Ballantyne v Ballantyne
[2021] NZHC 1190
•26 May 2021
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2020-419-000310
[2021] NZHC 1190
BETWEEN EUGENIA JOCELYN BALLANTYNE AND WALLACE ROTOHIKO JONES AS TRUSTEES OF THE TUNKU FAMILY
TRUST
ApplicantsAND
ANTHONY BALLANTYNE AS TRUSTEE OF THE TUNKU FAMILY TRUST
Respondent
Hearing: 30 March 2021 Appearances:
D O O’Neill & H J Mills for Applicants Respondent in person (via AVL)
Judgment:
26 May 2021
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 26 May 2021 at 3:00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
North End Law, Hamilton
BALLANTYNE & ANOR v BALLANTYNE AS TRUSTEE OF THE TUNKU FAMILY TRUST [2021] NZHC 1190 [26 May 2021]
Introduction
[1] Eugenia Ballantyne (Mrs Ballantyne) and Wallace Jones (together, the applicants) apply under Part 18 of the High Court Rules 2016 (HCR) for orders under the Trustee Act 1956 (the Act). The applicants seek to:
(a)Remove Mr Anthony Ballantyne (the respondent), as a trustee of the Tunku Family Trust (the Trust);
(b)Vest the trust property in the continuing trustees of the Trust; and
(c)Authorise the following transactions:
(i)Distribute 66 MacDonald Road, Hamilton (the Hamilton Property) to Mrs Ballantyne;
(ii)Sell 202 Achilles Avenue, Whangamata (the Whangamata Property);
(iii)Make an adjustment payment to Mrs Ballantyne;
(iv)Pay rates arrears and penalties from the respondent’s share;
(v)Determine the issue of costs, including who pays the cost of legal fees, valuation costs and the real estate agent’s commission; and
(vi)Distribute the balance to the respondent.
[2] Mr Ballantyne opposes the applicants’ application to remove him as a trustee of the Trust. He agrees to the sale of the Whangamata and Hamilton properties. However, he says he will abide the decision of this Court on the issues.
Background
[3]The Trust’s assets comprise:
(a)The Hamilton Property, valued at $750,000; and
(b)The Whangamata Property, valued between $1,050,000 to $1,500,000 (the recommended listing price for sale is $1,190,000) (together, the Trust Property).
[4] Mr and Mrs Ballantyne were married on 26 September 1975. They have four adult children and three grandchildren. They separated on 3 November 2004 and their marriage was dissolved on 15 January 2007. When they separated, they agreed that Mr Ballantyne would live at the Trust’s property at Whangamata and that Mrs Ballantyne would live at the Hamilton property.
[5] The Trust was established by a deed dated 1 September 1998. The settlors of the Trust were Mrs Ballantyne and the respondent. Together with Mr Wallace Jones both are also the trustees of the Trust. The discretionary beneficiaries of the Trust are Mrs Ballantyne and Mr Ballantyne, their children and grandchildren, and other persons, corporations, trusts or entities as may be determined by the trustees. The trust deed states that the trustees are to pay or apply the income and capital of the trust in their absolute discretion at any time before the date of distribution towards the maintenance, education, advancement wellbeing or benefit in any way of the discretionary beneficiaries.
[6] As at 30 June 2021, the Trust owes the Thames-Coromandel District Council (TCDC) $21,957.71 in rates arrears and $3,983.67 to the Waikato Regional Council for rates in relation to the Whangamata Property.
[7] Mr Ballantyne was convicted of one charge of murder in 2016 and sentenced to life imprisonment with a minimum non-parole period of 10 years’ imprisonment. Shortly after his conviction and imprisonment, he was asked to resign as a trustee by Mrs Ballantyne’s solicitors. Mrs Ballantyne states that shortly after Mr Ballantyne was convicted he agreed to being removed as a trustee but said that he was unable to meet the formal requirements regarding the execution of the necessary documents. Since that time despite a considerable amount of correspondence sent to him by
Mrs Ballantyne’s solicitors regarding his removal as a trustee, he has continued to refuse to sign the necessary documents.
