Hudson v Hudson - [2024] NZHC 45

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-3038

[2024] NZHC 45

UNDER Section 109 of the Trusts Act 2019

IN THE MATTER OF

An application under s 109 of the Trusts Act 2019

BETWEEN

JANICE MARGARET HUDSON

Applicant

AND

STEPHEN BRUCE HUDSON

First Respondent

JANICE MARGARET HUDSON and

STEPHEN BRUCE HUDSON as trustees of The Hudson Family Trust

Second Respondent

JANICE MARGARET HUDSON and

STEPHEN BRUCE HUDSON as trustees of The Stephen and Janice Hudson Family Trust

Third Respondent

Hearing: On the papers

Counsel:

Z L Wackenier for Applicant

Judgment:

31 January 2024

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 31 January 2024 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Tompkins Wake, Auckland

HUDSON v HUDSON [2024] NZHC 45 [31 January 2024]

Introduction

[1] This is a without notice interlocutory application seeking leave to commence proceedings by way of originating application under pt 19 of the High Court Rules 2016. The substantive application seeks orders under s 109 of the Trusts Act 2019 preventing removal of the applicant, Ms Hudson, as trustee from two family trusts. The trustees of the two different trusts are named in that capacity as the second and third respondents. The first respondent is the applicant’s ex-husband. Their marriage was dissolved in 2019 and the two parties remain in dispute, with proceedings before the Family Court concerning the division of relationship property.

[2] Each of the trust deeds contains a clause to the effect that the discretionary trustee powers may only be exercised if there is at least one independent trustee who is not a beneficiary. At present there is no independent trustee appointed to either of the two trusts. The applicant and the respondent were the two trustees, which has led to problems with decision-making given the disputes between them.

[3] On 17 November 2023, the first respondent served a notice to remove the applicant as trustee of both trusts, purporting to exercise that power under s 105 of the Trusts Act. The notice was due to take effect on 15 December 2023 unless an application was made under s 109 within that same time frame.1 Under s 110 of the Trusts Act, an applicant must produce evidence that raises a genuine dispute as to whether the removal decision was reasonably open to the person in the circumstances.

Legal principles

[4] Part 19 of the High Court Rules is designed to provide a relatively speedy and inexpensive process for determining applications under specific statutory provisions, or where the process is suitable in the interests of justice.

[5] Part 19 was initially designed as a simpler and more expedient process in cases where there was in reality no opposing party.2 That narrow approach is no longer

1 Trusts Act 2019, s 107(3).
2 Jessica Gorman and others McGechan on Procedure (looseleaf ed, Brookers) at [HRPt19.01].

strictly applied.3 However, for contested proceedings that are…

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 Hudson v Hudson

Details

AGLC: Hudson v Hudson [2024] NZHC 45
Case: [2024] NZHC 45
Decision Date: 31 January 2024

CaseChat Overview and Summary

The High Court of New Zealand, Auckland registry, was presented with an interlocutory application by Janice Margaret Hudson against her ex-husband, Stephen Bruce Hudson, and the trustees of two family trusts. The application sought leave to commence proceedings to prevent her removal as a trustee under section 109 of the Trusts Act 2019. The underlying dispute between the parties stems from their dissolved marriage and ongoing family court proceedings concerning the division of their relationship property. The trust deeds in question contain clauses stipulating that the discretionary trustee powers can only be exercised if there is at least one independent trustee who is not a beneficiary. Currently, there are no independent trustees appointed to either trust, leading to decision-making difficulties due to the ongoing disputes between the applicant and the respondent.

The legal issues before the court included whether the applicant was entitled to commence proceedings under part 19 of the High Court Rules 2016, which is designed for specific statutory provisions or cases suitable in the interests of justice, and whether the substantive application raised a genuine dispute warranting the intervention of the court under section 109 of the Trusts Act 2019. The court also had to consider whether the application was appropriate under part 18 of the High Court Rules, which applies to proceedings claiming relief solely under the Trusts Act 2019 and involves more extensive case management.

The court found that the proceeding was likely to be opposed and contentious, yet the applicant argued that an originating application procedure was appropriate due to the absence of the need for particularised proceedings or discovery. The applicant also emphasised the importance of a speedy process to ensure that decision-making in respect of the trusts could proceed without delay. The court acknowledged that the overarching objective was the "just, speedy and inexpensive determination of this proceeding." However, it was deemed necessary to hear from the respondent on the procedural issues before making a final decision. Consequently, the court directed that the application seeking leave to commence proceedings by way of originating application must be served on the first respondent, who was given two weeks to file and serve a memorandum advising their position on the procedural issues. The matter was subsequently re-listed before the duty judge.

Orders