Brown v Johnston

[2020] NZHC 881

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-175

[2020] NZHC 881

IN THE MATTER

of the Where A Wha Kawe Family Trust

AND

IN THE MATTER

of an application to remove a trustee pursuant to section 51 of the Trustee

Act 1956 and for a direction pursuant to s 66 of the Trustee Act 1956

BETWEEN

JENNIFER EVA BROWN

Applicant

AND

TOBY GREGG JOHNSTON

First Respondent

AND

NIGEL WARREN HUGHES

Second Respondent

Hearing:

30 April 2020

(By way of telephone conference)

Counsel:

J I Taylor for the Applicant

Judgment:

1 May 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

(in respect of application for leave to commence proceeding by way of originating application)

This judgment was delivered by me on 1 May 2020 at 2.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 1 May 2020

BROWN v JOHNSTON [2020] NZHC 881 [1 May 2020]

[1]                 The applicant seeks leave to bring this proceeding by way of an originating application. The proceeding seeks the removal of the first respondent as trustee of the Where A Wha Kawe Family Trust (“the Trust”).

[2]It is necessary to set out a brief background.

Background

[3]                 The applicant (“Jennifer”) and the first respondent (“Toby”), along with the second respondent, are the trustees of the Trust.  Jennifer and Toby lived together as a couple from some time in 2008, moved to Wanaka in September 2009, with the Trust buying a property in Wanaka in March 2012.

[4]                 Unfortunately, Jennifer and Toby separated in September 2016 and resolution of relationship property and Trust issues has not been straightforward.

[5]                 Toby commenced Family Court proceedings against Jennifer in March 2018, which proceedings were the subject of a successful settlement conference in December 2018. The settlement conference resulted in orders being made by her Honour Judge Farnan which included that Jennifer would allow Toby to reside in the Wanaka property rent free for six months and after the six month period the Wanaka property would be placed on the market for sale.

[6]                 The order recorded that its terms were in full and final settlement of all relationship property issues and all Trust disputes between the Trust, Toby and Jennifer in their capacity as trustees or beneficiaries of the Trust. The only outstanding issue was in respect of chattels.

[7]                 Following the six month occupation period of the Wanaka property provided for in the order of Judge Farnan, Jennifer called upon Toby to agree to the sale of the property. He has not agreed to the sale of the property and declined to sign a listing agreement.

[8]                 Mr Hughes, who is the independent professional trustee, has endorsed the sale of the Wanaka property, having signed a listing agreement with a recognised real estate firm.

[9]                 It transpires that prior to the settlement conference in December 2018, Toby had filed in the Dunedin High Court, under CIV-2018-412-92, proceedings under the Trustee Act 1956 (“the Act”) seeking the removal of Jennifer as a trustee of the Trust. Jennifer apparently only discovered this when those proceedings were served on her on 27 January 2020. Jennifer, in those proceedings, has applied for summary judgment as a defendant based on the fact that the order of Judge Farnan records that it is in full and final settlement of all Trust issues between the parties.

The present application

[10]Against that background, I turn to the present application.

[11]              The proceeding Jennifer proposes to bring by originating application seeks the removal of Toby  as trustee in order that Jennifer and the second respondent, as     the remaining trustees, can achieve the sale of the Wanaka property.

[12]              Jennifer seeks to utilise the originating application procedure as she says there are no factual disputes and because there are financial pressures relating to the Wanaka property.

[13]              I convened a telephone conference on 30 April 2020 with Mr Taylor, counsel for Jennifer, to address the concerns I had with the application.

[14]              The principal concern I had was that Jennifer was asking the Court to approve the commencement of a separate proceeding in the Christchurch High Court from  the extant proceeding in the Dunedin High Court, when both proceedings concerned the same property, and both would inevitably raise the significance of the Family Court order.

[15]              While I can understand Jennifer wanting to have the issue of the sale of the Wanaka property dealt with promptly, it is not appropriate for there to be two

proceedings in two different Registries concerning the same issues between the same parties.

[16]              Jennifer can achieve what she wants to achieve by filing a counterclaim in the extant proceedings and seeking summary judgment as counterclaim plaintiff.

[17]              As to the question of urgency, it is open to any litigant to seek a telephone conference in respect of a proceeding in which they seek urgency and, if and when,  a counterclaim and application for summary judgment are filed, Jennifer may request that a telephone conference be convened to discuss a timetable that will see the applications dealt with promptly.

Result

[18]              Accordingly, the application to commence the proceeding for the removal of the first respondent, Toby Gregg Johnston, as a trustee by way of an originating application is declined.

Associate Judge Lester

Solicitors:

Wynn Williams, Christchurch