Oldfield v Oldfield

[2019] NZHC 492

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2018-419-000261

[2019] NZHC 492

BETWEEN

DOROTHY ANN OLDFIELD

 Plaintiff

AND

KENNETH DAVID OLDFIELD

 Defendant

Hearing:

5 & 6 February 2019

Appearances:

A Grant for Plaintiff

P J Morgan QC & Z Mora for Defendant

Judgment:

19 March 2019

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 19 March 2019 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:

Nevermann Bennett, Hamilton McCaw Lewis, Hamilton

OLDFIELD v OLDFIELD [2019] NZHC 492 [19 March 2019]

Introduction

[1]                 The plaintiff, Dorothy Oldfield, has applied for an order to remove her former husband, David Oldfield, as trustee of the David Oldfield Family Trust (Trust). She has also applied to have Mr and Mrs Oldfield’s son, John Oldfield (John), appointed trustee in Mr Oldfield’s place.

[2]                 Mr Oldfield opposes Mrs Oldfield’s application and says now is not an appropriate time to replace the trustees. He says who should be trustees of the Trust and how the Trust’s assets should be disposed of should be decided in the context of Mrs Oldfield’s applications under the Property (Relationships) Act 1976 (PRA) and the Family Proceedings Act 1980 (FPA). He seeks an expedited hearing of that application and of his own proposals for a vesting of trust property.

[3]  Mr Oldfield also says that if he is removed as a trustee then Mrs Oldfield should also be removed. He also says John is not an appropriate person to be appointed as trustee.

[4]                 The issues for the Court are whether to remove Mr Oldfield as a trustee and, if so, whether to remove Mrs Oldfield as a trustee as well, and, if either or both are removed, who should be appointed in their places.

Relevant background

[5]                 Mr and Mrs Oldfield were married in 1971. They were together for 44 years and have three adult children, Susan Oldfield (Susan), Michael Oldfield (Michael), and John. Mr and Mrs Oldfield separated in February 2015.

[6]                 The Trust was established by a Trust Deed dated 30 November 1988. The Deed’s terms were varied by deed in 2005. The trustees are Mr Oldfield, Mrs Oldfield and Peter Stewart, an independent trustee. Mr Stewart has indicated he no longer wishes to be a trustee.

[7]Under the Trust Deed:

(a)The settlors of the Trust are Mr and Mrs Oldfield;

(b)The capital beneficiaries are Susan, Michael and John;

(c)The discretionary beneficiaries are:

(i)Mr and Mrs Oldfield;

(ii)The capital beneficiaries;

(iii)Any children or grandchildren of the capital beneficiaries who, in the reasonable opinion of the trustees, exhibits the characteristics set out in clause 3.4 of the Trust Deed;

(iv)Trustees of any trusts of which the above persons are beneficiaries;

(v)Any charitable trust purpose or institution involved in the advancement of education;

(d)The Trust may pay income towards the maintenance of Mr and Mrs Oldfield and to the education, advancement or benefit of any of the discretionary beneficiaries who, in the reasonable opinion of the trustees, exhibit the characteristics in clause 3.4 of the Trust Deed.

[8]The characteristics set out in Clause 3.4 of the Trust Deed are:

… a person who in the opinion of the Trustees has:

(a)     retained close links with members of the Settlors immediate family; and

(b)     exhibited a caring attitude towards others; and

(c)     shown modesty, industry, honesty and integrity; and

(d)   demonstrated that he or she is a good citizen who is or may be expected to make a worthwhile contribution to the community in which he or she lives.

[9]                 The Trust Deed provides that Trust resolutions may be passed by majority of trustees as long as the majority includes Mr and Mrs Oldfield, and that trustees may be appointed by mutual agreement of the Settlors. Accordingly, no resolutions can be adopted and no new trustees appointed without the agreement of Mr and Mrs Oldfield.

[10]The Trust Deed also provides for the appointment of advisory trustees.

