Deane v Deane

[2024] NZHC 841

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1033

[2024] NZHC 841

IN THE MATTER OF

an application for orders under the Trusts Act 2019

BETWEEN

KERRY ANTHONY DEANE AND MARK PETER DEANE

Plaintiffs

AND

CHRISTOPHER GARY DEANE

Defendant

Hearing:	29 February 2024
Appearances:	S L Robertson KC for plaintiffs A J Steele for defendant
Judgment:	18 April 2024

REASONS JUDGMENT OF JOHNSTONE J

This judgment was delivered by me on 18 April 2024 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Jackson Russell, Auckland Foley Hughes, Auckland

DEANE v DEANE [2024] NZHC 841 [18 April 2024]

Christopher Deane’s application for leave to file a statement of defence is declined

[1]                 By deed dated 1 April 1996, Augustine Deane settled a trust for the benefit of his three adult sons, Kerry Deane, Mark Deane and Christopher Deane, and others. He appointed his sons, whom I will refer to by their given names without intending disrespect, as the Trust’s trustees.

[2]                 In February 2016, the Trustees agreed to act “with all due expedition” to wind up the trust’s affairs and make final distributions. However, the Trust has not yet been wound up.

[3]                 By statement of claim dated 19 May 2023, Kerry and Mark sought orders removing or replacing Christopher as a trustee, and approving the winding up of the Trust, with the Trust’s funds being applied first to the costs and expenses of the winding up and then distributed to beneficiaries. In doing so, Kerry and Mark alleged that Christopher had failed to meet his obligations as a Trustee.

[4]                 By 14 November 2023, Christopher had not filed a statement of defence. Associate Judge Gardiner listed the proceeding for formal proof, at a hearing on     29 February 2024. The consequence, pursuant to r 15.9 of the High Court Rules 2016, was that no statement of defence might be filed “without the leave of a Judge granted on the ground that there will or may be a miscarriage of justice if judgment by default [were] entered”.

[5]                 By application dated 15 February 2024, Christopher sought leave to file a statement of defence. Kerry and Mark filed an opposition to Christopher’s leave application on 23 February 2024. I heard the application on 29 February 2024, and dismissed it indicating that my reasons would follow. This judgment sets out my reasons.

Kerry and Mark’s claim by formal proof is amended, and granted

[6]                 Despite Kerry and Mark’s opposition to Christopher filing a statement of defence, they recognised that final distribution of the Trust’s assets should not take place until Christopher’s claim for payment to him of accounting and management

fees is resolved. For that reason, their counsel Ms Robertson KC filed a memorandum prior to the hearing on 29 February, agreeing to adjournment of the formal proof of their claim for orders for distribution, to allow time for mediation of Christopher’s fees claim. Following discussion with the Bench at the start of the 29 February hearing, and  reflecting  on  the  difficult   procedural   consequences   of   that   approach,  Ms Robertson clarified Kerry and Mark’s position. She advised that:

(a)Christopher’s application for leave to file a statement of defence was for the time being opposed in its entirety, pending determination of Kerry and Mark’s application for formal proof;

(b)but if leave was declined, Kerry and Mark undertook to proceed by way of formal proof only upon their claim to remove or replace Christopher as a trustee; and

(c)once that aspect of their claim was determined by formal proof, the balance of Kerry and Mark’s claim might then be adjourned for determination on an opposed basis, and Christopher would be free to file a statement of defence, subject to any further order the Court might make as to timetabling or further formal proof hearing.

[7]                 Given that approach, Christopher’s position not being prejudiced, I proceeded with Kerry and Mark’s claim once Christopher’s leave application was dismissed, only insofar as it sought orders relating to Christopher’s status as a Trustee, and ancillary matters. I granted judgment in favour of Kerry and Mark, making an order under s 112 of the Trusts Act 2019 removing Christopher as a Trustee. Again, I indicated that my reasons would follow. This judgment sets out these reasons also.

[8]                 I then made consequential directions timetabling the filing of an amended statement of claim, and as to costs (which were reserved).

Background

[9]                 When Augustine Deane settled the Trust, he appointed his sons not only as its Trustees but as final beneficiaries. He also appointed them, their spouses and children,

associated entities, and (later) his stepson Robin O’Connor, as discretionary beneficiaries.

