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…

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 Deane v Deane

Details

AGLC: Deane v Deane [2024] NZHC 841
Case: [2024] NZHC 841
Decision Date: 18 April 2024

CaseChat Overview and Summary

The case of Deane v Deane [2024] NZHC 841 was heard before Johnstone J, who was tasked with deciding on Christopher Deane’s application for leave to file a statement of defence against the claims made by his brothers, Kerry and Mark Deane. The plaintiffs sought orders to remove Christopher as a trustee of a family trust established by their father, Augustine Deane. The primary legal issues revolved around whether Christopher had a substantial ground of defence to his removal, whether his failure to file a statement of defence was reasonably explained, and whether the plaintiffs would suffer irreparable injury if leave were granted.

Christopher argued that the core issue was his claim for payment of professional services, which he believed should be resolved before any final distribution of the trust’s assets. He admitted to being late in filing his statement of defence but contended that he had been trying to resolve the fees issue without resorting to litigation. The plaintiffs, on the other hand, argued that Christopher’s refusal to approve distributions and his subsequent conduct demonstrated his unsuitability as a trustee.

Johnstone J found that Christopher had no substantial ground of defence to his removal as a trustee. His conduct, particularly his refusal to engage with his brothers and their attempts to resolve the fees dispute, demonstrated a disinclination to perform his duties properly. The judge noted that Christopher's focus on his fees claim did not excuse his failure to act as a trustee. Additionally, Christopher's failure to file a statement of defence was deemed unexplained and unsatisfactory. The judge concluded that granting leave would likely result in further delay and that the plaintiffs might suffer irreparable injury as a result of Christopher’s continued refusal to cooperate.

Consequently, Johnstone J declined Christopher’s application for leave to file a statement of defence and ordered his removal as a trustee. The court also made directions for the filing of an amended statement of claim and reserved the matter of costs.

Orders