Green v Green
[2017] NZHC 1044
•19 May 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-2024 [2017] NZHC 1044
IN THE MATTER of the Hugh Green Trust and the Hugh
Green Property Trust
UNDER
Part 18 of the High Court Rules and
Section 51 of the Trustee Act 1956BETWEEN
MOIRA ELLEN GREEN First Plaintiff
JOHN PATRICK GREEN Second Plaintiff
FRANCES KATHLEEN GREEN Third Plaintiff
AND
MARYANNE GREEN (as trustee of the Hugh Green Trust and the Hugh Green Property Trust)
Defendant Continued over the page ….
Hearing: On the papers Counsel:
R B Lange and J D Ryan for Moira, John and Frances Green
V Bruton QC, for Maryanne Green
S Hunter and S Ambler for A Piper
A Ross and N Kusel for D Randell and C Darlow
P McKendrick for Hugh, James, Brianna and Daniel Green and
Bridget and Samuel ReynoldsA Bell for Gerard and Regan Green, D J Chisholm QC for Eamonn Green
S Mills QC for Jack, Caitlin and Emily Green, together with
any future natural born or adopted children and "remoter issue".Judgment:
19 May 2017
JUDGMENT OF MUIR J
This judgment was delivered by me on Friday 19 May 2017 at 10.00 am Pursuant to Rule 11.5 of the
High court Rules.
Registrar/Deputy Registrar
Date:…………………………
GREEN v GREEN [2017] NZHC 1044 [19 May 2017]
ALICE PIPER Party Served
DAVID HARDING RANDELL, CHRISTOPHER ROBERT DARLOW AND MARYANNE GREEN
Parties Served
HUGH GREEN, JAMES GREEN, BRIANNA GREEN, DANIEL GREEN, BRIDGET REYNOLDS AND SAMUEL REYNOLDS
Parties Served
GERARD JOSEPH BUCKLEY GREEN, REGAN GREEN, JACK GREEN, CAITLIN GREEN AND EMILY GREEN
Parties Served
EAMONN GREEN Party Served
CIV-2013-404-3676
IN THE MATTER of the ESTATE OF HUGH GREEN, and the grant of probate of a will dated 26 April 2012 by the High Court at Auckland under CIV-
2012-404-004791 on 21 August 2012
UNDER Part 27 and Rule 27.34 of the High Court
Rules
BETWEEN MARYANNE GREEN Plaintiff
ANDMICHAEL FISHER, JOHN PATRICK GREEN, FRANCES KATHLEEN GREEN and ROBERT NAREV
Defendants
CIV-2013-404-4840
IN THE MATTER of The Hugh Green Trust and the Hugh Green
Property Trust
UNDER Part 18 of the High Court Rules and Section
51 of the Trustee Act 1956
BETWEEN MARYANNE GREEN Plaintiff
ANDJOHN PATRICK GREEN First Defendant
MICHAEL JOHN FISHER Second Defendant
JOHN PATRICK GREEN, MICHAEL JOHN FISHER, FRANCES KATHLEEN GREEN and JOHN JAMES GOSNEY (as presently named trustees of a trust known as the Hugh Green Trust, settled by deed dated
7 June 1968) Third Defendants
JOHN PATRICK GREEN, MICHAEL JOHN FISHER, FRANCES KATHLEEN GREEN and JOHN JAMES GOSNEY (as presently named trustees of a trust known as the Hugh Green Property Trust, settled by deed dated
20 March 1989) Fourth Defendants
Introduction
[1] On 7 October 2016 the Court of Appeal delivered its decision in the appeal by John Patrick Green and others against the High Court decision of Winkelmann J.1
[2] Paragraphs [154] and [155] of that decision were in terms:
[154] Hugh Green was a remarkable man who left his family a remarkable legacy. He was generous and it was clear from the evidence that he wanted the wealth he created to be a positive thing and a force for good. During the hearing, both sides professed to know Hugh’s wishes. But one thing is beyond all doubt. Hugh would not have wanted to see the children he loved embroiled in wasteful and destructive litigation. There are no fewer than three proceedings on foot, with the prospect of more to come.
[155] The measures put in place by Winkelmann J are working well, but they are only interim stop-gap measures. There is a need for a permanent solution, which ultimately can only be achieved by the family itself.
