Wall v Ingle

[2025] NZHC 588

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2024-425-000071

[2025] NZHC 588

BETWEEN

NICOLA JANE WALL, CLAIRE

ELIZABETH SMITH, LYNDA MARION ROSS, KATHRYN HEATHER ROSS, BARBARA ANNE JONES, ALLYSON MARGARET ROSS and JENNIFER FAYE BOYD, ALL AS BENEFICIARIES OF THE DARA FAMILY TRUST
Plaintiffs

AND

DAVID ALLEN INGLE

First Defendant

AND

KLARA INGLE

Second Defendant

AND

DONALD McNAUGHTON STUART

Third Defendant

AND

WATS TRUSTEE CO LIMITED

Fourth Defendant

Hearing:

25 November 2024

Appearances:

A F Grant and S A Grant for Plaintiffs

L M McKeown nd P J M Gerard for 1st and 2nd defendants as Interested Parties
Appearances excused for 1st, 2nd, 3rd and 4th defendants

Judgment:

20 March 2025

JUDGMENT OF CULL J

[1]                 The trustees of the Dara Family Trust (the Trust) seek an order referring a trust dispute to mediation under s 145 of the Trusts Act 2019 (the Act). The parties agree that their trust dispute should be referred to mediation but they cannot agree on the

Wall v Ingle and Ors [2025] NZHC 588 [20 March 2025]

mediator. Objection is also taken to the proposal that the beneficiaries’ representative attends the mediation on behalf of those who do not wish to attend.

[2]                 The seven plaintiff sisters are final beneficiaries of the Trust, which was settled by their deceased sister, Robyn Ingle and her husband, David Ingle (David), the first defendant. The sisters have issued proceedings alleging breach of trustees’ duties, claiming that David and his wife Klara Ingle (Klara) have distributed assets of the Trust to themselves in breach of their duties as trustees (the Trust dispute).

[3]                 The parties have agreed that the Trust dispute should be referred to mediation at an agreed location but they cannot agree on the appointment of the mediator nor who can represent the beneficiaries at the mediation, and seek orders under s 145 of the Trusts Act 2019. The identity of the mediator and the issue of who should attend the mediation requires the determination of this Court.

Factual background

The Trust dispute

[4]                 The Trust was originally settled in September 2000 by David and his late wife Robyn, who died in February 2004. The Trust was originally settled as the Akwaaba Trust, with David and Robyn, together with the third defendant, Mr Stuart, as the initial trustees. The Trust had 10 final beneficiaries comprising David’s two children of his first marriage, David’s sister and Robyn’s seven sisters.

[5]                 David was a discretionary beneficiary in his capacity as the surviving settlor. Although the settlors could jointly appoint additional beneficiaries, they did not do so. As trustees, Robyn and David arranged for the Trust to buy a mixed avocado and kiwifruit orchard, which was the primary asset of the Trust, to be their retirement “nest egg”.

[6]                 After Robyn died in February 2004, David married Klara in 2006. A number of variations were made to the Trust, including renaming the Trust the DARA Family Trust. The sisters allege that David and Klara attempted to remove all of the plaintiffs as beneficiaries of the Trust and in realising the orchard property in November 2020,

distributed the bulk of the Trust’s assets to themselves. A number of variations were made to the Trust, which included appointing Klara as a trustee.

[7]                 The sisters seek orders to remove the trustees and appoint replacement trustees, together with orders requiring David and Klara to account to the Trust for the distributions made to them as trustees, and for any profits made from the use of moneys they received from the Trust.

Legal principles

Section 145 of the Act

[8]                 The Court’s discretion to submit a trust dispute to an alternative dispute resolution process is governed by s 145 of the Trusts Act. The section provides:

145   Power of court to order ADR process for internal matter

(1)The court may, at the request of a trustee or a beneficiary or on its own motion,—

(a)enforce any provision in the terms of a trust that requires a matter to be subject to an ADR process; or

(b)otherwise submit any matter to an ADR process (except if the terms of the trust indicate a contrary intention).

(2)In exercising the power, the court may make any of the following orders:

(a)an order requiring each party to the matter, or specified parties, to participate in the ADR process in person or by a representative:

(b)an order that the costs of the ADR process, or a specified portion of those costs, be paid out of the trust property:

(c)an order appointing a particular person to act as a mediator, an arbitrator, or any other facilitator of the ADR process.

(3)This section applies in relation to internal matters only.

[9]                 The parties agree that the dispute is an internal matter, that is, a matter to which the parties are a Trustee and one or more beneficiaries,1 and that the Trust deed does not preclude an order made under s 145.

