Burnside v Burnside (No 2) - [2017] NZHC 1678

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-000043 [2017] NZHC 1678

BETWEEN
ALEXANDER CRAIG BURNSIDE

Plaintiff

AND

ROBERT JAMES BURNSIDE Defendant

Hearing: On the papers

Appearances:

H N McIntosh for the Plaintiff
H B Rennie QC for the Defendant

Judgment:

20 July 2017

JUDGMENT No 2 OF PALMER J (COSTS)

This judgment is delivered by me on 20 July 2017 at 1 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 NO 2 [2017] NZHC 1678 [20 July 2017]

Summary

[1] Mr Alec Burnside and Mr Robert Burnside litigated about a number of aspects of the administration of their father’s estate. Now they each seek costs, against each other or to come from the estate. I consider it is primarily Alec’s and Robert’s jointly dysfunctional behaviour that has resulted in this litigation. They each acted unreasonably. The beneficiaries of the estate should not bear the costs of that. Accordingly, I order costs lie where they fall.

The substantive judgment

[2] The summary of the substantive judgment of 29 March 2017 was:1

[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.

[3] The last paragraph of the judgment stated:

[72] Alec has succeeded in his application to remove the trustees. Robert has succeeded in his counterclaim for the transfer of the BFL shares. Both sought costs. I am inclined to let costs lie where they fall. But I reserve leave for either side to file and serve brief written submissions on costs within 20 working days of the date of this judgment, to which the other party may respond within 10 working days.

[4] The need for this judgment suggests paragraph [3] was not effective.

1

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 (No 2)

Details

AGLC: Burnside v Burnside (No 2) [2017] NZHC 1678
Case: [2017] NZHC 1678
Decision Date: 20 July 2017

CaseChat Overview and Summary

The Burnside v Burnside (No 2) case involved a dispute between Alec Craig Burnside and Robert James Burnside over various aspects of the administration of their father's estate. Both parties sought costs, either against each other or to be borne by the estate. The court was required to determine whether the costs incurred by the parties should be met by the estate or whether they should lie where they fell. The court considered the principle that costs follow the event, where a losing party pays a winning party's legal costs, but also examined the circumstances of the case and the conduct of the parties.

The Burnside brothers were both trustees of their father's estate and had engaged in litigation against each other. The court found that their dysfunctional behaviour had led to the litigation and that both parties had acted unreasonably. The court considered the implications of this finding on the question of costs, ultimately deciding that the beneficiaries of the estate should not bear the costs of the brothers' dysfunctional behaviour. The court also noted that the Burnsides had expressed a desire for reconciliation and encouraged them to move forward as a family.

In its judgment, the court ordered that costs lie where they fall, meaning that neither party would be awarded costs from the estate. The court found that the brothers' collective dysfunctional behaviour had resulted in the litigation, and that the beneficiaries of the estate should not bear the costs of that behaviour. The court also noted that the Burnsides had expressed a desire for reconciliation and encouraged them to move forward as a family. This decision reflects the court's consideration of the broader context of the case and the conduct of the parties, rather than simply applying the principle that costs follow the event.

The court's decision in Burnside v Burnside (No 2) highlights the importance of considering the broader context of a case when determining the appropriate costs order. In this case, the court found that the dysfunctional behaviour of the Burnside brothers had led to the litigation and that both parties had acted unreasonably. The court ultimately decided that the beneficiaries of the estate should not bear the costs of that behaviour, and ordered that costs lie where they fall. This decision reflects the court's consideration of the implications of the parties' conduct on the question of costs, and its desire to encourage the Burnsides to move forward as a family.

Orders