First use of new powers allowing receivers to take control of deadlocked family trusts was put on hold by the High Court. In the absence of pressing commercial necessity, all affected parties must be given a chance to present their side of the story in court.
The Reaney Family Trust owns property in Pukekohe, south Auckland. Husband and wife Anthony and Jennifer Reaney are trustees, together with Jennifer’s mother Diane. The High Court was told all three lived together on the property; but Anthony and Jennifer are now estranged and Diane plans a move into a retirement village. Jennifer and her mother are looking to sell the Pukekohe property. Anthony refuses to sell, saying he will only agree once Jennifer resumes their relationship.
A February 2021 sale at an above-market valuation fell through after Anthony refused to sign the contract. Jennifer and her mother took to the High Court, asking the court to exercise new powers in the Trusts Act to remove Anthony as trustee and appoint a receiver to take control of the Trust’s only asset: the Pukekohe property. Anthony was given no notice of the court application.
Justice Jagose ruled a ‘without notice’ application will be heard only if absolutely necessary. Giving Anthony notice and allowing him to give evidence would not cause ‘undue delay or prejudice,’ he ruled. There was no evidence of a pressing commercial need to remove Anthony as trustee, expediting a sale.
Reaney v. Reaney – High Court (14.04.21)
21.068