Francis v Mortlock - [2024] NZHC 3247

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-317

[2024] NZHC 3220

UNDER the Trusts Act 2019

BETWEEN

DEBORAH ANNE FRANCIS

Plaintiff

AND

SIMON GEORGE MORTLOCK AND CRAIG PAUL BURROWES

Defendants

Hearing: On the papers

Appearances:

J W A Johnson and D J Pine for Plaintiff H G S Douch for Defendants

T C Weston KC and G Angus for H Francis S C I Jefffs for J F Blaxall and N F Norris

N L Walker and J B C Trezise for Wayne Francis Charitable Trust

Judgment:

1 November 2024

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 1 November 2024 at 10 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

FRANCIS v MORTLOCK [2024] NZHC 3220 [1 November 2024]

Introduction

[1] The defendants (the Applicants) have filed an interlocutory application for joinder and for orders under the Trust’s Act 2019. They, along with counsel for the other parties to the proceedings, have also provided a joint memorandum seeking the following orders to be made by consent:

(a)Pursuant to r 7.43A(1)(e) of the High Court Rules 2016 (Rules), for joinder of Simon George Mortlock (Simon) and Craig Paul Burrowes (Craig) in their capacities as trustees of the Family Trust, trustees of the Property Trust, and executors/trustees of the Estate as interested parties to these proceedings (Joinder Application);

(b)Pursuant to s 133 of the Trusts Act 2019 (Act) and/or the inherent jurisdiction of the Court, directing that it is proper and lawful for the Applicants to exercise their powers under the Wayne Francis Charitable Trust deed dated 22 June 1999 (WFCT Deed), W J Francis Family Trust deed dated 31 May 1992 (Family Trust Deed), Francis Property Trust deed dated 11 April 1993 (Property Trust Deed) and the will of Wayne James Francis dated 22 June 1999 (Will), respectively to enter into the settlement agreement dated 29 August 2024 (Settlement Agreement) and implement the settlement with Deborah as set out in the Settlement Agreement (Blessing Application); and

(c)Pursuant to s 124 of the Act, approving the variations to the WFPBT Deed, Family Trust Deed and Property Trust Deed set out in Schedule 1 to the Applicants’ interlocutory application (Variation Application) to take effect after the Applicants have transferred to the sum of
$15,000,000 (Settlement Sum) pursuant to the Settlement Agreement.

[2]I must consider whether it is appropriate to make the orders as sought.

Factual background

[3] Wayne James Francis (Wayne) passed away on 28 June 1999. Wayne was survived by his widow, Deborah Anne Francis (Deborah), and only child Helena Francis (Helena) from his first marriage to Sandra Francis. Helena has two children, Jamie Francis Blaxall (Jamie) and Nicholas Francis Norris (Nicholas).

[4]Throughout his lifetime Wayne settled a number of trusts, namely:

(a)the Family Trust, settled on 31 May 1992;

(b)the Property Trust, settled on 11 April 1993; and

(c)the WFPBT;

(together, the “Francis Group Trusts”); and

(d)the Wayne Francis Charitable Trust (WFCT),…

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 Francis v Mortlock

Details

AGLC: Francis v Mortlock [2024] NZHC 3220
Case: [2024] NZHC 3247
Decision Date: 1 November 2024

CaseChat Overview and Summary

The High Court of New Zealand was asked to decide an interlocutory application regarding the joinder of trustees and the approval of a settlement agreement and variations to trust deeds. The case involves Deborah Anne Francis and the trustees of several trusts established by Wayne James Francis. Deborah, who is a beneficiary of the trusts, filed proceedings against the trustees seeking various orders, including the removal of trustees for breach of fiduciary duties. The trustees, Simon George Mortlock and Craig Paul Burrowes, along with other parties, applied for joinder and sought the court's approval of a settlement agreement and variations to the trust deeds.

The court had to determine whether it was appropriate to join the trustees as interested parties, to bless the settlement agreement, and to approve the variations to the trust deeds. The joinder application was supported by consent from all parties and was deemed necessary to ensure the terms of the settlement could be implemented effectively. The blessing application involved a significant decision to resettle $15 million of trust assets to establish a new trust for Deborah, which was considered momentous and aligned with the settlor's intentions. The variation application sought approval for changes to the trust deeds to reflect the settlement agreement and the renunciation by Deborah of her interests in the trusts.

The court found that the trustees had the power to exercise their discretion to approve the settlement and variations, and that the settlement agreement was fair and reasonable, benefiting all parties involved. The court concluded that it was appropriate to join the trustees as parties to the proceedings, to bless the settlement agreement, and to approve the variations to the trust deeds. The settlement would provide for Deborah and resolve all claims against the trusts, ensuring a harmonious distribution of assets among the family members.

The final orders included the joinder of the trustees as interested parties, the blessing of the settlement agreement, and the approval of the variations to the trust deeds. The court's decision was based on the consent of all parties, the alignment of the settlement with the settlor's intentions, and the overall benefit to the beneficiaries of the trusts.

Orders