Addleman v Lambie Trustee Limited
[2024] NZHC 1790
•3 July 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-000104
[2024] NZHC 1790
BETWEEN PRUDENCE ANNE ADDLEMAN
Plaintiff
AND
LAMBIE TRUSTEE LIMITED
First Defendant
ANNETTE MERYL JAMIESON
Second Defendant….cont’d over
Hearing: 5 June 2024 Appearances:
A S Ross KC and R A Rose for Plaintiff
D T S Chambers KC and J M McGuigan for First and Second Defendant
P M Fee for Third Defendant
S P H Elliott for Fourth DefendantNo appearance for Fifth Defendant (deceased) I T Hikaka and R E King for Sixth Defendant N L Walker for Seventh Defendant
Judgment:
3 July 2024
JUDGMENT OF ANDREW J
This judgment was delivered by Justice Andrew on 3 July 2024 at 1.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date …………………………….
ADDLEMAN v LAMBIE TRUSTEE LTD & ORS [2024] NZHC 1790 [3 July 2024]
PETER ALBERTUS THEODORUS MARIA KEMPS
Third Defendant
DONALD BOYD HARGRAVES
Fourth Defendant
ROBERT JOB PALMER
Fifth Defendant
EDMONTON CO PTY LIMITED
Sixth Defendant
LAMBIE INDEPENDENT TRUSTEES LIMITED
Seventh Defendant
Introduction
[1] This is trust litigation. The principal parties are two sisters, now in their early 70s (i.e. Mrs Prudence Addleman and her younger sister, Ms Annette Jamieson). They are the primary beneficiaries of the Lambie Trust, being named as both discretionary and final beneficiaries.
[2] Their disputes about the Trust are long-standing. These proceedings, issued in 2021, have still not been set down for trial. Mrs Addleman estimates the trial will take eight weeks. Related proceedings issued in 2015 by Mrs Addleman seeking disclosure of Trust documents went on appeal to the Supreme Court. There are still outstanding issues about compliance with court-ordered disclosure.
[3] The third amended statement of claim (3ASOC) runs to 605 paragraphs. There are 13 causes of action. They include allegations against the trustees of breach of fiduciary duties, improper exercises of power of appointment, breach of Trust deed, negligence regarding Trust investments, dishonest assistance and knowing receipt.
[4] The Trust has a significant book of assets. By consent, an independent trustee, namely Lambie Independent Trustees Ltd (LITL), the seventh defendant, was appointed as an interim trustee of the Trust in June 2023.1
[5]There are three interlocutory applications now before me:
(a)An application by the first – fourth and sixth defendants to refer the proceeding to mediation under s 145 of the Trusts Act 2019.2 These parties seek the appointment of Mr Rhys Harrison KC as mediator;
(b)An application by the sixth defendant, Edmonton Co Pty Ltd (Edmonton) for an order for security for costs against Mrs Addleman. She is a resident of Portugal. Edmonton proposes security on a staged basis; and
1 Trusts Act 2019, s 114.
2 The seventh defendant, LITL, abides the Court’s decision. However, it does agree that mediation is appropriate and in the interests of all parties to this proceeding.
(c)An application for costs by Edmonton dated 10 May 2024, following the resolution of Edmonton’s strike out application (i.e. withdrawal of the application and the filing of the 3ASOC by Mrs Addleman).
[6] Mrs Addleman is not opposed to mediation in principle. However, she says that until such time as the defendants have provided full disclosure and discovery of relevant documents there should be no mediation. She says that she needs full disclosure so that her advisers can give her full and proper advice as to her options and possible solutions for settlement at mediation. She says that the defendants are in repeated and ongoing breach of court-ordered disclosure. She is also opposed to the appointment of Mr Harrison as mediator.
Factual background
[7] The Lambie Trust was established by a Deed of Trust dated 19 March 1990. The named settlor was Mr Robert Palmer, the fifth defendant, who is now deceased. He was Mrs Addleman’s and Ms Jamieson’s cousin. The original trustees were: their father, Mr Alexander Jamieson; their brother, Mr Anthony Jamieson; Mr Palmer; and Mr Wayne Hanna, an accountant.