[10]             The Trust’s  property  included  land  and  associated  buildings  known  as  Te Karaka Station at Waikaretu near Port Waikato, 75 and 75C Benson Road, Remuera, and  112  Lone  Kauri Road, Karekare.  Its terms  provide for vesting on  31 March 2076, or such earlier date as the Trustees might determine. The Trustees’ decisions are required to be unanimous. Under cl 21, the Trustees are entitled to be paid their usual professional fees or trade charges for “business transacted time expended and all acts done… in connection with the [Trust] including acts which a [t]rustee not being in any profession business or trade could have done personally”.

[11]             In contemplation of cl 21, Christopher’s accounting services company,  Deane & Co Ltd, has been the accountant for the Trust since its inception. Similarly, the firm of solicitors of which Kerry was a partner, Bay Law Office, has undertaken legal work for the Trust.

[12]             Following Augustine Deane’s death on 29 January 2002, the first land holding to be sold was 75 Benson Road, in September 2011.

[13]             From no later than 2013 onwards, Kerry and Mark sought to have Campbell Tyson Chartered Accountants retained as the Trust’s accountants, in preference to Christopher’s company. They say they were worried about non-compliance, in particular with the Trust’s tax-related obligations, and that they wanted an independent accountant. Their evidence included copies of warning letters and other materials issued by Inland Revenue indicating regular contact relating to overdue returns and overdue debts, and therefore, that Christopher failed to ensure accounting work for the Trust was undertaken in a timely manner in the years 2017 to 2022.

[14]             Te Karaka Station was sold in December 2015, around six weeks before the Trustees’ agreement to wind up its affairs. The winding up agreement was in writing, signed and dated 2 February 2016.

[15]             The payment of Trustees for their services to the Trust was of developing concern. Clause 2 of the agreement for winding up confirmed their entitlement to “reasonable remuneration”, and added that:

… This remuneration will be on a time and attendance (hourly rate) basis and claims for reimbursement/payment will be required to be accompanied by appropriate evidence of time spent. If the Trustees are unable to agree any amount it will be determined conclusively by an independent expert in the relevant field (accounting or law). If the Trustees cannot agree, that will be a person determined by the President of either NZCIA or the Auckland Branch of the New Zealand Law Society, as relevant.

[16]             Later in February 2016, Christopher emailed Kerry and Mark a set of figures outlining the essence of a plan  for interim distribution of the proceeds  of sale of    75 Benson Road and Te Karaka Station, which referred amongst other things to a “retention” for “Fees & Tax, GST” of $250,000, and of $50,000 in the Trust’s bank account. It appears that this interim distribution did not proceed.

[17]             The next property sold was 75C Benson Road, in May 2022. The Trustees’ solicitor at Bay Law Office proposed distribution to beneficiaries of the net sale proceeds,  and of  funds  held  following the earlier sales of 75 Benson  Road and   Te Karaka Station.

[18]             Kerry and Mark approved the distribution, but Christopher did not. He emailed the solicitor as follows:

Following on from my previous advice. NO approval for any payments to be made!!

[19]             Kerry and Mark rely largely on this response, and Christopher’s subsequent conduct, in pursuing their application for his removal as a Trustee.

Legal principles

[20]             In determining whether to grant Christopher leave to file a statement of defence, I was required to consider whether he had a substantial ground of defence to the application for his removal or replacement as a Trustee, whether his failure to file

was reasonably explained, and whether Kerry and Mark would suffer irreparable injury if leave were granted.1

[21]             I deal with each of these issues below. Before doing so, I outline Christopher’s arguments in favour of a grant of leave.

[22]             But first, I note that the first issue brought s 112 of the Trusts Act into focus. It provides:

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.

[23]             In Tod v Tod, the Court of Appeal endorsed the following statement of principles as applicable to a court dealing with an application to remove an administrator under the equivalent provision of the Administration Act 1969 (s 21):2

(a)The starting point is the Court’s duty to see estates properly administered and trusts properly executed.

(b)This jurisdiction involves a large discretion which is heavily fact- dependent.

(c)The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration, but ultimately the question is as to what is expedient in the interests of the beneficiaries.

(d)Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.

(e)Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and when it risks prejudicing the interests of the beneficiaries.

[24]             As is apparent, s 21 of the Administration Act employs a touchstone of “expedience”. I consider the touchstone set out in s 112 of the Trusts Act, of removal being “necessary or desirable”, to operate in the same way.