[8] During the period since his imprisonment, the respondent has failed to pay the TCDC rates and the Waikato Regional Council rates on the Whangamata property leading to the TCDC threatening to sell the property to recover the outstanding rates and accrued penalties. Mrs Ballantyne and Mr Jones claim that over the time since the respondent was sentenced and imprisoned, further difficulties have arisen in regard to the operation of the Trust. In particular difficulties have arisen in relation to making arrangements to sell the Trust Property for the benefit of the beneficiaries of the Trust because Mr Ballantyne is in prison.
[9] Mr O’Neill, for the applicants, notes that the applicants also seek orders of the Court allocating responsibility between the applicants and Mr Ballantyne for legal fees, court filing fees, valuation costs, insurance and the real estate agent’s commission.
[10] Mrs Ballantyne presently meets her day-to-day expenses using her superannuation fund, which she has done for approximately 10 years. When she and the respondent separated, they did not have any financial liabilities. She has, however, taken out a loan to fund the current proceeding.
[11] The respondent was declared bankrupt before he was sentenced to prison for murder. He had not worked for approximately 16 years prior to being sentenced. Before his sentence of imprisonment, the respondent met his day-to-day living expenses using sale proceeds from a property owned by the Jinky Trust. He also used the proceeds of sale from a marina berth in Whangamata, and from an insurance settlement.
Issues
[12]There are four main issues:
(a)Whether the respondent should be removed as a trustee;
(b)Whether the Trust Property should be vested in the continuing trustees;
(c)Whether the Court should order certain directions concerning property subject to the Trust and what those orders should be; and
(d)The costs order, and allocation of responsibility for meeting costs and expenses as between the parties.
Law
[13] Section 51 of the Act provides the Court with the power to remove a trustee if the Court appoints a new trustee. It provides:
51 Power of Court to appoint new trustees
(1)The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult or impracticable so to do without the assistance of the Court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.
[14] The Court also has an inherent jurisdiction to control a trust, including removing trustees in the exercise of its discretion.1
[15] In Harsant v Menzies, Ellis J said the term “expediency” as used in s 51 of the Act is:2
…a lower threshold than necessity and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty or unfitness is not required to be established.
[16] Justice Ellis noted the intensely discretionary nature of the jurisdiction and that the particular circumstances of the case are important. The guiding principles for the Court to consider being:3
1 Letterstedt v Broers (1884) 9 App Cas 371 (PC); Miller v Cameron (1936) 54 CLR 572 [1936] HCA 13; Wallace v Naknok [2012] NZHC 382 at [7]–[8] and Hunter v Hunter [1938] NZLR 520 (CA) affirmed in Powell v Powell [2015] NZCA 133 at [47].
2 Harsant v Menzies [2012] NZHC 3390 at [55].
3 Harsant v Menzies, above n 3, at [57].
(a)the Court’s duty to see estates and trusts properly administered and trusts properly executed;
(b)the wishes of the testator or settlor, as evident by their appointment of a particular executor or trustee, are to be given considerable weight;
(c)the welfare of the beneficiaries is the “litmus” test; and
(d)hostility between trustees and beneficiaries is not by and of itself, a reason for removal. Such hostility only assumes relevance when it risks prejudicing the interests of beneficiaries.
[17] Section 52 of the Act empowers the Court to make a vesting order in respect of property where the Court has appointed a trustee. The Court also has an inherent jurisdiction to make orders “where it is necessary for the welfare and benefit of the beneficiaries of the trust property”.4
[18] Subject to any contrary intention expressed in the instrument creating the trust, and where it is inexpedient or difficult or impracticable to do so without the assistance of the Court, the Court also has the power to authorise any sale, expenditure or other transaction that is expedient in the management or administration of any property vested in a trustee or which would be in the best interests of the persons beneficially interested under the trust.5
[19] In Equity and Trusts in New Zealand, Andrew Butler comments that the purpose of s 64 is to ensure that trust property is managed as advantageously as possible in the interests of the beneficiaries.6
4 Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) at [5.2.8(3)] citing Letterstedt v Broers; and Hunter v Hunter, above n 1; and Miller v Cameron, above n 1.
