Turvey v Reeves
[2022] NZHC 760
•12 April 2022
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-000129
[2022] NZHC 760
BETWEEN DARYN TURVEY
Plaintiff
AND
GRAEME REEVES
First Defendant
AND
CORNWALLIS TRUSTEES LIMITED
Second Defendant
AND
PATRICIA TURVEY
Third Defendant
Hearing: 21 March 2022 (by Microsoft Teams) Appearances:
Plaintiff, self-represented
J L Forrest for First and Second Defendants
D P MacKenzie and K S Dixit for Third DefendantJudgment:
12 April 2022
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 12 April 2022 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
TURVEY v REEVES [2022] NZHC 760 [12 April 2022]
[1] The plaintiff (Mr Turvey) commenced this proceeding seeking, principally, relief for various alleged breaches of trust and fiduciary duty. The claim, in so far as it relates to the first and second defendant, has been settled and stayed.1 This judgment concerns an application by the third defendant (Mrs Turvey) to strike out the proceeding and/or for summary judgment. The application is opposed by Mr Turvey.
The facts
[2]Mr Turvey is Mrs Turvey’s son.
[3] The Orana Trust was settled on 1 July 1996, with Mr Turvey and Mrs Turvey as the Trustees. They were also, along with others, both beneficiaries of the trust.
[4] Mr Turvey brings this proceeding as a beneficiary (and also a retired trustee) of the Orana Trust. He alleges Mrs Turvey committed numerous breaches of trust and fiduciary duty. These include, for instance, that she acquired a trust property by deceptive means and at an undervalue and then sold it for a considerable profit. Another allegation is that she has retained trust funds. It is also alleged she defended High Court litigation against the trustees when there was no valid defence available causing the Orana Trust to become insolvent. There are many more allegations also.
[5] From at least 2012, the relationship between Mr Turvey and Mrs Turvey deteriorated. This has resulted in a great deal of litigation, not only between them but also between entities with which they have been associated.2
[6] As a result of this dysfunction, in September 2013, Mr Turvey and Mrs Turvey appointed the second defendant, Cornwallis Trustees Ltd, to be an additional and independent trustee of the Orana Trust. The Trust Deed was varied at the same time to provide that where there were three or more trustees, the decision of the majority of them would be final. A further variation substituted a new trustees’ liability clause. That trustees’ liability clause is set out below.
1 Turvey v Reeves HC Wellington CIV-2019-485-129, 22 March 2022 (minute).
2 It is not necessary, for present purposes, to list all of the Court proceedings that are the result of the breakdown in the relationship between Mr Turvey and Mrs Turvey.
16TRUSTEES’ LIABILITY
16.1In carrying out the trusts and powers contained in this deed, no Trustee or former Trustee will be personally liable for any loss to the Trust Fund unless that loss is attributable to:
(a)that Trustee’s own dishonesty or lack of good faith;
(b)the wilful commission or omission by that Trustee of an act known to that Trustee to be a breach of trust;
(c)that Trustee acting beyond the scope of his or her powers as trustee of the Trust.
16.2No Trustee will be bound to take any proceedings against any other Trustee or former Trustee for any breach or alleged breach of trust committed by that other Trustee or former Trustee.
16.3Each Trustee or former Trustee is entitled to be indemnified out of the Trust Fund against all actions, proceedings, claims, damages, losses, demands, calls, liabilities, costs (including legal costs) and expenses (together called “liabilities”) suffered or incurred by that Trustee or former Trustee in the conduct of his or her duties for the Trust (including in respect of any decision made by a majority of the Trustees pursuant to clause 12.3), unless those liabilities (or any of them) are due to:
(a)that Trustee’s own dishonesty or lack of good faith;
(b)that Trustee’s wilful commission or omission of an act known by that Trustee to be a breach of trust; or
(c)that Trustee acting beyond the scope of his or her powers as trustee of the Trust.
