IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE	
CIV 2016-470-000195
[2019] NZHC 554	

BETWEEN	NATHAN CHARLES POLLOCK and LETITIA JANE POLLOCK
Plaintiffs	
AND	CHERYL LINDA POLLOCK
First Defendant & Ors	

	CIV 2017-470-000060	

BETWEEN	
STEVEN REX POLLOCK
Plaintiff	
AND	CHERYL LINDA POLLOCK and PETER EDMOND WASHER
As executors, trustees and administrators of estate of R D Pollock
First Defendant & Ors	
	continued overleaf	

Telephone Hearing:	21 March 2019	
Appearances:	G C McArthur for Letitia Pollock
D Fraundorfer and P Allan for Steven Pollock P J Morgan QC for Cheryl Pollock
K J Catran for Executors	
Judgment:	25 March 2019	

JUDGMENT OF VAN BOHEMEN J
(on applications for leave to amend proceedings)

This judgment was delivered by me on 25 March 2019 at 2.00pm
Pursuant to Rule 11.5 of the High Court Rules

…………………………
Registrar/Deputy Registrar

POLLOCK v POLLOCK [2019] NZHC 554 [25 March 2019]

continued from previous page

CIV 2017-470-000026

BETWEEN	NATHAN CHARLES POLLOCK and LETITIA JANE POLLOCK
Plaintiffs

AND	CHERYL LINDA POLLOCK and PETER EDMOND WASHER
As executors, trustees and administrators of estate of R D Pollock
First Defendant & Ors

Solicitors:
Holland Beckett Law, Tauranga Neverman Bennett, Hamilton
Cooney Lees Morgan, Tauranga

Introduction

[1]	Letitia Pollock (Letitia) and Steven Pollock (Steven), plaintiffs in these proceedings, have each applied for leave to file amended statements of claim, after the close of pleadings and less than two months before the start of the three-week hearing set down for 6 May 2019.

[2]	The applications are opposed by the defendants, Cheryl Pollock (Cheryl), the executors and administrators of the estate of Rex Pollock (Rex), and the trustees of the Judea Valley Trust (JVT) into which assets of Rex and Cheryl were transferred before Rex’s death. The defendants say that costs and adjournment are not adequate remedies for the prejudice that would result.

[3]	I heard the applications by telephone conference on 21 March 2019. At the end of the conference I indicated that I would grant the applications and give my reasons later. This judgment records my reasons.

Relevant background

[4]	Letitia, Nathan Pollock (Nathan) and Steven are the children of Rex Pollock and his first wife, Pauline Raewyn Pollock. Rex and Pauline separated in 1991/1992 and were subsequently divorced.

[5]	Rex married Cheryl in September 1995. At the time of their marriage, Cheryl had three children from an earlier marriage, Wayne Slater, Thomas Slater and Cassandra Slater (Cheryl’s children).

[6]	In July 2007, Rex as Settlor, established the JVT. The trustees were Rex, Cheryl and CLM Trustees Ltd, a trustee company established by Cooney Lees Morgan, solicitors. The final beneficiaries were Letitia, Nathan, Steven and Cheryl’s children. The discretionary beneficiaries were the final beneficiaries, any children or remoter issue of the final beneficiaries, Cheryl and Rex.

[7]	The assets of the JVT included assets re-settled from an earlier trust, also called the Judea Valley Trust, established by Rex’s mother in 1992. The final beneficiaries

of the earlier trust were Rex, Steven, Nathan and Letitia. The discretionary beneficiaries were the final beneficiaries, any remoter issue of the final beneficiaries, or any spouse thereof.

[8]	In July 2012, the trustees of the JVT removed Nathan as a discretionary and final beneficiary of the JVT.

[9]	In November 2013, the trustees of the JVT removed Steven as a discretionary and final beneficiary of the JVT.

