Erceg vs. Erceg goes another round, following Supreme Court decision

Friday 17th June 2016

The Supreme Court has granted former superyacht builder Ivan Erceg leave to appeal in a long-running and bitter family stoush over the fortune of the late Independent Liquor magnate, Michael Erceg.

At issue is disclosure over who got what when two trusts set up by Michael Erceg, who was killed in a helicopter crash in 2005, were wound up five years later.

His younger brother, Ivan, got no payout when the trusts were wound up even though he had been declared bankrupt 10 months earlier. His company, Sensation Yachts, has since been liquidated.

Michael Erceg was settlor and trustee of the Acorn Foundation Trust and Independent Group Trust and on his death his widow, Lynette Erceg, and Darryl Gregory became trustees.

Ivan’s subsequent request for documents about the trusts was turned down by the trustees because the trust deeds included a confidentiality clause that in their view had been included by Michael Erceg because he thought disclosure would “create further disharmony between family members where there was already an unfortunate history of tension and conflict”.

Ivan then brought proceedings against the trustees seeking orders that as a discretionary and final beneficiary they should be required to disclose various documents relating to administration of the trusts. His mother, Millie, who also didn’t receive a distribution from the trusts, had had some earlier success in getting limited disclosure of the documents.

The High Court agreed with the trustees that Ivan didn’t have standing to seek disclosure because of his bankruptcy and found his main complaint seemed to be that he had not received any distribution from the trusts.

Ivan then went took the matter to the Court of Appeal which in March this year released a ruling that disagreed with the High Court’s finding over whether he had standing to bring the case. But it also found that the case’s unusual circumstances required “fine judgement” about whether to order disclosure. The appellate judges upheld their High Court counterpart’s conclusion to refuse his bid.

In a one-page judgment released this afternoon, the Supreme Court judges granted Ivan leave to appeal the approved question of should the conclusion that disclosure not be made/required be set-aside?

The Erceg family was estimated to be worth $1.6 billion last year in the NBR Rich List.

Independent Liquor was sold in 2011 for $1.5 billion to Japan’s Asahi Group Holdings.

BusinessDesk.co.nz

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