BALLANTYNE v GEARY [2019] NZHC 3493

BALLANTYNE v GEARY [2019] NZHC 3493 [20 December 2019]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2019-412-000135[2019] NZHC 3493UNDER the Court's Inherent Jurisdiction andSections 51 and 52 of the Trustee Act 1956IN THE MATTER of an application to appoint a replacementtrustee in substitution for an existing trusteeand to vest property in the new trustee,dispense with service and dispense withlitigation guardianBETWEEN SUSAN MARGARET BALLANTYNE andJEFFREY MARK GEARYApplicantsAND WILLIAM NGATAHU GEARYRespondentHearing: Determined on the PapersCounsel: B Rooney for ApplicantsJudgment: 20 December 2019JUDGMENT OF ASSOCIATE JUDGE PAULSENThis judgment was delivered by me on 20 December 2019 at 4.00 pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors:Race Douglas Burke, DunedinIntroduction[1] The applicants seek orders:(a) that this proceeding be commenced by way of originating application;(b) dispensing with service of the proceedings on any other party;(c) dispensing with the appointment of a litigation guardian for therespondent William Ngatahu Geary (William);(d) removing William as a trustee of the Geary Family Trust;(e) appointing Allan John Geary (Allan) as a replacement trustee of theTrust;(f) vesting the Trust property in the applicants and the replacement trustee,Allan, as trustees of the Trust.Background[2] The Trust was created by a Deed of Trust dated 22 December 1995 appointingthe applicants and William as trustees. The primary beneficiaries of the Trust areWilliam and his wife Noelene Geary (Noelene). The beneficiaries of the Trust arefurther defined to include the child or children, grandchild or grandchildren of theprimary beneficiaries and any wife, husband, widow or widower of the primarybeneficiaries, the children or the grandchildren. Pursuant to cl 14 of the Trust Deed,William and Noelene are granted the power of appointment of new trustees duringtheir lifetime. Under cl 14.2 the number of trustees is to be no fewer than three.[3] The Trust property includes:(a) a property at 17 Scobie Road, Dunedin as contained in Record of TitleOT401/190;(b) shares with Fisher & Paykel Healthcare;(c) a Westpac Active Series investment portfolio; and(d) cash held with Westpac New Zealand Ltd.[4] There are no Trust liabilities.[5] William is suffering from Alzheimers disease. He no longer has the capacityto exercise his duties as trustee. Although Noelene has full capacity the power ofappointment of new trustees cannot be exercised severally. For that reason, theassistance of the court is sought to remove William as a trustee and to appoint Allanin his place as replacement trustee and to vest the Trust property at Scobie Road inAllan and the continuing trustees.[6] There is evidence before the court confirming that William suffers fromAlzheimers disease with severe cognitive impairment and that:(a) he is unable to safely manage his own care;(b) he wholly lacks competence to manage affairs or property;(c) he is incapable of understanding or carrying out the duties of being atrustee;(d) there is no prospect of his regaining capacity; and(e) with respect to court proceedings:(i) he would not understand the nature or purpose of the documentsif they were served on him;(ii) if required to attend proceedings he would not understand them,or any advice given; and(iii) his participation would likely cause distress and agitation to him.Originating application[7] This application does not raise difficult issues and does not requireparticularised pleadings or interlocutory steps. It is suitable to be commenced by wayof originating application. I grant leave to make application in that way.Litigation guardian[8] William is an incapacitated person for the purposes of the proceeding and givenhis incapacitated state, r 4.30 High Court Rules 2016 requires him to have a litigationguardian unless the court orders otherwise. This application relates to a routine matterand arises for the sole reason of William's disability and his interests are not affected.He is to be removed and replaced as a trustee in circumstances where he has no abilityto capably fulfil his responsibilities. I am satisfied that he would have no arguablegrounds to oppose the orders sought and would not be able to give instructions orunderstand any explanation of the nature of the proceeding. The appointment of alitigation guardian would be an empty charade.Service[9] Service on William would serve no purpose. The other primary beneficiary,Noelene, and the children of William and Noelene are aware of the application andsupport the application.1 This is an administrative matter that does not affect theinterests of any beneficiary. I dispense with service.Removal of trustee[10] The court has power, both under s 51 of the Trustee Act 1956 and under itsinherent jurisdiction, to remove and replace a trustee.2 It is well-established that unders 51 the court may not remove a trustee without appointing a replacement. I amsatisfied that William is unable to carry out his duties as trustee. I have no reason tobelieve that Allan is not a suitable appointee. Decisions will need to be made for theadministration of the Trust for the benefit of the beneficiaries and it is desirable thatthe Trust and its assets be placed in the hands of competent trustees. Accordingly,1 Para 18 of Counsel's memorandum.2 Clarke v Karatiana [2011] NZCA 154.there will be an order removing William as a trustee and appointing Allan as areplacement trustee.Vesting order[11] Under s 52 of the Trustee Act the court has the power to make vesting ordersin respect of land. Section 52(1)(b)(i) is applicable in this case. Given the need toensure that the trustees can deal with the Trust property in accordance with their duties,I am satisfied that the vesting order sought is appropriate.Result[12] There will be orders in terms of the draft that has been filed.[13] I reserve leave to apply should that be necessary.[14] I acknowledge the high quality of the submissions of counsel to which justiceis not done by the brevity of this judgment._______________________O G PaulsenAssociate Judge