Wylie v Wylie

[2019] NZHC 947

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000025 [2019] NZHC 947

BETWEEN

KIRSTEN MONIQUE WYLIE

Plaintiff

AND

KIRSTEN MONIQUE WYLIE, KEITH ROBERTS, RICHARD ALLAN LEACH as

Trustees of THE ROBERTS FAMILY TRUST

First Defendants

AND

KEITH ROBERTS

Second Defendant

Hearing:

30 April 2019

Appearances:

A L Bayliss for Plaintiff

No appearance for any other party (but Mr Roberts, second named First Defendant, having signed consents)

Judgment:

1 May 2019

JUDGMENT OF OSBORNE J

[1]    This is an application by Kirsten Wylie for removal of one trustee of a family trust. The proceeding has been set down for formal proof, no steps having been taken by the defendant trustee, Keith Roberts. A third trustee, Richard Leach, has filed consents to the orders sought by Dr Wylie.

Background

[2]    Dr Wylie resides in Christchurch. As summarised in the Statement of Claim, she entered into a relationship with Mr Roberts in January 2002 following which they

WYLIE v WYLIE, ROBERTS, LEACH and ROBERTS [2019] NZHC 947 [1 May 2019]

were married in March 2002. They separated in August 2004 and their marriage was dissolved in 2006. They do not have children.

[3]    During the marriage Dr Wylie settled the Roberts Family Trust (the Trust) by deed dated 30 August 2002 (the Deed). The discretionary beneficiaries of the Trust as settled were Dr Wylie as settlor; Mr Roberts; any child or children of Dr Wylie; any grandchild or grandchildren of Dr Wylie; the parents of Dr Wylie; the parents of Mr Roberts; any Trust established by Dr Wylie as settlor; and any trust established for the discretionary beneficiaries.

[4]    Dr Wylie subsequently exercised a right conferred upon her in the Deed to declare that Mr Roberts and his parents were removed as discretionary beneficiaries.

[5]    Under the Deed the power of appointment of new trustees and the power to remove trustees is held by Dr Wylie and Mr Roberts jointly, or the last survivor of them.

[6]    The Trust has as its asset a property at 46 Forfar Street, St Albans, Christchurch. A document exhibited in the interlocutory stage of this proceeding indicates that its title reference is CB40A/193 and that the property is held by Dr Wylie (then known as Roberts), Mr Roberts and the third named first defendant jointly. The Trust has a bank debt of $151,900 secured over the property.

[7]    For the purposes of this hearing Dr Wylie has filed the required affidavit under r 15 High Court Rules. She has verified the facts set out in the Statement of Claim.

Difficulty in the administration of the Trust

[8]    Turning to the circumstances which have given rise to this application, Dr Wylie records that since the separation in 2004 there have been difficulties in relation to the administration of the Trust. In particular Mr Roberts has not been involved in the administration of the Trust, he has refused to resign from his trusteeship and the trustees are deadlocked. Through her verifying affidavit Dr Wylie has confirmed that the difficulties in the administration of the Trust have hindered and continued to hinder its proper administration for the benefit of the beneficiaries. Dr Wylie asserts that it

has become impracticable or inexpedient to continue administration by the current trusteeship and that it is appropriate to remove the second defendant as a trustee.

Jurisdiction to remove a trustee

[9]    Removal of Mr Roberts as a trustee cannot be actioned without the assistance of the Court, given the power of appointment and removal as expressed in the Deed. In the Statement of Claim, Dr Wylie relied on both the Court’s powers under s 51 Trustee Act 1956 and the Court’s inherent jurisdiction. On discussion with Ms Bayliss I am satisfied that s 51 of the Act is inapt in that this is not a proceeding in which it is sought to have a new trustee appointed. I am however satisfied that the relevant jurisdiction is that which belongs to the Court under the inherent jurisdiction. In particular the law in New Zealand is settled by the Court of Appeal judgment in Hunter v Hunter.1 The headnote to that decision of a full court of the Court of Appeal accurately reflects the substance of the judgment, in particular the Court is summarised as having found:

The jurisdiction of the Court to remove a trustee is ancillary to its principal duty to see that the Trusts are properly executed; and if the Court is satisfied that the continuance of the trustee would prevent the Trust being properly executed, the trustee may be removed. In exercising this jurisdiction, the main guide must be not whether the trustee has committed breaches of trust but the welfare of the beneficiaries.

[10]   That summary of the case in the headnote follows directly from the Court’s adoption of the principle laid down by the Privy Council in Letterstedt v Broers.2 The Court of Appeal set out an extensive passage from the Privy Council advice which indicates that in situations such as the present the Court exercises a jurisdiction to remove trustees where the administration of the Trust is being hindered with the result that the interests of the beneficiaries are not being protected or promoted.

[11]   I am satisfied that the test laid down in Hunter v Hunter and Letterstedt v Broers applies directly to this case. I am therefore satisfied it is an appropriate case in which to make an order removing Mr Roberts as a trustee of the Trust.

1      Hunter v Hunter [1938] NZLR 520.

2      Letterstedt v Broers, (1884) 9 App. Cas. 371.

The vesting of land

[12]   The Court is asked also to vest the trust property in the remaining trustees. That power exists expressly under s 52 of the Trustee Act 1956. It is appropriate that the Court as an ancillary order vest the Trust is property in the remaining trustees. That will have the happy consequence of also bringing Dr Wylie’s name back into her present form of name rather than preserving it in her married name.

[13]   I will be making an order that the orders I pronounce shortly lie in Court until a further affidavit is filed. The further affidavit is to exhibit a true copy of the Certificate of Title for the property which has not been exhibited to date. Upon receipt of that, showing names in accordance with those reflected in this proceeding, the Registrar may proceed to seal the judgment.

Costs

[14]   Costs have previously been dealt with in relation to the interlocutory steps in this proceeding. In relation to other steps, Ms Bayliss seeks an order that the second defendant pay the costs of the proceeding on a 1A basis together with disbursements. That is an appropriate order and will be made.

Orders

[15]I order:

(a)Keith Roberts is removed as a trustee of the Roberts Family Trust as settled by Trust Deed dated 30 August 2002.

(b)Pursuant to s 52 Trustee Act 1956 the property at 46 Forfar Street, Christchurch, more particularly described in Certificate of Title CB40A/193, is vested in the remaining trustees, namely Kirsten Monique Wylie and Richard Allan Leach.

(c)The second defendant shall pay to the remaining trustees such costs of the proceeding as have not been awarded to date on a 1A basis, together with disbursements to be fixed by the Registrar.

(d)These orders are to lie in Court until counsel for the plaintiff files an affidavit of Dr Wylie exhibiting the Certificate of Title for 46 Forfar Street, Christchurch, showing the names of the trustees in accordance with the papers filed in Court.

Osborne J

Solicitors:

Stephen van Bohemen, Christchurch