Eggink v Eggink

[2014] NZHC 1784

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2012-443-458 [2014] NZHC 1784

UNDER

the Trustees Act 1956

AND

Under the Declaratory Judgments Act
1908

IN THE MATTER

of the Estate of HENDRICK EGGINK

AND IN THE MATTER

of the Partnership of the Estate of HENDRIK EGGINK and ANN ELLEN EGGINK

BETWEEN

JOY ELLEN CAMPBELL, MICHAEL RICHARD EGGINK, and ANTONIE HENDRIK EGGINK

Fist Plaintiffs

Continued over the page …

Hearing:

Further
Submissions:  .

19 February 2014

16 July 2014 (Telephone Conference)

Counsel:

GA Paine for Plaintiffs
ARH Laurenson for Defendants
R Dunlop in person

Interim

Judgment:

30 July 2014

INTERIM JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 30 July 2014 at 11:00 am

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

EGGINK & ORS v EGGINK & ORS [2014] NZHC 1784 [30 July 2014]

AND

ANTONIE HENDRIK EGGINK and

MICHAEL RICHARD EGGINK as partners in the ANTONIE HENDRIK EGGINK and MICHAEL RICHARRD EGGINK FARM PARTNERSHIP Second Plaintiffs

AND

ANNE ELLEN EGGINK as partner in the Estate of H EGGINK and ANN ELLEN EGGINK PARTNERSHIP

Second Defendant

[1]      This interim judgment contains consent orders for the replacement of one of the trustees of a will trust by an independent trustee and the provision to the new trustee of powers enabling him to resolve any dispute between the other two trustees.

Background

[2]      Hendrik Eggink died in 1992.   He was survived by his widow, Ann Ellen Eggink  (“Mrs  Eggink”),  and  five  adult  children:  Joy  Ellen  Campbell,  Michael Richard  Eggink, Antonie  Hendrik  Eggink,  Rachel Ann  Eggink  and  Diana  Jane Sharp.

[3]      In his will, Mr Eggink appointed Mrs Eggink, his son Antonie, and Mr Gavin O’Dea,  a  local  accountant,  as  executors  and  trustees.    There  were  no  specific bequests.  Mrs Eggink was given a life interest in the residuary estate which included the family dairy farm at Arorata, near Hawera.   The children and their surviving issue are the residuary beneficiaries in equal shares.

[4]      Michael  Eggink  had  the  option,  upon  his  mother’s  death  or  during  her lifetime if she consented, to purchase the farm at Arorata on terms and conditions fixed by the Trustees.  The will provided that any advance to Michael incidental to the purchase would be fixed for a term of ten years at a rate of interest determined by the Trustees.

[5]      The will also provided that if the net income from the residuary estate in any one year was not sufficient adequately to provide for Mrs Eggink’s maintenance, the trustees had the power to advance capital to Mrs Eggink on condition that if any such advances were not recouped out of subsequent income they would constitute a debt owing by Mrs Eggink to the trustees at her death.

[6]      Mrs Eggink is now infirm and her daughters Rachel and Diana have been given an enduring power of attorney to act on her behalf.  It is accepted that she is no longer capable of fulfilling her duties as a trustee of the will trusts.

[7]      After Hendrik Eggink’s death, Mr O’Dea was replaced as a trustee, with the

consent of Mrs Eggink and Antonie, by another local accountant, Mr Ross Dunlop.

[8]      By arrangement between a partnership formed by Antonie and Michael (“the Antonie and Michael farming partnership”) and a partnership between the estate and Mrs Eggink (“the estate/Ann Eggink partnership”) it was agreed the Antonie and Michael partnership would advance funds to the estate/Ann Eggink partnership to enable  the  purchase  and  subsequent  erection  of  a  dwelling  in  Hawera  for Mrs Eggink’s exclusive use and occupation.   It is said by the plaintiffs that it was agreed that those advances would be treated as a deposit against the future purchase of the farm by Michael pursuant to the option in the will.

The matters in dispute

[9]      There has been a falling out between the trustees with the plaintiffs (Joy, Antonie and  Michael) as one faction sharing compatible views  and Rachel  and Diana, individually and in their capacity as attorneys for their mother, as the other faction opposing.  It is alleged by the plaintiffs that Mr Dunlop has aligned himself with Rachel and Diana.

[10]     In the first cause of action in this proceeding, the plaintiffs seek orders for the removal  of  Mrs  Eggink  and  Mr  Dunlop  as  trustees  and  the  appointment  of  a corporate trustee company in their place.  In a second cause of action, they seek a declaration that Mrs Eggink is indebted to the Antonie and Michael partnership in respect of the advance for the purchase of her home.

[11]     The defendants initially opposed the removal of Mrs Eggink and Mr Dunlop as trustees, but they acknowledge the state of hostility between the family factions. The defendants oppose the declaration as to Mrs Eggink’s indebtedness and, in a cross-claim, they sought orders replacing Antonie as an executor and other orders relating to the administration of the Estate.

The course of the proceeding

[12]     In February 2014, I heard evidence from Antonie and Rachel, who were cross-examined, and I considered affidavits filed by other interested parties.  At the conclusion of the evidence I met counsel and Mr Dunlop in chambers.  After discussions, it was agreed that the hearing would be adjourned before the hearing of submissions to enable the parties to confer with counsel and with each other with a view to resolution of the issue of who should continue to act as trustees of the will trusts.

[13]     After the filing of subsequent memoranda, a further hearing was conducted by way of a telephone conference involving counsel and Mr Dunlop.  I was asked by the parties to make an order by consent under s 51 of the Trustee Act 1956 replacing Mrs Eggink as a trustee by a senior legal practitioner, Mr Wayne Chapman.  It was also agreed that Mr Chapman should have responsibility, in addition to his ordinary duties as a trustee, for assisting with the resolution of any disputes between his fellow  trustees,  Antonie  and  Mr  Dunlop.    Counsel  agreed  that  the  conditions attaching to Mr Chapman’s appointment could be made by the Court in the exercise of its inherent powers within the Court’s supervisory jurisdiction over trusts.

Consent orders

[14]     Accordingly, I make the following orders by consent:

(a)      Ann Ellen Eggink is removed as a trustee of the Estate of Hendrik Eggink and replaced by Wayne Seymour Chapman of Wellington, Solicitor.

(b)Mr Chapman is to have all of the usual powers of a trustee conferred upon him by law and the terms of the will and, in addition, is to have the powers:

(i)       to act as an independent trustee in the estate;

(ii)to  make  binding  decisions  where  the  other  trustees  cannot agree;

(iii)in  the  event  the  other  trustees  agree  on  a  matter  but Mr Chapman  considers  their  decision  is  not  in  the  best interests  of  the  life  tenant  and/or  ultimate  beneficiaries,  to make a binding decision overruling the other trustees; and

(iv)in any case where the other two trustees cannot agree on a matter, to make a final and binding decision.

[15]     The plaintiffs’ claims in the second cause of action are adjourned, to be

brought on for hearing by any party on the giving of not less than seven days’ notice.

[16]     Costs are reserved.

.........................................

Toogood J