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Cornes v Hirst

Cornes v Hirst

Case [2023] NZHC 2293 22 August 2023

Breach of Trust

Repudiation & Termination

Removal of Trustees

Appointment of Trustees

Trust Property

Trusts & Equity

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1110

[2023] NZHC 2293

UNDER sections 112 and 114 Trusts Act 2019 and the inherent jurisdiction of the High Court

AND UNDER

Part 19 High Court Rules

IN THE MATTER

of the BELLE STOREY TRUST

BETWEEN

KATHRYN MAY CORNES, GREGORY GRAHAM CORNES, JORDAN WILLIAM CORNES AS BENEFICIARIES OF THE BELLE STOREY TRUST

Applicants

AND

JANETTE JOY HIRST AND CODYMO TRUSTEES NO 2 LIMITED AS

TRUSTEES OF THE BELLE STOREY TRUST

Respondents

On the Papers

Counsel:

M Phillipps for Applicants

A Steele for First Named Respondent Janette Hirst
B P Thomas for Second Named Respondent Codymo Trustees No 2 Limited

Judgment:

22 August 2023

JUDGMENT ISAC J

[Application for removal and appointment of trustees]

CORNES& ORS v HIRST & ANOR AS TRUSTEES OF THE BELLE STOREY TRUST [2023] NZHC 2293
[22 August 2023]

Introduction

[1] The applicants are the beneficiaries of the Belle Storey Trust. They apply by way of originating application for orders removing the current trustees, Ms Jannette Hirst and Codymo Trustees No 2 Limited, and for the appointment of Comac Trustees Limited in their place.

[2] No opposition to the originating application was filed. Helpfully, the parties were able to reach agreement and, in a joint memorandum of 18 August 2023, sought orders in terms of the application, with the costs in the proceedings to be reserved pending agreement between the parties or, failing agreement, to be determined by the Court. In a Minute of 21 August 2023, I made the orders set out at [12](a)–(d) of the memorandum and indicated that a judgment setting out the reasons of my decision would follow. I now provide my reasons.

Jurisdiction

[3]Section 112 of the Trusts Act 2019 provides:

112 Court may make order for removal
Whenever it is necessary or desirable to remove a trustee and it is difficult or impracticable to do so without the assistance of the court, the court may make an order removing a trustee.

[4] Pursuant to s 114 of that Act, whenever it is necessary or desirable to appoint a new trustee, and it is difficult or impracticable to do so without the assistance of the court, the court may make an order appointing a new trustee.

[5] The statutory power exists alongside the court’s power to remove trustees and appoint trustees under its inherent jurisdiction to supervise and intervene in the administration of trusts.1

[6] Recent decisions on s 112 of the Trusts Act indicate that the expression “necessary or desirable” involves a broad fact-specific assessment and is directed to

1 Trusts Act 2019, s 8; Re Setter (as trustees of Central Hawkes Bay Consumers Power Trust) [2021] NZHC 1603 at [36]; Holland (as trustees of the Tauranga Energy Consumer Trust) v Jonkers [2021] NZHC 3469 at [100]–[102]; Ruby v Ruby (as trustees of the A Ruby Trust) [2022] NZHC 282 at [35]–[36]; and Whale v Silich [2022] NZHC 3339 at [19].

ensuring the…

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 Cornes v Hirst

Details

AGLC: Cornes v Hirst [2023] NZHC 2293
Case: [2023] NZHC 2293
Decision Date: 22 August 2023

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, heard an application from the beneficiaries of the Belle Storey Trust against the current trustees, Ms Janette Joy Hirst and Codymo Trustees No 2 Limited, for the removal of the trustees and the appointment of Comac Trustees Limited. The applicants sought orders to replace the existing trustees, and the respondents did not oppose the application. Instead, all parties reached an agreement, which was documented in a joint memorandum. The court granted the orders sought by the applicants, removing the existing trustees and appointing Comac Trustees Limited as the new trustees of the trust. The parties were instructed to agree on the costs of the proceedings, with a deadline set for any disagreements to be resolved by the court.

The court examined the legal grounds for its jurisdiction to remove and appoint trustees under sections 112 and 114 of the Trusts Act 2019 and its inherent jurisdiction to supervise and intervene in the administration of trusts. The court noted that the expression "necessary or desirable" in the Act involves a broad fact-specific assessment to ensure the efficient and proper administration of trusts. The interests of the beneficiaries are central to the exercise of this discretion. The court was satisfied that it was desirable to remove the existing trustees and appoint Comac Trustees Limited in their place, considering the affidavit of Gregory Cornes and the agreement reached by all parties.

The court granted the orders sought by the applicants, which included removing Janette Joy Hirst and Codymo Trustees No 2 Limited as trustees of the Belle Storey Trust and appointing Comac Trustees Limited as the new trustee. The court also vested the trust property, including shares in two properties, in Comac Trustees Limited. The parties were instructed to agree on the costs of the proceedings, with a deadline set for any disagreements to be resolved by the court.

No further orders were made by the court.

Orders