5 Trusts Act 1956, s 64.
6 Butler, above n 4, at [9.5.1(2)].
Submissions
The applicants’ submissions
[20] Mr O’Neill submits that Mr Ballantyne is endangering the Trust Property. He points to two prior occasions on which Mr Ballantyne has not honoured requests from the trust’s solicitor, Ms Nunn, to sell the Whangamata property. He says that Mr Ballantyne was responsible for paying the rates of the Whangamata Property while he was living there. However, he failed to pay the rates, which caused rates arrears and accrued penalties. Mr O’Neill adds that Mr Ballantyne has been unable to manage his affairs since he has been in prison, and that as a consequence, the property is now on the verge of being sold by the TCDC to enforce and recover the rates arrears and accrued penalties.
[21] At the hearing, in addition to relying on an affidavit sworn by Ms Nunn, the applicants also adduced evidence from her regarding her communications with Mr Ballantyne since he has been in prison. She also discussed the steps she is required to undertake to comply with the requirements of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) and Land Information New Zealand (LINZ). In the AML/CFT process, Ms Nunn stated that it is difficult to communicate with Mr Ballantyne in prison and arrange to get documents executed. She said that on two occasions, Mr Ballantyne refused to execute documents required in relation to the sale of the Whangamata property to get the outstanding rates paid in order to avoid a ratings sale. She said it is also difficult to arrange the identification requirements necessary to have authorisation documents witnessed.
[22] Ms Nunn said that further difficulties also arise in relation to Mr Ballantyne’s identification under the LINZ requirements and criteria. She explains the execution of the documents requires a witness such as a Judge, Justice of the Peace or a solicitor. Ms Nunn says that once sold, properties usually settle within a few weeks of sale, and therefore obtaining execution of the necessary documents to effect settlement of a sale is likely to be difficult because Mr Ballantyne is in prison. Ms Nunn is also concerned at the prospect of a default by the trustees on the sale contract if Mr Ballantyne remains as a trustee of the Trust as the Trust’s solicitors will need to consult with him on a regular basis regarding decisions about the sale of the Whangamata property. She adds
that a further difficulty that arises with Mr Ballantyne being in prison is that email attachments are restricted. In any event says Ms Nunn, Mr Ballantyne has not been cooperative regarding the signing of documents in the past and has not assisted in making decisions about the property for three years.
[23] Mr O’Neill submits it is in the best interests of all the beneficiaries if Mr Ballantyne is now removed as a trustee because the Trust can be properly managed, the Whangamata Property can be sold, and the trust property can be distributed. He says that it is not only expedient, but also necessary for Mr Ballantyne to be removed as trustee from the Trust.
[24] Mr O’Neill further submits that as well as making an order removing the respondent as a trustee, the Court should also use its inherent jurisdiction to vest the Whangamata Property and the Hamilton Property in the continuing trustees of the Trust. He says that such a vesting order will not affect Mr Ballantyne’s entitlements under the Trust,7 and that a vesting order is in the best interests of all the beneficiaries.
[25] Mr O’Neill accordingly submits that the Court should exercise its power under s 64 of the Act to authorise the continuing trustees to:
(a)sell the Whangamata Property;
(b)distribute the Hamilton Property to Mrs Ballantyne;
(c)make an adjustment payment to Mrs Ballantyne, being a half share in the difference in values between the Hamilton and Whangamata properties once the sale price of the Whangamata Property is known and settlement of the sale effected;
(d)pay all outstanding Trust liabilities and determine where those payments are to come from;
7 Docherty v Docherty [2013] NZHC 1885 at [29]–[30].
(e)distribute the balance of the sale proceeds of the Whangamata Property to Mr Ballantyne’s nominated bank account; and
(f)wind up the Trust.
[26] Mr O’Neill says the court orders sought by the applicants are expedient and are in the best interests of all the beneficiaries of the Trust.
