Lusty v Thorburn - [2019] NZHC 2610

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002593

[2019] NZHC 2610

UNDER the Contract and Commercial Law Act 2017 and the Declaratory Judgments Act 1908

IN THE MATTER

of an application for specific performance

BETWEEN

AILEEN BERYL LUSTY, RONALD HUNT LUSTY and WARWICK JAMES ROLAND

BROWNE as executors of the Estate of Kenneth Richard Lusty

Plaintiffs

AND

CRAIG MAXWELL THORBURN and

CARLY EVE THORBURN as trustees of the THORBURN TRUST

Defendants

Hearing: 12 September 2019

Appearances:

M J Matthew for Plaintiffs A A H Low for Defendants

Judgment:

14 October 2019

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 14 October at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Rennie Cox, Auckland
Alexandra Low & Associates, Auckland

LUSTY and BROWNE as executors of the Estate of Kenneth Richard Lusty v C M THORBURN and C E THORBURN as trustees of the THORBURN TRUST [2019] NZHC 2610 [14 October 2019]

Introduction

[1] This action concerns a registered lease of land situated at Duck Creek Road in Stillwater. The land is held in a charitable trust (the Thorburn Trust) preserving it as a burial ground. The plaintiff-lessees seek summary judgment for specific performance requiring the defendant-lessors to grant a renewal of the lease on terms that would allow further renewals, potentially at least, in perpetuity.1 The plaintiffs also seek declarations concerning the validity and interpretation of the lease.

[2] The defendants will grant a renewal of the lease but not on terms to allow for any further renewals. They argue that the plaintiffs are not entitled to summary judgment for specific performance (or declarations) because:

a)the plaintiffs were in breach of the lease at the time the lease was to be renewed;

b)the lease was granted in breach of trust and to grant a renewal on the same terms would perpetuate the breach;

c)the original lessee, through whom the plaintiffs hold the lease, knew, or was wilfully blind to, the breach of trust and liable for knowing receipt as a constructive trustee; and

d)there are factual disputes making the case unsuitable for summary judgment.

The position of the Attorney-General

[3] The Attorney-General, as the protector of charities, reviewed the claim. His counsel has filed a memorandum that he does not wish to become involved.

1 Damages have not been sought in the alternative to specific performance.

Background and the lease

[4] The plaintiffs are the executors of the estate of Kenneth Richard Lusty (Kenneth). The defendants are the trustees of the Thorburn Trust.

[5] The history of the Thorburn Trust begins with Andrew Weatherspoon Thorburn (Andrew). He was an early settler at Stillwater, Auckland. He acquired a block of land at Duck Creek Road on the edge of what was known as the Wade River. He established a burial plot overlooking the river. It is thought that the burial plot became the resting place of Andrew, his wife, daughter,…

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 Lusty v Thorburn

Details

AGLC: Lusty v Thorburn [2019] NZHC 2610
Case: [2019] NZHC 2610
Decision Date: 14 October 2019

CaseChat Overview and Summary

The plaintiffs, the executors of Kenneth Lusty's estate, sought summary judgment for specific performance of a lease for land held by the Thorburn Trust as a burial ground. The defendants, trustees of the Thorburn Trust, would grant a lease renewal but not on terms to allow further renewals. The plaintiffs sought declarations concerning the validity and interpretation of the lease. The defendants argued the plaintiffs were not entitled to summary judgment because they were in breach of the lease, the lease was granted in breach of trust, the original lessee knew of the breach, and there were factual disputes making the case unsuitable for summary judgment. The court found that there were material questions of fact, and the defendants had an arguable defence to the claim for specific performance. The lease was granted on imprudent terms that provided little benefit to the Thorburn Trust. The court found it was arguable that the lease was granted in breach of Frederick's obligations as trustee to perform his duties for the benefit of the beneficiaries of the Thorburn Trust and not to profit from his trusteeship. The court found it was also arguable that Kenneth knew of Frederick's breach of trust. The plaintiffs' application for summary judgment was dismissed. Costs were reserved. The Registrar should allocate the case a first case management telephone conference on the first available date.

Orders