Buckeridge v Buckeridge
[2015] NZHC 2231
•16 September 2015
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV 2015-454-74 [2015] NZHC 2231
BETWEEN SIMON CRAIG BUCKERIDGE
Applicant
AND
EMMA STEPHANIE BUCKERIDGE, IAN RONALD MCKENZIE AND SHB TRUSTEES LIMITED Respondents
Hearing: 10 September 2015 Counsel:
D I Sheppard for Applicant
No Appearance for RespondentsJudgment:
16 September 2015
JUDGMENT OF BROWN J
[1] In this proceeding the applicant seeks an order that the first-named respondent, Emma Stephanie Buckeridge, be removed as a trustee of the Aerodrome Trust (the Trust). In the alternative, orders are sought either giving directions for the sale of a property owned by the Trust at 152 Aerodrome Road or directing that both the applicant and Ms Buckeridge be removed as trustees of the Trust with the Public Trust being appointed as a replacement trustee.
[2] The applicant also seeks leave to commence the proceeding by way of an originating application under Part 19 of the High Court Rules.
BUCKERIDGE v BUCKERIDGE, MCKENZIE AND SHB TRUSTEES LTD [2015] NZHC 2231 [16 September 2015]
The grounds for the application
[3] The grounds stated in the application are as follows:
2.1The Applicant and the first-named Respondent are trustees of the Trust, along with two independent trustees, the second-named and third-named Respondents.
2.2The Applicant and the first-named Respondent were married, but separated in 2009.
2.3On 18 August 2010 the Family Court at Dannevirke made an order vesting the debt owed by the Trust of $263,712 to the Applicant and the first-named Respondent (“the Debt”), in the Applicant alone.
2.4 The Trust cannot pay the Debt. The Trust is insolvent.
2.5The Trust has an existing mortgage and has no funds from which to pay the mortgage.
2.6The first-named Respondent has failed or refused to respond to any attempts by the Applicant to manage the Trust and/or deal with the Trust property.
2.7It is in the interests of the beneficiaries as a whole that the deadlock between the Applicant and the first-named Respondent be resolved.
Evidence in support of the application
[4] The application is supported by an affidavit of the applicant. He states that by Deed of Trust dated 20 April 2005 he and Ms Buckeridge established the Trust as settlors. There are four trustees: the applicant, Ms Buckeridge, Mr I R McKenzie, a chartered accountant in Dannevirke, and SHB Trustees Ltd, a solicitor’s trustee company. The beneficiaries are the applicant, Ms Buckeridge and their children and grandchildren.
[5] He explains that on 5 May 2005 the Trust purchased bare land at 152
Aeordrome Road, Dannevirke of approximately 1.7 hectares for the sum of $94,000 with the total purchase price being financed by way of a mortgage advance from Westpac Bank. The Trust subsequently built a new house on the property in 2007 which was financed by further borrowings from Westpac and a loan from Mr Buckeridge’s mother of $100,000.
[6] The applicant and Ms Buckeridge separated on 10 November 2009. Mr Buckeridge deposes that it was a bitter separation which resulted in a number of court proceedings including an application under the Care of Children Act for parenting orders, an application under the Domestic Violence Act brought by Ms Buckeridge and an application for division of relationship property.
[7] The relationship property proceedings were determined on a formal proof hearing because Ms Buckeridge did not file any documents opposing the application. The orders made vested all relationship assets and debts in the applicant including the debt owed to Ms Buckeridge and himself from the Trust which at that point in time amounted to $263,712.
[8] Since the orders were made Ms Buckeridge has continued to be a trustee of the Trust and the Aerodrome Road property has remained in the Trust. However the applicant has lived in the property since the orders were made and has paid all expenses associated with the property including rates, insurances and mortgage payments.
[9] Mr Buckeridge deposes that he has no contact with Ms Buckeridge. Indeed he states that they have had no constructive communication since their relationship broke up and that they are unable to discuss anything without argument, let alone matters concerning the Trust and the Aerodrome Road property.
[10] He explains the attempts which have been made to resolve the deadlock between him and Ms Buckeridge. He states that he has tried to talk to her on numerous occasions but she ignores him. On 14 October 2010 he arranged for his solicitor to make formal demand on the trustees for repayment of the sum of
$263,712 and to make an offer at the same time to settle the debt by way of a transfer by the trustees to him of the Aerodrome Road property, subject to his assuming sole liability for and indemnifying the trustees in respect of all existing liabilities. No response to that letter was received from Ms Buckeridge.
[11] On 1 December 2011 Mr McKenzie wrote to Ms Buckeridge suggesting that the other trustees accept Mr Buckeridge’s offer or alternatively resign as trustees with an indemnity from Mr Buckeridge to them. Mr Buckeridge believes that there was no response from Ms Buckeridge to that letter. He deposes to further communications from his solicitors to Ms Buckeridge on 3 October 2014 and
2 June 2015.
[12] He then states:
30.Given the lack of any helpful response from the Respondent to any contact from me or my solicitors to any matter to do with the management or affairs of the Trust or the Aerodrome Property, I feel I have no choice but to issue these proceedings. The Respondent has no interest in anything to do with the Trust. The Trust is deadlocked.
31.I did consider invoking clause 13.1(c) of the Trust Deed which provides that in the event of our marriage being dissolved, the trustees must, at the request of either of them, establish and resettle the Trust fund onto two new Trusts, with one Trust excluding the Respondent as trustee, beneficiary and appointor and the other Trust excluding myself as trustee, beneficiary and appointor. However, I expect the same problem would arise, which is that the Respondent would simply not execute the necessary documentation to give effect to the resettlement.
Decision
[13] The dual source of the jurisdiction of the High Court in the field of trusts is usefully summarised in Clarke v Karaitiana:1
The jurisdiction of the High Court in the field of trusts is both statutory and inherent. The inherent jurisdiction is derived from the Court’s general supervisory powers in equity relating to the supervision of trusts for the welfare of beneficiaries. The inherent jurisdiction of the Court includes the power to enable it to act effectively within its jurisdiction. The Court may exercise its inherent jurisdiction even in respect of matters which are regulated by statute, so long as it can do so without contravening any statutory provision.
[Footnotes omitted]
1 Clarke v Karaitiana [2011] NZCA 154, [2011] NZAR 370 at [38].
[14] The application has been served on Ms Buckeridge but she has taken no steps in the proceeding. That is consistent with the history of the matter since 2010. The evidence in support of the present application clearly demonstrates that the Trust is in a state of deadlock. I consider that it is necessary and desirable that the Court should make an order to resolve that deadlock.
[15] In my view the most appropriate order is the first order sought in the application. I also consider that in the present circumstances there are good grounds for the application being made in the form of an originating application rather than by way of an ordinary proceeding.
[16] Consequently I grant leave under HCR 19.5 for the application to be brought by way of an originating application. I make orders on that application in terms of the draft order removing trustee and ancillary orders as submitted by counsel.
[17] Counsel having advised that the applicant does not seek costs, there will be no order for costs.
Brown J
Solicitors:
Fortune Manning, Lawyers, Auckland
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