[10]	In April 2014, Rex and Cheryl each transferred to the JVT by deed of gift their respective 50 per cent shareholdings in TP Group Ltd, a company comprising a large part of Rex’s business interests. The value of each of the 50 per cent shareholdings at the time of the transfer is said to have been $5.55 million.

[11]	In November 2014, Rex transferred to Cheryl by deed of gift his 50 per cent shareholding in Pollock & Sons Crane Hire Ltd, which has resulted in Cheryl owning
100 per cent of the shares in that company. The value of Rex’s 50 per cent shareholding at the time of the transfer is said to have been $78,000.

[12]	In his last will executed in November 2014, Rex gifted to Cheryl all his personal chattels and bank accounts, granted to Cheryl his power of appointment in the JVT, and gifted to the JVT the remainder of his estate. Rex made no provision for Letitia, Nathan or Steven in this will.

[13]	Rex died on 8 February 2015 following a period of illness after being diagnosed with cancer in late 2013.

[14]	As a result of the above transactions:

(a)	Letitia, Nathan and Steven received nothing under their father’s will;

(b)	Rex’s estate contained no significant assets as these had been transferred to the JVT or Cheryl; and

(c)	Nathan and Steven had been removed as beneficiaries under the JVT.

Proceedings

[15]	In March 2016, Nathan and Letitia brought a proceeding under the Family Protection Act 1955 against Cheryl and Peter Washer, a partner at Cooney Lees Morgan, as executors of Rex’s estate, seeking orders for their proper maintenance and support.

[16]	In November 2016, Nathan and Letitia brought a further proceeding under the Trustee Act 1956 and the Administration Act 1969 against Cheryl personally, Cheryl and Mr Washer as executors of Rex’s estate, and Cheryl and CLM Trustees Ltd as trustees of the JVT. The statement of claim alleged five causes of action. In summary, these were:

First cause of action - against Cheryl:

Alleged:    Cheryl  exercised undue influence  over Rex in relation to the   gift of his 50 per cent shareholding in Pollock & Sons Crane Hire.

Relief sought: Orders declaring void and rescinding gift and transferring shares to Rex’s estate.

Second cause of action - against trustees of JVT:

Alleged:	Cheryl exercised undue influence over Rex in relation to the gift of his 50 per cent shareholding in TP Group Ltd.

Relief sought: Orders declaring void and rescinding gift and transferring shares to Rex’s estate.

Third cause of action - against executors of Rex’s estate:

Alleged: Cheryl exercised undue influence over Rex which resulted in a conflict of interest with respect to her position as executor.

Relief sought: Orders removing Cheryl as administrator of estate and appointing the Public Trust administrator.

Fourth cause of action - against trustees of JVT:

Alleged: Cheryl exercised undue influence over Rex which resulted in a conflict of interest with respect to her position as trustee.

Relief sought: Orders removing Cheryl as trustee of the JVT, appointing the Public Trust as trustee, and transferring to the Public Trust the power of appointment in the JVT.

Fifth cause of action - against trustees of JVT:

Alleged: The trustees owe the beneficiaries a fiduciary  duty  when  exercising the power of appointment in the JVT and breached that duty when removing Nathan as a discretionary and final beneficiary.

Relief sought: Orders removing Cheryl as trustee of the JVT appointing the Public Trust as trustee, transferring to the Public Trust the power of appointment in the JVT, and rescinding the removal of Nathan as a discretionary and final beneficiary.

[17]	In May 2017, Steven brought a proceeding under the Family Protection Act 1955, the Law Reform (Testamentary Promises) Act 1949, the Administration Act 1969 and the High Court Rules 2016 against Cheryl and Mr Washer as executors of Rex’s estate, Cheryl personally, and Cheryl and CLM Trustees Ltd as trustees of the JVT. The statement of claim alleged three causes of action. In summary, these were:

First cause of action - against executors of Rex’s estate:

Alleged: Rex failed to make adequate or any provision for Steven in his estate.