[27] In regard to costs, Mr O’Neill submits that the Trust should meet the costs of the real estate agents’ commission on the sale of the Whangamata Property. He submits that Mr Ballantyne should meet the total of the outstanding rates arrears and penalties on the Whangamata Property together with the costs as awarded by the Court and the valuation fees for the property. He says that if Mr Ballantyne pays these costs, Mrs Ballantyne’s share of the proceeds will remain intact. However, if the Court finds the Trust should pay the costs, then Mrs Ballantyne’s share of the fund will be affected and reduced. Mr O’Neill says that Mr Ballantyne should also pay at least half of the applicants’ counsel’s fee and half the solicitors’ fees. He says the Court should allocate the remaining costs according to its discretion.
The respondent’s submissions
[28] Initially, Mr Ballantyne opposed the applicants’ claim to remove him as trustee of the Trust. He said that “since day one” he had not been opposed to the sale of the Whangamata Property. However at the conclusion of the hearing, Mr Ballantyne agreed that it was appropriate for the Court to remove him as trustee of the Trust to enable the sale of the Whangamata Property to take place without the complications and practical difficulties posed by him being in prison. He said that once the sale had been effected, the continuing trustees could appoint him again.
[29] In reply to Mr O’Neill’s submission that it had been difficult organising the sale of the Whangamata Property because of the respondent’s lack of cooperation, Mr Ballantyne says that he told North End Law in 2018 that he did not take issue with the Whangamata property being sold. However, he did oppose the trustees’ request that he be removed as a trustee of the Trust, and that was why he did not sign the documents. During the hearing, Mr Ballantyne said he agreed to Mrs Ballantyne
receiving the Hamilton Property. He also agreed with the proposition that Mrs Ballantyne receive 50 per cent of the sale proceeds of the Whangamata Property following the deduction of the sale costs. He said he will transfer the remaining funds that he is to receive from the Trust to a new Trust.
[30] Mr Ballantyne says he is happy to split the costs of legal fees, and the costs involved in selling the Whangamata Property equally between himself and Mrs Ballantyne.
Analysis
[31] I now turn to consider whether Mr Ballantyne should be removed as a trustee of the Trust; whether the Trust Property should be vested in Mrs Ballantyne and Mr Jones and the other continuing trustees; whether the Court should order certain directions concerning property subject to the Trust; and what the costs should be.
Removal of Mr Ballantyne as a trustee
[32] The first issue is whether the Trust can operate expediently and in the best interests of all beneficiaries while Mr Ballantyne remains a trustee. Mr O’Neill claims the Trust cannot operate in the best interests of the beneficiaries if Mr Ballantyne is a trustee. While Mr Ballantyne acknowledges the difficulties that the applicants have encountered, he says that he can carry out his duties as a trustee notwithstanding that he is in prison.
[33] Section 51 of the Act is not engaged here because the applicants have not applied to appoint a trustee in place of Mr Ballantyne.8 However, the Court has inherent jurisdiction to control a Trust which includes removing a trustee. As Peters J stated in Thurston v Thurston, there is no dispute that this jurisdiction exists.9 The situations that warrant the exercise of the Court’s inherent jurisdiction to control a Trust are when the acts or omissions of a trustee endanger the trust property, are dishonest, or the trustee does not demonstrate capacity to fulfil its duties.10 The
8 Thurston v Thurston [2013] NZHC 1886 at [6].
9 At [7].
10 Letterstedt v Broers, above n 1, at 385–386.
Court’s inherent jurisdiction to control a trust is related to its overall role to ensure the proper execution of trusts.11
[34] Mr Ballantyne’s conviction for murder does not of itself warrant the exercise of the Court’s inherent jurisdiction. However, his lack of cooperation with the Trust’s solicitor Ms Nunn and with the applicants, his failure to pay rates on the Whangamata Property leading to the threat of a rates sale, and his inability to effectively and efficiently carry out his duties as a trustee, are the reasons I find the Court’s inherent jurisdiction to control the Trust is engaged.