[8] Since April 2006, and until the appointment of LITL, Lambie Trustee Ltd was the sole trustee of the Trust. Ms Jamieson is the sole director and shareholder of Lambie Trustee Ltd.3 Apart from Mrs Addleman and Ms Jamieson, the only other final beneficiaries of the Trust are two companies controlled by Ms Jamieson, namely Edmonton, a company incorporated in Australia, and Mercadeo E Inversiones Gil SA, a company incorporated in Panama.
[9] Neither Mrs Addleman nor Ms Jamieson have children. Ms Jamieson has never married.
[10] The Trust is a discretionary Trust. The Trust Deed does not differentiate between the discretionary beneficiaries in any way. Until the vesting day, the trustees may in their absolute discretion pay or apply the Trust fund, or any part of it, towards
3 Addleman v Lambie Trustee Ltd [2019] NZCA 480 at [2].
the support, maintenance and benefit of all or any of the living discretionary beneficiaries and towards the benefit of any corporate discretionary beneficiary.
Similarly, the rights of final beneficiaries are equal as between them.4
[11] Mrs Addleman was not aware of the Trust’s existence until around the time of her father’s death in late 2001. She did not find out she was a beneficiary of the Trust until November 2002 when she received a letter from Mr Peter Kemps, a solicitor and the third defendant (then one of the trustees of the Trust), advising that distribution of approximately $4.25 million was to be made to her.
[12] Mrs Addleman was curious to know more about the Trust, its assets and income. She sought further information from the trustees, including Mr Kemps.
[13] In June 2015, Mrs Addleman commenced proceedings in this Court seeking orders requiring the defendants to provide comprehensive financial and other documents relating to the Trust.
[14] In a decision dated 4 October 2019, the Court of Appeal ordered Lambie Trustee Ltd to provide to Mrs Addleman all documents in the following categories: financial statements, minutes of meetings and any legal opinions and other advice obtained by the trustees and funded by the Trust.5 The Court held that Mrs Addleman fell into the category of a close beneficiary of the Trust. It further held that unless disclosure of basic Trust documents, including the accounts, was made to her, there would effectively be no-one who can hold the trustees to account. In overturning the decision of the High Court, the Court of Appeal concluded that the Trust cannot properly be regarded as a “sole purpose trust” or “essentially [Ms Jamieson’s] trust”. Those orders were upheld by the Supreme Court except in relation to a limited category of legal professional privilege for legal advice received after the commencement of the proceedings.6
4 Addleman v Lambie Trustee Ltd, above n 3, at [6].
5 Addleman v Lambie Trustee Ltd, above n 3.
6 Lambie Trustee Ltd v Addleman [2021] NZSC 54, [2021] 1 NZLR 307.
[15] In a judgment dated 17 February 2023, the Supreme Court made the following costs orders:7
(a)Mrs Addleman was to receive out of the Lambie Trust her actual costs in relation to the appeal to the Supreme Court;
(b)Lambie Trustee Ltd was not entitled to any indemnity for costs and expenses in connection with the appeal to the Supreme Court, including both its own legal fees and any solicitor/client costs and disbursements due to Mrs Addleman;
(c)Lambie Trustee Ltd was to reimburse the Lambie Trust (from funds not sourced from the Trust) the costs awarded by the Court;
(d)The orders of the Court at (b) and (c) above applied to the award of costs from the Court of Appeal.
[16] The trustees of LITL advise that the total amount Lambie Trustee Ltd owes to the Trust in accordance with the Supreme Court orders was $1,959,885.35. Lambie Trustee Ltd did not have the funds to repay those amounts owed to the Trust. Ms Jamieson, its director, then offered to provide the Trust with a guarantee for the full amount of costs claimed, secured by a mortgage.
[17] LITL further advised that as of 31 May 2024, it has recovered $1,734,885.35 with $225,000 outstanding. It expects to recover the outstanding $225,000 by 20 September 2024, by way of four monthly payments from Ms Jamieson.
Issues
[18]I need to address the following issues:
(a)Are the proceedings or dispute an “internal matter” thus giving the Court power to order mediation under s 145 of the Trusts Act 2019?