Relief sought: Orders under Family Protection Act for the proper maintenance and support of Steven.

Second cause of action - against executors of Rex’s estate:

Alleged: Steven rendered services to Rex in working at TP Group and Pollock & Sons Crane Hire and Rex made express and implied promises to Steven he would inherit Rex’s business and become a director of Pollock & Sons Crane Hire.

Relief sought: Orders under Law Reform (Testamentary Promises) Act to compensate Steven for services rendered.

Third cause of action - against Cheryl and trustees of JVT:1

Alleged: Cheryl exercised undue influence over Rex which was used to deprive Steven of his entitlement or reasonable expectation to share in Rex’s estate and which resulted in benefit to Cheryl and Cheryl’s children.

Relief sought: Orders declaring void and rescinding the removal of Steven as a discretionary and final beneficiary, the gifting of Rex’s shares in Pollock & Sons Crane Hire to Cheryl, and the gifting of Rex’s shares in TP Group to the JVT;

1	Steven also makes a claim under this cause of action with regard to his removal as a discretionary and final beneficiary of the Caribbean Trust, another trust established by Rex. For the purposes of this judgment only, I do not deal with this aspect of Steven’s claim which does not bear on the applications for leave.

Orders transferring Rex’s shares in Pollock & Sons Crane Hire and TP Group to Rex’s estate.

[18]	By Minute dated 19 June 2018, Andrew AJ set down the three proceedings for a three-week trial commencing on 6 May 2019 in the High Court at Tauranga. Andrew AJ also set a timetable for the proceedings which, among other things, provided that the close of pleadings date was 1 February 2019.

[19]	On 1 February 2019, Steven filed an amended statement of claim which amplified his pleading but did not materially change the causes of action or the relief sought.

[20]	On 25 February 2019, the trustees and executors filed a statement of defence to Steven’s amended statement of claim. On 26 February 2019, Cheryl filed a statement of defence to Steven’s amended statement of claim.

[21]	On 11 March 2019, Letitia applied for leave to file an amended statement of claim in the proceeding under the Trustee Act and the Administration Act. The application was filed in the name of Nathan and Letitia. However, Mr McArthur, counsel for Letitia, has advised that he has been unable to speak with Nathan who is understood to be in Australia and has taken no steps in the proceeding for some time. For now, Nathan is unrepresented and is not included in the application filed by Letitia.

[22]	Under the proposed amended statement of claim, Letitia would add allegations in the third and fourth causes of action that Cheryl obtained an unconscionable benefit or bargain in relation to the matter pleaded and would add four more causes of action as follows:

Sixth cause of action – against Cheryl:

Alleged:	The gift of Rex’s shares in Pollock & Sons Crane Hire is void as an unconscionable bargain.

Relief sought: Orders declaring void and rescinding the gift and transferring the shares to Rex’s estate.

Seventh, eighth and ninth causes of action – against trustees of JVT:

No new allegations.

Relief sought: Orders declaring void and rescinding the transfer of assets from the earlier Judea Valley Trust to the JVT and directing that the assets be distributed equally to the beneficiaries of the earlier trust;

Orders declaring void and rescinding the gifting of Rex’s shares in TP Group to the JVT and transferring the shares to Rex’s estate;

Orders removing Cheryl and CLM Trustees as trustees of the JVT and appointing the Public Trust as trustee.

[23]	On 13 March 2019, Steven applied for leave to file a further amended statement of claim. Under the proposed amended statement of claim, Steven would add two more causes of action as follows:

Fourth cause of action – against Cheryl and trustees of JVT:

Alleged: Through his work in the family businesses for over 28 years,  Steven contributed to the increased value in the businesses but was not compensated for the value of his contributions;

Steven was promised that he would inherit and become a shareholder in those businesses;

Those contributions and promises have not been honoured because of Steven’s removal as a discretionary and final beneficiary of the JVT, the transfer of Rex’s shares in Pollock & Sons Crane Hire to Cheryl and the transfer of Rex’s shares in

TP Group to the JVT; meanwhile Cheryl and the trustees of the JVT have been unjustly enriched by receiving the benefit of these actions.