[35] Mr Ballantyne is endangering the Trust Property by refusing to sign documents relating to the sale of the Whangamata Property and by resisting removal as a trustee. Most significantly, the welfare of the beneficiaries is jeopardised if Mr Ballantyne remains a trustee. If Mr Ballantyne remains as a trustee, the continuing trustees will be unable to operate the Trust properly and expediently. The Trust Property is at risk of losing further value while costs escalate. The rates arrears for the Whangamata Property reduce the distribution to the beneficiaries. The TCDC has held off proceeding with a forced sale of the Whangamata Property for the past three years while Mr Ballantyne refused to sign sale documents. Therefore, the TCDC could proceed to conduct a sale if the delays in the sale process continue. Mr Ballantyne has not acted in the best interests of the beneficiaries – including himself – by refusing to cooperate with the other trustees of the Trust in the sale of the Whangamata Property.
[36] Moreover, as Mr Ballantyne is himself a beneficiary of the Trust, he retains his interest in the Trust Property. Removing him as a trustee does not change his interest or rights as a beneficiary.12 Rather, he is relieved of the obligations on trustees to act in the best interests of the beneficiaries and to adhere to the terms of the trust.
[37] Importantly, at the hearing, Mr Ballantyne accepted that in the circumstances the Court could remove him as a trustee; order the sale of the Whangamata property; and order that the proceeds are divided so as to finalise a division of property between Mrs Ballantyne and himself.
11 At 386.
12 Docherty v Docherty, above n 7, at [29]–[30].
[38] In the circumstances, I am satisfied that it is appropriate to exercise the Court’s inherent jurisdiction to control the Trust and to remove Mr Ballantyne as a trustee of the Trust.
Vesting Trust Property in the Continuing Trustees
[39] The applicants also seek a vesting order for the Hamilton Property and the Whangamata Property in the names of the continuing trustees. The applicants rely on the Court’s inherent jurisdiction because s 52 does not apply to these circumstances. Mr Ballantyne does not oppose the decision to sell the Whangamata Property or vest the Trust Property in the continuing trustees.
[40] I agree that s 52 of the Act does not apply to this situation, as the applicants have not sought to appoint a trustee to replace Mr Ballantyne. The Court’s inherent jurisdiction operates to enable the Court to act in the best interests of the beneficiaries. As the Court will remove Mr Ballantyne as trustee of the Trust, it is in the best interests of the beneficiaries for the Court to make a vesting order to vest the Trust Property in the names of the continuing trustees. That will enable the trustees to proceed to effect the expedient sale of the Whangamata Property and distribute the sale proceeds to the beneficiaries. Vesting the Trust Property in the names of the continuing trustees will not affect the beneficiaries’ entitlements under the Trust, and will enhance the welfare of the beneficiaries, including Mr Ballantyne.
[41] Both parties agree to the making of a vesting order, and for the reasons above, I make a vesting order vesting the Trust Property in the continuing trustees.
Directions regarding the Trust Property
[42] The applicants seek the Court’s authority for the proposed actions referred to above at [25]. Mr Ballantyne does not oppose the making of the authorisations sought by the applicants. Pursuant to s 64 of the Act, the Court has the power to authorise dealings with trust property. The Court has inherent jurisdiction to vest the Hamilton Property in the continuing trustees.
Sale of the Whangamata Property
[43] It is in the best interests of the beneficiaries of the trust for Mrs Ballantyne and Mr Ballantyne to effect a final division of their assets, including those presently held for them by the Trust. The sale of the Whangamata Property will enable that to be achieved and also ensure the outstanding rates are repaid to the TCDC. It will prevent a forced sale by the TCDC and the risk of a diminished sale price. I am satisfied that a sale of the Whangamata Property is in the interests of the beneficiaries and that it is inexpedient or difficult to effect the sale without the assistance of the Court.
[44] I accordingly make an order authorising the continuing trustees to effect a sale of the Whangamata Property.