[11]The Trust holds most of the family’s assets. The Trust’s assets are:

(a)The former matrimonial home at 44 Lake Crescent, Hamilton which is currently occupied by Mr Oldfield;

(b)A holiday home in Raglan said to be worth approximately $1.5 million;

(c)92 per cent of the non-voting A shares of Demolition Traders Ltd, which has been, in effect, the family business since its acquisition in the 1980s;

(d)Industrial land in Hamilton on which Demolition Traders is located; and

(e)Approximately $1.3 million in cash.

[12]              The remaining non-voting A shares  in  Demolition  Traders  are  held  by  Mr Oldfield (6 per cent) and Mrs Oldfield (2 percent).

[13]              There are 10 voting B shares in Demolition Traders. Mr Oldfield holds six; Mrs Oldfield the other four. The company’s constitution requires that the appointment of a director requires a majority of 75 per cent of the B shares. Accordingly, no new director can be appointed without the agreement of Mr and Mrs Oldfield.

[14]              Demolition Traders is apparently a profitable business. Each month, it makes payments of $8,000 to Mr Oldfield, $9,000 to Mrs Oldfield and $3,000 to Susan.

[15]              Mr Oldfield was a director of Demolition Traders from 1985 until he resigned in September 2011. Michael became a director in August 2005. Michael resigned as a director in November 2014 following a fractious meeting involving Mr Oldfield. The current directors of Demolition Traders are Malcolm Qualtrough and Grahame Craig.

[16]              In February 2015, Mrs Oldfield left the matrimonial home and went to live with Susan.

[17]              Following the separation, the relationship between Mr Oldfield and Mrs Oldfield became increasingly acrimonious and unpleasant as did the relationship between Mr Oldfield and the rest of the Oldfield family. As a result of the breakdown in the relationship between Mr and Mrs Oldfield, the Trust has been deadlocked on all decisions, including the appointment of a third director of Demolition Traders.

Proceedings

[18]              On 19 May 2017, Mrs Oldfield applied to the Family Court in Hamilton for orders under the Property (Relationships) Act 1976 determining the respective shares of herself and Mr Oldfield in their relationship property. Her application was amended in November 2017 to seek orders under the Family Proceedings Act 1980 relating to the Trust property in addition to the orders sought under the Property (Relationships) Act.

[19]              On 9 February 2018, Mr Oldfield filed a notice of opposition to Mrs Oldfield’s amended application on the grounds that the orders sought were not appropriate in the circumstances.

[20]              Attempts to reach a resolution of the issues between Mr and Mrs Oldfield by way of mediation and then arbitration proved unsuccessful.

[21]              On the application of Mr Oldfield made in May 2018, the proceedings were transferred to the High Court. However, in October 2018, Mr Oldfield applied for orders that the two sets of proceedings be heard separately.

[22]              On 7 November 2018, Mrs Oldfield applied for orders under the Trustee Act 1956 seeking Mr Oldfield’s removal as a trustee and the appointment of John as trustee in Mr Oldfield’s place.

[23]              On 5 December 2018, Mr Oldfield filed notices opposing Mrs Oldfield’s application for his removal as trustee and for John’s appointment as trustee and applied for orders removing Mrs Oldfield as trustee and for the appointment of independent trustees.

[24]              By minute dated 12 December 2018, Courtney J directed that the applications for removal of Mr and Mrs Oldfield as trustees be heard on 4 and 5 February 2019, at which time a timetable might be set to hear Mr Oldfield’s application for a split trial. Mr Oldfield’s application for a split trial has now been resolved as set out at the end of this judgment.

