Rust v Greer - [2022] NZHC 91

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2021-412-52

[2022] NZHC 91

UNDER the Trusts Act 2019

BETWEEN

RODERICK DAVID ALLAN RUST

Plaintiff

AND

KATHERINE ANNE GREER

Defendant

Hearing: 2 February 2022

Appearances:

D Tobin for the Plaintiff

L A Andersen QC and S Gaskell for the Defendant

Judgment:

4 February 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

RUST v GREER [2022] NZHC 91 [4 February 2022]

[1] The defendant seeks an order that the plaintiff file a more explicit statement of claim.

Background

[2] The broad background is not in dispute. The parties were married in May 1985, separated in August 2001 and are now divorced. A trust known as the Greer-Rust Family Trust (the Trust) was settled by Yvonne Edna Greer, who I assume is a relative of the defendant. The parties were, and are, the only trustees of the Trust.

[3] In August 2000, the parties sold to themselves as trustees, a commercial building, they owned in Dunedin known as the Hydro Building. That building is retained by the trustees and, in the broadest of terms, it is the management of that building which is in issue between the parties.

[4] The statement of claim, after setting out the background summarised above, pleads that the plaintiff sought information from the defendant and the accountant acting for the Trust about the financial affairs and management of the Trust. Some information was provided and one of the issues between the parties is the extent of the information provided.

[5] The key pleading for the purposes of this application is para [15] of the statement of claim which states as follows:

15.A review of the financial material provided by the Accountant disclosed the following concerns:

a.Potential conflicts of interest between the Greer-Rust Family Trust and commercial entities associated with the Defendant;

b.Management fees paid to the Defendant by the Greer-Rust Family Trust; and

c.The business relationship between the Defendant and the Accountant.

[6]No particulars are provided to flesh out the above allegations.

[7]The statement of claim goes on to plead that the defendant has:

refused, failed or neglected to provide all of the financial information and records requested by the Plaintiff or agree to its provision by the Accountant.

[8] The statement of claim seeks that the defendant be removed as a trustee, that there be a new trustee appointed in substitution and such further order as the Court considers appropriate.

The statement of defence

[9] To overly simplify, the statement of defence asserts the plaintiff disengaged from his role as trustee and thereby in effect delegated management of the Trust to the defendant, which the defendant says she has undertaken in a proper manner.

[10] The statement of defence records space is let in the commercial part of the Hydro Building to two companies. The defendant and Trust accountant are directors and shareholders of one of the companies, and the defendant is sole director and joint shareholder with the Trust accountant…

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.

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Details

Case: [2022] NZHC 91
Decision Date: 4 February 2022

CaseChat Overview and Summary

Roderick Rust commenced proceedings against Katherine Greer, seeking an order that she be removed as a trustee of the Greer-Rust Family Trust, alleging that she had failed to provide him with all the information and records requested about the management of the Trust. The dispute primarily revolves around the management of the Hydro Building, a commercial property owned by the Trust. The defendant has counterclaimed for the approval of the amounts received for managing the rentals. Greer applied for further particulars of the plaintiff's claim, which was heard on 2 February 2022. The primary legal issues were whether the plaintiff's statement of claim was sufficiently detailed and whether the defendant was entitled to particulars to enable her to properly respond to the plaintiff's claims.

The court found that the defendant was entitled to further particulars. The plaintiff's statement of claim was not sufficiently detailed to inform the defendant of the case to be met. The plaintiff's claims of potential conflicts of interest and the business relationship between the defendant and the Trust's accountant were pleaded in general terms. The court held that the plaintiff should specify the duties owed by the defendant as trustee, how those duties were breached, and provide particulars of how the commercial arrangements were on other than market terms. The court also found that the plaintiff should be explicit about his concerns in relation to the role of the accountant or the defendant's actions if either was maintained. The court ordered the defendant to provide the plaintiff with copies of any lease or other dealing between the Trust and her or any entity associated with her. The plaintiff was directed to file an amended statement of claim within 28 days, providing further particulars of the allegations made. The court awarded costs to the defendant on a 2A basis with a quarter day allowed.

The court's decision highlights the importance of providing sufficient detail in pleadings to enable a reasonable degree of pre-trial briefing and preparation. The court found that the plaintiff's statement of claim was not sufficiently detailed to inform the defendant of the case to be met, and that the defendant was entitled to further particulars to enable her to properly respond to the plaintiff's claims. The court's orders aim to ensure that the plaintiff provides sufficient detail in his amended statement of claim to enable the defendant to properly respond to the allegations made.

Orders