Distribution to Mrs Ballantyne
[45] To further implement an equal division of the assets of the Trust between Mrs Ballantyne and Mr Ballantyne, the applicants seek an order authorising the continuing trustees to distribute and transfer the Hamilton Property to Mrs Ballantyne, and make an adjustment payment to her of half of the difference in value of the Hamilton Property (valued at $750,000) and the net proceeds of sale derived from selling the Whangamata Property.13 In other words, the applicants seek the Court’s authorisation to make a payment to Mrs Ballantyne from the net proceeds of sale of the Whangamata property, which would result in her receiving a half-share of the combined value of the Hamilton property ($750,000) and the net proceeds from the sale of the Whangamata property (being the sale price less real estate agent’s commission and the direct costs of sale including legal fees incurred in relation to the sale transaction).
[46] While the objective of Mrs Ballantyne and Mr Ballantyne receiving an equal distribution of the value of the Trust Property is appropriate and equitable, the distribution of the net proceeds of sale of the Whangamata property cannot however
13 The net sale price for the Whangamata Property is the sale price less the real estate agents’ sales commission, and less half of the Trust’s solicitor’s fees in relation to the sale and settlement of the sale.
be made without regard to the Trust’s obligation to pay the solicitors and counsels fees14 and any other liabilities of the Trust.
[47] Accordingly, I make an order authorising the continuing trustees to make the adjustment payment to Ms Ballantyne from the net proceeds of sale of the Whangamata property subject to and after making payment of any other liabilities of the Trust.
Responsibility for payment of rates and valuation fees
[48] The applicants also seek the Court’s authorisation to deduct the amounts required to pay the outstanding TCDC rates and the Waikato Regional Council rates in relation to the Whangamata Property from Mr Ballantyne’s share of the proceeds of sale of the Whangamata Property. Mr Ballantyne accepts that he is responsible for the arrears of rates and penalties accrued during the period that he occupied the Whangamata Property and since his conviction and imprisonment to the present.
[49] The applicants also seek an order of the Court authorising the continuing trustees to deduct the whole of the amount of the valuation fees incurred in relation to obtaining a registered valuation of the Hamilton Property from the respondent’s share of the net proceeds of sale of the Whangamata Property.15 However, I do not consider that this cost should be borne solely by Mr Ballantyne. It was equally in Mrs Ballantyne’s interests to obtain a registered valuation of the Hamilton Property so as to determine the respective interests of herself and Mr Ballantyne.
[50] I accordingly direct that the cost of obtaining the Hamilton Property valuation from SGHU Valuations LP is met from the assets of the Trust, and not solely from Mr Ballantyne’s share of the net proceeds following the sale of the Whangamata Property.
14 As detailed in exhibit “C” attached to Mrs Ballantyne’s affidavit.
15 $2040 plus GST and disbursements. Mrs Ballantyne affidavit (30 March 2021), exhibit “C”.
Responsibility for payment of solicitors’ and counsel’s fees
[51] The applicants also seek the Court’s authorisation to deduct the whole of the amount of the legal fees (including counsel’s fees) incurred by the Trust in relation to these proceedings. Mr O’Neill says that were the Court to authorise the continuing trustees to deduct the whole of the actual amount of the solicitors’ fees,16 and Mr O’Neill’s counsel’s fees,17 then that would ensure that the adjustment amount Mrs Ballantyne receives from the Trust from the sale proceeds of the Whangamata Property will not be reduced by reason of the Trust assets being used to meet those legal costs. Mr O’Neill submits that if it was not for Mr Ballantyne’s inability or refusal to pay the rates and his refusal to deal with the Trust property in a timely and expedient manner, these proceedings would not have been necessary. Mr O’Neill also notes that Mrs Ballantyne was forced to borrow money to meet the cost of obtaining legal advice and bringing the proceedings. He submits that Mr Ballantyne should at least pay counsel’s fees and half of the Trust’s solicitors’ fees from his share of the proceeds of the sale of the Whangamata Property.
