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Burgess v Monk

Burgess v Monk

Case [2016] NZHC 527 24 March 2016

Fiduciary Duty

Breach of Trust

Discovery & Disclosure

Legal Privilege

Trusts & Equity

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IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2013-463-87 [2016] NZHC 527

BETWEEN
WARWICK JAMES BURGESS

First Plaintiff

CTE BURGESS LTD Second Plaintiff

AND

PHILLIP CHARLES MONK First Defendant

THE NEW ZEALAND GUARDIAN TRUST COMPANY LTD

Second Defendant

THE ESTATE OF ANTHONY RICHARD WESTERN

Third Defendant

ALISDAIR MORRISON Fourth Defendant

ARMER FARMS (NI) LTD Fifth Defendant

O'SULLIVAN CLEMENS SOLICITORS Sixth Defendant

GRAEME WILLIAM ELVIN AND SHARLENE DARRAUGH AS TRUSTEES OF FTB TRUST Seventh Defendant

TIHOI HOLDINGS LTD Eighth Defendant

Hearing: 10 March 2016

Counsel:

D G Chesterman for Plaintiffs
R J Latton for First, Second, Fourth and Sixth Defendants
C T Walker for Fifth Defendant
C K Lyon for Third Defendant (abiding decision)

Judgment:

24 March 2016

BURGESS v MONK [2016] NZHC 527 [24 March 2016]

JUDGMENT OF BREWER J

This judgment was delivered by me on 24 March 2016 at 11:30 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors: Bell & Graham (Matamata) for Plaintiffs
Kennedys (Auckland) for First, Second, Fourth and Sixth Defendants
Gilbert Walker (Auckland) for Fifth Defendant
C K Lyon (Auckland) for Third Defendant

Introduction

[1] The plaintiffs apply for particular discovery against the first, second, fourth and sixth defendants. Over the course of the hearing, counsel, professionally and responsibly, were able to reach broad agreement on much of the material in contention. This judgment decides the outstanding issues.1

Background

[2] The first plaintiff, Mr Burgess, spent his life working on the family farm. He always thought it would eventually become his. When his father died, the farm was left wholly to his mother. His mother died some 27 years later. In the period between the death of his father and the death of his mother, a half interest in the farm was held for his mother on a bare trust by trustees.

[3] In her final will, his mother left Mr Burgess 60 per cent of the residual estate and his brother the remaining 40 per cent. The will conferred on her executors and trustees complete discretion as to how to effect this division. As a result, the executors and trustees were under no obligation, by way of the will, to transfer title of the farm to Mr Burgess.

[4] After his mother’s death, the executors and trustees of her estate sold the farm to the fifth defendant. Mr Burgess contends that the trustees breached fiduciary duties to him in the decisions they made which resulted in the farm being sold to the fifth defendant.

The discovery dispute

[5] Mr Burgess wants the defendants to discover to him all documents relating to their dealings with the estate of his mother which are relevant to the proceeding. This includes, crucially, their requests for legal advice and the advice that they received. The defendants respond that Mr Burgess is entitled to the discovery that any litigant may achieve under the High Court Rules. However, the communications
between the trustees and the estate’s lawyer are privileged. Especially since the

1 Burgess & Anor v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Burgess v Monk

Details

AGLC: Burgess v Monk [2016] NZHC 527
Case: [2016] NZHC 527
Decision Date: 24 March 2016

CaseChat Overview and Summary

Burgess v Monk [2016] NZHC 527 was a case before the High Court of New Zealand, where the plaintiffs, Warwick James Burgess and CTE Burgess Ltd, sought particular discovery from the defendants. The plaintiffs aimed to obtain all documents relating to the defendants' dealings with the estate of the plaintiffs' mother, which were relevant to the proceedings. The defendants argued that the communications between the trustees and the estate's lawyer were privileged and not subject to discovery. The central issues in the case were whether Mr Burgess, as a residuary beneficiary, was entitled to the discovery he sought and if his claim to be a beneficiary by way of constructive or precatory trust granted him the right to the discovery.

The court ruled in favor of the plaintiffs, finding that Mr Burgess, as a residuary beneficiary, was entitled to the discovery he sought, as long as the documents were relevant to his allegations that the executors breached their duties of even-handedness and good faith in the administration of the estate. The court held that the doctrine of privilege should not obstruct any and all claims to legal material, as it has the potential to create inequity and illogicality. The court also found that the executors were not receiving legal advice to prepare a defense, but rather to ensure they were administering the estate in accordance with the law. Therefore, communications the executors had with legal advisers in relation to the discharge of their legal duties were relevant to the claims being brought by Mr Burgess. The court did not need to decide on the issue of whether the executors waived any privilege that may have existed in the documents, as the outcome for the defendants would not be different.

The final orders of the court included a decision in favor of the plaintiffs, with an invitation for the parties to consult the Court if they were unable to agree on the relevance or status of any documents. The court also indicated that it was inclined to award costs on a 2B basis, allowing for memoranda and replies if any party demured or if quantum was in issue.

Orders