Addleman v Lambie Trustee Limited
[2021] NZHC 2504
•23 September 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-104
[2021] NZHC 2504
BETWEEN PRUDENCE ANNE ADDLEMAN
Plaintiff
AND
LAMBIE TRUSTEE LIMITED
First Defendant
ANNETTE MERRYL JAMIESON
Second DefendantPETER ALBERTUS THEODORUS MARIA KEMPS
Third DefendantDONALD BOYD HARGRAVE
Fourth DefendantROBERT JOB PALMER
Fifth DefendantEDMONTON CO PTY LIMITED
Sixth Defendant
Hearing: 21 September 2021 Appearances:
A S Ross QC and R A Rose for the Plaintiff
D A T Chambers QC for the First and Second Defendants T C Daley for the Third Defendant
I T F Hikaka and J L Beverwijk for the Sixth Defendant
Judgment:
23 September 2021
JUDGMENT OF ASSOCIATE JUDGE R M BELL
This judgment was delivered by me on 23 September 2021 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
PRUDENCE ANNE ADDLEMAN v LAMBIE TRUSTEE LIMITED [2021] NZHC 2504 [23 September 2021]
[1] Edmonton Co Pty Ltd, the sixth defendant, applies under s 22 of the Trans- Tasman Proceedings Act 2010 for a stay of the claim against it. It says that a court in Australia is more appropriate to hear the case against it.
[2] The Supreme Court gave the background in its disclosure decision in Lambie Trustee Ltd v Addleman:1
The factual background
The Jamieson family
[12] The parents of Mrs Addleman and Ms Jamieson were Alexander and Merryl Jamieson. Alexander Jamieson was a businessman who was associated with a number of businesses in Australia and elsewhere. In his commercial activities, he was very private. He died on 2 November 2001. His wife, Merryl Jamieson, died on 19 September 2012. They had four children, Mrs Addleman, Ms Jamieson and their two younger siblings, Anthony and Meredith. Mrs Addleman is 71 and Ms Jamieson is 67. They do not have children. Ms Jamieson has never married. The Jamieson family was primarily based in Sydney, which is where Mrs Addleman, Ms Jamieson and their siblings grew up. For most of her adult life, Mrs Addleman has lived in the United Kingdom with her husband Martin Addleman.
Ms Jamieson’s accident
[13] In 1972, Ms Jamieson, then 19, was catastrophically injured in an accident in a swimming pool in Sydney operated by a local authority. She sued the local authority and, in 1979, was awarded damages which, after an appeal, she eventually received in 1981. The amount paid to her was AUD 1,029,084.
The Howick development
[14] As far as we can tell from the limited information before us, the funds held by the Lambie Trust result largely from the development of what was once a farm in Howick, Auckland.
[15] The possibility of this development was raised with Alexander Jamieson by his nephew, Robert Palmer. A company, Howick Parklands Ltd (HPL), was incorporated on 19 September 1986. Mr Palmer held 99 per cent of the shares in the company and he was initially the sole director. Mr Palmer held these shares on trust but it is not entirely clear who the beneficial owner
1 Lambie Trust Ltd v Addleman [2021] NZSC 54 at [12]–[27].
was. What is clear is that Mr Palmer acted on the direction of Alexander Jamieson. HPL duly acquired the land and commenced development.
[16] Ms Jamieson’s position in this litigation is that it was her money which funded the purchase and the tenor of her evidence was that Mr Palmer held the shares in HPL on trust for her (albeit possibly through Alexander Jamieson as an intermediary). Her general position is supported by a statement signed by Mr Palmer on 14 November 2014 and in an affidavit to the same effect by Mr Palmer, which was before the High Court.
[17] This development did not initially run smoothly. Some of the background is discussed in the judgment of Thomas J in Howick Parklands Building Co Ltd v Howick Parklands Ltd [1993] 1 NZLR 749 (HC). But despite these difficulties, the development was, in the end, successful and very profitable.
The Lambie Trust
[18] The Lambie Trust (the Trust) was established on 19 March 1990. The settlor was Robert Palmer. The original trustees were Alexander Jamieson, Anthony Jamieson, Mr Palmer and Wayne Hanna, a New Zealand accountant.
[19] Mrs Addleman and Ms Jamieson, along with two companies, Edmonton Co Pty Ltd SA (incorporated in Australia) and Mercadeo E Inversiones Gil SA (incorporated in Panama) (both controlled by Ms Jamieson), are the final beneficiaries. On the vesting day (80 years from the date of the establishment of the trust), the trustees are to hold the remainder of the Trust fund on trust for such of the final beneficiaries then living and the corporate final beneficiaries still in existence as tenants in common in equal shares.