[52] However, I do not consider that it is appropriate for the Court to make an order, which would have the effect of making Mr Ballantyne responsible for meeting the actual solicitor/client costs and counsel’s fees incurred by Mrs Ballantyne and the applicants in relation to their previous and present dealings. The issue of responsibility for legal costs relating to this application will be determined by an order for costs that this Court will make following the receipt of costs memorandum and submissions from the parties. I set out the details regarding the costs award below at [59].
[53] I accordingly decline to make an order authorising the applicants to deduct from funds to be distributed to Mr Ballantyne any legal costs either they or Mrs Ballantyne have incurred that are not related to the present application. The only legal costs that the continuing trustees shall be authorised to deduct from monies that they distribute to Mr Ballantyne will be the costs of this proceeding to be determined
16 Estimated $25,000 plus GST and disbursements. Mrs Ballantyne affidavit (30 March 2021), exhibit “C”.
17 Estimated $30,000 plus GST and disbursements. Mrs Ballantyne affidavit (30 March 2021), exhibit “C”.
following delivery of this judgment and in accordance with my directions which follow.
[54] I accept that Mr Ballantyne’s actions in opposing this application have contributed unnecessarily to the time and expense incurred by the applicants in bringing this application, preparing for the hearing and conducting the hearing. However, these are matters relevant to the Court fixing the applicants’ award of costs in relation to this application and are not such as would warrant the Court making an order authorising the continuing trustees to deduct the whole or even half of the legal fees incurred by Mrs Ballantyne and the trustees in relation to their dealings with the respondent over the trust and the Trust Property.
[55] Should an order for costs be made against Mr Ballantyne, the continuing trustees shall be authorised to deduct the whole of the amount of the costs and disbursements he is ordered to pay from the sum to be distributed to Mr Ballantyne.
Result and orders
[56] The applicants have succeeded in their application seeking the removal of Mr Ballantyne as a trustee of the Tunku Family Trust and for the Court to make the orders outlined in [25].
[57]I accordingly make the following orders:
(a)An order that Mr Anthony Ballantyne be removed as a trustee of the Tunku Family Trust;
(b)An order vesting the Trust Property (being the Whangamata Property and the Hamilton Property) in the names of the continuing trustees of the Trust;
(c)An order authorising the continuing trustees to distribute the Hamilton Property to Mrs Ballantyne.
(d)An order authorising the continuing trustees of the Trust to sell the property at 22 Achilles Avenue, Whangamata.
(e)An order authorising the continuing trustees, to make an adjustment payment to Mrs Ballantyne from the net proceeds of sale of the Whangamata property, which would result in her receiving a half-share of the combined value of the Hamilton property ($750,000) and the net proceeds from the sale of the Whangamata property (being the sale price less real estate agent’s commission and the direct costs of sale including legal fees incurred in relation to the sale transaction). The amount of the adjustment payment to Mrs Ballantyne is subject to any other liabilities of the Trust, such as the payment of legal fees or other liabilities, which would be borne equally by and deducted from the distributions to be made to Mrs Ballantyne and Mr Ballantyne.
(f)An order authorising the continuing trustees to deduct and pay from Mr Ballantyne’s share of the net proceeds of sale of the Whangamata Property all arrears of rates payable to the Thames-Coromandel District Council and to the Waikato Regional Council.
Costs
[58] As the applicants are the successful party, they are prima facie entitled to an award of costs against Mr Ballantyne.18
[59] I make an order reserving costs. I direct the applicants to file and serve a costs memorandum detailing their claim for costs by 5.00 pm on 10 June 2021. I direct the respondent to file and serve his memorandum in reply to the applicants’ costs memorandum by 5.00 pm on 17 June 2021. The costs memoranda are not to exceed three pages in length excluding the intituling page and excluding any schedule of costs and annexures related to disbursements. Upon receipt of the costs memoranda, I shall determine the costs to be awarded to the applicants on the papers.
18 High Court Rules, r 14.2(1)(a).
Leave to apply for directions
[60] I reserve leave to the parties to apply for further directions and/or orders necessary for the implementation of the orders made in this judgment.
Paul Davison J
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