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Andrews v Andrews [2015] NZHC 759 (20 April 2015)

Last Updated: 8 March 2016

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2015-404-000804 [2015] NZHC 759

_{JUDGMENT OF ANDREWS J}

This judgment is delivered by me on 20 April 2015 at 11am pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

ANDREWS AND HORROCKS v ANDREWS [2015] NZHC 759 [20 April 2015]

Introduction

[1] The applicants have applied for procedural orders:

(a) giving leave to commence this proceeding by way of originating application; and

(b) dispensing with service on the respondent.

[2] In the substantive proceeding, the applicants seek an order under s 51 of the Trustee Act 1956 (the Act) removing the respondent as trustee of the Andrews Family Trust (the Trust) and appointing Horrocks Hampton Trustee Co Ltd as trustee in his stead. The applicants also seek an order under s 52 of the Act vesting a residential property in the continuing trustees of the Trust, and an order vesting in the first-named applicant all of her and the respondent’s joint powers of appointment and removal of trustees, set out in clause 13 of the Trust’s trust deed.

Background

[3] The applicants and the respondent are trustees of the Trust. Evidence has been presented that the respondent (who is 86) is suffering from moderate to severe dementia. He has been assessed by a specialist general physician and geriatrician as lacking testamentary capacity, and as being incapable of making reliable decisions about his health, property, finance, and welfare.

[4] Under the Trust, which was settled by Mr and Mrs Andrews in May 1996, they along with their children and grandchildren are among the discretionary beneficiaries. Mr and Mrs Andrews hold jointly during their lifetimes the power of appointment and removal of trustees. That power may be assigned by Deed and, upon death, the power reverts to their respective executors and administrators.

Procedural orders

[5] In a memorandum of counsel dated 14 April 2015 Mr Knight, on behalf of the applicants, notes that the removal of the respondent as trustee and appointment of

a trustee in his stead could be achieved by his being removed under clause 13 of the Deed, by seeking nomination of a suitable person by the President of the Auckland District Law Society, by way of a Deed of Appointment pursuant to s 43(1) of the Act, or by an order of the Court under s 51. As, in any event, it is necessary to seek a vesting order under s 52 of the Act, it has been submitted that it is more expedient and practical for the applicants to seek orders under both s 51 and s 52 of the Act, contemporaneously.

[6] I am satisfied that it is appropriate for the proceeding to be brought by way of an originating application, and leave is, accordingly, given. Further, I am satisfied that, in the circumstances, service on the respondent may be dispensed with. I so order. I do not consider it necessary for any other person to be served.

Substantive application

[7] Mr Knight submitted that if the Court concluded that the procedural orders should be made, the substantive application should be determined on the papers. I accept that the substantive application may be dealt with in this manner.

[8] First, as to the appointment of a new trustee, I am satisfied that it is appropriate for the respondent to be removed as a trustee. On the evidence, he is not able to exercise his functions as trustee. Further, I am satisfied that the standard of it being “expedient” for the Court to appoint a new trustee is satisfied.¹

[9] I accept Mr Knight’s submission that Horrocks Hampton Trustee Co Ltd is an appropriate entity to be appointed trustee. I note Mr Knight’s advice that one of the present trustees, Mr Horrocks, is a director and shareholder of the trustee company and has stated that upon the appointment of the trustee company Mr Horrocks will resign as trustee, leaving Mrs Andrews and the trustee company as the continuing trustees of the Trust.

[10] I note, further, that it is within the terms of the Trust Deed for a corporate trustee and one other person to be trustees of the Trust.

¹ See R v Leitch [1998] 1 NZLR 420 (CA) at 429.

[11] As to the vesting of the property in the continuing trustees, I am satisfied that such an order may be made by the Court. There is ample authority for such an order being made where a former trustee is under a disability, such as in the present case.²

[12] Finally, I turn to the applicants’ application for an order varying the Trust Deed suspending the respondent’s power of appointment and vesting the same solely in Mrs Andrews during the respondent’s lifetime. Such an order may be made if the Court is satisfied that the variation sought is necessary.³ In the present case, I am satisfied that the order sought is necessary.

[13] Accordingly, I am satisfied that the orders sought by the applicants should be made. Orders are therefore made as follows:

(a) Pursuant to s 51 of the Trustee Act 1956, the respondent is removed as a trustee of the Andrews Family Trust and Horrocks Hampton Trustee Co Ltd is appointed in his stead and, together with the applicants, shall be the continuing trustees of the Trust.

(b) Pursuant to s 52 of the Act, the residential property at 8 Redbluff Rise, Campbells Bay, being all the land comprised and contained in Lot 4 on Deposited Plan 53865, Certificate of Title NA8B/92 (North Auckland Registry) is vested in the continuing trustees of the Trust.

(c) During the respondent’s lifetime, all the joint powers of appointment and removal of trustees, set out in clause 13 of the Deed of Trust for the Trust, dated 10 May 1996, are vested in Joyce Beverley Andrews.

(d) The costs of and incidental to this proceeding are to be met by the

_Trust.

_{Andrews J}

² _{See, for example, Lipscombe v Lipscombe [2014] NZHC 3340.}

³ See Lance v Lance [2014] NZHC 2846.