Relief sought: Orders declaring void and rescinding the removal of Steven as a discretionary and final beneficiary, the gifting of Rex’s shares in TP Group to the JVT and the gifting of Rex’s shares in Pollock & Sons Crane Hire to Cheryl;

Orders transferring Rex’s shares in Pollock & Sons Crane Hire and TP Group to Rex’s estate;

Orders directing that Cheryl and the trustees hold the shares in Pollock & Sons Crane Hire and in TP Group on constructive trust for Steven and orders for equitable tracing into the shares held by JVT in TP Group.

Fifth cause of action – against Cheryl and trustees of JVT:

Alleged: The trustees of the JVT owed Steven a fiduciary duty, which included duties to act in good faith towards Steven, not to enter engagements that give rise to conflicts of interest and duties under s 13F of the Trustee Act;

CLM Trustee Ltd had overriding professional obligations as a professional trustee company which included duties to ensure the interests of the beneficiaries of the JVT were considered and duties under s 13C of the Trustee Act.

The trustees breached those duties and CLM breached its professional obligations when they removed Steven as a discretionary and final beneficiary of the JVT.

Relief sought: Declarations that the trustees breached their fiduciary duties and s 13F of the Trustee Act and that CLM Trustee Ltd breached

its professional obligations to Steven and s 13C of the Trustee Act;

Declaration and orders declaring void and rescinding the removal of Steven as a discretionary and final beneficiary;

Orders directing Cheryl and the trustees of the JVT to account to Steven for profits obtained from the breach of the fiduciary duty owed to Steven and an order for equitable tracing into the shares in TP Group held by the JVT.

Law relevant to applications for leave

[24]	Rule 7.7 of the High Court Rules provides that no amended pleading may be filed after the close of pleadings without the leave of a judge.

[25]	To obtain leave to take steps after the close of pleadings, an applicant must satisfy the Court that doing so would be in the interests of justice, will not significantly prejudice other parties or cause significant delay.2 The Court must weigh these constraints against the principle that the parties should have every opportunity to ensure that the real controversy goes to trial so as to secure the just determination of the proceeding.3

[26]	Mr Morgan for Cheryl submits that the issues for the Court on the applications are:

(a)	The reasons for the delay;

(b)	Whether the defendants will suffer irreparable injury;

(c)	Whether the proposed amendments are seriously arguable.

2	Elders Pastoral v Marr (1987) 2 PRNZ 383 (CA) at 385.
3	Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd [1989] 3 NZLR 304, (1989) 3 TCLR 249 (CA) at 309,252.

[27]	Mr Catran for the executors of Rex’s estate and the trustees of the JVT supports that submission.

[28]	Mr McArthur for Letitia and Mr Fraundorfer for Steven do not disagree but say that primary considerations for the Court are the interests of justice and to ensure that the true contest between the parties is determined.

Discussion

[29]	I adopt Mr Morgan’s approach, although not in the order he proposed, and also bring into account the considerations of the interests of justice and the need to ensure the true contest between the parties is determined. I consider each of the applications in turn.

Application to amend Letitia’s statement of claim Reasons for delay
[30]	Mr McArthur acknowledges that the proposed new causes of action in Letitia’s claim based on unconscionable bargain had occurred to him only recently, in early March. Nonetheless, he considers them important because it is possible that the Court might not find that undue influence had been brought to bear but that the bargain that had resulted was still unconscionable. However, Mr McArthur says the allegations supporting the unconscionable bargain are based on the same facts supporting the undue influence causes of action so no new evidence has to be called to support or rebut the claims. As a consequence, he says the new causes of action impose no additional burdens on the defendants.

Are the proposed amendments seriously arguable?