7 Lambie Trustee Ltd v Addleman [2023] NZSC 7.
(b)If so, is there a mechanism to address outstanding disclosure issues as part of a mediation process?
(c)If so, should I, as a matter of discretion, submit the proceedings to mediation under s 145(1)(b) of the Trusts Act 2019?
(d)If so, should Mr Harrison be appointed as mediator?
(e)Is it in the interests of justice to order security for costs against Mrs Addleman?
(f)Should costs be awarded to Edmonton and against Mrs Addleman following the resolution of its strike out application dated 10 May 2024?
Referral to mediation
[19] In the attached appendix A, I have set out a summary of the claims and concerns that Mrs Addleman has about the administration of the Lambie Trust. The appendix also sets out the defendants’ response to those claims.
[20] The position of the parties is clearly polarised and seemingly far apart. As Ms Chambers submitted, the case for the parties to sit down together in the same room and have sensible settlement discussions is a compelling one.
Issue (a) – Jurisdiction under s 145
[21] In opposing mediation, Mrs Addleman contends that the Trusts Act 2019 does not give the courts jurisdiction to compel mediation in all cases. Nor does it detract, she says, from mediation’s fundamental tenet that it is a consensual process.
[22]She further submits:
(a)The Court has no jurisdiction to require mediation of an “external dispute”.8
(b)The Act does not allow the Court to cede or delegate its procedural jurisdiction and/or responsibility of case progression to a mediator.
(c)The defendants’ claims that a mediator can somehow decide what information the defendants must disclose and/or compel are misplaced.
(d)Various claims in her 3ASOC are “external” not “internal” disputes.
(e)At best, the Court can compel mediation only of certain aspects of her 3ASOC.
[23] The issue is one of statutory interpretation. The starting point is that the meaning of legislation is to be ascertained from its text and in light of its purpose and its context.9
[24] The relevant statutory words are defined in broad terms. Under s 145, the Court may make an order requiring parties to an “internal matter” to participate in mediation. A “matter” is relevantly and broadly defined in s 142(a)(i) as “a legal proceeding brought by or against a trustee in relation to the trust”.10 An internal matter is further defined as a matter “to which the parties are a trustee and 1 or more beneficiaries, or a trustee and 1 or more other trustees, of the trust”. By contrast “external matter” means a matter to which the parties are a trustee and one or more third parties.11
[25] I note also that the power under s 145 is a power to order an alternative dispute resolution (ADR) process. That is also defined in broad terms in s 142. It includes, but is not confined to, mediation or arbitration.
8 See the Trusts Act 2019, s 145(3).
9 Legislation Act 2019, s 10.
10 Trusts Act 2019, s 142(a)(ii) provides that a “matter” also means “a dispute in relation to the trust between a trustee and a beneficiary, or between a trustee and a third party, or between 2 or more trustees, that may give rise to a legal proceeding”.
11 Trusts Act 2019, s 142.
[26] One of the purposes of the 2019 Act is to provide for mechanisms to resolve trust-related disputes.12 This includes the new power to make ADR more accessible to the parties by submitting matters to mediation. It also includes the power to appoint a “particular person” to act as a mediator or arbitrator.
[27] In exercising powers under the Act, the Court is required to have regard to the principle that a trust should be administered in a way that avoids unnecessary cost and complexity.13 The power to require parties to attend mediation is one way to give effect to that principle. Parliament has clearly recognised the significant benefits that ADR might offer in contrast to the expense and damage that adversarial litigation can give rise to. The power to require attendance at mediation is available even where the parties might be reluctant or even refuse to attend.
[28] Similar powers exist in other jurisdictions. As Venning J noted in Wright v Pitfield,14 a “pithy encapsulation” of the response to concerns about compelling parties to attend a voluntary process can be found in the speech by Lord Phillips, the Lord Chief Justice of England and Wales in 2008:15
Those opposed argue that compulsion is the very antithesis of mediation. The whole point of mediation is that it is voluntary. How can you compel parties to indulge in a voluntary activity? ‘You can take a horse to water, but you cannot make it drink’. To which those in favour of compulsory mediation reply, ‘yes, but if you take a horse to water it usually does drink.’ Statistics show that settlement rates in relation to parties who have been compelled to mediate are just about as high as they are in the case of those who resort to mediation of their own volition.
