PALEAE v PALEAE [2017] NZHC 2007

PALEAE v PALEAE [2017] NZHC 2007

It is expedient to appoint new trustees because the existing trustees have failed in their duties and have obstructed refinancing, and it is impracticable to effect any change without court assistance; the applicants (Kristina and Ann) are the persons best placed to act as trustees. However, the court will not make a final substitution order that would breach the trust deed requirement for a minimum of four trustees (clause 14.2) and therefore will require further directions before making a final appointment.

Citation
[2017] NZHC 2007
Parties
Plaintiff / Trustee of the Paleae Number Two Family Trust: Tina Kristina Paleae; Plaintiff / Trustee of the Paleae Number Two Family Trust: Anatasia Siauini; Defendant / Trustee of the Paleae Family Trust: Moana Paleae; Defendant / Trustee of the Paleae Family Trust: Tiana Paleae; Defendant / Trustee of the Paleae Family Trust: Ioane Paleae; Defendant / Trustee of the Paleae Family Trust: Tina Paleae
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 August 2017
Procedural Posture
Application Under Trustee Act 1956 S51 for Appointment of New Trustees and Alternative Vesting Orders / Interim Judgment Following Formal Proof; Matter Reserved for Further Direction
Outcome
Interim judgment: Court indicates it would appoint the plaintiffs (Tina Kristina Paleae and Anatasia Siauini) as new trustees in substitution for the existing trustees but will not make a substitution order that breaches clause 14.2 of the trust deed; matter is reserved pending memorandum on how clause 14.2 issue is...
Legal Topics
Appointment of Trustees, Removal of Trustees, Substituted Service, Trust Deed Interpretation, Refinancing and Security of Trust Property
Trusts Property Equity Civil Procedure Appointment of Trustees Removal of Trustees Substituted Service Trust Deed Interpretation +1 more

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Parties

Tina Kristina Paleae

Plaintiff / Trustee of the Paleae Number Two Family Trust

Anatasia Siauini

Plaintiff / Trustee of the Paleae Number Two Family Trust

Moana Paleae

Defendant / Trustee of the Paleae Family Trust

Tiana Paleae

Defendant / Trustee of the Paleae Family Trust

Ioane Paleae

Defendant / Trustee of the Paleae Family Trust

Tina Paleae

Defendant / Trustee of the Paleae Family Trust

Procedural Posture

Application Under Trustee Act 1956 S51 for Appointment of New Trustees and Alternative Vesting Orders / Interim Judgment Following Formal Proof; Matter Reserved for Further Direction

Legal Issues

  1. 1 Whether it is expedient to appoint new trustees under s 51 Trustee Act 1956
  2. 2 Whether it is inexpedient, difficult or impracticable to appoint new trustees without court assistance
  3. 3 Whether the court can substitute trustees where the trust deed requires a minimum number of trustees (clause 14.2)

Ratio Decidendi

It is expedient to appoint new trustees because the existing trustees have failed in their duties and have obstructed refinancing, and it is impracticable to effect any change without court assistance; the applicants (Kristina and Ann) are the persons best placed to act as trustees. However, the court will not make a final substitution order that would breach the trust deed requirement for a minimum of four trustees (clause 14.2) and therefore will require further directions before making a final appointment.

Court Disposition

Interim judgment: Court indicates it would appoint the plaintiffs (Tina Kristina Paleae and Anatasia Siauini) as new trustees in substitution for the existing trustees but will not make a substitution order that breaches clause 14.2 of the trust deed; matter is reserved pending memorandum on how clause 14.2 issue is...

Orders

  • Service on first to third defendants proved (service effected 17 February 2017) and on fourth defendant pursuant to substituted service order (March 2017)
  • Court indicates it would appoint plaintiffs as substitute trustees in substitution for Moana, Tiana, Ioane and Tina but will not make final substitution order unless minimum number of trustees required by clause 14.2 is maintained