Clemett v Clemett - [2021] NZHC 317

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1871

[2021] NZHC 317

UNDER Part 18 of the High Court Rules

IN THE MATTER

of an application for orders under sections 51 and 52 of the Trustee Act and under the

inherent jurisdiction of the High Court

BETWEEN

PATRICIA ANN CLEMETT

Applicant

AND

MALCOLM JAMES CLEMETT

Respondent

Hearing: 24 February 2021

Appearances:

M Phillipps for the Applicant

C F L Godinet for the Respondent

Judgment:

26 February 2021

JUDGMENT OF HINTON J

This judgment was delivered by me on 26 February 2021 at 4:30 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors/Counsel:
Vicki Ammundsen Trust Law Limited, Auckland Henley-Smith Law, Auckland
C F L Godinet, Barrister, Auckland

CLEMETT v CLEMETT [2021] NZHC 317 [26 February 2021]

[1] Mrs Patricia Clemett seeks an order under s 51 of the Trustee Act 1956 removing herself and her husband as trustees of the Howmac Trust; appointing Comac Trustees Limited as a sole trustee; and related orders as set out in her application dated 6 October 2020.

Background

[2] Mr and Mrs Clemett are married but estranged. They live on separate floors in what was their family home.

[3] They settled the Howmac Trust by deed dated 16 February 2000. The trustees were initially the parties, their accountant and their solicitor. The accountant and solicitor have since resigned such that the parties are the sole trustees.

[4] The current beneficiaries of the trust, following the death of Mr Clemett’s parents, are the parties and their three adult children.

[5]Initially the trust functioned well.

[6] In 2004 Mr Clemett was diagnosed with multiple sclerosis, a chronic and debilitating illness which has confined him to a wheelchair but has not affected his mental capacity. It seems that the parties’ relationship has since broken down completely to the point where they do not communicate with each other at all. Mr Clemett refuses to engage on almost any matter to do with the trust except through lawyers.

[7] Mrs Clemett has struggled for some time to sort matters regarding the trust. Mr Clemett seems to wish to retain control but is either unable or unprepared to take any effective action.

[8] As a result, for some years, the trust has been in a complete stalemate and falling into debt. Also Mrs Clemett has faced the considerable stress of staving off demands and making payments to creditors.

[9] The trust assets, being four valuable residential properties, are now in very poor condition. There seems to be no cash in the trust and the parties themselves both receive only modest incomes, in Mr Clemett’s case from a sickness benefit.

[10]The trust assets are:

(a)103 Tanekaha Road, Titirangi CV $1,430,000

(b)105 Tanekaha Road, Titirangi CV $865,000

(c)13 Ewen Street, Ngunguru CV $1,058,000

(d)1929 Ngunguru Road, Ngunguru CV $812,000

103 Tanekaha Road

[11] This is the family home. As noted, it is still occupied by the parties…

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 Clemett v Clemett

Details

AGLC: Clemett v Clemett [2021] NZHC 317
Case: [2021] NZHC 317
Decision Date: 26 February 2021

CaseChat Overview and Summary

The case of Clemett v Clemett involved an application by Patricia Ann Clemett to remove herself and her estranged husband as trustees of the Howmac Trust. The trust, settled in 2000, comprises four valuable residential properties, which have fallen into disrepair due to the breakdown in the relationship between the parties. The primary legal issue was whether the court should grant Patricia Ann Clemett's application to remove herself and her husband as trustees and appoint Comac Trustees Limited as the sole trustee. The court found that Mr Clemett's refusal to cooperate in the conduct of the trust was ample justification for making the orders sought. The court also considered the appropriateness of varying the trust deed to allow for a sole corporate trustee. The court ordered the removal of both Patricia Ann Clemett and Malcolm James Clemett as trustees, the appointment of Comac Trustees Limited as the sole trustee, and the vesting of the trust properties in the new trustee. The court further ordered the variation of the trust deed to allow for a sole corporate trustee. The court also directed that costs be paid out of the trust fund, with Mr Clemett to meet his own legal and related costs.

In summary, the court granted the application and made orders to remove the existing trustees, appoint a new trustee, and vary the trust deed to allow for a sole corporate trustee. The decision was based on the breakdown in the relationship between the parties and the need for active management of the trust assets. The court also directed that costs be paid out of the trust fund, with Mr Clemett to meet his own legal and related costs.

Orders