Estates of Glue [2023] NZHC 464 (10 March 2023)

Last Updated: 15 March 2023

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2023-470-0016 [2023] NZHC 464

IN THE MATTER	the Trusts Act 2019
AND IN THE MATTER	of an application by WILLIAM BEAU HOLLAND of Tauranga, Solicitor for orders as to how a trustee of the Estates of MARGARET ELLEN GLUE and DENZEL IAN GLUE may distribute the Estates

Hearing:	On the papers
Counsel:	D M Fraundorfer and R E Steens for the applicant
Date of judgment:	10 March 2023

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 10 March 2023 at 10.00am.

Pursuant to Rule 11.5 of the High Court Rules.

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

Solicitors:

Holland Beckett, Tauranga

RE ESTATES OF GLUE [2023] NZHC 464 [10 March 2023]

[1] I have the trustee’s without notice originating application dated 17 February 2023 for an order under s 136 of the Trusts Act 2019, in relation to the estates of Margaret Ellen Glue (Margaret) and Denzel Ian Glue (Ian) (together, the Glues). The trustee seeks an order authorising him to distribute the estates as if the Glues’ son, David Bruce Glue (David), does not exist.

Background

[2] Margaret died in November 2005. She left a life interest in her estate to Ian, with any residue equally between David and their other son, Jonathan Barry Glue (John). Ian died in November 2009. He left his estate equally to David and John.

[3] John’s share in the estates have been transferred to him. John died in June 2019.

[4] Despite considerable enquiries, David has not been able to be contacted. John provided the trustee with David’s address in London, United Kingdom, but described him as “a bit reclusive”. Since 2009, the trustee’s correspondence advising of David’s entitlement has been left at that address, requesting his nomination of a bank account for its payment. The most recent correspondence of August 2022 couriered to the address updated the amount then as close to NZD 300,000.

[5] David has not responded to any enquiry. On-site professional investigation establishes he likely still resides at the address, which is understood to be local authority housing. There is a suggestion David may consider any entitlement under the estates to disqualify his tenancy.

The law

[6] Section 136 provides:

Trustee may apply to court to allow distribution of missing beneficiaries’ shares

• (1) The court may, on application by a trustee, make an order authorising the trustee to distribute trust property—

  (a) as if a potential beneficiary or a class of potential beneficiaries does not exist or never existed or has died before a date or an event specified; and

  (b) if, because of the order, it is not possible or practicable to determine whether any condition or requirement affecting a beneficial interest in the property or any part of it has been complied with or fulfilled, as if that condition or requirement had been or had not been complied with or fulfilled.

• (2) The court may make an order only if it is satisfied that—

  (a) reasonable measures have been taken to bring to the notice of the potential beneficiary or beneficiaries their potential beneficial interest or interests; and

  (b) at least 60 days have passed since the last of those measures was taken; and

  (c) no potential beneficiary with respect to whom an order is sought has come to the attention of the trustee as a result of those measures, or the claim of any such beneficiary may be disregarded in the circumstances.

Section 136 enables “broader, more flexible” determination of ‘reasonable measures’, compared to its predecessor’s “long and impenetrable provision”,¹ by codifying a common law jurisdiction under which the Court has broad powers to approve distributions by trustees where beneficiaries cannot be traced.²

Without notice application

[7] Because David has not responded to multiple enquiries over an extended period of years, and s 136(2)(b)’s timeframe is well elapsed, I am satisfied both requiring the trustee to proceed on notice would cause undue delay to him, and the interests of justice then require the application to be determined without serving notice of it. I therefore determine the application can properly be dealt with without notice.³

Discussion

[8] I am satisfied the trustee has taken reasonable measures to bring David’s potential beneficial interest in the estates to his attention.⁴ At least 60 days have elapsed since the last of those measures. The question for my decision is if any claim by David as a potential beneficiary “may be disregarded in the circumstances”.

1. Hodgson v Hodgson [2021] NZHC 906 at [14]–[15], citing Te Ako Mature o Te Ture | New Zealand Law Commission Law of Trusts: Preferred Approach (NZLC IP31, 2012) at [11.58].
2. See FFP Trustee (NZ) Limited v Peng [2021] NZHC 3507 at [65], citing Re Benjamin [1902] UKLawRpCh 26; [1902] 1 Ch 723, [1900-1903] All ER Ext 1300.

³ High Court Rules 2016, r 7.46(3)(a) and (e).

4. See Hodgson v Hodgson, above n 1, at [16]–[17], citing Re Holland [2019] NZHC 1146 at [11] and Young v Young [2013] NZHC 1396 at [10]; and Re Estate of Doak [2022] NZHC 3111 at [12].

[9] Given David decidedly is not “missing” (as s 136’s heading targets), and recognising David’s possible reason not presently to claim his entitlement, my 6 March 2023 minute expressed the preliminary view transfer of David’s interest to the Crown under s 149 may better accord with the terms of the Glues’ wills, leaving David opportunity to claim his entitlement if ever he cared to do so.

[10] Enclosing a copy of John’s will, the trustee responded by affidavit sworn 8 March 2023:

I knew Margaret and Ian Glue since I was in high school, as they were neighbours of my parents in the house I grew up in. My father acted for the Glues until 1978, when he passed away and then they became my clients. I have been their trusted advisor for some time, having even been in charge of their cheque book to arrange payments for them whilst they were on an extended overseas trip.

I strongly believe they would not have wanted a half share of their Estates to go to the Crown.

I believe they would have rather it gone to John and, in this instance, it will fall to be inherited by John’s beneficiaries. I am therefore trying to honour what I believe the Glues would have wanted.

...

I will be guided by the Court as to where the residue of the Estates should be distributed and, if the Court is so minded, I will abide by an order to distribute to the Crown ... .

[11] I have no desire or reason to second-guess the trustee’s diligent and informed objective. John’s beneficiaries do not appear untoward in any manner. In those circumstances, I am satisfied David’s claim may be disregarded.

Result

[12] I order the trustee is authorised to distribute the estates of Margaret Ellen Glue and Denzel Ian Glue as if David Bruce Glue does not exist.

—Jagose J