Potter v Duffy - [2015] NZHC 544

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2014-470-131 [2015] NZHC 544

BETWEEN
TERI ANNE POTTER

Plaintiff

AND

MARK FRANCIS DUFFY Defendant

TERI ANNE POTTER

MARK FRANCIS DUFFY and LE PINE TRUSTEES LIMITED Second Defendant

Hearing: 25 February 2015

Appearances:

E Eggleston for the Plaintiff
M F Duffy (First Defendant) in person

No appearance for Le Pine Trustees Ltd, (third-named Second Defendant)

Judgment:

24 March 2015

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 24 March 2015 at 4:00pm
Pursuant to Rule 11.5 of the High Court Rules

………………………………………….
Registrar/Deputy Registrar

Solicitors:
Holland Beckett Lawyers, Tauranga, for plaintiff
Le Pine & Co, Taupo for third-named second defendant

Copy for:
E Eggleston, Barrister, Tauranga, for Plaintiff
Mark F Duffy, RD3 Tauranga, First Defendant

POTTER v DUFFY [2015] NZHC 544 [24 March 2015]

[1] Mark Duffy and Teri Potter lived in a relationship in the nature of marriage from 1979 to 2007. They have two children, Michael aged 23 and Rhian aged 20. They lived on a horticultural property at Pyes Pa, Tauranga. Since separation Mr Duffy has continued to live on the property. Rhian lives there as well. Ms Potter, a sickness beneficiary, has been waiting since 2007 to obtain a property settlement with Mr Duffy. That has not been straightforward. That is because their family trust owns the Pyes Pa property. Trust law applies, not the Property (Relationships) Act 1976.

[2] Ms Potter and Mr Duffy have not been able to decide what should happen to the Pyes Pa property. If the couple owned the property in their own names, rather than through a trust, Ms Potter would have a strong case under the Property (Relationships) Act 1976 to have her share of relationship property realised. The “clean break” principle would count strongly in her favour. The remedies under trust law are not so straightforward.

Procedural history

[3] Ms Potter began a relationship property proceeding in the Family Court in December 2012. In June 2014 that proceeding was transferred to the High Court. In September 2014 Ms Potter filed a statement of claim with two causes of action. The first cause of action seeks a division of relationship property under the Property (Relationships) Act. In the second, she seeks orders for the sale of the property, the division of proceeds of sale, and for the removal of Mr Duffy as trustee. If the court were to remove Mr Duffy as trustee, she would also resign, leaving Le Pine Trustees Ltd as the sole trustee.

[4] Ms Potter required leave under r 12.4(2) of the High Court Rules 2008 to apply for summary judgment. I gave it on 13 October 2014.

[5] Le Pine Trustees Ltd neutrally neither consented to nor opposed the summary

judgment application but abided the court’s decision. Mr Duffy opposed.

The trust deed

[6] The trust that owns the Pyes Pa property was set up under a deed dated

23 January 2002. Mr Duffy and Ms Potter are…

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 Potter v Duffy

Details

AGLC: Potter v Duffy [2015] NZHC 544
Case: [2015] NZHC 544
Decision Date: 24 March 2015

CaseChat Overview and Summary

The case of Potter v Duffy involved a dispute between former de facto partners, Teri Potter and Mark Duffy, over the division of property held in trust. The trust in question was a family trust that owned a horticultural property in Pyes Pa, Tauranga. Teri sought a division of the trust property under the Property Law Act 2007, as well as the removal of Mark as trustee. The legal issues before the court were whether the court could order a division of property held by a single trust and if there were arguable defences to the removal of Mark as trustee.

The court held that the Property Law Act 2007 did not provide a remedy for dividing property held by a single trust, especially when trustees disagreed on sale or retention. The court also found that Mark had arguable defences to the removal of his trusteeship, as there were alternative outcomes, such as the resettlement of the trust as provided in the trust deed. The court declined the application for summary judgment and directed a case management conference for the parties to consider possible amendments to the statement of claim, such as seeking a resettlement of the trust fund under clause 8.1 of the trust deed.

This case highlights the importance of considering the specific circumstances of trust property when seeking a division of assets and the need to carefully examine the terms of the trust deed for potential remedies. It also emphasises the importance of serving all necessary parties in legal proceedings and the court's inherent jurisdiction to remove trustees in cases of deadlock or breakdown of relationships between trustees.

Orders