[7] The appointment of Cornwallis Trustees Ltd did not resolve the dysfunction. In 2014, Mr Turvey, along with his wife, Fiona Turvey, and Carol Birch, as trustees of the Chibbi Trust, brought proceedings in the Wellington High Court against the trustees of the Orana Trust. Ultimately, the proceeding was settled in June 2016 and judgment entered by consent for the trustees of the Chibbi Trust in an amount of
$573,037. Cornwallis Trustees Ltd retired as a trustee of the Orana Trust on 22 June 2016.
[8] In 2017, Mr Turvey filed a further proceeding on behalf of the Chibbi Trust trustees against himself and Mrs Turvey as the trustees of the Orana Trust.3 In response, Mrs Turvey commenced her own proceeding in the High Court seeking to
3 Turvey v Turvey HC Wellington CIV-2017-096-28.
remove Mr Turvey as a trustee of the Orana Trust.4 One of the grounds relied upon was that Mr Turvey was conflicted and, in breach of his obligations as a trustee of the Orana Trust, was seeking to prevent the trustees of the Orana Trust from defending the claim brought by the trustees of the Chibbi Trust.
[9] Mr Turvey, representing himself, defended Mrs Turvey’s claim. He filed a statement of defence and counterclaim, making allegations of breach of trust by Mrs Turvey. He sought relief in these terms:
I ask that [Mrs Turvey] be removed as Trustee, that I remain, and that another Trustee is appointed to replace [Mrs Turvey], so that the beneficiaries can finally get some form of justice and hope that some of the missing money can be recovered.
[10] That proceeding was set down for hearing on 4 September 2017 before Cull J. At the hearing, Cull J directed the parties to the reality of their situation which led to a discussion concerning settlement on the basis that both Mr Turvey and Mrs Turvey would be removed as trustees and replaced by independent trustees. In the result, consent orders were made by Cull J that both Mr Turvey and Mrs Turvey were removed as trustees and directing the parties to confirm the names of the independent trustees to be appointed. On 27 October 2017, Cull J appointed David Vance and Ian Millard QC, as the trustees of the Orana Trust. Messrs Vance and Millard have taken no part in this proceeding.
[11] Again representing himself, Mr Turvey filed this proceeding in March 2019 against Graeme Reeves (a lawyer and the sole shareholder/director of Cornwallis Trustees Ltd), Cornwallis Trustees Ltd and Mrs Turvey. The statement of claim contained what purported to be 17 causes of action against the defendants.
[12] Mr Reeves and Cornwallis Trustees Ltd filed a statement of defence on 16 April 2019. On 29 April 2020, those parties entered into a settlement agreement with Mr Turvey and nothing more need be said about their position.
[13] Mr Turvey filed an amended statement of claim dated 17 August 2021 and Mrs Turvey filed her statement of defence, and these applications for strike out and
4 Turvey v Turvey HC Wellington CIV-2017-485-150.
summary judgment, on 11 October 2021. Mr Turvey filed a further amended statement of claim, also erroneously dated 17 August 2021, which is his latest pleading.
[14] This latest iteration of the statement of claim removes several of the causes of action, but 13 causes of action remain. There is only one prayer for relief for all causes of action. Mr Turvey seeks compensation/damages of $5,000,000 in total for “loss of assets”, “loss of future income and assets” and “punitive damages and mental stress”. There are also claims that Mrs Turvey reimburse the Orana Trust costs and expenses incurred in the defence of the claim by the Chibbi Trust.5
Strike out principles
[15] Rules 15.1(a)-(d) of the High Court Rules 2016 permit the Court to strike out all or part of a pleading in specified circumstances. It provides:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b)is likely to cause prejudice or delay; or
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the court.
(2)If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4)This rule does not affect the court’s inherent jurisdiction.
