Supreme Court refuses family squabble

Property Magnate Calls For Seaside High-Rise Taking Care of Business ; Prominent businessman Anthony Gough said residential development would attract commercial investment in New Brighton Mall.

The Supreme Court has refused to take a case concerning one of Christchurch's richest families, who have been infighting for decades.

Disputes within the Gough family started soon after patriarch Tracy T. Gough died in 1955 and continue to the present day.

The Gough family is well known in the Canterbury region and is estimated to be worth $350 million.

Tracy T. Gough was one of three men who in 1929 set up Gough Gough and Hamer (GGH), which has held a dealership for Caterpillar heavy equipment since the early 1930s.

Today, that includes machinery such as excavators, rollers and compactors.

At the time of his death, Gough owned the vast majority of shares in GGH and had three children from two marriages.

Under his last will, he established several trusts, the main assets of which were the shares in GGH.

The beneficiaries in the estate were Gough's children - all now deceased - and his grandchildren.

These included the children of Blair Gough - the B.T. Gough parties - and the children of Owen Gough - the O.T. Gough parties. Ben Gough and his sister Gina Satterthwaite are on the B.T. Gough side; brothers Antony, Harcourt and Tracy Gough are on the other.

A new structure was set up in the 1980s, under which the O.T. Gough parties and the B.T. Gough parties were represented by sub-trusts, with each appointing a trustee to a head trust.

The head trustees, in turn, have the power to appoint directors, who are required to retire after three years unless they are also full-time employees of the Gough Holdings company.

But there is a chance the head trust may now be wound up.

Because of this, a possible issue was flagged involving Ben Gough, who was appointed as a director by the head trustees and is also a full-time company employee.

The then-trustee of the O.T. Gough Family Trust went to the High Court at Wellington in 2013 to determine how part of the company's constitution should be interpreted if the head trust was wound up.

We do not consider that the proposed appeal raises any issues of general or public importance or general commercial significance.

Supreme Court judgment

It wanted to know, if the head trust was wound up, would a family member who was a full-time employee and appointed as a director by the head trustees be prohibited from staying on the board unless all shareholders unanimously agree that they should continue?

Lawyers for the O.T. Gough branch of the family argued the answer to this should be yes; representatives of the B.T. Gough side disagreed.

In a decision delivered last year, Justice Alan MacKenzie said that if the head trust no longer existed the company's constitution would prohibit a family director appointed by the head trust staying in office without the unanimous approval of shareholders.

The B.T. Gough branch challenged this decision and earlier this year the Court of Appeal sided with it.

The appellate court effectively held if the head trust was wound up an existing family director that was also a full-time employee could remain in office indefinitely without the unanimous support of Gough Holdings shareholders.

The O.T Gough branch sought to take the matter to the Supreme Court, but was denied leave to appeal this afternoon.

The country's highest court said the interpretation of the clause would have no significance beyond the parties themselves.

"We do not consider that the proposed appeal raises any issues of general or public importance or general commercial significance," the Supreme Court said.

Whether or not the head trust has been wound up or will soon be wound up is also in dispute between the branches of the family and is subject to separate court action in Wellington. No date for that action has been set.