Martin v Martin - [2024] NZHC 147

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2023-435-10

CIV-2023-435-14 [2024] NZHC 147

UNDER The Trusts Act 2019 and the Inherent Jurisdiction of the High Court

IN THE MATTER

of the Dyerville Trust

BETWEEN

JULIA MARIE MARTIN

Applicant

AND

ALISTAIR HENRY MARTIN

Respondent

Hearing: 28 November 2023

Counsel:

S W H Fletcher and L Hansen for Applicant R C Laurenson and C D Batt for Respondent

Judgment:

12 February 2024

JUDGMENT OF ELLIS J

[1] Julia and Alistair Martin are the two remaining trustees of the Dyerville Trust (the Trust). They are husband and wife but have been separated since February 2020. In general terms, it is accepted that property owned by the Trust is relationship property, but there is a dispute about whether the “Otaraia Farm” property is included. Otaraia Farm is a 695 ha beef and sheep farm in Martinborough. It has been in Mr Martin’s family for generations.

MARTIN v MARTIN [2024] NZHC 147 [12 February 2024]

[2] Ms Martin believes the administration of the Trust is at an impasse and has applied for an order replacing her and Mr Martin with independent trustees.1 She also seeks leave under r 19.5 of the High Court Rules 2016 (the HCR) to commence the proceeding as an originating application.

[3] Mr Martin says the daily operation of the Trust is not deadlocked, and that neither the existing trustees nor any replacement trustees are in a position to make decisions about the division of the trust funds until the underlying dispute about the ownership of the Otaraia Farm is resolved. He also objects to the use of the r 19.5 procedure.

[4] Soon after Ms Martin commenced her proceedings (the replacement proceedings), Mr Martin filed proceedings against Ms Martin, the trustees of the Trust and Gibson Sheat (the relationship property proceedings).2 The statement of claim pleads causes of action in equity, contract, tort and under the Property (Relationships) Act 1976 (the PRA). Although this Court has no automatic jurisdiction over PRA matters, Mr Martin has applied to the Family Court to have the proceedings transferred here.

[5] Mr Martin has also applied under s 137 of the Trusts Act 2019 (the Act) for directions that Ms Martin represent the trustees of the Trust in the relationship property proceedings, where there is a conflict with his personal interests.

[6] Justice McQueen directed that Ms Martin’s application for leave to commence proceedings under r 19.5 be heard together with her substantive application for replacement of the Trustees and Mr Martin’s s 137 application.3

Possible settlement

[7] The applications were, accordingly, all heard by me on 28 November 2023. In the course of the hearing, there appeared to be some prospect of the parties resolving

1      Being the -010 proceedings.
2      Being the -014 proceedings.
3      Martin v Martin HC Masterton CIV-2023-435-010, 25 October 2023 (Minute of McQueen J).

matters by agreement. It was agreed that I should defer issuing a judgment until there…

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 Martin v Martin

Details

AGLC: Martin v Martin [2024] NZHC 147
Case: [2024] NZHC 147
Decision Date: 12 February 2024

CaseChat Overview and Summary

Julia Martin applied to the High Court to replace herself and Alistair Martin as trustees of the Dyerville Trust. The Trust holds family wealth, including Otaraia Farm, a 695 ha beef and sheep farm in Martinborough. The Martins separated in 2020. Julia believes the administration of the Trust is at an impasse. She also seeks leave to commence the proceeding as an originating application. Alistair says the daily operation of the Trust is not deadlocked, and that neither the existing trustees nor any replacement trustees are in a position to make decisions about the division of the trust funds until the underlying dispute about the ownership of the Otaraia Farm is resolved. He also objects to the use of the r 19.5 procedure. Alistair has also applied under s 137 of the Trusts Act 2019 for directions that Julia represent the trustees of the Trust in the relationship property proceedings, where there is a conflict with his personal interests. The Court heard the application together with the s 137 application. The Court held that the order sought by Julia for removal and replacement of both herself and Alistair as Trustees is the fair and sensible way forward. In terms of the statutory provisions, it is necessary or desirable to remove and replace both trustees and, given the discord between the parties, it would be difficult or impracticable to do so without the assistance of the Court. It is not a precondition that misconduct, breach of trust, dishonesty, or unfitness by the current trustees be established and the Court made no such finding. Given the hostility between the parties and Alistair's arguable conflict of interest, removal and replacement is necessary for the proper execution of the trust and in the interests of the beneficiaries as a whole. Leave to commence under pt 19 should also be granted. The Court granted Julia leave to commence the replacement/removal proceedings under pt 19 of the High Court Rules. The Court also granted the applications under ss 112 and 114 of the Act: Julia and Alistair are removed as Trustees of the Dyerville Trust and Jessica Kellow and Iain Shepard of BDO are appointed in their stead. The representation application under s 137 of the Act is declined. Orders (b) and (c) will not take effect until a decision about the identity of the replacement Trustees has been made. Julia has proposed Kellow and Shepard who are insolvency practitioners and partners in BDO. Counsel are therefore to confer further and advise the Court of the outcome within 10 working days. In the event agreement cannot be reached the Court will resolve the matter on the papers. Costs will follow the event (the event being that Julia has succeeded). Any such memoranda (no more than two pages in length) are to be filed and served 10 working days from the date of this judgment.

Orders