[31]	Mr Morgan says it is untenable to claim that the transfer of Rex’s shares to the JVT resulted in an unconscionable bargain to Letitia when she remains a beneficiary under the JVT to which Rex’s shares in TP Group have been transferred. He also said that the transfer of Rex’s shares in Pollock & Sons Crane Hire is de minimis given their value as compared with the value of the shareholding in TP Group. Mr McArthur says that submission does not take into account the reality that the disposition of trust

funds to Letitia is dependent on Cheryl who has the right to dispose of the entirety of the  JVT assets before they become available to the  final beneficiaries even if, as  Mr Catran pointed out, Cheryl is not the sole trustee.

[32]	Mr Morgan and Mr Catran also say there is nothing in the additional causes of action that is not already covered in the existing undue influence causes of action.

[33]	At this stage of the proceeding, I cannot assess whether the circumstances of the transfer of Rex’s shares in TP Group can be said to have resulted in an unconscionable bargain or whether that claim is conceptually distinct from the claim based on undue influence. I am satisfied, however, that where Letitia, Steven and Nathan have been excluded from Rex’s will, and Steven and Nathan removed as beneficiaries of the JVT, Letitia’s concerns about her ability to share in the assets of the JVT are understandable and cannot be dismissed just because she remains a beneficiary.

[34]	While Cheryl is only one of two trustees, as Rex’s former wife her views can be expected to carry some weight with the independent trustee who has already agreed to the removal of Steven and Nathan as beneficiaries. I do not accept, therefore, that Mr McArthur’s argument is untenable even though Letitia is still a beneficiary of the JVT. The case is stronger again with respect to the shares in Pollock & Sons Crane Hire, even if the value of that shareholding is much smaller. My conclusion, therefore, is that a claim based on unconscionable bargain is arguable and an issue that bears on the contest between the parties.

Prejudice to defendants

[35]	Mr McArthur says because the new causes of action do not require further evidence and are largely a matter of legal submission, to grant leave to amend the pleadings would not impose a significant additional burden on the defendants and would not imperil the trial date. Mr Morgan acknowledges that if leave to amend were granted, he could cope even though his client maintains her opposition to the application. Mr Catran does not take a different position.

Overall assessment / interests of justice / need to ensure true contest determined

[36]	As Bell AJ said in RHH Ltd v Anderson (No 3)4, there is a purpose in setting close of pleadings dates – to ensure that the pleadings and all interlocutory matters have been completed so the parties can concentrate on preparing for the hearing. The date for the close of pleadings in this case was set seven months in advance. There can be little excuse, therefore, for the late applications except for the reality that many people, including counsel, only truly engage with the substance of a task when it is almost upon them. While the Court expects timetables to be observed, it is appropriate to grant leave where it is in the interests of justice to do so, where it is necessary to ensure the true contest between the parties is determined, and where there is no substantial prejudice to the other parties.5

[37]	Mr Morgan and Mr Catran may be correct that the proposed new causes of action do not add materially to the causes of action based on undue influence. That will only become apparent as the trial progresses. However, given that the trial does not start for another five weeks, no new evidence is required, the trial date will not be imperilled, and that defence counsel accept that they are not prejudiced if leave is given to amend Letitia’s statement of claim, I consider that leave should be granted to the application to amend Letitia’s statement of claim.

Application to amend Steven’s statement of claim

[38]	Mr Fraundorfer says that, as drafted, the amended statement of claim that was filed on 1 February 2019 does not ensure that the true contest between the parties will be determined and a significant injustice could result if the trial proceeds on the current pleading.

4	RHH Ltd v Anderson (No 3) [2018] NZHC 2045 at [9].
5	Elders Pastoral v Marr (1987) 2 PRNZ 383 (CA) at 385.

Reasons for delay

[39]	Mr Fraundorfer acknowledges that the proposed amendments to Steven’s pleading are late but submits that delay, without more, is not a reason for declining leave if there was no significant prejudice to the other parties.

