Estate of Witchall (Rees) [2024] NZHC 789 (12 April 2024)

Last Updated: 15 May 2024

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2024-412-16 [2024] NZHC 789

UNDER	the Trust Act 2019
IN THE MATTER OF	an originating application for leave to commence proceedings and an order to appoint a new trustee without notice
BETWEEN	ANNE MAREE REES Applicant

Hearing:	On the papers
Appearances:	L N Johnston for Applicant
Judgment:	12 April 2024

JUDGMENT OF MANDER J

This judgment was delivered by me on 12 April 2024 at 3 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date: .

Re Estate of Witchall [2024] NZHC 789 [12 April 2024]

• [1] The applicant, Anne Rees, is the daughter of John Witchall, who passed away on 3 December 2022. Under his will, Ms Rees was appointed as executor and trustee of his estate.

• [2] Between 1945 and 1980, various parcels of land were transferred to a company called Bengerburn Poultry Farm Ltd (the Company). The land constituted Mr Witchall and his wife’s family farm which they ran for some 50 years until shortly before their respective deaths. The Company is described as having held the land on bare trust (the Trust) for Mr Witchall.

• [3] Unfortunately, the Company was removed from the Companies Register on 5 May 1992 because it failed to file annual returns. The effect of the Company having been struck off and Mr Witchall’s death means there is presently no replacement trustee for the Trust. Mr Witchall’s wife, Shirley Witchall, who was the primary beneficiary of Mr Witchall’s estate, passed away in November 2023. At that time, steps were being taken to regularise the position. It now falls to Ms Rees in her capacity as executor and trustee of her father’s estate to remedy the situation.

• [4] The purpose of the application is to be able to transfer the land held on trust by the Company to Ms Rees, as executor and trustee of Mr Witchall’s estate, in order for it to be distributed in accordance with his will. Presently, the outstanding issue regarding the land’s registered owner is preventing Mr Witchall’s estate from being finalised and, as a result, is similarly delaying the resolution of Mrs Witchall’s estate.

• [5] Ms Rees seeks a declaration the properties that constitute the farm were held by way of bare trust on behalf of Mr Witchall by the Company, and orders appointing her a trustee of the Trust and vesting those properties in her as trustee. Ancillary applications are made for leave to commence this proceeding by way of originating application and a direction dispensing with service of the application. In order to address those applications, it is necessary to set out some further background.

Background

• [6] The farm was the amalgam of four pieces of land transferred to the Company over some 35 years.¹ In 1987 and 1990, Mr Witchall registered caveats in respect of those pieces of land claiming an estate or interest by virtue of a constructive trust whereby the Company held these properties in trust for him as the beneficiary of the said constructive trust. Prior to her death, Mrs Witchall, who was a director of the Company, and Mr Witchall’s brother, who also was a director of the Company, made statutory declarations confirming the Company held this land as bare trustee for Mr Witchall after he had transferred these properties or their value to the Company. The caveats remain registered on the titles to the land to this day.

• [7] Both Mrs Witchall and the brother attested to the fact that Mr and Mrs Witchall had lived next door to the land for the last 50 years, paid all the rates and outgoings on the land and used it for grazing pigs, cattle and other stock. They have fully fenced the perimeter of the land and made various improvements. It was noted by both Mrs Witchall and Mr Witchall’s brother that the land had not been dealt with prior to the Company being struck off and that the removal of the Company came as something of a surprise to the directors, who had no intention of disposing of the land at that time. Both of them supported the application that was being prepared at that time in Mrs Witchall’s name, which mirrors the present application, albeit now in the name of Ms Rees.

Restoration of the Company

• [8] In 2018, an application was made to the Registrar of Companies to have the Company restored. However, this application was declined on the basis the Companies Office does not have the ability under the Companies Act 1993 to restore a company removed under the Companies Act 1955. It was suggested that an application be made to this Court to restore the Company, but that course also appears to be unavailable. Because more than 20 years have passed since the company was

¹ The four pieces of land are as follows:

(a) Section 3, Block III, Town of Ettrick, Record of Title OT1D/1268;

(b) Section 13, Block III, Town of Ettrick, Record of Title OT314/127;

(c) Section 68, Block VI, Benger Survey District, Record of Title OT8C/309; and

(d) Sections 2 and 12, Block III, Town of Ettrick, Record of Title OTB1/29.

dissolved, such an application is not considered possible. That position is based upon a reading of s 336(7) of the Companies Act 1955 and s 42(4)(a) and (b) of the Companies Amendment Act 1993. Those provisions respectively provide:

(7) If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register, the Court, on an application made by the company or member or creditor before the expiration of twenty years from the publication in the Gazette of the notice aforesaid, may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register, and upon a sealed copy of the order being delivered to the Registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the Court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.

42. Transitional provisions applying to liquidation of companies—

...