1      Neumayer v Kapiti Coast District Council [2014] NZHC 417, [2015] NZAR 1185 at [8].

2      Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22], endorsing the statement of principles submitted as applicable by counsel in Farquhar v Nunns [2013] NZHC 1670 at [13].

[25]             Similarly, the Court of Appeal’s further observation that “[t]he courts will not readily replace an executor selected by a deceased to manage his or her estate”,3 applies also in respect of trustees generally, selected by settlors. However, as the Court in Frickleton v Frickleton stated:4

[T]he interests of the beneficiaries must always be the focus. As it was put by the Privy Council over 100 years ago in Letterstedt v Broers,:5

… if [the Court is] satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.

Christopher’s arguments for leave

[26]For Christopher, Mr Foley submitted that:

(a)The crux of the present dispute, when peripheral matters are stripped away, is that Christopher believes he is entitled to payment for professional services. It is this issue that holds up any final distribution of the Trust’s property.

(b)There is no fundamental disagreement between the Trustees about the making of a final distribution or the winding up of the Trust, albeit the details cannot be resolved until the fees issue is resolved.

(c)Christopher accepts responsibility for the failure to file a statement of defence. However, he was unaware this might result in judgment by default. He anticipated resolution of the fees issue without the need for costly High Court litigation.

(d)Christopher maintains that the criticisms of him as a Trustee are a smokescreen. His brothers’ endeavours to have him removed have

3      Tod v Tod, above n 2, at [27(a)].

4      Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154 at [33].

5      Letterstedt v Broers (1884) 9 App Cas 371 (PC) at 386 per Lord Blackburn, delivering the Privy Council’s opinion. Cited with approval by this Court in Hunter v Hunter [1938] NZLR 520 (CA) at 529 and 530–531 per Myers CJ and at 552–553 per Callan J.

nothing to do with the interests of beneficiaries, but rather his brothers’ personal interests in extracting money from the Trust without first addressing his fees claim.

A substantial ground of defence to removal?

[27]             It is indeed now clear that Christopher’s fees claim has held up final distribution of the Trust’s property. But that this was the reason for Christopher’s refusal to approve the interim distribution proposed in May 2022 seems not to have been clear to Kerry and Mark.

[28]             Review of the chronology of interaction between  the  brothers,  as  from  May 2022, is required.

Christopher’s conduct in and since May 2022

[29]             By email dated 15 May 2022, Kerry asked for the basis and reasons for Christopher’s objection, observing that he and Kerry were “at a loss to understand why [he would] not agree”. Christopher did not answer.

[30]             By email dated 19 May 2022, Kerry asked for a response. Christopher did not answer. By email dated 22 May 2022, Kerry observed Christopher had not responded. He asked for an urgent explanation, pointing out he had been unable to work since a stroke in June 2015, and that ACC and income protection insurance payments to him would soon cease, requiring his acquisition of an alternative source of income. Christopher did not answer.

[31]               Kerry sent further requests for a response, again garnering silence, by emails dated 28 May, and 4 and 8 June 2022. The latter emails referred to Kerry’s intention, having sold a house, to buy a replacement.

[32]             Kerry sent text messages to Christopher on 1 June and 12 June 2022, checking he had received Kerry’s emails and proposing a meeting to discuss proposed Trust distributions and the sale of the Karekare property.

[33]             On 12 June 2022, Christopher emailed Kerry and Mark, from the same email address as that to which Kerry’s emails had been sent, as follows:

Hello Kerry, Mark,

I was very concerned to see that the balance of the DFT Trust balance was nil. There should be a balance of $250,000, as agreed, that was to be available to go towards payment of our fees.

I have to investigate what has happened to the funds.

[34]Christopher’s reference to agreement over fees appears to draw from the

$250,000 retention labelled “Fees & Tax, GST” referred to at [16] above. Again, it seems Kerry and Mark had not understood Christopher’s view of this issue. Kerry emailed Christopher on 14 June 2022 expressing his confusion, his lack of agreement to a claim for fees charged as a Trustee rather than for work done as a professional for the Trust, and requesting distributions to be authorised.

[35]             In the absence of a response, Kerry proposed a Trustees’ meeting by email dated 17 June 2022. Christopher did not answer.

[36]By email dated 5 July 2022, Kerry wrote:

Are we to assume that the reason you are blocking the proposed distributions is because you are claiming there is money owing to you by the trust, and that you want payment before the funds held by Bay Law are distributed?

