Addleman v Lambie Trustee Limited
[2018] NZCA 616
•20 December 2018 at 10.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA545/2017 [2018] NZCA 616 |
| BETWEEN | PRUDENCE ANNE ADDLEMAN |
| AND | LAMBIE TRUSTEE LIMITED |
| Hearing: | 27 September 2018 |
Court: | Kós P, Miller and Clifford JJ |
Counsel: | A S Ross QC and R A Rose for Appellant |
Judgment: | 20 December 2018 at 10.00 am |
JUDGMENT OF THE COURT
A The application to adduce further evidence is granted.
B There is no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Kós P)
This is an application to adduce further evidence on appeal.
Background
In 1972 Annette Jamieson, then aged 19, dived into a tidal pool near Sydney and broke her spinal cord. She became a quadriplegic. A negligence claim against the local authority succeeded and in 1981 the authority paid Ms Jamieson AUD 1,029,084.
She entrusted the funds to her father, a businessman who had been in a substantial way, but who in 1982 was declared bankrupt. The family continued to live in Australia. Ms Jamieson needed constant nursing care. In 1986 a substantial part of the award was invested in a subdivision opportunity at Howick, near Auckland, that was being promoted by a cousin of Ms Jamieson, a Mr Palmer. A company, Howick Parklands Ltd (HPL), was formed to undertake the subdivision. Mr Palmer and a solicitor held the shares in HPL. Mr Palmer’s evidence was that he held the shares on behalf of Mr and Ms Jamieson.
In due course the shares in HPL were transferred to the Lambie Trust. This was settled in 1990, the settlor being Mr Palmer.
The respondent company, Lambie Trustee Ltd, has since 2006 been the sole trustee of the Lambie Trust. That company, in turn, is controlled by Ms Jamieson. The appellant, Mrs Addleman, is her elder sister and a businesswoman living in England.
The final beneficiaries of the trust are Ms Jamieson, Mrs Addleman and two companies controlled by Ms Jamieson. Discretionary beneficiaries are the final beneficiaries, any spouse or issue thereof, and any charitable object.
In 2000 Mr and Ms Jamieson, discussed Mrs Addleman receiving 25 per cent of the capital of the trust. Ms Jamieson became a trustee, and Mr Jamieson retired. He died in 2001.
In 2002 the trust distributed NZD 4,257,000 to Mrs Addleman. At the time, the trustees wrote to her stating that this amounted to a full and final distribution from the trust to her.
In 2003 Mrs Addleman’s then-solicitors made certain enquiries as to whether the distribution represented her “proper entitlement”. In 2014 Mrs Addleman took this issue up again. Her solicitors wrote to the trustee requesting information over a 24‑year period in order to “ensure the Trust property is being properly managed and there is proper accountability of the trustees in terms of the Trust deed”. After further correspondence, and some additional disclosure by the trustee, Mrs Addleman issued proceedings in June 2015.
The claim issued is a wide-ranging claim for financial and transactional information for the trust and any trust “subsidiaries”, including HPL. The full list is set out in Woolford J’s High Court judgment, the subject of this appeal.[1]
Judgment appealed
[1]Addleman v Lambie Trustee Ltd [2017] NZHC 2054 at [23].
Woolford J dismissed Mrs Addleman’s claim. It suffices to quote the penultimate paragraph of his judgment:[2]
… I do not think it is appropriate for the court to exercise its supervisory jurisdiction to order disclosure to [Mrs Addleman] of all or any of the information sought by her. The Trust deed is not to be interpreted in isolation from its context. The Trust was settled with the primary purpose of ensuring [Ms Jamieson’s] welfare and financial security. Her needs are great. [Mrs Addleman] has already received a generous distribution from the Trust. She has no need for further provision. I accept there is no real prospect of her receiving any further distribution. [Mrs Addleman] claims to be only after information but I am of the view that the provision of that information may well lead to further intra-familial discord. [Ms Jamieson’s] privacy should be respected.
[2]At [74] (footnote omitted).
Mrs Addleman appealed to this Court.
Application to adduce further evidence
The appeal was set down to be heard on 27 September 2018. Submissions on the substantive appeal were filed by the appellant on 31 August 2018. But then on 7 September 2018 she filed the present application to adduce further evidence on the appeal. That evidence consists, principally, of documentary material obtained from Archives New Zealand relating to Land Settlement Promotion and Land Acquisition Act 1952 and Overseas Investment Commission consent decisions for the Howick land (involving HPL, and two Panamanian companies, Recibo Shipping SA and Lake Real Estate SA). These included a statutory declaration by Mr Palmer that the latter company was beneficial owner of 99 per cent of HPL. Also sought to be adduced are Panamanian company records showing the two companies were formed in 1976 and 1986 respectively and appear to be Jamieson‑family companies. There is no reference to Ms Jamieson in either record.
It was accepted by the appellant that the application needed to be resolved before the appeal. The fixture for the latter was vacated.
