Justice Helen Winkelmann ruled a new will Hugh Green made just months before his death should be overturned and family members removed as trustees of the trusts that control the business empire.
Maryanne Green, the daughter of the late NBR Rich Lister Hugh Green, has won a High Court challenge over control of his $400 million business empire.
Justice Helen Winkelmann ruled a new will Hugh Green made just months before his death should be overturned and family members removed as trustees of the trusts that control the business empire.
Mr Green, an Irishman who arrived penniless in New Zealand in 1951, built his wealth through construction, farming and property investment, before he died at the age of 80 in July 2012.
His assets were managed through several trusts, including the Hugh Green Trust and the Hugh Green Property Trust, while the family's charitable endeavours were channelled through a foundation. The beneficiaries of the trusts are Hugh Green's wife Moira, their three children, and grandchildren.
Maryanne Green, who lost her position on the trust, sought a ruling in the High Court at Auckland, challenging the validity of a new will that her father signed in April 2012, three months before he died of cancer. The only change in the will was adding his son John and daughter Frances as directors and trustees within the business empire along with Auckland barrister Michael Fisher.
They were also made executors of the will. This small change had considerable significance for control of the Green Group because it is the executors who appoint trustees for the various trusts while the estate is in the administration phase. The trusts control the group.
Maryanne Green, who had been chief executive of the family business from 1997 to 2012, argued the will was invalid because her father lacked testamentary capacity when he executed it, and also because he was subject to undue influence exercised by his son and Mr Fisher.
In a written ruling, Justice Winkelmann said the new will should be overturned because Hugh was subject to undue influence from his son, John, when he executed it, "such that he was not exercising his own free will when exercising those powers and making those decisions." That included making a decision to remove Maryanne as a trustee and director.
"It follows that the will is invalid and I therefore order a recall of the grant of probate for the will," the judge said, despite her finding that Hugh hadn't lacked capacity when making those decisions.
She found that resolutions by the trustees of the two main trusts in appointing John and Frances as directors were not validly passed as they didn't have the required majority and that they should be removed given the "level of hostility they feel and exhibit" towards their sister and niece, Alice Piper, was sufficient to mean the trusts couldn't operate for the benefit of all its beneficiaries.
There had been long-running tensions between Maryanne and John, mainly stemming from his departure from the company and resignation as a trustee in 1994. He left following an investigation into cattle trading when he was working at Kilmacrennan Livestock, the entity through which Hugh Green conducted his cattle trading business.
Following his later return from Australia, Hugh Green wanted John to share the running of his business empire with Maryanne but she told the court she was reluctant to allow him to be in a position of joint responsibility because she believed him to be dishonest as a result of the earlier incident. She also said he had poor business skills evidenced by his father having to bail him out of failed business ventures on more than one occasion.
John has denied any wrongdoing but Justice Winkelmann concluded the evidence established that, in the early 1990s, he had been involved in dishonest transactions, using Kilmacrennan funds in an unauthorised way, sometimes keeping them for his own purposes, and creating documentation which misrepresented the nature of the transactions. These transactions led to a shortfall of stock against what the company's records disclosed to the tune of $276,000.
"In making these findings I bear in mind the seriousness of the findings for John. I have only made findings I consider to be supported by very strong evidence," the judge said.
Justice Winkelmann's preliminary view for the appropriate next steps were to remove Mr Fisher as a trustee and reinstate Maryanne, and to declare invalid Hugh's votes to remove Maryanne as a director and appoint Mr Fisher.
Maryanne has also sought an inquiry into the consequences of the court finding in her favour because the judgment has flow-on consequences to the decisions taken by trustees and directors who were not validly appointed.
A further hearing was set to make orders removing Mr Fisher, John, and Frances, as trustees and appointing an interim trustee or trustees and what to do about Maryanne's status as trustee. The judge also banned the existing trustees from taking any further steps in their role without further order of the court.
(BusinessDesk)
