McCartney v Cox - [2012] NZHC 1369

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-454-918 [2012] NZHC 1369

UNDER the Trustee Act 1956

IN THE MATTER OF an Application for Order to Sell Trust
Property

BETWEEN CHER MCCARTNEY Plaintiff

ANDTIMOTHY JOHN COX First Defendant

ANDCHER MCCARTNEY, TIMOTHY JOHN COX AND ADRIAN KENNETH PORTER Second Defendants

Hearing: 14 May 2012

Counsel: M R Duston for Plaintiff
No appearance for First Defendant

Judgment: 19 June 2012

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 10:30am on the 19th June 2012.

JUDGMENT OF WILLIAMS J

CHER MCCARTNEY V TIMOTHY JOHN COX HC WN CIV-2011-454-918 [19 June 2012]

[1] Cher McCartney was in a relationship with Timothy Cox from January 2000. They had two children. They settled a trust in December 2005 to hold a bare section of land in Levin, upon which they (then) proposed to build. They separated on
6 October 2008 without having commenced building.

[2] The discretionary beneficiaries of the trust are Mr Cox and Ms McCartney together with their two children. The trustees are Mr Cox, Ms McCartney and Adrian Porter.

[3] The section is now valued at $160,000. It carries a mortgage valued at nearly

$74,000 and, as I will explain below, there is an unsecured debt owed by the trust to

Ms McCartney’s parents in the sum of nearly $24,000.

[4] Following separation, Mr Cox has refused to participate in the administration of the trust property. Indeed he does not appear to have had any ongoing involvement with his children either. A Deed of Retirement of Mr Cox as trustee, and a Separation and Relationship Property Agreement were prepared and, I am told, its contents were initially agreed. But Mr Cox has since refused to execute them.

[5] An order for substituted service of these proceedings was made with service on Mr Cox being by way of public notice in the Dominion Post on Wednesday,
22 February 2012. It is understood that Mr Cox remains in the country. Ms McCartney has had occasional and terse telephone contact with Mr Cox, but the situation is essentially that he refuses to be contacted and refuses to engage (either in respect of the administration of the trust property, with his family) or these proceedings.

[6] Ms McCartney wants Mr Cox removed as a trustee and the trust to sell the section and use the proceeds to contribute to the purchase of a modest home for herself and the children. Mr Adrian Porter, the third independent trustee, supports these steps. He is not well pleased with Mr Cox’s apparent abdication of his responsibilities to the trust and particularly to the children.

[7] An obvious obstacle to this outcome is to be found in clause 14 of the Trust Deed. It provides that if Ms McCartney and Mr Cox separate, the trust asset is to be split with one half to vest in a trust to be established by Mr Cox, and the other half to remain…

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 McCartney v Cox

Details

AGLC: McCartney v Cox [2012] NZHC 1369
Case: [2012] NZHC 1369
Decision Date: 19 June 2012

CaseChat Overview and Summary

Cher McCartney applied for an order to remove Timothy Cox as a trustee of a trust that holds a section of land in Levin. Timothy Cox, who was in a relationship with Cher McCartney, had refused to participate in the administration of the trust or engage with her since their separation. The trust was established to hold a bare section of land upon which Cher McCartney and Timothy Cox intended to build a home. The discretionary beneficiaries of the trust are Mr Cox and Ms McCartney together with their two children. The trustees are Mr Cox, Ms McCartney and Adrian Porter. The section is valued at $160,000 but carries a mortgage of nearly $74,000 and an unsecured debt of nearly $24,000. Cher McCartney sought to sell the section and use the proceeds to contribute to the purchase of a modest home for herself and the children. An obvious obstacle to this outcome was clause 14 of the Trust Deed, which required the trust asset to be split if Cher McCartney and Timothy Cox separated. The court considered that the trust was effectively hamstrung by Mr Cox’s absence and that his refusal to engage with the trust or respond to these proceedings disqualified him from continuing involvement. The court found that Mr Cox had misconducted himself in the administration of the trust and ordered that both Mr Cox and Ms McCartney be removed as trustees. Cullinane Steele Trustees (2011) Limited was appointed as an independent professional trustee to administer the asset alongside the remaining independent trustee, Mr Porter. The court reserved leave to apply for further directions if necessary and reserved costs.

Orders