Application for removal of Mr Oldfield as trustee

[25]              In her application for Mr Oldfield’s removal, Mrs Oldfield says Mr Oldfield has breached his duties as trustee and should be removed. Mrs Oldfield’s application states 17 reasons why Mr Oldfield should not continue as trustee. These include that:

(a)Mr Oldfield has contrived to deprive Mrs Oldfield of the Trust’s assets by asserting control over them and by obstructing decisions of the trustees to release trust funds to Mrs Oldfield;

(b)Mr Oldfield has refused to agree to the Trust providing Mrs Oldfield with a home of her own, thereby forcing her to lodge with Susan at a cost of $1,000 per month, while he lives rent-free in the former matrimonial home at Lakeview Crescent;

(c)There has been a serious breakdown in Mr Oldfield’s relationship with Michael and Mr Oldfield has refused to allow Trust assets to be used to assist in meeting the living, medical and education costs of Michael’s children;

(d)Mr Oldfield has become alienated from Susan and seldom sees her;

(e)Mr Oldfield has taken various actions which Mrs Oldfield says were calculated to prevent the Trust from meeting and taking decisions;

(f)Mr Oldfield is so unsympathetic to Mrs Oldfield and the three children that they all seek his removal on the grounds he is incapable of acting fairly and impartially.

[26]              Mrs Oldfield, Susan, Michael, John, and Mr Craig, one of the current directors of Demolition Traders, have sworn affidavits in support of Mrs Oldfield’s application. Ms Margot Pienaar of NZGT has sworn an affidavit stating NZGT’s willingness to be appointed trustee of the Trust.

[27]              In his notice of opposition, Mr Oldfield says he has not breached his duties as trustee as claimed by Mrs Oldfield  and  says  that  the  Court  should  deal  with  Mrs Oldfield’s application under the  Family  Proceedings  Act,  that  removal  of  Mr Oldfield as trustee will not resolve the Trust’s issues, that if he is removed as trustee, then Mrs Oldfield should also be removed, and that he is opposed to John being appointed as trustee. Mr Oldfield, Mr Qualtrough, the other current director of Demolition Traders, and Mr Cornelius Botha, a former director of Demolition Traders, have sworn affidavits in support of Mr Oldfield’s opposition.

[28]              In his affidavit, Mr Oldfield takes issue with some of the specific allegations made in the affidavits in support of Mrs Oldfield’s application and does not accept the characterisation of his behaviour in those affidavits as difficult, dictatorial, and domineering, and a range of other terms he says are used to describe him which he says are out of all realistic proportion and not a correct portrayal of him as a person. Mr Oldfield gives examples of the steps he has taken to resolve matters with

Mrs Oldfield and says that he believes the evidence he has provided establishes that he has taken all appropriate and genuine steps to attempt to resolve the inter-family disputes and to act appropriately in his role as trustee.

[29]Mr Oldfield acknowledges, however, that:

… the current disputes within the family are very acrimonious and have led to a very significant rift within the family. My relationships with [Mrs Oldfield], Michael and John are at a low ebb. In that sense I have effectively and deliberately been isolated from the immediate family.

[30]              With respect to Mrs Oldfield’s application that John be appointed as trustee to replace Mr Oldfield, Mr Oldfield says that John owes substantial amounts of money to the Trust, is not impartial and is not independent and says:

I consider that John has turned against me and in the last couple of years my relationship with John has been deteriorating. I therefore do not believe that he can act impartially towards me, a primary beneficiary of the Trust.

Relevant law

[31]              Mrs Oldfield’s application states that Mr Oldfield should be removed as a trustee pursuant to s 51(1) of the Trustee Act and/or s 182 of the Family Proceedings Act and/or the inherent jurisdiction of the Court. In the hearing before me, however, Mr Grant advanced the case for removal on the basis of s 51 of the Trustee Act and the inherent jurisdiction of the court, as well as s 43(2)(c) of the Trustee Act, to which Mr Grant attached particular significance.

[32]Section 51(1) of the Trustee Act provides:

The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult, or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees, either in substitution for or in addition to any existing trustee or trustees, or although there is no existing trustee.