[20] The trust is discretionary. The discretionary beneficiaries are the final beneficiaries, any child or remoter issue, wife, husband, widow or widower of any final beneficiary, and any lawful charitable object. Mrs Addleman’s husband is thus a discretionary beneficiary.
[21]Anthony and Meredith are not beneficiaries.
[22] A power to remove trustees and to appoint new trustees was vested in Alexander Jamieson and, after his death, in his administrator.
Transactions affecting the Lambie Trust and changes of trustee
[23] In 1991, the shares held by Mr Palmer in HPL were transferred to the Lambie Trust.
[24] Mr Hanna resigned as a trustee on 4 August 1992. Mr Palmer was removed as a trustee on 22 September 1992. Anthony was removed as a trustee on 13 September 1993 and replaced by Donald Hargrave, a New Zealand accountant, and Peter Kemps, a New Zealand solicitor. Alexander Jamieson retired as a trustee on 1 May 2000 and was replaced by Ms Jamieson. As noted, Alexander Jamieson died on 2 November 2001. Ms Jamieson and her mother were his executors.
[25] Ms Jamieson and Messrs Hargrave and Kemps retired as trustees on 20 April 2006 and were replaced by the appellant, Lambie Trustee Ltd. Ms Jamieson is the sole director and shareholder of Lambie Trustee Ltd.
The “memorandum of wishes”
[26] On 9 May 2000, Mr Kemps wrote to Alexander and Merryl Jamieson. This letter has been referred to in the litigation as a “memorandum of wishes”. It followed a visit to Sydney by Messrs Kemps and Hargrave. It also followed the 1 May 2000 retirement of Alexander Jamieson as a trustee and the appointment of Ms Jamieson. The letter is in these terms:
Thank you very much for your hospitality during our recent visit. [Mr Hargrave] and I were well satisfied with the progress we were able to make during our visit and appreciated your assistance.
I wanted to summarise the understanding [Mr Hargrave] and I had of Mr Jamieson’s wishes for ultimate distribution of Lambie Trust funds. Apart from the allowance to be paid to Mrs Jamieson’s relatives, the ultimate distribution of the Trust fund is to be as follows:
1.A fund of NZ$2,000,000 to be set aside to provide income for Anthony and his children during their lifetimes.
2.Of the balance of the Lambie Trust fund 40% but not more than NZ$10,000,000 to be set aside for the Paraplegic and Quadriplegic Organisation and other charities.
3.Of the balance 50% to be paid to [Ms Jamieson] and 25% each to Meredith and [Mrs Addleman].
Your instructions are that Anthony’s fund is to be administered on his behalf during his lifetime and income and capital made available to him and his family at the discretion of the Trustees.
[Mr Hargrave] and I are dealing with [Ms Jamieson] on a number of other matters including the funding of further land purchases by Lambie Trust and the development of those properties by Mr Noma [a business associate of Mr Jamieson].
As noted above at [21] and below at [33](b), Anthony and Meredith are not beneficiaries. This means that the memorandum was not in accordance with the trust deed.
Distribution to Mrs Addleman
[27] Mrs Addleman first became aware of the Trust’s existence around the time of her father’s death in late 2001. She did not find out that she was a beneficiary of the Trust until November 2002 when she received a letter from Mr Kemps:
As you know, I am one of the Trustees of the Lambie Trust established in New Zealand in March 1990. The other Trustees are Don Hargrave and your sister, [Ms Jamieson].
The Trust is a discretionary Trust and you are named as one of the discretionary beneficiaries. The Trustees in their discretion have decided to make a distribution of part of the Trust fund to you. While it had been intended that this distribution would not take place until the passing of your mother, the Trustees have decided to bring the distribution forward so that you can be in a position to make your own financial decisions regarding these funds and can use the funds to meet your own expenditure.
The sum that will be distributed to you is NZ$4,257,000.00 and represents the full distribution of funds that will be coming to you from Lambie Trust.
Please note that this distribution bears no relationship to the estate of your late father. Neither [Mr Hargrave] nor I act in your late father’s estate nor in respect of any other of his affairs or those of your mother.
[3] Having obtained disclosure, Mrs Addleman has brought this proceeding, claiming generally that the Lambie Trust is under Ms Jamieson’s effective control and has been run primarily to benefit only Ms Jamieson. She claims a range of breaches of trust. Importantly she says that trustees made payments to and conferred benefits of $44 million on Edmonton Co Pty Ltd, but it is not a final beneficiary of the trust. She wants it to repay the trustee.
