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Cain v Martin

Cain v Martin

Case [2024] NZHC 715 28 March 2024

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2023-442-16

[2024] NZHC 715

BETWEEN
MARY JOSEPHINE MORTON CAIN AND PAUL JAY ATKINSON

Applicants

AND

CLAIRE BERNICE ATKINSON MARTIN, ROBIN WHALLEY AS DIRECTOR OF TOLEMAC TRUSTEES LTD AND ROBIN WHALLEY TOGETHER AS TRUSTEES OF THE TOLEMAC TRUST

Respondents

Hearing:
Further memoranda:

21 November 2023

19 November 2023 and 2 February 2024

Counsel:

G Pearson and M M Gray for Applicants G J Praat for Respondents

Judgment:

28 March 2024

JUDGMENT OF ISAC J

[Interim removal of trustees]

Introduction

[1] This proceeding concerns the administration of the Tolemac Trust, which the late Mr John Atkinson established in 2012 for the benefit of his partner and children.

[2] Unfortunately, nearly four and a half years after Mr Atkinson’s death, his family have been unable to resolve issues relating to his legacy. This has led to the current proceedings, with the applicants, two beneficiaries of the Trust, filing a second set of proceedings against the respondents as its trustees. The applicants seek a range

CAIN & ANOR v MARTIN & ORS [2024] NZHC 715 [28 March 2024]

of substantive orders, including the respondents’ removal as trustees, an account of the Trust’s assets, and judgment requiring the respondents to make good any loss caused by a breach of Trust.

[3] This judgment deals with an interlocutory application by the applicants seeking:

(a)appointment of an interim trustee “and/or suspending the current trustees”; and

(b)a freezing order under r 32.2 of the High Court Rules 2016.

[4] At the conclusion of the hearing on 21 November 2023, I indicated a preliminary view that a new interim trustee replacing Ms Claire Martin would be in the beneficiaries’ best interests. The parties requested time to explore a resolution that would avoid the need for a judgment. I therefore reserved my judgment. On 29 November 2023, counsel for the defendants requested a further 14 days to allow time for resolution. After the parties were unable to reach one, the applicants filed a memorandum on 2 February 2024 seeking judgment.

[5] I have come to the view that an interim order removing one of the trustees, Claire, is appropriate. My reasons follow.

Background

The Trust and its assets

[6] Mr Atkinson had a lifelong passion for the legend of King Arthur. As a successful businessman, he enjoyed spending his time with his partner, Mary Jo, one of the applicants, travelling around the United Kingdom in search of Camelot. His interest in the subject also inspired the name of the Trust at the centre of this case, which is an anagram of Camelot.

[7] Camelot also inspired Mr Atkinson’s choice of investments. Over many years, he collected gold and silver coins. By the time he passed away, he had amassed

significant amounts of gold and silver bullion. Mr Atkinson also nicknamed the properties he wanted to pass on to MJ and his children Camelot West, Camelot City Retreat, Camelot Island Retreat and Camelot Country…

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 Cain v Martin

Details

AGLC: Cain v Martin [2024] NZHC 715
Case: [2024] NZHC 715
Decision Date: 28 March 2024

CaseChat Overview and Summary

This proceeding concerns the administration of the Tolemac Trust, established by the late Mr John Atkinson in 2012. The applicants, two beneficiaries of the Trust, seek the removal of the current trustees and a range of substantive orders, including an account of the Trust’s assets. The current hearing addresses an interlocutory application by the applicants seeking the appointment of an interim trustee and/or suspension of the current trustees, as well as a freezing order. The applicants seek the interim removal of Claire Martin as a trustee of the Tolemac Trust on the basis of concerns about her conduct, including self-dealing, and the trustees' failure to disclose material information to the applicants. The court must decide whether it is necessary and desirable to remove Claire as a trustee, and whether a freezing order is appropriate.

The court found that it was necessary and desirable to remove Claire Martin as a trustee of the Tolemac Trust. The Trust Deed prohibits self-dealing by trustees who are also beneficiaries, and Claire's conduct indicated a lack of understanding of this requirement. Claire had uplifted a significant proportion of the Trust’s bullion, and there was an undisclosed sale of the remaining bullion, followed by a payment of $24,000 to Claire. The court considered the pattern of conduct to be inconsistent with good practice by trustees, and there was a strong likelihood of further litigation and wasted costs if Claire remained trustee. The court dismissed the application for a freezing order as Claire’s removal secured the assets from the risk of dissipation.

The application for an interim order removing Claire Martin as a trustee of the Tolemac Trust is granted. The Public Trust will be appointed in her place, subject to the parties providing memoranda on the appropriate replacement trustee or obtaining Public Trust’s consent. In all other respects, the interlocutory application is dismissed. The court reserves the question of costs, encouraging the parties to focus on a satisfactory final distribution of the Trust assets rather than further litigation.

Orders