Mr Ross QC for the appellant submits that these documents should have been discovered by the respondent. Shortly before trial the respondent had particularised allegations that the trust capital was sourced ultimately and solely from the 1981 damages award. The new documentary evidence is said to be adverse to that allegation. In the circumstances, the documents are fresh (they could not readily have been obtained before trial), credible (they are official records) and cogent (they are very relevant to the allegation as to source of capital).
Ms Chambers QC for the respondent submits that these were not documents Lambie Trustee Ltd was bound to produce, being archival records of the governments of New Zealand and Panama. Ms Chambers submits the evidence is not fresh: the source of the Lambie Trust’s capital had been put in issue by the appellant as early as November 2014 (in correspondence). She had always alleged that the funding of the trust came from sources beyond the damages award, including from other family moneys in which she might well have a legatee’s interest. Ms Chambers also submits the documents are not cogent because they do not suggest other sources contributed to the Lambie Trust’s capital. They do not show funds transfers. They did not impugn the essence of Mr Palmer’s evidence, which was that Mr Jamieson had told him, repeatedly, that the source of the funding for HPL was the damages and that the trust (which took over HPL) was to benefit Ms Jamieson.
Our assessment
We infer, as the Judge did, that the claim is brought by Mrs Addleman as a precursor to a further claim against the trust for a second distribution of capital — if it can be established that Mr Jamieson contributed some of his own funds to the Lambie Trust. That claim might be cast either as an informal request to the trustee for further distribution, or as a claim for breach of trustee duty.
Regardless of whether a further claim is advanced, the original source of the capital was treated by everyone, including the Judge, as a relevant enquiry in determining the current claim to access to information. That is because a relevant consideration identified by the Supreme Court in Erceg v Erceg was:[3]
The nature of the interests held by the beneficiary seeking access. The degree of proximity of the beneficiary to the trust (or likelihood of the requesting beneficiary or others in the same class of beneficiaries benefitting from the trust) will also be a relevant factor.
[3]Erceg v Erceg [2017] NZSC 28, [2017] 1 NZLR 320 at [56(c)].
Two considerations arose in the Court below. The first was identification of the true object of the trust. The respondent asserted that it was to protect the welfare of Ms Jamieson, and that Mrs Addleman was a “backstop” beneficiary to succeed to the capital in the event Ms Jamieson died early. However the trust deed does not state that its primary object is to protect the interests of one beneficiary over another. Nor does it state that Mrs Addleman’s expectations as a discretionary beneficiary are to be less than those of Ms Jamieson, also as a discretionary beneficiary. That may well be what was intended, but the deed does not say it. The trust is now effectively in Ms Jamieson’s control, as the respondent trustee is controlled by her.
The second was the source of the trust capital. The respondent asserted that Ms Jamieson’s funds were the “sole source” of the trust funds. Ms Jamieson gave evidence that the land was purchased for NZD 2 million, from the damages award, which had in the meantime been invested at high interest rates in Australia.[4] Mr Palmer gave evidence supporting Ms Jamieson.
[4]The total purchase price was NZD 4 million, but the balance was met by land sales.
The Judge accepted Mr Palmer’s evidence that the funds HPL received via Mr Jamieson were beneficially owned by Ms Jamieson. He concluded that there was no evidence that Mr Jamieson had introduced any funds into the trust, and that it was likely the sole source of capital was indeed the damages award.[5] He concluded also that the Lambie Trust was settled for the primary purpose of ensuring Ms Jamieson’s welfare and financial security, and that Mrs Addleman “was only included as a beneficiary … on a contingent basis in case Annette died at an early age”.[6]
[5]Addleman v Lambie Trustee Ltd, above n 1, at [67].
[6]At [66].
We accept that the documentary material which the appellant now seeks to adduce is capable of being construed so as to place the former conclusion in doubt.[7] Given the focus in the claim on the source of funding, we think it is material that should probably have been identified as relevant by the respondent, albeit that it was not in its possession. Indeed, it is somewhat surprising to us how little financial information as to the source of funds for the 1986 investment in HPL was produced.
[7]That construction is by no means inevitable, however.
We accept that the documentary evidence the appellant seeks to adduce on appeal is cogent, in the sense that it is capable of affecting one of the bases on which the Judge reasoned to the result he reached. It is credible, because it consists of contemporaneous records held in government archives. It is, by a fine margin, fresh, because we consider its existence probably ought to have been adverted to by the respondent in discovery.
That said, greater diligence by the appellant would have identified this material, and far earlier. The New Zealand archival material was identified using Archives New Zealand’s Archway database on 28 August 2018, and physically accessed the same day. The Panamanian companies’ material was accessed at the same time. Loss of the appeal fixture was therefore entirely avoidable. For these reasons, we are not disposed to order costs on this application.
Result
The application by the appellant to adduce further evidence is granted.
There is no order for costs.
Solicitors:
Bell Gully, Auckland for Appellant
Kemps Weir Lawyers, Auckland for Respondent