[4] There is a qualification to the facts outlined by the Supreme Court. In paragraph [19] the Supreme Court described one of the final beneficiaries of the Lambie Trust as “Edmonton Co Pty Ltd SA (incorporated in Australia)”. According to the statement of claim, under the trust deed Edmonton Co Ltd SA, a “sociedad anónima” incorporated in Panama on 9 August 1965 is a final beneficiary. The sixth defendant, Edmonton Co Pty Ltd, is an Australian corporation established in September 2006. The Australian company says that it is the redomiciled Panamanian entity. On the other hand, Mrs Addleman says that the Panamanian sociedad anónima continues to exist and is distinct from the Australian company. Edmonton Co Pty Ltd says that the claims against it, including the question whether it is the same or distinct from the Panamanian sociedad anónima should be decided in Australia, while the rest of the proceeding can continue in New Zealand.
[5] As for the parties, Mrs Addleman lives in England. She is a final beneficiary of the Lambie Trust.
[6] Lambie Trustee Ltd, the first defendant, is a New Zealand company incorporated in 2005 and became trustee of the Lambie Trust in 2006. It is currently the sole trustee of the Lambie Trust, which was established in New Zealand in 1990 and is governed by New Zealand law. It holds and held trust assets in New Zealand.
[7] Ms Jamieson, the second defendant, lives in Sydney, Australia. She is the sole shareholder of Lambie Trustee Ltd and its sole director. Ms Jamieson was a trustee of the trust from 1 September 2000 until 20 April 2006.
[8] Mr Peter Kemps, the third defendant, a retired Auckland lawyer, has been legal advisor to Ms Jamieson and her father at least since 1992. He was a trustee of the trust with Mr Hargrave, the fourth defendant, and the late Mr Jamieson from September 1993 until May 2000, and with Mr Hargrave and Ms Jamieson from May 2000 until April 2006. He was a director of Lambie Trustee Ltd with Ms Jamieson and Mr Hargrave from November 2005 until March 2006, and with Ms Jamieson from March 2010 until January 2014. His firm held significant funds on behalf of the Lambie Trust between 2001 and 2019.
[9] Mr Hargrave, the fourth defendant is a retired Auckland chartered accountant. His practice did the accounting work for the trust and for other Jamieson entities and businesses in New Zealand. He was personally a trustee of the trust from September 1993 until May 2000 and with Mr Kemps and Ms Jamieson from May 2000 until April 2006. He was a joint signatory on the trust bank accounts until December 2009 and was a substitute attorney for Lambie Trustee Ltd.
[10] Mr Palmer, the fifth defendant, a company director living in Havelock North is a cousin of Mrs Addleman and Ms Jamieson. He was the nominal settlor of the Lambie Trust although Mr Jamieson (Mrs Addleman and Ms Jamieson’s father) was responsible for setting up the trusts. Mr Palmer was a trustee of the trust personally, from its establishment in March 1990 until he was removed in September 1992.
[11] Edmonton Co Pty Ltd (Edmonton Australia) was incorporated on 14 September 2006 in Australia. Its shareholders are Ms Jamieson 10 per cent, and the Alexon Foundation 90 per cent. Ms Jamieson is its director. The shareholders of
Alexon Foundation are Edmonton Australia 90 per cent, Ms Jamieson 5 per cent and Mr Delahunt (an Australian) 5 per cent.
[12] The sociedad anónima, Edmonton Co Ltd SA, is not a party. It was established in 1965. The statement of claim gives its directors and officers:
President: Agustin Arias
Treasurer: Alicia De Rodriguez
Secretary: Alicia De Rodriguez
Subscriber: Rodolfo R Chiari Subscriber: Domingo Diaz Rosemena Director: Jaime Ricardo Arias
Director: Agustin Arias
Director: Alicia De Rodriguez
[13] The statement of claim pleads that the sociedad anónima and Edmonton Australia are different legal entities and they do not depend on each other for their separate legal existence. On the other hand, the defendants maintain that Edmonton sociedad anónima was re-domiciled to Australia in 2006 and is the same entity as Edmonton Australia.
[14] The statement of claim pleads that since 1990, $65 million has flowed through the trust. It also pleads that Edmonton Australia has received net dispositions of over
$44 million. It has benefited far more than any final beneficiary. Mrs Addleman says that any dispositions to Edmonton Australia were not to a beneficiary of the trust and were in breach of the trust.