Are the proposed amendments seriously arguable?

[40]	Mr Fraundorfer says the proposed new cause of action based on unjust enrichment is based on Steven’s contributions to building up Rex’s businesses and the expectations that had arisen and the promises made to him that he would inherit those businesses. Mr Morgan says the new cause of action is simply a rolled-up re-pleading of the existing causes of action under the Family Protection Act, the Law Reform (Testamentary Promises) Act and undue influence and adds nothing of substance.

[41]	Mr Fraundorfer says that the original statement of claim of Nathan and Letitia alleges breach of fiduciary duty by the trustees of the JVT, so the issue is not a new one for Mr Catran’s clients. With respect to Steven’s position, Mr Fraundorfer says the issue has crystallised after admissions made in Cheryl’s statement of defence to Letitia’s amended statement of claim dated 1 February 2019 where Cheryl admits, with regard to the transfers of the shares in TP Group to the JVT and in Pollock & Sons Crane Hire to Cheryl, that Rex had wanted to avoid a claim by Steven under the Family Protection Act. Mr Fraundorfer says that there has been increasing recognition by the Courts of a general jurisdiction to provide relief in circumstances where there has been unconscionable conduct arising from trust structures designed to defeat property claims that would otherwise fall outside legislation-based claims. He cites the Supreme Court’s decision in Clayton v Clayton in support of that proposition.6

[42]	Mr Catran and Mr Morgan dispute Mr Fraundorfer’s assertion that CLM Trustees already face a claim for breach of fiduciary duty under the proceeding brought by Nathan. They say that, as pleaded, that cause of action in Nathan’s claim is directed at Cheryl and does not seek the removal of CLM Trustees as a trustee of the JVT.  Mr Catran says that the trustees have not made any admissions regarding

6	Clayton v Clayton [2016] NZSC 29, [2016] 1 NZLR 551, (2016) 4 NZTR 26-002, [2016] NZFLR
230, (2016) 31 FRNZ 61.

Rex’s purposes in making the gifts of shares. Mr Morgan also says these were not admissions by Cheryl as to her intentions with respect to those gifts.

[43]	I agree with Mr Catran and Mr Morgan that, as pleaded, the claim by Nathan is not directed at CLM Trustees because the relief sought is against Cheryl alone, even if the preceding allegations against the trustees are stated more generally. The proposed new cause of action by Steven is far more specific and far reaching – seeking the removal of Cheryl and CLM Trustees as trustees and also seeking orders that they account to Steven for profits obtained from the breach of the fiduciary duty owed to Steven and for equitable tracing into the shares in TP Group held by the JVT.

[44]	At this stage of the proceeding, I can make no assessment of whether principles developed in relation to a claim under the Relationship (Properties) Act 1976 may be applicable to the circumstances of this case. However, even without regard to emerging principles of law, I consider a claim based on breach of fiduciary duty is clearly arguable in circumstances where beneficiaries have been removed from a trust and, as I understand it, Cooney Lees Morgan provided advice to Rex in relation to those and related matters while Cooney Lees Morgan’s trust company was a trustee. It is an obvious issue in the contest between Steven and the trustees of the JVT that requires resolution. Whether there is a breach of fiduciary duties can only be determined at trial.

Prejudice to defendants

[45]	Mr Fraundorfer says there is no prejudice to the defendants if leave is granted to include the new causes of action because additional evidence is not required, and the new causes of action essentially raise legal issues. Accordingly, they should not require additional preparation time and should not imperil the trial date.

[46]	Mr Morgan says there is significant prejudice to Cheryl in the proposed cause of action based on unjust enrichment because, as drafted, two of the prayers for relief seek orders that Cheryl and the trustees of the JVT hold all of the shares in Pollock & Sons Crane Hire and in TP Group on constructive trust for Steven and tracing into all of the shares in TP Group. That means Steven is claiming interests in the shares held

in Cheryl’s own right and not just the shares that Rex transferred to Cheryl and the JVT.

