Originating considerations

The decisions in Francis v Fishbowl Trustee Stanley Limited both include applications for leave to commence proceedings by originating application.

In Francis v Fishbowl, where the substantive proceedings relate to the appointment of a receiver under section 138 of the Trusts Act 2019 the application was not granted. The background to this matter is expressed as follows:

Proceedings in the High Court are normally commenced by filing a statement of claim. However, in addition to proceedings that must be commenced by originating application the High Court has the discretion to permit other proceedings to commence by way of originating application “to secure
the just, speedy and inexpensive determination of any proceeding or interlocutory application.”

Originating applications are:

• “generally used for cases where it is not necessary to have full pleadings and interlocutory steps such as discovery for the proper determination of the issues.” See Fisk v [E] Ltd
• not to be used as a short cut for urgent case. See Hong Kong and Shanghai Banking Corporation v Erceg
• not appropriate where there are factual issues in dispute. See Jones v O’Keeffe

In declining leave Jagose J stated that:

Also see Moore v Horsfield where McHerron J declined leave to commence proceedings filed by a beneficiary seeking the the appointment of Public Trust and the removal of the current trustees on the grounds as noted at [3] that the trustees:

(a) have failed to provide him with basic trust information in a timely manner, or at all;
(b) are unable to properly discharge their fiduciary obligations as trustees as each of them has conflicting professional roles and fiduciary responsibilities as between the Trust and the Estate of Jenny Moore (the applicant’s mother) and the beneficiaries of each of the Trust and the estate;
(c) are mismanaging the estates of the Trust by adopting an “altogether passive approach to the prudent investment of the [Trust’s] assets”, and that they have failed to pursue a clear strategy for obtaining maximum long- or short-term returns and as a result are “dissipating and/or eroding the potential value of the assets to the detriment of all the beneficiaries”;
(d) have failed in their duty to act objectively and in the interests of all beneficiaries of the Trust by permitting Mr Moore’s brother, Roger Moore, to have the sole and free use of the most valuable assets of the Trust (a freehold property at in Feilding), in circumstances where “his free use and occupation is undocumented by resolution or otherwise”;
(e) have conflated their management and administration of the Trust with that of the estate of Jenny Moore, more particularly that they have “expressed that there comprise one global entity for the purposes of making distribution decisions”:
(f) have alleged that Mr Moore and his legal representatives have been threatening or hostile towards them (which allegations are denied).

Leave was denied because as noted by McHerron J at [11]:

By contrast in Thomas v Garnham an application for leave to file by way of originating application was granted respect of an application to remove and replace the executor of an estate pursuant to the Administration Act 1969. As noted by Grau J at [11] “… While there appear to be some intricacies in the factual background to this matter—for example, complicated family dynamics and Mr Garnham’s involvement in the drafting of the Will—the actual factual and legal issues to be determined are confined and can be addressed effectively by way of originating application. I do not consider that statements of claim or statements of defence will be required to help define issues or the scope of the proceedings. The
issue is a relatively straightforward one and involves the application of the provisions in the Administration Act. There is also a limited number of parties.”

References:

• Francis v Fishbowl Trustee Stanley Limited [2024] NZHC 3058
• Trusts Act 2019, section 138
• High Court Rules r 19.2
• Fisk v [E] Ltd [2014] NZHC 2797
• Jones v O’Keeffe [2019] NZCA 222
• Hong Kong and Shanghai Banking Corporation v Erceg (2010) 20 PRNZ 652
• Moore v Horsfield [2024] NZHC 3179