Easton v New Zealand Guardian Trust Company

[2015] NZHC 11

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-9 [2015] NZHC 11

IN THE MATTER OF

the Trustee Act 1956

BETWEEN

IAN CHARLES EASTON Plaintiff

AND

THE NEW ZEALAND GUARDIAN TRUST COMPANY

Defendant

(on the Papers)
Judgment:	13 January 2015

JUDGMENT OF WILLIAMS

[1]      The defendant is sole trustee of the Moutoa Trust, a trust settled by the parents of the plaintiff.  The plaintiff is a beneficiary along with his two sisters.  The Trust owns or controls two properties.  They are run as a single cropping operation by the plaintiff.  He leases the two properties for that purpose.  The larger property (209ha)  is  owned  outright  by the  Moutoa Trust,  though  it  holds  a  part  of  that property in trust for a company called Ian Easton Limited.  Ian Easton Limited also owns the second much smaller property (1.772ha). All voting shares in IEL are held by the Moutoa Trust.  The plaintiff, one of his sisters and the Moutoa Trust own all of the asset shares.  The plaintiff owns nearly 77 per cent of those shares.  They carry no voting rights.

[2]      The plaintiff has a 50 per cent interest in a further 25ha block across the road from the two properties just described.  The other 50 per cent of that block is owned

by the Ian Easton Family Trust.  This is the plaintiff’s own family trust.  This land

EASTON v THE NEW ZEALAND GUARDIAN TRUST COMPANY [2015] NZHC 11 [13 January 2015]

too, is run as part of the cropping operation.   Infrastructure such as packing and implement sheds is situated on this block but utilized as part of the whole operation.

[3]      The plaintiff says the defendant is preparing to sell the two properties it controls in order to pay a substantial debt to the IRD.  The plaintiff seeks an interim injunction to prevent the defendant from so proceeding.

[4]      He mounts causes of action in breach of trust and under ss66 and 68 of the Trustee Act.  The defendant’s action in trying to sell the properties, the plaintiff says, is variously:

(a)       in breach of previous agreements as to the defendant’s conduct;

(b)      unnecessary; (c) unfair;

(d)      inconsistent with the plaintiff’s right to a lease renewal;

(e)       creative of a conflict of interest.

[5]      The application is made without notice to the defendant so I do not have the benefit of the defendant’s perspective on the allegations made but it seems, judging by the terms of the Statement of Claim and the plaintiff’s affidavit, that the defendant faces a substantial tax bill that must be paid by the end of this month and sees no prospect of it being made on time without sale of the land.   The plaintiff also acknowledges the defendant’s allegation that he (the plaintiff) has not paid rent.

[6]      The plaintiff denies both allegations and says the defendant has caused the

situation itself through poor administration of the trust’s accounts.

[7]      The papers filed are sparse, but the plaintiff says he has had to act quickly over the holiday period because the defendant moved precipitately on Christmas Eve to prepare the property for sale.  The fact that lawyer’s offices were closed over this

period made it impossible, he said, to mount a more comprehensive response to the situation.

[8]      I am satisfied that the plaintiff has at least a serious case to be tried and that it is reasonably necessary to grant limited relief to protect the plaintiff’s position in the meantime.  I am satisfied that the plaintiff will be amply protected if the defendant is prevented from advertising or selling the land in the interim.  I am not satisfied that damages, in the circumstances, will suffice to protect him.  This will be conditional upon the plaintiff paying full market rent in accordance with the undertaking at paragraph [53] of his affidavit.  The defendant will however be entitled to bring the matter on for further consideration by the duty judge on 48 hours notice.  This may be done by filing a notice of opposition and such affidavit evidence as the defendant sees fit.

[9]      I make orders therefore as follows:

(a)      Provided the plaintiff pays full market rent each month, as due and owing following receipt of an appropriate GST invoice, the land described  in  identifiers WN42D/276  and  WN296/174  may not  be advertised for sale or nor any agreement for sale and purchase entered into until further order of this Court.

(b)The defendant may bring the matter on before the duty Judge for further  consideration  on  48  hours  notice  by  filing  a  notice  of opposition and such supporting affidavits as may be considered necessary.

(c)       Costs are reserved.

Williams J