debt, loans were taken out with the ASB Bank. This debt was secured by way of a mortgage against the Property. As noted, no formal objection has been raised by Mr Marshall in respect of his removal as a trustee, but he has not attended to the signing of the land transfer forms. Towards the end of Mrs Wells’ relationship with Mr Marshall, their relationship became difficult and they did not separate on the best terms. She believes Mr Marshall is being obstructive by not signing the forms.

[6] Mrs Wells advises that the economic downturn has affected her business. She is a self-employed business coach, and her adverse circumstances have resulted in an inability to meet loan repayments…

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 Wells v Marshall

Details

AGLC: Wells v Marshall [2023] NZHC 136
Case: [2023] NZHC 136
Decision Date: 9 February 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Wells v Marshall was brought by Daphne Bronwyn Wells and Lucas & Lucas Trustees No 2 Limited against Graeme Bruce Marshall. The applicants sought to vest a property, located at 23 Edna Street, Ocean View, Dunedin, solely in the names of the remaining trustees, as they believed the continued presence of Marshall as a trustee was obstructing the proper administration of the D B Wells Family Trust. Marshall had been removed as a trustee on 11 June 2020 but had not executed the necessary documentation to transfer the property to the remaining trustees, despite not objecting to his removal. The applicants argued that this inaction impeded the administration of the Trust.

The central legal issue before the court was whether it was appropriate to grant a vesting order to transfer the property to the remaining trustees, under section 52(1)(h) of the Trustees Act 1956. The court had to determine whether it was expedient, suitable, practical, and efficient to vest the property in the remaining trustees given the circumstances, particularly in light of the absence of any opposition to the vesting order. The court also needed to consider the transitional provisions of the Trusts Act 2019, which came into force after Marshall's removal but before the vesting order was sought.

The court found that Marshall was validly removed as a trustee, and there was no opposition to the vesting order. The term "expedient" was interpreted to encompass considerations of suitability, practicality, and efficiency. The court accepted that issuing a vesting order was necessary for the proper administration of the Trust and would accurately reflect the ownership of the property. Consequently, the court granted the vesting order, vesting the property in Daphne Bronwyn Wells and Lucas & Lucas Trustees No 2 Ltd as trustees of the D B Wells Family Trust. The court did not make any order as to costs.

Orders