[16] The Court will exercise its power to strike out a pleading sparingly and only in clear cases. Further, the Court has traditionally been wary of the potential inefficiency of applications to strike out part of a pleading, but that may be justified if it could substantially reduce the burden of trial or preparing for trial. The jurisdiction to strike out is not excluded by the need to decide difficult questions of law requiring extensive
5 At subparagraph (i) of the prayer for relief there is a claim in respect of what were referred to as the Mirror Trusts but Mr Turvey confirmed the proceeding concerns only the Orana Trusts.
argument, but if a defect in the pleadings can be cured by amendment, the claim should not be struck out.
[17] I accept the general approach in Attorney-General v McVeagh, where the Court of Appeal said:6
The Court is entitled to receive affidavit evidence on a striking-out application, and will do so in a proper case. It will not attempt to resolve genuinely disputed issues of fact and therefore will generally limit evidence to that which is undisputed. Normally it will not consider evidence inconsistent with the pleading, for a striking-out application is dealt with on the footing that the pleaded facts can be proved; see Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641, 645-646, Southern Ocean Trawlers Ltd v Director-General of Agriculture and Fisheries [1993] 2 NZLR 53 at pp 62-63, per Cooke P. But there may be a case where an essential factual allegation is so demonstrably contrary to indisputable fact that the matter ought not to be allowed to proceed further.
The applications and Mrs Turvey’s arguments
[18] Mrs Turvey argues that Mr Turvey’s statement of claim must be struck out under r 15.1 because it:
(a)discloses no reasonably arguable cause of action;
(b)is frivolous or vexatious; and
(c)is otherwise an abuse of process.
[19]This is said to be because:
(a)the complaints that Mrs Turvey breached her duties as a trustee of the Orana Trust are matters that have or could have been determined in the 2017 proceeding and it is an abuse of the Court’s processes for Mr Turvey to raise those matters again in this proceeding;
6 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.
(b)Mr Turvey has not identified any actionable loss but, in any event, Mrs Turvey has an absolute answer to the claim under the trustees’ liability clause; and
(c)certain of the causes of action are time-barred or are claims which Mr Turvey has no standing to bring.
No reasonable cause of action
[20] Mr MacKenzie submits the statement of claim discloses no reasonable cause of action. He argues it is difficult to discern what claims are being made and in what capacity Mr Turvey purports to bring them. The only matter that is apparent, he says, is that at a high level Mr Turvey takes objection to Mrs Turvey’s conduct as a trustee of the Orana Trust.
[21] Mr MacKenzie also argues that the statement of claim is defective because there is no right for a beneficiary to claim damages in an action for breach of trust. The only claim that a beneficiary could have in such circumstances is that the trustee restore the property that he or she is bound to account for and, when the trustee has retained property in his or her own hands, to account further for any profit that he or she has in fact made or is presumed to have made.7
Abuse of process
[22] Mr MacKenzie submits that one of the circumstances in which proceedings may amount to an abuse of process includes where defendants are harassed with issues that should have been raised in previous litigation.8 He relies on the principle in Henderson v Henderson that there should be finality in litigation and a defendant should not be oppressed by successive suits.9 It is an abuse, he says, to commence a proceeding relying on issues or facts which ought to have been raised in a previous proceeding.
7 Mulligan v Perpetual Trust Co Ltd HC Christchurch M119/02, 10 March 2003 at [35].
8 Lai v Chamberlains [2006] NZSC 70; [2007] 2 NZLR 7 at [61]; Faloon v The Planning Tribunal at Wellington [2020] NZCA 170 at [1].
9 Henderson v Henderson (1843) 3 Hare 100 (Ch).
[23] Here, Mr MacKenzie argues that, except in one respect,10 Mr Turvey was undoubtedly aware in 2017 of all the claims that he is now bringing and, in fact, he made those claims in his counterclaim in the 2017 proceeding. He notes also that Mr Turvey obtained discovery orders in that proceeding for disclosure of documents to establish misconduct by Mrs Turvey in the running of the affairs of the Orana Trust.11 Mr MacKenzie contends, also, that as Mr Turvey did not challenge the orders made by Cull J, the judgment must be considered as final on the issues raised in the proceeding.