[33]              As the Court of Appeal said in Kain v Hutton, the inherent jurisdiction is derived from the Court’s general supervisory powers in equity relating to the

supervision of trusts for the welfare of beneficiaries.1 The Court referred in that context to the Privy Council’s decision in Letterstedt v Broers2 and its own decision in Hunter v Hunter3 – cases referred to by Mr Morgan and Mr Grant respectively. The Court in Kain v Hutton then set out the following passage from the speech of Lord Blackburn in Letterstedt v Broers as authoritatively and conveniently summarising the circumstances in which a Court will exercise its powers to remove trustees:4

But in cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees who have abused their trust; it is not every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity.

It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances … is merely ancillary to its principal duty, to see that trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet if it is satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.

[34]              Mr Morgan also referred to passages in a later decision of the Court of Appeal in Kain v Hutton where the Court noted that decisions to replace trustees will be based on a large and varied number of considerations which must, when combined, show that it is detrimental to the welfare of the beneficiaries for the trustee to continue in office, that merely showing breaches of trust would not necessarily be sufficient to justify the removal, and that to justify such removal, any incompatibility between trustee and beneficiary would have to be at such a level that the proper administration of the trust was seriously affected and it had become difficult for a trustee to act in the interests of the beneficiary.5

1      Kain v Hutton (2002) 1 NZTR 12-004 (CA).

2      Letterstedt v Broers (1884) 9 AC 371.

3      Hunter v Hunter [1938] NZLR 520.

4      Letterstedt v Broers (1884) 9 AC 371 at 385-6.

5      Kain v Hutton [2007] NZCA 199, [2007] 3 NZLR 349 at [266]-[267].

[35]              With reference to these passages, as well as to passages in two Australian decisions, Guazzini v Pateson6 and Miller v Cameron,7 Mr Morgan submitted that conduct by a trustee qualifying for his or her removal would ordinarily need to come within categories such as disposition of trust assets or fraud and, even then, it would be a question of degree.

Discussion on proposed removal of trustees

[36]              The authorities establish that where it is apparent that a trustee is unable to carry out his or her responsibilities to the beneficiaries, then the case for replacement is made out, however the behaviour of the trustee may be characterised. Both of the decisions in Kain v Hutton, as well as the passage from Letterstedt v Broers, focus on the effect of the trustee’s conduct on the execution of his or her responsibilities as trustee, rather than on the conduct of the trustee per se. For that reason, while not every breach by a trustee of his or her duties will warrant a trustee’s replacement, I do not accept Mr Morgan’s submission that a trustee should ordinarily be removed only if the trustee’s behaviour entails fraud or a mis-disposition of trust assets or similar misconduct.

Should Mr Oldfield be removed as trustee?

[37]              In the present situation, the case for Mr Oldfield’s removal is made out on two bases, even without getting into the detail of the accusations made in the various affidavits. The first is that the trust is deadlocked, as Mr Oldfield acknowledges himself, and the deadlock arises from Mr Oldfield’s refusal to have trustee meetings with Mrs Oldfield or to make any decisions about the disposition of trust assets. Accordingly, Mr Oldfield is frustrating the purposes of the Trust and failing in his responsibilities to the other beneficiaries. That is so, regardless of the fact that Mr Oldfield is one of the primary beneficiaries. Mrs Oldfield is no less a primary beneficiary than Mr Oldfield and her interests as a beneficiary are being denied by the deadlock, however Mr Oldfield seeks to justify his behaviour.

6      Guazzini v Pateson (1918) 18 SR(NSW) 275 (SC).

7      Miller v Cameron (1936) 54 CLR 572 (HCA).

[38]              The second basis for Mr Oldfield’s removal is that, as the affidavits sworn in support Mrs Oldfield’s application and Mr Oldfield’s own affidavits demonstrate, there has been a fundamental breakdown of trust between Mr Oldfield on the one side and Mrs Oldfield and the children on the other. Whatever the reasons for that breakdown, I have been left in little doubt that Mr Oldfield cannot be relied on to act impartially towards any of the other beneficiaries. It is apparent from the affidavits that Mr Oldfield struggles to separate his own interests from those of the other beneficiaries. In his own affidavit, Mr Oldfield says that John should not be appointed trustee because the deterioration in their relationship means that John cannot be relied upon to act impartially towards Mr Oldfield, a primary beneficiary. The same logic applies to Mr Oldfield with respect to his inability to be impartial towards the other beneficiaries, particularly towards Mrs Oldfield, the other primary beneficiary.

