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Court authorises estate distribution after extensive search for missing beneficiary

22 Mar 2024

| Author: Vivian Mitchell

Trusts Act 2019, s 136 – missing beneficiary – distribution of estate – reasonable measures to be taken – Re Holland – Young v Young – Hodgson v Hodgson

Tyson v Beaver [2024] NZHC 279 per Cull J.

 

Mary Emerson Beaver died in 2011 and Richard Tyson was the executor of her estate. According to Beaver’s will, the residue of the estate was to be divided into nine equal parts of $22,000 each, and distributed among four people.

Her son Mervyn was entitled to two of the nine parts but he had been missing since 2010. Tyson made various efforts to locate him, such as contacting extended family, instructing Wellington Investigations Limited in 2015 and later Secure Collections & Investigations Limited in 2021.

But Mervyn could not be found. Tyson’s supporting affidavit speculated that he might have passed away prior to Beaver’s death in 2011. His reasoning included the following facts: Mervyn adored his mother and would usually call on her birthday but failed to in 2010; when it was suggested that Beaver might need to be put into a retirement home, Mervyn had called to say he would “sort it out” but nothing further occurred; and no one in Mervyn’s extended family has heard from him since before Beaver’s death. Though close to his mother, Mervyn had also failed to attend her funeral.

The deceased’s will provided that if a beneficiary predeceased Beaver, that person’s share should be added to the other shares equally. As of October 2023, the residue held on trust amounted to $35,437, so this would be split equally between the remaining beneficiaries.

 

Legal reasoning

Justice Helen Cull referred to s 136 of the Trusts Act 2019, which states that trustees may apply to the court to allow distribution of missing beneficiaries’ shares. Under s 136, a court can make an order only if it is satisfied that reasonable measures have been taken to notify the beneficiaries of their beneficial interest(s).

Justice Cull referred to s 76 in the old Trustee Act 1956. This “provided the machinery for ascertaining the existence or whereabouts of unknown or missing claimants” and required the trustee to publish advertisements.

Justice Cull cited Re Holland [2019] NZHC 1146. In that case, the court noted that engaging a private investigator went beyond the minimum requirement of an advertisement. The size of the estate also affected what constituted a proper inquiry.

The judge also referenced Young v Young [2013] NZHC 1396 where the court found that retaining private investigators on three occasions, conducting internet searches and placing advertisements in three Australian newspapers was sufficient.

Justice Cull further cited Hodgson v Hodgson where the court held newspaper advertisements were no longer the best medium for locating people and social media searches should be undertaken instead.

In applying s 136, the judge found Tyson had met the reasonable measures (efforts) threshold. She said hiring private investigators on two occasions, who conducted extensive searches, was sufficient. Tyson had also conducted investigations of his own.

Justice Cull considered the size of the bequest. She found that since Mervyn’s share was relatively small compared to the amounts in the cases she relied on, Tyson’s inquiries were sufficient, given the low value of the bequest.

Justice Cull also noted that any further efforts to locate Mervyn would have been an inefficient use of trust assets.

 

Applicable principles: “reasonable measures” threshold – minimum requirement of an advertisement – size of estate is relevant

Held: Justice Cull authorised the distribution of the trust property.

 

Tyson v Beaver [2024] NZHC 279 per Cull J

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