Wootton v Wootton - [2020] NZHC 2684

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-300

[2020] NZHC 2684

BETWEEN
MARGARET ANN WOOTTON

Applicant

AND

PHILLIP GARRY WOOTTON

Respondent

Hearing: 5 October 2020

Appearances:

Applicant in person

E Collins and C McDonald for respondent

Judgment:

13 October 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] Mr Phillip Wootton and Ms Margaret Wootton married in December 1993. They separated in January 2006. Their marriage was dissolved in June 2008. They have three children.

[2] In November 2004 Mr and Ms Wootton settled the Wootton Family Trust. They were the settlors, the trustees (along with the Public Trust) and two of the beneficiaries (along with their children and others). As I understand it the Wootton Family Trust was settled with a view to distancing the family’s financial affairs from any risk being assumed by Mr Wootton around this time when he took a shareholding in and became a director of Maycroft Construction Ltd, by which company he had been employed for some time.

[3] Following Mr and Ms Wootton’s separation in January 2006, the resolution of their affairs appears to have been fraught to say the very least. However, not long after

WOOTTON v WOOTTON [2020] NZHC 2684 [13 October 2020]

the dissolution of their marriage in June 2008, the division of their relationship property was resolved by way of a consent order made by the Family Court dated 2 July 2008. Both parties were represented by solicitors and counsel in the proceeding. The order was in conventional terms. It identified assets that were to be received by Mr Wootton and assets that were to be received by Ms Wootton (both of which included assets then owned by the trustees of the Wootton Family Trust). It contemplated that the assets of the Wootton Family Trust to be received by Mr and Ms Wootton would be resettled on or transferred to new trusts to be settled by each of them. It provided that Ms Wootton was to be removed as a trustee and beneficiary of that trust.

[4] Some time previously, Mr Wootton had, no doubt in anticipation of an earlier resolution of the relationship property dispute, settled two new trusts — the Esrastar Trust (Mr Wootton’s family trust) and the Esrastar Business Trust (Mr Wootton’s business trust). Mr Wootton had by this time begun a new relationship with a Ms Cheryl Vendt whom he subsequently married but who has since died. Mr Wootton was the settlor of the new trusts. He and Ms Vendt were trustees and beneficiaries. During the course of the hearing before me these trusts were consistently referred to by Ms Wootton as shams, although I am unsure why.

[5] The Family Court order was to be implemented within 14 days. Implementation was delayed. That is unsurprising. I infer nothing from it (other, perhaps, than ongoing difficulty between Mr and Ms Wootton). It is not suggested in this proceeding that it was not fully implemented in all…

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 Wootton v Wootton

Details

AGLC: Wootton v Wootton [2020] NZHC 2684
Case: [2020] NZHC 2684
Decision Date: 13 October 2020

CaseChat Overview and Summary

Phillip Garry Wootton and Margaret Ann Wootton were married in 1993 and separated in 2006. Their marriage was dissolved in 2008. The dispute arose from the resolution of their relationship property, which was settled by a consent order made by the Family Court in 2008. The order provided for the division of assets, including those held in the Wootton Family Trust. Following the implementation of the order, Mr Wootton executed deeds transferring assets from the Wootton Family Trust to new trusts settled by him and Ms Wootton. Ms Wootton lodged caveats against three properties owned by the trustees of Mr Wootton's family trust, claiming a beneficial interest in them as cestui que trust. She sought an order under s 143 of the Land Transfer Act 2017 sustaining the caveats, relying on s 138(1)(b) of the Act, which provides for caveats to be lodged on the basis of a beneficial estate or interest in the land under an express, implied, resulting, or constructive trust.

The primary legal issue was whether Ms Wootton had a reasonably arguable claim to a legal or equitable interest in the properties over which the caveats were lodged. The court considered Ms Wootton's argument that Mr Wootton had committed fraud or deceit by withholding information about an increase in the value of the shares in Maycroft Construction Ltd, resulting in a material imbalance in the division of assets. However, the court found no evidence of material non-disclosure by Mr Wootton in the Family Court proceeding. Furthermore, the court found that there was no prospect of tracing the proceeds of the alleged fraud into the properties in question.

Associate Judge Johnston dismissed Ms Wootton's application, holding that she could not establish an arguable claim to a proprietary interest in the properties. The court ordered that Mr Wootton was entitled to require the removal of the caveats over the two properties owned by the trustees of his family trust and to the immediate release of the monies held in trust by Collins & May, being the proceeds of the sale of the third property. The court also indicated that Mr Wootton was entitled to his costs on a 2B basis, unless the parties could resolve the costs issue themselves.

Orders