The trustees’ liability clause
[24] Mr MacKenzie submits the trustees’ liability clause protects a trustee from personal liability unless loss is attributable to that “Trustee’s own dishonesty or lack of good faith” or “the wilful commission or omission by that Trustee of an act known to that Trustee to be a breach of trust” or “that Trustee acting beyond the scope of his or her powers as trustee of the Trust”.
[25] He argues that Mr Turvey’s allegations lack credibility and have no prospect of success, given the broad trustees’ powers and Mr Turvey’s role as a trustee at all material times. He says that Mr Turvey’s status as a trustee is fatal to his claim as Mr Turvey cannot complain about decisions made whilst he was a trustee, even in instances where majority decision-making applied.
[26] Mr MacKenzie also submits that Mr Turvey makes no allegations of fraud or dishonesty against Mrs Turvey, but even had he done so, there is no scope for any finding that Mrs Turvey acted dishonestly.
Limitation Act and lack of standing
[27] These submissions were directed to three causes of action. It is submitted those causes of action are either time-barred or Mr Turvey has no standing to bring them.
10 This relates to the fourteenth cause of action under the Companies Act 1993.
11 Turvey v Turvey HC Wellington CIV-2017-485-150, 8 August 2017 (minute).
[28] It is argued Mr Turvey’s seventh and fifteenth causes of action must be out of time.12 The seventh cause of action concerns steps taken in 2005 by Mrs Turvey to change a bank account operating authority in respect of the Orana Trust’s bank account to remove Mr Turvey as a signatory. The fifteenth cause of action includes several allegations, including that Mrs Turvey “redirected and kept rental income” of
$102,000 between 2002 and 2010.
[29] The fourteenth cause of action is discrepant. It is alleged, in reliance upon ss 131, 133, 135 and 137 of the Companies Act 1993, that Mrs Turvey breached duties as a director of Vey Group Ltd by using funds loaned by the Orana Trust to settle debts and paid herself a salary contrary to the interests of the company and the Orana Trust. Mr MacKenzie submits Mr Turvey has not been a shareholder of Vey Group Ltd since 2018 and he has no standing to bring an action for breach of duty by a director.
Mr Turvey’s submissions
[30] Mr Turvey filed lengthy submissions which largely addressed the factual basis of his grievances, including against the second defendant (which are no longer in issue) and a Mr Fugle, who features prominently in Mr Turvey’s narrative. Mr Fugle swore the affidavit in support of Mrs Turvey’s applications.
[31] In his oral presentation, Mr Turvey realistically accepted that his statement of claim required amendment.
[32] He does not accept that he is attempting to raise issues that were or should have been raised in the 2017 proceeding. I understood him to say he was unaware that he could recover damages against Mrs Turvey at that time without a unanimous decision of the trustees, and that the case was heard under urgency.
[33] He does not consider Mrs Turvey is protected from liability by the trustees’ liability clause because, he says, she caused the Orana Trust loss through fraud and dishonesty.
12 Mr MacKenzie did not explain why that is the case or refer me to particular sections in the Limitation Acts of 1950 or 2010.
My assessment
The pleadings
[34] The statement of claim is diffuse. It is largely incoherent as a stand-alone document. It does not comply with the High Court Rules in several respects. It contains a great deal of evidence and submission. Many of the matters that are identified as causes of action are not causes of action at all. It does not state what relief is sought in respect to each cause of action. There is merit in Mr MacKenzie’s submission that “damages” are not recoverable by a beneficiary for breach of trust but, at least in part, that is what Mr Turvey appears to seek. While latitude is extended to litigants in person on matters of pleading, defendants are entitled to be fairly informed as to the case they have to respond to.13
[35] I told Mr Turvey that his statement of claim, in its present form, cannot stand. He accepted the need to replead. He conceded, also, that he would not pursue several of the causes of action and that those that remained could probably be reduced to just one or two in number. He said he was prepared to accept a direction to amend his pleadings with the assistance of counsel.
