Green v Green

[2015] NZHC 1218

ORDER THAT THERE IS TO BE NO PUBLICATION OR FURTHER DISTRIBUTION OF THE CONTENTS OF THIS JUDGMENT OR THE RESULT, UNTIL 5PM WEDNESDAY 10 JUNE 2015. SEE PARAGRAPH [675].

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4840 [2015] NZHC 1218

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

AND

JOHN 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

GREEN v GREEN, FISHER & ORS [2015] NZHC 1218 [3 June 2015]

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

AND

MICHAEL FISHER, JOHN PATRICK GREEN, FRANCES KATHLEEN GREEN AND ROBERT NAREV Defendants

Hearing:

12-15, 18-22, 25-29 August 2014

1-5, 15-17 September 2014
25-26 November 2014

Appearances:

V Bruton, G Harley, P A Brown for plaintiff
SBW Grieve QC for first defendant in CIV-2013-404-4840
R B Stewart QC, R B Lange, J Ryan for all defendants in
CIV-2013-404-4840
H Waalkens QC for defendants in probate proceeding
CIV-2013-404-3676
S Hunter, S Ambler for Ms Piper

Judgment:

3 June 2015

JUDGMENT OF WINKELMANN J

This judgment was delivered by me on 3 June 2015 at 4.30 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Table of contents  Para

1             Introduction  [1]

2             Factual background  [12]

2.1     The legal entities  [12]

2.2     The people  [16]

2.3     Events leading up to the challenged decisions  [28]

2.4First  challenged  decision:  appointment  of  John  and  Frances  as trustees of three trusts on 8 November 2011

2.5Second  challenged  decision:  appointment  of  John  and  Frances  as directors of the main companies in the Green Group on 5 December

2011

2.6     Third challenged decision: removal of Maryanne as a trustee on 20

December 2011

2.7     Fourth challenged decision: appointment of Mr Fisher as trustee on 29

March 2012

2.8Fifth and sixth challenged decisions: appointment of Mr Fisher as director of all trust owned companies on 2 April 2012, and the removal of Maryanne as a director of all trust owned companies on 2 April and

29 April 2012

2.9     Seventh challenged decision: Hugh’s execution of a new will on 26

April 2012 appointing Mr Fisher, John and Frances (together with Mr

Narev) his executors and trustees

[72] [73]

[74] [76] [77]

[80]

2.10   Events after the execution of Hugh’s last will  [82]

3             The issues raised in this proceeding  [88]

4             What are the principles governing the challenge to Hugh’s capacity

to have exercised the various powers and to execute his last will?

[89]

4.1     Understands the nature of the act and its effects  [92]

5What are the principles governing the challenge based on undue influence?

[100]

6             Evidence relating to Hugh’s capacity  [104]

6.1     Expert medical evidence  [114]

6.2     Family and friends  [123]

Credibility issues  [123]

The evidence of family and friends as to capacity  [133]

6.3     Lawyers and business associates  [151]

6.4     Medical professionals involved in Hugh’s care  [168]

6.5     Analysis  [187]

7             First  challenged  decision  –  capacity:  appointment  of  John  and

Frances as trustees on 8 November 2011

[191]

7.1     Appointment  ill  advised,  and  contrary  to  long  standing  plan  as   [195]

evidence of lack of capacity?
7.2	Mr Fisher’s involvement	[197]
7.3	Circumstances surrounding the execution of the documents	[212]
7.4	Analysis	[216]
8	First challenged decision – undue influence: appointment of John and Frances as trustees on 8 November 2011	[221]
8.1	Analysis	[239]
9	Second challenged decision  – capacity: appointment of  John and Frances as directors of the main companies in the Green Group on 5 December 2011	[260]
9.1	Evidence relating to capacity	[264]
10	Second challenged decision – undue influence: Hugh’s exercise of power as trustee shareholder (together with John and Frances) to appoint John and Frances directors of main Hugh Green Group companies on 5 December 2011	[269]
10.1	Were the resolutions validly passed?	[288]
11	Third  challenged  decision  –  capacity:  removal  of  Maryanne  as trustee on 20 December 2011	[304]
11.1	Events leading up to execution of deeds	[304]
11.2	Background to execution of deeds	[329]
11.3	Other evidence relevant to capacity	[332]
11.4	Analysis	[346]
12	Third challenged decision – undue influence: removal of Maryanne as trustee on 20 December 2011	[350]
13	Fourth challenged decision: appointment of Mr Fisher as trustee on 29 March 2012	[367]
13.1	Events leading up to appointment	[367]
Letter of 22 December 2011	[367]
Steps to remove Maryanne in January 2012	[373]
Working together in February and March 2012	[391]
28 March board meeting	[412]
The instruction to appoint Mr Fisher as trustee	[420]
Circumstances of execution	[424]
13.2	Evidence as to capacity	[426]
13.3	Undue influence	[429]
14	Fifth  and  sixth  challenged  decisions  -  capacity:  appointment  of Mr Fisher as a director and removal of Maryanne as a director on 2 April 2012	[438]
15	Fifth and sixth challenged decisions - undue influence: appointment of Mr Fisher as a director and removal of Maryanne as a director on 2 April 2012	[447]
16	Seventh challenged decision - capacity:  execution of a new will on 26 April 2012	[449]

16.1   The new will  [449]

16.2   Events leading up to the new will  [450]

The instruction  [453]

16.3   The execution of the new will  [455]

16.4   Analysis  [464]

17Seventh challenged decision – undue influence:  execution of a new will on 26 April 2012

18           Fifth  cause  of  action:    was  Maryanne  re-appointed  trustee  on

21 December 2011?

[470]

[473]

18.1   Defence of estoppel by convention  [484]

19           Third cause of action: improper exercise of fiduciary powers              [493]

19.1   Appointment of John and Frances  [494]

19.2   Removal of Maryanne as trustee  [499]

19.3   Appointment of Mr Fisher  [500]

19.4   Trustee defendants’ position  [501]

19.5   Relevant principles  [504]

19.6   Analysis  [508]

19.7   Background to the allegations of dishonesty  [513]

Trip to Mangatangi  [514]

Mr Staub’s investigation  [527]

19.7   Transactions investigated by Ms Payne  [534]

Cash cheques signed by John Green  [538] Cash payment for C Kennedy  [543] Cheque cashed at Auckland Trotting Club  [546] Payment to J W & J M Langdon  [548] Cash payment for Overdevest  [552] Interlaken Livestock Ltd  [554] Stock discrepancies  [557] Defence position in connection with these transactions    [562]

19.8Allegation that Hugh did not exercise power of removal of Maryanne and removal of Mr Fisher in the best interests of the beneficiaries

[581]

20           Fourth cause of action: substitution of new trustees  [588]

20.1   Principles to be applied  [598]

20.2   John Green  [608]

Misconduct in the administration of the trusts – fraud on a power       [608] Dishonesty  [609] Hostility  [610] Other conduct  [611]

20.3   Michael Fisher  [612] Misconduct in the administration of the trusts – fraud on a power       [612] Hostility  [613] Conflicts of interest  [622]

20.4   Frances Green  [629]

Misconduct in the administration of the trusts – fraud on a power Hostility Conflicts of interest – misconduct	[629] [630] [633]
20.5	Mr Gosney	[645]
20.6	Do any of the issues affect the administration of the trust?	[652]
21	Result	[657]
21.1	Probate proceedings	[657]
21.2	Trust proceedings	[660]
21.3	Next steps	[670]
22	Costs	[674]
23	Confidentiality	[675]

1.       Introduction

[1]      The Green family are the owners of a complex group of companies and trusts which, taken together, hold assets worth hundreds of millions of dollars.1   Mr Hugh Green was the founder of this group.   Hugh was born in Ireland in 1931 and immigrated to New Zealand in 1951.  Although he arrived in the country with nothing,  over  the  next  60  years  he  accumulated  considerable  wealth,  working initially with fellow Irishman, Bernard McCahill (together they operated a company

Green & McCahill Ltd) and then after the termination of that business relationship, on his own account through various entities.

[2]      Hugh had a passion for cattle farming and in particular cattle trading, but it was largely through land dealings that the Green family wealth was generated.  Hugh was also a family man, and during the course of a long marriage to Moira they had four children, John, the eldest, the plaintiff Maryanne and younger children Frances and Eamonn Green. They also adopted a nephew, Gerard.2

[3]      In 2010 Hugh was diagnosed with a terminal illness, and with that diagnosis came the need to settle upon a plan for who would control the Green Group after Hugh’s death.  Although some of Hugh’s children had roles in the Green Group over the years, the plaintiff, Maryanne, was the only one who worked there constantly for any length of time.   She was also the one who had a measure of control over the Green Group, although always working alongside her father.

[4]      With his diagnosis Hugh began to express a wish that his other children John and Frances have more of a role within the Green Group.   Tensions quickly built within the family as plans for this were formulated, debated, argued over and reformulated.  Over a period of months, Hugh signed a number of documents the combined effect of which was to completely remove his daughter Maryanne from control of any aspect of the Green Group and to put others in control, namely John,

Frances, and a lawyer, Mr Michael Fisher.

1      Referred to as the Green Group in this judgment.

2      Because of the number of members of the Green family involved in this proceeding I refer to them by their first names in this judgment to avoid confusion and prolixity.

[5]      In these two sets of proceedings Maryanne challenges the validity of her father’s actions in the last nine months of his life, to the extent that those actions effected this change in control of the Green Group and the Green family’s interests in it.   She is supported in these challenges by her daughter, Alice Piper who as a beneficiary under trusts settled by Hugh is a party served in these proceedings.3

[6]      In the probate proceedings, Maryanne seeks the recall of the grant of probate of a will dated 26 April 2012.  The only change in this will of any significance from Hugh’s earlier will is that Mr Fisher, John and Frances were added as executors and trustees of the will while Moira was removed from that role.4   This small change has considerable significance for control of the Green Group.  It is the executors of the will who have the power of appointment of trustees for the various trusts while the estate is in the administration phase.5    The trusts have control of the entire Green Group.  Maryanne argues that the will is invalid because Hugh lacked testamentary capacity when he executed it, and also because he was subject to undue influence exercised by his son John and by Mr Fisher.

[7]      In the other set of proceedings (the trust proceedings) Maryanne and Alice challenge Hugh’s exercise of the power of appointment to appoint John and Frances, and also Mr Fisher as trustees of the various trusts, and the exercise of his power of removal to remove Maryanne as trustee.   She also challenges the exercise of his power as a trustee shareholder to appoint John, Frances and Michael Fisher as directors of the main trust owned companies, and to remove Maryanne as director of those same companies. The challenges are advanced on the following bases:

(a)       Hugh  did  not  have  the  capacity  to  understand  the  effects  and implications of his exercise of each power.