[39]              Mr Morgan submits that there is no need to replace Mr Oldfield now because there is no threat to Trust funds in the sense that Mr Oldfield is not likely to make off with them or dissipate them, and there is no threat to the continuing Trust distributions to Mrs Oldfield, Susan and Mr Oldfield, and that the future of the Trust can be addressed when decisions are made on Mrs Oldfield’s Family Proceedings Act application.

[40]              That submission might have had some force if the hearing of the Family Proceedings Act application was reasonably imminent. However, it became apparent at the hearing of the present application that the earliest that the Family Proceedings Act application can be heard is late September 2019. A decision may take another two or three months to be released – which might mean Mrs Oldfield would have to wait almost another full year, on top of the four years she has already waited since separating from Mr Oldfield, before getting access to Trust assets beyond the amount of the monthly payments. That is far too long.

[41]              However, even if the hearing of the Family Proceedings Act application had been more proximate, I consider Mr Oldfield’s removal as trustee should happen without further delay given the stark imbalance in the living situations of Mr and Mrs Oldfield and Mr Oldfield’s refusal to agree to any steps to adjust that balance in Mrs Oldfield’s favour.

Should Mrs Oldfield be removed as trustee?

[42]              Mr Morgan submits that the authorities establish that where one trustee is removed in circumstances such as this – that is, where the trustees are estranged spouses or partners – then the other trustee should also be removed. Mr Grant says Mrs Oldfield is ready to be removed if that is the price of removing Mr Oldfield.

[43]              The decisions cited by Mr Morgan – Powell v Powell8 and Little v Little9 – do not establish a rule or presumption that if one former spouse is removed as trustee the other should also be removed. However, as in those cases, I accept that the level of estrangement between Mr and Mrs Oldfield means that it would be difficult for Mrs Oldfield to be even handed between all beneficiaries of the Trust. Mrs Oldfield and Mr Oldfield are the primary beneficiaries of the Trust. Given the state and history of their relationship, it would be difficult for either to them to be impartial towards the other, particularly if one were trustee and the other were not. Accordingly, I agree Mrs Oldfield should also be removed as trustee.

Should John be added as trustee?

[44]              Given the fractured relationships within the family, with John very much aligned with Mrs Oldfield, I do not consider that John should be added as a trustee, particularly in view of Mr Oldfield’s strong objection to that appointment.

Who can and should be appointed as replacement trustees?

[45]              Mr Grant argues that this question should be considered under s 43 of the Trustee Act, even though Mrs Oldfield’s application was made under s 51 of that Act.

[46]              Section 43(1) provides that where a trustee is dead or is unable, unwilling, unfit or incapable of acting as trustee:

… the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustees for the time being, or the personal representatives of the last surviving or

8      Powell v Powell [2014] NZHC 476.

9      Little v Little [2014] NZHC 3159.

continuing trustee, may by deed appoint a person or persons (whether or not being the person or persons exercising the power) to be a trustee or trustees in the place of the first-mentioned trustee.

[47]Section 43(2)(c) provides that on the appointment of a trustee:

it shall not be obligatory … to fill up the original number of trustees where more than 2  trustees  were originally  appointed;  but,  except  where  only  1 trustee was originally appointed, a trustee shall not be discharged under this section unless there will be either a trustee corporation or at least 2 individuals to act as trustees to perform the trust.

