Davidson v Israel - [2012] NZHC 631

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-553 [2012] NZHC 631

UNDER the Trustee Act 1956

IN THE MATTER OF Sleeping Fox Trust

BETWEEN TARA DAVIDSON Plaintiff

ANDGORDON ISRAEL Defendant

Hearing: 19 March 2012

Counsel: D J Jenkin for Plaintiff
Mr TJ Brown in person (as interested party) Judgment: 4 April 2012
JUDGMENT OF BREWER J

This judgment was delivered by me on 4 April 2012 at 2:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar

SOLICITORS
Jane Hunter (Thames) for Plaintiff
(Copy to Defendant in person)

COUNSEL Dennis J Jenkin

(Copies to Mr TJ Brown and to Litigation Guardian)

DAVIDSON V ISRAEL HC AK CIV-2011-404-553 [4 April 2012]

[1] The plaintiff is a final beneficiary of a trust called Sleeping Fox Trust (the Trust). She seeks the removal of the defendant as a trustee of the Trust and the appointment of an independent trustee.1

[2] The proceedings were filed on 4 February 2011. At that time the sole trustee of the Trust was Mr Thomas Joseph Brown. He was in that capacity named as the defendant. However, Mr Brown was adjudicated bankrupt on 8 March 2011. In an affirmation made on 21 September 2011 and filed in the Court,2 Mr Brown deposed that he resigned as a trustee of the Trust on 17 February 2011. By affirmation also made on 21 September 2011 and filed in the Court,3 Mr Israel, the current defendant, deposed that he was appointed a trustee of the Trust on or about 21 December 2010 and that Mr Brown’s resignation left him as the sole trustee.4

[3] On 16 February 2012, the Court granted a priority fixture for the hearing of the substantive application. A one-day fixture was allocated for 19 March 2012. At a case management telephone conference heard at 4:00 pm on 16 February 2012, Associate Judge RM Bell noted that Mr Brown had emailed the Court advising that Mr Israel had resigned as a trustee and that a new corporate trustee had been appointed. Associate Judge Bell made a timetable order that would apply to the plaintiff and to the defendant, or to any other person opposing the relief sought by the plaintiff.

[4] An affidavit of service by the plaintiff’s solicitor sworn on 16 March 2012

confirms that the plaintiff’s affidavits were duly served on the defendant and on

Mr Brown.

1      (Second) amended statement of claim dated 4 October 2011.
2      Affirmation of Thomas Joseph Brown in support of application to strike out.
3      Affirmation of Gordon Israel in support of application to strike out.
4      Memoranda from Mr Brown and Mr Israel to the same effect were before Associate Judge Christiansen on 29 June 2011.   On that date, Christiansen AJ directed that Mr Israel be substituted for Mr Brown as trustee of the Trust and that the intituling of the proceeding be changed accordingly. Mr Brown was to continue as a party entitled to service of documents because of his interest in the Trust as…

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 Davidson v Israel

Details

AGLC: Davidson v Israel [2012] NZHC 631
Case: [2012] NZHC 631
Decision Date: 4 April 2012

CaseChat Overview and Summary

Tara Davidson brought an application against Gordon Israel, seeking his removal as a trustee of the Sleeping Fox Trust and the appointment of an independent trustee. The trust was established by Alison Davidson and Gordon Israel, with Tara Davidson and Miss SD Brown as final beneficiaries. Gordon Israel was appointed as a trustee of the trust, however, Thomas Joseph Brown, the former trustee, resigned from his position as trustee. Brown had been made bankrupt by the Commissioner of Inland Revenue over unpaid tax assessments relating to the trust. The plaintiff alleged that Brown dissipated the assets of the trust and the final asset, a piece of land, is in danger of being taken by creditors with the result that no assets will be left in the Trust. The court found that the affairs of the trust were in disarray and it was expedient to appoint an independent trustee to avoid the dissipation of the remainder of the trust's assets. The court appointed Francis William Bedford as the sole trustee of the trust and vested the title in the trust's land in him. The court also varied Gordon Israel's power of appointment of new trustees and gave Bedford the power of appointment. The court reserved leave to either of the final beneficiaries to seek further orders of the court on this matter. The plaintiff was awarded costs on a 2B basis, to be paid out of the assets of the trust.

Orders