Lieven v Grieve

[2024] NZHC 1560

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-757

[2024] NZHC 1560

IN THE MATTER OF

the Trusts Act 2019

BETWEEN

TANYA MARIA LIEVEN

Plaintiff

AND

GRAEME STEPHEN GRIEVE

Defendant

On the Papers
Judgment:	14 June 2024

JUDGMENT OF GWYN J

Introduction

[1]        The parties were in a long-term relationship which ended in 2021. During their relationship they owned several properties and had set up trusts for that purpose. After their separation, Court orders prevented Mr Grieve from entering the former family home.

[2]       The dispute raised before this Court concerned two bare trusts. Ms Lieven alleged that Mr Grieve failed to maintain proper accounts in his role as trustee and committed a breach of trust by using trust funds for his own purposes and/or failing to account for trust funds. Mr Grieve brought a counterclaim against Ms Lieven that she had failed to apply rental income to property expenses, failed to account to Mr Grieve for his share, and instead used those funds for her own purposes.

[3]       In his affidavit dated 10 February 2023, Mr Grieve said that all his financial records relating to the various transactions identified by Ms Lieven in her evidence

LIEVEN v GRIEVE [2024] NZHC 1560 [14 June 2024]

were held at the former family home, and that despite several requests, Ms Lieven had refused to provide access to the house or the records.

The Judgment

[4]On 3 May 2023, the High Court issued the Judgment which found:1

(a)The allegation that Mr Grieve failed to maintain proper accounts was not a cause of action pleaded in Ms Lieven’s statement of claim, and the Court declined to grant leave to amend the statement of claim given the potential prejudice to the defendant at this stage in the proceedings.2 In any event, there was no  evidence to  support the allegation  that  Mr Grieve failed to keep accounts — documents provided by the defendant demonstrated that some accounts were kept, and the plaintiff’s refusal to allow the defendant to access the family home prevented him from accessing materials which would enable him to explain the transactions in question.3

(b)In the absence of full evidence, which was at least in part caused by Ms Lieven’s actions,4 the Court was not satisfied that Mr Grieve had breached his duty, as trustee, to account for trust funds. The Court held that a further inquiry would be necessary for the Court to reach a conclusion on that claim.5

(c)A further inquiry would also be necessary for the Court to reach a conclusion on Mr Grieve’s counterclaim.6

[5]       Both parties had sought an account and inquiry into the revenue and borrowings relating to the property held under the trusts and other property the parties have held, under pt 16 of the High Court Rules 2016 (Rules). The Court accepted that

1      Lieven v Grieve [2023] NZHC 1034 [Judgment].

2 At [43].

3 At [44].

4 At [45].

5 At [61].

6 At [61].

there was liability to account on the part of both Ms Lieven (in relation to the rental income) and Mr Grieve (as trustee).7 However, a number of preliminary steps were necessary prior to an account or inquiry being ordered under pt 16.8

[6]The Judgment directed:9

(a)Ms Lieven was to provide Mr Grieve and his support person access to the family home, at an agreed time, to retrieve documents and records.

(b)Once he had acquired the necessary material, Mr Grieve would have a 60-day period to reconcile the material and provide it to Ms Lieven through counsel.

(c)Also within 60 days, Ms Lieven would provide to Mr Grieve through counsel a supported accounting in respect of the counterclaim.

(d)Once that was completed, if either party was unsatisfied with the material that the other provided, they had leave to return to the Court and seek further directions.

Further filing from Mr Grieve

[7]       Counsel for the defendant filed a memorandum dated 5 October 2023, with an accompanying affidavit from Mr Grieve dated 3 October 2023, to update the Court following the discovery visits to the former family home.

[8]        Mr Grieve’s affidavit recorded that, as directed in the Judgment, on 27 May 2023 he and his support person attended the family home. They were met by two unfamiliar men who gave him a box of documents (it appears Ms Lieven had prepared this box). Large parts of the house, including Mr Grieve’s former bedroom where he stored documents and records, were locked.

7 At [59].

8 At [60].

9      At [62(a)]. The orders regarding Mr Grieve’s obligation to account as trustee and Ms Lieven’s obligation to account for rental income (the counterclaim) were under pt 16 of the High Court Rules 2016.

[9]       On 10 June 2023 Mr Grieve attended the address again. He was again met by the two unfamiliar men. He had unrestricted access to the house but was unable to find the material he was looking for.