If this is the real obstacle to distribution, can you please let us know the amount you are claiming and supply invoices and full supporting information/documentation for your claim so we can fully and properly consider it.

We expect to hear back from you on this without further delay as we need to resolve this issue now.

[37]Christopher did not answer. Kerry and Mark resorted to consulting lawyers.

[38]             By letter dated 15 August 2022, Jackson Russell, lawyers acting for Kerry and Mark, wrote to Christopher explaining their instructions. They observed that if he did not agree to the proposed distributions, or provide considered reasons for refusing to agree, Kerry and Mark intended to instruct them to commence proceedings in this

Court. Those proceedings would request the Court to review Christopher’s decision to refuse to make any distribution, and would seek his removal as a Trustee.

[39]             By letter dated 24 August 2022, Foley Hughes advised that Christopher had instructed them prior to his departure that day for Australia. Foley Hughes sought details of the proposed distributions, upon which the barrister they intended to instruct might give advice once Christopher returned in several weeks’ time. Further, they advised that if Kerry was in serious need of funds, Christopher was prepared to approve an interim payment of $150,000 to each of Kerry, Mark and himself.

[40]             Correspondence between the parties’ solicitors continued in August 2022, and interim payments of $150,000 to each brother and $100,000 to Mr O’Connor, were approved in September 2022. There was indication that Andrew Steele, barrister, would be instructed for Christopher. However, there was then a lack of progress, leading Ms Robertson, as counsel for Kerry and Mark, to express frustration at being “stonewalled”. By email dated 1 November 2022, Mr Steele advised he had “no instructions, so can’t assist”.

[41]             Jackson Russell sent a further pre-litigation letter, dated 4 November 2022, to Foley Hughes. By email dated 11 November 2022, Mr Foley responded by forwarding Christopher’s email of that date, asserting his interest in winding up the Trust and referring to the need to complete financial statements for the years ended 2017 to 2022. Christopher’s expectation was that he would have those statements completed in the coming week, together with his “invoicing… for review”.

[42]             Later in November 2022, Mr Foley advised in the absence of the completed financial statements that Christopher had contracted COVID, and that “the further statements should be finalised very shortly”. The financial statements were not finalised shortly.

[43]             Instead, by email dated 14 November 2022, Christopher sent Kerry and Mark the Trust’s financial statements for the year ended 2017. And he followed up providing statements for the year ended 2018 and asking “when are we going to receive the Financial Statements for YE2017 back signed off”? Although he had not expressly

said so, it appears Christopher’s interest in Kerry and Mark’s approval related to the fact these statements incorporated substantial provision for the Trust to make payments to Christopher’s accounting company, Deane & Co. Kerry and Mark’s accountant at Campbell Tyson queried the Trust’s expenses, amongst a range of other things, by email dated 25 January 2023, as follows:

Expenses in 2016, I note some large expenses, wages $146,510, management fees $46,914, administration $31,057, consultants $37,421. Could you supply the Ledger transactions for these amounts to show the breakdown of what makes up the amount?

[44]             By 20 February 2023, there had been no response. Jackson Russell referred to Christopher’s delay in providing the  promised  financial  statements  and  sought  Mr Foley’s confirmation there were no further impediments to Christopher engaging on the issue of distributions, by email that day. Foley Hughes did not respond.

[45]             Jackson Russell followed up on 3 March 2023. This time Foley Hughes responded, by forwarding Christopher’s email dated 27 February 2023, seeking to explain his delays in preparing financial statements by reference to it being a busy time of year for accountants and to having received the full Bay Law Office ledger only in November 2022. Enigmatically, Christopher added “I would hope we can reach agreement on issues in the next few weeks that enable Financial Statements to be completed, and distributions to be made”.

[46]             Again,  Jackson  Russell  threatened  litigation,  this  time  by  email  dated    9 March 2023. In response, Foley Hughes forwarded Christopher’s email of 21 March 2023, proposing a timeframe for the financial statements of 6 to 12 April 2023. That timeframe was not met.

[47]The present proceedings were filed on 10 May 2023.

[48]             At last, Christopher provided his answer to Campbell Tyson’s queries about “large expenses” in 2016. By email dated 16 June 2023, he provided ledgers and itemised Deane & Co’s charges, amounting to $255,434 for accounting, administration, management and consulting. He provided answers to Campbell Tyson’s other queries over successive days.