Henderson v Henderson
[36] Citizens are entitled to bring their cases to the Court and have them heard on their merits. The Court will not deny them the right to bring genuine grievances to the Court without scrupulous examination of all the circumstances.14
[37] However, as was noted by the Court of Appeal in Craig v Stringer, access may be properly denied where a litigant seeks to misuse the Court’s processes for an improper purpose such as to vex, harass or embarrass another party, or to reopen disputes that have already been determined, which is precluded by the doctrine of res judicata.15
13 O’Neill v Bridgman [2020] NZCA 460 at [22].
14 Johnson v Gore Wood & Co [2002] UKHL J1214–3; [2002] 2 AC 1.
15 Craig v Stringer [2020] NZCA 260 at [14].
[38] The principle formulated by Wigram V-C in Henderson v Henderson, precludes a party from raising, in subsequent proceedings, matters which were not, but could and should have been, raised in the earlier ones. Perhaps the leading judgment in this area is to be found in Johnson v Gore Wood & Co where Lord Bingham of Cornhill said:16
But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because the matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits–based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.
[39] These principles are well established in New Zealand. In Lai v Chamberlains, Elias CJ referred to Johnson v Gore Wood & Co, stating:17
Lord Bingham considered that what constitutes abuse as a “broad, merits- based judgment”, incapable of capture in hard and fast rules of determination and not limited to further litigation between the same parties or their privies. Lord Millett in the same case thought it “primarily an ancillary and salutary principle” which prevents res judicata and issue estoppel being “deliberately or inadvertently circumvented”.
[40] The question whether these principles will apply in any case is “subject to an extremely wide and open-textured discretion”.18 It follows, the fact a matter could
16 Johnson v Gore Wood & Co, above n 14, at 31.
17 Lai v Chamberlains, above n 8, at [62] (footnotes omitted).
18 Wilken and Ghaly The Law of Waiver, Variation, and Estoppel (3rd ed, Oxford University Press, Oxford, 2012) at 321.
have been raised in earlier proceedings does not, in and of itself, render the raising of it in later proceedings abusive. All of the circumstances must be considered and both private and public interests taken into account. Ultimately, the Court must then stand back and ask itself whether a party is misusing or abusing the Court’s processes.
[41] The facts of Johnson v Gore Wood & Co are instructive. There, Mr Johnson conducted his business affairs through a number of companies including W Ltd, in which he was the major shareholder. He instructed the defendants, a firm of solicitors, to act for W Ltd to serve a notice exercising an option to purchase land on behalf of W Ltd. A dispute arose as to the validity of the notice and litigation followed, causing W Ltd loss. Mr Johnson considered he personally had suffered loss also. W Ltd commenced proceedings against the defendants for professional negligence in connection with the exercise of the option. Before the action came to trial, the solicitors representing W Ltd notified the defendants’ solicitors that Mr Johnson considered he had a personal claim arising out of the same matters. W Ltd’s claim was compromised by settlement. Sometime later Mr Johnson issued his own proceeding against the defendants. The defendants applied to have it struck out as an abuse of process of the Court. The House of Lords, overturning the result in the Court of Appeal, held the proceeding was not an abuse.
[42] Lord Bingham considered the terms of the settlement agreement between W Ltd and the defendants, as well as the exchanges which had preceded it, pointed towards an acceptance by both parties that it was open to Mr Johnson to issue proceedings to enforce a personal claim, which could then be tried or settled on its merits. In those circumstances, it would be unjust to permit the defendants to resile from that assumption. He noted, also, Mr Johnson had reasons he considered compelling to defer the prosecution of his personal claim. He also noted the failure by the defendants to promptly take action to strike out the proceeding as potent evidence, not only that the action was not seen as abusive at the time, but also that it was in fact not abusive. He concluded that the Court of Appeal had adopted a too mechanical an approach, giving little or no weight to the considerations which led Mr Johnson to act as he did and failing to weigh the overall balance of justice.
