Green v Green

CourtCourt of Appeal
Docket NumberCA365/2015 CA411/2015
JudgeFrench J
Judgment Date07 Oct 2016
JurisdictionNew Zealand
Neutral Citation[2016] NZCA 486

[2016] NZCA 486

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

KóS P, Harrison and French JJ

CA365/2015 CA411/2015

Between
John Patrick Green, Michael John Fisher, Frances Kathleen Green and Robert Narev (As Executors and Trustees of the Estate of Hugh Green Under a Will Dated 26 April 2012)
First Appellants
John Patrick Green, Michael John Fisher, Frances Kathleen Green and John James Gosney (As Trustees of the Hugh Green Trust and the Hugh Green Property Trust)
Second Appellants
John Patrick Green
Third Appellant
and
Maryanne Green
Respondent
Counsel:

A H Waalkens QC for First Appellants

M D O'Brien QC for Second Appellants

J A Farmer QC and J D Ryan for Third Appellant

V T M Bruton QC and I Rosic for Respondent

S M Hunter and S H Ambler for Interested Party

Appeal against a High Court (“HC”) decision which unconditionally reinstated the respondent as trustee of two trusts established by the parties deceased father — the HC also found that the removal of the respondent as trustee and director was the result of pressure exerted on the deceased by his son amounting to undue influence — the HC also removed the third appellant and another sibling as trustees — the parties deceased father Hugh Green had founded and operated a group of companies worth hundreds of millions of dollars — the shares in the companies were owned by trusts so that whoever controlled the trusts also controlled the companies — the third appellant and respondent were siblings — the first and second appellants were the trustees — whether the HC had failed to recognise undue influence could only be made out if there was impropriety or unconscionability — whether undue influence must be the only possible hypothesis on the evidence — whether the evidence supported the HC finding of vulnerability and susceptibility — whether the deceased had reappointed the respondent as his trustee when he tore the deed of removal from the trust minute book — whether the HC had been correct to remove the third appellant and sister as trustees.

REDACTED VERSION

NOTE: HIGH COURT ORDER PROHIBITING PUBLICATION OF SPECIFIED DETAILS, INCLUDING THOSE RELATING TO MOIRA GREEN SET OUT AT [61] OF THIS JUDGMENT, REMAINS IN FORCE.

Held: The HC had stated the applicable legal principles relating to undue influence in the following terms: the overall burden of proof was on the person who sought to establish undue influence: the burden of proof was the balance of probabilities: the person asserting undue influence must show the alleged influence led to the making of the impugned transaction, and the influence was undue: the question of whether a transaction was brought about by undue influence was a question of fact and that pressure could amount to undue influence if it overbore the will of the testator.

The doctrine of undue influence was founded on unconscionability in the sense that equity considered it inherently unconscionable for a person to rely on a transaction that had been procured by overbearing another's will. Impropriety or unconscionability was not a prerequisite of undue influence. The essence of the undue influence doctrine was impairment of free will. It was the overbearing of the will that made the influence “undue”. The focus was on the mind of the person consenting to the impugned transaction, not the motives of the person exerting the pressure or influence. M had not been required to demonstrate unconscionability or impropriety on the part of J in order to establish undue influence.

Before the court could be satisfied undue influence had been proved, it must be satisfied that the circumstances raised a more probable inference in favour of what was alleged than not, after the evidence on the question had been evaluated as a whole. The HC had correctly stated the relevant principles. The HC's finding on vulnerability had not been limited to H's declining memory and variable mental state. The HC had also relied on evidence that H was “emotional, tired and increasingly very unwell, he was finding it difficult to make big decisions and had lost either the ability or the will to engage with the detail of business decisions. There was ample evidence to support the HC's finding that H was vulnerable.

MF was a friend of J's. MF's instructions and most communications had been with J. He had very little contact with H. The presence or absence of independent advice was often a critical factor when deciding whether to draw an inference of undue influence. There was compelling evidence H had not received independent advice. The HC had been correct to characterise MF's role as facilitating J's influence, instead of neutralising it and protecting H as he should have done.

It was difficult to conceive of more unequivocal conduct than causing the deeds to be torn from the minute books, handing them personally to the removed trustee and saying in the present tense “you are my trustee”. The executors had not suffered any operative detriment because H had lost the opportunity to remove M. That assertion was contrary to the evidence he would not have exercised that opportunity. H had consistently said he wanted M to remain as his trustee.

An appeal against a court order removing a trustee was an appeal against the exercise of a discretion. The HC had been entitled to rely on J's past dishonesty and J and F's hostility as reasons for removing them as trustees.

The appeal was dismissed.

JUDGMENT OF THE COURT
  • A The application made by the respondent and Alice Piper dated 22 April 2016 for leave to adduce further evidence is granted in relation to the two reports of the interim trustees but declined in respect of the affidavits of Maryanne Green sworn 26 March 2015, 27 March 2015, 31 March 2015 and 26 August 2015.

  • B The second application made by the respondent and Alice Piper dated 9 May 2016 for leave to adduce further evidence is declined.

  • C The appeals in CA365/2015 and CA411/2015 are dismissed. D There is no order as to costs.