(b)The exercise of each power was not the exercise of Hugh's free will, and was caused by the undue influence of John and/or Mr Fisher.

3      Alice is Maryanne’s adopted daughter.  During the course of this proceeding an issue arose as to

Alice’s status as a beneficiary of the Hugh Green Trust, and that issue is now being investigated.

4      Hugh’s earlier will was executed on 1 November 2011.

5      Once the administration phase is complete, the power of appointment passes to the surviving or continuing trustees.

(c)       The exercise of each power was the improper exercise of a fiduciary power by Hugh.

[8]      Maryanne argues as an alternative that even if she was validly removed as a trustee, she was nevertheless reappointed by Hugh and so remains a trustee.

[9]      Finally, as a further or alternative cause of action Maryanne claims that some of the existing trustees should be removed and replaced because of misconduct in the administration of the trusts, or because they are unsuitable, conflicted, hostile and/or incapable of acting even-handedly towards Maryanne and Alice.

[10]     The defendants in the probate proceedings are the executors and trustees of Hugh, under a will dated 26 April 2012.6   They deny that the will was executed by Hugh when he lacked testamentary capacity, or was subject to undue influence.  The defendants in the trust proceedings are trustees of the Hugh Green Trust, and of the Hugh Green Property Trust.7    The trustee defendants say that although Hugh had a terminal illness at the time he made the challenged decisions he exercised all of the powers with full capacity, of his own free will (there was no undue influence), and in accordance with his fiduciary obligations.   The trustee defendants say that to the extent the decisions involved the removal of Maryanne as a trustee and director, they were hard decisions for Hugh to make, and upsetting for him, but they were his decisions.  Because of Maryanne’s refusal to accept the appointments of John and Frances as trustees and directors, her removal became necessary to ensure that the

trusts and the Green Group could be governed and managed without continual conflict.

[11]     The trustee defendants say that as trustees they have acted competently and that they have and will continue to exercise their powers, functions and duties as trustees in good faith, for proper purposes and in the interests of the beneficiaries of the trusts.  There is no real case that the interests or welfare of Maryanne or Alice as beneficiaries are likely to be in any way prejudiced under the status quo.  They point

out that it is the wish of all beneficiaries of the trust with the exception of Maryanne

6      Mr Fisher, John Green, Frances Green and Mr Narev.

7      John Green, Mr Fisher, Frances Green and Mr John Gosney.

and Alice that they remain as trustees of the trusts and that in all the circumstances there is no proper basis to remove any of the current trustees.

2.       Factual Background

2.1      The legal entities

[12]     The Green Group is divided between a business arm and a charity arm.  The wealth is controlled through three entities, the Hugh Green Trust, the Hugh Green Property Trust, and the Hugh Green Foundation (previously the Hugh Green Charitable Trust).

[13]     The Hugh Green Trust and the Hugh Green Property Trust are on the business side.    The  Hugh  Green  Trust  was  settled  in  1968.    After  Hugh’s  death  the beneficiaries of the Hugh Green Trust are Moira, and the children and grandchildren of Hugh Green.   The Hugh Green Property Trust was settled in 1989.   The beneficiaries include Moira, the children and grandchildren.  There are also a large number of companies formed for various business activities.   One or more of the Hugh Green Trust and the Hugh Green Property Trust hold the shares in those companies and as shareholders have the power to appoint and remove directors.

[14]    The Hugh Green Foundation was established in 1998, and is as its name suggests, on the charitable side of the Green family’s interests.

[15]     Prior  to  Hugh’s  death  the  Moira  Green  Property  Trust  also  held  and controlled part of the Green family wealth.   It was settled at the same time as the Hugh Green Property Trust, and as the settlor of that trust, Moira had power of appointment of trustees.  However, shortly before Hugh’s death it was proposed that this trust be resettled upon the Hugh Green Property Trust.   Hugh recorded his agreement to this in writing, although the resettlement was not implemented until after his death.  This resettlement had the effect of further shifting control of Green family assets away from Maryanne, and toward John, Frances and Mr Fisher.

2.2      The people

[16]     In 2010, prior to his diagnosis with terminal cancer, two of Hugh’s children were involved in the family business.   Maryanne joined her father’s business in

1987, initially as the Manager of Kilmacrennan Livestock Limited (Kilmacrennan), the entity through which Hugh conducted his cattle trading business.  Maryanne rose to become Chief Executive Officer of Green & McCahill and later, following the split of Hugh and Mr McCahill’s business interests, she was Chief Executive of the Green Group from 1997 to 2012.  It is not disputed that, like her father, she lived and breathed the business, working very closely with her father on a daily basis.   By

2010 she was trustee of all of the trusts and director of all Green Group companies.

She was also executor of Hugh’s will.

[17]     Maryanne’s evidence was that at the time of her father’s diagnosis her plan, which she had told her father and other trustees, was over time to move aside from the role of Chief Executive Officer but remain as a hands on working director on the property side of the business. The property aspect of the business was her interest.

[18]     John  started  working  in  the  family  business  about  the  same  time  as Maryanne, but left in the mid 1990s, not rejoining until 2009.   In the early 1990s John worked on a part time basis as a cattle agent for Kilmacrennan and from 1989 to 1994 was also a trustee of the Hugh Green Trust, alongside Maryanne and Hugh. He resigned from both positions in 1994 and from then on lived mainly in Australia. However in August 2009 he began working as a part time administrator for the Hugh Green Foundation.

[19]     There have long been tensions in the relationship between Maryanne and John.  These stem in part from their very different personalities, but also from the circumstances surrounding John’s departure from the Green Group in 1994 and his resignation as trustee at that time.   These resignations followed on from an investigation into cattle trading by John when he was working at Kilmacrennan. That investigation found irregularities in a significant number of transactions which

he had committed Kilmacrennan to.   Maryanne believes, and alleges in these proceedings that these transactions involved dishonesty on the part of John.8

[20]     Hugh was a man well known for both the strength of his character and his opinions but he appreciated the value of good advice and valued debate.  His work style was to gather around him a small group of trusted advisers and employees. Over many years he sought the advice and assistance of two men in particular in connection with business matters, Mr Robert Narev and Mr Robert Carter.

[21]     Mr Narev is a solicitor with extensive commercial and legal experience.  He knew and worked with Hugh for over 30 years.  During Hugh’s life Mr Narev was a trustee of each of the three principal trusts referred to above and a director of many of the principal Green Group companies.   He is an executor under the challenged will and also under the previous will.  In the context of this family conflict Mr Narev is unique amongst the many that have been drawn into it, because he has retained the trust of both sides.

[22]     Mr Carter joined Green & McCahill as Company Secretary (performing the role of Chief Financial Officer) and later was the Managing Director of the Green & McCahill Group.   After the division of the Green & McCahill business interests Mr Carter remained as a non-executive director of the Green Group companies and continued as a close confidant and business adviser to Hugh, adding accounting and technical knowledge to Hugh’s business skills.  He resigned most directorships in the latter part of the last decade due to health reasons.  However he continued to act as adviser and confidant to Hugh and continued as a trustee of the Hugh Green Foundation and as a director of Hugh Green Charitable Trust Limited until his resignation in December 2013.

[23]     Hugh also sought advice from Ms Kathryn Roberts, who was at the time, a partner at PWC.   She provided accounting, taxation and advisory services to the Green Group, and also acted as a trust adviser, attending trust meetings from 2006.

She had been asked by Maryanne and Hugh to be a trustee but partnership rules

8      Amended statement of claim in the trust proceedings at [2.5] – [2.9] and [5.4].

precluded her from taking on such a role.  Until 2012 she regularly attended trust meetings.

[24]     From time to time Hugh also instructed Mr Fisher to represent the interests of the Green Group.   Initially he was instructed in respect of litigation, but in 2006

Hugh asked him to represent the interests of the Green Group by serving as a director on the board of a company in which the Green family had a substantial investment, Dorchester Pacific Limited.

[25]     The business also had a number of long standing employees who played some role in the events that have given rise to these proceedings.  Ms Jane Porter is the Chief Financial Officer of the Green Group.  She has held various roles within the Green Group since the early 1990s.  Mr Seamus Brennan joined the Green Group in  1997  and  was  someone  trusted  by  both  Hugh  and  Maryanne.    Ultimately Mr Brennan took over from Maryanne as Chief Executive Officer, and continues in that role today.

[26]     Maryanne’s  account  of  how  the  business  was  run  prior  to  Hugh’s  final diagnosis was that she oversaw the property side, which Hugh left to her to a significant  extent.     Hugh  oversaw  the  cattle  and  share  market  investments. Mr Carter worked closely with Ms Porter on the finance and investment and Hugh and Maryanne worked closely on charitable giving.9   At a more general level, Hugh was the one who set the vision for the business and made the strategic decisions. Maryanne’s role was to ensure execution of those plans.10

[27]     All of these people, with the exception of Mr Brennan, gave evidence in these proceedings.

2.3      Events leading up to the challenged decisions

[28]     Much is in dispute in these proceedings as to how events came to occur and as to what motivated the various participants in those events.  There is however little

dispute as to the key chronology.   Resolution of the issues between the parties

9 Affidavit of Maryanne Green at [68].

10     CBD at 683-684.

necessarily turns upon close analysis of this chronology of events as established through contemporaneous documents and through evidence in these proceedings, as well as upon a weighing up of competing accounts of events.  This is a complex task given the number of actions challenged, and the time frame within which they occur. I have found that it means an unavoidably large judgment.   To assist in the comprehension of this volume of material I believe it is helpful at this point to set out a basic narrative of events.

[29]     The critical chain of events commences with the diagnosis in February 2010 that Hugh, then aged 78, had a recurrence of a cancer for which he had previously been treated, and that he was now terminally ill.  At that time Hugh was already dealing with a number of chronic ailments [redacted material].  He was nevertheless well, alert and active.  He continued to be well for some time after the diagnosis and remained the driving force in the Green Group.  It may be for this reason that the issue of how the Green Group and the Green family interests would be controlled after Hugh’s death was not initially focused upon by the family.

[30]     Some very small steps toward succession planning were taken when in June

2010 Hugh prepared a memorandum of wishes for the trustees of the Hugh Green Trust.  He recorded his wish that the business continue, and that there should be equality amongst the primary family beneficiaries, his children.

