Wells v Young

[2019] NZHC 561

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-20

[2019] NZHC 561

UNDER

the Trustee Act 1956

BETWEEN

DENNIS EDWARD WELLS

Applicant

AND

SHIRLEY MAUREEN YOUNG

Respondent

On the papers
Appearances:	RE Kettlewell for Applicant
Judgment:	25 March 2019

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 25 March 2019 at 4.15 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

WELLS v YOUNG [2019] NZHC 561 [25 March 2019]

Introduction

[1]    The Shirley Young Family Trust (“the Trust”) was settled by Shirley Maureen Young (“Mrs Young”) by deed of trust dated 27 July 1994. The trustees of the Trust are Mrs Young and Dennis Edward Wells (together, “the current trustees”). In that capacity, they are the registered proprietors of a residential property at 98 Edgecumbe Road, Tauranga being the land comprised in Record of Title Identifier No. SA28A/487, South Auckland Land Registration District, being Lot 1 on Deposited Plan South Auckland 32068 (“the Land”).

[2]    Mrs Young is aged 86 years. She is now in long term residential care at Radius Care Matua in Tauranga. I am satisfied by the evidence of Mrs Young’s daughter Amber L’von McLean (“Amber”) and a certificate signed by Dr Anna Ryan, a general practitioner, dated 24 January 2019 that Mrs Young suffers from vascular dementia and that she is mentally incapable, in that she lacks the capacity to make decisions about her personal care, welfare or finances. It follows that she does not have the mental capacity to exercise her powers and duties as a trustee of the Trust.

[3]    The applicant, Mr Wells, seeks orders removing Mrs Young as a trustee of the Trust and replacing her as trustee with Amber. Amber and Mr Wells agree that the Land should be sold and the proceeds applied to Mrs Young’s care. They seek an order vesting the Land in the new trustees.

Application for leave to commence the proceeding by originating application and directions as to service

[4]    This is not the type of proceeding that can be commenced by way of originating application as of right pursuant to rr 19.2 to 19.4 of the High Court Rules 2016. However, the Court may, in the interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application. Such permission may be sought without notice.1 Mr Wells seeks leave to bring this proceeding as an originating application under Part 19 of the High Court Rules 2016.

[5]The beneficiaries of the Trust are:

1      High Court Rules 2016, r 19.5.

(a)Mrs Young;

(b)Amber; and

(c)any grandchild or grandchildren of Mrs Young.

[6]    There is no point in serving the proceeding on Mrs Young. Moreover, because the proceeding does not involve any disputed questions of fact and there is no opposing party, it is not necessary in the interests of justice for there to be a particularised pleading or to follow the usual interlocutory steps involved in a civil proceeding.

[7]    I am satisfied, therefore, that it is appropriate that this proceeding proceed by way of originating application and that service of the proceeding be dispensed with.2

Background

[8]    Clause 7.4 of the deed of trust provides that the trustees have the power to appoint trustees, but it appears from the wording of the clause that such powers must be exercised jointly. Mrs Young does not have the capacity to act in that manner, so the applicants ask the Court to intervene. There is no express power for the trustees or either of them to remove a trustee.

Removal of a trustee and substitution

[9]    There is authority for the Court to order the removal of a trustee under s 51(1) of the Trustee Act 1956, which provides:

The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

[10]   I am satisfied that, given Mrs Young’s incapacity, the assistance of the Court to remove her and appoint Amber in substitution is expedient.

2      See McKean v McKean [2017] NZHC 2212, (2017) 4 NZTR 27-019 at [10]; Re Hetrick [2017]

NZHC 472, (2017) 4 NZTR 27-006 at [5] and [6].

Vesting of property

[11]   Despite the removal of Mrs Young as a trustee, the title to the Land will remain in the names of the current trustees without a formal transfer by Mrs Young or an order of the Court. Section 52(1)(b)(i) of the Trustee Act permits the vesting of land or interest therein, in any such person or any such manner as the Court may direct, where a trustee entitled to or possessed of land, either solely or jointly with another person, is under disability. Section 2(2) of the Act provides that “a person shall be deemed to be under a disability while he [or she] is not of … full mental capacity”.

[12]   The Registrar-General of Land routinely accepts Court orders vesting properly identified land in trustees as sufficient proof of ownership to record appropriate changes to certificates of title.

Findings and orders

[13]I am satisfied on the affidavit evidence filed that:

(a)Mrs Young no longer has the capacity to fulfil her duties as a trustee or registered proprietor or to facilitate the transfer of the title in the Land.

(b)Mrs Young should be removed as a trustee and Amber added as a new trustee in her place.

(c)The Land should be vested in the new trustees under s 52 of the Trustee Act.

[14]Accordingly, I order:

(a)The proceeding may be commenced by originating application under Part 19 of the High Court Rules 2016 and service of the proceeding on any person shall be dispensed with.

(b)Pursuant to s 51 of the Trustee Act 1956, Shirley Maureen Young is removed as a trustee of the Shirley Young Family Trust and Amber L’Von McLean is appointed a trustee.

(c)Under s 52(1)(h) of the Trustee Act 1956, the land at 98 Edgecumbe Road, Tauranga being the land comprised in Record of Title Identifier No. SA28A/487, South Auckland Land Registration District, and being Lot 1 on Deposited Plan South Auckland 32068, shall be vested in Dennis Edward Wells and Amber L’Von McLean and held by them as trustees of the Shirley Young Family Trust.

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Toogood J