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Hansard v Hansard

Hansard v Hansard

Case [2014] NZCA 433 4 September 2014

Fiduciary Duty

Breach of Contract

Unconscionable Conduct

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA512/2013
[2014] NZCA 433

BETWEEN	SHARON GRACE HANSARD as a trustee of the D & S Hansard Family Trust Appellant
AND	GERALD GUY HANSARD and DIANA HANSARD as trustees of the GG Hansard Family Trust No 2 Respondents

Hearing:	20 May 2014
Court:	Randerson, Winkelmann and Lang JJ
Counsel:	D E Smyth and P J Kennelly for Appellant D J Chisholm QC and S J Davys-Brown for Respondent
Judgment:	4 September 2014 at 11:00 am

INTERIM JUDGMENT OF THE COURT

AThe appeal is dismissed to the extent it relates to the appellant’s liability to pay to the respondents the sum of $509,863.
BIn respect of the remaining sum of $712,795, directions for further submissions are given in [77] of the judgment.
CCosts are reserved.

____________________________________________________________________

REASONS OF THE COURT

(Given by Lang J)

Table of Contents

Para No

Introduction
Grounds of appeal
Did Sharon consent to the debt being incurred?

Background
The Hansard family restructures its affairs
Subsequent events
Sharon’s argument

Failure to comply with s 129 of the Companies Act 1993
Failure to act unanimously as trustees of the D & S Trust

The High Court judgment
Decision

Did Sharon subsequently ratify the transactions?
Decision

The debt of $509,863
The debt of $712,795

Estoppel

The ingredients of estoppel
This case

Did David act in breach of his fiduciary duty to the D & S Trust by entering into the transactions?
Was Sharon entitled to advance a defence based on knowing assistance?
Result

[1]
[5]
[8]
[8]
[12]
[21]
[26]
[30]
[32]
[35]
[37]
[45]
[52]
[52]
[54]
[61]
[63]
[64]

[67]

[70]
[76]

Introduction

This appeal concerns a dispute between the trustees of trusts associated with two generations of the Hansard Family. The respondents, Gerald and Diana Hansard, are the trustees of the GG Family Trust No 2 (“the GG Trust”). Their son David and his estranged wife Sharon are the trustees of the D & S Hansard Family Trust (“the D & S Trust”).[1]
[1]All of the parties to the appeal share the surname Hansard. As Ellis J did in the High Court, we will refer to them by their Christian names.
The trustees of the GG Trust allege that David and Sharon, in their capacity as trustees of the D & S Trust, are indebted to the GG Trust in the sum of approximately $1.22 million. A significant portion of that debt arose in 2001 when the GG Trust advanced monies to David and Sharon’s company, MH Publications Ltd (“MHP”). As will be seen shortly, the GG Trust alleges that the D & S Trust assumed responsibility for MHP’s debt in or about 2005.
MHP appears to have operated profitably until about 2008, when it was significantly affected by the global financial crisis. Then, at or about the same point, David and Sharon separated.[2] They have yet to resolve relationship property issues. The GG Trust called up…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hansard v Hansard

Details

AGLC: Hansard v Hansard [2014] NZCA 433
Case: [2014] NZCA 433
Decision Date: 4 September 2014 at 11:00 am

CaseChat Overview and Summary

This appeal concerns a dispute between the trustees of two family trusts. The GG Trust, established by Gerald and Diana Hansard, alleges that the D & S Trust, established by their son David and his estranged wife Sharon, owes them approximately $1.22 million. The debt arose when the GG Trust advanced funds to David and Sharon's company, MHP. The GG Trust claims the D & S Trust assumed responsibility for MHP's debt in 2005. Sharon contests the validity of the debt and the court's finding that she ratified the transactions. The court found that Sharon had a general understanding of the restructuring proposal and had signed financial statements acknowledging the D & S Trust's responsibility for the debts. However, the court found that Sharon had not ratified the transaction involving the debt of $712,795 because she did not know the value of the assets the D & S Trust received in return for assuming the debt. The appeal is dismissed in relation to the debt of $509,863 but the court has invited further submissions on the issue of estoppel in relation to the remaining debt of $712,795. Costs are reserved.

Orders