Martin v Martin - [2024] NZHC 658

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2023-435-010

[2024] NZHC 658

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

On the papers:

Counsel:

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

Judgment:

22 March 2024

JUDGMENT OF GRAU J

[Costs]

Introduction

[1] Julia and Alistair Martin (Julia and Alistair) are the remaining trustees of the Dyerville Trust (the Trust). Both parties and their children are also named as beneficiaries in the Trust deed. Julia and Alistair are married but have been separated since February 2020. Proceedings are currently underway to determine whether Otaraia Farm, a 695-ha beef and sheep farm in Martinborough currently owned by the Trust, is relationship property. All other property owned by the Trust is accepted to be relationship property.

MARTIN v MARTIN [2024] NZHC 658 [22 March 2024]

[2] Following the breakdown in their relationship and the dispute about Otaraia Farm, on 1 September 2023 Julia applied to the Court for an order replacing her and Alistair with independent trustees pursuant to ss 112 and 114 of the Trusts Act (the Act). She also applied for leave to commence proceedings by way of originating application under r 19.5 of the High Court Rules 2016 (the HCR). This prompted Alistair to commence the substantive relationship property proceedings noted above. At the same time, Alistair made a cross-application under s 137 of the Act for directions that Julia represent the trustees of the Trust in the relationship property proceedings.

[3] On 12 February 2023, Ellis J delivered a judgment in respect of the applications by Julia and Alistair.1 Justice Ellis granted Julia’s applications and dismissed Alistair’s.2 Her Honour gave both parties an opportunity to confirm that Ms Jessica Kellow and Mr Iain Shephard of BDO are to be appointed as the independent trustees before the orders replacing Julia and Martin took effect.3 The parties have confirmed that Ms Kellow and Mr Shephard can be appointed by consent. The orders in [38(b)– (c)] of Ellis J’s decision thus take effect accordingly.

[4] Justice Ellis also indicated she saw no reason why 2B costs should not follow the event (being that Julia had succeeded). However, her Honour agreed to the parties filing memoranda following her judgment.4 This decision deals with the remaining issue of costs.

Julia’s position

[5] Julia’s position is that she should have her actual costs paid from the Trust funds, but that Alistair should not. She also seeks an order for increased costs at 20 per cent above 2B scale.

[6] Julia says that she acted entirely reasonably in bringing her applications: the trustees were deadlocked, no trustee decisions could be made, and judicial intervention

1 Martin v Martin [2024] NZHC 147; to the extent that it is necessary, this judgment should be read…

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 658
Case: [2024] NZHC 658
Decision Date: 22 March 2024

CaseChat Overview and Summary

Julia Martin applied to the High Court for an order replacing herself and her husband Alistair as trustees of the Dyerville Trust, with independent trustees appointed in their place. This was in response to a deadlock in decision-making on the trust, as a result of their separation. Alistair cross-applied for Julia to represent the trust's interests in proceedings to determine whether a farm owned by the trust was relationship property. Justice Ellis, in a prior decision, granted Julia's application and dismissed Alistair's, and the present judgment deals with the issue of costs. Julia sought an order that her costs be paid from the trust funds, at an increased rate, and that Alistair bear his costs personally. Alistair submitted that no costs should be awarded between the parties at all, or that if they were to be awarded, they should be paid from trust funds and reserved until the determination of all issues in the substantive litigation.

The court held that Julia's costs should be paid from trust funds, as her application to have the trustees replaced was reasonable and in the interests of the trust's beneficiaries. As for Alistair's costs, the court held that he was not entitled to have his costs indemnified from trust funds, as his opposition to Julia's applications and filing of his counter-application were not in the interests of the beneficiaries. The court also held that increased costs should be awarded to Julia, as Alistair's opposition was unreasonable, and that his counsel had acted unfairly in discussing the substance of settlement negotiations in submissions on the issue of costs.

The orders of the Court were that Julia was to be indemnified out of trust funds at 20 per cent above 2B scale costs, being a total of $22,370.40 in costs and $2,261.37 in disbursements, and that Alistair was to bear his costs personally.

Orders