RE THE PAGEL FAMILY HOME TRUST [2021] NZHC 3142

RE THE PAGEL FAMILY HOME TRUST [2021] NZHC 3142 [19 November 2021]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2021-412-110[2021] NZHC 3142UNDER the Trustee Act 1956IN THE MATTER of an application for the replacement andappointment of trustees and to vest trustproperty in THE PAGEL FAMILY HOMETRUSTBETWEEN CASTLE TRUSTEES LIMITED andDOUGLAS GEORGE PAGELApplicantsHearing: (Determined on the Papers)Counsel: A J Douglass for the ApplicantsJudgment: 19 November 2021JUDGMENT OF ASSOCIATE JUDGE LESTER[1] The applicants seek the following orders:(a) granting leave to bring this application by way of originatingapplication;(b) dispensing with the appointment of a litigation guardian for RobertGordon Pagel;(c) dispensing with service of the application;(d) removing Robert Gordon Pagel and Heritage TrusteeCompany Limited as trustees of the Pagel Family Home Trust (theTrust) and appointing Castle Trustees Limited, one of the applicants, asa trustee of the Trust with the continuing trustee Douglas Gordon Pagel;and(e) vesting the property at 31 Cannington Road, Dunedin in the applicants,Castle Trustees Limited and Douglas George Pagel, jointly.[2] Applications for the removal of trustees on the grounds of incapacity and forthe vesting of the Trust property in new trustees were relatively common prior to theintroduction of the Trusts Act 2019.[3] Counsel for the applicants, Ms Douglass, has identified that by virtue of cl 11of the transitional provisions in pt 1 of sch of the Trusts Act 2019, the presentapplication needs to be considered under the Trustee Act 1956 as Mr RobertGordon Pagel (Gordon) resigned as a trustee on 20 July 2019 and the property wasnot vested in the new trustees at that time. I thank counsel for her comprehensivememorandum in support of the application and in particular, the clarity around theapplication of the transitional provisions of the new Act. Counsel seeks that thisapplication be dealt with on a without notice basis and I consider that appropriate.Background[4] Gordon and Maisie Pagel established the Pagel Family Home Trust (the Trust)on 1 April 1999. They were the original trustees along with Heritage TrusteeCompany Ltd (Heritage). On the same day the trustees purchased from Gordon andMaisie their family home which they had owned since 1987.[5] The family home at 31 Cannington Road, Maori Hill, Dunedin, TitleOT189/194 (the Property) remains in the Trust and is its only asset.[6] Heritage is now known as Certane (NZ) Limited (Certane).[7] In October 2019, Heritage wanted to resign as a trustee. In July 2020, it wasreplaced as trustee by Castle Trustees Limited (Castle) which remains a trustee and isone of the applicants along with Douglas George Pagel (Doug), one of the children ofGordon and Maisie.[8] Maisie lost capacity to act as trustee, which was confirmed by a medicalassessment in early 2019. In August 2019, she was removed as a trustee of the Trustand was replaced by Doug as trustee.[9] Gordon resigned as a trustee and appointor of the Trust on 20 July 2020 andDoug replaced him as appointor. However, Gordon was assessed as lacking mentalcapacity only four days after resigning and, accordingly, the present trustees areconcerned as to the validity of his resignation. As Castle were also appointed in July2020, the trustees are similarly concerned as to Gordon's ability to appoint Castle astrustee at that time – hence the order sought at para [1](d) above.[10] Certane has provided a letter consenting to the vesting of the property in thenew trustees and confirming its position that it does not wish to continue as a trustee.[11] The applicants have contacted Maisie and Gordon's children, who arebeneficiaries under the Trust, and they have provided their consent to this application.The class of beneficiaries is wider than only Maisie and Gordon's children, but thereality is regularising the status of the trustees does not of itself impact on thebeneficiaries. If there are grandchildren of Gordon and Maisie then I would not seeany point in them being served in any event.[12] Accordingly, this application is aimed at confirming the status of the trusteesand vesting the Trust property in them.[13] I am satisfied this is an appropriate case to be dealt with by way of originatingapplication. The originating application procedure was routinely used for suchapplications under the 1956 Act, and this application is no different.[14] I am also satisfied that there is no point in the appointment of a litigationguardian for Gordon or service of the proceedings on him. The applicants haveobtained updated medical evidence that confirms which Maisie and Gordon's mentalcapacity has not improved. Service on Gordon would only be likely to distress him.[15] As to the dispensing of service generally, given Certane consents to theapplication, as do Gordon and Maisie's children, and given what I have said aboutthere being no point serving grandchildren, if such exist, I am satisfied that thisapplication need not be served.[16] Orders are sought removing Gordon and Heritage as trustees of the Trustessentially on an avoidance of doubt basis. This is because, as I have said, on20 July 2020 when Gordon resigned and removed Heritage as trustees, there must bea question mark over his capacity given he was assessed as lacking capacity only fourdays later. I am satisfied this order is appropriate.[17] Clearly Heritage wished to resign and be replaced as trustee of the Trust andthat remains its position to this day (as Certane). Given Gordon's lack of capacity ifhe did not validly resign, he would be unable to fulfil his role as trustee and wouldhave to be removed to permit the Trust to operate. It follows that it is appropriate toconfirm the appointment of the replacement trustees, Douglas Gordon Pagel andCastle Trustees Ltd. Similarly, a vesting order is necessary to give effect to theconfirmation of the appointment of the new trustees.[18] Accordingly, in all the circumstances, the orders sought as set out at [1] aboveare appropriate, and I order accordingly.Costs[19] There is no order as to costs.______________________________________Associate Judge LesterSolicitors:Home Transfer Centre Property Lawyers, DunedinCopy to counsel:A J Douglass, Barrister, Dunedin