REASONS OF THE COURT

(Given by French J)

Table of Contents

Para No

Introduction

[1]

Grounds of appeal

[13]

Applications to adduce further evidence

[17]

The scope of appellate review

[26]

The law relating to undue influence

[35]

Requirement of unconscionable conduct

[38]

Threshold for finding probate undue influence

[45]

Findings of fact

[50]

Vulnerability and Moira

[53]

The role of Mr Fisher and John

[64]

The evidence of Messrs Hickson and Cahill

[79]

Maryanne's refusal to co-operate

[82]

24 July 2011 codicil and 26 April 2012 will

[85]

Belated raising of undue influence by Maryanne

[95]

Conclusion on undue influence

[97]

Invalidity of trustee resolutions on 5 December 2011 appointing Frances and John directors

[100]

Did the Judge err in finding that Hugh reinstated

[105]

Maryanne as trustee effective 21 December 2011?

Conclusion on appeal against substantive judgment — CA365/2015

[119]

Appeal against the relief decision — CA411/2015

[122]

Grounds of appeal

[124]

Analysis

[136]

A final comment

[154]

Outcome of the appeal

[156]

Introduction
1

Mr Hugh Green (Hugh) 1 was an extraordinarily successful businessman. During his lifetime he founded and operated a group of companies worth hundreds of millions of dollars (the Green Group). The shares in the companies are owned by trusts so that whoever controls the trusts also controls the companies.

2

Hugh and his wife Moira had five children: John, Maryanne, Frances, Eamon and Gerard. 2 Maryanne was the only one of the children to work closely with Hugh in the business for any length of time. She first started working for her father in 1987. As at February 2010 she held the position of CEO of the Green Group and was a trustee and director of the main trusts and companies. The two most important trusts were and are the Hugh Green Trust and the Hugh Green Property Trust. 3

3

Hugh and Moira's children and grandchildren, as well as Moira herself, are beneficiaries of both the Hugh Green Trust and the Hugh Green Property Trust. 4 Under the relevant trust deeds Hugh had the sole power of appointment and removal of trustees during his lifetime. The trust deeds also provided that on Hugh's death the power of appointment would vest in the executors and trustees of his estate.

4

In February 2010 Hugh was diagnosed with terminal cancer. That prompted discussion about succession planning. Previously the understanding was that Maryanne would take over from Hugh. However, from around March 2011 Hugh began to express the wish that John and Frances should also become more involved in the business. Maryanne was strongly opposed to John having any significant role because of his past dishonest conduct and because his business practices were so different from her own. Maryanne did not believe John was a fit person to be either a director or a trustee.

5

Tensions arose within the family as various proposals were mooted and debated. Over a period of nine months Hugh made a number of decisions, the combined effect of which was to remove Maryanne completely from control of any aspect of the Green Group and to put John and Frances and a lawyer, Michael Fisher, in charge. Hugh appointed Frances and John trustees on 8 November 2011 and directors of certain Green Group companies on 5 December 2011; removed Maryanne as trustee on 20 December 2011 and director on 2 April 2012; appointed Mr Fisher as trustee on 29 March 2012 and director on 2 April 2012; then on 26 April 2012 executed a new will appointing John, Frances and Mr Fisher as executors and trustees of his estate.

6

Hugh died on 13 July 2012. In September 2012, on the recommendation of Mr Fisher, another lawyer, Mr Gosney, was appointed a trustee and director.

7

Maryanne then issued proceedings in the High Court...

To continue reading

Request your trial
11 cases
  • FONTERRA CO-OPERATIVE GROUP Ltd v MCINTYRE and WILLIAMSON PARTNERSHIP and ORSs
    • New Zealand
    • Court of Appeal
    • 16 November 2016
    ...[17]. 55 Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA). 56 At 198. 57 At 199. 58 Green v Green [2016] NZCA 486 at [31]. 59 The term “entitlement” is used in Fonterra's pleadings. 60 Ithaca (Custodians) Ltd v Perry Corp [2004] 1 NZLR 731 (CA) at [153].......
  • Do Yay Ltd ((in Liquidation)) v WEI and Lodge Food Ltd
    • New Zealand
    • High Court
    • 20 April 2020
    ...when seeing the witnesses provides an advantage because credibility is important; see Austin, Nichols at [13]; and Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [27]–[32]. 8 Austin, Nichols at [16]; and Kacem v Bashir at [32]. 9 Stieller v Porirua City Council [1986] 1 NZLR 84 (CA) at......
  • Hong v Auckland Standards Committee No. 5
    • New Zealand
    • High Court
    • 16 April 2020
    ...when seeing the witnesses provides an advantage because credibility is important; see Austin, Nichols at [13], and Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [27]–[32]. The appellate court may consider it appropriate to give due regard to a specialist Tribunal's assessment: Orlov v......
  • O'Neill v O'Neill
    • New Zealand
    • High Court
    • 13 November 2020
    ...of Drs Vaughan and O'Sullivan, this might have endured until death. Undue influence 40 Principle was affirmed by the Court of Appeal in Green v Green. 12 Transposed to this case: David, Martin and Philippa must prove on the balance of probabilities Judith's influence led to the change about......
  • Request a trial to view additional results