It is a common problem in rural New Zealand: how are children to be treated equally when a son is to take over the farm but other siblings want ‘their share’ in cash? With siblings at daggers drawn, the High Court removed all trustees from a Northland family farming trust replacing them as trustee with an independent lawyer having experience in mediating family disputes. This after disruption to the farm’s refinancing, use of trespass notices and moves to keep one son from his mother’s funeral.
Family grievances came to a head following the deaths of brothers Bill and Martin Guest, who had farmed in partnership at Te Kopuru, near Dargaville, since the 1970s. Martin died in 2012; Bill in 2016. Their partnership leased land from each of their respective family trusts, including Martin’s family trust: the M&A Family Trust.
The High Court was told of bad blood between some of Martin’s children and a deadlock in the operation of his family trust: M&A Family. Aaron (on one side) had remained at home to work the farm. His siblings Joanne, Melissa and Philip (on the other side) had left for careers elsewhere. At its simplest: Aaron wants to see the farm kept operational as a viable farming unit; his sisters want to get out cash so all benefit ‘in equal shares’. Aaron has made legal claims against his parents’ estates and M&A Family to keep the farm intact as an economic unit. As a complicating factor, there is a dispute between the brothers’ family trusts over the partnership accounts with allegations accounting trickery has been used to advantage Bill’s family over Martin’s.
Against this background, M&A Family was in turmoil with disputes over who were the current trustees: members of Martin’s family or Anne Warner (previously a business confidante of Martin’s brother Bill). Justice Jagose swept the board clear by removing all claiming to be trustees. Deadlock had arisen over approvals for farm refinancing. Land was sold to get cash and ward off a possible mortgagee sale. Attempts were made to trespass Aaron from the former family home. Aaron was given belated notice of his mother’s death. His siblings omitted him from the order of service for her funeral. Justice Jagose said an independent trustee was needed. Animosity between beneficiaries meant any trust beneficiary also acting as trustee lacked neutrality. He indicated the warring trustees are to bear their own legal costs; M&A Family does not have to pay. Lawyers for each side were asked to agree on a suitable candidate to take over as sole trustee of M&A Family Trust.
Guest v. Warner – High Court (12.04.18)
18.073