[15] There are seven causes of action in the statement of claim. Only the fourth involves Edmonton Australia:
(a)The first, directed only against the first to fourth defendants, claims that the trust deed required two trustees but there could be a sole trustee if it was a trust corporation. Mrs Addleman says that Lambie Trustee Ltd is not a trust corporation under the Trustee Act 1956.
(b)The second cause of action is directed mainly against Lambie Trustee Ltd and Ms Jamieson. It alleges breach of the trust and non-compliance with no self-dealing and conflict rules. The prayer for relief to that cause of action seeks restoration of the trust fund in full by Lambie Trustee Ltd, Ms Jamieson and/or Edmonton Australia. In discussion Mr Ross accepted that the reference to Edmonton Australia appeared to be in error. I disregard that reference for this decision. This cause of action is not part of Edmonton Australia’s stay application.
(c)The third cause of action, for breach of trust and fiduciary duty, is based on an alleged failure to consider Mrs Addleman for income or capital distributions and a failure to treat beneficiaries even-handedly. It is pleaded against the first to fourth defendants. No orders are sought against Edmonton Australia.
(d)The fourth cause of action is directed against the first to fourth defendants and Edmonton Australia. This is a claim for breach of trust and breach of fiduciary duty for making payments, loans and benefits to non-beneficiaries. Part of the relief sought is that the trust fund be restored, and that includes orders sought against Edmonton Australia. It seeks a stay of this part of the case against it.
(e)The fifth cause of action is a failure to keep accounts and trust records and is directed against the first to fifth defendants. No relief is sought against Edmonton Australia.
(f)The sixth cause of action alleges breach of duty as trustees to supply copies of accounts, minutes and resolutions on request.
(g)The seventh cause of action seeks the removal of Lambie Trust Ltd as trustee and the appointment of independent trustees.
[16] The claim against Edmonton Australia has connections on both sides of the Tasman. The Lambie Trust has a New Zealand resident trustee and payments were made from New Zealand assets to an Australian corporation in Australia.
[17] The fourth cause of action pleads distinct legal claims. The claims against the trustees are for breach of trust in disposing of trust assets to non-beneficiaries (not just Edmonton Australia). The claim against Edmonton Australia is for receiving assets to which it was not entitled. Mr Hikaka submitted that it is a personal claim for knowing receipt. Counsel for Mrs Addleman did not suggest otherwise. A beneficiary has standing to make a claim for knowing receipt. On the other hand a trustee would be the normal plaintiff for a restitutionary claim and Mrs Addleman could only bring a derivative claim seeking restitution if she pleaded special circumstances.2 She has not pleaded a derivative proceeding. Nor has she pleaded a proprietary claim.
[18] The fact of the payments to Edmonton Australia does not appear to be seriously in dispute, subject to accounting checks. The knowledge element in the cause of action is unlikely to trouble the court, given Ms Jamieson’s involvement first as trustee, later as director of the trustee and also as director of the recipient. The real contest is about whether Edmonton Australia could receive dispositions as a beneficiary of the trust. That question is common to the claims against the trustee and former trustees as well as against Edmonton Australia.
[19] Mr Hikaka emphasised that Mrs Addleman’s claim against Edmonton Australia is conceptually distinct from the claims against the trustees. The knowing receipt cause of action should have been pleaded separately from the claims for breach of trust. Even so, there is significant overlap and the claims against the trustees and Edmonton Australia will turn on broadly similar questions.
[20] Under s 3(1)(a) of the Trans-Tasman Proceedings Act 2010, one purpose is to streamline the process for resolving civil proceedings with a trans-Tasman element in order to reduce costs and improve efficiency. Under Part 2 subpart 2 of the Act, a court may only stay a proceeding if it is satisfied that an Australian court has
2 Hayim v Citibank NA [1987] 1 AC 730 (PC) and Roberts v Gill & Co [2010] UKSC 22, [2011] 1 AC 240.
jurisdiction and that it is the more appropriate court to determine those matters.3 It applies s 24:
24 Order of stay of proceeding
(1)On an application under section 22, the New Zealand court may, by order, stay the proceeding if it is satisfied that an Australian court—
(a)has jurisdiction to determine the matters in issue between the parties to the proceeding; and
(b)is the more appropriate court to determine those matters.
