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Ryan v Lobb

Ryan v Lobb

Case [2021] NZHC 496 12 March 2021

Fiduciary Duty

Breach of Trust

Resettlement of Trust

Alternative Dispute Resolution

Specific Performance

Res Judicata

Trusts & Equity

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1591

[2021] NZHC 496

BETWEEN
VERENA COLLEEN RYAN

Plaintiff

AND

STUART JAMES LOBB

First Defendant

LOCKHART TRUSTEE SERVICES NO.56 LIMITED

Second Defendant

On the papers: 12 March 2021

Appearances:

W M Patterson for the Plaintiff

P A Fuscic and Kate Thompson for the First Defendant A A H Low for the Second Defendant

Judgment:

12 March 2021

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 12 March 2021 at 4:00pm
pursuant to Rule 11.5 of the High Court Rules

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

Solicitors:
Patterson Hopkins (W M Patterson/Luke Dixon), Auckland, for the plaintiff McVeagh Fleming (P Fuscic/K L Thompson), Auckland, for the First Defendant
Alexandra Low and Associates (A A H Low), Ponsonby, Auckland, for the Second Defendant

RYAN v LOBB [2021] NZHC 496 [12 March 2021]

[1] Mr Lobb seeks leave under s 56(3) of the Senior Courts Act 2016 to appeal against Associate Judge Smith’s decision of 20 November 2020 dismissing Mr Lobb’s application to dismiss or stay this proceeding and refusing his application for the return of record and documents.1 Both Mr Lobb and Ms Ryan accept that leave to appeal is required. Lockhart Trustee Services No 56 Ltd is not taking an active part.

[2] I asked the parties to file submissions after which I would assess whether to decide the matter on the papers or to hear the application in court. Both sides have filed helpful submissions. A joint memorandum of 10 March 2021 accepts that the application can be decided on the papers. A hearing is not required. Accordingly, the fixture for 20 April 2021 at 10.00 am is vacated.

[3] The case is about a family trust established in 2005. Mr Lobb and Ms Ryan were married but separated in October 2016. Their marriage is now dissolved. The trust owns the former family home and certain antique furniture, jewellery and watches. Mr Lobb and Ms Ryan were the settlors under the trust deed. As protectors, they have the power to appoint and remove trustees. At their separation they were also the trustees along with Lockhart Trustee Services No.56 Ltd. They and their children are discretionary beneficiaries. Their children are final beneficiaries.

[4]The trust deed has a resettlement provision:

2.5 Resettlement of Trust
…

(3)If the Settlors separate (or their marriage is legally dissolved), either Settlor may give the Trustees written notice requiring them to resettle (on new Trusts acceptable to the Settlor who has given notice) such part of the Trust assets as the Trustees consider fair and equitable having regard to the respective contributions of the Settlors (whether by gifting, inheritance or otherwise) to the total assets of the Trust.

(4)Once resettlement is effected under clause 2.5(3), the Settlor who gave notice shall cease for the purposes of this Deed to be a Discretionary Beneficiary and one of those acting as Protector. From that time, the other Settlor…

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 Ryan v Lobb

Details

AGLC: Ryan v Lobb [2021] NZHC 496
Case: [2021] NZHC 496
Decision Date: 12 March 2021

CaseChat Overview and Summary

In Ryan v Lobb, the Court was required to decide whether Stuart James Lobb had leave to appeal against the decision of Associate Judge Smith, who dismissed his application to dismiss or stay the proceeding and refused his application for the return of records and documents. The case involves a family trust established in 2005 by Stuart Lobb and Verena Ryan, who were married but separated in 2016. The trust owns the former family home and certain assets, and the trust deed includes a resettlement provision and a dispute resolution provision requiring any disputes to be referred to arbitration. The dispute between Lobb and Ryan centres on the interpretation of the resettlement provision, specifically the phrase "having regard to the respective contributions of the Settlors." Lobb and Ryan cannot agree on the interpretation of the phrase, and Lobb applied for an order dismissing the proceeding on the ground that the dispute should be referred to arbitration. Associate Judge Smith held that arbitration could not be held between trustees because there were no longer any trustees, and the arbitration provisions of the trust deed were invalid to the extent that they purported to bind discretionary beneficiaries who were not parties to the trust deed and had never agreed to arbitrate. Lobb applied for leave to appeal against this decision, arguing that the Court of Appeal should consider the alternative dispute resolution provisions of the Trusts Act 2019, a new feature in trusts law. The court noted that there are undoubtedly interesting legal issues that could be explored on appeal and they could be of wider interest than just to the parties themselves. However, the court also noted that when a marriage fails, the law favours a clean break with a clear division of the assets so that the parties may disengage and go their separate ways. The court considered the history of protracted disputes and Lobb's tendency to appeal every decision that goes against him, and held that the circumstances did not warrant further delay. Accordingly, the application for leave to appeal was dismissed.

Orders