Legler v Formannoij - [2021] NZHC 737

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV 2020-488-32

[2021] NZHC 737

IN THE MATTER OF The Kaahu Trust

UNDER

Part 18 of the High Court Rules

BETWEEN

LI KARI LEGLER, LAILA SUN LEGLER KLAUI, and KEN LEGLER

Plaintiffs

AND

MARIA GUILLAUMINA CORNELIA JOHANNA FORMANNOIJ

First Defendant

KAAHU TRUSTEE LIMITED

Second Defendant

Hearing: 29 March 2021

Appearances:

D R Bigio Q C and J W H Little for the Plaintiffs J D McBride for the Defendants

Judgment:

1 April 2021

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 1 April 2021 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

LEGLER, KLAUI, and LEGLER v FORMANNOIJ [2021] NZHC 737 [1 April 2021]

[1] The defendants applied for further and better discovery from the plaintiffs. I heard the application on 30 March 2021. The parties requested expedition in my decision, as the trial is scheduled to commence on 17 May 2021. In those circumstances I did not want to delay judgment until after the Easter vacation. Given the limited time available to me, in this judgment I do not address every point that was made at the hearing of the application.

Background

[2]Except where indicated, I understood the following to be common ground.

[3] The plaintiffs are the only children of the late Mr Ricco Legler. Mr Legler died on 16 November 2017.

[4] The first defendant, Ms Formannoij, is Mr Legler’s widow, and the plaintiffs’ stepmother. Mr Legler and Ms Formannoij were in a relationship, and then married, from 1989 until Mr Legler’s death.

[5] The plaintiffs’ claim concerns the Kaahu Trust. The Kaahu Trust was created by deed in June 2008. The initial trustees were Mr Legler, Ms Formannoij, and a corporate trustee that I will call BOI Co Ltd. The plaintiffs were originally beneficiaries of the Kaahu Trust. The plaintiffs say they still are; the defendants say the plaintiffs have recently been excluded as beneficiaries.

[6] After Mr Legler’s death, Ms Formannoij and BOI Co Ltd were left as the two trustees of the Kaahu Trust. On about 21 November 2019 (roughly two years after Mr Legler’s death), BOI Co Ltd resigned as trustee. This left Ms Formannoij as sole trustee.

[7] The plaintiffs allege at paragraph [13] of their statement of claim that, as sole trustee of the Kaahu Trust, Ms Formannoij was unable to exercise any power or discretion in favour of herself. This is denied by the defendants.

[8] On 26 November 2019, Ms Formannoij instructed her solicitors to incorporate the second defendant, Kaahu Trustee Ltd (KTL). Ms Formannoij is the sole director

of KTL. The shares in KTL are held by Ms Formannoij and a company controlled by her solicitors.

[9] The next day, 27 November 2019, by a deed of retirement and appointment, Ms Formannoij purported to appoint (the plaintiffs say) or did appoint (the defendants say) KTL as trustee of the Kaahu Trust in…

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 Legler v Formannoij

Details

AGLC: Legler v Formannoij [2021] NZHC 737
Case: [2021] NZHC 737
Decision Date: 1 April 2021

CaseChat Overview and Summary

The case of Legler v Formannoj pertains to a dispute over the administration and control of the Kaahu Trust, following the death of Mr. Ricco Legler. The plaintiffs, who are the children of Mr. Legler, contest the actions of Ms. Maria Formannoj, the widow of Mr. Legler and the first defendant, specifically her appointment of Kaahu Trustee Ltd (KTL) as the trustee of the Kaahu Trust. The defendants, including Ms. Formannoj and KTL, have applied for further and better discovery from the plaintiffs, seeking documents related to the administration of the Horowai Family Trust and the intentions of Mr. Legler regarding the distribution of assets between the Horowai Family Trust and the Kaahu Trust. The central legal issue in this case revolves around whether the documents sought by the defendants are relevant to the proceeding, which hinges on the plaintiffs' narrow claim that Ms. Formannoj's appointment of KTL as trustee was a fraud on a power. The court found that the documents sought were not relevant to determining Ms. Formannoj's purpose at the time of exercising the power of appointment, as they were not in her possession or control at that time. Furthermore, the court determined that the defendants' affirmative allegations did not render the documents discoverable, as they did not pertain to issues actually in dispute in the proceeding. The court dismissed the defendants' application for further and better discovery and awarded costs to the plaintiffs.

Orders