(2)In determining whether an Australian court is the more appropriate court to determine the matters in issue between the parties to the proceeding, the New Zealand court must not take into account the fact that the proceeding was commenced in New Zealand, but must take into account the following matters:
(a)the places of residence of the parties or, if a party is not an individual, its principal place of business:
(b)the places of residence of the witnesses likely to be called in the proceeding:
(c)the place where the subject matter of the proceeding is situated:
(d)any agreement between the parties about the court or place in which those matters should be determined or the proceeding should be instituted (other than an exclusive choice of court agreement to which section 25(1) applies):
(e)the law that it would be most appropriate to apply in the proceeding:
(f)whether a related or similar proceeding has been commenced against the defendant or another person in a court in Australia:
(g)the financial circumstances of the parties, so far as the New Zealand court is aware of them:
(h)any other matters that the New Zealand court considers relevant.
[21]Some preliminary points can be noted.
[22] Mrs Addleman’s notice of objection raised a procedural objection. Edmonton Australia did not give an affidavit in support of its application. Nor did Mrs Addleman
3 Section 21(3).
give an affidavit in response. This led to both sides complaining that counsel were giving evidence from the bar. No-one objected to my using the Supreme Court’s summary in its disclosure decision. I have also read the statement of claim and assume that Mrs Addleman has a case worth taking to a hearing but that it is contested. In a stay application under the Trans-Tasman Proceedings Act the court needs to ascertain the issues but is less concerned with the strength of a party’s case. The pleadings assist in identifying the issues. Evidence may be required for facts going to particular matters affecting a party, but that is missing here. I have however made some assumptions, for example, that it is likely to cost more to run two proceedings, one in Australia and one in New Zealand, than one proceeding in only one country. For a judge the absence of evidence has an upside: a slim bundle of documents.
[23] Under s 24(1) it has to be shown that a court in Australia has jurisdiction and is more appropriate. Edmonton Australia’s application did not state any particular court in Australia where the case should be heard. The matter is important because some Australian courts may be less appropriate than a New Zealand court, but others may be more appropriate. A New Zealand court deciding an application under s 22 should be told which Australian court is proposed so that informed comparisons can be made. Jurisdiction is relevant. Australia is a federation made up of states and territories, each with their own courts as well as federal courts. As I understand it, some state courts can exercise federal judicial powers, but some federal courts cannot exercise state judicial powers. Proving jurisdiction may require evidence from Australia. I will take the Equity Division of the New South Wales Supreme Court as the comparator. The Australian parties in this case are based in New South Wales and that court undoubtedly has jurisdiction for trust disputes. No-one suggested any other court.
[24] Edmonton Australia is not seeking a stay of the whole proceeding, only the part directed against it. Mr Hikaka argued by analogy with the court’s practice in dealing with protests to jurisdiction under r 5.49 of the High Court Rules 2016. For proceedings against defendants outside New Zealand and Australia, one of the gateways for service abroad without requiring leave is that the person overseas is:4
4 High Court Rules 2016, r 6.27(2)(h)(i).
a necessary or proper party to proceedings properly brought against another defendant served or to be served (whether within New Zealand or outside New Zealand under any other provision of these rules), and there is a real issue between the plaintiff and that defendant that the court ought to try…
[25] Even if a defendant is served without leave under that rule, the court has a discretion not to assume jurisdiction.5 On an application under r 5.49 the court may direct that the part of the case against the defendant served overseas should be heard in another jurisdiction, leaving the rest of the case to continue in New Zealand. If such a partial stay is possible in cases of overseas service outside Australia, it should also be possible in Australian cases. I accept the submission. There is also support in the definition of “proceeding” in s 4 of the Trans-Tasman Proceedings Act:
proceeding, in a court or tribunal, includes—
(a)an interlocutory proceeding in the court or tribunal; and
(b)a proceeding that relates to an application made to the court or tribunal (including an application for interim relief under subpart 3 of Part 2)
[26] If a court can stay a partial matter such as an interlocutory proceeding, that is, an interlocutory application, it should also be able to stay that part of a proceeding that applies only to one defendant. All the same, as with applications challenging overseas service under rr 6.27–6.29 of the High Court Rules, the court may consider convenience with regard to the interests of all the parties to the proceeding, not just the interests of the party proposing a stay.
[27] The comparison under s 24(2) is to determine the more appropriate court to determine the issues between the parties. So before beginning the comparison it is appropriate to identify the issues. The key one is whether Edmonton Australia is a beneficiary of the Lambie Trust. As already stated, the dispositions of trust assets to Edmonton Australia by the trustee defendants to a net value of $44 million do not seem to be seriously in dispute. As the trust is governed by New Zealand law, that law will decide whether Edmonton Australia is a beneficiary.
