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Percy v Percy

Percy v Percy

Case [2020] NZHC 3537 19 November 2020

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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2019-441-089

[2020] NZHC 3537

IN THE MATTER of claims of breach of contract, breach of trust and fiduciary duty and an application for removal of Trustees

UNDER

Section 51 of the Trustee Act 1956 and the Court’s inherent and supervisory jurisdiction

BETWEEN

DOUGLAS WILLIAM PERCY

First Applicant

VIRGINIA FRANCES BENNETT
Second Applicant

AND

VANCE CHARLES PERCY

First Respondent

STEPHEN PETER LUNN
Second Respondent

STEPHEN ALEXANDER GREER
Third Respondent

STEPHEN HUGH ORR REANEY

Fourth Respondent

Hearing: 19 November 2020

Counsel:

J L Bates for Applicants

J O Upton QC and D J O’Connor for Respondents

Judgment:

19 November 2020

JUDGMENT OF GRICE J

PERCY v PERCY [2020] NZHC 3537 [19 November 2020]

[1] This is an application seeking joinder of two additional defendants and for the determination of two pre-trial questions.1

[2] The application seeks to add the third respondent, Mr Greer, and the fourth respondent, Mr Reaney, as defendants in the substantive proceedings. They were appointed as trustees of the Percy Farming Trust by a Deed of Settlement dated 5 June 2020. The applicants say that their appointments as trustees, in effect, was an abuse of process and went against the provisions of the Deed of Settlement, which settled earlier proceedings,2 where a process of appointment of trustees had been agreed.

[3] The first and second plaintiffs in the substantive proceedings (the applicants in this decision) are Mr Douglas Percy (Douglas) and Virginia Bennett (Virginia). The first respondent is Mr Vance Percy (Vance): the first defendant in the substantive proceedings. The second respondent is Mr Stephen Lunn: the second defendant in the substantive proceedings. The third respondent is Mr Stephen Greer and the fourth respondent is Mr Stephen Reaney. The third defendants in the substantive proceedings are Vance and Denise Percy, in their capacities as the partners of the Shiloh Santa Gertrudis partnership.3

Background

[4] The first and second plaintiffs filed these proceedings in November 2019. They allege breaches of trust, breaches of fiduciary duty, that the third defendant knowingly assisted the first defendant to breach his fiduciary duties, and a constructive trust over the profits received from grazing stock on the farm property. In addition, there is a claim for breach of contract. The fourth cause of action is for the removal and appointment of an independent professional trustee. The then trustees whose removal was sought (the first and second respondents/defendants) have now been removed as trustees by a deed dated June 2020.

1      This judgment was delivered orally on 19 November 2020 and has been footnoted and edited for grammar and flow. No change is made to the substance of the decision.
2      Percy v Percy [2017] NZHC 1989.
3      See below at [5] for the background of the Shiloh partnership.

[5] The summary of the background is set out in the decision of Doogue J on an application for prospective costs. She said:4

[6] The trust was established on…

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 Percy v Percy

Details

AGLC: Percy v Percy [2020] NZHC 3537
Case: [2020] NZHC 3537
Decision Date: 19 November 2020

CaseChat Overview and Summary

Percy v Percy was an application seeking to join additional defendants and to determine two pre-trial questions. The applicants, Douglas Percy and Virginia Bennett, sought to add the third and fourth respondents as defendants in the substantive proceedings. They were appointed as trustees of the Percy Farming Trust by a deed of settlement dated 5 June 2020. The applicants argued that their appointments as trustees constituted an abuse of process and went against the provisions of the deed of settlement, which settled earlier proceedings, where a process of appointment of trustees had been agreed. The respondents, Vance Percy and Stephen Peter Lunn, argued that the new trustees need not be part of the proceedings in order for the claims to be determined.

The legal issues in this case were whether the new trustees should be joined as defendants in the proceedings and whether the pre-trial questions should be determined separately from the trial. The court considered the jurisdictional threshold for joinder of defendants under r 4.56(1)(b)(i) and (ii) of the High Court Rules 2016 and the discretionary question of whether the joinder should be granted. The court also considered the criteria for determining whether to order a split trial under r 10.15 of the High Court Rules 2016.

The court held that the new trustees should be joined as defendants in the proceedings as their presence may be necessary to adjudicate and settle all questions involved in the proceedings. The court also held that the pre-trial questions should not be determined separately from the trial as there were substantial risks of delay by the risk of appeals, as well as duplications of time and cost if the trial were to be split. The court dismissed the application for the determination of pre-trial questions.

In conclusion, the court granted the application to join the new trustees as defendants in the proceedings and dismissed the application for the determination of pre-trial questions. The costs of the application to join were awarded to the applicants, and the costs of the application for pre-trial questions were awarded to the respondents.

Orders