Wright v Wright

[2016] NZHC 270

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-531 [2016] NZHC 270

UNDER

section 51 of the Trustee Act

IN THE MATTER OF

the Wai-ou Family Trust and the estate of
Nigel Bruce Wright

BETWEEN

RICHARD HENRY WRIGHT First Plaintiff

DAVID RUSSELL DICKS Second Plaintiff

AND

LOIS ELAINE WRIGHT Defendant

Hearing:	24 February 2016
Appearances:	G J Thomas for the plaintiffs No appearance for the defendant
Judgment:	24 February 2016

ORAL JUDGMENT OF MALLON J

[1]      This is an application for the removal of a trustee and the appointment of a replacement.  It is proceeding on an unopposed basis.

[2]      The applications relate to the Wai-ou Family Trust (the Trust).  The Trust was constituted by a deed dated 3 August 1975.   The settlor of the Trust was Nigel Wright.  He died on 18 October 1979.  The present trustees of the Trust are the two plaintiffs (Richard Wright and David Dicks) and the defendant (Lois Wright).  The first plaintiff and the defendant are the two surviving children of the settlor and the present executors and trustees of his estate.

[3]      The major asset of the Trust is a farm near Waipukurau.  The present trustees are named on the title to the farm.  The current beneficiaries of the Trust are Nigel

WRIGHT v WRIGHT [2016] NZHC 270 [24 February 2016]

Wright’s   surviving   children   (the   first   plaintiff   and   the   defendant)   and   his

grandchildren.

[4]      The application is to replace the defendant with Esther McLaren.  She is the daughter  of  the  settlor’s  deceased  third  child  (Marie  McLaren).    Consequential orders  are  sought  appointing  Esther  McLaren  as  a  trustee  and  executor  of  the settlor’s estate in substitution for the defendant, and replacing the defendant with Esther McLaren as one of the trustees of the Trust named on the title to the farm land owned by the Trust.

[5]      The application to replace the defendant is made because she has refused to attend trustee meetings, to discuss Trust business and to sign trustee resolutions. This has been the situation since 2012.  The defendant was invited to sign a Deed of Retirement so that Esther McLaren could be appointed in  her place.   This was delivered to the defendant in March 2014 but she refused to sign it.  The plaintiffs cannot continue to administer the Trust without the removal of the defendant.  An affidavit from the first plaintiff attests to these matters.

[6]      This  application  was  commenced  in  July  2015.    It  was  served  on  the defendant, by way of personal delivery, on 17 August 2015. The defendant has taken no steps in the proceeding.  On 16 October 2015 she wrote a letter to the High Court stating:

Re my status on the Waiou Trust, I hereby resign from it now.

[7]      The grandchildren of the settlor were also served in August 2015.  None of them have elected to take any steps in the proceeding.

[8]      Clause 5 of the Trust Deed gives the executors of Nigel Wright’s estate the power to appoint new trustees to the Trust.  As the first plaintiff and the defendant are  presently  executors  and  trustees  of  the  estate,  they  have  the  power  of appointment.  The application to replace the defendant as trustee of the Trust is made under s 51 of the Trustee Act 1956. That section provides:

51       Power of court to appoint new trustees

(1)       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 …

(2)       In particular and without prejudice to the generality of the foregoing provision, the court may make an order appointing a new trustee in substitution for a trustee who—

(a)      has been held by the court to have misconducted himself [or

herself] in the administration of the trust …

…

(3)       An order under this section, and any consequential vesting order or conveyance, shall not operate further or otherwise as a discharge to any former or continuing trustee than an appointment of new trustees under any power for that purpose contained in any instrument would have operated.

(4)       Nothing in this section shall give power to appoint an executor or administrator.

…

[9]      I am satisfied it is appropriate to make the order replacing the defendant as trustee of the Trust with Esther McLaren.  The evidence is that the defendant has not been discharging her duties as trustee and is willing to resign but has not done so formally.  Esther McLaren is a suitable replacement as the daughter of the settlor’s deceased child and with her agreement to being appointed.

[10]     The plaintiffs also seek an order that Esther McLaren be appointed as a new trustee of the estate in substitution for Lois Wright.  Counsel for the plaintiff advises that the administration of the estate has been completed so the executor functions under the estate are at an end.  All that remains is the power under clause 5 of the Trust Deed to appoint trustees.  Counsel has referred me to a decision in Re Eagle

which discusses the transition from executor to trustee.1   Relying on that discussion

counsel submits that the remaining role under the estate is a trustee role and Ms

McLaren can be appointed under s 51(1).

1      Re Eagle (deceased) HC Auckland M721/97, 21 November 1997 at 5.

[11]     Alternatively the  application  in  respect  of  the  estate  can  be made under s 21(1) of the Administration Act 1969. That section provides, so far as relevant:

21       Discharge or removal of administrator

(1)       Where an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator, the court may discharge or remove that administrator, and may if it thinks fit appoint any person to be administrator in his or her place, on such terms and conditions in all respects as the court thinks fit.

...

[12]     The third basis upon which the order could be made is pursuant to the Court’s inherent jurisdiction.   Counsel has referred me to the decision in Green v Green which refers to the Court’s inherent jurisdiction to remove trustees as part of its general jurisdiction to supervise the administration of trusts.2     He also refers to Hunter v Hunter which was a case concerning the removal of an executor and trustees of an estate pursuant to the Court’s inherent jurisdiction.3

[13]     Accordingly  I  am  satisfied  that  I  have  jurisdiction  to  make  the  order substituting the defendant for Esther McLaren in respect of the estate.

[14]     Lastly, the plaintiffs seek an order to enable the new trustee to be named on the title to the Trust property.  After discussion with counsel, the order that is sought is one vesting the Trust property in the new trustee pursuant to s 51(3) of the Trustee Act.4

[15]     Accordingly I make the following orders:

(a)       an order that Esther Charlotte McLaren be appointed a new trustee of the Wai-ou Family Trust in substitution for Lois Elaine Wright;

2      Green v Green [2015] NZHC 1218 at [598]-[607] in particular at [600].

3      Hunter v Hunter [1938] NZLR 520 (CA).

4      A similar order was made in Mudgway v Slack HC Auckland CIV-2010-404-2058, 26 July 2010, at [41].

(b)an order that Esther Charlotte McLaren be appointed a new trustee of the estate of the late Nigel Bruce Wright of Waipukurau, sheep farmer, in substitution for Lois Elaine Wright; and

(c)       an order vesting the land in CTHBP2/1325 in the name of Richard

Henry Wright, David Russell Dicks, and Esther Charlotte McLaren. [16]      The plaintiffs do not seek costs.

Mallon J