1      Trusts Act 20190, s 142.

Identity of mediator

[10]            The main dispute in this application is the choice of mediator. This Court has the discretion to make an order appointing a particular person to act as a mediator.2 The plaintiffs have proposed the appointment of the Hon Rhys Harrison KC. David and Klara oppose this, and have proposed six alternative options.3

[11]            In their notice of opposition dated 23 July 2024, David and Klara opposed the appointment of Mr Harrison, on the grounds that he is not a member of the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ) or the International Academy of Mediators, and the plaintiffs’ insistence on his appointment without engagement with the alternative mediators proposed by them has caused them to lose trust and confidence in his neutrality.

[12]            In response, the sisters submit that Mr Harrison had been a member of AMINZ and withdrew from the organisation on good terms, with the organisation asking him to address its members. The plaintiffs also pointed to comments from this Court that Mr Harrison “is an effective and experienced well-respected mediator”, as well as a former High Court and Court of Appeal Judge and an experienced litigator.4

[13]            The plaintiffs’ Counsel, Mr Grant, said that the choice of Mr Harrison was based entirely on his recommendation, with none of the plaintiffs previously meeting or communicating with Mr Harrison. The fundamental reason for his recommendation, was Mr Harrison’s success in resolving mediation. Mr Grant said that Mr Harrison told him that 49 of the 51 mediations he conducted most recently were successful.

[14]            David and Klara remain opposed to the appointment of Mr Harrison, on the grounds of his lack of professional accreditation/affiliation, the sisters’ insistence on his being the mediator, and the sisters’ lack of engagement with the alternatives provided by David and Klara. They observe that the sisters have not explained why

2      Trusts Act 2019, s 145(2)(c).

3      These are Mark Kelly, Nina Khouri, Hayden Wilson, the Hon Paul Heath KC, the Hon Rodney Hansen KC and the Hon Robert Fisher KC.

4      Wright v Pitfield [2022] NZHC 385 at [46]; Addleman v Lambie Trustee Ltd [2024] NZHC 1790 at [45].

any of the six mediators they proposed would be unsuitable. They also say Mr Harrison’s claimed rate of success has not been verified by affidavit evidence and cannot be objectively checked without reference to information that is likely confidential. David and Klara say that the High Court authorities cited can be distinguished from the facts here.

Decision

[15]            The main issue for determination by the Court is the appointment of a mediator. The issue was whether the Hon Rhys Harrison KC should be appointed as the plaintiff sisters urge or whether there should be another mediator appointed, as the defendants propose.

[16]            Although in their written submissions, David and Klara oppose Mr Harrison’s appointment in part because he “is not a member of AMINZ or the International Academy of Mediators”, it became apparent at the hearing that the real opposition is that the sisters’ insistence on his appointment has caused the defendants to “lose trust and confidence” in his “neutrality”.

[17]            Mr Grant for the sisters submits that his appointment is the best chance of success and that if Mr Harrison is appointed the mediator for this dispute, the plaintiffs will pay his travel and accommodation costs and the venue hire fees in Wellington, but they will not pay those expenses if another mediator is appointed.

[18]            At the heart of the impasse between the plaintiffs and the defendants is the perception that Mr Harrison may have a personal connection to the plaintiffs, given their insistence on a single mediator and lack of engagement with any of the six alternative options proposed by the defendants. The plaintiffs offer to meet all his costs. They say this is a real cause for discomfort.

[19]            In Addleman v Lambie Trustees Limited,5 Mrs Addleman opposed the appointment of Mr Harrison as mediator but it appears that no alternative mediators were proposed. The Court appointed Mr Harrison as mediator but noted that it is

5      Addleman v Lambie Trustees Limited, above n 4.

important that the appointed mediator should “have the confidence of all parties and be someone who can offer the best opportunity for a successful outcome.”6

[20]            Section 145 of the Act does not specify the considerations that should be taken into account by the High Court in determining whether an internal matter should be referred to alternative dispute resolution.

[21]            A commentator, Christopher W. Moore, has emphasised that mediation involves “a mutually acceptable third party”:7

“Acceptability” refers to “disputing parties’ willingness to welcome, accept, tolerate, or at minimum, not oppose the involvement of a third party who assists them in settling contested issues. It does not mean that the parties eagerly welcome the mediator’s involvement, nor is it an indication that they will accept his or her recommendations regarding process and, in some mediations, his or her input on substantive issues. It merely means that disputants are willing to listen to and seriously consider his or her suggestions regarding process, and on occasion substantive considerations, to resolve their differences.

[22]            Moore suggests that the acceptance of a mediator by the parties may be grounded in a number of factors, including a party’s perception about the mediator’s impartiality and independence, lack of connections, or in some cases, desirable links to one or more disputers, and whether or not the proposed mediators are perceived to be neutral, unbiased, fair and objective toward any of the issues in question.8

[23]            There can be no question that Mr Harrison is an effective, experienced, neutral and well-respected mediator. In Wright v Pitfield, this Court found that there was no good reason to depart from the applicant’s recommendation of Mr Harrison as a mediator:9

[46]  The proposed mediator, the Hon Rhys  Harrison QC, is an effective  and experienced well-respected mediator. Like the Hon Raynor Asher QC he is a former High Court and Court of Appeal Judge, and experienced litigator. In the absence of a principled opposition to his appointment, I consider the Hon Rhys Harrison QC to be an appropriate appointment. In the event he was

6 At [43].

7      Christopher W Moore The Mediation Process: Practical strategies for resolving conflict (4th ed, Jossey-Bass, San Francisco, 2014) at 20.

