Erceg v Erceg - [2014] NZHC 155

ORDER THAT FILE NOT BE SEARCHED WITHOUT LEAVE OF A JUDGE.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-004330 [2014] NZHC 155

UNDER The Declaratory Judgments Act 1908

IN THE MATTER OF The Acorn Foundation Trust

BETWEEN MILLIE MARTHA ERCEG Plaintiff

ANDLYNETTE THERESE ERCEG and DARRYL EDWARD GREGORY Defendants

Hearing: 31 January 2014

Appearances: G Illingworth QC and D G Collecutt for Plaintiff
A R Galbraith QC and J F Anderson for Defendants

Judgment: 14 February 2014

JUDGMENT OF VENNING J

This judgment was delivered by me on 14 February 2014 at 11.30 am, pursuant to Rule 11.5 of the
High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Simpson Dowsett Mackie, Auckland
Wilson Harle, Auckland

Copy to: G Illingworth QC, Auckland
D G Collecutt, Auckland
A R Galbraith QC, Auckland
J F Anderson, Auckland

ERCEG v ERCEG & Anor [2014] NZHC 155 [14 February 2014]

Introduction

[1] In this application for summary judgment Millie Erceg seeks orders:

(a) declaring that she is a beneficiary of the Acorn Foundation Trust (the

Trust); and

(b)requiring the defendants to provide copies of documents relating to the Trust to her and her advisers.

Background

[2] Millie Erceg is the mother of the late Michael Anthony Erceg (Michael). The

Trust Deed records her as a secondary beneficiary of the Trust.

[3] Michael settled the Trust in 2004. Michael and the second-named defendant were the original trustees.

[4] Michael was also the founder of Independent Liquor NZ Limited (Independent Liquor). He was killed in an accident on 4 November 2005. At the time of his death the Trust held a significant number of shares in Independent Liquor which it had acquired from Michael.

[5] Following Michael’s death his widow, Lynette Therese Erceg, became a trustee with Mr Gregory.

[6] The Trust sold its shares in Independent Liquor for a substantial sum. The Trust was subsequently distributed. Millie Erceg has not received any distribution from the Trust.

[7] The documents Millie Erceg seeks copies of are: (a) the Trust Deed;
(b)financial accounts for the Trust from the date of its creation to the date of determination by the Court;

(c) copies of the agreements for the sale of the Trust’s shares in Independent Liquor and any valuations obtained by the defendants in relation to Independent Liquor;

(d) minutes of all meetings of the trustees of the Trust.

[8] Millie Erceg seeks orders that the documents be provided to her, to her counsel (senior and junior), to her solicitor and to her son Ivan as a family adviser on the condition that confidentiality undertakings be provided.

[9] The defendants accept that Millie Erceg is a secondary beneficiary of the Trust. They note that she was formerly represented by other legal advisers and that she was previously provided with inspection of the Trust Deed, the Deed of Sale of the Independent Liquor shares by Michael to the Trust, the associated Acknowledgement of Debt for the same amount and the draft accounts of the Trust showing the equity…

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 Erceg v Erceg

Details

AGLC: Erceg v Erceg [2014] NZHC 155
Case: [2014] NZHC 155
Decision Date: 14 February 2014

CaseChat Overview and Summary

The case of Erceg v Erceg concerns an application by Millie Erceg, the mother of the late Michael Erceg, for summary judgment against Lynette Erceg and Darryl Gregory, the trustees of the Acorn Foundation Trust. The trust was established by Michael Erceg and holds significant shares in Independent Liquor NZ Limited. Following Michael’s death, his widow Lynette Erceg became a trustee alongside Mr Gregory, and the Trust's shares were sold for a substantial sum. Millie Erceg, listed as a secondary beneficiary, seeks declarations of her beneficiary status and access to trust documents to ensure accountability of the trustees. The defendants acknowledge her status as a beneficiary but resist full disclosure, citing the settlor's desire for confidentiality.

The legal issues revolve around the extent of a beneficiary's right to access trust documents and the discretion of the Court to order such disclosure. The Court considers the balance between the beneficiaries' rights to ensure proper management of trust property and the trustees' discretion in managing the trust, especially in cases of personal confidentiality. The Court examines previous cases, including Schmidt v Rosewood Trust Ltd and Foreman v Kingstone, which establish that while beneficiaries have a right to seek disclosure, the Court has a discretion to order disclosure based on the inherent jurisdiction to supervise trust administration.

In this case, the Court finds that while Millie Erceg is entitled to seek disclosure to ensure the trustees' accountability, the request for full disclosure of certain documents is not necessary in the context of this summary judgment application. The Court determines that providing certain documents in redacted form, with specific confidentiality undertakings, is sufficient to enable proper legal advice without compromising the settlor's intention for confidentiality. The Court also rejects the request for disclosure to Ivan Erceg, Millie's son, as unnecessary for holding the trustees accountable. Ultimately, the Court orders partial disclosure of the Trust documents under specific conditions to balance the competing interests of confidentiality and accountability.

Orders