[49]             By email dated 22 June 2023, Christopher confirmed having sent schedules and timesheet records relating to the fees he was claiming against the Trust, and proposed meeting Kerry and Mark, at the Rose Park Hotel in Parnell, in the first week of July to discuss.

[50]             By text message dated 27 June 2023, Kerry wrote that he and Mark thought a meeting in some form was necessary. He wrote that he would respond further once he and Mark had settled on form and timing.

[51]             However, Christopher further emailed Kerry on 27 June 2023. He referred to having discussed the filing of his statement of defence with Mr Foley the previous day. He then appeared to threaten Kerry that his statement of defence would likely include allegations relating to Kerry’s obligations as a solicitor holding trust funds. In connection with this, Christopher proposed an extension to the date for filing his statement of defence:

… say for 30 days or so, during which time we can get together and deal with our issues and reach an agreed settlement (which I believe we can), then of course we will not need to file

Can you let me know what you want to do as soon as possible.

[52]             By email dated 29 June 2023, Jackson Russell referred Christopher’s email of 27 June to Mr Foley, rejecting his allegations against Kerry, expressing serious concern they had been made by reference to the offence of blackmail, and observing that mediation might be possible. However, Christopher would “need to file his statement first. No extensions will be granted.”

[53]             As is apparent, Christopher’s statement of defence was not filed, despite this advice. Instead, in the period from 13 July 2023 to 27 July 2023, Christopher sent Kerry and Mark the Trust’s financial statements for the years ended 2019, 2020, 2021, 2022 and 2023. These statements indicated accounting fees in each of those years of

$900 per year. But they also indicated total current liabilities of $262,104 for the year ended 2018, comprised of “creditors accounts payable”. Presumably, these creditors’ accounts incorporated Christopher’s unmet fees claim. No further detail was provided.

[54]             From this point, nothing of consequence happened before Kerry and Mark filed for formal proof.

[55]             Associate Judge Gardiner having set the proceeding for formal proof at a hearing on 29 February 2024, Jackson Russell advised Mr Foley of that fixture by email dated 7 December 2023. Remarkably, Christopher took no action until his application for leave to file a defence was filed on 15 February 2024.

[56]             In summary, a review of Christopher’s conduct in and since May 2022 discloses that:

(a)The plan Christopher formulated in February 2016, for interim distribution of the proceeds of the first two Trust property sales, provided for a $250,000 retention under the broad and uninformative label “Fees & Tax, GST”. Apparently known to Christopher, but not to Kerry and Mark, was that the better part of this amount was to be held on account of his firm’s professional fees. Christopher’s conduct in this regard vis-à-vis his fellow Trustees was less than transparent.

(b)It required many attempts at communication with Christopher, following his bald refusal to approve an interim distribution of funds in May 2022, to extract from him the reason for that refusal. In June 2022, it emerged that the reason was he considered Kerry and Mark had agreed to a $250,000 retention for fees.

(c)This dispute having been identified, Christopher failed to engage with Kerry and Mark so that it might be resolved. They were required to engage lawyers. Even once that occurred, Christopher’s lawyers were not instructed to respond promptly to communications, or to engage at all over the issue of his fees claim. That issue was instead subsumed within Christopher's undertaking belatedly to prepare financial statements which, in light of his insistence upon his company doing the work, he should have attended to several years before.

(d)In November 2022, Christopher sought (disingenuously in my view) to have Kerry and Mark hastily approve financial statements which asserted that the Trust had incurred around $250,000 in expenses owing for his company’s work. It took an unanswered, specific, pre-approval enquiry from Kerry and Mark’s accountant, and then the commencement of legal proceedings, before Christopher was prepared to itemise his fees claim.

(e)Even then, Christopher did not engage with Kerry and Mark so that his fees claim might be resolved, beyond proposing a meeting and threatening to make embarrassing allegations against Kerry in the statement of defence that he knew he was required to file within a certain time frame. Having then been warned that no extension of that time frame would be agreed, Christopher simply did nothing. It is unsurprising that Kerry did not take up the offer to meet, in circumstances where Christopher’s threat had been made.

(f)Then, having been advised of the formal proof hearing, Christopher took no substantive action until seeking leave to file his defence. The Court registry was open during this period of delay. But even if the formal Court vacation is excluded from calculation, the filing of Christopher’s application took more than a month, and occurred only two weeks before the hearing.

