JAN CAROLINE KITE v GRAEME HODGE [2014] NZHC 3025

JAN CAROLINE KITE v GRAEME HODGE [2014] NZHC 3025

The court held that Graeme breached clause 7.3 of the David Hodge Trust by participating in and signing the resolution that approved a capital distribution to himself, and that Graeme and Ms De La Rue breached clause 7.1 of the Kite Family Trust by failing to provide David with the opportunity to vote or express his opinion on the proposed capital distribution; accordingly declarations of breach were made and all present trustees were removed with the Public Trust appointed as sole trustee of the four trusts.

Citation
[2014] NZHC 3025
Parties
First Plaintiff: Jan Caroline Kite; Second Plaintiff: Carla Hodge; First Defendant: Graeme Hodge; Second Defendant: Maureen De La Rue; Third Defendant (corporate Trustee): Hodge Trust Limited; Fourth Defendant (corporate Trustee): Graeme Hodge Trust Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 December 2014
Procedural Posture
Trusts Breach of Trust (capital Distributions) / Judgment on Declarations Application
Outcome
Declarations and orders for plaintiffs: breaches found, trustees removed, Public Trust appointed, costs awarded.
Legal Topics
Capital Distribution, Power of Attorney, Breach of Trust, Trust Deed Interpretation, Trustee Act 1956 S51 Orders
Trusts Fiduciary Duties Equity Trustee Removal and Appointment Capital Distribution Power of Attorney Breach of Trust Trust Deed Interpretation +1 more

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Parties

Jan Caroline Kite

First Plaintiff

Carla Hodge

Second Plaintiff

Graeme Hodge

First Defendant

Maureen De La Rue

Second Defendant

Hodge Trust Limited

Third Defendant (corporate Trustee)

Graeme Hodge Trust Limited

Fourth Defendant (corporate Trustee)

Procedural Posture

Trusts Breach of Trust (capital Distributions) / Judgment on Declarations Application

Legal Issues

  1. 1 Whether Graeme breached clause 7.3 of the David Hodge Trust by participating in and voting for a capital distribution to himself
  2. 2 Whether Graeme and Maureen De La Rue breached clause 7.1 of the Kite Family Trust by failing to give David the opportunity to vote or express his opinion before approving a capital distribution to Graeme
  3. 3 Whether the power of attorney held by Graeme authorised his actions so as to negate any breach of the trustee decision‑making provisions

Ratio Decidendi

The court held that Graeme breached clause 7.3 of the David Hodge Trust by participating in and signing the resolution that approved a capital distribution to himself, and that Graeme and Ms De La Rue breached clause 7.1 of the Kite Family Trust by failing to provide David with the opportunity to vote or express his opinion on the proposed capital distribution; accordingly declarations of breach were made and all present trustees were removed with the Public Trust appointed as sole trustee of the four trusts.

Court Disposition

Declarations and orders for plaintiffs: breaches found, trustees removed, Public Trust appointed, costs awarded.

Orders

  • Declaration that Graeme breached clause 7.3 of the David Hodge Trust by joining in resolution approving a capital distribution to himself
  • Declaration that Graeme and Maureen De La Rue breached clause 7.1 of the Kite Family Trust by failing to provide David with an opportunity to vote or give his opinion on the proposed capital distribution