[31]     The next significant event in terms of succession planning occurred on Friday

27 May 2011, when a meeting took place between Hugh, Moira, and Mr Narev, with Mr Carter attending by phone.   Following that meeting Mr Narev prepared a memorandum of matters agreed at the meeting including that John was confirmed as head of distribution for the Foundation, and was to have signing authority and that Maryanne’s involvement in the Foundation would be limited to that of trustee. As to

the Green Group, the memo recorded:11

Hugh to speak to [Seamus] with a view to appointing him as General Manager of Operations (but not as a director at this stage), responsible for construction, leasing and subdivision development but not for other activities such as share portfolio and financing, which will remain the responsibility of

11     CBD at 621.

Jane Porter.  Both [Seamus] and Jane will report to Maryanne.  If this is acceptable to [Seamus], Hugh will then clear with Maryanne.

[32]     As  to  the  distribution  from  the  trusts  to  his  children  the  memorandum recorded:

At this stage, all children are to receive as soon as possible [redacted material].  Gerard might receive the Helensville property for his share.  John [redacted material]. and Frances [redacted material] ?. are to bring those amounts to account as part of such allocations.

[33]    Mr Narev circulated the memorandum to Hugh and Moira.  Moira made a handwritten addendum to it, recording that Maryanne was to get an [redacted material].  Moira said in her evidence that she assumed that Maryanne was to receive an [redacted material] in recognition of the work she had done for the business over

many years.12

[34]     The  plan  recorded  in  this  memorandum  is  consistent  with  Maryanne’s evidence that Hugh’s long term plan for the Green Group was that it would be Maryanne who would look after the family’s interest in it, and that she should have a good team of executives to help her with this.   It is evidence corroborated by documents and statements made at the time, and I accept that as at this date at least,

that was Hugh’s intention.13

[35]     Maryanne had not attended the 27 May meeting, and so was not party to the agreement that John should be a cheque signatory for the Foundation.  She was at this time a trustee of the Foundation.  Maryanne did not agree that John should be given signing authority and told her father so.   Her evidence is that she reminded Hugh that they had previously agreed that John would not have signing authority. Maryanne says that her father responded “Well, it is just of the charitable trust, that

will be okay won’t it?”14    Maryanne says that she took no further steps to put in

place the authority for John, and her father did not press the issue.  She did however speak to Mr Brennan about his taking on the role of General Manager Operations.

12 First affidavit of Moira Green at [54].

13     See for example CBD at 686, NOE Robert Carter at 1328-1330, Transcript interview with Paul

Little at 379.

14 Affidavit of Maryanne Green at [145].

[36]     Around   this   time  Hugh   and   Maryanne  together  were  giving  further consideration to additional trustees and directors for the Green Group.   Various names were discussed.   Maryanne’s evidence was that both their preferences were for Ms Roberts, and Mr Narev’s son Ian Narev to be appointed additional trustees. However neither was able to accept the role because of restrictions placed upon them by the  organisations  they  worked  for.    There  was  nevertheless  a  plan  to  bring Mr Carter into the trusts and to appoint Mr Narev as a director of the main Green Group companies.  In pursuance of this plan Mr Carter was appointed trustee of the Hugh Green Trust, the Hugh Green Property Trust and the Hugh Green Charitable Trust in mid June.  One thing was clear, Hugh wanted these two men to be involved in the future of the Green Group after his death.   It is not disputed that he placed great store in their judgment and experience.

[37]     Hugh was well for some time following his diagnosis.  Although the cancer continued to progress, he remained under the care of his initial treating surgeon, Dr Jonathan Masters.   However by June 2011 Dr Masters had formed the opinion that although Hugh was still feeling well in himself, the medication regime with which he was treating Hugh was beginning to lose its effectiveness, and he referred

Hugh to a specialist oncologist Dr Fritha Hanning.15

[38]     There  had  been  discussions  of  John  becoming  a  director  in  early  2011. Mr Carter  refers  to  Maryanne  telling  him  of  this  in  March  2011.16      However Maryanne says it was in June of 2011 that Hugh told her that he wanted John to be a director and that John and Maryanne should run the business together.  Maryanne’s evidence was that she queried with Hugh how that would work and that his reply was that he did not know but that they should just get on and do it.17

[39]     Maryanne was reluctant to be in a position of joint responsibility with John and expressed these views to her father and to Mr Narev and Mr Carter.   She believed him to be dishonest, and in her mind his dealings in 1994 were evidence of this.  She also thought he had poor business skills, a view based on her assessment

that many of his previous business ventures had failed and that on more than one

15     Affidavit of Jonathan Masters at [19]

16     Affidavit of Robert Carter at [6.7].

17 Affidavit of Maryanne Green at [150].

occasion he had needed to be bailed out by his father.  Finally she believed that their work styles were irreconcilable.  Maryanne administered the Green Group with precision,  employing  extensive  procedures;  procedures  she  was  relentless  in requiring those who worked with her to comply with.  It is not in dispute that John has a radically different business style, according little respect to process and of course, in context, this meant paying little regard to Maryanne’s processes.

[40]     After this discussion with her father Maryanne prepared a number of letters addressed to Hugh proposing various solutions which would give both John and Maryanne a role within the Green Group.   The principal options were either that John continue on the charity side or that the Green Group farming and cattle trading operations be separated off and run by John, leaving Maryanne to run the remaining business.  The proposals included a “Family Board” overseeing the business made up of John, Frances and Moira.

[41]     When Maryanne followed up on these letters with her father, he told her that he was thinking about her proposals.  She told him that if he wanted her to go as trustee, director and Chief Executive Officer he only had to say and she would go, and that it would not affect their relationship as father and daughter.  Hugh replied

that he did not want that.18    It seems that Hugh never engaged with these detailed

proposals.

[42]     Family relations took a turn for the worse following a meeting at Hugh and Moira’s home on 29 June 2011.  Moira obviously anticipated that the meeting was going to be difficult.  She came armed with a strategy to keep the discussion orderly. She told her family she would pass a hat around and only the person wearing the hat could speak.   Although  there are different accounts as to the exact tone of the meeting it is not in dispute that the principal agenda items were the future of the Green Group, whether it was to continue in family ownership, and if so, the role the various family members were to have in the business.   Views were divided about whether the family should continue its involvement in the business.  Hugh said that he wanted the business to keep running while Moira and Frances initially said they

thought it should be sold.  John and Gerard said they wanted whatever Hugh wanted.

18 Affidavit of Maryanne Green at [157].

Maryanne’s evidence was that she said she wanted the business kept running but that

Kilmacrennan should be sold if it could not be run profitably.

[43]    On this last point Maryanne’s evidence conflicts with that of John.  John’s evidence is that at the meeting Maryanne said she wanted Kilmacrennan sold, with no qualification added.  The significance of this difference is that the Kilmacrennan business was the aspect of the Green Group closest to Hugh’s heart.  John, Frances and Moira all say that everybody else agreed to do what Hugh wanted, with the exception of Maryanne.  She wanted to discuss her proposed plans for the business contained in the letters she had given her father.  Hugh did not want to be drawn into that.

[44]     The other item for discussion was who in the family would run the business following  Hugh’s  death.    Hugh  said  he  wanted  John  and  Maryanne  to  run  the business together and that Frances should have a role as non-executive director.19

Frances’ evidence is that Maryanne was dismissive of Hugh’s desire that Frances be involved, and that Maryanne said something to the effect that over the years they had had the chance to be involved in the business but had declined.20

[45]     To the extent that there is a conflict of evidence between the witnesses as to the events at this meeting, I prefer Maryanne’s version of events.   She had taken notes of the meeting which confirm her account from which she was able to refresh her memory.  Her evidence is also consistent with documents created at that time. The plans for the future of the Green Group contemplated an ongoing cattle trading and farming operation.  They also reiterated a commitment on Maryanne’s part to carry on the business as her father wished.

[46]     It is nevertheless clear that the meeting was fraught.   Maryanne may well have angered her father and others with the insistent way she put forward her point of view.  It became plain to me through the course of the hearing that she is not someone easily diverted from ensuring that her point of view is heard, and has little

sense that the honest expression of her views and opinion may be offensive to others.

19 First affidavit of Frances Green at [21].

20 At [23].

[47]     However, in considering this meeting I have reminded myself that at that time Maryanne had joint control of the business with her father.  They were working together at the office on the day to day business of the Green Group.  Hugh had told her he wanted something to happen, that she and John should run the business together.  She not only doubted the wisdom of that course of action, she could not understand what exactly her father meant by it.   She knew that there is necessary detail to what it means to run a business together, particularly one as complex as that of the Green Group.    Maryanne had put together various proposals to make this work, but it seems no-one was interested in engaging with the detail of those proposals.

[48]     Around 11 July Mr Narev received two instructions from Hugh, both in Moira’s handwriting.  One was an instruction for his funeral.  He wanted to be cremated.  In the other, he instructed Mr Narev to prepare a codicil to his will which would remove Maryanne as one of the executors of his will and replace her with Moira (Moira and Mr Narev would then be the executors).21   Maryanne’s evidence is that Hugh told her he made the change because John was concerned that Maryanne had too much control,22 although John disputes he said this.23   The change to the will was made by way of codicil on 24 July 2011.

[49]     By July 2011 Hugh remained well enough to travel to Ireland.  This was a trip of great importance to Hugh who had retained a love of his birthplace, and was very proud of his Irish blood.  He was accompanied on the trip by his daughter Frances.

[50]     In Hugh’s absence there were meetings of the trustees for the various trusts. The  trustees  of  the  Hugh  Green  Foundation  resolved  to  give  cheque  signing authority for the Foundation to John, Frances and Moira.   Maryanne remained opposed to John having this authority and abstained from voting.  Following the meeting she wrote to Mr Narev to tell him that she could not continue as a trustee of the Foundation, and that she wished to resign.  She formally resigned on 24 August

after Hugh’s return from Ireland.

21     Affidavit of Robert Narev at [37] – [38].

22 Affidavit of Maryanne Green at [174].

23 Affidavit of John Green at [97].

[51]     According to Maryanne, the trip to Ireland was a turning point in terms of Hugh’s well being.  On his return on the 17th of August he was much depleted, both physically and mentally, and it is from this point on that his deterioration accelerated. Moira, Frances and John however say that although tired from his travels, Hugh returned very much his old self, in good condition for a 79 year old man - mentally vital and physically well.  It is the evidence of Moira, John and Frances that Hugh

retained full mental faculties right until the end of his life, and in this they are supported by a number of medical professionals who looked after Hugh during his illness, and by a number of friends and work colleagues.

[52]     Following Hugh’s return from Ireland the whole issue of control of the Green Group and the family’s interest in it revived and intensified.  Maryanne continued to press for a solution which would have John working on the Foundation side, with her involvement being limited to the business side.  There were two further family meetings (25 August and 1 September) which were attended by Ms Roberts at Maryanne’s request.  At those meetings Maryanne put forward a solution which involved John having responsibility for the Foundation, and her, the business.  The detail proposed was that Maryanne would be Chief Executive Officer to whom staff in the Green Group would report, and John, and possibly Frances, would be non- executive directors.  John would be responsible for the Foundation.

