Barrett v Osborne - [2024] NZHC 1733

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2022-441-000081

[2024] NZHC 1733

BETWEEN
SONJA ASTRID BARRETT

Plaintiff

AND

SILKE NICOLE OSBORNE

First Defendant

THE PUBLIC TRUST as trustee of the Estate of Lothar Herzog

Second Defendant

Hearing: 17-18 June 2024

Counsel:

P Mooney and A Thompson for Plaintiff D Kerr for First Defendant

P Vinnell for Second Defendant

Judgment:

1 July 2024

JUDGMENT OF LANG J

This judgment was delivered by Justice Lang On 1 July 2024 at 10.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:
Mooney & Webb, New Plymouth
Bramwell Bate, Hastings/D Kerr, Barrister, Napier Public Trust, Wellington

BARRETT v OSBORNE [2024] NZHC 1733 [1 July 2024]

[1] This is yet another sad story involving the breakdown of the relationship between siblings caused by an uneven distribution of assets following the death of their parents. One sister, Ms Silke Osborne (Silke), received all the assets owned by a family trust (the trust) whilst the other, Ms Sonja Barrett (Sonja), received nothing. This has led to the present proceeding.

[2] Sonja alleges that her sister and father breached their duties as trustees of the trust. She also alleges that her father breached a fiduciary duty that he owed to her as settlor of the trust when he appointed Silke to receive the only asset owned by the trust. This was a house property situated on the outskirts of Hastings.

Background

[3] Mr Lothar Herzog (Lothar) and his wife, Roswitha (Rita), emigrated to New Zealand in 1985 from West Germany. They brought with them their two daughters, Sonja and Silke. Sonja was born in March 1972 and Silke was born in June 1974.

[4] The family settled in Hawkes Bay, where Lothar set up business in Hastings as a fitter and turner. This enabled him to buy a home for the family in Hastings. A few years later, the family moved to another home on the outskirts of Hastings.

[5] The two girls finished at their schooling in Hastings before they left school to pursue careers working for a fast-food franchise. Both moved from casual work to positions of administrative responsibility within their organisation.

[6] On 8 October 1997, Lothar and Rita formed a family trust and transferred the family home to the trust. It seems that some other investments were also transferred to the trust at that time but there is no evidence as to what subsequently became of these.

[7] Lothar was initially the trustee of the trust along with his solicitor. The solicitor subsequently retired and Silke was appointed as a trustee in his place.

[8] The income beneficiaries of the trust were Lothar, Rita, their two daughters, any children of their daughters born before the death of the survivor of Lothar and Rita, together with such other persons as Lothar and Rita or the survivor of them

nominated in writing. The capital beneficiaries were Sonja and Silke, together with such…

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 Barrett v Osborne

Details

AGLC: Barrett v Osborne [2024] NZHC 1733
Case: [2024] NZHC 1733
Decision Date: 1 July 2024

CaseChat Overview and Summary

The case of Barrett v Osborne involved a dispute between two sisters, Sonja Astrid Barrett and Silke Nicole Osborne, over the distribution of assets from a family trust following the death of their parents, Lothar Herzog and Roswitha Gerlinde Elsbeth Herzog. Sonja alleged that her father and sister breached their duties as trustees of the trust and that her father breached a fiduciary duty when he appointed Silke to receive the sole asset of the trust, a house in Hastings. Sonja's primary claim was that Lothar breached a fiduciary duty in his capacity as the surviving settlor by appointing Silke to receive the trust assets. The court had to determine whether Lothar, in exercising the power given to the settlors under clause 5 of the deed of trust, owed any fiduciary duty to the capital beneficiaries. The court found that Lothar did not owe a fiduciary duty to Sonja as he had the power to appoint either or both of his daughters to receive the trust assets to the exclusion of the other. The court rejected Sonja's argument that a fiduciary duty arose due to the nature of the relationship between her and her father, noting that Sonja's vulnerability arose from the nature of the power given to Lothar under the trust deed rather than the particular nature of their relationship. The court concluded that Sonja's claim based on breach of fiduciary duty could not succeed. Consequently, Sonja's remaining claims, which alleged that Lothar and Silke breached their duties as trustees, also could not succeed as the trustees were bound to give effect to Lothar's appointment of Silke as the sole recipient of the trust assets. The court dismissed Sonja's claims and awarded costs to Silke as the successful party.

Orders