Stephenson v Stephenson

[2019] NZHC 1345

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-916

[2019] NZHC 1345

BETWEEN

JOHN ALLAN STEPHENSON AND ROBERT ANDREW FERGUS JANE
Applicants

AND

KAY MAUREEN STEPHENSON

Respondent

Hearing:	On the papers
Counsel:	M L Hayward for Applicants
Judgment:	14 June 2019

JUDGMENT OF WHATA J

This judgment was delivered by me on 14 June 2019 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Miller Poulgrain, Thame Miller Poulgrain, Thames

STEPHENSON v STEPHENSON [2019] NZHC 1345 [14 June 2019]

[1]                   This is a without notice application for directions as to service and representation, together with an application for orders removing a trustee and obtaining a vesting order.

[2]                   The salient facts can be stated shortly. The applicants are trustees of the Kay Maureen Stephenson Family Trust. The respondent, Kay Maureen Stephenson, has been diagnosed with dense dementia, spondylosis, osteoporosis and bladder incontinence. There is also medical opinion evidence that Mrs Stephenson would not understand the nature of any advice received in relation to Court proceedings. The present trustees wish  to sell  the main  property  of the Trust,  being  a property at  82 Island View Drive, Whangaparaoa. The property is owned by the trustees of the Trust and Mr Stephenson Senior’s respective family trust. Mrs Stephenson is one of the existing trustees. As such,  in  order  to  complete  the  sale  of  the  property,  Mrs Stephenson must be removed as a trustee and the property vested in the remaining trustees.

[3]                   There can be no doubt that it is appropriate that Mrs Stephenson be removed as a trustee. The only remaining issue is whether a litigation guardian needs to be appointed on her behalf.

[4]Rule 4.30 of the High Court Rules 2016 states:

An incapacitated person must be represented by a litigation guardian.

(1)An incapacitated person must have a litigation guardian as his or her representative in any proceeding, unless the Court orders otherwise.

(2)If a person becomes an incapacitated person during a proceeding, a party must not take any step in the proceeding without permission of the Court until the incapacitated person has a litigation guardian.

[5]                   The object of this rule is to protect incapacitated persons. The starting point therefore is that this Court should appoint a litigation guardian unless it is persuaded that it is not necessary to do so.

[6]                   The solicitors for the applicants submit that one is not necessary. It is noted that the respondent is a discretionary beneficiary of the Trust and, as such, only has a

right or expectation to be considered by the trustees, for the time being, of the Trust. It is further said that whether the respondent is a trustee of the Trust or whether she has been removed, her rights and expectations as a discretionary beneficiary remain unchanged: that is, her personal position is not affected.

[7]                   No authority is cited by counsel by way of example or otherwise as to the appropriateness of circumventing r 4.30 in this way in this context. Nor is it the task of the Court to form an independent view as to whether or not the defendant’s interests are so limited.

[8]                   Having said that, a similar issue was addressed by Associate Judge Osborne (as he then was) in Cade v Cade.1 There the incapacitated person had to be removed as a trustee before the Court was able to transfer Trust property to new trustees. In that situation, the Judge could see no reason why a litigation guardian could be required.2

[9]                   I am similarly satisfied, particularly given that in the present case there remains an independent trustee, namely Mr Jane, with the indication made by the applicants that the funds from the sale of the property will go to the care of Mrs Stephenson.

[10]               In those circumstances, the orders as sought by the applicants, including an order vesting property in the remaining trustees, are made.

1      Cade v Cade [2016] NZHC 1624.

2      See also Andrew Beck and others, McGechan on Procedure (online ed, Thomson Reuters, accessed 13 June 2019) at HR4.35.01.