[43] Here, the evidence supporting the submission that Mr Turvey should be prevented from pursuing this claim further, under the principle in Henderson v Henderson, is insufficient for me to make any such finding. There is no affidavit from Mrs Turvey that she has been harassed or vexed by an attempt to relitigate issues. It is Mr Fugle who gives evidence on Mrs Turvey’s behalf and he does not explicitly assert that either.
[44] Mr Fugle’s affidavit recounts the bare facts that Mr Turvey filed a statement of defence and counterclaim which alleged that Mrs Turvey had eroded the assets of the Orana Trust and cost beneficiaries approximately $1,500,000; that he had sought discovery concerning Mrs Turvey’s alleged misconduct; and that as a result of the proceeding both Mr Turvey and Mrs Turvey were removed as trustees. Indicating an absence of personal knowledge, Mr Fugle says, “as best I can tell, these matters were already raised by Daryn in his counterclaim in [Mrs Turvey’s] 2017 proceeding”. He concludes that Mr Turvey seeks to “dredge up some matters that have long since been concluded and/or makes complaints about matters already determined by other proceedings”. He does not identify specifically what matters have been concluded, how they were concluded, what matters have been determined, and in what other proceedings.
[45] While it is the case Mr Turvey raised Mrs Turvey’s conduct as a trustee in the 2017 proceeding, the relief he sought was not monetary compensation (as he does here) but removal of Mrs Turvey as a trustee of the Orana Trust. It can be inferred from his counterclaim that any action to recover losses suffered by the Orana Trust would follow the removal of Mrs Turvey as a trustee.
[46] While Mr Fugle is correct that Mr Turvey sought discovery in the 2017 proceeding, the evidence before me suggests that such discovery was not ordered against Mrs Turvey.19
[47] It appears to be the case that when the 2017 proceeding came before Cull J for hearing on 4 September 2017, she did not consider she was dealing with anything other than competing applications to remove trustees. At paragraph [1] of her
19 Turvey v Turvey, above n 11, at [6].
4 September 2017 minute, Cull J states that the issue in the proceeding was Mrs Turvey’s application to remove Mr Turvey as a trustee and his cross-application for Mrs Turvey to be removed as well.
[48] Further, and importantly in any assessment of the relevant circumstances and overall justice of the case, the parties agreed to settle the proceeding. There is no evidence about the discussions leading to the settlement, the basis upon which parties agreed to settlement, including whether there was any discussion concerning Mr Turvey’s monetary claims and, if so, what was agreed in relation to them. There is also no explanation for what appears to be a long delay between the service of this proceeding upon Mrs Turvey and the making of her application asserting that it is an abuse. In addition, there are reasons Mr Turvey raises as to why he did not pursue claims for compensation in the 2017 proceeding to be considered in the overall assessment of the merits.
[49] In short, the evidence falls well short of satisfying me that it is appropriate to strike out this claim as an abuse under the principle in Henderson v Henderson. The matter is one which requires a scrupulous examination of the facts which I do not have before me.
The trustees’ liability clause
[50] Mr MacKenzie’s submission that Mr Turvey is not alleging fraud or dishonesty is not correct. He is plainly alleging Mrs Turvey caused loss to the Orana Trust through dishonesty or by the wilful commission of acts known to her to be a breach of trust. The allegations concerning Mrs Turvey’s purchase of a property owned by the trustees and the steps taken to defend the claim by the trustees of the Chibbi Trust, are two examples. Whether Mrs Turvey has acted in breach of trust or fiduciary duty and, if so, whether the trustees’ liability clause protects her, are trial issues.
Limitation Act and lack of standing
[51]I accept the three causes of action in issue cannot stand.
[52] I agree with Mr MacKenzie’s submission that the seventh cause of action is not a cause of action at all. There is no obvious allegation of a breach of trust or fiduciary duty or that any loss was suffered.
[53] Mr Turvey acknowledged the fifteenth cause of action was no more than a summary of the complaints set out in the previous causes of action.
[54] Mr Turvey also said that he would not be pursuing the fourteenth cause of action alleging breach of director’s duties under the Companies Act 1993.