[10]     In his affidavit, Mr Grieve says Ms Lieven has removed large volumes of material from the address. Without these documents, Mr Grieve says he is unable to complete the reconciliation anticipated by the Court.

[11]      In the memorandum dated 5 October 2023, Mr Grieve’s counsel submits the full evidence needed for the Court to reach a conclusion regarding breach of trust will not become available because Ms Lieven has removed the material. Without this material, there can be no account and inquiry under pt 16 of the Rules, and the Court is no further ahead in reaching a conclusion in relation to Ms Lieven’s breach of trust claim.

[12]      Counsel submits that, without the full evidence to persuade the Court regarding breaches, Ms Lieven’s claim under the Trusts Act 201910 must fail.

Further filing from Ms Lieven

[13]     Ms Lieven replied to the material filed by Mr Grieve by way of a memorandum dated 18 December 2023, filed on 20 December 2023. Ms Lieven generally refutes the allegations Mr Grieve makes in his affidavit and the memorandum of his counsel. She does not provide any new evidence nor indicate where the documents are that Mr Grieve alleges have been removed from the property since he moved out are.

[14]     Ms Lieven says that the Trust’s missing funds total millions of dollars. Her children require funding for their education, housing and wellbeing. She says that as the sole beneficiary, she continues to be denied access to the trust funds under both trusts and replacement trustees’ demands  for accountability have been  denied by  Mr Grieve.

10     The statement of claim records that the breach of trust claim is under sch 1, cl 9 of the Trusts Act 2019 and s 13M of the Trustee Act 1956.

[15]     Ms Lieven claims that the Court and Mr Grieve have been provided with material to enable the quantification, accounting and seizing of trust funds. She claims Mr Grieve is breaching his responsibilities under the Trusts Act and his duties as a Chartered Accountant by “designed obfuscation” during his final six months of residing in the Waikanae family home and subsequently.

[16]     Ms Lieven seeks leave “to so do”. She claims that denying leave would be prejudicial to the rights of herself and her children under the New Zealand Bill of Rights Act 1990, the laws of natural justice and the United Nations Convention on the Rights of the Child.

Discussion

[17]      At the time of the Judgment, the Court could not be satisfied on the evidence before it that Ms Lieven’s allegations of breach of duty as a trustee by Mr Grieve (or the counterclaim by Mr Grieve) were made out.

[18]      Mr Grieve says that because Ms Lieven refuses to make the necessary records available, the Court is no different a position now than it was at the time of the Judgment. Therefore, the plaintiff’s claim must fail, and the Court should dismiss the proceeding.

[19]     It is much less clear what the plaintiff seeks. Ms Lieven’s reference to “To deny such leave to so do” is unclear and is not linked to a direction or next step sought from the Court.

[20]     The evidence currently available to the Court does not establish a breach of trust on the  part  of  Mr Grieve.  There  is  force  to  Mr  Grieve’s  arguments  that Ms Lieven’s actions prevent the discovery of the evidence necessary to complete the reconciliation directed in the Judgment.

[21]     Nor does the memorandum filed for Ms Lieven address the direction in the Judgment that within 60 days she provide a supported accounting in respect of

Mr Grieve’s counterclaim against her.11 There is no material before the Court suggesting that Ms Lieven has attempted to fulfil the order to do so. That question is not addressed in Ms Lieven’s memorandum.

[22]     Mr Grieve says the family home contained the documents and financial records that he had kept during their relationship. Mr Grieve says he was restricted from accessing large sections of the home on his first arranged visit, then on the second visit was unable to find the documents and records where he left them or in other locations around the house. Ms Lieven was in control of the family home and access to it. It appears that her actions have prevented discovery of the full evidence necessary for the Court to reach a conclusion on Ms Lieven’s allegation of breach of trust.

[23]     Because Mr Grieve is unable to acquire the necessary material, I am satisfied that he is unable to fulfil the order at [62(b)] of the Judgment that he reconcile that material.

[24]     The inquiry necessary for the Court to reach a conclusion on the claim and counterclaim has not been completed within the timeframe directed, nor subsequently.

[25]     In those circumstances there remains insufficient evidence for the Court to reach a conclusion on the substance of either the claim or counterclaim, or to make directions pursuant to pt 16 of the Rules. I have no alternative but to dismiss the claim and counterclaim.

Outcome

[26]The claim and counterclaim are dismissed.

Gwyn J

Solicitors:

Thomas Dewar Sziranyi Letts, Lower Hutt McCabe and Company, Wellington

11     Judgment, above n 1, at [62(c)].