Simpson v Sax - [2017] NZHC 112

IN THE HIGH COURT OF NEW ZEALAND

TAURANGA REGISTRY

CIV-2016-470-48

[2017] NZHC 112

UNDER High Court Rules Part 19

IN THE MATTER

of an application by one of the trustees of the Luke Simpson and Janine Simpson Family Trust

BETWEEN

LUKE ANDREW SIMPSON AS TRUSTEE/BENEFICIARY OF THE LUKE SIMPSON AND JANINE SIMPSON FAMILY TRUST

Plaintiff

AND

JANINE DAVINA SAX AS TRUSTEE/BENEFICIARY OF THE LUKE SIMPSON AND JANINE SIMPSON FAMILY TRUST

First Defendant

LUKE ANDREW SIMPSON AS TRUSTEE/BENEFICIARY OF THE LUKE SIMPSON AND JANINE SIMPSON FAMILY TRUST

Second Defendant

Hearing: 14 July 2016

Counsel:
Further submissions:

E Eggleston for Plaintiff/Second Defendant G McArthur for First Defendant

12, 16 and 21 December 2016 and 20 January 2017

Judgment:

10 February 2017

JUDGMENT OF THOMAS J

[1] The plaintiff, Mr Simpson, applies under s 66 of the Trustee Act 1956 (the Act) seeking directions that the Luke Simpson and Janine Simpson Family Trust (the Trust) may:

SIMPSON v SAX [2017] NZHC 112 [10 February 2017]

(a)defend proceedings taken in the District Court by the Peter Sax No 2 Trust (the Sax Trust); and

(b)pay the reasonable costs of defending the claim from the Trust fund.

[2] Mr Simpson, who is a trustee of the Trust, contacted Ms Sax, the first defendant and other trustee, and sought her approval to the Trust defending the proceedings. He says he received no reply. The District Court proceedings are continuing, as the Sax Trust would not agree to extend the time for filing the statement of defence until this application was resolved.

Background

[3] The background to this matter involves the marriage of Mr Simpson and Ms Sax on 29 March 2009 and the dissolution of their marriage in June 2013. Despite the marriage being of short duration and the absence of any child custody issues, six Family Court applications were filed when the relationship ended.

[4] During their marriage, Mr Simpson and Ms Sax lived together in a house purchased by the Trust. The house was purchased for $481,000. It was funded:

(a)by a loan of $356,000 from Mr Simpson;

(b)by a loan of $100,000 from the Sax Trust; and

(c)by a “wedding gift” (now contested) of $25,000 from the Sax Trust.

[5] His Honour Justice Brewer issued a judgment on applications by each party relating to their use of the house after separation on 26 June 2015.1 The claims included cross claims for occupation rent, possible damages owed to the Trust, the question of whether the Trust owed Mr Simpson interest on his loan and whether the Trust owed either or both monies for reimbursement of payments made in respect of the house. Relevant to this proceeding, his Honour ordered the Trust to pay Mr Simpson $7,168.73, being five per cent interest per annum on the $356,000 he

1 Simpson v Sax [2015] NZHC 1466, [2015] NZAR 1210.

loaned the Trust for the period between 7 June 2013 (when Mr Simpson made demand for the repayment of the debt by the Trust) and 1…

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 Simpson v Sax

Details

AGLC: Simpson v Sax [2017] NZHC 112
Case: [2017] NZHC 112
Decision Date: 10 February 2017

CaseChat Overview and Summary

The case of Simpson v Sax involved an application by Luke Simpson, as a trustee and beneficiary of the Luke Simpson and Janine Simpson Family Trust, against Janine Sax, another trustee and beneficiary, seeking directions for the Trust to defend proceedings in the District Court brought by the Peter Sax No 2 Trust and to pay the costs of defending those claims from the Trust fund. The application was dismissed. The background to the case involved the marriage and subsequent dissolution of Mr Simpson and Ms Sax, the purchase of a family home funded by loans and a gift, and several Family Court applications following the end of their relationship. The Trust had already been ordered to pay Mr Simpson interest on his loan to the Trust. The Sax Trust filed proceedings against the Trust seeking repayment of loans and interest, and associated costs. The Court considered whether it was in the best interests of the Trust to defend the District Court proceedings, and whether the Trust should indemnify Mr Simpson from the Trust in advance of the proceedings or make orders as to the priority of payments in advance. The Court found that the litigation was a continuation of the long-running dispute between the two trustees and principal beneficiaries of the Trust following their separation, and that in advance it was difficult to determine which interpretation of events was correct and whether it would be in the best interests of the Trust to defend this claim. The Court declined to make any orders as to the priority of payments in advance or to indemnify Mr Simpson from the Trust. The District Court proceedings would need to take their course with the Court faced with the unenviable task of a defendant whose trustees were in conflict as to whether the claim should be defended or not. The Court invited Mr Simpson to reconsider his position on costs.

Orders