[47]	Mr Fraundorfer has clarified that Steven’s claim is in relation only to the shares Rex transferred to Cheryl and to the JVT and has undertaken to amend his pleading to make that clear. On that basis, Mr Morgan accepts that his client is not prejudiced by the addition of the unjust enrichment cause of action.

[48]	The situation is very different, however, with respect to the proposed cause of action based on breach of fiduciary duty. As noted, this is more specific and far reaching than the equivalent claim in Nathan’s proceeding and raises directly a possible conflict of interest if Cooney Lees Morgan continues to represent the trustees and executors. Mr Catran says that if leave is granted to allow this cause of action, Cooney Lees Morgan will have to notify their insurers and withdraw from the proceeding. He is doubtful that new solicitors and counsel could be retained to act in a three-week trial starting in five weeks or to get up to speed in time for the trial to proceed on 6 May 2019.

[49]	Mr Morgan observes that because of the pressure on court resources in Tauranga, any adjournment is likely to mean that a new fixture date would be in 2020. That would cause considerable prejudice to Cheryl and to TP Group and Pollock & Sons Crane Hire whose affairs have been in limbo because of these proceedings. He also says that costs would not be an adequate remedy and that Steven has not paid costs awarded to Cheryl in another proceeding.

[50]	Mr Fraundorfer says there should be no need for an adjournment and that he had called attention last year to the conflict of interest he saw facing Cooney Lees Morgan even under the original statement of claim. Any difficulty now in that regard is of Cooney Lees Morgan’s own making.

Overall assessment / interests of justice / need to ensure true contest determined

[51]	While Mr Fraundorfer did draw attention earlier to the potential conflict of interest, it is understandable that Cooney Lees Morgan had considered they could continue to represent the trustees and executors as the pleadings had been originally drafted. Those pleadings did not call in issue the role of the firm in the actions that gave rise to Steven’s and Nathan’s claims. That position is now changed with the more specific and far reaching cause of action for breach of fiduciary duty.

[52]	I agree with Mr Catran that if leave is granted for that cause of action it would be very difficult for Cooney Lees Morgan to continue to act and that it would be difficult to find replacement solicitors and counsel. However, I do not see it as consistent with the interests of justice to refuse leave just because it makes the conflict of interest point acute or that it may require adjournment of the proceeding. A claim based on breach of fiduciary duty is clearly arguable in the circumstances of this case and is part of the contest between Steven and the trustees. I consider it cannot reasonably be excluded by reasons of prejudice of this nature.

[53]	For these reasons, I have decided that leave should be granted to Steven to amend his statement of claim, even if that means the trial cannot take place in 2019. However, Mr Morgan asks that before I consider any application to adjourn the trial, Mr Catran be given time to see if replacement solicitors and counsel could be instructed in time to enable the trial to proceed. Mr Fraundorfer and Mr McArthur support that request and Mr Catran has undertaken to see what is possible.

[54]	I have agreed to Mr Morgan’s proposal but have asked Mr Catran to keep the Court apprised of developments that may affect the trial date.

Result

[55]	Leave is granted to Letitia Pollock and to Steven Pollock to amend their statements of claim as proposed in their applications dated 11 March 2019 and 13 March 2019 respectively, subject to the amendments which Mr Fraudorfer has made to the prayers for relief in Steven’s claim to exclude shares owned by Cheryl Pollock in her own right.

[56]	Leave is granted to apply to adjourn if the amended pleadings cause significant prejudice to any party.

Costs

[57]	While Letitia and Steven have succeeded in their applications, they have defaulted in complying with the orders made by Andrew AJ in June 2018. It is appropriate, therefore, to award costs in favour of the defendants, as Mr Fraundorfer acknowledged in his memorandum of 13 March 2019.

[58]	I order that the plaintiffs pay the defendants’ costs on a 2B basis as fixed by the Registrar.

G J van Bohemen J