[3] Those prescient words have resulted in extensive and ongoing discussions between the relevant parties which, in a result which would no doubt bring considerable pleasure to the late Hugh Green, have seen them reach a binding and all inclusive settlement, conditional only on orders: (i) under s 64A of the Trustee Act (as required) and (ii) implementing the agreement. Such settlement agreement has been signed by all adult beneficiaries.
The scope of the proposed settlement
[4] In broad terms the settlement provides that:
(1)from the assets of the Hugh Green Trust and Hugh Green Property Trust totalling some hundreds of millions of dollars the following distributions be made:
(i)A sum approximating 14 per cent of the combined assets of the two trusts to Maryanne Green and her daughter Alice Piper by
way of a distribution net of tax from the Hugh Green Trust
1 Green v Green [2016] NZCA 486 [2017] 2 NZLR 321, on appeal from Green v Green [2015] NZHC 1218, (2015) 4 NZTR 25-017.
(such sum to be in turn settled on a new trust of which inter alia Maryanne, Alice and Alice’s children are discretionary beneficiaries and Alice’s children the final beneficiaries).
(ii)A sum approximating 10 per cent of the combined assets of the two trusts to the Hugo Charitable Trust (a charitable trust settled by Maryanne and now registered with the Charities Commission) such distribution to be from the Hugh Green Property Trust (or procured by it from companies under its control).
(2)on payment of such sums Maryanne is to retire as a trustee of the Hugh Green Trust and Hugh Green Property Trust and Maryanne, Alice and her children will cease to be beneficiaries as the case may be of those trusts.
(3) John Green and Frances Green are to be appointed as trustees of the
Trusts.
(4) all remaining proceedings are to be discontinued.
Beneficiaries and potential beneficiaries affected
[5] The beneficiaries of the Hugh Green Trust are: (a) Hugh’s widow, Moira Ellen Green; and
(b) the children and grandchildren of Hugh Green.
[6] By orders dated 1 December 2016 I confirmed the status of adopted children and grandchildren as beneficiaries of that Trust.
[7] The beneficiaries of the Hugh Green Property Trust are:
(a) The children of Hugh Green and Moira Green (including children by adoption), being the original beneficiaries;
(b)The grandchildren of Hugh Green and Moira Green (including grandchildren by adoption), appointed as beneficiaries by Deed dated
18 April 1999;
(c) Moira Green, appointed as a beneficiary by Deed dated 7 April 2000; (d) “Any charity” added by Deed dated 19 May 2010; and
(e) Eithne Patricia Murphy (the sister of Moira Green).
[8] The only beneficiaries of the Trusts who were not served with these proceedings were “Any charity” within the class of beneficiaries of the Hugh Green Property Trust. In directions as to service made on 13 November 2013 by Doogue AJ, such unspecified potential charities were excluded from service, appropriately so in my view given the remoteness of their interests and what counsel described at the time, in somewhat understated terms, as “logistical difficulties”.
[9] I also accept the submission of all counsel that because the proposed settlement has significant charitable implications it is demonstrably for the benefit of “Any charity”.
Consent of existing beneficiaries
[10] All beneficiaries of the Hugh Green Trust and the Hugh Green Property Trust are legally advised and agree to the settlement.
[11] That includes three beneficiaries who are minors, in each case children of
Gerard Green and being:
(a) Jack Green aged 19;
(b) Caitlin Green aged 17; and
(c) Emily Green aged 16.
[12] Each were formerly represented by their father’s counsel and consented to the arrangements de facto. On 5 May 2017 I appointed Mr S Mills QC to represent their interests and certain categories of unborn or unknown beneficiaries.
[13] All of the adult beneficiaries apart from Eithne Murphy have signed the relevant agreement.
[14] The existence of minors and future beneficiaries and known or unknown persons necessitates the Court’s involvement pursuant to s 64A of the Trustee Act
1956 and/or the exercise of its inherent and supervisory jurisdiction. That is because both Trusts are necessarily varied to exclude Maryanne, Alice and Alice’s children as beneficiaries following the settlement.
[15] Eithne Murphy is concerned with settlement only of the proposed payment from the Hugh Green Property Trust to the Hugo Charitable Trust and the amendment of the Trust Deed to thereafter exclude Maryanne and Alice as beneficiaries. Mrs Murphy was made a discretionary beneficiary in 2012 and since then has received relatively modest distributions not exceeding $30,000 per annum which I am advised have in each case been made at the request of Moira. She has no interest in the winding up of the Trust. Her consent to the distribution in favour of the Hugo Charitable Trust has been obtained. She also consents to associated variations to the trust deed of the Hugh Green Property Trust.
