ADDLEMAN v LAMBIE TRUSTEE LIMITED [2018] NZCA 616

ADDLEMAN v LAMBIE TRUSTEE LIMITED [2018] NZCA 616 [20 December 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA545/2017[2018] NZCA 616BETWEEN PRUDENCE ANNE ADDLEMANAppellantAND LAMBIE TRUSTEE LIMITEDRespondentHearing: 27 September 2018Court: Kós P, Miller and Clifford JJCounsel: A S Ross QC and R A Rose for AppellantD A T Chambers QC for RespondentJudgment: 20 December 2018 at 10.00 amJUDGMENT OF THE COURTA The application to adduce further evidence is granted.B There is no order for costs.____________________________________________________________________REASONS OF THE COURT(Given by Kós P)[1] This is an application to adduce further evidence on appeal.Background[2] In 1972 Annette Jamieson, then aged 19, dived into a tidal pool near Sydneyand broke her spinal cord. She became a quadriplegic. A negligence claim againstthe local authority succeeded and in 1981 the authority paid Ms JamiesonAUD 1,029,084.[3] She entrusted the funds to her father, a businessman who had been ina substantial way, but who in 1982 was declared bankrupt. The family continued tolive in Australia. Ms Jamieson needed constant nursing care. In 1986 a substantialpart of the award was invested in a subdivision opportunity at Howick, near Auckland,that was being promoted by a cousin of Ms Jamieson, a Mr Palmer. A company,Howick Parklands Ltd (HPL), was formed to undertake the subdivision. Mr Palmerand a solicitor held the shares in HPL. Mr Palmer's evidence was that he heldthe shares on behalf of Mr and Ms Jamieson.[4] In due course the shares in HPL were transferred to the Lambie Trust. This wassettled in 1990, the settlor being Mr Palmer.[5] The respondent company, Lambie Trustee Ltd, has since 2006 been the soletrustee of the Lambie Trust. That company, in turn, is controlled by Ms Jamieson.The appellant, Mrs Addleman, is her elder sister and a businesswoman living inEngland.[6] The final beneficiaries of the trust are Ms Jamieson, Mrs Addleman and twocompanies controlled by Ms Jamieson. Discretionary beneficiaries are the finalbeneficiaries, any spouse or issue thereof, and any charitable object.[7] In 2000 Mr and Ms Jamieson, discussed Mrs Addleman receiving 25 per centof the capital of the trust. Ms Jamieson became a trustee, and Mr Jamieson retired.He died in 2001.[8] In 2002 the trust distributed NZD 4,257,000 to Mrs Addleman. At the time,the trustees wrote to her stating that this amounted to a full and final distribution fromthe trust to her.[9] In 2003 Mrs Addleman's then-solicitors made certain enquiries as to whetherthe distribution represented her "proper entitlement". In 2014 Mrs Addleman took thisissue up again. Her solicitors wrote to the trustee requesting information overa 24-year period in order to "ensure the Trust property is being properly managed andthere is proper accountability of the trustees in terms of the Trust deed". After furthercorrespondence, and some additional disclosure by the trustee, Mrs Addleman issuedproceedings in June 2015.[10] The claim issued is a wide-ranging claim for financial and transactionalinformation for the trust and any trust "subsidiaries", including HPL. The full list isset out in Woolford J's High Court judgment, the subject of this appeal.1Judgment appealed[11] Woolford J dismissed Mrs Addleman's claim. It suffices to quotethe penultimate paragraph of his judgment:2 I do not think it is appropriate for the court to exercise its supervisoryjurisdiction to order disclosure to [Mrs Addleman] of all or any ofthe information sought by her. The Trust deed is not to be interpreted inisolation from its context. The Trust was settled with the primary purpose ofensuring [Ms Jamieson's] welfare and financial security. Her needs are great.[Mrs Addleman] has already received a generous distribution from the Trust.She has no need for further provision. I accept there is no real prospect of herreceiving any further distribution. [Mrs Addleman] claims to be only afterinformation but I am of the view that the provision of that information may welllead to further intra-familial discord. [Ms Jamieson's] privacy should berespected.[12] Mrs Addleman appealed to this Court.Application to adduce further evidence[13] The appeal was set down to be heard on 27 September 2018. Submissions onthe substantive appeal were filed by the appellant on 31 August 2018. But then on7 September 2018 she filed the present application to adduce further evidence onthe appeal. That evidence consists, principally, of documentary material obtainedfrom Archives New Zealand relating to Land Settlement Promotion and LandAcquisition Act 1952 and Overseas Investment Commission consent decisions for1 Addleman v Lambie Trustee Ltd [2017] NZHC 2054 at [23].2 At [74] (footnote omitted).the Howick land (involving HPL, and two Panamanian companies, Recibo ShippingSA and Lake Real Estate SA). These included a statutory declaration by Mr Palmerthat the latter company was beneficial owner of 99 per cent of HPL. Also sought tobe adduced are Panamanian company records showing the two companies wereformed in 1976 and 1986 respectively and appear to be Jamieson-family companies.There is no reference to Ms Jamieson in either record.[14] It was accepted by the appellant that the application needed to be resolvedbefore the appeal. The fixture for the latter was vacated.[15] Mr Ross QC for the appellant submits that these documents should have beendiscovered by the respondent. Shortly before trial the respondent had particularisedallegations that the trust capital was sourced ultimately and solely fromthe 1981 damages award. The new documentary evidence is said to be adverse to thatallegation. In the circumstances, the documents are fresh (they could not readily havebeen obtained before trial), credible (they are official records) and cogent (they arevery relevant to the allegation as to source of capital).