[53]     Maryanne’s evidence was that she was firm in her view that she could not be in a position of joint responsibility with John because of what she saw as his past dishonesty, his poor financial position, what she viewed as his less than professional business approach and his attempts to undermine her as Chief Executive Officer.

[54]     The last she based on emails she read as part of an on-going audit of the use of work email by all within the Foundation and Green Group.  It was Maryanne’s practice to scan employees’ emails to check they were not misusing the Green Group’s system.  She included John in this form of audit, and continued to do this right through until after her departure as Chief Executive Officer in 2012, when John directed  that  the  facility  that  enabled  her  to  do  this  be  effectively  unplugged. Although checking emails sent from a business is an entirely conventional, and even

prudent practice, in this context this was clearly not something likely to engender good family relations.

[55]     Maryanne thought that her proposal that John work on the Foundation side, and she work on the business side, had been agreed to at the second of the meetings, although  she  accepts  it  was  also  agreed  that  John  would  attend  management meetings to learn about the business.  As events transpired, there was no agreement to the solution she hoped for, or at least no agreement which lasted beyond the meeting.

[56]     On  13  September  John  emailed  Maryanne  resolutions  appointing  John  a director of four of the key Green Group companies.  The resolution was signed by Hugh but not by any of the other trustees, Maryanne, Mr Carter and Mr Narev. John’s appointment as director required a trustees’ resolution as the trustees had to exercise their powers as shareholders to appoint, or if the issue arose, remove directors.

[57]     Maryanne’s evidence was that she was surprised to receive these documents from John.   She accepts that there had been discussion of non-executive director roles for John, but claims that no final decisions had been made to carry this into effect.  Moreover Hugh had not told her he was going to do this.  He does not seem to have discussed these proposed resolutions with Mr Narev and Mr Carter.  In any case the resolutions were not passed at that time, although it was around this time that  the  trustees  appointed  Mr  Narev  a  director  of  the  principal  Green  Group

companies.24

[58]     A trustees’ meeting was convened by Hugh for 30 September 2011.25    The Green Group Company Secretary, Ms Porter circulated an agenda in advance of the meeting.  The items for discussion were the appointment of John as trustee of the Hugh Green Trust, the Hugh Green Property Trust and the Moira Green Property Trust, and executive roles within the Green Group.  Maryanne’s evidence was that

this was the first time she had heard mention of the possibility of appointing John a

24     Affidavit of Maryanne Green at [215] – [218].

25     For the Hugh Green Trust, the Hugh Green Property Trust and the Moira Green Property Trust.

trustee of the principal business trusts.  The role of trustee is significant within the Green Group because it is through the trusts that all Green Group companies are controlled, because the trusts own the shares in the companies.

[59]     The meeting was attended by Mr Narev, Mr Carter, Hugh and Maryanne.  At the meeting Maryanne spoke out against John’s appointment.  Maryanne explained her view that it was not in the interests of the beneficiaries for John to be appointed a trustee in light of what she characterised as his past dishonesty. She referred to the events in 1994 which she regarded as evidence that John had stolen from the company.  Mr Carter’s notes record the following note of what Maryanne said:26

JG stolen on 1994-as he has stolen from COY he is not fit to be a trustee or

director…..How do trustees know that JG has changed?  Risky.

[60]     Maryanne told the meeting that she had obtained legal advice from a Queen’s Counsel that John was not a fit person to be a trustee.  The evidence is that by this time Maryanne had engaged Mr Tony Molloy QC to advise her in connection with her responsibilities as a trustee.

[61]     Mr Narev’s evidence is that the view he expressed during the meeting was that he could see no reason why John could not be a trustee, as he would be only one of many and could not make binding decisions.

[62]     Maryanne suggested to the other trustees that if they could not agree they could seek the Court’s directions.  Hugh responded that if she did that, “she and him were finished.”  There was more talk about the issue, and Hugh said that he was prepared to take the risk of appointing John a trustee.  Maryanne’s response was that she would need to take further legal advice.  Hugh again said that if she did that they were finished.

[63]     Mr Narev’s evidence was that the meeting ended without resolution but that

Hugh remained committed to appointing John.   Maryanne’s view of where things

were left was that Hugh had not finally resolved upon appointing John a trustee.

26     CBD at 896.

[64]     On the day following the meeting Mr Carter travelled up from Tauranga to meet with Hugh.  He told Hugh that he was questioning why he should remain as a trustee in circumstances of what appeared likely to become an increasingly acrimonious family dispute in which he had no vested interest.27   Hugh was able to persuade him not to resign but Hugh blamed Maryanne for Mr Carter’s concern, and was angry with her.   When Hugh and Maryanne spoke on the telephone about it,

Hugh told Maryanne to pack her bags and get out of the office.  For a few days Maryanne worked from home, but on the 6th of October Hugh phoned her and asked her to come into the office.  When she did he acted like nothing had happened and they continued to work together.

[65]     Hugh executed a further will on 1 November 2011.  It confirmed Mr Narev and Moira as executors.

[66]     There  was  subsequently  another  meeting,  in  early  November,  this  time attended by Mr Narev, and Ms Roberts, but not Mr Carter as he was on leave following surgery.   Maryanne was also on leave from the business, for the period

31 October to 2 December 2011.  Her foster son had been killed the previous year, and she and her family wished to take time to attend the trial of the man accused of his murder and then to deal with the aftermath.   Hugh had contacted Maryanne during this period of leave and asked if she could attend a meeting.  Following some toing and froing, a date for the meeting was set for 1 November 2011.

[67]     Before  the  meeting  Maryanne  emailed  to  Mr  Narev  and  Ms  Roberts  a document which detailed the reasons for her objections to John’s appointment as trustee and director.  This material included details of the events around 1994 and of business activities she characterised as failed. 28   It also contained the allegation that John had been banned as a horse trainer in New Zealand for drugging horses. Maryanne now accepts that her allegations in relation to John’s activities as a horse trainer are wrong.29   Maryanne also provided them with her summary of the advice

she had received from Mr Molloy.

27     Affidavit of Robert Carter at [6.20].

28     CBD at 965.

29     NOE Maryanne Green at 68.

[68]     On the day of the meeting she met with Mr Narev and Ms Roberts before Hugh joined them for the formal meeting.  She had brought with her further material which she said was contributing to her opposition to John’s involvement in the business.    She  had  the  Kilmacrennan  cheques  and  other  documents  she  says evidenced John’s dishonesty in 1994.   She also had bank statements for the Hugh Green   and   Moira   Green   Property   Trusts   showing   internet   transactions   for expenditure on horse training fees and travel associated with John’s horse training business.  Maryanne saw these as suggesting unauthorised dealings by John as Hugh and Moira did not do internet banking and the expenses were not of the type that should have been charged to the trusts.  I note at this point that Moira’s evidence was

that she and Hugh had authorised these transactions.30    Maryanne also produced

copies of emails that John had sent on behalf of the Foundation as evidence that he was not taking a businesslike approach to these tasks.

[69]     The point of all of this material was obviously to show that John had been and continued to be dishonest, and that he conducted himself poorly in business, including through his work at the Foundation.  He was not, Maryanne argued, an appropriate person to be a director or trustee.

[70]     Hugh then joined the meeting.  There are some differences in the accounts given of what was then said at the meeting.  However Mr Narev agrees that he said to Hugh that it might be premature to appoint John as a director or trustee.  He had only been working at the Foundation for about six months and Mr Narev thought that he should prove himself in that setting before being appointed a director or trustee.  Mr Narev’s account was that Hugh nevertheless remained determined to appoint him.  Ms Roberts says that most of the discussion was in connection with appointing  John  as  a  director  and  that  both  she  and  Mr  Narev  opposed  that. Maryanne of course remained opposed to either step.

[71]     Mr Carter says that on 9 November Hugh called him and wanted to know if he was happy for John to be appointed a director.  He replied no, because it needed

to be discussed first by the trustees.  He said his concern was that the terms of his

30 First affidavit of Moira Green at [72].

appointment needed to be properly considered and approved by all trustees as the shareholders of the relevant companies.31

2.4      First challenged decision: appointment of John and Frances as trustees of three trusts on 8 November 2011

[72]     On 8 November Hugh executed documents appointing John and Frances as trustees of the Hugh Green Trust, and the Hugh Green Property Trust.  At the same time Moira appointed them as trustees of the Moira Green Property Trust.   These documents had been drafted by Mr Fisher, and the execution of them was witnessed by Mr Hickson, a sole practitioner Mr Fisher had organised to attend upon the Greens for this purpose.

2.5      Second challenged decision: appointment of John and Frances as directors of the main companies in the Green Group on 5 December 2011

[73]     A meeting of the trustees of the Hugh Green Trust, the Hugh Green Property Trust and the Moira Green Property Trust was called for 5 December.  The agenda for the meeting was the appointment of John and Frances as directors to 13 Green Group companies owned by the Hugh Green Trust and 27 subsidiaries and 11 Green Group companies owned by the Hugh Green Property Trust and the Moira Green Property Trust.  Attendees were the trustees Hugh, Maryanne, Mr Narev, John and Frances, as well as Ms Roberts and Moira.  The meeting proceeded on the basis that John and Frances had been appointed trustees although Maryanne said during the course of the meeting that she did not consider their appointment valid.   The resolution to appoint John and Frances directors was put.  Hugh, John and Frances voted in favour and Mr Narev abstained.   Mr Carter did not attend and did not provide a proxy.  I address later an argument that the required majority to pass these resolutions was not achieved.

2.6      Third   challenged   decision:   removal   of   Maryanne   as   a   trustee   on

20 December 2011

[74]    Following the 5 December meeting there was some uncertainty as to what further steps were required to implement the resolutions appointing John and Frances

31     Affidavit of Robert Carter at [6.27].

as directors.   On 16 December Maryanne was delivered an ultimatum that she immediately sign resolutions to implement the trustees’ earlier decision appointing John and Frances directors to various companies.   When she failed to do so, on

20 December 2011 she was removed as a trustee of the Hugh Green Trust and the Hugh Green Property Trust by deeds of removal, drafted by Mr Fisher, and executed by Hugh.

[75]     Maryanne and her husband Mr Mark Owens visited Hugh at home on the 21st of December.  The purpose of the visit was for Maryanne to tell Hugh that she was resigning as CEO of the Green Group.   Moira was present for at least part of the visit.   Just what was said at this meeting is at issue in this proceeding.   It is Maryanne’s case that her removal as trustee of those trusts was cancelled by Hugh at that time, or alternatively that Hugh reappointed her.

