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Burnside v Burnside

Burnside v Burnside

Case [2017] NZHC 595 29 March 2017

Statutory Interpretation

Unjust Enrichment

Trusts & Equity

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-000043 [2017] NZHC 595

BETWEEN
ALEXANDER CRAIG BURNSIDE

Plaintiff

AND

ROBERT JAMES BURNSIDE Defendant

Hearing: 28 - 30 November 2016

Appearances:

H N McIntosh and K H Lawrence for the Plaintiff
H B Rennie QC and L C Ord for the Defendant

Judgment:

29 March 2017

JUDGMENT OF PALMER J

This judgment is delivered by me on 29 March 2017 at 2 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Counsel/Solicitors:
H N McIntosh, Barrister, Wellington
Greg Kelly Law Limited, Wellington
H B Rennie QC, Wellington
Ord Legal, Wellington

BURNSIDE v BURNSIDE [2017] NZHC 595 [29 March 2017]

Summary

[1] Mr Jim Burnside, who built substantial business holdings, died in 2003. His family has fallen out over aspects of administration of his estate. Mr Alec Burnside seeks to remove both himself and his brother, Mr Robert Burnside, as trustees of the estate. Alec also seeks a declaration about Robert’s obligations to distribute the net proceeds of a forestry harvest and orders that Robert pay $173,321 to the estate. Robert counterclaims seeking directions that the estate’s shareholding in Burnside Forests Ltd and Ravensdown be transferred to Robert.

[2] I consider the dysfunctionality between the brothers is impeding the administration of the estate and I remove them both as trustees. I order the appointment of independent trustees through a specified process. I do not consider any order is required regarding the net proceeds of the forestry harvest. I order the estate’s shareholding in Burnside Forests Ltd to be transferred to, and vest in, Robert. I find the Ravensdown shares form part of the residue of the estate.

[3] Behind the animosity created by mutual suspicion and resentment regarding the estate, I discern a wish for reconciliation on all sides. I encourage the Burnsides to put these issues behind them and move forward as a family.

Factual context

Jim’s Will

[4] Jim Burnside was a successful businessman. He died on 11 July 2003. Under the key provisions of his will and a codicil, he left:

(a) to his eldest son, Alec Burnside, a farm called Muritai;

(b)his other son Robert Burnside, another farm called Crownthorpe and his 50 per cent shareholding in Burnside Forests Ltd (BFL), after completion of the next harvest;

(c) to his daughters, Ms Lynn Burnside, Ms Wendy Wilson and Ms Maree

Paterson, a leased commercial property;

(d)to his widow Mrs Shirley Burnside, aged 87, a life interest in either the family home or another property and a monthly income from William and Kettle Ltd shares or other investments (W&K Fund); and

(e) the W&K Fund would also be used, at the discretion of the trustees, for the education of the grandchildren and, upon Shirley’s death, the balance would go to the grandchildren.

[5] Robert and Alec, and Mr Matthew Magill, were appointed executors and trustees. Mr Magill subsequently resigned as trustee due to distrust and confusion between the trustees.

The Deed of Family…

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 Burnside v Burnside

Details

AGLC: Burnside v Burnside [2017] NZHC 595
Case: [2017] NZHC 595
Decision Date: 29 March 2017

CaseChat Overview and Summary

The case of Burnside v Burnside involved a dispute between the sons of Jim Burnside, Alec and Robert, over the administration of their father’s estate. Jim Burnside died in 2003, leaving a will that allocated his assets to his family. However, the family later agreed on a Deed of Family Arrangement to better distribute the assets. The primary issues in this case were the removal of trustees, the distribution of forestry harvest proceeds, the transfer of Burnside Forests Ltd (BFL) shares, and the distribution of Ravensdown shares.

The court found that Alec and Robert could not work together effectively as trustees, leading to a dysfunctional administration of the estate. The court exercised its inherent jurisdiction to remove them both as trustees and ordered the appointment of new independent trustees. The court did not find any basis to order Robert to pay additional funds from the forestry harvest to the estate, as it was not clear that such an obligation existed under the Deed. Regarding the BFL shares, the court held that they should be transferred to Robert as per the will and the Deed, despite concerns about pre-emptive rights. Lastly, the Ravensdown shares were determined to form part of the residue of the estate and should be distributed according to the will, with any potential value to be realized and distributed.

Ultimately, the court ordered the removal of Alec and Robert as trustees, the transfer of BFL shares to Robert, and the distribution of Ravensdown shares according to the will. The court also invited the parties to nominate new trustees and reserved the right to decide on costs.

Orders