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McLaren v McLaren

McLaren v McLaren

Case [2018] NZCA 570 10 December 2018

Fiduciary Duty

Breach of Trust

Breach of Fiduciary Duty

Constructive Trust

Trusts & Equity

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA438/2018
[2018] NZCA 570

BETWEEN	DAVID MUIR MCLAREN, LENORE MARY MCLAREN AND MARK PHILIP BROWN AS TRUSTEES OF THE MCLAREN FAMILY TRUST First Applicants DAVID MUIR MCLAREN AND LENORE MARY MCLAREN AS APPOINTOR OF THE MCLAREN FAMILY TRUST Second Applicants DAVID MUIR MCLAREN, LENORE MARY MCLAREN AND MARK PHILIP BROWN AS TRUSTEES OF AN UNNAMED TRUST Third Applicants
AND	SUSAN MARY MCLAREN Respondent

Court:	Brown and Clifford JJ
Counsel:	M I S Phillipps for Applicants A R Shaw for Respondent
Judgment: (On the papers)	10 December 2018 at 11.00 am

JUDGMENT OF THE COURT

A The application for leave to appeal is declined.

BThe applicants are to pay the respondent costs as for a standard application for leave to appeal on a band A basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Brown J)

Introduction

By a statement of claim dated 10 May 2017 the respondent alleged breaches of trust and breaches of fiduciary duty by the applicants. The applicants’ application to strike out the proceeding for failure to disclose a reasonably arguable cause of action was declined in a judgment of Associate Judge Matthews dated 28 March 2018.[1]
[1]McLaren v McLaren [2017] NZHC 555 [strike out decision].
The applicants’ application under s 56(3) of the Senior Courts Act 2016 (the Act) for leave to appeal that judgment was declined by Associate Judge Matthews in a judgment dated 6 July 2018.[2] The applicants now apply to this Court under s 56(5) of the Act for leave to appeal.

Relevant principles

[2]McLaren v McLaren [2018] NZHC 1668 [leave decision].

The requirement in s 56 that leave be required for appeals from decisions of the High Court made on interlocutory applications represents a significant change in procedure and procedural rights.[3] In Finewood Upholstery Ltd v Vaughan Fitzgerald J described the leave requirement as a “filtering mechanism” to ensure that unmeritorious appeals of interlocutory orders or appeals of interlocutory orders of no great significance to either the parties or more generally do not unnecessarily delay the proceedings to which the orders were made.[4]
[3]Sutcliffe v Tarr [2017] NZCA 360, [2018] 2 NZLR 92 at [8].
[4]Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].
Similarly in Ngai Te Hapu Inc v Bay of Plenty Regional Council this Court observed that there was no doubt that s 56(3) was intended to reduce the volume of appeals to this Court from interlocutory decisions in the High Court.[5] The Court noted the comparison made with s 24G of the Judicature Act 1908 concerning commercial list appeals in the Explanatory Note to the Judicature Modernisation Bill and then referred to the statement of the s 24G principles in Meates v Taylor.[6]
[5]Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [15].
[6]At [15]–[16], citing Meates v Taylor [leave] (1992) 5 PRNZ 524 (CA) at 526, confirmed…

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 McLaren v McLaren

Details

AGLC: McLaren v McLaren [2018] NZCA 570
Case: [2018] NZCA 570
Decision Date: 10 December 2018 at 11.00 am

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, McLaren v McLaren was an appeal against a decision of the High Court. The applicants, David Muir McLaren, Lenore Mary McLaren, and Mark Philip Brown as trustees of the McLaren Family Trust, sought leave to appeal against a decision to decline their application to strike out the respondent's claim. The respondent, Susan Mary McLaren, alleged breaches of trust and fiduciary duties by the applicants. The applicants argued that the decision went to the heart of the proceedings, could be dispositive, and involved important questions of law of general public importance.

The Court of Appeal considered the principles for granting leave to appeal under section 56 of the Senior Courts Act 2016, which required a significant error of fact or law, or significant implications for the case, the applicant, or as a matter of precedent. The Court found that the applicants had not demonstrated that the claim was clearly untenable or that the high threshold for granting leave had been met. The Court concluded that the Associate Judge's decision on the application for leave to appeal was appropriate, and declined leave to appeal under section 56(5) of the Act.

The applicants were ordered to pay the respondent's costs for a standard application for leave to appeal on a band A basis, together with usual disbursements. The Court of Appeal's decision upheld the Associate Judge's approach to strike out applications, which required caution in disposing of cases on a summary basis to prevent injustice to claimants and to avoid skewing the law with undisciplined propositions of legal principle or assumptions about policy considerations. The Court of Appeal found that the applicants had not demonstrated that the respondent's case was demonstrably so deficient that it warranted a divergence from the settled practice in respect of strike out applications.

Orders