2.7      Fourth  Challenged  Decision:  appointment  of  Mr  Fisher  as  trustee  on

29 March 2012

[76]    Hugh was admitted to hospital on the 29th of March 2012 to have a blood transfusion.  John and Mr Fisher say that on 28 March Hugh asked Mr Fisher to be a trustee of the Hugh Green Trust and Hugh Green Property Trust.  Mr Fisher prepared the necessary documentation and on 29 March asked Mr Hickson to attend upon Hugh to see to the execution of the documents.  Mr Hickson visited Hugh in hospital and while Hugh was having the transfusion, witnessed Hugh signing the document appointing Mr  Fisher  as trustee of the  Hugh  Green Trust  and  the Hugh  Green Property Trust.

2.8      Fifth and sixth challenged decisions: appointment of Mr Fisher as director of all trust owned companies on 2 April 2012, and the removal of Maryanne as a director of all trust owned companies on 2 April and 19 April 2012

[77]     A meeting of trustees of the Hugh Green Trust was convened for 2 April

2012.  Maryanne did not receive notice of the meeting.  The business of the meeting was to appoint Mr Fisher as director of all trust owned companies and to remove Maryanne as a director of all companies where the trustees held a majority of shares. The trustees also resolved to authorise the taking of immediate steps to remove

Maryanne as a director of all other companies in the Green Group.32   Mr Narev and Mr Carter were not able to attend the meeting but they were aware of the agenda items. They did not vote by proxy.

[78]     On 3 April Maryanne received an email from Ms Porter advising her that she had been removed as director of a list of companies.

[79]     On 19 April Maryanne was removed as a director of a further 27 companies.

2.9      Seventh Challenged Decision: Hugh’s execution of a new will on 26 April

2012 appointing Mr Fisher, John and Frances (together with Mr Narev) his executors and trustees

[80]     On 26 April 2012 Hugh signed his last will.   He had contacted Mr Narev asking him to prepare a new will for him which replaced Moira as executor of the will with Mr Fisher, John and Frances (with Mr Narev continuing as executor). Hugh told Mr Narev that the background to this change was that Moira no longer wished to be an executor.

[81]     Mr Narev passed these instructions on to his partner Mr Norman Cahill. Mr Cahill  prepared  the  new  will,  and  visited Hugh  at  his  home  to  witness  the execution of the will.

2.10    Events after the execution of Hugh’s last will

[82]     Maryanne was away from New Zealand on holiday during the last week of April through until late June.  By late April matters were proceeding on the basis that her only remaining role in the business was through her role as trustee of the Moira Green Property Trust and as a director of some companies controlled by that trust.

[83]     Hugh died on 13 July 2012.  Following his death Mr Fisher was appointed as a trustee of the Foundation and as a director of the remaining Green Group companies.   In late August Mr Narev and Mr Carter both resigned as trustees and

directors of the trusts and Green Group companies.

32     CBD at 1851.

[84]    Mr Gosney, a friend and business associate of Mr Fisher, was appointed a director of various Green Group companies in early September 2012.

[85]     On 20 September 2012, the trustees of the Moira Green Property Trust (who by this time included Mr Fisher) voted to resettle the assets of that trust on the Hugh Green Property Trust.  This was a response to Moira’s expressed wish not to have involvement as a trustee or as the executor of Hugh’s will.  She expressed this wish at a meeting with Mr Fisher, Hugh and some family members on 16 April 2012.  The resettlement of the Moira Green Property Trust on the Hugh Green Property Trust had the effect of removing Maryanne as a trustee of the Moira Green Property Trust.

[86]     On Friday 21 September Mr Gosney was appointed as a trustee of the Hugh

Green Trust and the Hugh Green Property Trust.

[87]     On Tuesday 25 September Maryanne was removed as a director from the final 10 companies in the Green Group of which she had remained a director.

3.       The issues raised in this proceeding

[88]     I  have  approached  the  multiplicity  of  issues  raised  by  the  plaintiff’s

allegations in the following order:

(a)       What are the principles governing the challenge to Hugh’s capacity to

have exercised the various powers and to execute his last will?

(b)What  are  the  principles  governing  the  challenge  based  on  undue influence?

(c)       What  does  the  evidence  in  relation  to  Hugh’s  capacity  establish

generally?

(d)Were the various decisions (in respect of appointments, removals, testamentary instruments) vitiated either by lack of capacity or undue influence?

(e)      In any case, if Maryanne was validly removed as a trustee was she reappointed or alternatively, was her removal cancelled?

(f)       Were the various removals of Maryanne as trustee, and the various appointments of John, Frances and Mr Fisher invalid because Hugh exercised these powers in breach of fiduciary duty?

(g)Should I exercise this Court’s jurisdiction to substitute new trustees for the existing trustee defendants on the grounds of their past conduct and on-going hostility to Maryanne and her daughter Alice?

4.        What are the principles governing the challenge to Hugh’s capacity to

have exercised the various powers and to execute his last will?

[89] capaci	The ty: (a)	parties agree the following principles apply to the enquiry as to Hugh’s Capacity must be assessed in relation to the specific decision or act
that is questioned.33
(b)	For Hugh to have had the capacity to make the various decisions that
are now challenged he needed to have the capacity to understand the nature of the particular act and its effects.34
(c)	In respect of testamentary capacity, to that must be added the capacity
to understand the extent of the property that Hugh was disposing of,
and to comprehend and appreciate the claims to which he ought to give effect.35
(d)	The enquiry in all cases is into Hugh’s capacity to understand rather
than his actual understanding. As the English Court of Appeal has stated:36

33     Gibbons v Wright (1954) 91 CLR 423 at 437; Masterman-Lister v Brutton & Co (Nos 1 and 2) [2002] EWCA Civ 1889, [2003] 1 WLR 1511 at [58]; Hoff v Atherton [2004] EWCA Civ 1554 at [35].

34     Masterman-Lister v Brutton & Co (Nos 1 and 2) above n 33, at [60]; Banks v Goodfellow (1870) LR 5 QB 549 (QB) at 565; Gibbons v Wright above n 33 at 438-439.

35     Banks v Goodfellow, above n 34 at 565.

36     See Hoff v Atherton, above n 33 at [33] – [34]; see also Simon v Byford [2014] EWCA Civ 280 at

[39] – [41].

If there is evidence of actual understanding, then that would prove the requisite capacity, but there will often be no such evidence, and the court must then look at all the evidence to see what inferences can properly be drawn as to capacity. Such evidence may relate to the execution of the Will but it may also relate to prior or subsequent events. It would be absurd for the law to insist in every case on proof of actual understanding at the time of execution.

(e)      In relation to the challenge to the will, as the will is rational on its face Maryanne must establish a tenable case that Hugh lacked capacity.  If she can do this then the onus shifts to the defendants to show that Hugh had capacity.37

(f)       However,  where  a  will  has  been  professionally  prepared  and  the lawyer has formed the view that the will maker has capacity, the Courts should not too readily overturn that view, particularly on the basis of expert evidence, where the expert did not interact with the

testator. As the English Court of Appeal said in Hawes v Burgess:38

[60] My concern is that the courts should not too readily upset, on the grounds of lack of mental capacity, a will that has been drafted by an experienced independent lawyer. If, as here, an experienced lawyer has been instructed and has formed the opinion from a meeting or meetings that the testatrix understands what she is doing, the will so drafted and  executed  should  only  be  set  aside  on  the  clearest evidence of lack of mental capacity. The court should be cautious about acting on the basis of evidence of lack of capacity given by a medical expert after the event, particularly when that expert has neither met nor medically examined the testatrix, and particularly in circumstances when that expert accepts that the testatrix understood that she was making a will and also understood the extent of her property.

(g)      In relation to the other challenged decisions the onus of proof lies on

Maryanne.39   It does not shift as it does with testamentary capacity.

[90]     I proceed on the basis that these principles govern the plaintiff’s various

challenges based upon lack of capacity.

37     Bishop v O’Dea (1999) 18 FRNZ 492 (CA).

38     Hawes v Burgess [2013] EWCA Civ 94. See further Revie v Druitt [2005] NSWSC 902 at [34].

39     Masterman-Lister v Brutton & Co (Nos 1 and 2) above n 33, at [17].

[91]     Many  of  these  principles  as  they  relate  to  testamentary  capacity  were helpfully elucidated by the Court of Appeal in Woodward v Smith as follows:40

[19]      The celebrated judgment of the Court of Cockburn CJ in the Queen's Bench (Cockburn CJ, Blackburn, Mellor and Hannen JJ) in Banks v Goodfellow (1870) LR 5 QB 549 remains the leading authority on testamentary capacity. We paraphrase and number the propositions stated in that case at 565-8:

(1)       Because it involves moral responsibility, the possession of the intellectual and moral faculties common to our nature is essential to the validity of a will

(2)       It is essential to the exercise of such a power that a testator: [i]      understands the nature of the act and its effects; and

also  the  extent  of  the  property  of  which  he  is

disposing;

[ii]      is able to comprehend and appreciate the claims to which he ought to give effect;

[iii]      be free of any disorder of the mind which would poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties; that no insane delusion shall influence his will in disposing of  his  property  and  bring  about  a  disposal  of  it which, if the mind had been sound, would not have been made.

(3)       Unsoundness  of  mind  arising  from  want  of  intelligence caused by defective organization, or by supervening physical infirmity or the decay of advancing age, as distinguished from mental derangement is equally cause of incapacity. But

[i]       though the mental power may be reduced below the ordinary standard, yet if there be sufficient intelligence to understand and appreciate the testamentary act in its different bearings, the power to make a will remains.

[ii]      It is enough if the mental faculties retain sufficient strength fully to comprehend the testamentary act about to be done.

(4)       It is not necessary that the testator should view his will with the eye of a lawyer, and comprehend its provisions in their legal form. It is sufficient if he has such a mind and memory as will enable him to understand the elements of which it is composed, and the disposition of his property in its simple forms.

40     Woodward v Smith [2009] NZCA 215.

(5)      In deciding upon the capacity of the testator to make his will, it is the soundness of the mind, and not the particular state of the bodily health, that is to be attended to. The latter may  be  in  a  state  of  extreme  weakness,  feebleness  or debility and yet he may have enough understanding to direct how his property shall be disposed of; his capacity may be perfect to dispose of his property by will, and yet very inadequate to the management of other business, as, for instance, to make contracts for the purchase or sale of property.

(6)       A testator  who  has  reflected  over  the  years  on  how  his property should be disposed of by will is likely to find it less difficult to express his testamentary intentions than to understand some new business.

