Jongeneel v Schaake - [2023] NZHC 3568

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-303

[2023] NZHC 3568

UNDER The Trusts Act 2019

IN THE MATTER

of the JAG & AJ Schaake Family Trust

BETWEEN

AMANDA JULIE JONGENEEL

Plaintiff

AND

JACK ALLAN GEORGE SCHAAKE

First Defendant

AND

KIM SCOTT THOMPSON

Second Defendant

Hearing: 17 October 2023

Appearances:

Z T Mora for the Plaintiff

D M O’Neill and F O’Back for the First Defendant
No appearance by or on behalf of the Second Defendant

Judgment:

7 December 2023

JUDGMENT OF POWELL J

This judgment was delivered by me on 7 December 2023 at 4.00 pm pursuant to
r 11.5 of the High Court Rules

…………………..
Registrar/Deputy Registrar

Counsel/solicitors: McCaw Lewis, Hamilton D M O’Neill, Hamilton
North End Law, Hamilton P J Morgan KC, Hamilton Nielsen Law, Hamilton

AMANDA JULIE JONGENEEL v JACK ALLAN GEORGE SCHAAKE [2023] NZHC 3568 [7 December 2023]

[1] The parties are the trustees of the J A G and A J Schaake Family Trust (“the trust”).

[2] Pursuant to a deed of trust (“the deed”) the trust was established on 15 May 2014. At that time the plaintiff, Amanda Jongeneel, and the first defendant, Jack Schaake, had been in relationship for some three years and married for two. They, together with Mr Schaake and Ms Jongeneel’s accountant, the second defendant Kim Thompson, were appointed as and remain the three trustees of the trust.

[3] Clause 12.6 of the deed requires trustees to act unanimously in exercising “all powers and discretions”.

[4]There is no dispute that the Trust owns two properties:

(a)The former family home at Horotiu (“the Horotiu property”); and

(b)A beach house at Langs Beach (“the Langs Beach property”).

[5] The trust also owns 28 of the 100 shares in Schaake Holdings Limited, a company established to hold a commercial property from which Mr Schaake’s company operates.

[6] Ms Jongeneel and Mr Schaake separated in June 2021. Relevantly, Ms Jongeneel subsequently obtained an occupation order in respect of the Horotiu property where she currently resides. Mr Schaake continues to use the Langs Beach property and by changing the locks has effectively precluded Ms Jongeneel’s use of that property.

[7] Ms Jongeneel contends that as a result of the breakdown in the relationship between her and Mr Schaake, the trust is deadlocked. Necessary maintenance of the Horotiu property is therefore not being carried out and as noted, Ms Jongeneel is excluded from the Langs Beach property. As a result Ms Jongeneel has applied under ss 112 and 114 of the Trusts Act 2019 (“the Act”) for orders removing the trustees and replacing them with a single professional trustee.

[8] The application is opposed by Mr Schaake. He disputes the trustees are deadlocked and that on the contrary there has been no issue put before the trustees requiring consideration. Moreover, Mr Schaake contends that the trust has no money or source of funding and it therefore has no resources to undertake maintenance on any of…

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 Jongeneel v Schaake

Details

AGLC: Jongeneel v Schaake [2023] NZHC 3568
Case: [2023] NZHC 3568
Decision Date: 7 December 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Amanda Julie Jongeneel brought an application against Jack Allan George Schaake, a trustee of the JAG and AJ Schaake Family Trust, under sections 112 and 114 of the Trusts Act 2019. The trust, established by a deed on 15 May 2014, owns two properties and shares in Schaake Holdings Limited. The plaintiff and defendant were married and trustees of the trust until their separation in June 2021. The plaintiff contends that the trust is deadlocked, leading to issues with property maintenance and her exclusion from one property. She seeks the removal of the trustees and their replacement with a professional trustee. The defendant opposes the application, arguing that the trust has no resources for maintenance, and that the trustees have not been presented with a proposal requiring consideration.

The court examined whether the trustees were deadlocked and if their removal was necessary. The court found no evidence of deadlock as there was no income for the trust to fund maintenance or distributions. Additionally, the only specific maintenance request identified was for the replacement of the underfloor gas central heating system at the Horotiu property, which had not been approved by the trustees. The court also noted that the plaintiff's proposal to resolve the trust issues by splitting the net assets was beyond the trustees' powers and not an issue for the trustees to resolve.

In conclusion, the court dismissed the plaintiff's application for the removal of the trustees, finding that the trustees were not deadlocked and there was no basis for their removal under the Act. The court also noted that further proceedings could be brought if the trustees became deadlocked on a substantive issue in the future. The defendant was awarded costs on the dismissal of the proceedings.

Orders