Green v Green

• Jurisdiction: New Zealand
• Judge: French J
• Judgment Date: 07 October 2016
• Neutral Citation: [2016] NZCA 486
• Docket Number: CA365/2015 CA411/2015
• Court: Court of Appeal
• Date: 07 October 2016

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

[2016] NZCA 486

Court:

KóS P, Harrison and French JJ

CA365/2015 CA411/2015

IN THE COURT OF APPEAL OF NEW ZEALAND

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.

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

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 challenging the validity of seven of Hugh's decisions on the grounds inter alia of lack of capacity and/or undue influence. 5 She was supported by her daughter, Alice Piper, who was joined to the proceedings as an interested party.

8 The impugned documents included the will signed by Hugh on 26 April 2012 making changes to his executors and trustees. The will retained one of Hugh's oldest and most trusted advisers — a Mr Narev — as an executor, but removed Moira from

that role and added Frances, John and Mr Fisher. This was a significant change. As mentioned, the trust deeds of the Hugh Green and Hugh Green Property Trusts provided that on Hugh's death the power of appointment and removal of trustees would vest in his testamentary executors and trustees. The April 2012 will had been granted probate before Maryanne issued her proceedings and one of the remedies she sought was a recall of that grant

9 The case was heard by Winkelmann J. In a judgment dated 3 June 2015 (the substantive judgment) the Judge made the following key findings: 6

• (a) In so far as there was a conflict between the evidence of Maryanne and the main witnesses called by the appellants, the Judge preferred the evidence of Maryanne. The Judge found Maryanne to be a truthful and reliable witness whose evidence was corroborated by contemporaneous documentation. The Judge did not find John a credible and reliable witness.

• (b) At the time Hugh made all of the impugned decisions he had capacity in the sense that he knew and understood the effect of what he was endorsing.

• (c) Hugh's appointment of John and Frances as trustees of the Hugh Green Trust and Hugh Green Property Trust on 8 November 2011 was not the product of undue influence.

• (d) The appointment of John and Frances as directors of the main companies in the Green Group on 5 December 2011 was not the product of undue influence, but it was invalid because the resolution was not passed by a sufficient number of trustees, as required under the relevant trust deeds.

• (e) Four decisions made by Hugh between 20 December 2011 and 26 April 2012, involving the removal of Maryanne as trustee and

  director, the appointment of Mr Fisher as director and trustee, and the signing of the April 2012 will, were the result of pressure exerted on Hugh by John amounting to undue influence.

• (f) Mr Fisher did not himself consciously apply pressure on Hugh but assisted John to do so.

• (g) On 21 December 2011 Hugh unconditionally reinstated Maryanne as trustee of the Hugh Green Trust and the Hugh Green Property Trust and she was not estopped from asserting otherwise.

10 After delivering the substantive judgment, Winkelmann J gave the parties a further opportunity to be heard on what relief should flow from the findings. In a subsequent relief decision Winkelmann J made various declarations and orders, including the removal of John and Frances as trustees and the appointment of independent interim trustees. 7

11 Dissatisfied with that outcome, John, the other trustees and executors appointed under the April 2012 will and the other trustees of the Hugh Green and Hugh Green Property Trusts then filed appeals against...