Whelan

[2018] NZHC 2751

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2018-485-771

[2018] NZHC 2751

UNDER

the Trustee Act 1956

IN THE MATTER OF

an application by FRANCIS GORDON WHELAN, KRIS WHELAN and JOSIE

WHELAN as Trustees of THE DAWN WHELAN FAMILY TRUST for vesting order and removal of specified powers in Trust Deed

AND IN THE MATTER OF

an application by FRANCIS GORDON WHELAN, ELAINE MELVA MURPHY and SIMCO TRUSTEES LIMITED as

Trustees of THE MURPHY WHELAN TRUST for vesting order

On the papers
Judgment:	24 October 2018

JUDGMENT OF MALLON J

Introduction

[1]                   The applicants are the trustees of two trusts: the Dawn Whelan Family Trust and the Murphy Whelan Trust. They seek orders arising out of the declined mental capacity of Rosemary Whelan (known as Dawn) who is the settlor of the Dawn Whelan Family Trust and, until dates earlier this year, a trustee of both trusts.

The background

[2]                   Dawn was formerly married to Francis Whelan. They had two children, Kris and Josie. Francis is now married to Elaine Murphy (known as Lani). Despite the dissolution of their marriage, Dawn and Francis remained good friends.

Re Whelan [2018] NZHC 2751 [24 October 2018]

[3]                   Dawn now lives in residential care in a dementia unit. She requires full time care. She was recently assessed by Anthony Duncan, a psychiatrist. He has certified that she is suffering from incurable progressive dementia. His affidavit advises Dawn lacks competence to manage her property affairs and the affairs of the trusts. He also advises that she would be unable to reasonably comprehend the present proceedings and she would likely find them confusing and distressing.

[4]                   When the Dawn Whelan Family Trust was settled, Dawn and Francis were the trustees. They have remained the trustees until 6 March 2018 when by deed Francis appointed Kris and Josie to replace Dawn. Kris and Josie accepted their appointment as is recorded in a resolution of the same date. Dawn had the sole power of appointment of replacement trustees under the Trust. Therefore Francis relied on s 43 of the Trustee Act 1956 to do this. The discretionary beneficiaries are Dawn, Kris and Josie and any grandchild of Dawn born before the date of distribution.

[5]                   The sole asset of the Dawn Whelan Family Trust is a property at Raumati Beach. This was the family home and Dawn resided there until she moved into residential care. The property is in the names of Dawn and Francis, as the trustees under the Trust. The trustees intend to sell the property and put the funds on an interest bearing account and to use the interest to pay for Dawn’s care.

[6]                   The Whelan Family Trust was settled on 30 March 2005. The beneficiaries are Francis, Lani and any of their children and grandchildren. On establishment, the trustees were Francis, Lani and Dawn. The trust gives Francis and Lani the power to to appoint new trustees. Pursuant to that power, by Deed dated 8 October 2008, Francis and Lani appointed Simco Trustees Limited to replace Dawn as trustee. Simco accepted the appointment as is recorded in a resolution of the same date.

[7]                   The Whelan Family Trust’s asset is a property at Paekakariki. It is registered in the names of Francis, Lani and Dawn, as trustees of the Whelan Family Trust.

Orders sought

[8]The trustees of the Dawn Whelan Family Trust seek orders:

(a)that the powers of appointment under the trust (clause 9) be removed from Dawn and be vested in Kris and Josie;

(b)vesting the trust property at Raumati Beach in Kris, Josie and Francis;

(c)the costs of the trust’s application be paid out of the assets of the Dawn Family Trust.

[9]The trustees of the Murphy Whelan Trust seek orders:

(a)vesting the trust property at Paekakariki in Francis, Lani and Simco;

(b)the costs of the trust’s application be paid out of the assets of the Murphy Family Trust.

[10]               The trustees also seek an order for permission to bring this proceeding as an originating application.

[11]These orders are sought pursuant to ss 52 and 71 of the Trustee Act 1956 and r

19.5 of the High Court Rules. I am satisfied it is appropriate to make the orders sought. The order to vest trust property to align with the new trustees is within the terms of s

52. There is also authority for vesting the power of appointment when that becomes necessary.1 The costs order is within s 71. The originating application procedure is appropriate in the circumstances given the orders affect only Dawn and the orders relieve her of her obligations which she can no longer discharge.

[12]The draft orders prepared by counsel may be finalised and sealed accordingly.

Mallon J

1      Davidson v Israel [2012] NZHC 631; Lance v Lance [2014] NZHC 2846; Andrews v Andrews

[2015] NZHC 759; and Re Trustees Executors [2015] NZHC 1329.