Justitiae Trustee Co Ltd v NZF Nominees Ltd - [2021] NZHC 659

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1954

[2021] NZHC 659

BETWEEN JUSTITIAE TRUSTEE COMPANY LIMITED
Plaintiff

AND

NZF NOMINEES LIMITED

Defendant

Hearing: 22-23 February 2021

Appearances:

B D Gray QC, R B Hucker and R Selby for the Plaintiff No appearance by or on behalf of the Defendant

M V Robinson and A van Ammers for Fairlight Forestry Ltd and Clive Bradbury (Interested Parties)

K Glover for Clayton Bradbury (Interested Party)

S Gollin for De Havilland Investments Ltd and Heather Bradbury (Interested Parties)

Judgment:

30 March 2021

JUDGMENT OF GORDON J

This judgment was delivered by me on 30 March 2021 at 2 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Hucker & Associates, Auckland
West Auckland Law Office, Auckland Harrington Law Limited, Auckland

Counsel:B D Gray QC, Auckland M V Robinson, Auckland

JUSTITIAE TRUSTEE CO LTD v NZF NOMINEES LTD [2021] NZHC 659 [30 March 2021]

Introduction

[1] This case is a sequel to the long-running tax litigation arising out of what was known as the Trinity tax scheme.1 The plaintiff, Justitiae Trustee Co Ltd (Justitiae) is associated with Garry Muir, a tax lawyer involved in the construction of the Trinity tax scheme, and his family. On the other side of the dispute the interested parties are associated with Clive Bradbury, a commercial lawyer involved in the Trinity tax scheme, and his family.2 Garry and Clive were formerly partners in the law firm Bradbury & Muir. As will become apparent, the two families have fallen out.

[2] Justitiae and Fairlight Forestry Ltd3 (Fairlight) (the latter associated with the Bradbury family interests) are the two beneficiaries of a trust, which was part of a private investment scheme set up by Garry and Clive. The Trust is essentially a private investment vehicle held by a nominee.

[3] The proceeding arises out of the execution of a Deed of Assignment (Assignment) on 24 June 2019, which assigned legal title to Fairlight of an undivided one-half share as tenant in common in the Trust Assets at the time held on trust for Fairlight by the Trustee under the Trust Deed. The principal issue is whether the Assignment is binding on the trust concerned. The various legal issues raised are all connected to this principal issue.

[4] Justitiae brings its claims under s 68 of the Trustee Act 1956 (the Act). The parties rely on affidavit evidence. There was no cross-examination on the affidavits.

Background and parties

[5] The R & A Trust (the Trust) was settled on 14 November 2008, by R & A Nominees (Anguilla) Inc (Anguilla). Garry and Clive were the directors and shareholders of Anguilla. They have joint power of appointment of the Trustees of the

1 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115, [2009] 2 NZLR 289.
2 I will refer to Garry Muir and Clive Bradbury by their first names. Clive’s brother,…

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.

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Details

Case: [2021] NZHC 659
Decision Date: 30 March 2021

CaseChat Overview and Summary

The proceeding arose out of a Deed of Assignment executed on 24 June 2019. The principal issue was whether the Deed was binding on the trust. The various legal issues raised were all connected to this principal issue. The Court found that Justitiae’s claims did not fall under s 68 of the Trustee Act 1956. In case it was wrong, the Court considered a further submission in relation to the onus of proof and the claims on their merits. The Court found that Justitiae bore the onus of proof on its claims (the onus of proof was not reversed as Justitiae submitted). The two causes of action failed on the merits. The Court found that the Assignment of 24 June 2019 was binding on the Trust. The Court found that Justitiae had not established any of the alleged breaches of trust. The Court found that there were no breaches by Clayton and NZF, and it was not necessary to consider the position of the other interested parties. The defendant/interested parties were prima facie entitled to costs. The Court reserved costs.

Orders