Court battle to remove sister from family trust

By Sophie Boot

Businessman and philanthropist Hugh Green (left), next to his son John Green in 2011. Photo / Steven McNicholl
Businessman and philanthropist Hugh Green (left), next to his son John Green in 2011. Photo / Steven McNicholl

Two of late NBR Rich Lister Hugh Green's children are asking the Court of Appeal to overturn a ruling that returned control of Green's $400 million business empire to their sister.

Last year, Justice Helen Winkelmann ruled a new will that Green made just months before he died in July 2012 should be overturned, and his children John and Frances removed as trustees of the trusts that control the business empire.

Green's daughter Maryanne, who lost her position as a trustee and director, 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 John and Frances as directors and trustees along with Auckland barrister Michael Fisher.

Mark O'Brien QC, representing the plaintiffs, said the appeal was "not about the money," and Justice Winkelmann had erred in inferring Hugh Green was unduly influenced by his son, John.

"A core part of our submission is Hugh Green remained mentally able and mentally determined right through," O'Brien said, adding that the court needed to look at the facts of the case established in the High Court to determine whether undue influence was the right inference to make.

O'Brien said Maryanne Green had not suggested there was a problem with undue influence until November 2012, and it was not tenable that she and others close to Hugh Green had all been duped.

In the High Court ruling, Justice Winkelmann found that resolutions by the trustees of the two main trusts appointing John and Frances as directors were not validly passed as they didn't have the required majority and that they should be removed. The "level of hostility they 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.

There are long-running tensions between Maryanne and John Green, mainly stemming from his departure from the company and resignation as a trustee in 1994. Justice Winkelmann concluded John had been involved in dishonest transactions in the early 1990s when he was working at Kilmacrennan Livestock, the entity through which Hugh Green conducted his cattle trading business. Maryanne was reluctant to work with John because she believed him to be dishonest and thought he had poor business skills, she told the High Court.

O'Brien today said the hostility between the family members was "certainly not a one-way street" and Maryanne had opposed and undermined John and Frances.

Justice Stephen Kos, the new president of the Court of Appeal, said the court may remove Maryanne as a director but if it did that, it may not reinstate John and Frances.

"If Maryanne goes, the outcome may be that they all go, because this situation is insoluble, it's hopeless," Justice Kos said. "We have to produce an outcome in terms of trustee appointment which does justice to the beneficiaries."

O'Brien suggested the three siblings could all be trustees with professional trustees also appointed and said the family would accept that. Justice Rhys Harrison said that would not be responsible, based on the evidence, and his experience with professional trustees was that they would not take an appointment where co-trustees were family members who were in a dispute.

Justice Harrison also said it seemed to him the appeal "might be largely academic" due to other proceedings taken by John and Frances to remove Maryanne as a trustee, as well as proceedings to determine whether adopted members of the family could be beneficiaries of the trust.

"The battle could continue on the same sort of issues, which would be a terrible thing," Justice Harrison said.

The trial is set down for four days and continues this afternoon.

- BusinessDesk

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