Little v Howick Trustee DL Ltd - [2018] NZHC 1884

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-424

[2018] NZHC 1884

BETWEEN
DEIDRE ANN LITTLE

First Plaintiff

JOHN LAWSON LITTLE
Second Plaintiff

AND

HOWICK TRUSTEE DL LTD AS

TRUSTEE OF THE WOODSIDE TRUST

Defendant

Hearing: 9, 10, 11 and 12 April 2018

Appearances:

First Plaintiff in person

P J Dale for Second Plaintiff (watching brief only) Z A Matheson for Defendant

Judgment:

27 July 2018

Reissued:

31 July 2018

JUDGMENT OF BREWER J

This judgment was delivered by me on 27 July 2018 at 4:30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Neilsons Lawyers (Onehunga) for Second Plaintiff Claymore Partners Ltd (Auckland) for Defendant

LITTLE v HOWICK TRUSTEE DL LTD AS TRUSTEE OF THE WOODSIDE TRUST [2018] NZHC 1884 [27
July 2018]

Introduction

[1] Mr and Mrs Little established Woodside Trust (“the Trust”) in 2002, shortly after their marriage. They were the trustees when they separated in 2013. At that time, in their capacities as trustees, they owned or controlled three major assets:

(a)A residential property at 7 Woodside Crescent, St Heliers, Auckland. This was used as the family home;

(b)A commercial property in Marua Road, Ellerslie, Auckland;

(c)A company, Prince & Princess Ltd (“PPL”), which imported and sold children’s products.

[2] The beneficiaries of the Trust are Mr Little and Mrs Little, and their teenage son, Oscar. Mr and Mrs Little are discretionary beneficiaries. Oscar is also a discretionary beneficiary and he is currently the sole final beneficiary.

[3] Mr and Mrs Little are bitterly estranged. They have been unable to work together or even to co-operate where reasonable co-operation would have been in their interests and those of Oscar. As I will come to, this bitter estrangement provides the hostile animus for Mrs Little to bring this wholly unnecessary proceeding.

[4] In 2014, Mrs Little applied to have Mr Little removed as a trustee of the Trust. Instead, Peters J removed both Mr Little and Mrs Little.1 In their place, Peters J appointed the defendant, Howick Trustee DL Ltd, as sole trustee. The sole director and shareholder of the defendant is Mr Hussey and for convenience I will refer to him as the trustee of the Trust.

[5]Mr Hussey had a difficult task. I accept the following description as accurate:2

(a)The trust was financially distressed: two properties (including 7 Woodside Crescent) were in arrears on their mortgages. There was an extensive history of missed mortgage payments and Westpac wanted the properties sold or refinanced with another bank.

1 Little v Little [2014] NZHC 3159.
2 Defendant’s list of issues, dated 9 April 2018.

(b)The relationship between Mr Little and Mrs Little was highly acrimonious. Mrs Little made serious accusations against Mr Little in respect of his actions while he was a trustee and urged the trustee to issue court proceedings against Mr Little and/or make deductions from Mr Little’s entitlements in Mrs Little’s favour. Mr Little would not be on the business…

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: [2018] NZHC 1884
Decision Date: 27 July 2018

CaseChat Overview and Summary

In the High Court of New Zealand, Mrs. Deidre Ann Little and Mr. John Lawson Little brought a claim against Howick Trustee DL Ltd as the trustee of the Woodside Trust. The couple had established the Woodside Trust in 2002, shortly after their marriage, and the Trust owned or controlled three major assets: a residential property at 7 Woodside Crescent, a commercial property in Marua Road, Ellerslie, and a company, Prince & Princess Ltd (PPL), which imported and sold children's products. After the couple separated in 2013, the court removed them as trustees and appointed Howick Trustee DL Ltd as the sole trustee. The trustee sponsored a mediation between Mr. and Mrs. Little, which resulted in a signed settlement agreement. However, Mrs. Little commenced the current proceeding in 2017, alleging that the trustee had acted in breach of his duties as a trustee. The court found that Mrs. Little, as a discretionary beneficiary, had no standing to bring an application under s 68 of the Trustee Act 1956. The court also found that Mrs. Little was estopped by the terms of the settlement agreement from re-opening the matters settled by the agreement. The court dismissed Mrs. Little's claims, as she had not established a dereliction on the part of the trustee which would invoke the inherent supervisory jurisdiction of the Court. The court also found that the trustee had acted appropriately and with great thoroughness in carrying out his duties as trustee of the Trust. The court further found that the trustee's proposed allocation of costs and distribution of capital were appropriate exercises of his discretion as trustee.

Orders