Thurston v Thurston - [2013] NZHC 1886

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-2022 [2013] NZHC 1886

BETWEEN LYALL GRAEME THURSTON Plaintiff

ANDCOLLEEN ELIZA THURSTON AND JEREMY JAMES MALLABY GOODWIN
Defendants

Hearing: 25, 26 and 27 February and 1 March 2013

Appearances: V T Bruton and D M Urmson for Plaintiff
A H Waalkens QC for C E Thurston
G M Harrison for J J M Goodwin

Judgment: 26 July 2013

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 26 July 2013 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date: ...................................

Solicitors: TGT Legal, Auckland

Counsel: A H Waalkens QC, Auckland
G M Harrison, Auckland

THURSTON v THURSTON [2013] NZHC 1886 [26 July 2013]

Introduction

[1] This is an application by the Plaintiff to remove the Defendants (“Mrs Thurston” and “Mr Goodwin” respectively) as trustees of the Thurston Family Trust (“trust”). There are four trustees. The Plaintiff and his three sons are beneficiaries of the trust, as is Mrs Thurston.

[2] At the outset of the trial, the Plaintiff sought leave to amend his statement of claim, to include an application to remove Mrs Thurston as executor and trustee of the estate of Mr Graeme Thurston (deceased) (“estate” and “Mr Thurston”).1 For their part, the Defendants sought leave to cross claim for an order removing the other trustees of the trust, namely Ms B Gorinski and Mr J S Burrett.

[3] I granted leave to amend to both parties but declined to allow either to proceed on the fresh causes of action in the hearing before me. Counsel for Mrs Thurston had no prior notice of the Plaintiff’s new cause of action, and the Defendants had not served their cross claim on Ms Gorinski or Mr Burrett, neither of whom was represented.

[4] The Plaintiff’s application to remove the Defendants as trustees is made under s 51 of the Trustee Act 1956 (“Act”), and in the alternative seeking the exercise of the inherent jurisdiction of the Court.

[5] In his statement of claim the Plaintiff alleges that it is expedient to remove the Defendants as trustees because:

(a) administration of the trust is deadlocked;

(b)the trustees are unable to make unanimous decisions or any decisions at all;

(c) Mrs Thurston is acting in and motivated by her own personal interests, not the interests of all beneficiaries; and

1 Administration Act 1969, s 21.

(d)Mr Goodwin is a “close confidante” of Mrs Thurston, he supports her position and is in breach of his duty to act even-handedly in the interests of all beneficiaries.

Principles

[6] Section 51 of the Act confers power on the Court to remove a trustee if the Court is appointing a new trustee. No such appointment is sought in the present case and, accordingly, s 51 has no application.

[7] There is no dispute that the Court has inherent jurisdiction to control a trust and that it may remove a trustee in the exercise of that jurisdiction. Counsel referred me…

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 Thurston v Thurston

Details

AGLC: Thurston v Thurston [2013] NZHC 1886
Case: [2013] NZHC 1886
Decision Date: 26 July 2013

CaseChat Overview and Summary

The plaintiff, Lyall Graeme Thurston, sought the removal of the defendants, Colleen Eliza Thurston and Jeremy James Mallaby Goodwin, as trustees of the Thurston Family Trust. The trust was established by the late Mr Graeme Thurston and the trustees were required to act unanimously. The plaintiff alleged that the administration of the trust was deadlocked and that the trustees were unable to make decisions. The primary purpose of the trust was to provide for Mrs Thurston in the event that Mr Thurston died before her. The trustees were required to hold the income derived from the Group A Fund for Mrs Thurston and to permit her to have the use of any items of real property in the Group A Fund for the remainder of her life. The Court found that Mrs Thurston had failed to act impartially as between all beneficiaries and that Mr Goodwin was so closely aligned to Mrs Thurston's interests as a beneficiary of the trust that he had not acted impartially as between all beneficiaries and that he could not so act. The Court concluded that it was necessary for the proper execution of the trust that Mrs Thurston and Mr Goodwin be removed as trustees. The Court reserved leave to apply to the parties if any further orders were required, consequential on these orders to remove. The Court noted that it may be possible for the parties to agree costs, and if not, the plaintiff could submit a memorandum by a certain date and the defendants could reply within two weeks thereafter.

Orders