Winwood v Winwood - [2015] NZHC 946

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2015-425-000037 [2015] NZHC 946

UNDER an application for a vesting order

BETWEEN

RALPH GILBERT WINWOOD, ALAN RAYMOND MACDONALD AND GAYNOR CAROLE KERR AS TRUSTEES OF THE WINGILL TRUST Plaintiff

AND

MARGARET WINIFRED WINWOOD Defendant

(Determined on the papers)

Appearances:

RJB Bannerman for the Plaintiffs

Judgment:

6 May 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to vesting of trust property

Introduction

[1] The defendant, Margaret Winwood, has been a trustee of the Wingill Trust

(the Trust) since Neil Pritchard settled it by deed of trust (the Trust deed) on 23 June

1997. In 2009, Mrs Winwood suffered a brain haemorrhage which left her permanently mentally incapacitated. For this reason, the Trust has been unable to function, as the trustees must act unanimously.

[2] Clause 13 of the Trust deed vests jointly in Mrs Winwood and her husband, Ralph Winwood (the Appointors), the power to remove any trustee without being obliged to give reasons and the power to appoint new trustees. Due to Mrs Winwood’s mental incapacity, the Appointors have been unable to exercise their
joint power of appointment and removal of trustees.

WINWOOD v WINWOOD [2015] NZHC 946 [6 May 2015]

[3] Section 43(1) Trustee Act 1956 provides that where a trustee is unfit to act as a trustee, or incapable of so acting:

… the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustees for the time being … may by deed appoint a person or persons … to be a trustee or trustees in the place of the appointment of the first-mentioned trustee.

[4] Pursuant to that provision, Mr Winwood and Alan Macdonald, as continuing trustees of the Trust, removed Mrs Winwood as a trustee and replaced her with her daughter, Gaynor Kerr. This was effected by deed dated 12 January 2015, on the basis that Mrs Winwood’s medical condition rendered her unfit to act as a trustee.

The orders sought

[5] The plaintiffs are the continuing and newly appointed trustees of the Trust. They seek orders under s 52(1)(a) Trustee Act to vest the property owned by the Trust (the Trust property) in the plaintiffs as current trustees.

[6] The plaintiffs also seek directions as to service, including orders dispensing with service of the proceedings on Mrs Winwood or any other person. Further, the plaintiffs seek an order that no directions be made with regard to Mrs Winwood’s representation.

The application to dispense with service

On Mrs Winwood

[7] An order to dispense with service may be made under r 6.8(c) High Court Rules. That provision applies to circumstances in which the document has already come to the knowledge of the person to be served or it cannot be served.

[8] As I noted in similarly sombre circumstances in Grazier v Grazier, the issue in this case is…

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.

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Details

Case: [2015] NZHC 946
Decision Date: 6 May 2015

CaseChat Overview and Summary

The High Court of New Zealand was presented with an application for a vesting order in the case of Winwood v Winwood. Margaret Winwood, a trustee of the Wingill Trust, had become permanently mentally incapacitated following a brain haemorrhage in 2009. The trust had been unable to function as the trustees needed to act unanimously. Clause 13 of the trust deed granted the power to appoint and remove trustees to Mrs Winwood and her husband, Ralph Winwood. Due to Mrs Winwood's incapacity, the trustees were unable to exercise this power. The plaintiffs, Ralph Winwood, Alan Macdonald, and Gaynor Kerr, sought vesting orders to vest the trust property in them as current trustees, and to dispense with service on Mrs Winwood and any other person.

The court considered the legal issues surrounding the application, including whether to dispense with service on Mrs Winwood and other parties, and whether to make vesting orders for the trust property. The court found that service on Mrs Winwood would serve no useful purpose due to her severe dementia and lack of capacity to participate in the decision-making of trustees. The court also determined that no other parties required service of the proceedings, as the vesting orders would not affect the beneficiaries' rights in respect of the trustees or trust property.

The court concluded that the vesting orders sought were appropriate to recognise the appointment of the current trustees and to ensure the trustees could deal with the trust property in accordance with the trust deed. The court granted the vesting orders and dispensed with service on Mrs Winwood and any other person.

In summary, the court found that the application for vesting orders was appropriate and granted the orders, while also dispensing with service on Mrs Winwood and any other person due to her severe dementia and lack of capacity to participate in the decision-making of trustees. The court did not make any order as to costs.

Orders