IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2017-404-1961 [2017] NZHC 2053
UNDER Section 52 of the Trustee Act 1956 AND UNDER
the Court's inherent jurisdiction
BETWEEN
AILEEN GWENNETH ARNOLD, KATIE ANNE BARR AND BYRON ANTHONY ARNOLD AS TRUSTEES OF THE MILLBROOK TRUST Plaintiffs
AND
MALCOLM JOHN ARNOLD Defendant
On the papers Appearances:
HJ Brandts-Giesen and SJ Kelly for the Plaintiffs
Judgment:
25 August 2017
JUDGMENT OF TOOGOOD
This judgment was delivered by me on 25 August 2017 at 3.30 pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Arnold v Arnold [2017] NZHC 2053 [25 August 2017]
[1] Mr Malcolm John Arnold, aged 74, is the settlor and former trustee of a family trust known as the Millbrook Trust, the trustees of which own a property in Speargrass Flat Road, Lake Hayes near Queenstown.
[2] An affidavit from Dr JP Mottershead establishes that, as a result of an epileptic incident suffered by Mr Arnold on 8 August 2017, Mr Arnold has become mentally incapacitated to such an extent that he lacks the capacity to manage his own affairs both in terms of his property and personal care and welfare. In Dr Mottershead’s opinion, Mr Arnold’s mental capacity is unlikely to improve significantly.
[3] As a result of Mr Arnold’s unfortunate disability, he has been removed as a trustee of the family trust but he lacks the capacity to sign documents vesting the Lake Hayes property in the current trustees.
[4] Accordingly I make the following procedural orders:
(a) service of this proceeding on Malcolm John Arnold shall be dispensed with;
(b) a litigation guardian for Mr Arnold need not be appointed;
(c) the proceeding brought by the applicants shall be determined on the papers; and
(d) evidence in the proceeding shall be by way of affidavit.
[5] I am satisfied that it is appropriate to make the vesting order sought.
[6] I order that, that pursuant to s 52(1)(b)(i) of the Trustee Act 1956, the property legally described as Lot 4 Deposited Plan 23684 comprised in computer freehold register OT15D/361, shall vest in:
(a) Aileen Gwenneth Arnold; and
(b) Katie Anne Barr; and
(c) Byron Anthony Arnold.
.......................................
Toogood J
- AGLC
- Arnold v Arnold [2017] NZHC 2053
- Case
- [2017] NZHC 2053
- Decision Date
CaseChat Overview and Summary
The central legal issue in this case was whether the trustees could legally vest the property in their names without the incapacitated settlor’s consent. The Court had to determine if it was appropriate to make the vesting order under Section 52 of the Trustee Act 1956, and whether the inherent jurisdiction of the Court could be exercised to facilitate the transfer of the property.
The Court, in its judgment, found that Mr Arnold’s mental incapacity, as confirmed by Dr JP Mottershead, rendered him unable to manage his affairs, including signing the necessary documents to vest the property in the current trustees. The Court held that it was appropriate to proceed with the vesting order on the papers, without requiring the appointment of a litigation guardian for Mr Arnold, as his mental capacity was unlikely to improve. The Court also ruled that service of the proceeding on Mr Arnold could be dispensed with and that evidence should be submitted by way of affidavit. The Court ultimately ordered that the property vest in the names of the trustees, Aileen Gwenneth Arnold, Katie Anne Barr, and Byron Anthony Arnold, in accordance with Section 52(1)(b)(i) of the Trustee Act 1956.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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