[28] To decide whether Edmonton Australia is the same entity as the Panama sociedad anónima will require evidence of Panamanian law. That is because under
5 High Court Rules 2016, r 6.29(1).
New Zealand’s choice of law rules, the law of the place of incorporation applies. That can be seen in Bank of Otago v Commercial Bank of New Zealand.6 In that case, a company had been incorporated in England under English companies legislation. It also operated in New Zealand. The New Zealand Parliament passed the Commercial Bank of New Zealand (Limited) Act 1864 under which the English company was also constituted under New Zealand law. The Court of Chancery in England made a winding-up order. The Supreme Court in New Zealand stayed a proceeding brought by a New Zealand creditor on the ground that the company was being put into liquidation. It disregarded the New Zealand statute and applied English law as governing the status of the company. That was a choice of law decision. The company was always an English company and subject to English law. It was not a New Zealand company. The New Zealand legislation was irrelevant to decide the status of the company. It was a case of an ineffective redomiciling. The law of the intended domicile did not count unless the company had emigrated under the law of the place of incorporation.
[29] The same choice of law rule can be seen in Lazard Brothers & Co v Midland Bank Ltd. In 1930, an English creditor sued a Russian bank that had been established in Tsarist times. The House of Lords held that the claim could not succeed, because the Russian bank no longer existed. Its existence was decided by Russian law. Private banks had been abolished after the 1917 revolution. Lord Wright said:7
English Courts have long since recognised as juristic persons corporations established by foreign law in virtue of the fact of their creation and continuance under and by that law. Such recognition is said to be by the comity of nations. Thus in Henriques v Dutch West India Co8 the Dutch company were permitted to sue in the King’s Bench on evidence being given “of the proper instruments whereby the law of Holland they were effectually created a corporation there”. But as the creation depends on the act of the foreign state which created them, the annulment of the act of creation by the same power will involve the dissolution and the non-existence of the corporation in the eyes of English law. The will of the sovereign authority which created it can also destroy it. English law will equally recognise the one, as the other, fact.
6 Bank of Otago v Commercial Bank of New Zealand (1867) Mac 233 (SC).
7 Lazard Brothers & Co v Midland Bank Ltd [1933] AC 289 (HL) at 297.
8 (1728) 2 Ld Raym 1532, 1535.
[30] Accordingly, evidence from Panama will apply to decide the status of the sociedad anónima, its incorporation, whether it still exists, whether it is distinct from Edmonton Australia and whether it has migrated to Australia. Australian law will become relevant only if under Panama law the sociedad anónima has migrated to Australia. Australian law will decide if the immigrant entity has redomiciled in accordance with its legislation, but that inquiry will not start unless the findings under Panama law go in favour of Edmonton Australia.
[31] In a hearing of the fourth cause of action in New Zealand against the current trustee, the former trustees and Edmonton Australia, there will be evidence by New Zealand witnesses about the dispositions to Edmonton Australia, but that may not be contested. There will be evidence from experts on Panamanian law on the status of the sociedad anónima. There will be evidence from Australia on redomiciling of foreign corporations and whether Edmonton Australia is the same entity as the sociedad anónima. There will be no need for evidence on New Zealand law because that is not a matter of fact to be proved. The court’s findings will bind all the parties. The court will deal with any cross claims among defendants, for example, if the former New Zealand trustees seek contribution or indemnity from Edmonton Australia. Any relief ordered against Edmonton Australia will be made with regard to relief ordered against other defendants. The fourth cause of action will be heard at the same time as Mrs Addleman’s other claims in this proceeding. Ms Jamieson is likely to give evidence for the other claims, even if she does not give evidence for the fourth cause of action.
[32] If the claim against Edmonton Australia in the fourth cause of action is stayed to be heard in Australia, Mrs Addleman’s case against the other defendants will continue in New Zealand, including the fourth cause of action. The court will hear the same evidence as in a hearing where Edmonton Australia was still a party. The court’s decision will bind only the parties, but not Edmonton Australia. The court will not be able to consider any claims by the former trustees against it because it is not a party.
[33] If Edmonton Australia gets its stay Mrs Addleman will sue it in New South Wales. The same Panamanian evidence will be required. Evidence as to the status of the sociedad anónima in Australia and as to the status of Edmonton Australia under Australian law will be required but it may not be as extensive as the evidence that
would be given in New Zealand. As Mrs Addleman will be bringing a claim under a trust governed by New Zealand law, evidence as to New Zealand law may be required. Australia has legislated choice of law rules for the status of foreign corporations, the Foreign Corporations (Application of Laws) Act 1989 (Cth), but that only applies in cases where the matter is to be determined under Australian law.9 Instead the New Zealand choice of law rule will need to be proved. There will be a significant overlap of the matters dealt with in the New Zealand court and the New South Wales court. The Australian decision will bind only the parties in that proceeding. The decision of the Australian decision need not be the same as that given in New Zealand.