[29] I find that the interpretation contended for by Mrs Addleman, namely that at best the Court could compel mediation only for certain aspects of her 3ASOC is a narrow and technical one. It is contrary to the broad purpose and language of the legislation.
[30] The parties to the proceedings fall within the Act’s definition of “internal matter”, being: (a) current trustees: LTL and LITL, an independent trustee; (b) former
12 Trusts Act 2019, s 3(c).
13 Trusts Act 2019, s 4(b).
14 Wright v Pitfield [2022] NZHC 385 at [35].
15 Lord Phillips of Worth Matravers, Lord Chief Justice of England and Wales “Alternative Dispute Resolution: an English Viewpoint” (India, 29 March 2008).
trustees: Ms Jamieson, Mr Kemps and Mr Hargraves and prior to his death, Mr Palmer; and (c) beneficiaries: Ms Jamieson, Mrs Addleman and Edmonton.16
[31] In substance, the proceedings here relate to internal matters of the Trust: appointment of trustees; interpretation of the Trust Deed; alleged breach of conflict; self-dealing and even-handedness duties; negligent investment of the Trust fund; payment to alleged non-beneficiaries; failure to keep accounts and Trust records; failure to disclose Trust information; improper exposure to regulatory risks; removal of trustees and appointment of a (new) court-appointed trustee and/or receiver.
[32] Mrs Addleman alleges that Edmonton is not a beneficiary of the Trust. That is because the Trust Deed refers to “Edmonton Company Ltd SA” as beneficiary. Edmonton’s position is that it was re-domiciled in Australia and is the same company. That is a live issue to be determined in the proceedings. However, in my view, it does not exclude the Court’s jurisdiction under s 145. In substance, this issue is closely aligned with and integrally linked to the substantive and core internal dispute between the principal parties. The real dispute is between the primary beneficiaries about decisions made by the trustees. It would be artificial and contrary to the broad purpose of the legislation to exclude the issue of the status of Edmonton from a referral to mediation.
[33] I conclude that I have jurisdiction under s 145 to refer the whole of these proceedings to mediation. The terms of the Trust do not indicate a contrary intention.17
Issue (b) – Mechanism to address disclosure
[34] As noted, Mrs Addleman’s principal concern is disclosure; she says that the Court cannot delegate its discovery powers to a mediator who will not be able to compel the defendants to provide relevant information. She says that mediation will inevitably fail if outstanding disclosure is not resolved.
16 Although it should be noted that Mrs Addleman disputes whether Edmonton truly is a beneficiary under the Trust, see below at [32].
17 Trusts Act 2019, s 145(1)(b).
[35] I understand Mrs Addleman’s concerns about disclosure; they are borne out by the litigation to date. However, I find that there is a clear mechanism within a mediation referral for resolution of outstanding disclosure issues. What is at issue is disclosure of sufficient information/documents to enable Mrs Addleman to receive full and proper advice as to her position and options available to her for settlement at mediation. That is not the same as discovery which is a formal process adopted in this Court. The parties, with the assistance of good counsel and an experienced mediator, are more than capable of designing a process to address outstanding disclosure issues. This might involve a pre-mediation meeting with the mediator. It would not require or involve the court improperly delegating its powers to order discovery.
[36] I note that the defendants agree to be bound by any direction of the mediator that they provide disclosure. Disclosure issues will, of course, not be unfamiliar to any experienced mediator. I further note that the court-appointed independent trustee has a right of access to Trust documents. I have no doubt that it would cooperate with any direction that a mediator made about disclosure.
Issue (c) – Discretion to refer
[37] The Court has a discretion under s 145. In S v N, Wylie J held that the matters which could bear on the exercise of that discretion could include cost, confidentiality, speed, the seriousness and complexity of the matter, the suitability of the proposed mediator, the wishes of the parties, the wishes of the settlor (if known), finality and enforceability.18
[38] In my view, there is a clear need for some honest reckoning in this case which would involve the parties sitting down in the same room and candidly and sensibly addressing their concerns. The focus should be on the future of the Trust, as Ms Fee submitted. I find that there is a clear need to try the alternative route of ADR with a view to avoiding the real risk in this case of extreme cost and delay leading to further and irreparable breakdown in the relationship between the parties. ADR potentially presents a wider range of settlement options for the parties and despite what appears
18 S v N [2021] NZHC 2860, [2021] NZFLR 756 at [29].
to be an intractable dispute, disputes of that kind are not unfamiliar to experienced mediators.
