McLaughlin v McLaughlin

Case [2019] NZHC 2597


IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2017-442-000052

[2019] NZHC 2597

BETWEEN MARK JAMES MCLAUGHLIN AND ANDREW ASHLEY MCLAUGHLIN
Plaintiffs

AND

JOHN DAVID MANUEL MCLAUGHLIN, GLASGOW HARLEY TRUSTEE

LIMITED AND MARK WILLIAM RUSSELL
First Defendants

AND

BRIAN JAMES MAURICE NELSON

Second Defendant

AND

BRETT MCLAUGHLIN

Interested Third Party

Hearing: 8 October 2019

Appearances:

S D Campbell and J R Halligan for Plaintiffs

O D Peers and G G Dill-Russell for Defendants J M McGuigan for Interested Third Party

Judgment:

11 October 2019


JUDGMENT OF DUNNINGHAM J


This judgment was delivered by me on 11 October 2019 at 4.15 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 11 October 2019

[1]                 These proceedings involve a dispute between beneficiaries of a family trust, the Ashley Trust, and the trustees of that Trust.

MCLAUGHLIN v MCLAUGHLIN [2019] NZHC 2597 [11 October 2019]

[2]                 The Trust was settled in February 2004 by the late Jim McLaughlin and his wife Edna. Its only asset was a large block of farm land situated in Stoke, Nelson (the Trust property). The settlors’ wishes, as expressed in the Trust Deed, was that the trustees should “realise the value of the farm property by way of subdivision into individual or lifestyle allotments to better benefit the discretionary beneficiaries”.

[3]                 The plaintiffs are two of the four sons of the McLaughlins and are beneficiaries of the Trust. They have expressed concerns about the way current and former trustees, including their brother John, have managed the Trust Property. They filed proceedings seeking removal of the current trustees and damages from the trustees for alleged breaches of their duties as trustees.

[4]                 They now seek an interim injunction to restrain the trustees from proceeding with the next stage of development of the Trust Property, including signing contracts with a prospective purchaser of lots within that development, until a new trustee is installed to replace Glasgow Harley Trustee Ltd (Glasgow Harley). Their brother Brett McLaughlin who appears as an interested party, is generally in support of this application.

[5]                 The trustees oppose the application on the grounds that to grant the injunction would risk serious harm to the Trust in both the short and long term.

[6]                 On 8 October 2019, after hearing from the parties, I declined the interim injunction sought.1 This decision provides my reasons for doing so.

Background

The Ashley Trust

[7]                 Jim and Edna McLaughlin purchased the Trust property in the 1960s, as farm land, but with a long term view to subdivide it as they could see its development potential.


1      McLaughlin v McLaughlin [2019] NZHC 2561.

[8]                 Their son, John, and his wife purchased five hectares of land from Jim and Edna in 1979 and John assisted Jim in the preparation and pursuit of various subdivision and rezoning applications in respect to both the McLaughlins’ land and John’s land.

[9]                 When the McLaughlins settled the Trust Property upon the Ashley Trust…

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McLaughlin v McLaughlin [2019] NZHC 2597
Case
[2019] NZHC 2597
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CaseChat Overview and Summary

This case involved a dispute between beneficiaries of a family trust, the Ashley Trust, and the trustees of that Trust. The plaintiffs, two of the four sons of the McLaughlins and beneficiaries of the Trust, sought an interim injunction to restrain the trustees from proceeding with the next stage of development of the Trust Property. The plaintiffs expressed concerns about the way current and former trustees, including their brother John, have managed the Trust Property. They filed proceedings seeking removal of the current trustees and damages from the trustees for alleged breaches of their duties as trustees. The trustees opposed the application on the grounds that to grant the injunction would risk serious harm to the Trust in both the short and long term. After hearing from the parties, the Court declined the interim injunction sought. The Court found that there was a serious question to be tried but that the balance of convenience lay against granting the injunction. The Court also found that preserving the status quo and the conduct of the parties did not support granting the injunction. Finally, the Court found that the overall justice favoured declining the interim injunction application.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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