Powell v Powell - [2014] NZHC 476

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001371 [2014] NZHC 476

BETWEEN JOHN WILLIAM POWELL Plaintiff

ANDDANIEL JOHN POWELL Defendant

ANDCHARLOTTE TERESA GAVIN (NEE POWELL)
Interested Party

Hearing: 3 March 2014

Appearances: J V Ormsby, C L Webber and J P Bell-Connell for Plaintiff
S M Grieve and S A Woods for Defendant
J Moss for Interested Party

Judgment: 14 March 2014

JUDGMENT OF DUNNINGHAM J

Introduction

[1] This is an application by the plaintiff to remove the defendant, his son, as trustee of the Daniel Powell Family Trust (the Trust) and appoint an independent trustee in his place. It is made on the basis that the plaintiff, too, would step down as trustee on the appointment of an independent trustee, to replace the existing trustees.

[2] There is also a cross-application by the defendant to remove the plaintiff as a trustee of the Trust and have the defendant remain as trustee, either alone, or in
combination with an independent trustee.

POWELL v POWELL AND ANOR [2014] NZHC 476 [14 March 2014]

[3] The plaintiff also seeks an ancillary order that the express powers to appoint and remove trustees contained in cl 12 of the Trust Deed are suspended pending further order of the Court.

Basis of Application and Cross-Application

[4] The plaintiff’s application is made under the Court’s inherent jurisdiction although reference was also made in submissions to the Court’s power to remove and appoint new trustees under s 51 of the Trustee Act 1956. No party suggested there was any practical difference to the outcome depending on which route was relied on. Implicitly, the defendant’s cross-application is made on the same basis.

[5] In his statement of claim the plaintiff alleges that:

(a) the defendant is putting his personal interests ahead of the Trust’s and the beneficiaries’ interests,

(b)the trustees are unable to properly administer the Trust and make decisions because of the state of deadlock, and

(c) the defendant has reacted violently towards the plaintiff when the plaintiff has attempted to address the issues in relation to properly administering the Trust and between the trustees.

[6] The defendant’s counter-claim seeking to remove the plaintiff as a trustee, alleges that:

(a) the plaintiff is being obstructive in the administration of the Trust,

(b)the plaintiff has demonstrated he does not intend to act in the best interests of the beneficiaries,

(c) the plaintiff’s concerns about the motivations and ability of the defendant in the administration of the Trust are not valid, and stem from personal issues between the plaintiff and defendant.

[7] An extensive amount of factual material was put before me, including

11 affidavits from seven witnesses, most of whom were members of the Powell family. That is understandable. In cases such as this, the relevant legal principles are well settled. It is the factual circumstances of the case which will determine how the Court’s discretion should be exercised. As was said in Letterstedt v Broers,1 the Court’s main guide must be the welfare of…

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 Powell v Powell

Details

AGLC: Powell v Powell [2014] NZHC 476
Case: [2014] NZHC 476
Decision Date: 14 March 2014

CaseChat Overview and Summary

This case involved an application by the plaintiff, John William Powell, to remove his son, Daniel John Powell, as a trustee of the Daniel Powell Family Trust. The defendant, Daniel, cross-applied to remove the plaintiff as a trustee. The court was required to decide whether the trustees should be replaced, and if so, by whom. The court considered the allegations made by both parties, the evidence presented, and the terms of the Trust Deed.

The court found that the relationship between the trustees had broken down, and it was impossible for them to work together effectively. The court was satisfied that the confrontation between Daniel and John in August 2012 would not be repeated with another trustee if Daniel remained as a trustee. The court also found that Daniel's request for a $700,000 distribution or loan did not reflect negatively on his ability to remain as a trustee. Furthermore, the court considered that Daniel's management of the Trust assets had been reasonable, and there was no evidence to suggest that he was unfit to remain as a trustee.

However, the court was not satisfied that John could fairly and impartially consider requests by the beneficiaries given the events that had occurred. The court decided to remove John as a trustee and replace him with an independent professional trustee, while allowing Daniel to remain as a trustee alongside the new trustee. The court did not see the need to suspend the operation of the clause in the Trust Deed that allowed the trustees to appoint new trustees. The court invited the parties to confer on an appropriate appointment for the independent trustee and set a deadline for the parties to report their respective proposals.

Orders