(7)       Testamentary   capacity   does   not   require   a   sound   and disposing   mind   and   memory   in   the   highest   degree; otherwise, very few could make testaments at all;

(8)       Nor  must  the  testator  possess  such  capacity  to  the  same extent  as  previously.  His  mind  may  have  been  in  some degree weakened, his memory may have become in some degree enfeebled; and yet there may be enough left clearly to understand and make a sound assessment of all those things, and all those circumstances, which enter into the nature of a rational, fair, and just testament.

(9)      But if that standard is not met, he will lack capacity.

4.1      Understands the nature of the act and its effects

[92]     The parties do differ as to what it means to understand the nature of the act and its effects.  Maryanne argues in substance that in order for Hugh to have the capacity to understand the nature and effect of each decision he had to have the capacity to understand the implications of the decision for other legal and family relationships.   I take as an example the testamentary decision to appoint new executors.  Maryanne argues that Hugh needed to be able to understand the impact of the appointment of those executors upon the control of the Green Group, the welfare of the Green Group, the trusts, and the beneficiaries, particularly in light of the working relations between the various trustees and beneficiaries.  Ms Bruton for the plaintiff describes this as “the general nature, broad operation, and wider effect of the exercise of each challenged power”.

[93]     The defendants’ position is that the relevant capacity is simply the capacity to

understand  the  nature  of  the  decisions  and  not  the  wider  implications  of  the

decisions, certainly not the interplay of each decision with the human dynamics of the family situation.

[94]     As to the “effects” of the action, I agree with the defendants’ contention that it is not necessary for the appointor/testator to have the capacity to understand the collateral consequences of the disposition, appointment or removal.  A case which throws some light on this proposition is the case of Simon v Byford a case concerning a  testator  who  had  previously  left  all  of  her  shares  in  her  deceased  husband’s

company to one of her children.41   She had done this to avoid a potential deadlock if

all of the children were given equal shares in the company.  However, in a later will she gave the shares to each of her children equally, and did not appear to have considered the reasons which had earlier caused her to give all of the shares to one child.   Lewison LJ considered that this did not indicate a lack of testamentary capacity, because the law did not require a testator to understand the significance of

assets to other people.42

[95]     It  is  clear  however  that  the  effects  referred  to  in  Banks  that  the  person expressing a power or executing a will must have the capacity to understand, are more than understanding the nature of the act or decision itself.  It must encompass the immediate effect of the decision, for example that the effect of appointing an executor is to give the executor control over an estate.43    In this case it would encompass the fact that the executors have the power of appointment of trustees and through that, control over the Green Group.

[96]    Maryanne relies upon the case of Gibbons v Wright as authority for the proposition that the effect of the acts encompasses both direct and indirect effects.44

That case concerned a claim to establish title to a piece of land as the last remaining

joint tenant.  The other two tenants had purported to sever the joint tenancy to create

41     Simon v Byford, above n 36.

42     At [44]–[46].

43     For examples of the need to understand the effect of the decision see Re Beaney [1978] 1 WLR

770 (Ch) and Re K, Re F [1988] Ch 310 (Court of Protection) at 316, cited in Masterman-Lister v Brutton, above n 33 at [61].

44     Gibbons v Wright, above n 33.

a tenancy in common in equal shares.  The plaintiff claimed that the acts of the other two were void for want of capacity. The High Court of Australia held that:45

The mental capacity required by law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of the transaction when it is explained…

Ordinarily the nature of the transaction means in this connection the broad operation, the “general purport” of the instrument; but in some cases it may mean the effect of the wider transaction which the instrument is a means of carrying out…

In the present case, it was necessary, we think, that the two sisters should have been capable of understanding, if the matter had been explained to them, that by executing the mortgages and the memorandum of transfer they would be altering the character of their interests in the properties concerned, so that instead of the last survivor of the three joint tenants becoming entitled to the whole, each of them would be entitled to a one-third share which would pass to her estate if she still owned it at her death. This is apparently not what the learned Chief Justice put to the jury. It was the direct effect of the instruments according to their terms, and not the resultant severance of the joint tenancy, that seems to have been referred to by the expression “the effect of the deed”, in the questions ultimately formulated. But a jury which found the sisters incapable of understanding the direct effect of the deeds could hardly have found them capable of understanding the indirect effect of the deeds in severing the joint tenancy.

[97]     That case does not seem to me to stand as authority for the very broad concept of “effects” that is argued for.   The Court held that sisters executing documents which together had the effect of severing the joint tenancy had to have the capacity to understand that was the effect of that document when operating together with other documents.  It was in fact, the legal consequence of the operation of the instruments.  This is a long way removed from requiring of Hugh that he have capacity to understand the effects of his decisions upon the well being of the various entities, and his beneficiary children and grandchildren.

[98]     At the other end of the spectrum, the defendants argue that where a decision is on its face, fair and rational only a small amount of capacity will be required.  The case they rely upon for this proposition is Re Austin.46    In that case Gendall J considered that only a small amount of testamentary capacity is required where the

change to the will is fair.  On the facts of that case there was very little difference

45     At 438–439.

46     Re Austin [2013] NZHC 2374.

between the challenged will and the previous will.  The plaintiff was bringing the case on a point of principle only.   Gendall J relied on several cases for this proposition, including Re Rhodes, where Hammond J stated:47

[40]      Finally there is (as in this case) the question of the terms of the will itself. Where property is disposed of fairly, and in accordance with moral dictates, then only a very small amount of capacity is needed. But with abrupt and unfair changes, fuller and clearer evidence of capacity is required. (See, for instance, Brown v McEnroe (1890) 11 NSWR Eq 134).

[99]     I do not accept that the law is that a fair and rational decision requires less capacity than one that on its face is unfair or apparently irrational.  The nature of the decision will clearly be one of the factors, part of the evidence, that a court takes into account in assessing the issue of capacity.  As the principles stated above recognise, an apparently irrational decision may in certain circumstances make the case that there was no capacity.  Similarly, the rationality or consistency of the decision is reassuring as to capacity. It does not follow however that less capacity is required to make an apparently fair or rational will than one which is apparently irrational.  This

point was made by Tipping J in Bishop v O’Dea as follows:48

[21]      Irrationality  of  a  will  on  its  face,  either  as  to  content  or  as  to expression, is often an indication of greater or lesser force that the will maker lacked capacity. But the rationality of a will on its face does not necessarily provide much evidence of capacity, especially if the will is professionally drawn, in which case one can expect it to be at least rationally expressed. There was in this case a rational reason for Mr Byrne wishing to benefit the Bishop family; thus the will certainly could not be described as irrational on its face. Its ex facie rationality was simply one of a number of factors which the Judge had to consider. That the will was rational on its face was clearly apparent. In the circumstances of the present case and in particular in the light of the medical evidence we do not consider there is any force in Mr Matheson's contention that the Judge failed to give any or sufficient weight to this factor. (Emphasis added)

5.       What  are  the  principles  governing  the  challenge  based  on  undue influence?

[100]   The principles I apply as to the law of undue influence are as follows:49

47     Re Rhodes HC Wellington CP25/02, 7 March 2002.

48     Bishop v O’Dea, above n 37.

49     I adopt here principles from the House of Lords in Royal Bank of Scotland v Etridge [2002] 2

AC 773 (HL), approved by the Court of Appeal in Hogan v Commercial Factors Ltd [2006] 3
NZLR 618 (CA) at [36].

(a)      The overall burden of proof rests on the person seeking to establish undue influence.

(b)The  burden  of  proof  is  the  balance  of  probabilities.     I  accept Mr Waalkens’ submission (counsel for the defendant in the probate proceedings) that where the allegation made is serious (such as an allegation of dishonesty or criminal offending), the Court will require strong evidence to be satisfied on the balance of probabilities that that

occurred.50

(c)      The person asserting undue influence must show that the alleged influence led to the making of the impugned transaction, and that the influence was undue in the sense that the transaction was not the result of the free exercise of an independent will on the part of the person at whose expense the transaction was made.

(d)The question of whether a transaction was brought about by undue influence is a question of fact.  A party can succeed in establishing this either directly by proving “actual undue influence” or recourse to an evidential presumption which arises where it is established that:

(i)the person said to have been subject to undue influence placed trust and confidence in the other; and

(ii)      the transaction called for explanation.

(e)      Whether there is a relationship of trust and confidence can either be established factually or by reference to a class of specific relationships such as lawyer/client; parent/child; doctor/patient.   In the latter category the law presumes irrebutably that one party had influence over the other.  The presumption is only as to proof of influence.  The person  alleging  undue  influence  will  still  need  to  establish  a

transaction calling for an explanation.

50     Re H (Minors) [1996] AC 563 (HL); Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1.

(f)       Whether  a  transaction  calls  for  an  explanation  depends  on  the circumstances of the case.  The question is simply whether “failing proof to the contrary, [the transaction] was explicable only on the basis that undue influence had been exercised to procure it”.51

(g)Once the person claiming undue influence has established both the relationship of trust and confidence and a transaction calling for explanation, the evidential burden shifts to the person seeking to uphold the transaction to show that the transaction was not the result of undue influence. This however should not obscure the position that the overall burden of proof will always rest on the person alleging undue influence.

(h)The presence of independent advice is one of many factors that may be taken into account in determining whether undue influence is proved.  Whether the independent advice helps to establish that the transaction was the result of a person’s free will depends on the facts of the case.   Independent advice can help establish that a person understood the decision they were making.  But establishing that a person fully understood the act is not the same as establishing that the act was not brought about by undue influence.   A person can fully understand an act and still be subject to undue influence.

(i)Allegations of undue influence may succeed in relation to the exercise of powers not just the transfer of property.52

[101]   In relation to the alleged undue influence in the making of a new will I

recognise the following additional points:

(a)      In relation to the alleged undue influence in the making of a new will, the burden of proof rests upon the plaintiff.   There is no evidential

presumption that Maryanne can rely upon.53

51     National Westminster Bank Plc v Morgan [1985] AC 686 (HL) at 704, cited in Royal Bank of

Scotland v Etridge (No 2), above n 49 at [25].

52     Harris v Rothery [2013] NSWSC 1275.

(b)Pressure of whatever character can amount to undue influence if it overbears the will of the testator. As Sir JP Wilde recognised:54

To make a good will a man must be a free agent. But all influences are not unlawful. Persuasion, appeals to the affections or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like, — these are all legitimate, and may be fairly pressed on a testator. On the other hand, pressure of whatever character, whether acting on the fears or the hopes, if so exerted as to overpower the volition without convincing the judgment, is a species of restraint under which no valid will can be made. Importunity  or  threats,  such  as  the  testator  has  not  the courage to resist, moral command asserted and yielded to for the sake of peace and quiet, or of escaping from distress of mind or social discomfort, these, if carried to a degree in which the free play of the testator's judgment, discretion or wishes, is overborne, will constitute undue influence, though no force is either used or threatened. In a word, a testator may be led but not driven; and his will must be the offspring of his own volition, and not the record of some one else's.