[39] Resolution of even some issues at mediation may materially reduce the extent of discovery eventually required as well as the length of any trial.
[40] As I have noted above, Mrs Addleman is not opposed to mediation in principle. I have already addressed her concern about disclosure.
[41]I conclude the proceedings should be referred to mediation under s 145.
Issue (d) – Which mediator?
[42] Mrs Addleman objects to the appointment of Mr Harrison. She says he is “unsuitable” and that the defendants’ regular use of him for mediations is not a proper reason to “force him on Mrs Addleman”. Mrs Addleman understands that Mr Harrison had some involvement with the fifth defendant, Mr Palmer, on a previous occasion.
[43] I accept and understand Mrs Addleman’s concern that the mediator appointed should have the confidence of all the parties and be someone who can offer the best opportunity for a successful outcome. It is understandable that before committing to the expense and time involved to travel to New Zealand for a mediation, such confidence is of the utmost importance to her. However, in my view, her opposition to Mr Harrison is not a principled or a legitimate one. His involvement with Mr Palmer was a fleeting one many years ago; Mr Palmer was never a client. Had Mr Harrison himself had any reason to consider this would preclude him from being a mediator, he clearly would have advised the parties. He has not done so. I note also that counsel for Mrs Addleman have had the opportunity to discuss this issue with Mr Harrison.
[44] In a small jurisdiction such as New Zealand, Mr Harrison’s involvement with Mr Palmer is not unusual. Even in a much larger jurisdiction, a fleeting relationship of that kind would not be a disqualifying factor.
[45] As noted by Venning J in Wright v Pitfield,19 Mr Harrison is an effective, experienced and well-respected mediator. He is a former High Court and Court of Appeal Judge and experienced litigator. He is well known to counsel. Mrs Addleman can have every confidence that he would conduct a fair and robust mediation process.
[46]I find that Mr Harrison should be appointed as the mediator.
Security for costs
[47] The sixth defendant, Edmonton (an Australian company), is being sued in New Zealand by Mrs Addleman, a plaintiff now currently residing in Portugal. In seeking security for costs, Edmonton submits that it is appropriate that it have protection for costs it will incur in defending this “complex litigation”.
[48] Edmonton proposes that Mrs Addleman pay security for costs on a prospective basis and in three tranches. In total, at this stage, the sum sought exceeds $350,000.
[49] There is no dispute that the threshold in r 5.45(1)(a) of the High Court Rules 2016 is made out because the plaintiff, Mrs Addleman, is resident out of New Zealand. The critical issue is whether it would be just in all the circumstances to make an order for security for costs.20 What is required is a broad overall assessment.21
[50] Edmonton contends that even enforcement of a judgment in England would not be straightforward, but especially not enforcement of a judgment in Portugal. That would be complicated, given Portugal operates through a civil law system and in a different language. Edmonton contends that enforcement of a common law judgment in a non-common law foreign court that operates in a different language is a prime example of where there will be difficulty and expense for Edmonton in enforcing any costs award against the plaintiff.
[51] I find that, in all the circumstances, it would not be just to make an order for security of costs, at least at this stage. For reasons given above, the proceedings should
19 Wright v Pitfield, above n 14, at [46].
20 High Court Rules 2016, r 5.45(2).
21 Hamilton v Papakura District Council (1997) 11 PRNZ 333 (HC) at 335.
now go to mediation and the issue of security for costs is a distraction and the application unhelpful. The position could be reviewed if the litigation does proceed (i.e. after a failed mediation). However, and this is only a preliminary view, it would seem unlikely that if Edmonton is successful, that costs payable by Mrs Addleman could not be ordered from her share of any Trust asset. On their face, the concerns of Edmonton at this stage appear to be overstated.
[52] I find that the application for security for costs should be dismissed. That is without prejudice to the issue being advanced should the mediation be unsuccessful.
