Eggink v Eggink [2014] NZHC 1784 (30 July 2014)

Last Updated: 28 August 2014

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2012-443-458 [2014] NZHC 1784

UNDER	the Trustees Act 1956
AND	Under the Declaratory Judgments Act 1908
IN THE MATTER	of the Estate of HENDRICK EGGINK
AND IN THE MATTER	of the Partnership of the Estate of HENDRIK EGGINK and ANN ELLEN EGGINK
BETWEEN	JOY ELLEN CAMPBELL, MICHAEL RICHARD EGGINK, and ANTONIE HENDRIK EGGINK Fist Plaintiffs
	Continued over the page ...

Hearing: Further Submissions: .	19 February 2014 16 July 2014 (Telephone Conference)
Counsel:	GA Paine for Plaintiffs ARH Laurenson for Defendants R Dunlop in person
Interim Judgment:	30 July 2014

_{INTERIM JUDGMENT OF TOOGOOD J}

This judgment was delivered by me on 30 July 2014 at 11:00 am

Pursuant to Rule 11.5 High Court Rules

_{Registrar/Deputy Registrar}

EGGINK & ORS v EGGINK & ORS [2014] NZHC 1784 [30 July 2014]

AND	ANTONIE HENDRIK EGGINK and MICHAEL RICHARD EGGINK as partners in the ANTONIE HENDRIK EGGINK and MICHAEL RICHARRD EGGINK FARM PARTNERSHIP Second Plaintiffs
AND	ANNE ELLEN EGGINK as partner in the Estate of H EGGINK and ANN ELLEN EGGINK PARTNERSHIP Second Defendant

[1] This interim judgment contains consent orders for the replacement of one of the trustees of a will trust by an independent trustee and the provision to the new trustee of powers enabling him to resolve any dispute between the other two trustees.

Background

[2] Hendrik Eggink died in 1992. He was survived by his widow, Ann Ellen Eggink (“Mrs Eggink”), and five adult children: Joy Ellen Campbell, Michael Richard Eggink, Antonie Hendrik Eggink, Rachel Ann Eggink and Diana Jane Sharp.

[3] In his will, Mr Eggink appointed Mrs Eggink, his son Antonie, and Mr Gavin O’Dea, a local accountant, as executors and trustees. There were no specific bequests. Mrs Eggink was given a life interest in the residuary estate which included the family dairy farm at Arorata, near Hawera. The children and their surviving issue are the residuary beneficiaries in equal shares.

[4] Michael Eggink had the option, upon his mother’s death or during her lifetime if she consented, to purchase the farm at Arorata on terms and conditions fixed by the Trustees. The will provided that any advance to Michael incidental to the purchase would be fixed for a term of ten years at a rate of interest determined by the Trustees.

[5] The will also provided that if the net income from the residuary estate in any one year was not sufficient adequately to provide for Mrs Eggink’s maintenance, the trustees had the power to advance capital to Mrs Eggink on condition that if any such advances were not recouped out of subsequent income they would constitute a debt owing by Mrs Eggink to the trustees at her death.

[6] Mrs Eggink is now infirm and her daughters Rachel and Diana have been given an enduring power of attorney to act on her behalf. It is accepted that she is no longer capable of fulfilling her duties as a trustee of the will trusts.

[7] After Hendrik Eggink’s death, Mr O’Dea was replaced as a trustee, with the

consent of Mrs Eggink and Antonie, by another local accountant, Mr Ross Dunlop.

[8] By arrangement between a partnership formed by Antonie and Michael (“the Antonie and Michael farming partnership”) and a partnership between the estate and Mrs Eggink (“the estate/Ann Eggink partnership”) it was agreed the Antonie and Michael partnership would advance funds to the estate/Ann Eggink partnership to enable the purchase and subsequent erection of a dwelling in Hawera for Mrs Eggink’s exclusive use and occupation. It is said by the plaintiffs that it was agreed that those advances would be treated as a deposit against the future purchase of the farm by Michael pursuant to the option in the will.

The matters in dispute

[9] There has been a falling out between the trustees with the plaintiffs (Joy, Antonie and Michael) as one faction sharing compatible views and Rachel and Diana, individually and in their capacity as attorneys for their mother, as the other faction opposing. It is alleged by the plaintiffs that Mr Dunlop has aligned himself with Rachel and Diana.

[10] In the first cause of action in this proceeding, the plaintiffs seek orders for the removal of Mrs Eggink and Mr Dunlop as trustees and the appointment of a corporate trustee company in their place. In a second cause of action, they seek a declaration that Mrs Eggink is indebted to the Antonie and Michael partnership in respect of the advance for the purchase of her home.

[11] The defendants initially opposed the removal of Mrs Eggink and Mr Dunlop as trustees, but they acknowledge the state of hostility between the family factions. The defendants oppose the declaration as to Mrs Eggink’s indebtedness and, in a cross-claim, they sought orders replacing Antonie as an executor and other orders relating to the administration of the Estate.

The course of the proceeding

[12] In February 2014, I heard evidence from Antonie and Rachel, who were cross-examined, and I considered affidavits filed by other interested parties. At the conclusion of the evidence I met counsel and Mr Dunlop in chambers. After discussions, it was agreed that the hearing would be adjourned before the hearing of submissions to enable the parties to confer with counsel and with each other with a view to resolution of the issue of who should continue to act as trustees of the will trusts.

[13] After the filing of subsequent memoranda, a further hearing was conducted by way of a telephone conference involving counsel and Mr Dunlop. I was asked by the parties to make an order by consent under s 51 of the Trustee Act 1956 replacing Mrs Eggink as a trustee by a senior legal practitioner, Mr Wayne Chapman. It was also agreed that Mr Chapman should have responsibility, in addition to his ordinary duties as a trustee, for assisting with the resolution of any disputes between his fellow trustees, Antonie and Mr Dunlop. Counsel agreed that the conditions attaching to Mr Chapman’s appointment could be made by the Court in the exercise of its inherent powers within the Court’s supervisory jurisdiction over trusts.

Consent orders

[14] Accordingly, I make the following orders by consent:

(a) Ann Ellen Eggink is removed as a trustee of the Estate of Hendrik Eggink and replaced by Wayne Seymour Chapman of Wellington, Solicitor.

(b) Mr Chapman is to have all of the usual powers of a trustee conferred upon him by law and the terms of the will and, in addition, is to have the powers:

(i) to act as an independent trustee in the estate;

(ii) to make binding decisions where the other trustees cannot agree;

(iii) in the event the other trustees agree on a matter but Mr Chapman considers their decision is not in the best interests of the life tenant and/or ultimate beneficiaries, to make a binding decision overruling the other trustees; and

(iv) in any case where the other two trustees cannot agree on a matter, to make a final and binding decision.

[15] The plaintiffs’ claims in the second cause of action are adjourned, to be

brought on for hearing by any party on the giving of not less than seven days’ notice.

[16] Costs are reserved.

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Toogood J