8      At 20.

9      Wright v Pitfield, above n 4, at [46].

unavailable I accept that the Hon Raynor Asher QC [the respondent’s preferred mediator] would be an appropriate alternative.

[24]            The issue here is not with the competence, expertise or impartiality of Mr Harrison himself. The issue here is one of the perception of the parties. Unfortunately, in offering to meet the expenses of their only stipulated mediator and refusing to engage with the alternatives proposed by David and Klara, the plaintiffs have fuelled the defendants’ perception of their connection to their proposed mediator. As Moore concludes:10

The ultimate test of the impartiality and neutrality of the mediator lies in the judgment of the parties: they must perceive that the intermediary is not overtly partial or non-neutral in order to accept his or her assistance.

[25]            Other commentators have made similar observations about the client’s view of mediators as persons they can trust.11

[26]            The appointment of a mediator to deal with this Trust dispute must be conducive to the parties’ resolution of the dispute. Because of the required engagement of the parties with the mediation process, I consider that the Court should appoint a mediator who has not been the subject of debate or concern by either party. I do so reluctantly, as there should be no reflection on Mr Harrison. This situation has not been of his making.

[27]            The plaintiffs have submitted that they also have a strong preference for a mediator with judicial experience. In the exercise of the Court’s powers under s 145 of the Act, I appoint the Hon Paul Heath KC to be the mediator of the Trust dispute.

[28]            The parties are in agreement that the mediator’s fee is to be shared equally, 50 per cent by the plaintiffs and 50 per cent by David and Klara.

10 Moore, n 7, at 36.

11 Laurence Boulle, Virginia Goldblatt and Phillip Green Mediation: Principles, Process, Practice (LexisNexis, Wellington, 2008) at 192: “… trust is ultimately a function of the parties’ subjective assessments of the mediator …”.

Representation at mediation

[29]            The plaintiffs intend that two of them and one of their husbands, Mr Wall, will attend, and have delegated authority to speak for all the plaintiffs and enter into an agreement on their behalf to resolve the dispute. They say Mr Wall is a successful businessman and has been assisting the plaintiffs with this litigation. Mr Wall also gives evidence that he gave Robyn advice when the trust was being created.

[30]            David and Klara submit that all seven plaintiffs and their legal representation should attend the mediation, and only these parties, but as a compromise are willing to mediate with a majority of the plaintiffs present and have the others attend by video- link. They say it is important for all plaintiffs to be involved with the mediation process and engaged with the issues. Seven plaintiffs may have different recollections regarding key facts and different interests or needs, Mr and Ms Ingle say, and there may be a need for the plaintiffs to provide indemnities on behalf of their children (who were discretionary beneficiaries).

[31]            Mr and Ms Ingle submit that Mr Wall’s proper role should be to support Mrs Wall, rather than attempting to advocate and represent the other plaintiffs, given that he is not their litigation guardian or attorney.

Decision

[32]            The Court has power to compel parties to attend mediation under s 145. Although the defendants consider that it is important for all plaintiffs to be involved with the mediation process and to be fully engaged with the issues, the parties to a mediation can choose whom they wish to represent them and their interests. The seven plaintiff sisters have advised they want Mr Wall, with his commercial expertise, to assist them. There is no legal reason why the plaintiffs cannot choose their own representation.

[33]            Nor can the Court stipulate that Mr Wall can attend the mediation in a support role only. The important factor in having parties represented at mediation is that the representative should have the authority to bind those persons to any agreement

reached at mediation. Having such authority demonstrates the bona fides of those persons engaging in the mediation process.

Result

[34]            The Court appoints the Hon Paul Heath KC to be the mediator of the Trust dispute.

[35]            The mediator’s fee is to be shared equally, 50 per cent by the plaintiffs and 50 per cent by David and Klara.

[36]No direction as to the representation of the beneficiaries at mediation is made.

Costs

[37]            In the event the parties cannot agree, costs memoranda of no more than five pages may be filed; for the plaintiffs, within four weeks of the date of this judgment and for David and Klara, a reply within a further three weeks.

Cull J

Solicitors:

Martelli McKegg, Auckland, for Plaintiffs

Duncan Cotterill, Wellington, for 1st and 2nd Defendants JB Morrison, Wellington, for 3rd Defendant

Greg Kelly Trust Law, Wellington, for 4th Defendant