EASTON v THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED [2021] NZHC 2084 [12 August 2021]

EASTON v THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED [2021] NZHC 2084 [12 August 2021]

The trustee did not breach trust in selling the farm; its decisions to proceed to market and to accept the neighbour's unconditional offer were reasonably open to it, it properly considered the settlors' memorandum of wishes and the plaintiff's offers, no dishonest conduct by the trustee was established, and the shareholder oppression claim under s 174 also failed; plaintiff's claims dismissed and only distribution/quantum reserved.

Citation
[2021] NZHC 2084
Parties
Plaintiff/applicant: Ian Charles Easton; First Defendant/first Respondent: The New Zealand Guardian Trust Company Limited; Second Defendant/second Respondent: Ian Easton Limited; Third Defendant/third Respondent: Perpetual Trust Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 August 2021
Procedural Posture
Breach of Trust and Shareholder Oppression (s 174 Companies Act 1993) / Liability Hearing (trial on Liability Concluded; Distribution and Quantum Reserved)
Outcome
Plaintiff's claims dismissed on liability; proceedings adjourned for distribution and quantum if required
Legal Topics
Breach of Trust, Trustee Duties and Discretion, Memorandum of Wishes, Judicial Review of Trustee Decisions, Dishonesty Test for Trustees, Shareholder Oppression (s 174 Companies Act 1993), Legal Professional Privilege
Trusts Company Law Equity Civil Procedure Breach of Trust Trustee Duties and Discretion Memorandum of Wishes Judicial Review of Trustee Decisions +3 more

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Parties

Ian Charles Easton

Plaintiff/applicant

The New Zealand Guardian Trust Company Limited

First Defendant/first Respondent

Ian Easton Limited

Second Defendant/second Respondent

Perpetual Trust Limited

Third Defendant/third Respondent

Procedural Posture

Breach of Trust and Shareholder Oppression (s 174 Companies Act 1993) / Liability Hearing (trial on Liability Concluded; Distribution and Quantum Reserved)

Legal Issues

  1. 1 Whether the trustee breached trust in selling the family farm
  2. 2 Whether the trustee acted dishonestly such that damages are recoverable
  3. 3 Interpretation and weight of the settlors' memorandum of wishes

Ratio Decidendi

The trustee did not breach trust in selling the farm; its decisions to proceed to market and to accept the neighbour's unconditional offer were reasonably open to it, it properly considered the settlors' memorandum of wishes and the plaintiff's offers, no dishonest conduct by the trustee was established, and the shareholder oppression claim under s 174 also failed; plaintiff's claims dismissed and only distribution/quantum reserved.

Court Disposition

Plaintiff's claims dismissed on liability; proceedings adjourned for distribution and quantum if required

Orders

  • Claims dismissed as to liability on both breach of trust and s 174 shareholder oppression causes of action
  • Proceeding adjourned to address distribution of trust assets and quantum only if necessary