[48]              Mr Grant submits that the effect of s 43(2)(c) is that, in order to ensure that Mr and Mrs Oldfield do not retain any residual liabilities as trustees once they are removed, the Court must appoint either a trustee corporation, as that term is defined in s 2 of the Trustee Act, or two individuals, being human beings, as trustees but cannot appoint a corporate trustee because a corporate trustee is neither a trustee corporation nor an individual.10 Mr Grant notes that s 48 of the Trustee Act specifically provides for the Court to appoint a trustee corporation as sole trustee of any trust unless the trust deed forbids such an appointment.

[49]              In support of his argument, Mr Grant refers to Jasmine Trustees Ltd v Wells, a decision of Mann J in the Chancery Division of the High Court of England and Wales, where it was held, in interpreting s 37(1)(c) of the United Kingdom’s Trustee Act 1925 which is drafted in almost identical terms to s 43(2)(c), that “individuals” must mean natural persons and cannot include corporate bodies.11 Mr Grant finds this point to be of considerable interest.12

[50]              The relevance of this argument is  that  Mrs  Oldfield  proposes  that  the  New Zealand Guardian Trust (NZGT), which is a “trustee corporation”, should be appointed as trustee to replace Mr and Mrs Oldfield, whereas Mr Oldfield proposes that if there is to be a sole trustee, Norris Ward McKinnon Trustees Ltd, a corporate

10 Under s 2 of the Trustee Act 1956, “trustee corporation” means the Public Trust or the Māori Trustee or any corporation authorised by any Act of the Parliament of New Zealand to administer the estates of deceased persons and other trust estates.

11 Jasmine Trustees Ltd v Wells [2007] EWHC 38 (Ch), [2007] 3 WLR 810, [2007] 1 All ER 1142 at [11]-[32].

12 See Mr Grant’s  commentary under Trusts & Estates Law, Auckland District Law Society Law  News Issue 4 (22 February 2019) at 5.

trustee, should be appointed. A privately established corporate trustee is not a “trustee corporation”. Mr Grant says that if the Court were to appoint Norris Ward McKinnon Trustees to be the sole trustee of the Trust in place of Mr and Mrs Oldfield and Mr Stewart, there would be a risk, in terms of s 43(2)(c), that Mr and Mrs Oldfield and Mr Stewart would be held liable for the consequences of future decisions taken by the corporate trustee in their absence, similar to findings that were made in Jasmine.

[51]              Mr Morgan says s 43 has no relevance to the Court’s powers to appoint a replacement trustee which he says, are set out in s 51 of the Trustee Act and are unconstrained by s 43. He says s 43 is limited to applications by persons nominated in a trust deed to appoint new trustees, or if there is no such person able or willing to act, the surviving or continuing trustees, or the personal representative of the last surviving or continuing trustee. He also says s 43 provides that in such situations, the appointment of the new trustees is by deed, and does not deal with appointments by order of the Courts.

Discussion on powers to appoint replacement trustees

[52]              Mr Grant was unwilling to address me on the relationship between s 43 and   s 51. In any event, it is not necessary to decide this question.

[53]              I agree with Mr Morgan that, on its face, s 43 is limited to the circumstances set out in s 43(1) – appointments of new trustees by private persons by way of deed. Further support for that view can be derived from the fact that s 45, which deals with the retirement of trustees and contains the same limitation as in s 43(2(c), is also concerned with appointments made by deed and not by court order. In addition, s 46, which deals with situations where a trustee wishes to retire but is unable to secure the agreement of the persons with powers to appoint new trustees, gives the Court the broad power to appoint a “proper person” to replace the retiring trustee, and that power is not subject to the limitation in s 43(2)(c).

[54]              However, the circumstances of this case do not require me to rule on this question or to pronounce on whether Jasmine should be followed in New Zealand. On the facts of this case, I see no good reason not to appoint NZGT as the sole trustee in place as proposed by Mrs Oldfield. Mr Morgan said that Mr Oldfield had not proposed

Norris Ward McKinnon Trustees instead of NZGT out of bloody-mindedness but because they are a local firm. I do not consider that to be an adequate reason for preferring Norris Ward McKinnon Trustees to NZGT which, operating under the name Perpetual Guardian, has offices in Hamilton as well as in other parts of New Zealand. NZGT, like Norris Ward McKinnon Trustees, has also confirmed its willingness to be appointed as trustee.

