SR Hamilton Corporate Trustee Ltd v White - [2016] NZHC 1408

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2014-470-189 [2016] NZHC 1408

BETWEEN
S R HAMILTON CORPORATE

TRUSTEE LTD AND LAMB TRUST SERVICES LTD

Plaintiffs

AND

STEPHEN WHITE First Defendant

MAUREEN EDITH PARSONS Second Defendant

JOCELYN ZELPHA CHAMBERS Third Defendant

Hearing: 4, 5, 6, 7 April 2016

Counsel:

E J Hudson and D Reynolds for Plaintiffs
R Connell for First and Second Defendants
T M Braun and R Karalus for Third Defendant

Judgment:

27 June 2016

JUDGMENT OF HEATH J

This judgment was delivered by me on 27 June 2016 at 11.00am pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar

Solicitors:
Lamb Bain Laubscher, Te Kuiti Connell & Connell, Auckland Whitehead Braun, Hamilton Counsel:
E J Hudson, Hamilton

S R HAMILTON CORPORATE TRUSTEE LTD AND LAMB TRUST SERVICES LTD v WHITE [2016] NZHC 1408 [27 June 2016]

CONTENTS

The application  [1] Background  [4] The issues    [14] Context
(a)      The Memoranda of Guidance  [17]
(b)       Steps taken by the trustees after Mr Royce White’s death                 [21] Issue 1: the contractual issue
(a)      The 16 June 2014 letter  [35]
(b)       Analysis  [39] Issue 2: The sale issue
(a)      Trustees’ applications for directions  [56]
(b)      The directions sought  [62] (c)      The competing contentions  [65] (d)      Analysis  [69] Costs  [84] Result  [86]

The application

[1] SR Hamilton Corporate Ltd and Lamb Trust Services Ltd (the trustees), as trustees of the W H R and Z D White Family Trust (the Trust), apply for directions under s 66 of the Trustee Act 1956.1 The application was brought in the wake of proceedings issued by Mr Stephen White and Ms Maureen Parsons, two of three beneficiaries of the Trust.

[2] In their proceeding, Mr Stephen White and Ms Parsons sought an order removing the trustees on the grounds of misconduct, primarily directed to alleged favouritism towards the other residuary beneficiary, their sister Dr Jocelyn Chambers. The suggested favouritism is said to have resulted in Dr Chambers obtaining an unfair advantage over her siblings, arising out of the price at which she considers that she is entitled to purchase a property, at 4 Grace Avenue, Mt Maunganui (the property), owned by the Trust.

[3] For reasons set out briefly in another judgment that I am delivering today, the proceeding brought by Mr White and Ms Parsons has been dismissed.2 Mr Connell, for Mr Stephen White and Ms Parsons, accepted that the other proceeding could be
dismissed if the scope of the application for directions was enlarged to enable all

1 Set out at para [56] below.
2 White and Parsons v SR Hamilton Corporate Trustee Ltd and Lamb Trust Services Ltd [2016] NZHC 1409.

contentious issues among the parties to be resolved satisfactorily, and in a binding fashion. That is possible because there are no (material) disputed facts to determine, all three beneficiaries have been joined as defendants, and each has been fully heard.3

Background

[4] The property, of which the trustees are now the legal owners, has been…

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: [2016] NZHC 1408
Decision Date: 27 June 2016

CaseChat Overview and Summary

SR Hamilton Corporate Trustee Ltd and Lamb Trust Services Ltd, as trustees of the W H R and Z D White Family Trust, applied for directions in respect of the sale of a property owned by the Trust. The application was brought in the wake of proceedings brought by two of the three beneficiaries of the Trust, Mr Stephen White and Ms Maureen Parsons. They sought to remove the trustees on the grounds of misconduct. The suggested misconduct was alleged favouritism towards the other beneficiary, their sister Dr Jocelyn Chambers. The trustees' ability to achieve a prompt sale was thwarted by external events which Mr Royce White, the deceased settlor, could not have been expected to foresee. The property had significant problems with water ingress. It took some time for the trustees to obtain advice about the way in which they should deal with the property. Eventually, on 16 June 2014, the trustees asked all three beneficiaries whether they wished to exercise an “option” to purchase the property. Only Dr Chambers agreed to purchase the property at $945,000. Mr Stephen White and Ms Parsons refused to purchase. The trustees were seeking directions in respect of the sale of the property and the weathertightness issues. The Court gave directions to the trustees in respect of the sale of the property and the weathertightness issues. The trustees were directed to offer the property for sale to each of the three beneficiaries at a purchase price of $1,725,000, plus GST if any. If the property is not sold by private treaty within a period to be assessed by the trustees as reasonable, instructions shall be given by the trustees to enable the property to be sold at auction, with a reserve price to be fixed by them in light of prevailing market conditions. The Court reserved questions of costs, but indicated a provisional view that reasonable costs and disbursements incurred by all parties to the application for directions shall be paid out of trust funds.

Orders