Costs application by Edmonton
[53] Edmonton seeks costs in connection with its application for orders striking out all or part of the second amended statement of claim of 17 June 2022 (2ASOC). The hearing of that application was vacated by consent and as noted, Mrs Addleman has now filed a 3ASOC.
[54]I am determining this costs matter on the papers.
[55] Edmonton says that upon receipt of the 2ASOC and prior to filing its application, it wrote to Mrs Addleman identifying the deficiencies in the 2ASOC and invited her to re-file it in a compliant manner. Mrs Addleman did not respond to the letter or amend the 2ASOC at the time.
[56] Edmonton then filed the application to strike out on the grounds that the cumulative deficiencies in the 2ASOC were likely to cause prejudice and delay and were sufficiently serious to reach the strike out threshold. Mrs Addleman initially opposed the application.
[57] One month prior to the hearing (some 16 months later) Mrs Addleman accepted that a new pleading would be required and sought for the relevant fixture to be vacated. The Court made a direction accordingly with the consent of the defendants.
[58] Questions of costs are ultimately a matter of discretion.22 The overall objective is to achieve an outcome that best meets the interests of justice. The starting point is that the party who fails with respect to a proceeding or interlocutory application should pay costs to the successful party.23
[59] I reject the submission of Edmonton that its strike-out application, following Mrs Addleman’s decision to file her 3ASOC, can properly be characterised as “successful”. As counsel for Mrs Addleman submitted, it is difficult to see how the sparingly exercised strike-out jurisdiction could have been exercised in Edmonton’s favour had it not abandoned its strike out application.
[60] There appears to be merit to Mrs Addleman’s contention that she has been handicapped by a lack of disclosure by the defendants of relevant documents.
[61] In the circumstances, I find that there should be no order as to costs on the strike-out application. The appropriate outcome is for costs to lie where they fall.
Result
[62] I grant the application by the first to fourth and sixth defendants for an order submitting the proceedings to mediation.
[63]I make the following orders and directions:
(a)I order that the proceedings are to be submitted to mediation.
(b)I appoint the Hon Mr Rhys Harrison KC to act as mediator.
(c)The mediator is to:
22 High Court Rules 2016, r 14.1.
23 High Court Rules 2016, r 14.2(1)(a).
(i)resolve any disputes between the parties regarding disclosure necessary to attend the mediation;24
(ii)resolve any other procedural issues which may arise between the parties prior to mediation; and
(iii)otherwise regulate the conduct of the mediation.
(d)I order that each party to the proceeding is to participate in the mediation in person in Auckland, New Zealand.
(e)The costs of the application for mediation and the mediation itself are to be met from the property of the Lambie Trust.
(f)That the first – seventh defendants are not required to file statements of defence to the plaintiff’s 3ASOC dated 15 March 2024 until after the mediation has been held.
[64] The application by the sixth defendant, Edmonton, for security for costs is dismissed. Edmonton is to pay costs to Mrs Addleman on a 2B basis plus disbursements for the failed security for costs application.
[65] There is no order for costs in relation to Edmonton’s strike-out application dated 10 May 2024. Costs are to lie where they fall.
Andrew J
24 In response to my direction, counsel for Mrs Addleman have filed and served a list of documents that Mrs Addleman says are required for mediation (dated 18 June 2024). That is obviously a useful starting point for the parties and Mr Harrison to discuss.
APPENDIX ‘A’
Mrs Addleman’s claims and concerns
(1) Mrs Addleman contends that the defendants are desperate to avoid pleading, giving full and diligent discovery/inspection and telling her what exactly they have been doing and done wrong with the Trust over the years. She says they have continued disdain for her and a “seeming lack of insight” about the fact the trustees are fiduciaries of the highest order. She says that their past and current treatment of her as a beneficiary is unacceptable and must appropriately be remedied.
(2)She further claims:
(a)Despite the criticism by the Court of Appeal and the Supreme Court of LTL’s behaviour and alignment with Ms Jamieson’s interests, LTL’s (and other defendants’) behaviour towards Mrs Addleman has not changed.