[55]              When faced with two equally good choices, I see no reason not to prefer the course proposed by the applicant. Accordingly, I have decided that NZGT should be appointed trustee in place of Mr Oldfield and Mrs Oldfield who, as discussed above are to be removed, and Mr Stewart, who wishes to resign. It follows that if Mr Grant is right that s 43 does apply and that Jasmine should be followed in New Zealand, both points on which I specifically make no findings, the appointment of NZGT as trustee is consistent with that position.

Should the Court appoint Mr and Mrs Oldfield as advisory trustees?

[56]              Clause 9.4(f) of the Trust Deed and s 49 of the Trustee Act provide for the appointment of advisory trustees. Mr Grant submits that if the Court removes Mr and Mrs Oldfield as trustees, it should nonetheless appoint them and John as advisory trustees so that their views can be obtained and taken into account by NZGT. Mr Grant notes that NZGT can consult the advisory trustees separately from each other so can avoid unpleasantness if relationships with the family remain fractured. Mr Morgan evinced no enthusiasm for the appointment of advisory trustees.

[57]              In her affidavit sworn on 16 November 2018, Ms Pienaar the Hamilton Client Manager of NZGT, states that NZGT would prefer to act as sole trustee, working with all family members in relation to Trust matters. It is likely, therefore, that NZGT will consult Mr and Mrs Oldfield and their children before making major decisions on the distribution of trust assets regardless of whether or not Mr and Mrs Oldfield and John are appointed as advisory trustees.

[58]              I acknowledge there may be some value in appointing Mr and Mrs Oldfield and John as advisory trustees to ensure that NZGT understands the needs and circumstances of the primary beneficiaries and the perspective and interests of the

capital beneficiaries. However, I consider the potential disadvantages outweigh those notional advantages.

[59]              Under s 49(3)(d) and (e) of the Trustee Act, a trustee may seek the Court’s directions if an advisory trustee provides advice that the trustee considers conflicts with the trusts or where advisory trustees tender conflicting advice. If Mr and Mrs Oldfield and John were appointed advisory trustees the chances of one of those situations arising must be high, given the divisions within the family. While there would be no obligation on NZGT to seek the direction of the Court in such a case, it may feel it prudent to do so, or be pressured to do so, if it is not going to follow the advice of one or more of the advisory trustees. That could prove an unnecessary drain on Trust resources.

[60]              I consider it is preferable not to put NZGT in a situation where it may be pressured by an advisory trustee to spend trust funds on an application for directions under s 49, as might happen if Mr and Mrs Oldfield and John were appointed advisory trustees. It is always open to NZGT, of course, to come to the court for directions under s 66 of the Trustee Act, if it so wishes.

Direction to NZGT to provide suitable home for Mrs Oldfield

[61]              Mrs Oldfield asks that if the Court removes the current trustees and appoints NZGT in their place, it should also direct NZGT to make urgent provision to enable Mrs Oldfield to live in a home of equivalent value to the former matrimonial home in which Mr Oldfield is residing. Mr Grant points out that because of Mr Oldfield’s refusal to agree to the Trust providing a home for Mrs Oldfield, for the last four years Mrs Oldfield has had to live with Susan in circumstances that have not been easy for mother or daughter. Meanwhile, Mr Oldfield has been living in the former matrimonial home, to which he has denied Mrs Oldfield access. Mr Grant notes that the Trust has cash reserves of approximately $1.3 million that could be used to buy Mrs Oldfield a suitable house and to furnish it appropriately. Mr Grant also notes that in her affidavit, Ms Pienaar of NZGT states that NZGT would comply with any such direction from the Court, subject to the availability of Trust assets.

