Liston Trustees Services Limited v Kohlhase [2015] NZHC 1961 (18 August 2015)

Last Updated: 26 August 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1838 [2015] NZHC 1961

IN THE MATTER	of the Trustee Act 1956 and the inherent jurisdiction of the High Court to supervise trusts
IN THE MATTER	the Roy Kohlhase Family Trust, the Elizabeth Kohlhase Family Trust and R&E Kohlhase Family Trust
BETWEEN	LISTON TRUSTEE SERVICES LIMITED, JENNIFER MARY MCGILL AND DONALD WILLIAM MCMORLAND AS TRUSTEES OF THE ROY KOHLHASE FAMILY TRUST, THE ELIZABETH KOHLHASE FAMILY TRUST AND R&E KOHLHASE FAMILY TRUST Plaintiff
AND	ELIZABETH ALMA KOHLHASE Defendant

Hearing:	On the papers
Date:	18 August 2015

_{JUDGMENT OF THOMAS J}

This judgment was delivered by me on 18 August 2015 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

_{Date:...............................}

LISTON TRUSTEE SERVICES LIMITED, MCGILL AND MCMORLAND AS TRUSTEES OF THE ROY KOHLHASE FAMILY TRUST, THE ELIZABETH KOHLHASE FAMILY TRUST AND R&E KOHLHASE FAMILY TRUST v KOHLHASE [2015] NZHC 1961 [18 August 2015]

[1] The plaintiffs, Liston Trustee Services Ltd, Ms Jennifer McGill and Mr Donald McMorland, are trustees of the Roy Kohlhase Family Trust, the Elizabeth Kohlhase Family Trust and the R & E Kohlhase Family Trust (the Trusts).

[2] They have applied for a vesting order under s 52 of the Trustee Act 1956 to vest the properties owned by the Trusts (the Trust property) in the plaintiffs as current trustees. This order is required because the Trust property needs to be sold to provide an income for the monthly costs of care for the defendant, Mrs Kohlhase, at the Aranui Home & Hospital.

[3] The trustees of the Roy Kohlhase Family Trust and Elizabeth Kohlhase Family Trust jointly own two residential properties at Ocean Beach Road, Mount Maunganui, described as Lot 1 and Lot 2 Deposited Plan 333269 comprised in certificate of title 136477 and 136478. The trustees of the R & E Kohlhase Family Trust own a property at Silverton Avenue, Glen Innes, described as Lot 163

Deposited Plan 41243 comprised in certificate of title NA1902/72.

[4] The R & E Kohlhase Family Trust was established by deed on 4 December

2007. Mr and Mrs Kohlhase were settlors of the Trust and they requested Liston Trustee Services Ltd to act alongside them as trustee. On 11 December 2007, Mr Kohlhase exercised his powers under cl 13(a) of the Roy Kohlhase Family Trust¹ and Mrs Kohlhase exercised her power under cl 13(a) of the Elizabeth Kohlhase Family Trust² to appoint Liston Trustee Services Ltd as a trustee of both trusts.

[5] Mr Kohlhase died on 5 May 2013. Following Mr Kohlhase’s death, Mrs Kohlhase and Liston Trustee Services Ltd were the remaining trustees of the Trusts. Mrs Kohlhase ceased to be a trustee on 4 March 2013³ because she was declared incapable of managing her property affairs. Thus Liston Trustee Services Ltd

_{became the only continuing and capable trustee of the Trusts.}

¹ _{Mr Kohlhase is the settlor in the Deed of Trust.}

² _{Mrs Kohlhase is the settlor in the Deed of Trust.}

³ Pursuant to ss 97(5) and 99D of the Protection of Personal and Property Rights Act 1988.

[6] Clause 14 in each of the Trusts’ deeds requires that the number of trustees remain more than one. The appointment of new trustees could not be made in accordance with the Trusts’ deeds.⁴ Pursuant to s 43 of the Trustee Act, Liston Trustee Services Ltd on 24 June 2015 appointed Ms Gill and Mr McMorland as new trustees of the Trusts by way of deeds.

[7] Despite being replaced as trustees, the certificates of title to the Trust property specify the registered proprietors as Mr and Mrs Kohlhase, because they were trustees of the Trusts at the time the property was acquired, and Liston Trustee Services Ltd.

[8] A Mr Laurenson was appointed by the Family Court as Mrs Kohlhase’s property manager⁵ on 30 April 2015 and as her welfare guardian⁶ on 14 July 2015. Mr Laurenson does not have the power to deal with the Trust property on behalf of Mrs Kohlhase. Thus the trustees of the Trusts are prevented from dealing with the Trust property.

[9] The plaintiffs apply for vesting orders in order to enable the proper management of the Trust property. The affidavit of the sole director and shareholder of Liston Trustee Services Ltd, Mr Snedden, highlights that the matter is urgent due to the outstanding residential fees owed to Aranui Home & Hospital in relation to Mrs Kohlhase’s care.

[10] Mr Laurenson does not oppose the proceedings on behalf of Mrs Kohlhase. In his affidavit of 7 August 2015, he says he believes it is in Mrs Kohlhase’s best interest, as a beneficiary of the Trusts, that the Trust property is vested in the trustees.

_{[11] In the circumstances, I am satisfied the vesting orders sought are appropriate.}

4. This is because Mrs Kohlhase was certified as mentally incapable to manager her property matters in March 2013 and Mr Kohlhase passed away in May 2013.

⁵ _{Pursuant to s 31 of the Protection of Personal and Property Rights Act 1988.}

⁶ Pursuant to s 12 of the Protection of Personal and Property Rights Act 1988.

Orders

[12] I accept the plaintiffs’ submission that this is an appropriate case for service on the defendant to be dispensed with as it would serve “no useful purpose”⁷ in the circumstances of this case.

[13] I make an order vesting in the plaintiffs the properties at Ocean Beach Road, Mount Maunganui, described as Lot 1 and Lot 2 Deposited Plan 333269 comprised in certificate of title 136477 and 136478 and the property at Silverton Avenue, Glen Innes, described as Lot 163 Deposited Plan 41243 comprised in certificate of title NA1902/72.

[14] The costs associated with this application are to be met from the funds of the

_Trusts.

_{Thomas J}

⁷ Docherty v Docherty [2013] NZHC 1885 at [33]. Cited with approval in Grazier v Grazier [2014] NZHC 3058 at [14], noting that the source of jurisdiction to dispense with service lies within the inherent jurisdiction of the Court to regulate the process and proceedings of the Court.