Kerry and Mark’s response

[57]             Kerry and Mark’s approach in response to Christopher’s conduct has in my view been entirely reasonable.

[58]             They disagree with Christopher’s denial by way of affidavit that he is a delinquent trustee, and his assertion that he has fulfilled his duties to the Trust. But in

response to Christopher’s assertion that they “can hardly be described as impartial or objective in this claim against me”, they undertook to the Court that:

[W]e will not make any distributions to beneficiaries until either Christopher’s claims for accounting and “management fees” fees are resolved by agreement between the three of us, or pursuant to a further order of the Court.

Analysis

[59]             In light of this chronology, I did not consider Christopher to have a substantive ground of defence to his removal as a Trustee:

(a)The questions of Christopher’s entitlement to accounting and other fees, and then to his share as a final beneficiary in the winding up of the Trust, stand apart from the question of his conduct as a Trustee. His conduct as a Trustee, in failing to engage in the proper administration of the Trust in accordance with the Trustees’ agreement that it be wound up, has been wholly unsatisfactory. It smacks of him favouring his personal interests over his responsibilities to the Trust. But in any event, his unwillingness to confront the need to resolve the dispute, has demonstrated his unsuitability as a Trustee.

(b)Christopher’s arguments made in support of his application for leave to file a statement of defence only served to confirm this point. His only explanations for his unsatisfactory conduct as a Trustee focussed upon the existence of the fees dispute. They did not address his recalcitrant conduct, or suggest that he might conduct himself differently were he to remain as a Trustee. In simple terms, beyond asserting that he had not been delinquent in his role, Christopher did not offer a defence to that claim.

[60]             As this Court has previously recognised, trustees may be removed for the benefit of those to whom the settlor has given the trust estate, in order to ensure the trust is properly executed. The threshold for removal is met when the trust is deadlocked because one trustee refuses to make decisions.6 In this case, Christopher

6      Oldfield v Oldfield [2019] NZHC 492 at [37]–[38]; Taylor v Taylor [2021] NZHC 992 at [14].

has consistently demonstrated his disinclination to engage with the decision-making process.

Was the failure to file unexplained?

[61]             In respect of his failure to file a statement of defence, Christopher’s affidavit said this:

Rightly or wrongly, my lawyer and I adopted a strategy that if I got the financial statements for the Trust all done to my brothers’ satisfaction, then we could sit down and resolve our differences regarding the fees - without a court hearing.

[62]             But, as noted above, having eventually completed the Trust’s financial statements several years late, and having threatened Kerry with the content of any statement of defence and been warned in response that a timely statement of defence would nevertheless be necessary, Christopher failed to take any further step towards the resolution he says that he wanted.

[63]             To the extent an explanation for failing to file a statement of defence was offered, it was unsatisfactory.

Would Kerry and Mark suffer irreparable injury if leave were granted?

[64]             Plainly, it is in the interests of all of the Trust’s beneficiaries that it be wound up. I considered that Christopher’s unsatisfactory conduct as a Trustee has caused considerable delay.

[65]             Further, I took the view that Christopher’s conduct indicated a substantial risk that if not removed as a Trustee, he would continue to rely upon the simple expiration of time as a strategy for the advancement of his personal position regarding his fees claim. And on that basis, that there was a risk of Kerry and Mark being forced, in the responsible exercise of their responsibilities as Trustees, to compromise the Trust’s position vis-à-vis Christopher’s fees claim so as to make progress with final distributions to all three brothers.

[66]             If Christopher were removed, then at least Kerry and Mark as remaining Trustees would be in a better position, with control of the Trust and its records, to approach this Court for final orders as to distribution following payment of all of the Trust’s properly determined expenses. In that way, particularly in light of the prospect of the costs of doing so being ordered to be met from Trust funds, Christopher might be incentivised, in a way he previously has not, to pursue proper settlement of the fees claim and the winding up of the Trust.

[67]             For these reasons, I found not only that Kerry and Mark might suffer irreparable injury if leave were granted, but also that the Court’s responsibility to ensure proper administration of the Trust would best be observed by his removal.

Conclusion

[68]             It was for these reasons that I declined leave, ordered Christophers’ removal as a Trustee, and took care to timetable the balance of the matter so that it will be resolved with or without his agreement as efficiently as possible.

Johnstone J