(c)      It is not necessary to provide direct evidence of undue influence, circumstantial evidence is sufficient. However, as Fisher J observed in Hayden v Simeti:55

…it is not enough to show that others had the means and opportunity to unduly influence the deceased and that there has been a recent testamentary disposition in their favour. The  Court  must  be  satisfied  both  that  the  power  was exercised and that the will would not have resulted but for that exercise.

[102]  This first of the additional points in relation to the will was disputed by Maryanne.   Her counsel argued that where someone is instrumental in obtaining a will and takes for his or her benefit, that person must establish that the will was not caused by undue influence.56   I do not accept that this is a correct proposition.  The obligation on a person claiming under the will to show “the righteousness of the

transaction” arises in cases where it is alleged that the testator did not know and

53     See Silbery v Silbery-Dee, HC Wellington CIV-2005-485-2499, 22 August 2007 at [67] – [68]

and Puru v Puru HC Auckland CIV-2007-404-3881, 5 November 2008 at [79] – [80].

54     Hall v Hall (1868) LR 1 P&D 481 (Court of Probate and Divorce) at 482.

55     Hayden v Simeti HC Auckland P1042/92, 14 May 1993 at 12.

56     Relying on Fulton v Andrew (1875) LR 7 JL 448, Re Austin, above n 46 and Harrison v

Harrison (2007) 26 FRNZ 532 (HC).

approve of the contents of the will.  That is not the allegation made in this case.  This distinction is helpfully explained by Wylie J in Puru v Puru as follows:57

[79]     The issue of knowledge and approval has often been raised in the context of undue influence, and there has on occasion been confusion as to who bears the onus of proof and in relation to which issue. For example in the LexisNexis text Wills and Succession (Loose leaf) at para 3.12, it is suggested  that  although  undue  influence  must  usually be  proved  by the person alleging it, the onus shifts if the person propounding the will is the principal beneficiary, especially if the beneficiary prepared the will. Tanner is cited as authority for this proposition. However, in my view Tanner is not a case of undue influence at all: see Tanner at [71]. Rather it is a case where suspicious circumstances called into question whether the will-maker knew and approved of the contents of the will. The Court held that the onus was on the propounder/beneficiaries to remove the suspicion and to show the “righteousness of the transaction”.

[636]   Maryanne  raised  the  issue  of  the  ownership  of  the  Irish  funds  with  the executors on 10 May 2013 and again on 11 June 2013.286    On 20 June 2013, the executors said that they were obtaining Counsel’s opinion, but as at the date of the hearing that opinion had not been provided.287

[637]   The  evidence  that  Maryanne  points  to  support  her  contention  that  the

[redacted material] plus was distributed to Frances beneficially is as follows:

(a)       Mr Narev’s record of the 27 May 2011 meeting.

(b)      The money was held in an account in Frances’ name although she

held no role in the trusts at the time the accounts were opened.

[638]   Frances says that she did not expressly or formally agree anything, but the clear understanding was that she was to look after the money in the 704 account on

284   AIB Euro bank account no. 28277-007 and AIB AUD bank account no, 29832704.

285   CBD at 621.

286   CBD at 2665-2667 and 2703-2704.

287   CBD at 2709-2710.

behalf of Moira.  She says that she and Hugh did not directly discuss the matter in respect of these funds with her, but from the time he got sick she heard Hugh and Moira discussing the Irish money, and her father reassuring her mother that the Irish money was hers.  Frances said that she has never regarded the Irish money as her own and has not used it for her own purposes.  She has drawn funds or made payments  from  the account  as  directed by Moira.   Moira corroborates  Frances’

evidence on these matters.288

[639]   It was put to Frances on cross examination that the notation in Mr Narev’s note suggested that the [redacted material] was hers.  She said she could not explain the [redacted material] reference but noted that it had a question mark next to it, and speculated that perhaps her father was thinking of giving the money to her.289

[640]   There was no challenge to Frances’ explanation for the various payments out of the accounts.   Frances’ evidence is that they were all payments made at the direction of Moira.  Certainly, on the face of things, most of the payments do not appear to be for personal expenditure for Frances.  There are cash withdrawals and debits associated with a Visa card connected to the account.   Frances’s evidence, again not challenged, was that these amounts were applied for the benefit of Moira or at her direction.

[641]   Maryanne makes the point that even though these payments have been made at Moira’s direction or for her benefit that still leaves a balance in the accounts of more than a million.   It was put to Frances that the question mark on Mr Narev’s note related to uncertainty as to the amount in the account in light of currency variances, and not to the status of the gift.  She rejected that.

[642]  I accept the trustee defendants’ argument that the evidence corroborates Frances’ account that the funds in the 704 account are held by Frances for Moira. That is the evidence of both Moira and Frances and is corroborated by the use to

which the funds have been put.

288   First affidavit of Moira Green at [56], and second affidavit of Moira Green.

289   NOE Frances Green at 1059.

[643]   In connection with the 007 account, the evidence suggests that the shares were held jointly by Hugh and Moira.  I did not receive any evidence as to whether the principle of survivorship would apply in this circumstance in Ireland where the shares were owned by Hugh and Moira.  The preparedness of the stockbroker to pay the proceeds of sale at Moira’s direction on proof of Hugh’s death might suggest that the principle does apply.  In any case I do not have sufficient evidence to conclude that the proceeds of sale of those shares are properly to be regarded as an asset of Hugh’s estate.

[644]   For  these  reasons  I  am  not  satisfied  that  the  Irish  funds  are  Frances’ beneficially, and it follows, I am not satisfied she had a conflict of interest arising from this issue.

20.5    Mr Gosney

[645]   Maryanne says against Mr Gosney that because he is a longstanding business associate and friend of Mr Fisher, he cannot treat Maryanne and Alice impartially and  even  handedly.    She  says  this  is  evidenced  by several  actions  on  his  part including his refusal to meet with Maryanne and engage in good faith negotiations to find a “workable succession plan, in the best interests of all family members” and an “amicable, negotiated solution to the present disputes and difficulties”.290

[646]   Mr Gosney and Mr Fisher knew each other at university and according to Mr Gosney had become friends in the 1990s.  They continue to play the odd game of golf.  I consider that they are friends.  Mr Fisher and Mr Gosney have also had an extensive professional association.  They served on the Dorchester Pacific Board together.   Mr Fisher has represented Mr Gosney in litigation.   Because of his association  with  Mr  Fisher,  Mr  Gosney  engaged  the  law  firm  Brookfields  to

represent him when Mr Fisher was still a partner at Brookfields.291   Mr Gosney was

appointed   a   director   and   trustee   on   Mr   Fisher’s   recommendation   without

consideration of other applicants.

290   Amended statement of claim at [6.19], [6.22]-[6.26].

291   NOE John Gosney at 1285-1289.

[647]   The defendants say that Mr Gosney is plainly well qualified to be a trustee and director.  I accept that is so.  They also say that personal relationships between directors are no unusual, and that there is nothing to suggest that Mr Gosney will not act impartially and even handedly towards Maryanne and Alice.

[648]   Mr Gosney was appointed to the trusts and as a director as a replacement for Mr Narev and Mr Carter.  He was appointed as an independent trustee.  Given the events that led up to this point it was clearly undesirable that the new appointment be a friend of Mr Fisher.  A previous association with an existing director is of course not usually a disqualifying factor, but Mr Gosney’s appointment needs to be seen in context.  The Green family was fractured, and only one side of the family was represented on the trusts and through directorships.  The only other independent trustee  at  that  time,  Mr Fisher,  had  been  instrumental  in  the  steps  to  remove Maryanne  from  positions  of  control  within  the  Green  Group.    Mr  Fisher  felt antipathy toward Maryanne, and the most fair minded observer would describe his relationship with her as broken.

[649]   In a family situation such as this the role of independent trustee was critical. Even in the face of litigation, the independent trustees had to ensure that the beneficiaries excluded from the board tables were given fair consideration.  The evidence suggests that Mr Gosney has not turned his mind to this aspect of his role. There is little to suggest that he has turned his mind to the interests of Maryanne or Alice.

[650]   It is unfortunate that the first act he was called upon to perform was to vote on  a  resolution  to  remove  Maryanne  as  a  director  of  various  Green  Group companies.  He voted in support of the motion in reliance upon the information provided to him by the other trustees.  He had no knowledge which would have allowed him to form a view as to whether that step was in the best interests of beneficiaries.   He did not ask to defer consideration to allow himself time to investigate the issue further.  He did not abstain.

[651]  Subsequently, as with the other trustees he has failed to take any steps to communicate with Maryanne and Alice in connection with their needs.  Again in the

circumstances, it was obvious that the trustees needed to communicate with the estranged part of the family to find out whether they had any needs.   Given the family breakdown that independent trustees’ role here was vital, yet Mr Gosney has also refused to meet with Maryanne.292    He agreed that he had taken no steps to investigate or inform himself as to Alice’s situation although he also accepted that John and Frances could not represent her interests.293    Indeed Mr Gosney does not seem very engaged with the affairs of the trusts.  He apparently was not aware that John was involved in the affairs of the Group (Kilmacrennan) in an executive role.

20.6    Do any of the issues affect the administration of the trust?

[652]   I accept Maryanne’s argument that were each or any of the trustee defendants to continue as trustees that would undermine the proper administration of the trusts. Of the present trustees, John, Frances and Mr Fisher have all actively taken sides in the family dispute to the extent that I am satisfied that they are incapable of giving consideration to the interests of some of the beneficiaries (Maryanne and Alice) in a fair and impartial manner.  For whatever reason, Mr Gosney has gone along with the other trustees in his general approach to the interests of Maryanne and Alice. Notwithstanding the critical role he plays as independent trustee he has made no attempt to step around the family dispute to properly perform his role.  He therefore is no check on the partiality of the other three trustees.

