Wethey v Wethey

[2015] NZHC 493

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV2015-409-000114 [2015] NZHC 493

BETWEEN

TERESA MARY WETHEY, ANTHONY

JAMES FRANK WILDING, DAVID WILFRED FRANK WILDING as trustees of the AFW and D J Wilding Family Trust Plaintiffs

AND

TERESA MARY WETHEY, DAPHNE JUDITH WILDING, AND ANTHONY FREDERICK WESTALL WILDING as former trustees of the AFW and D J Wilding Family Trust

Defendants

Hearing:	17 March 2015 (On the papers)
Appearances:	DWF Wilding for Plaintiffs
Judgment:	17 March 2015

JUDGMENT OF NATION J

[1]      In these proceedings the plaintiffs apply under s 52 of the Trustee Act 1956 (the Act) for an order vesting the title to two properties owned by AFW and DJ Wilding  Family  Trust  (the  Trust)  in  the  names  of  the  present  trustees.    The application is made under part 18 of the High Court Rules.

[2]      Counsel for the plaintiffs has acknowledged that no application for directions as to service has been made as would normally be required under r 18.7.  Counsel’s explanation for this is outlined in their memorandum and supported by an affidavit from one of the plaintiffs, Teresa Mary Wethey, who is a continuing trustee of the Trust.   She is also named as one of the defendants being an original trustee.  The other defendants named are the two other original trustees. One of these trustees,

Daphne Wilding, has died. The other, Anthony Wilding, lacks capacity.

WETHEY AND ORS v WETHEY AND ORS [2015] NZHC 493 [17 March 2015]

[3]      Teresa Wethey, a solicitor has sworn an affidavit in which she explains how Anthony James Frank Wilding (James Wilding) of Christchurch, and David Wilfred Frank Wilding (David Wilding) have come to be appointed as trustees of the Trust in association with her as a continuing trustee.  Daphne Wilding purported to appoint James Wilding as a trustee of the Trust in her will.  In her will she had also appointed her husband, Anthony Wilding, to exercise any powers of appointment she might have had in respect of the Trust.  Because there was some doubt as to the validity of Daphne’s appointment of James Wilding by her will and because Anthony Wilding lacks the capacity to exercise any powers of appointment, Teresa Wethey appointed James Wilding  as  co-trustee  pursuant  to  s  43(1)  of  the  Act.    Her  reasons  for appointing James Wilding as a trustee are explained in the deed of appointment (dated 5 February 2015) and confirmed in her affidavit (dated 3 March 2015).

[4]      Following the appointment of James Wilding as a trustee, Teresa Wethey and James Wilding as trustees appointed David Wilding, a solicitor in Christchurch, as a third trustee in place of Anthony.   David Wilding is Anthony Wilding’s nephew. Teresa   Wethey   and   James   Wilding   made   this   appointment   by   deed   dated

12 February 2015, pursuant to their powers as continuing trustees under s 43 and/or pursuant to cl 13 of the trust deed for the Trust.   In her affidavit, Teresa Wethey explained that David Wilding was appointed as a third trustee because both Anthony and Daphne Wilding had shown their confidence in him when they were alive and had capacity.  They both appointed him as substitute attorney in respect of personal care and welfare and property if their son and first appointed attorney, James, was not willing to act.

[5]      The successive appointments of James Wilding and David Wilding appear to have  been  properly  made  in  accordance  with  the  powers  which  were  initially available to Teresa Wethey and subsequently to Teresa Wethey and James Wilding.

[6]      The application before the Court seeks vesting orders which would ensure that titles to the two properties owned by the Trust are held in the names of the current trustees, so that the trustees are able to deal with them.  Teresa Wethey has explained that the vesting of titles into the names of the present trustees is urgent

because the trustees need to use the properties, or one of them, as security for a loan which is needed to assist in meeting the costs of day to day care for Anthony.

