White v Brkic - [2021] NZHC 919

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001613

[2021] NZHC 919

UNDER Part 18 of the High Court Rules

IN THE MATTER

of the exercise or purported or threatened

exercise of a right or power alleged to arise out of charge 11521647.1 registered on Identifier 526110 North Auckland Land Registration District

BETWEEN

CAROLINE RUTH WHITE and JOHN

SEAKINS WHITE suing as trustees of the AWHITU TRUST

Plaintiffs

AND

GORDON BRKIC, EMILIA BRKIC and NAGI

FALTAUS, sued as trustees of the MADEG TRUST

First Defendants

THE SHERIFF OF THE HIGH COURT AT AUCKLAND

Second Defendant

Hearing: 19 April 2021

Appearances:

W C Pyke for the Plaintiffs

P Rice for the First Defendants

No appearance by or on behalf of the Second Defendant

Judgment:

28 April 2021

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 28 April 2021 at 3:00 pm pursuant to r 11.5 of the High Court Rules.

Solicitors:Sellar Bone & Partners (C Lucas), Auckland, for the Plaintiffs Haigh Lyon (B Molloy), Auckland, for the First Defendants

Counsel: W C Pyke, Barrister, Auckland, for the Plaintiffs
P Rice, Barrister, Auckland, for the First Defendants

WHITE v BRKIC [2021] NZHC 919 [28 April 2021]

[1]The first defendants have obtained a charging order and sale order over

23.75 hectares of land in the Awhitu Peninsula (the Land) owned by the first named plaintiff, Caroline Ruth White. In doing so, they relied upon a High Court judgment against Ms White and Crummer Trustees No.82 Limited as trustees of the Grafton Road Trust. Ms White says she owns the land, not in her personal capacity, but as a trustee of a separate trust, The Awhitu Trust. Therefore, the land cannot be properly charged or sold. She now seeks orders setting aside the charging and sale orders. The orders sought are opposed by the first defendants. The second defendant abides the decision of the Court.

Factual background

[2] On 1 March 2011, Ms White established the Awhitu Trust as settlor in anticipation of purchasing the land. Ms White and Crummer Trustees No.79 Limited were the original trustees. The discretionary beneficiaries are the final beneficiaries and any issue of any final beneficiary. The final beneficiaries are Ms White, Keegan David Gray and Renee Caroline Gray, the children of Ms White’s partner, John Gray.

[3] Crummer Trustees No.79 Limited ceased to be a trustee on 15 April 2014, when it was liquidated. On 4 September 2014, Ms White appointed her brother, John Seakins White, as a replacement trustee and an additional discretionary beneficiary of the Awhitu Trust. Then on 7 February 2020, Ms White appointed her brother’s daughter, Vaile Seakins White, as an additional discretionary beneficiary of the Awhitu Trust. Vaile White was born seven days earlier, on 31 January 2020.

[4] Ms White says that she and Crummer Trustees No.79 Limited, acting as trustees of the Awhitu Trust, purchased 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 White v Brkic

Details

AGLC: White v Brkic [2021] NZHC 919
Case: [2021] NZHC 919
Decision Date: 28 April 2021

CaseChat Overview and Summary

The case of White v Brkic involves a dispute over the ownership of a parcel of land in the Awhitu Peninsula. Caroline Ruth White and John Seakins White, suing as trustees of the Awhitu Trust, are the plaintiffs. The first defendants are Gordon Brkic, Emilia Brkic, and Nagi Faltaus, suing as trustees of the Madeg Trust. The second defendant, the Sheriff of the High Court at Auckland, has not appeared in the proceedings. The plaintiffs are challenging the validity of a charging and sale order over the land obtained by the first defendants. The first defendants argue that the charging and sale orders are valid because Ms White holds extensive powers over the trust property, which they claim is tantamount to ownership. The central legal issue in this case is whether the extensive powers held by Ms White as settlor, trustee, and beneficiary of the Awhitu Trust render her the legal and equitable owner of the land, thereby invalidating the charging and sale orders. The court held that the plaintiffs have demonstrated, on the balance of probabilities, that Ms White owns the land as a trustee of the Awhitu Trust and not personally. The court found that the trust deed includes a no self-benefit clause, which restricts the exercise of powers by trustees who are also beneficiaries in their own favour. This clause is significant because it expressly provides otherwise to the purported absolute and uncontrolled discretion granted to the trustees. The court concluded that the trust remains a properly functioning trust and is not an objective nullity. Therefore, the court set aside the charging and sale orders and ordered that the land be discharged from the charging order. Costs were to follow the event.

Orders