[653]   The antipathy that John, Frances and Mr Fisher feel toward Maryanne creates more than hypothetical difficulties in the administration of the trust.  These trustees have been unwilling to communicate directly with Maryanne or Alice.  The trustees have also made no attempts to establish a procedure by which they can receive information as to Alice’s needs.  The defendants say that it is a mere oversight that prior to the filing of Alice’s affidavit in these proceedings they made no inquiry into Alice’s circumstances to establish her needs.  If it is an oversight it is a surprising one, as to the knowledge of John and Frances, Alice is a young mother who has recently separated from her partner.   She might be supposed to have needs.   It

appears  that  none  of  the  trustees  thought  it  part  of  their  role  to  gather  this

292   NOE John Gosney at 1310.

293   NOE John Gosney at 1295-1298.

information.   Meanwhile the needs of the grandchildren on the other side of the camp are clearly being considered and met.   School fees have been paid, and the trusts have also made loans to John’s sons for share investments.  The trustees have also been resistant to Maryanne and Alice’s requests for information about the trusts, although   they   have   been   able   to   obtain   that   information   through   these

proceedings.294

[654]   The trustees have also failed to address and manage the issues in connection with John’s past dishonesty.  The evidence in connection with it is compelling yet there  is  no  suggestion  that  they  have  reflected  upon  what  that  means  for  the wellbeing of the trusts.  They have simply framed the issue in terms of conflict with Maryanne.  I consider that by doing so they have failed to address the best interests of the beneficiaries.  Given the current make up of the trustees it is doubtful they will ever fully consider this issue.

[655]   In the circumstances I consider that grounds exist for the making of orders removing John and Frances as trustees.   The effect of my earlier findings is that Mr Fisher and Mr Gosney may not have not been validly appointed as trustees.  For Mr Fisher that follows from my finding that his appointment was the result of undue influence.   For Mr Gosney it follows from my finding that Hugh’s will was not validly executed because of undue influence. I say may follow because I did not

receive  submissions  on  the  consequences  of  a  finding  of  undue  influence.295

Generally transactions that are subject to undue influence are voidable by the person who has suffered undue influence rather than void.296 However, it may be that a different principle applies in the case of powers that are exercised while subject to undue influence.297    If it is necessary, I will also make orders removing Mr Fisher and Mr Gosney.

[656]   Each of the trustees cannot properly discharge the role of trustee to act in the best interests of all beneficiaries because of the personal antipathy all but Mr Gosney

feel toward Maryanne, which spills over into their dealings with Alice, and because

294   See for example NOE John Gosney at 1301-1303.

295   I address the need for further submission on this point at the end of this judgment.

296   See Allcard v Skinner (1887) 36 Ch D 145 (CA) at 186.

297   See Harris v Rothery, above n 52 at [172].

of the dysfunctional relationship they all have with Alice and Maryanne.  I include Mr Gosney as a trustee who has a dysfunctional relationship with these beneficiaries. Allowing the trustees to continue in their role will obstruct the proper administration of the trusts.

21.      Result

21.1    Probate proceedings

[657]   Maryanne has sought a recall of the grant of probate for the will dated 26

April  2012.    I have  found  that  Hugh  was  subject  to  undue  influence  when  he executed the will of 26 April, so that his will was overborne.  It follows that the will is invalid and I therefore order a recall of the grant of probate for the will dated 26

April 2012.

[658]   My provisional view is that it follows that the appointment of Mr Gosney was invalid as he was appointed by the executors of the will that I have found to be the product of undue influence.  I will hear counsel further on this issue.

[659]   Maryanne also sought orders as to which of Hugh’s testamentary dispositions is valid and should be the subject of a grant of administration.  Given the breadth of the issues traversed in this proceeding it was resolved to defer this issue for further submissions  following judgment  in  the event  I ordered  a recall  of the grant  of probate.

21.2    Trust proceedings

[660]   Maryanne  has  failed  to  establish  that  Hugh  lacked  capacity  when  he exercised powers:

(a)       appointing John and Frances as trustees;

(b)      appointing John and Frances directors of all Green Group companies; (c)     removing Maryanne as trustee;

(d)      appointing Mr Fisher a trustee;

(e)       appointing Mr Fisher a director of all Green Group companies; and

(f)       removing Maryanne as a director of Green Group companies.

[661]   However I have found that when Hugh acted to:

(a)       remove Maryanne as a trustee; and

(b)      appoint Mr Fisher a trustee;

(c)       vote to remove Maryanne as a director; and

(d)      vote to appoint Mr Fisher a director;

he was subject to undue influence exercised by John, such that he was not exercising his own free will when exercising those powers and making those decisions.

[662] Maryanne sought orders that the powers of appointment were invalidly exercised and that the decisions by Hugh to vote to appoint Mr Fisher a director and remove Maryanne as a director were invalid and of no effect.  Counsel did not advance submissions on the appropriate relief in the case of a finding of undue influence.  Generally transactions that are subject to undue influence are voidable by the person who has suffered undue influence rather than void.298 However, it may be that a different principle applies in the case of powers that are exercised while subject to undue influence.299 My preliminary view is that the appropriate relief is:

(a)       the removal of Mr Fisher as a trustee;

(b)      the reinstatement of Maryanne as a trustee; and

(c)       a declaration that Hugh’s votes to remove Maryanne and appoint Mr

Fisher as directors should be considered invalid. However, I will also hear counsel further on this matter.

[663]   In any case, I have held in the alternative that the removal of Maryanne as trustee was validly cancelled by Hugh on 21 December 2011, and Maryanne is not estopped from now asserting that she is a trustee.  There may nevertheless be good reasons why she should not be a trustee.   John and Frances (at least), two of the

principal beneficiaries, are very hostile to her.  Allowing her to remain a trustee in

298   See Allcard v Skinner (1887) 36 Ch D 145 (CA) at 186.

299   See Harris v Rothery, above n 52 at [172].

the aftermath of this litigation would be a recipe for further discord and litigation. There is however no application for removal of Maryanne.

[664]   I have held that grounds are made out for the removal of Mr Fisher and Mr Gosney  as  trustees  if  that  is  necessary.  However,  as  noted,  it  may  not  be necessary to make those orders as, in the case of Mr Gosney, he was appointed by executors of a will I have now found to be the product of undue influence and, in the case of Mr Fisher, he was appointed as a trustee as a result of undue influence.

[665]   I have held that the resolutions of the trustees of Hugh Green Trust, the Hugh

Green Property Trust and the Moira Green Property Trust purportedly passed on

5 December 2011 appointing John and Frances directors were not validly passed as the resolutions were not passed by the required majority.

[666]   I have also held that grounds are made out for the removal of John and Frances as trustees on the grounds that the level of hostility they feel and exhibit toward Maryanne and Alice is sufficient to undermine the execution of the trusts for the benefit of all beneficiaries.

[667]   I do not at present make orders removing John, Frances, Mr Gosney and Mr Fisher  as  trustees.    Before  I  do  so  it  is  necessary  to  put  in  place  interim arrangements.  I said at the hearing that I will hear counsel before doing so.

[668]   The power of appointment is presently in the executors of Hugh’s will. I am satisfied that it is necessary for the Court to make at least an interim appointment of trustees to replace John, Frances, Mr Gosney, Mr Fisher and possibly Maryanne. This is in light of the recall of probate and the consequent uncertainty as to who are the executors.  I do not address whether, when probate is granted the Court should exercise its supervisory jurisdiction to supervise the appointment of trustees.  That would be addressing a hypothetical at this stage.

[669]   Maryanne has also sought an inquiry into the consequences of the Court finding in her favour.  This judgment will of course have flow on consequences in terms of decisions taken by trustees and directors who were not validly appointed,

and in the absence of Maryanne, who was not included as a trustee, and it seems possible, if not likely, not validly removed as a director.

21.3 Next steps

[670]   I direct that this proceeding be called before me at 10 am on Thursday 18

June to address the following issues:

(a)      Any submissions  directed  to  the  appropriate  relief  in  light  of  the findings of undue influence in [658] and [662] above.

(b)      Orders removing Mr Fisher and Mr Gosney as trustees if necessary. (c)        Orders removing John and Frances as trustees.

(d)      Appointment of an interim trustee or trustees.

(e)      Any  order  incidental  to  matters  or  directions  arising  from  my judgment including Maryanne’s status as trustee, and status of the beneficiaries in the next phase of the proceeding.

(f)       What further steps, if any, are necessary in this proceeding, including in connection with issues of probate.

[671]   It is my expectation that counsel will discuss who the interim trustees should be in advance of the hearing on 18 June 2015.

[672]   The plaintiff should file written submissions by midday on Monday 15 June and the defendants by midday on Wednesday 17 June.

[673]   In  the  meantime  I  make  orders  that  the  existing  trustees  John,  Frances, Mr Fisher, Mr Gosney and Maryanne are to take no steps as trustees without further order of the Court.   If urgent matters arise which require the trustees to act, the parties may ask that this proceeding be called at short notice.

22. Costs

[674]   My understanding is that the parties have agreed that there will be no order for costs.

23. Confidentiality

[675]   This judgment traverses the detail of a family dispute.  It is also a very large judgment.  I consider that the parties should have time to read it and consider its contents before it is publicly released.  I therefore make orders that there is to be no publication or further distribution of the contents of this judgment or the result, until

5  pm  Wednesday  10  June  2015.     If  there  are  any  applications  for  ongoing suppression they should be filed by midday on 8 June 2015.

Postscript

[676]   Having provided the parties with the opportunity referred to in [675] above, limited applications were made for redaction.  These were made to meet what I considered to be legitimate privacy concerns regarding health information, or distributions to members of the family about which there could be no concerns. Having heard the submissions, all of the existing suppression orders are lifted save for the following.  I order permanent suppression of the following:

1.        Paragraph [29] – the second half of the second sentence, after the words

“chronic ailments”.

2.Paragraph [32] – the three monetary values contained in the quote set out there.

3.Paragraph [33] – the last two words in the second sentence.   Also, those words where they are repeated in the third sentence.

3.        Paragraph [118(c)] – the words that appear after that part of the second

sentence which ends “he suffered from”.

4.        Paragraph [124] – the monetary amount set out there.

5.        Paragraph [131] – the third sentence.

6.        Paragraph [345] – that part of the second sentence which follows on after the

words “in her recollections”.

7.Paragraph  [391]  –  the  names  of  the  three  companies  referred  to  in  this paragraph (I do not include the reference to the Green Group in this).  The monetary amount set out in the last sentence.

8.        Paragraph [392] – the monetary amount set out in the second sentence.

9.        Paragraph [394] – the name of the company referred to there.

10.      Paragraph [395] – the name of the company referred to there.

11.      Paragraph [397] – the name of the company listed there.

12.      Paragraph [494(b)] – the monetary amount set out there.

13.      Paragraph [494(c)] – the monetary amount set out there.

14.      Paragraph [496] – the monetary amount set out there.

15.      Paragraph [508(a)] – the monetary amounts set out there.

16.      Paragraph  [634]  –  the  monetary  amounts  set  out  there,  including  the

Australian dollar amount.

17.      Paragraph [635] – the monetary amounts set out there.

18.      Paragraph [637] – the monetary amount set out there.

19.      Paragraph [639] – the monetary amounts set out there.