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IN THE SUPREME COURT OF NEW ZEALAND
SC 17/2016 [2017] NZSC 28
BETWEEN
IVAN VLADIMIR JOSEPH ERCEG Appellant
AND
LYNETTE THERESE ERCEG AND DARRYL EDWARD GREGORY AS TRUSTEES OF ACORN FOUNDATION TRUST First Respondents
LYNETTE THERESE ERCEG AND DARRYL EDWARD GREGORY AS TRUSTEES OF INDEPENDENT GROUP TRUST Second Respondents
Hearing:
1 September 2016
Court:
Elias CJ, William Young, Glazebrook, Arnold and OʼRegan JJ
Counsel:
C R Carruthers QC and R B Hucker for Appellant G M Coumbe QC and F C Monteiro for Respondents
Judgment:
8 March 2017
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellant must pay to the respondents costs of $25,000 plus reasonable disbursements (to be fixed by the Registrar in the absence of agreement between the parties). We certify for two counsel.
Is the Court’s role limited to reviewing the trustees’ discretion?
[14]
What is the jurisdiction to require disclosure?
[20]
Schmidt v Rosewood Trust Ltd
[22]
Foreman v Kingstone
[35]
Court of Appeal decision in the present case
[42]
Erceg 1
[49]
The supervisory jurisdiction
[50]
Appellate standard
[63]
The present application
[71]
Documents that are sought
[72]
The context for the request and the objective of the beneficiary making the request
[74]
The nature of the interest held by the appellant
[83]
Personal or commercial confidentiality
[87]
Practical difficulty
[92]
Disclosure of reasons
[93]
Impact on other beneficiaries if disclosure is made
[94]
Impact on settlor and third party
[95]
Protecting confidentiality
[96]
Safeguards on use of the documentation
[97]
Our approach
[98]
Standing
[104]
Result
[113]
Costs
[114]
Schedule: Documents sought by the appellant
The issue
This appeal raises for consideration the approach the courts should take to an application by a beneficiary for an order directing trustees to disclose to the beneficiary information relating to a trust.
Background
The appellant, Ivan Erceg, was a discretionary beneficiary and final beneficiary of two trusts, the Acorn Foundation Trust and the Independent Group Trust. The trusts were settled by the appellant’s brother, Michael Erceg, in 2004 and 2002 respectively. Michael Erceg died in a helicopter crash in 2005. Shares in Independent Liquor (NZ) Limited (ILNZ), a successful business associated with Michael Erceg, were transferred to the trusts prior to Michael Erceg’s death.
The trustees sold the trusts’ shareholding in ILNZ in December 2006. Both trusts were wound up in December 2010. At the time, the appellant was an undischarged bankrupt, having been adjudicated bankrupt on 2 February 2010. The appellant was discharged from bankruptcy on 12 May 2014, but his bankruptcy has not, as yet, been annulled.
Mr Gregory, a trustee of both trusts, gave evidence about the appellant’s status as a beneficiary of each of the trusts. Mr Gregory’s evidence was that the appellant was not a named beneficiary of either trust. He was one of a class (among…
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.
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AGLC
Erceg v Erceg [2017] NZSC 28
Case
[2017] NZSC 28
Decision Date
CaseChat Overview and Summary
In Erceg v Erceg, the Supreme Court of New Zealand addressed an appeal regarding the disclosure of trust documents to a beneficiary. Ivan Erceg, the appellant, sought extensive information from two trusts established by his brother, Michael Erceg, who died in 2005. The Court examined the inherent jurisdiction of the Court to supervise and, if necessary, intervene in the administration of trusts, particularly in relation to the disclosure of trust documents to beneficiaries. The Court considered various factors, including the nature of the interest held by the beneficiary, issues of personal or commercial confidentiality, and the potential impact on other beneficiaries and third parties. The Court concluded that while discretionary beneficiaries do have a right to seek disclosure of trust documents, this right is not absolute and must be balanced against other considerations, such as confidentiality and the potential for harassment. The Court ultimately determined that disclosure should not be ordered in this case due to the appellant's conduct and the significant risk of harassment to other beneficiaries. The appeal was dismissed, and the appellant was ordered to pay costs.