[7]      The Trust is a discretionary trust.  The beneficiaries who are alive now, are Anthony Wilding,   James   Wilding   and   James’   sister,   Anna   Rose   Wilding (Anna Wilding).  Neither James Wilding nor Anna Wilding have children.  The Trust vests on 13 March 2086, but the trustees have a discretion to bring the date of distribution forward.  The trustees have a discretion as to how income and capital in the Trust is distributed between the beneficiaries, but if the trust fund has not been distributed otherwise, pursuant to cl 11.1 of the Trust deed the capital and accumulated income in the Trust at the time of distribution would be distributed equally between the surviving beneficiaries.

[8]      With Daphne having died, Anthony Wilding now suffering from Alzheimer’s, and James Wilding and Anna Wilding not having any children, James Wilding and Anna Wilding might be anticipating that they would be sharing equally in the capital and  income  in  this  Trust  after Anthony  Wilding’s  death.    With  the  discretions available to the trustees of the Trust, there cannot be certainty over this.  It is also apparent from the affidavit of Teresa Wethy that trust capital and income currently needs to be used to support Anthony Wilding so that there must be uncertainty as to what capital might remain in the Trust after his death.

[9]      The orders sought as to the vesting of titles for properties owned by the Trust would give effect to the appointment of the current trustees as explained above.  In seeking to dispense with service the plaintiffs are effectively asking the Court to decide that there is no person other than those who are already aware of the proceedings who is “interested in, or may be adversely affected by, the relief sought by the plaintiffs”.1

[10]     Anthony Wilding’s interests are affected because the orders sought reflect the fact he has been replaced as a trustee.   James Wilding is his property attorney. James Wilding is fully aware of the proceedings as one of the plaintiffs.  Service of

the proceedings on Anthony would serve no useful purpose.

1      High Court Rules, r 18.7(3).

[11]     James Wilding is arguably interested in the relief sought by the plaintiffs as beneficiary of the Trust.  He is fully aware of the proceedings as a plaintiff.

[12]     The issue for me to consider is whether Anna Wilding should be issued with the proceedings as a person who is interested in or who might be adversely affected by the relief sought by the plaintiffs.

[13]     Teresa Wethey has quite properly, in her affidavit, advised the Court that Anna  Wilding  lives  in  the  USA  and  that  Anna Wilding  was  opposed  to  the appointment of James Wilding and David Wilding as trustees and sought to be appointed “instead of or in addition to James and David Wilding”.

[14]     Teresa Wethey, in her affidavit, also advised the Court as to the nature of Anna Wilding’s concerns and why those concerns did not cause her, or ultimately, her and James Wilding to deviate from their proposed cause of action in relation to the appointment of new trustees.

[15]     Teresa Wethey said in her affidavit that Anna Wilding has been made aware that she can apply to the High Court should she wish to seek the removal of trustees, that she did have Christchurch solicitors acting for her, but it is understood they no longer do so.  Teresa Wethey also said that Anna Wilding has been told the trustees would be making the current application on an urgent basis and that the application may  proceed  without Anna Wilding  formally  having  notice  of  the  proceedings, although the trustees were going to provide her with a copy of the proceedings for her information.

[16]     Against that background, the Court has to consider:

(a)      whether the application can be dealt with by the Court without proceedings being served on Anna Wilding as a beneficiary of the Trust;

(b)if the application can be dealt with on what is effectively an ex parte basis, whether the vesting orders are appropriate.

[17]     On an application under r 18.7, the Judge may make any orders for service or representation that the Judge thinks just.2

[18]     Rule 7.44 states:

A Judge may make any interlocutory order or grant any interlocutory relief the  Judge  thinks  just,  even  though  the  order  or  relief  has  not  been specifically claimed and there is no claim for general or other relief.

[19]     On the information that has been made available to the Court I am satisfied that the beneficiaries of the Trust are not, as beneficiaries, parties who are interested in, or who may be adversely affected by the relief sought by the plaintiffs.   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.

[20]     On that basis, I do not consider Anna Wilding needs to be given notice of the proceedings.   I also consider the vesting orders sought to be appropriate given the need to recognise the appointment of the current trustees of the Trust and to ensure the trustees can deal with land owned by the Trust in terms of their obligations as trustees.

[21]     Accordingly, I make orders in terms of the draft orders filed by the plaintiffs.

Solicitors:

Wilding Law, Christchurch

2      High Court Rules, r 18.8.