[34]Now for the matters under s 24(2)
Places of residence of parties
[35] Edmonton Australia says that it is based in New South Wales and Mrs Addleman lives in England. Neither has any connection with New Zealand, so this favours Australia. That overlooks other parties: Ms Jamieson in New South Wales, and the New Zealand trustee and former trustees, the first, third and fourth defendants. As Edmonton Australia is under Ms Jamieson’s effective control, she need not be treated separately from the company under this head. The other parties are relevant as they stand to be affected if the New Zealand claim against Edmonton Australia is stayed. They may lose any right of recourse against Edmonton in this proceeding if there is a stay and instead have to pursue it separately in Australia while facing a substantial judgment debt in the meantime. It is in their interests to have all matters heard and decided together. New Zealand is a more convenient forum for them. This factor does not favour Australia.
Places of residence of witnesses
[36] So far as Panamanian experts are concerned, it is neither here nor there whether the case is heard in New South Wales or New Zealand. For a hearing in New Zealand there will be evidence from Australian witnesses about the status of Edmonton Australia. Ms Jamieson may give evidence, but she will no doubt be required to give
9 Foreign Corporations (Application of Laws) Act 1989 (Cth), s 7(1).
evidence in New Zealand anyway because of the other claims against her in this proceeding. New Zealand witnesses will need to give evidence as to the dispositions to Edmonton Australia. For a hearing in Australia expert evidence as to New Zealand law may be required. There is no clear pointer one way or another here.
[37] The place of residence of witnesses may be important where witnesses have to travel abroad to give evidence, but there are good prospects that not many witnesses may need to travel. This is a proceeding under Part 18 of the High Court Rules under which evidence is normally by affidavit.10 Witnesses are required to attend court only if they are to be cross-examined. Some evidence may not be contested. Moreover, directions for witnesses to give their evidence remotely are common.11
The place of the subject matter of the proceeding
[38] The subject matter is a New Zealand trust governed by New Zealand law with a New Zealand trustee controlled by Ms Jamieson, an Australian. She is alleged to have preferred herself over the interests of her sister in England. Part of that involved the transfer of trust assets to an alleged non-beneficiary in New South Wales. The connections go both ways. Neither side of the Tasman predominates.
Any agreement about the court or place where matters should be determined
[39] For Mrs Addleman it was submitted that, as the trust is governed by New Zealand law (as the trust deed provides), it was an agreement showing a preference for a New Zealand court. For Edmonton Australia it was submitted that there was no agreement.
[40] In contractual disputes it can be important to distinguish between choice of law clauses and choice of forum clauses. Choice of forum clauses state expressly where a proceeding may (a non-exclusive choice) or must be brought (an exclusive choice). On the other hand a choice of law clause is no more than a pointer to the appropriate jurisdiction to hear a case. This is not a contract case. As Mrs Addleman is saying
10 High Court Rules 2016, r 18.15.
11 Courts (Remote Participation) Act 2010.
that Edmonton Australia is not a beneficiary and is not entitled to take under the trust deed, she can hardly allege that it has agreed to an implied choice of forum under the trust deed. There is no relevant agreement under this head.
The law that it would be most appropriate to apply
[41] The point that Mrs Addleman tried to make has more traction under this head. This is a New Zealand trust governed by New Zealand law. While Ms Jamieson has had effective control, she has not redomiciled the trust to Australia. That reflects an acquiescence at New Zealand law continuing to apply. A New Zealand court is better equipped to decide matters arising under the trust. As Edmonton Australia is an entity also under her control to which dispositions were made, it cannot complain about the application of New Zealand law.
[42] Laws of other jurisdictions will also apply: Panama and Australia. Nothing turns on the application of Panamanian law. A New Zealand court is in just a good a position as the Equity Division to decide questions of Panamanian law.
[43] Australian law is secondary. It will arise only if it is found under Panama’s law that the sociedad anónima emigrated. New Zealand’s Companies Act has clear provisions for redomiciling companies into and out of New Zealand, including for maintaining identity and continuing existence.12 Apparently Australian law is not so straightforward. All the same I would expect there to be a broad measure of agreement between expert Australian lawyers on the relevant aspects of Australia’s corporations law. New Zealand and Australian companies legislation work on similar principles. A New Zealand judge is unlikely to find this aspect challenging.
[44] Equally a judge in the Equity Division will not be challenged by questions of New Zealand trust law. Again expert witnesses can be expected to agree.
