Court of Appeal rejects claim by two of Hugh Green's children to family trust

The Court of Appeal has rejected an attempt by two of deceased NBR Rich Lister Hugh Green's children to have their sister removed as trustee of the $400 million family property business, and has declined to reinstall the siblings to the trust because of their intense hostility and attempts to remove an adopted grandchild as a beneficiary of the trust.

Siblings Frances and John Green asked the appeal court to throw out the High Court's ruling last year which removed them as trustees of one of the trusts that control the business empire and reinstated their sister Maryanne Green, following Justice Helen Winkelmann's ruling that a new will that Mr Green made just months before he died of cancer in July 2012 should be overturned.

The only change in the will was adding John and Frances as directors and trustees along with Auckland barrister Michael Fisher.

In the High Court ruling, Justice Winkelmann found that Hugh Green had been vulnerable and John had instigated Maryanne's removal in 2012. The "level of hostility they [John and Frances] feel and exhibit" towards their sister Maryanne and niece, Alice Piper, was sufficient to mean the trusts couldn't operate for the benefit of all its beneficiaries, she said.

The Court of Appeal today backed that ruling. The bench found that Justice Winkelmann had adequately considered evidence from Hugh Green's friends and wife when considering whether he was vulnerable and that she was justified in her finding of undue influence on Hugh Green and reinstallation of Maryanne.

John and Frances initially asked the appeal court to reappoint them to the trust, but after the hearing filed a memorandum withdrawing that submission and requesting Maryanne be removed and the trust be solely operated by independent trustees.

The high court judge ordered John and Frances' removal for two reasons: the level of hostility they exhibited towards Maryanne and Alice Piper, and in relation to John, his past theft from a company owned by the family trust while a trustee.

Justice Winkelmann said John and Frances were hostile to the point the trust couldn't be properly run to benefit all the beneficiaries and pointed to their unwillingness to communicate with Maryanne and Alice and consider their needs, in contrast to the way they treated John and Frances' children.

After Hugh Green's death, John and Frances questioned whether Alice was eligible as a beneficiary as she was adopted. If adopted beneficiaries were excluded, most of the wealth Hugh created would ultimately go to John and Frances' six children.

The appeal court said this position reinforced Justice Winkelmann's view that John and Frances couldn't be relied on to act in Alice's wishes, and didn't sit easily with their claim to want to honour Hugh's wishes, so declined to interfere with the ruling to remove them as trustees.

"During the hearing, both sides professed to know Hugh's wishes. But one thing is beyond all doubt. Hugh would not have wanted to see the children he loved embroiled in wasteful and destructive litigation," the appeal bench said in their ruling.

"There are no fewer than three proceedings on foot, with the prospect of more to come. The measures put in place by Justice Winkelmann are working well, but they are only interim stop gap measures. There is a need for a permanent solution, which ultimately can only be achieved by the family itself."

The bench was also critical of the conduct of Michael Fisher, who played golf with John and had known him since they were teenagers. Mr Fisher had purported to act as Hugh's primary legal adviser from November 2011, and drafted the documents for Maryanne's removal and his own appointment as a trustee and director, despite not being the trust's usual lawyer.

Frances and John's lawyer accepted Mr Fisher had been imprudent in his alignment with John but said there was no direct evidence of undue influence from him.

"There was compelling evidence Hugh was not receiving independent advice," the appeal bench said. "His chief adviser throughout the relevant period was a man who was not his usual lawyer, who had minimal contact with him and who was doing the bidding of the person exerting the pressure."

Mr Fisher's involvement had also isolated Hugh Green from his traditional advisers "at the very time when Hugh needed them most, when he was in the last stages of a terminal illness and long-standing arrangements were being radically changed," the judges said.

The costs of all parties will be met by the trust.

(BusinessDesk)

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