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Brkic v White

Brkic v White

Case [2021] NZCA 670 9 December 2021

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA276/2021
[2021] NZCA 670

BETWEEN	GORDON BRKIC and EMILIA BRKIC AS TRUSTEES OF THE MADEG TRUST Appellants
AND	CAROLINE RUTH WHITE and JOHN SEAKINS WHITE AS TRUSTEES OF THE AWHITU TRUST First Respondents
AND	THE SHERIFF OF THE HIGH COURT AT AUCKLAND Second Respondent

Hearing:	1 November 2021
Court:	Cooper, Duffy and Dunningham JJ
Counsel:	P L Rice for Appellants W C Pyke for First Respondents No appearance for Second Respondent
Judgment:	9 December 2021 at 2.30 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay the first respondents’ costs for a standard appeal on a band A basis, plus usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Dunningham J)

This appeal concerns whether the first-named respondent, Ms Caroline White, has an interest in land registered in her name which is “tantamount to ownership of the land”, such that the appellants can obtain a charging order over the land and sell it to recover a judgment debt owed by Ms White.[1] The first respondents contend that Ms White owns the land not in her personal capacity but as trustee of the Awhitu Trust (the Trust).
[1]This judgment debt is owed by Ms White and Crummer Trustees No.82 Ltd as trustees of the Grafton Road Trust, which is a separate trust independent of the Awhitu Trust.
In the High Court, Woolford J held that this case could be distinguished from the cases Clayton v Clayton and Webb v Webb, which were relied on by the appellants, and Ms White owned the land as a trustee of the Trust.[2] The charging order which the plaintiffs had placed on the land, and the consequential sale order, were set aside.[3]
[2]White v Brkic [2021] NZHC 919 [High Court judgment] at [12]–[16], citing Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29, [2016] 1 NZLR 551; and Webb v Webb [2020] UKPC 22, [2021] 2 NZLR 376.
[3]At [22].
The appellants appeal that decision, saying the High Court erred in holding that the Trust was not an objective nullity and remained on foot as a properly functioning trust.[4] They say Ms White has such power over the trust property that she should be treated as the owner, and the charging order and sale order reinstated.
[4]At [19].
At the outset we note that the fact the charging order has lapsed does not, as the first respondents suggest, mean the appeal is moot. There is no impediment to this Court reinstating that order, if it is otherwise appropriate to do so.

The background facts

The relevant factual background was set out succinctly in Woolford J’s judgment as follows:
[2] On 1 March 2011, Ms White established the Awhitu Trust as settlor in anticipation of purchasing the land. Ms White and Crummer Trustees No.79 Limited were the original trustees. The discretionary beneficiaries are the final beneficiaries and any issue of any…

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 Brkic v White

Details

AGLC: Brkic v White [2021] NZCA 670
Case: [2021] NZCA 670
Decision Date: 9 December 2021 at 2.30 pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand considered an appeal by Gordon and Emilia Brkic against a decision of the High Court that Ms Caroline White was the trustee, not the owner, of a parcel of land registered in her name. The Brkics sought a charging order over the land to recover a judgment debt owed by Ms White. Ms White, as trustee of the Awhitu Trust, argued that she did not own the land personally, but as trustee of the Trust. The High Court agreed with Ms White and set aside the charging order. The Brkics appealed, arguing that the Judge had erred in two ways: (a) he was wrong to conclude that the no self-benefit clause distinguished this case from Clayton v Clayton and (b) he was wrong to view the Trust as a defeasible trust. The Court of Appeal dismissed the appeal, holding that the Judge had not erred in concluding that the Trust was not an objective nullity and remained on foot as a properly functioning trust. The Court held that the no self-benefit clause was a complete answer to the appellants' claim that Ms White's powers were tantamount to ownership. The Court also held that the Judge was correct to consider the Trust to be a defeasible trust, which existed until Ms White exercised her powers to bring it to an end. The appeal was dismissed and the appellants were ordered to pay the first respondents' costs.

Orders