Young v Young - [2020] NZHC 2569

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2020-425-057

[2020] NZHC 2569

UNDER the Trustee Act 1956

IN THE MATTER

of an originating application

BETWEEN

JULIA MAREE YOUNG and MITCHELL LACHLAN YOUNG

Applicants

AND

LACHLAN BRUCE YOUNG and DAVID

JOHN GRAY, as trustees of the MODERATE TRUST

Respondents

Hearing: Determined on the papers

Counsel:

J W J Graham for Applicants

Judgment:

1 October 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

(in respect of application for leave to utilise originating application procedure)

This judgment was delivered by me on 1 October 2020 at 11am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 1 October 2020

YOUNG v YOUNG [2020] NZHC 2569 [1 October 2020]

[1] The applicants, Julia Maree Young and Mitchell Lachlan Young, seek leave to use the originating application procedure for a proceeding in which they seek the removal of the respondents as trustees of the Moderate Trust and the appointment of an independent trustee in their place.

[2] The applicants are the children of the first named respondent, Lachlan Bruce Young. David John Gray, of Gore, is a solicitor trustee.

[3] The Moderate Trust was settled in March 2000. The initial trustees were Lachlan Young and his wife, the applicants’ mother, Natalie Young. Unfortunately, Natalie died less than two years after the Moderate Trust was created. In 2009, Lachlan married Patricia Young.

[4] At the heart of the proposed proceeding is the relationship between the Moderate Trust and a separate trust, the L&P Trust, of which the applicants are not beneficiaries. The reference to L&P is presumably to Lachlan and Patricia.

[5] The applicants complain they have been provided with insufficient or incomplete information regarding the financial affairs of the Moderate Trust, but from the information they have received, they have identified there is an advance of over
$570,000 made by the Moderate Trust to the L&P Trust. Title searches show the L&P Trust has acquired four properties. The applicants are concerned that funds of the Moderate Trust, which could have used to build its asset portfolio, were diverted to the L&P Trust.

[6] The applicants do not have details of the L&P Trust but it is a reasonable inference from the contents of the affidavit of Ms Young, in support of the substantive application, that Lachlan Young is a trustee of the L&P Trust. Accordingly, the situation has the appearance of Lachlan Young being in a conflict of interest situation where funds have been advanced from one Trust of which he is a trustee and beneficiary, to another trust in which it is assumed he is a trustee and beneficiary.

[7] The evidence in support of these concerns includes the transcript of a family meeting held earlier this year. Ms Julia Young, with everyone’s consent, made a voice

recording of the meeting. The transcript of that meeting attended by Lachlan Young suggests he agreed everything that had gone into the L&P Trust using funds from 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 Young v Young

Details

AGLC: Young v Young [2020] NZHC 2569
Case: [2020] NZHC 2569
Decision Date: 1 October 2020

CaseChat Overview and Summary

In the High Court of New Zealand, the applicants Julia Maree Young and Mitchell Lachlan Young sought leave to use the originating application procedure for a proceeding to remove the respondents, Lachlan Bruce Young and David John Gray, as trustees of the Moderate Trust and to appoint an independent trustee in their place. Julia and Mitchell are the children of Lachlan, who is one of the trustees, and the application was brought under the Trustee Act 1956. David John Gray is a solicitor who is also a trustee. The applicants alleged that they had been provided with insufficient or incomplete information regarding the financial affairs of the Moderate Trust, and they were concerned that funds from the Moderate Trust had been diverted to another trust, the L&P Trust, of which they are not beneficiaries.

The primary legal issue before the court was whether it was in the interests of justice for the applicants to use the originating application procedure to bring the proceeding, instead of initiating the proceeding under part 19 of the High Court Rules 2016. The court considered various factors, including whether the exchange of statements of claim and defence were needed to better define the issues between the parties, whether interlocutory procedures were required to resolve issues, whether the application was straightforward, and whether the application involved multiple parties or cross-claims.

The court found that it was appropriate for the applicants to use the originating application procedure because there were no significant factual disputes, and the rules concerning trustee’s duties and conflicts of interest were well settled. The applicants had obtained accounts that confirmed the existence of advances by the Moderate Trust to the L&P Trust, and the conflict of interest such created for Lachlan. The court granted leave to the applicants to bring the proceeding by way of an originating application, and directed that the proceedings be served on the respondents and their sibling, Livia Jayne Young.

In summary, the court granted leave for the applicants to use the originating application procedure to bring a proceeding to remove the respondents as trustees of the Moderate Trust and to appoint an independent trustee in their place, on the basis that there were no significant factual disputes and the rules concerning trustee’s duties and conflicts of interest were well settled. The applicants had obtained accounts that confirmed the existence of advances by the Moderate Trust to the L&P Trust, and the conflict of interest such created for Lachlan. The court directed that the proceedings be served on the respondents and their sibling, Livia Jayne Young.

Orders