Aitkenhead v Kooperberg - [2017] NZHC 3071

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1955 [2017] NZHC 3071

UNDER
Section 51 of the Trustee Act 1956 and the

Court's inherent jurisdiction

IN THE MATTER

of the Caldan Trust, being a trust settled on 6 April 2006, pursuant to a Deed of Trust executed on that date

BETWEEN

HELEN DENISE AITKENHEAD, NATALIE ELEANOR JONKERS AS TWO OF THE THREE TRUSTEES OF THE CALDAN TRUST

Applicants

AND

PHILLIP LEONARD KOOPERBERG AS THE THIRD TRUSTEE OF THE CALDAN TRUST

First Respondent

NEW ZEALAND TRUSTEE SERVICES LIMITED

Second Respondent

Hearing: On the papers

Appearances:

F N McGeorge for the Applicants
P A Craighead for the First Respondent

Judgment:

11 December 2017

JUDGMENT OF PALMER J

This judgment is delivered by me on 11 December 2017 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

AITKENHEAD & ANOR v KOOPERBERG & ANOR [2017] NZHC 3071 [11 December 2017]

Summary

[1] I appoint New Zealand Trustee Services Ltd (NZ Trustee Services), the second respondent, as trustee in substitution for the applicants and first respondent. NZ Trustee Services will need to assess administration costs for payment. The application should not have been necessary. It was Mr Kooperberg’s defaults which occasioned its costs. I award indemnity costs of the application against Mr Philip Kooperberg, the first respondent, personally.

The Caldan Trust

[2] Ms Helen Aitkenhead, one of the applicants, settled the Caldan Trust (the Trust). The trustees were her, her mother Ms Natalie Jonkers, and, from 2007, her then de facto partner, Mr Kooperberg. The beneficiaries were initially Ms Aitkenhead’s children but she and Mr Kooperberg were added as discretionary beneficiaries. Ms Aitkenhead and Mr Kooperberg are joint appointors and have the power to add and remove trustees.

[3] The assets of the Trust are the proceeds of sale of the home occupied by Ms Aitkenhead and Mr Kooperberg and shares in a company otherwise owned by them, which is being liquidated. There were various lending and gifting transactions between Ms Aitkenhead and Mr Kooperberg and the Trust. Ms Aitkenhead has applied to the Family Court to determine whether the Trust’s debts are relationship property.

This application

[4] In this application Ms Aitkenhead and Ms Jonkers applied:

(a) to remove Mr Kooperberg and, if necessary, themselves as trustees of the Trust;

(b)to appoint NZ Trustee Services as trustee and appoint Ms Aitkenhead as an advisory trustee;

(c) for the costs of the applicants in managing the affairs of the Trust and in making the application be met from the trust fund; and

(d) for costs to be awarded against Mr Kooperberg personally.

[5] Mr Kooperberg consented to NZ Trustee Services being appointed a trustee and to himself being removed as trustee if both applicants were also removed. On that basis, the applicants abandoned the application that Ms Aitkenhead be appointed an advisory trustee. Mr Kooperberg did not oppose the administration costs being paid if he approved…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Aitkenhead v Kooperberg

Details

AGLC: Aitkenhead v Kooperberg [2017] NZHC 3071
Case: [2017] NZHC 3071
Decision Date: 11 December 2017

CaseChat Overview and Summary

In the case of Aitkenhead v Kooperberg, the applicants, Helen Aitkenhead and Natalie Jonkers, sought the removal of Phillip Leonard Kooperberg as a trustee of the Caldan Trust. The dispute involved the administration of the trust and the costs associated with the application. The applicants also sought for the costs to be met by the trust fund and for costs to be awarded against Mr Kooperberg personally. The High Court of New Zealand heard the case on the papers and appointed New Zealand Trustee Services Limited as a substitute trustee for the applicants and the first respondent. The court held that the application should not have been necessary, as it was the defaults of Mr Kooperberg which occasioned the costs. The court ordered Mr Kooperberg to pay the indemnity costs of the application personally.

The legal issues that the court was required to decide were whether the costs of the application should be met from the trust fund and whether costs should be awarded against Mr Kooperberg personally. The court found that the application should not have been necessary, as it was the defaults of Mr Kooperberg which occasioned the costs. The court held that the Trust fund should not meet the costs of the application and that Mr Kooperberg should do so personally. The court also held that costs could be awarded against trustees personally where it appears their own deficiencies have been the cause of loss to the estate.

The court's reasoning was based on the grounds that the application should not have been necessary, as it was the defaults of Mr Kooperberg which occasioned the costs. The court held that the Trust fund should not meet the costs of the application and that Mr Kooperberg should do so personally. The court also held that costs could be awarded against trustees personally where it appears their own deficiencies have been the cause of loss to the estate. The court found that Mr Kooperberg had been reluctant to enter into any agreements and did not really explain why, other than to say he had misunderstood the legal situation and that Ms Aitkenhead had an accounting background and he did not.

The final orders of the court were that New Zealand Trustee Services Limited be appointed as trustee in substitution for the applicants and the first respondent, and that Mr Kooperberg be ordered to pay the indemnity costs of the application personally. The court also ordered that NZ Trustee Services assess the administration costs for payment and that the application should not have been necessary, as it was Mr Kooperberg's defaults which occasioned its costs.

Orders