[45] This aspect goes in favour of New Zealand as its law governs the trust, but it is not overwhelming.
12 Companies Act 1993, Part 19.
The parties’ financial circumstances
[46] There is no evidence of the parties’ financial circumstances. All the same it would be more expensive for Mrs Addleman to bring two proceedings, one in New Zealand and the other in New South Wales, than to bring one proceeding. Equally, as Ms Jamieson is behind Edmonton Australia, she will appreciate that running cases on both sides of the Tasman will cost her more.
Other relevant matters
[47] The matters considered so far slightly favour New Zealand, but not by much. There is however another matter that counts strongly against a stay. It does not make any sense to have two proceedings, one in New Zealand and the other in Australia, where neither will dispose of all relevant issues. One proceeding is more efficient and more just.
[48] I take up Mr Hikaka’s analogy of a foreign defendant served without leave under r 6.27(2)(h) of the High Court Rules. In a claim against local trustees for breach of trust for disposing trust assets to a non-beneficiary, the foreign non-beneficiary is an obvious person to be made a party to the proceeding so that all relevant questions can be resolved among the beneficiary, the trustees and the recipient. All other things being equal, the foreign recipient will not win a forum non conveniens argument. The same goes for Edmonton Australia.
[49] Running separate proceedings in different jurisdictions risks inconsistent decisions. In Donohue v Armco Inc, the House of Lords overrode an exclusive jurisdiction clause in favour of an English court to make sure that all matters involving a number of parties could be heard together in one hearing. Lord Bingham said:13
It seems to me plain that in a situation of this kind the interests of justice are best served by the submission of the whole dispute to a single tribunal which is best fitted to make a reliable, comprehensive judgment on all the matters in issue. A procedure which permitted the possibility of different conclusions by different tribunals, perhaps made on different evidence, would in my view run directly counter to the interests of justice.
13 Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER 749 at [34].
[50] Running separate proceedings in different jurisdictions over substantially the same matter is wasteful in time and resources and prolongs unnecessary uncertainty. Finality can be better achieved at lower cost with a single proceeding. If considered alone, Edmonton Australia may incur lower costs defending Mrs Addleman’s claim in Sydney instead of in Auckland, but that takes too narrow a view. Ms Jamieson is behind Edmonton Australia. She will still be sued here in New Zealand and will incur New Zealand legal costs in defending Mrs Addleman’s claim in the fourth cause of action. Even for her, it will overall be more efficient if Mrs Addleman’s claims against Ms Jamieson and the entities associated with her are heard together in one place.
Outcome
[51] The purpose of the Trans-Tasman Proceedings Act of streamlining civil proceedings with a trans-Tasman element to reduce costs and improve efficiency will be met by keeping Mrs Addleman’s claim against Edmonton Co Pty Ltd Australia in New Zealand. For this case this court is more convenient than the Equity Division in Sydney.
[52]I dismiss the stay application by Edmonton Co Pty Ltd.
[53] Edmonton Co Pty Ltd will pay costs on the application to Mrs Addleman. If counsel cannot agree costs, memoranda may be filed and I will decide costs on the papers. No costs memoranda should be filed later than 8 October 2021.
[54] Edmonton Co Pty Ltd is to file and serve a statement of defence by 29 October 2021.
[55]Leave is reserved to apply for further directions.
[56] The parties are reminded of Associate Judge Andrew’s direction in paragraph [11] of his minute of 22 June 2021.
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Associate Judge R M Bell
Solicitors:
Bell Gully (Simon Ladd), Auckland, for the Plaintiff
Dyer Whitechurch (Lyn Nicholson), Auckland, for the First and Second Defendants Fee Langstone (Tim Daley), Auckland, for the Third Defendant
Hornabrook Macdonald Lawyers (Andrew Macdonald), Auckland, for the Fourth Defendant Sellar Bone & Partners (Colin Lucas), Newmarket, Auckland, for the Fifth Defendant
Lee Salmon Long (Isaac Hikaka/Josie Beverwijk) Auckland, for the Sixth Defendant
Counsel:
A S Ross QC, Shortland Chambers, Auckland, for the Plaintiff R A Rose, Bankside Chambers, Auckland, for the Plaintiff
D A T Chambers QC, Bankside Chambers, Auckland, for the First and Second Defendants Janna McGuigan Barrister Limited, Christchurch, for the First and Second Defendants Shane Elliott, Blackstone Chambers), Auckland, for the Fourth Defendant
Peter Wright, Shortland Chambers, Auckland, for the Fifth Defendant
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