(4) Sections 336 and 336A (which relate to the striking off the register of companies incorporated in New Zealand and the Cook Islands), as in force before the commencement of this Act, shall continue in force in respect of—

(a) The striking of a company off the register in any case where a letter has been sent or a notice given by the Registrar in relation to the company under either of those sections before the commencement of this Act:

(b) Any company struck off the register under either of those sections before the commencement of this Act—

as if this Act had not been passed and as if for the expression "20 years" in subsection (7) of section 336 there was substituted the expression "2 years".

• [9] On the basis of those provisions, the applicant takes the view the Company cannot be restored by way of a restoration application, as both the 20-year and two- year timeframes have now expired. The present application is necessary.

Bona vacantia and the Treasury

• [10] In March 2022, the applicant approached the Treasury for the purpose of making enquiries about vesting the land previously held by the Company in Mr and Mrs Witchall by way of the Crown. Section 337 of the Companies Act 1955 provides:

(1) Where a company is dissolved all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property, but not including property held by the company on trust for any other person) shall, subject and without prejudice to any order which may at any time be made by the Court under section three hundred and thirty-five or section three hundred and thirty-six of this Act be deemed to be bona vacantia, and shall accordingly belong to the Crown, and shall vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown.

...

• [11] Advice was received that, because the land is owned on trust by the Company for Mr Witchall, the bona vacantia provisions of the Companies Act cannot apply. Given the basis of the present application, the land cannot vest in the Crown.

The applications

• [12] Turning firstly to the ancillary application for leave to permit this proceeding to commence by way of originating application and that no other parties need be served, I consider orders to that effect are appropriate. Applications of this nature under the broadly equivalent provisions of the Trustee Act 1956 are routinely made by way of originating application.² No pleadings are required, nor interlocutory steps such as discovery are necessary to either define the issues or facilitate resolution. I accept, in the absence of any other interested parties, the application is straightforward, requiring as it does the application of the statutory test contained in s 114 of the Trusts Act 2019. It is appropriate therefore that leave be granted for the matter to be commenced by way of originating application.

• [13] For essentially the same reason, it is appropriate to allow the substantive application to proceed without notice. Efforts have been made to engage with both

2. Re AR Trustees (Wilsona) Ltd [2020] NZHC 2734 at [11]; and Re Cairns [2020] NZHC 2738 at [7].

the Companies Office and the Treasury. From their responses it is apparent that neither has any interest in the proceedings, nor is it apparent that any other party needs to be served. The beneficiaries under Mr Witchall’s will (the applicant, her siblings, and their offspring) are protected by its terms, which will have to be adhered to by the applicant. Requiring Ms Rees to proceed on notice would cause delay. She is the only person directly affected in her capacity as executor. It follows that the interests of justice favour the applications being determined without notice. Accordingly, there will be a direction dispensing with service.

Decision

• [14] Having read Ms Rees affidavit of 9 February 2023 and counsel’s memoranda filed in support of the application, I am satisfied that orders should be made as sought regarding the status of the properties, the appointment of Ms Rees as a trustee and an order vesting those properties in the applicant as trustee. I am satisfied appropriate steps have been taken in an endeavour to resolve the matter by alternative means. Enquiries have been made of the Companies Office and the Treasury, but have not led to the situation being able to be advanced. I am therefore satisfied the Court’s intervention is necessary in order to resolve the outstanding issue of the ownership of the land.

• [15] As a result of the background I have previously outlined, I am satisfied the Company held the four parcels of land on Trust for Mr Witchall. The Company no longer exists but, given the basis on which it held the property on trust, it cannot vest in the Crown. Restoration of the Company is not available and the only practical resolution is to appoint Ms Rees as a trustee in substitution of the now defunct Company and vest the four parcels of land in her as trustee. I consider it is “necessary or desirable” to make that appointment and that it is “difficult, or impractical to do so” without the Court’s assistance.³ As the executor of Mr Witchall’s estate, it is appropriate that she be appointed as trustee and an order is made pursuant s 114 of the Trusts Act 2019 to that effect.

³ Trusts Act 2019, s 114(1).

Orders

• [16] The following orders are made:

(a) Leave is granted to commence this proceeding by way of originating application.

(b) Service on any person is dispensed with.

(c) There will be a declaration that the following properties were held by way of bare trust (the Trust) on behalf of John William Witchall by Bengerburn Poultry Farm Ltd:

(i) Section 3, Block III, Town of Ettrick, Record of Title OT1D/1268;

(ii) (b) Section 13, Block III, Town of Ettrick, Record of Title OT314/127;

(iii) (c) Section 68, Block VI, Benger Survey District, Record of Title OT8C/309; and

(iv) (d) Sections 2 and 12, Block III, Town of Ettrick, Record of Title OTB1/29.

(d) Anne Maree Rees is appointed a trustee of the Trust.

(e) The said properties are to vest in Anne Maree Rees as trustee.

Solicitors:

Downie Stewart Lawyers, Dunedin