[62]              Mr Oldfield opposes any such direction on the grounds that Mrs Oldfield’s accommodation situation can be addressed when her Family Proceedings Act application is considered and that, in the meantime, Mrs Oldfield can live at the Raglan property if she wishes. That position tends to confirm some of the assessments made of Mr Oldfield by his wife and children in their affidavits – namely, that Mr Oldfield lacks empathy and puts his own interests ahead of other family members.

[63]              The Court has the power under s 67 of the Trustee Act to make a direction of the kind sought upon application by any person beneficially interested in the Trust’s property. Given the length of time that Mrs Oldfield has been without a home and the time that may yet pass before the Family Act Proceedings application is finally resolved, it is appropriate to make the order sought.

Other matters

[64]              Mr Morgan submits that if NZGT is to be directed to make provision for a home for Mrs Oldfield, it should also be directed to advance funds to cover Mrs Oldfield’s share of the costs of the arbitrator which remain outstanding. Mr Grant submits that NZGT should also be directed to obtain a valuation of the A and B shares of Demolition Traders so that the value of the shares is available to the Court when making determinations under the Property (Relationships) Act and the Family Proceedings Act.

[65]I agree that directions along these lines are appropriate.

Next steps

[66]              Earlier in the hearing of the current application, Mr Morgan confirmed that Mr Oldfield was not pursuing his application for a split hearing. He also confirmed that Mr Oldfield accepted that the Court had adequate powers under the Property (Relationships) Act and the Family Proceedings Act to make all orders necessary to deal with the relationship property and trust property in which Mr and Mrs Oldfield have interests. Accordingly, Mr Oldfield was not intending to bring proceedings under the Companies Act 1993, contrary to indications made at the time Mrs Oldfield’s applications were transferred to the High Court.

[67]              At the conclusion of the hearing of the current application, counsel agreed that Mrs Oldfield’s applications under the Property (Relationships) Act and the Family Proceedings Act would be heard at a five-day hearing commencing on 23 September 2019 and on the terms of the timetable for the preparation of the hearing. Accordingly, I make the timetable directions set out in the Schedule to this judgment.

Orders

[68]For the reasons set out above, I make the following orders:

(a)I appoint New Zealand Guardian Trust as the sole trustee of the David Oldfield Family Trust in substitution for David Oldfield, Dorothy Oldfield and Peter Stewart, who are hereby removed as trustees.

(b)Subject to the availability of Trust resources, I direct New Zealand Guardian Trust:

(i)To make urgent provision to obtain a house, furnished to an appropriate standard, of approximately the same value as the Trust’s property at 44 Lakeview Crescent, Hamilton, in order to provide a home for Dorothy Oldfield;

(ii)To advance Trust funds to Mr and Mrs Oldfield to meet any outstanding debts;

(iii)To obtain a valuation of the shares in Demolition Traders Ltd that distinguishes, as appropriate, between the value of the A and B class shares, and to provide copies of that valuation to counsel for Mr and Mrs Oldfield no later than 24 June 2019.

(c)I make the timetable directions set out in the Schedule to this judgment.

G J van Bohemen J

Schedule

[1]    The applications by Mrs Oldfield and Mr Oldfield under the Property (Relationships) Act 1976 and the Family Proceedings Act 1980 are set down for a five- day hearing at the High Court in Hamilton, commencing 23 September 2019.

[2]    By 1 April 2019, Mr Grant is to notify Mr Morgan of the sections in the Property (Relationships) Act 1976 on which Mrs Oldfield is relying.

[3]    By 24 June 2019, NZGT is to provide the parties with a valuation of the shares in Demolition Traders Ltd that distinguishes, as appropriate, between the value of the A and B class shares;

[4]By 5 pm on 22 July 2019, any further evidence to be filed and served;

[5]    By 5 pm on 12 August 2019, any evidence in reply to the further evidence to be filed and served,

[6]    By 5 pm on 2 September 2019, submissions on behalf of Mrs Oldfield are to be filed and served;

[7]    By 5 pm on 16 September 2019, submissions on behalf of Mr Oldfield are to be filed and served.