Clement v Lucas - [2017] NZHC 3278

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-1620 [2017] NZHC 3278

UNDER
Part 18 of the High Court Rules, Sections 51 &

56 Trustee Act 1956, Section 21 Administration Act 1969 and the inherent jurisdiction of the Court

IN THE MATTER

of the CLEMENT FAMILY TRUST and the

Estate of NOLA VALERIE CLEMENT

AND

In an application for the removal and replacement of Trustee and directions as to distribution pursuant to Sections 51 & 68 Trustee Act 1956 and the inherent jurisdiction of the Court. And for removal of Administrator of Estate pursuant to Section 21 Administration Act

1968

BETWEEN

KEITH TREVOR CLEMENT as beneficiary of the CLEMENT FAMILY TRUST and Administrator of the Estate of NOLA VALERIE CLEMENT

Plaintiff

AND

COLIN JAMES LUCAS AND SAMUEL M W BASSETT as Trustees of the CLEMENT FAMILY TRUST

First Defendants …/cont

Hearing: 24-27 and 31 October 2017

Appearances:

G Stringer and C Tuck for Plaintiffs
S Robertson QC and AHH Choi for First Defendants
V Bruton QC and P Brown for Second Defendants
N Woods for Third Defendant

Judgment:

21 December 2017

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 21 December 2017 at 2.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

CLEMENT v LUCAS [2017] NZHC 3278 [21 December 2017]

ANDBRIAN CAMPBELL CLEMENT as beneficiary of the CLEMENT FAMILY TRUST and Administrator of the Estate of NOLA VALERIE CLEMENT
Second Defendant
DERENE WENDY CLEMENT as beneficiary of the CLEMENT FAMILY TRUST and Administrator of the Estate of NOLA VALERIE CLEMENT
Third Defendant

Solicitors: Inder Lynch, Papakura Robert Burton, Papakura Rice Craig, Papakura

Counsel: V Bruton QC, Auckland
S Robertson QC, Auckland

Introduction

[1] This case concerns a family farming enterprise in Hunua, Papakura that was put into a family trust, and decisions made by the trustees on the distribution of trust assets to the children of the settlors of the trust. The case illustrates the difficulties and sadness that can arise when beneficiaries cannot agree on how to give effect to arrangements made by their parents for their own wellbeing and for the protection of the wealth the parents had accumulated over their lifetime. That the beneficiaries in this case are in their late 60s and early 70s and nurse deep grievances about each other only adds to the sadness.

[2] The second defendant, Brian Clement (Brian), challenges a decision of the trustees of the Clement Family Trust (Trust) to sell the assets of the Trust - the farm and homestead - and the trustees’ signalled intention to distribute the proceeds equally among the three beneficiaries of the Trust - Brian, his brother, Keith Clement (Keith), and their sister, Derene Clement (Derene). Brian considers these courses of action, which Keith and Derene support, are not what their parents, Walter Clement (Walter) and Nola Clement (Nola), had in mind when they established the Trust and are at odds with promises made…

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 Clement v Lucas

Details

AGLC: Clement v Lucas [2017] NZHC 3278
Case: [2017] NZHC 3278
Decision Date: 21 December 2017

CaseChat Overview and Summary

The proceeding was brought by Keith Clement, a beneficiary of the Clement Family Trust, and the Administrator of the Estate of Nola Clement, to challenge decisions made by the Trustees of the Trust, namely Colin Lucas and Sam Bennett. The Trustees had decided to sell the Trust assets and distribute the proceeds equally among the three beneficiaries of the Trust. Brian Clement, another beneficiary of the Trust, brought the application challenging those decisions, arguing that they were not in accordance with the purposes of the Trust and the intentions of the Settlors, Walter and Nola Clement. The proceedings also involved a counterclaim by the Trustees seeking orders authorising them to sell the Trust assets and distribute the proceeds equally if the Court found their decisions to be outside their powers. The Court held that the Trustees’ decisions to sell the Trust assets and distribute the proceeds equally should be set aside and that the Trustees should reconsider their decision on the disposal of the Trust assets having regard to the purposes of the Trust and the intentions of the Settlors. The Court declined to make orders for the distribution of the Trust’s assets, noting that the Trustees had not surrendered their discretion to the Court and had not made an application for directions under the Trustees Act. The Court offered observations for the assistance of the Trustees, suggesting that the Trustees need not achieve precise equality among the three siblings but should aim to achieve broad equality between Brian and Keith and ensure appropriate and fair provision is made for Derene. The Court reserved costs, indicating that they should follow the event on a 2B basis and that the parties may file memoranda no more than five pages in length if they could not agree on costs. The Court noted a submission from counsel for Derene that her costs should be met from the proceeds of the sale of trust assets, assuming such a sale takes place, and invited other counsel to comment on this submission if they filed memoranda.

Orders