[16] The adult beneficiaries consider the proposed settlement to be commercially appropriate on the basis of the total assets available within the two Trusts. They agree that it is also demonstrably in the family’s overall interests, relying on the observations of the Court of Appeal recorded in [2] above and my own comments in related proceedings CIV-2015-404-341 to the effect:2
[The variations have] clear benefits in terms of the family’s unity and its ability to achieve a permanent resolution of this potentially devisive issue. Unity and finality are matters that go directly to the “welfare and honour of the family” which in terms of s 64A(d) of the Trustee Act is a valid counterweight to any perceived detriment.
[17] Counsel also emphasise that charitable giving was an important part of Hugh Green’s philosophy, that this will continue with the work of the Hugh Green Foundation and that the further sum to be settled on the Hugo Charitable Trust will enhance those objectives. I was referred to Hugh’s memorandum of wishes to the Trustees of the Hugh Green Trust dated 18 June 2010 in terms that “a fair bit [was] to go to Charity” and the inclusion of “Any Charity” as an additional discretionary beneficiary of the Hugh Green Property Trust at about the same time.
Minor, future, unborn and unknown beneficiaries
[18] In respect of the Hugh Green Trust the only possible further beneficiaries (being unknown or unborn) affected by the settlement are any further natural born or adopted children of Maryanne, John, Frances, Eamonn or Gerard.
[19] In respect of the Hugh Green Property Trust there is the further and even more remote category of future children of the grandchildren to be considered by virtue of cl 10(i) of the Deed which provides for vesting (in 2069) on “children or remoter issue”.
[20] In my Minute dated 1 December 2016 I recorded:3 “It is unlikely, albeit possible, that any of John, Frances or Eamonn would have any further children either adopted or natural”. The same applies to Gerard whose status as a beneficiary was confirmed by that Minute. Maryanne confirms that she has no intention of adopting any further children. Nor is she in a position to have any further natural born children.
[21] In assessing the position of the minor beneficiaries and any future natural or adopted children of John, Frances, Eamonn or Gerard it is significant that, in terms of the settlement agreement Maryanne and her daughter Alice:
(a) covenant and agree that in consideration of the payments to them each will disclaim all rights as beneficiaries or prospective or possible beneficiaries of both the Hugh Green Trust and Hugh Green Property Trust or either of them; and
(b)consent to a variation of the Trust Deeds of both Trusts so as to remove them and any further children of Maryanne and Alice as beneficiaries of those Trusts.
[22] The Hugh Green and Hugh Green Property Trusts will, following the Settlement, retain very substantial assets with a value of many hundreds of millions of dollars. Each of the minor beneficiaries and any future children of John, Frances, Eamonn and Gerard will remain beneficiaries of those trusts. The assets comprise (in large part) extensive land holdings on the periphery of Auckland City which the interim trustees have every confidence will continue to grow substantially in value.4
[23] It is clear to me that the corpus of these very valuable Trusts is such that it is difficult to identify in a practical sense how any minor beneficiary, unborn biological grandchild, future adopted grandchild, or remoter issue will suffer a material detriment on account of the proposed settlement agreement.
[24] I take into account that:
(a) under the Hugh Green Trust final distribution (21 years after the death of the last survivor of Moira and the children of Moira and Hugh) is in favour of the grandchildren; and
(b)the settlement sum in favour of Maryanne and Alice will nominally have the effect of reducing the corpus available for distribution to each such grandchild to a level less than if the settlement had not
occurred and Alice remained a beneficiary.
4 Interim Trustee Mr Darlow attended the conference before me on 5 May 2017 at which such confidence was expressed.
[25] However, such ultimate distribution to the grandchildren occurs only in the absence of an alternative determination by the trustees. Moreover, the trustees are expressly empowered to dispose of the Trust fund or any part thereof at any time (cl 3(c)).
[26] In relation to the Hugh Green Property Trust, I likewise take into account the fact that the distribution date is not until 2069 with wide discretions to apply any part of the capital to any living beneficiary (including the children, grandchildren and others) at any time.
[27] In this context the detriment to the minor beneficiaries (and any hypothetical or future beneficiaries) from the settlement seems to me to border on speculative.