[16] Ms Chambers QC for the respondent submits that these were not documentsLambie Trustee Ltd was bound to produce, being archival records of the governmentsof New Zealand and Panama. Ms Chambers submits the evidence is not fresh:the source of the Lambie Trust's capital had been put in issue by the appellant as earlyas November 2014 (in correspondence). She had always alleged that the funding ofthe trust came from sources beyond the damages award, including from other familymoneys in which she might well have a legatee's interest. Ms Chambers also submitsthe documents are not cogent because they do not suggest other sources contributedto the Lambie Trust's capital. They do not show funds transfers. They did not impugnthe essence of Mr Palmer's evidence, which was that Mr Jamieson had told him,repeatedly, that the source of the funding for HPL was the damages and that the trust(which took over HPL) was to benefit Ms Jamieson.Our assessment[17] We infer, as the Judge did, that the claim is brought by Mrs Addleman asa precursor to a further claim against the trust for a second distribution of capital — ifit can be established that Mr Jamieson contributed some of his own funds tothe Lambie Trust. That claim might be cast either as an informal request to the trusteefor further distribution, or as a claim for breach of trustee duty.[18] Regardless of whether a further claim is advanced, the original source ofthe capital was treated by everyone, including the Judge, as a relevant enquiry indetermining the current claim to access to information. That is because a relevantconsideration identified by the Supreme Court in Erceg v Erceg was:3The nature of the interests held by the beneficiary seeking access. The degreeof proximity of the beneficiary to the trust (or likelihood of the requestingbeneficiary or others in the same class of beneficiaries benefitting fromthe trust) will also be a relevant factor.[19] Two considerations arose in the Court below. The first was identification ofthe true object of the trust. The respondent asserted that it was to protect the welfareof Ms Jamieson, and that Mrs Addleman was a "backstop" beneficiary to succeed tothe capital in the event Ms Jamieson died early. However the trust deed does not statethat its primary object is to protect the interests of one beneficiary over another.Nor does it state that Mrs Addleman's expectations as a discretionary beneficiary areto be less than those of Ms Jamieson, also as a discretionary beneficiary. That maywell be what was intended, but the deed does not say it. The trust is now effectivelyin Ms Jamieson's control, as the respondent trustee is controlled by her.[20] The second was the source of the trust capital. The respondent asserted thatMs Jamieson's funds were the "sole source" of the trust funds. Ms Jamieson gaveevidence that the land was purchased for NZD 2 million, from the damages award,which had in the meantime been invested at high interest rates in Australia.4Mr Palmer gave evidence supporting Ms Jamieson.3 Erceg v Erceg [2017] NZSC 28, [2017] 1 NZLR 320 at [56(c)].4 The total purchase price was NZD 4 million, but the balance was met by land sales.[21] The Judge accepted Mr Palmer's evidence that the funds HPL received viaMr Jamieson were beneficially owned by Ms Jamieson. He concluded that there wasno evidence that Mr Jamieson had introduced any funds into the trust, and that it waslikely the sole source of capital was indeed the damages award.5 He concluded alsothat the Lambie Trust was settled for the primary purpose of ensuring Ms Jamieson'swelfare and financial security, and that Mrs Addleman "was only included asa beneficiary on a contingent basis in case Annette died at an early age".6[22] We accept that the documentary material which the appellant now seeks toadduce is capable of being construed so as to place the former conclusion in doubt.7Given the focus in the claim on the source of funding, we think it is material thatshould probably have been identified as relevant by the respondent, albeit that it wasnot in its possession. Indeed, it is somewhat surprising to us how little financialinformation as to the source of funds for the 1986 investment in HPL was produced.[23] We accept that the documentary evidence the appellant seeks to adduce onappeal is cogent, in the sense that it is capable of affecting one of the bases on whichthe Judge reasoned to the result he reached. It is credible, because it consists ofcontemporaneous records held in government archives. It is, by a fine margin, fresh,because we consider its existence probably ought to have been adverted to bythe respondent in discovery.[24] That said, greater diligence by the appellant would have identified thismaterial, and far earlier. The New Zealand archival material was identified usingArchives New Zealand's Archway database on 28 August 2018, and physicallyaccessed the same day. The Panamanian companies' material was accessed at the sametime. Loss of the appeal fixture was therefore entirely avoidable. For these reasons,we are not disposed to order costs on this application.Result[25] The application by the appellant to adduce further evidence is granted.5 Addleman v Lambie Trustee Ltd, above n 1, at [67].6 At [66].7 That construction is by no means inevitable, however.[26] There is no order for costs.Solicitors:Bell Gully, Auckland for AppellantKemps Weir Lawyers, Auckland for Respondent