Stratford v Moses - [2021] NZHC 3337

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE

CIV-2021-476-40

[2021] NZHC 3337

UNDER the Trusts Act 2019

IN THE MATTER

of the Stratford Investment Trust

BETWEEN

BRIAN GEORGE STRATFORD, as

beneficiary and former trustee of the Stratford Investment Trust

Plaintiff

AND

JULIET MOSES and LYNN STRATFORD,

as trustees of the Stratford Investment Trust First Defendants

AND

JULIET MOSES

Second Defendant

Hearing:
6 December 2021

(Telephone Conference)

Counsel:

D A T Chambers QC and M M Gray for Plaintiff

P J Hunt and D P Turnbull(for First-named First Defendant and Second Defendant

J W A Johnson and J I Taylor for Second-named First Defendant J P Bell-Connell for Mr David Vance (non-party)

Judgment:

7 December 2021

RULING OF ASSOCIATE JUDGE LESTER

STRATFORD v MOSES [2021] NZHC 3337 [7 December 2021]

[1] In July 2020, the plaintiff Mr Brian Stratford (Brian), and the second-named first defendant, Lynn Stratford (Lynn), separated.

[2] Brian issued these proceedings on 15 October 2021. On 23 November 2021, Brian filed an interlocutory application seeking the following orders:

1.1Appointing a receiver to administer the trust until final determination of the 2021 proceeding, with:

(a)The receiver having any additional power conferred on liquidators under the Companies Act 1993 … that the Court considers appropriate;1

(b)Leave reserved for any party or the receiver to apply to the Court for any additional power considered reasonable; or

1.2In the alternative, appointing interim Court appointed trustees and/or suspending Juliet Moses, and Lynn Stratford’s powers to make any decision affecting the trust fund in any way; or

1.3In the alternative, precluding Juliet Moses (“Juliet”) and Lynn Stratford (“Lynn”), or any person related or connected or associated with Juliet or Lynn from acting in any way contrary to schedule 1 without prior Court approval; and/or

1.4As the Court considers appropriate.

[3] The application was given a first call date of 13 December 2021 in the Timaru High Court miscellaneous list.

[4] On 1 December 2021, Ms Chambers QC, counsel for Brian, sought by memorandum that the application be set down for an urgent hearing.

[5] I note here that when Associate Judge Paulsen reviewed the interlocutory application, he issued a Minute on 29 November 2021 saying he did not see any urgency in relation to the matters raised in the application. However, with the full memoranda filed, the application for urgency was considered at a telephone conference on 6 December 2021.

1 For example, power pursuant to ss 261 – 267 and 273 – 274 of the Companies Act 1993, as if the trust were a company in liquidation and the settlor and trustees (past and present) were the directors of a company and the beneficiaries of the trust were shareholders of a company in liquidation.

Test for urgency

[6] I adopt the submissions of Mr Johnson, counsel for Lynn, on the applicable principles, which were not disputed by Ms Chambers.

[7] The principles to be applied in considering applications for priority fixtures were summarised…

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 Stratford v Moses

Details

AGLC: Stratford v Moses [2021] NZHC 3337
Case: [2021] NZHC 3337
Decision Date: 7 December 2021

CaseChat Overview and Summary

Brian Stratford, as a beneficiary and former trustee of the Stratford Investment Trust, commenced proceedings against Juliet Moses and Lynn Stratford, who are trustees of the Trust. The plaintiff sought various urgent orders, including the appointment of a receiver to administer the trust until the final determination of the proceedings. The application for urgency was heard via a telephone conference on 6 December 2021. The court considered whether the application met the criteria for urgency, including the presence of exceptional circumstances, as outlined in Gavin v Powell. The urgency was based on concerns that the defendant trustees might make decisions that could not be easily reversed or that assets might be dissipated. However, the court found that the appointment of an independent trustee and the existing safeguards, such as undertakings given by Lynn regarding notice of any proposed distributions or asset sales, mitigated the need for urgency. The court also noted that the application for urgency was made late in the proceedings, despite the dispute having been ongoing since July 2020. The court declined the application for urgency and addressed remaining procedural issues, including the requirement for an undertaking in damages and the need to join beneficiaries as parties if the plaintiff wished to pursue relief against them. Costs were reserved, with the court to advise counsel of possible hearing dates in the new year.

This case underscores the importance of timely applications for urgency and the need for strong evidence to justify such applications. The court's decision highlights the role of independent trustees and existing safeguards in mitigating risks associated with trust administration. It also emphasises the procedural requirements, such as providing an undertaking in damages for interim applications and the necessity of joining relevant parties to the proceedings.

Orders