[28] Moreover, as I pointed out in the context of my Minute dated 1 December
2016, finality to the long running disputes within this family is a matter which goes directly to the family’s welfare and honour and that is a matter which I may appropriately (and do) take into account as a counterweight to any perceived detriment to the minor, hypothetical or future beneficiaries. Relevant also, in my assessment, is the unanimous agreement of all adult grandchildren (of whom there are seven excluding Alice) to the Agreement. I am in no doubt, on the materials before me, that it is appropriate to approve on behalf of minor, future, unborn and unknown beneficiaries the proposed variations of trust deeds in order to bring this long-running, expensive and ultimately debilitating litigation to an end. In that respect I adopt the observations of the Court of Appeal already noted.
[29] I am fortified in that conclusion by the advice of Mr Mills QC. In his carefully considered memorandum dated 10 May 2017, he refers to the highly discretionary nature of the Trusts and the powers vested in the trustees under cls 2(d) and 3(c) of the Hugh Green Trust and cls 3 and 5 of the Hugh Green Property Trust. He concludes that the effect of these provisions is that the position of the final beneficiaries at dates well into the future is uncertain in the extreme. He contrasts this with what he describes as the “current certainty of a destructive and expensive family feud that seems likely to continue for some time if not resolved by the proposed Deed of Settlement”. He makes the point that, quite apart from the damage
to family relationships from such an ongoing dispute, it is unlikely to be conducive to increasing the wealth of the Trusts. He also says that the fact some of the adult beneficiaries who have consented to the proposed Deed of Settlement are likely to be of an age that they will be included in the final beneficiary group indicates that there is a shared concern across the generations.
[30] In its terms Mr Mills’ appointment includes “remoter issue” as referred to in cl 10(i) of the Hugh Green Property Trust. Alice’s son Ronan (aged 8) and any future siblings fall into that category. To the extent Mr Mills concludes that the settlement is in the best interests of the actual and potential final beneficiaries, that position applies with at least equal force in respect of Ronan and any such siblings who become discretionary and final beneficiaries of the new trust referred to in
[4(1)(i)] above.5 Whether such next generation would have vested under cl 10(i) of
the Hugh Green Property Trust and if so to what extent, given the provisions of cls 3 and 5, is itself highly speculative.6 I have no doubt therefore that the settlement and associated variations of trust are in the best interests of this particular subcategory of remoter issue.
Position of Trustees
[31] As indicated, Maryanne will upon Completion (as that term is defined in the
Settlement Agreement) resign as a trustee of the two Trusts.
[32] Mr Darlow and Mr Randell, who were appointed interim trustees by Winkelmann J, together with Maryanne (in her capacity as trustee) seek the directions of the Court that they be entitled to implement the proposed settlement.
[33] The joint memorandum of counsel submits that the Court has jurisdiction in this respect by virtue of:
(a) its inherent and supervisory jurisdiction over trusts;
5 See memorandum of counsel for Alice Watson dated 11 May 2017 and cls 2.1(d)(ii) and 2.1(e)
of the Hugh Green Family Trust Deed dated 28 April 2017.
6 Alice would be 87 at the vesting date and could well therefore be alive.
(b)section 66 of the Trustee Act 1956 which gives trustees the right to apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of any trust;
(c) order 3(d) of Winkelmann J in the proceedings CIV-2013-404-4840 dated 2 July 2015, appointing Mr Darlow and Mr Randell interim trustees until further order of the Court;7
(d)irder 3(m) of the orders of Winkelmann J in the same proceedings which prevented the trustees (Maryanne, Mr Darlow and Mr Randell) from exercising any power to appoint or remove trustees or to resettle Trust assets without notice to the beneficiaries and without consent of the Court;
(e) order 3(o) of the orders of Winkelmann J in the same proceedings which reserve leave to Mr Darlow and Mr Randell to apply for any directions they seek;
(f) section 51 of the Trustee Act 1956 which gives the Court power to make an order appointing new trustees either in substitution for or in addition to any existing trustee where it is expedient to do so; and
(g)section 64A of the Trustee Act which gives the Court power to make any order authorising variations of trust on behalf of any minor, unborn or unknown beneficiary.
[34] The settlement provides for Mr Darlow and Mr Randell to continue as full (as opposed to interim) trustees and for John and Frances to be likewise appointed. An order is sought making these appointments immediately following payment of the relevant sums to Maryanne, Alice and the Hugo Charitable Trust.
