Carmine v Ritchie - [2012] NZHC 1514

JUDGMENT FOR PUBLIC RELEASE: SEE ADDENDUM

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-6375 [2012] NZHC 1514

IN THE MATTER OF a Deed of Trust dated 9 February 2001
AND IN THE MATTER OF the JMC and RA Ritchie Family Trust created by that Deed
AND IN THE MATTER OF a claim under r 18.1(a)(ix) for the determination of a question that arises in
the administration of that Trust, viz whether a Deed of Removal of Trustee signed by the Second Respondent and dated 13
December 2010 is of any, or no effect

BETWEEN VINCENT JOHN CARMINE Plaintiff

ANDANDREW JOHN RITCHIE, RACHEL ANNE RITCHIE AND WARWICK KENT PURDIE AS TRUSTEES OF THE JMC & RA RITCHIE FAMILY TRUST
Defendants

Hearing: 2 April 2012

Appearances: A P Molloy QC and D Spencer for plaintiff
R B Stewart QC and S Gollin for first and second-named defendants
K Davenport for third-named defendant

Judgment: 29 June 2012

JUDGMENT OF GILBERT J

This judgment was delivered by me on 29 June 2012 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date: ………………….

Counsel: A P Molloy QC, Auckland: apmolloyqc@shortlandchambers.co.nz
R B Stewart QC, Auckland: rbstewart@xtra.co.nz
K Davenport, Auckland: kate@katedavenport.co.nz

CARMINE V RITCHIE HC AK CIV 2011-404-6375 [29 June 2012]

Solicitors: Smith & Partners: ilsaad.razak@smithpartners.co.nz

Introduction

[1] This proceeding concerns the validity of the removal of the plaintiff, Mr Carmine, as trustee of the JMC and RA Ritchie Family Trust (the Trust) which was established by John and Rachel Ritchie in 2001. Mr Carmine is a solicitor who previously acted for John and Rachel Ritchie. Following John’s death on
14 July 2010 Rachel changed solicitors and executed a deed dated

14 December 2010 removing Mr Carmine as a trustee. She appointed the third-named defendant, Mr Purdie, in his place.

[2] The Trust’s main asset is a 44.83% shareholding in Ritchie Transport Holdings Limited (the Company). The remaining shares in the Company are held by interests associated with other family members. Mr Carmine claims that the trustees have a duty to commence proceedings under s 174 of the Companies Act 1993 to obtain full value for the trust’s shareholding in the Company. The other trustees do not support such an action being taken.

[3] Mr Carmine considers that his removal as a trustee in these circumstances is contrary to the interests of the Trust and the protection of its assets. He contends that the purported exercise of the power of removal was therefore a nullity with the result that he remains a trustee with an ongoing duty to protect the Trust’s estate. He seeks a direction accordingly.

Background

[4] To set the current dispute in context, it is necessary to trace the background of the Company and its ownership. The Company, now the largest privately-owned bus company in Australasia, was incorporated in 1972 to take over a business that had been started by the late Donald Ritchie, possibly as early as 1937. The business was initially quite…

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 Carmine v Ritchie

Details

AGLC: Carmine v Ritchie [2012] NZHC 1514
Case: [2012] NZHC 1514
Decision Date: 29 June 2012

CaseChat Overview and Summary

The Court was asked to determine the validity of a Deed of Removal of Trustee signed by the Second Respondent and dated 13 December 2010, which purported to remove the plaintiff, Mr Carmine, as trustee of the JMC and RA Ritchie Family Trust. Mr Carmine argued that his removal was contrary to the interests of the Trust and therefore a nullity, and sought a direction accordingly. The defendants argued that the deed of removal was valid and effective according to its terms. The Court held that the powers vested in Rachel to remove and appoint trustees were fiduciary powers, which she exercised in good faith and in the best interests of the beneficiaries. The Court found that Rachel was entitled to remove Mr Carmine as a trustee and did not do so for any improper purpose. The Court rejected Mr Carmine’s claim that his removal was a nullity, and entered judgment for the defendants on the plaintiff’s claim.

Orders