Daniel v Cundall - [2020] NZHC 1590

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-3033

[2020] NZHC 1590

UNDER Section 51 Trustee Act 1956 and Part 18 High Court Rules

IN THE MATTER

of a trust settled by CH and JD Cundall under a certain Deed of Trust dated 13 September 1991 (the “trust”).

AND

IN THE MATTER

of an application to replace the defendant as a trustee

BETWEEN

DAVID GLOSTER DANIEL

Plaintiff

AND

STEPHEN BRUCE CUNDALL

Defendant

Hearing: 4 February and 14 and 15 October 2019

Appearances:

R O Parmenter for Plaintiff L Ponniah for Defendant

Judgment:

6 July 2020

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 6 July 2020 at 4.30 pm pursuant to r 11.5 of the High Court Rules

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

DANIEL v CUNDALL [2020] NZHC 1590 [6 July 2020]

[1] The plaintiff and defendant (“Mr Daniel” and “Mr Cundall”) are the trustees of a trust settled by Mr Cundall’s parents, Mr and Mrs C & J Cundall, in 1991 (“trust”). Mr Cundall and Mr Daniel are also the executors and trustees of the estate of Mrs Cundall (“estate”). Mr Daniel was Mr and Mrs Cundall’s family solicitor and, for many years, a partner in Daniel Overton & Goulding, solicitors of Auckland (“Daniel Overton”).

[2] Each trustee seeks an order removing the other, and the appointment of Mr Timothy Grant Livingstone, an experienced chartered accountant, in substitution.

[3] The orders are sought pursuant to s 51 Trustee Act 1956 (“Act”), the relevant part of which provides:

51 Power of court to appoint new trustees

(1)The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

…

[4] The Court also has inherent jurisdiction to remove a trustee. In either case, whether proceeding under s 51 or in the exercise of inherent jurisdiction, such an order is made to ensure the proper execution of the trust in the interests of the beneficiaries.

[5] There is no dispute either or both of the trustees must be removed. For reasons given below, I propose to substitute Mr Livingstone in place of Mr Cundall, so that from hereon the trustees will be Mr Daniel and Mr Livingstone.

Background

[6] The beneficiaries of the trust are Mr Cundall, his sister Ms Dianne Cundall, and any children of Mr Cundall. Mr Cundall has an adult daughter (“R”).

[7] Ms Cundall is intellectually disabled and Mr and Mrs Cundall, concerned for Ms Cundall’s future, settled a unit in Onehunga on the trust to ensure she would have somewhere to live (“unit”). The trust deed provides Ms Cundall is to be allowed the “use occupation and enjoyment” of the unit as her…

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 Daniel v Cundall

Details

AGLC: Daniel v Cundall [2020] NZHC 1590
Case: [2020] NZHC 1590
Decision Date: 6 July 2020

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, was tasked with resolving a dispute between David Gloster Daniel and Stephen Bruce Cundall, who were trustees of a trust established by Cundall's parents. Both trustees sought to remove each other and to appoint an independent trustee, Mr. Timothy Grant Livingstone, in their place. The legal issues that the Court had to address included whether Mr. Cundall should be removed as a trustee due to his refusal to cooperate, his hostility towards Mr. Daniel, and his conflict of interest. The Court also had to determine if Mr. Daniel should be removed as a trustee despite his efforts to progress trust matters after learning that the beneficiary, Dianne Cundall, had vacated the trust's property.

The Court found that Mr. Cundall's refusal to meet with Mr. Daniel and discuss important trust matters, his hostility towards Mr. Daniel, and his conflict of interest justified his removal as a trustee. The Court noted that Mr. Cundall's inability to act impartially and his aggressive and unhelpful responses to correspondence regarding the trust's property demonstrated his unsuitability as a trustee. In contrast, Mr. Daniel had taken steps to progress trust matters after learning that the beneficiary had vacated the property and had shown a commitment to fulfilling his duties as a trustee. Therefore, the Court decided to remove Mr. Cundall as a trustee and to appoint Mr. Livingstone as a substitute trustee, while retaining Mr. Daniel as a trustee.

In conclusion, the Court found it necessary to remove Mr. Cundall as a trustee due to his refusal to cooperate, hostility towards Mr. Daniel, and conflict of interest. The Court appointed Mr. Livingstone as a substitute trustee in place of Mr. Cundall, while retaining Mr. Daniel as a trustee due to his efforts to progress trust matters. The Court's decision aimed to ensure the proper administration of the trust in the interests of the beneficiaries.

Orders