(b)Ms Jamieson has “helped herself to millions of dollars” of Lambie Trust money to get advice about and run litigation against Mrs Addleman to try and stop her finding out about the Trust, its operation/affairs and what Ms Jamieson has been doing with the Trust’s money.
(c)Ms Jamieson has used Trust money in trying to defeat Ms Addleman’s interest in the Trust (including paying for restructuring advice and causing Edmonton’s establishment) after Mr Kemps told her that Mrs Addleman was a principal beneficiary and could not be removed as such.
(d)Ms Jamieson, with the assistance of Mr Kemps, Eden Palmer Prewett Ltd25 and others, moved over $45 million net out of New Zealand to Edmonton.
25 The Trust’s accountants.
(e)Ms Jamieson has failed to ensure that she/LTL/the Trust have complied with all tax and Overseas Investment Act (OIA) obligations.
(f)Ms Jamieson gave evidence in 2017 that she/LTL and other trustees had not paid any Trust money to a non-beneficiary (including those identified in an alleged 9 May 2020 letter of wishes which Mr Kemps prepared). Contrary to this, at the time of the High Court hearing, the trustees had recorded payments to non-beneficiaries in the Trust’s financial statements and minutes/resolutions and discussed the same in legal advice.
(g)The $1 million FY 2023 distribution to Mrs Addleman:
(i)represents less than five per cent of total income/capital distributions made in the last 10 years (i.e. since FY 2014);
(ii)did not take any account of the quantum of purported distributions previously made to Ms Jamieson and other persons/entities connected with her (e.g. Mercadeo E Inversiones Gil SA and Edmonton) and/or Ms Jamieson’s direct and indirect wealth; and
(iii)was not based on need.
The defendants’ response
(3) The defendants deny Mrs Addleman’s claims; they say they are extravagant and unsupported by probative evidence.26 They note that this proceeding has been on foot for three-and-a-half years with 13 interlocutory applications filed. Five of these have proceeded to hearing, requiring significant resources from the Court and the parties. Very little progress has been made. They further say that the third amended statement of claim is repetitive, prolix and inflammatory and contains significant tracts
26 I note that the defendants are yet to file amended statements of claim to the third amended statement of claim. For present purposes, I am simply referring to their position generally, noting of course that there are different causes of action against them and they will likely have different positions.
of evidence and legal submissions. Without settled pleadings, it has not been possible to determine tailored discovery categories or sensibly assess the length of trial.
(4) The first and second defendants, in particular, say that Mrs Addleman fails to acknowledge that the Trust has been highly successful and in large part because of the substantial compensation sum that Ms Jamieson received for an accident at age 19 (she was rendered a quadriplegic) which was placed into the Trust (by their father) to fund Ms Jamieson’s significant expenses. They note that the Trust has distributed significant funds to charities, including grants to the Auckland School of Medicine, to Paraquad and to CanTeen.
(5) The defendants further say that they have asked Mrs Addleman to provide a list of essential documents for mediation (promised twice, never delivered) and suggested that counsel meet to discuss necessary steps for a productive mediation, including the appointment of a mediator to resolve various issues including discovery. The defendants confirm that they will provide further disclosure through the mediation process, and that if a valuation of the Trust property is required as part of mediation, the trustees will obtain one.
(6) In addition to the Trust Deed, deeds recording changes of trustees and the settlor’s wishes, Mrs Addleman has received, and continues to receive:
(i)financial statements for years ended 1999 (earliest available) – 2023;
(ii)Trust minutes from 2001 (earliest available) – 2024;
(iii)Trust resolutions from 2001 (earliest available) – 2024;
(iv)Trust tax returns for the past five years; and
(v)trustee reports regarding the management and administration of the
Trust.
(7) Mrs Addleman has also received copies of legal advice obtained by the trustees since approximately 2000 (earliest available) and paid for from the Trust fund (unless
covered by litigation privilege). She has also received an affidavit from the Trust’s previous solicitor, setting out the steps taken to identify and locate Trust documents, and the Independent Trustee, whilst noting that it is very difficult to value the expected return from the Trust’s most recent development given its nature and the ongoing OIO investigation, has said “of course, if valuations are required as part of a mediation, they can be obtained by the trustees”.
4
0