Bell v Thomson

[2014] NZHC 724

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2012-454-000178 [2014] NZHC 724

IN THE MATTER OF       the Christine Bell Family Trust

BETWEEN  CHRISTINE BELL Plaintiff

ANDPETER BRYCE THOMSON First Defendant

ANDRICARDO WAYNE SCHWAMM Second Defendant

(Determined on the papers) Appearances:  G A Paine for Plaintiff

P B Thomson (First Defendant) in person
J Tannahill for Second Defendant

Judgment:                9 April 2014

JUDGMENT OF GENDALL J

The litigation

[1]      This litigation concerns a family trust.

[2]      The plaintiff, Ms Bell, settled the trust and is a beneficiary of the trust.

[3]      The first defendant is a solicitor appointed as trustee of the trust.  The second defendant is the other trustee.

[4]      Difficulties arose with the result that the trustees were unable to effectively administer the trust and to wind it up as was appropriately called for.

BELL v THOMSON [2014] NZHC 724 [9 April 2014]

[5]      Ms Bell issued this proceeding to have the second defendant removed as a trustee.

[6]      As a result of a settlement conference in November 2012 a Consent Order was made which appeared to resolve issues in the litigation.  There then arose some taxation issues which for a time precluded implementation of the settlement.

[7]      The parties have now  agreed  the terms of what will be a full and  final resolution.

[8]      The Court is satisfied that the orders to which Ms Bell and Mr Schwamm consent are an appropriate way of proceeding with the winding up of the trust.

[9]      Mr Thomson as the second trustee has confirmed that he abides the Court’s orders in relation to the agreement reached between Ms Bell and Mr Schwamm.  The other potential beneficiaries (adult children and grandchildren) had previously consented to any resolution which was acceptable to Ms Bell (their mother).

Orders

[10]     I order:

(a)      The plaintiff and the first defendant will cause to be sent promptly to the Inland Revenue Department a request for the remission of all or some of the penalties and interest imposed upon the Christine Bell Family Trust (“the Trust”) by the Department;

(b)In the event the request to the Department results in a remission, the remitted funds will fall to be included within the assets of the Trust and will be taken into account in the final distribution to be effected in terms of the following orders;

(c)      The Trust is to be wound up and the trustees making the following payments to the following persons:

(i)By way of payment of professional fees and expenses, and in full and final settlement of all claims the first defendant may have in  relation  to  the  Christine Bell  Family Trust,  a sum equivalent to 33.34 percent of the assets of the Trust, available for final distribution (“the available fund”), upon presentation of a GST invoice by the first defendant;

(ii)By way of final distribution to the plaintiff and to the second defendant the remaining two-thirds of the trust funds to be allocated as to 44.44 percent of the available funds to the first defendant  and  22.22  percent  of  the  available  funds  to  the second defendant.

(d)The proceeding, insofar as the primary relief sought related to the removal of the second defendant as a trustee of the Christine Bell Family Trust, is dismissed.

(e)       There is no order as to costs.

Solicitors:

Opie & Dron, Palmerston North.

Mr P B Thomson, Palmerston North. Langford Law, Wellington.

Gendall J