Ward v Forsyth HC Auckland CIV 2010-404-6188
[2010] NZHC 1892
•22 September 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2010-404-6188
BETWEEN ROSALYN FRANCES WARD First Plaintiff
ANDROY IVON FORSYTH AND DAVID OWEN ASHER
Defendants
Hearing: 22 September 2010
Counsel: V T Bruton for First Plaintiff
P A B Mills for Defendants
Judgment: 22 September 2010 at Oral
ORAL JUDGMENT OF MACKENZIE J
[1] This proceeding was for mention in this list pursuant to direction given by Lang J in a minute issued on 17 September 2010. The proceedings themselves are quite complex and relate to the position of the plaintiff who is the widow of Mr Ward who was the effective settlor of a trust called the Tomorrowland Family Trust (“the Trust”).
[2] In the substantive proceedings the plaintiff seeks a range of remedies effectively that her status as a beneficiary of the Trust be recognised or established and seeking payment as a beneficiary from the Trust. It is unnecessary to describe the proceedings in detail and indeed their complexity is such that I am by no means sure that I have a clear understanding of the issues which they raise.
[3] The matter before the Court is an application for a freezing order in respect of assets held by the defendants in their capacity as trustees of the Trust. The
WARD V FORSYTH AND ASHER HC AK CIV-2010-404-6188 22 September 2010
application was made on a without notice basis but Lang J considered that it should not be dealt on with on a without notice basis. He directed that the proceedings be served immediately on the trustees and the matter be listed for mention today.
[4] I have had lengthy exchanges with counsel as to whether some interim arrangement can be reached and counsel have had the opportunity to discuss that possibility among themselves. It is clear that the application for a freezing order will have to be dealt with at a defended hearing. The issue for me then is the timetable to that defended hearing and what interim arrangements might be appropriate between now and the date of that defended hearing. Counsel have discussed whether an undertaking might be agreed rather than have the Court make a formal order. While those discussions have been able to achieve some measure of agreement there are two aspects of the proposed interim arrangements which are not agreed. In those circumstances I consider that the better course is for the Court to make a formal order which addresses both what had been offered by way of undertaking and the additional matters which cannot be agreed.
[5] I should also mention at this stage that counsel for the plaintiff has signalled an intention to make application for an order directing that the trustees make available certain accounting information. There is no formal application presently before the Court but the directions which I have discussed with counsel, and will now formalise, will make provision for that application.
[6] The timetable for the interim freezing order application and for the proposed application in relation to accounting information is as follows:
a) By 29 September 2010 the plaintiff is to make a formal application for the provision of the accounting information which the plaintiff seeks;
b)By 20 October 2010 the respondents are to file and serve a notice of opposition to the application for an interim freezing order and for the other application if it is made;
c) The respondents will also file by that date (20 October 2010) any affidavits in opposition to those applications;
d)By 3 November 2010 the plaintiff will file and serve any affidavits in reply.
e) The matter is to be allocated a fixture. It is anticipated that there is likely to be cross-examination on affidavits and so a two day fixture should be allocated.
f) Any application to cross-examine any deponent in respect of these applications, by either party, is to be filed and served by
10 November 2010. Any opposition to any application for leave to cross-examine is to be filed and served by 17 November 2010. If necessary, the applications for leave to cross-examine can be listed for hearing in the duty Judge list in the week commencing
22 November 2010.
g) The fixture of two days, to be allocated as directed above for the hearing of the interim application for freezing order and the intended application relating to the provision of accounts, is to be arranged for a date as soon as practicable after the completion of the timetable.
[7] There is also before the Court an application to consolidate these proceedings with some related proceedings which have been commenced. Ms Bruton submits that that application could be dealt with at that same fixture. However, that application involves other parties who are not parties to the present proceedings. I think that dealing with the consolidation application at that fixture would be likely to hinder rather than help the expeditious handling of the application. I consider it better that that matter be kept separate. There is an application which is currently listed before the Associate Judge on 24 November and that seems a more appropriate mechanism for dealing with the issue of consolidation. I make that by way of comment without giving any formal direction to that effect. It will be for the parties and for the Associate Judge to decide how that aspect is best handled.
[8] Having fixed that timetable I now turn to the question of what arrangements should be in place to preserve the status quo until the interim freezing order application can be heard. The timetable which I have fixed makes it likely that that will be into the new year. So the position needs to be considered between now and then.
[9] The form of the order will be that trustees will not, pending the hearing of the application which I have just timetabled, make any distribution to beneficiaries from the assets of the trust except as approved by an order of this Court. The trustees will not make any payments other than in the ordinary course of business without the approval of the Court, save in respect of the matters which I now mention.
[10] The first is payment of trustees’ fees. The trustees are said to be both professional persons who are, on the face of it, entitled to charge fees under the terms of the trust deed. Ms Bruton does not accept that position so far as Mr Asher is concerned. He is described as an engineer but there is no formal evidence to that effect. It is not in dispute that Mr Forsyth is a chartered accountant.
[11] Ms Bruton submits that during the term of this order no payments should be able to be made. I do not think that it is appropriate to make an order which would go as far as that. I direct that the trustees will not make any payments to themselves by way of fees until an invoice has been rendered to the Trust and a copy of that invoice has been made available to counsel for the plaintiff. Payment in accordance with any such invoice may be made at the expiration of seven days after such delivery of the invoice, unless in the meantime application is made by the plaintiff to the Court to challenge that payment.
[12] The second matter is payment of legal fees. Ms Bruton also seeks an order that any payments by way of legal expenses be prohibited at least unless approved. I do not consider that it is appropriate to impose such a condition. It seems likely that potentially substantial legal fees may have to be incurred in the defence of these proceedings and of related proceedings. I do not consider that it is appropriate to restrain the trustees from making proper payment of legal fees, nor to direct that details of the fees should be provided to the plaintiff. Of course any fees charged
will have to meet the proper professional requirements in respect of any such payment.
[13] Costs on the present application are reserved.
[14] Leave is reserved to all parties to apply further in respect any matters that may arise as a result of these directions.
Solicitors: Brookfields Lawyers, Auckland for First Plaintiff
Patricia Mills, Barrister, Auckland for Defendants
A D MacKenzie J
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