[35] The assistance of the Court is required in this respect because:
7 Green v Green HC Auckland CIV-2013-404-4840, 2 J7uly 2015 (Final Orders).
(a) Winkelmann J’s order 3(d) provides that Mr Darlow and Mr Randell’s appointment as interim trustees continues until further order of the Court.
(b)Order 3(m) prevents the present trustees from exercising any power to appoint or remove trustees without consent of the Court.
(c) Under the trust deeds the power of appointment of trustees rests with the executors of Hugh’s estate. If there are no executors able and willing to act then the power of appointment rests with the present trustees.
(d)There are no executors of Hugh’s estate in office. This is because Winkelmann J ordered that the grant of probate to the defendants of the will of Hugh Green dated 26 April 2012 be recalled and that the issue of the grant of probate in respect of any testamentary disposition of Hugh Green prior to his will dated 26 April 2012 be deferred until the outcome of the substantive appeal.
[36] The will prior to Hugh Green’s will dated 26 April 2012 was that dated 1
November 2011 (and second codicil). Mr Robert Narev and Moira Green are the named executors of that will. They have confirmed that, conditional on the settlement agreement proceeding, they:
(a) have no present intention to seek probate of the previous will and second codicil; and
(b) consent to the orders proposed in CIV-2013-404-4840 that:
(i) Mr Darlow and Mr Randell continue as full trustees; and
(ii) John Green and Frances Green be appointed as trustees of the
Trusts.
[37] In the recent decision of Re Burnett Mount Cook Station Charitable Trust the Court recognised that s 66 may be invoked by trustees to obtain the sanction of the Court in respect of significant transactions.8
[38] I am satisfied that on the jurisdictional bases set out in counsel’s
memorandum the orders sought are appropriate.
Confidentiality
[39] Counsel submit that the terms of the settlement agreement, the contents of their memorandum and the accompanying bundles of documents contain information confidential to the parties and that there is no public interest in their disclosure. Also relevant is the fact that the interests of minors are engaged.
[40] The appropriate course is, in my view, to make orders that the file not be searched without leave of the Court on notice to the parties.
Result
[41] I accordingly make the following orders (by consent as appropriate):
(a) In these orders “Completion” and “Completion Date” have the
meaning set out in cl 1.1 of the Settlement Agreement.
(b)Mr Darlow, Mr Randell and Maryanne Green are entitled to implement the Settlement Agreement in accordance with its terms, and in so doing have the protection of the Court as set out in s 69 of the Trustee Act 1956.
(c) Maryanne Green, Alice Watson (formerly Piper), any future children adopted by Maryanne Green, and any children of Alice Watson will cease to be beneficiaries of the Hugh Green Trust and the Hugh Green Property Trust upon Completion and orders in terms of the Variation
Deed annexed as schedule 1 and 2 to the Settlement Agreement.
8 Re Burnett Mount Cook Station Charitable Trust [2016] NZHC 2669, (2016) 4 NZTR 26-024.
(d)Upon Completion, John Green and Frances Green are appointed as trustees of the Hugh Green Trust and the Hugh Green Property Trust.
(e) Upon Completion, Mr Darlow and Mr Randell will continue as full trustees (as opposed to interim trustees in terms of their appointment as such by court order dated 2 July 2015) and will be released from their reporting obligations to the Court in terms of that order.
(f) Order 3(m) of the orders of this Court dated 2 July 2015 shall cease to have effect.
(g)The Court approves the variation of the Hugh Green Trust Deed in the form at Tab J of the parties’ bundle of documents on behalf of the minor beneficiaries and any unborn or unknown beneficiaries, such variation to take effect immediately upon Completion.
(h)The Court approves the variation of the Hugh Green Property Trust deed in the form at Tab K of the parties’ bundle of documents on behalf of the minor beneficiaries, any unborn or unknown beneficiaries and any charity, such variation to take effect immediately upon Completion.
(i)The Court file is not to be searched without leave of the Court and any application to do so is to be notified to the parties who shall be given a minimum 20 working days to respond.
(j)The costs of all parties, Mr Mills QC, Mr Darlow and Mr Randell are to be paid by the Hugh Green Trust and/or the Hugh Green Property Trust.
(k)Upon Completion, all remaining proceedings are to be discontinued, being proceedings CIV-2013-404-4840; CIV-2013-404-3676; and CIV-2015-404-2024.
[42] I express my congratulations to all parties and counsel (including Mr Stewart
QC who has had a significant involvement in the settlement negotiations) in having achieved a resolution to these disputes.
Muir J
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