Summary of findings on strike out application
[55] I accept that the amended statement of claim is seriously deficient, likely to cause prejudice and delay in resolving the proceeding. In addition to pleading deficiencies, it contains “causes of action” that are not causes of action at all. I do not, however, accept that the proceeding should be struck out on the basis of the principles in Henderson v Henderson or that the trustees’ liability clause is a total answer to all claims Mr Turvey may wish to pursue.
The summary judgment application
[56] A defendant’s application for summary judgment is made under r 12.2(2) of the High Court Rules. The Court may give judgment if the defendant satisfies it that none of the causes of action in the plaintiff’s statement of claim can succeed. A defendant’s onus under r 12.2 is an exacting one and “rightly so since it is a serious thing to stop a plaintiff bringing his claim to trial unless it is quite clearly hopeless”.20
[57] Mr MacKenzie argues that if Mrs Turvey was not successful in striking out the claim, then summary judgment should be entered. His submissions were very brief, no doubt because he expected the charge on summary judgment to be led by the first and second plaintiffs, who had filed an application which was resolved. His submissions do not address all causes of action or identify why none of them can succeed.
20 Attorney-General v Jones (2003) 16 PRNZ 715 at [10].
[58] He did submit that at all material times Mr Turvey was a trustee of the Orana Trust, that decisions could, following the 2013 variation, be made by a majority and that as Mr Turvey had the ability to complain about decisions made at that time, he could not revisit those decisions now. I do not accept the submission. It cannot be the case that because Mr Turvey was a trustee at material times Mrs Turvey is insulated from an action brought by him as a beneficiary for breach by her of obligations as a trustee. No authority was cited for such a proposition.
[59] There are many factual disputes between these parties which makes the case plainly unsuitable for summary judgment. Mr Turvey identifies some of these in his affidavit. For example, in relation to the sale of the trust property to Mrs Turvey, Mr MacKenzie referred to a diary note prepared by a solicitor at Reeves Lawyers recording that Mr Turvey was aware of the circumstances of the sale and authorised it to proceed. Mr Turvey alleges, however, that Mrs Turvey fraudulently concealed from the trustees her intent to buy the property and made a substantial profit at the expense of the beneficiaries. Such disputes should be determined at trial, not upon a summary application.
The way forward
[60] As I have foreshadowed, Mr Turvey’s claim cannot continue on the present state of his pleadings. Mrs Turvey would be severely prejudiced in maintaining a defence to such a poorly drafted pleading. I do not consider the claim can be dismissed as entirely hopeless. I regard the pleadings capable of amendment. The changes required go beyond mere editing and nothing short of a wholesale reconsideration and redrafting of the claim is required. I expect this will only be satisfactorily achieved if Mr Turvey allows counsel to redraft the claim in a proper manner. He advised me he would do so. I consider the proper course is to give Mr Turvey that opportunity, but reserve to Mrs Turvey the right to bring her strike out application back before the Court in the event the amended pleading remains deficient.
Result
[61]Mrs Turvey’s application for summary judgment is dismissed.
[62] Mrs Turvey’s application for strike out shall be adjourned with leave reserved to bring the application on again following the filing and service of Mr Turvey’s amended statement of claim, if it is considered it remains deficient.
[63] Mr Turvey shall file an amended statement of claim within 42 days of the date of this judgment.
[64] Following filing and service of the amended statement of claim the case is to be set down before an Associate Judge for further case management. The parties shall file memoranda of proposed timetabling directions at least three working days prior to the conference.
[65] Given the possibility that Mrs Turvey may renew the application for strike out, I reserve costs. Should either party wish to make application for costs they may do so, on notice, by memoranda (no longer than five pages) with any reply memoranda (also no longer than five pages) to be filed seven days thereafter.
O G Paulsen Associate Judge
Solicitors:
Darroch Forrest Lawyers, Wellington Dewhirst Law, Otaki
Copy to:
Mr D Turvey
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