It
was the views of an 86 year old matriarch that won out in a dispute over the
sale of eleven hectares of valuable land on the outskirts of west Auckland
owned by a family trust. The High Court
ruled she did not act improperly when removing her daughter and a local
solicitor as trustees following arguments over the method and timing of any
sale.
The Harre family
established a family trust in 1989 which took ownership of eleven hectares of farm
land on Totara Road, Whenuapai. The land
is not economic as a farm, but has been used to run dry stock. Now worth millions, its value is expected to
increase as Auckland expands.
The Trust land is all
that remains of a farm which has been in the Harre family since the 1860s. At age 86, Lois Harre is the oldest living
descendant. Her descendants and their
spouses are named as beneficiaries of the Trust. The court was told there had been a family
meeting in late 2009 with general support for a sale. Dissension followed within the family about
what should happen: one daughter looking for an immediate sale; a son looking
to wait and subdivide later before selling.
Matters reached a head
when two of the trustees, daughter Lynette Clark and solicitor Colin Lucas took
steps to market the property and it was listed for auction in March 2012. The auction was cancelled following
objections by matriarch Lois and a son, Roderick.
Evidence was given
that Lois then used her power of appointment in the Trust deed to appoint
herself and son Roderick as trustees.
Colin Lucas was removed as trustee at the same time. When daughter Lynette objected, she too was
removed as trustee.
The High Court was
asked to rule on who were now in charge of the Trust. The two dismissed trustees claimed to still
be trustees and they claimed the appointments of Lois and Roderick were made
for improper reasons. It was alleged
that Roderick was attempting to misuse his position as trustee to buy some of
the land cheaply. It was also alleged
Lois was angling to continue using the Trust land. The court was told she lives on an adjoining
property.
The power in a trust
deed to appoint and remove trustees must be used for a proper purpose,
consistent with the purpose of the trust and in the best interests of the
beneficiaries as a whole. Justice Brewer
described Lois Harre as a determined and formidable person. He said the dismissed trustees had failed to
prove on the balance of probabilities that the two new trustees had been
appointed for an improper purpose.
Harre
v. Clark – High Court (16.10.14)
14.048