Thomson v Riley - [2018] NZHC 2963

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2018-443-16 [2018] NZHC 2963

IN THE MATTER

AND
of the Trustee Act 1956

IN THE MATTER

of an application pursuant to s 51 of the
Trustee Act 1956

BETWEEN

LINDA MARGARET THOMSON AND KERRY WAYNE THOMSON

Plaintiffs

AND

KEVIN JOHN RILEY Defendant

Hearing:
10 October 2018

(further submissions received 19 and 31 October 2018)

Appearances:

S Hughes QC for Plaintiffs
J Marinovich and S Ebert for Defendant

Judgment:

15 November 2018

(INTERIM) JUDGMENT OF GRICE J

[1] Mr and Mrs Thomson, the plaintiffs, and Mr Riley, the defendant, are the executors and trustees of the estates of their late parents, Kenneth Riley who died on
18 July 1999 and Margaret Riley who died on 26 March 2013. Their children, Mrs Thomson and Mr Riley, are the sole beneficiaries of their estate.

[2] The primary asset of the Riley estate is a farm property at Kaimata in Taranaki. The wills of Kenneth and Margaret Riley anticipate that Mr Riley could acquire ownership of this farm property by exercising an option to purchase under the wills.

THOMSON v RILEY [2018] NZHC 2963 [15 November 2018]

[3] Kenneth and Margaret Riley had mirror wills. The farm was owned by them as tenants in common in equal shares, with the surviving partner having a life interest under each will.

[4] Mr Riley’s option under the wills was to purchase the farm as a going concern. The valuation process is set out in the wills. The trustees may provide a second mortgage at a rate of interest and other terms and conditions to be determined by the trustees.

Issues

[5] It is common ground now that the option to purchase has been properly exercised. The parties have also now agreed that they will all resign as trustees and a replacement trustee should be appointed by the court. The appointment of new trustees will bring these proceedings to an end.

[6] Counsel came to this agreement after some initial dispute concerning the scope of today’s hearing. They agreed that the:1

Agreed 1. Trustees resign;
2. Replacement trustees follow terms of will;
3. Option to purchase has been exercised;
4. Primary function to sell farm according to option process in Wills;
5. Trustees acting as “trustees” and not “executors”.

[7] The only matter for this court is whether it should appoint new trustees and if so who the new trustees should be.

Disputed evidence

[8] At the outset of the hearing Ms Hughes indicated that there were a number of items of evidence contained in the briefs of evidence and affidavits that she objected to on the basis that the parties had agreed that the hearing was limited to the appointment of replacement trustees. She noted that the basis upon which the parties
had agreed to proceed was that the evidence would be focused on the issue of the new

1 Handwritten agreement handed up by counsel at the…

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 Thomson v Riley

Details

AGLC: Thomson v Riley [2018] NZHC 2963
Case: [2018] NZHC 2963
Decision Date: 15 November 2018

CaseChat Overview and Summary

The case of Thomson v Riley was heard in the High Court of New Zealand. The plaintiffs, Linda and Kerry Thomson, and the defendant, Kevin Riley, are the executors and trustees of the estates of their late parents, Kenneth and Margaret Riley. The primary asset of the Riley estate is a farm property at Kaimata in Taranaki. The parties have agreed that they should all resign as trustees, and that a replacement trustee should be appointed by the court. The only matter for the court was whether it should appoint new trustees and if so, who the new trustees should be.

The court considered the evidence and submissions of both parties, and determined that it was expedient to appoint new trustees. The court noted that the present trustees have indicated they wish to resign, there have been a number of disputes between the parties, and the parties remain suspicious of each other's motives. The court also noted that the parties have been unable to agree on who should be appointed as the new trustee.

The court considered the two potential groups of trustees proposed by the parties: Mr Larmer and Ms James, and the New Zealand Guardian Trust Company Ltd (Perpetual Guardian). The court found that both groups of trustees were qualified, but had reservations about appointing Mr Larmer due to potential conflicts of interest and concerns about his ability to effectively resolve the disputes between the beneficiaries. The court found that Perpetual Guardian was a dedicated trust company with extensive experience in dealing with trusteeships of farms, appropriate insurance and compliance systems, and a presence in New Plymouth. The court also noted that Perpetual Guardian was not dependent on one individual being responsible for the administration of the estate.

The court appointed Perpetual Guardian as the independent trustee of the trusts created by the wills of Kenneth and Margaret Riley, subject to it accepting the appointment. The court directed that Perpetual Guardian file its consent to such appointment within ten days of the date of the decision, at which stage the court will issue a final order. The parties have a further five days from the filing of the consent to file any submissions in relation to that consent.

Orders