JOSEPH GORDON BUTTERFIELD, DEREK JOHN TAYLOR AND EUAN BOYD HILSON Appellants
AND
PUBLIC TRUST First Respondent
ATTORNEY-GENERAL Second Respondent
Hearing:
17 August 2017
Court:
Kós P, Winkelmann & Clifford JJ
Counsel:
J V Ormsby and S Campbell for Appellants K G Davenport QC for First Respondent A M Powell for Second Respondent N J Cunningham and D M Lawry, interveners in person
Judgment:
24 August 2017 at 11.00 am
JUDGMENT OF THE COURT
A The appeal is allowed.
BThe application by the appellants for indemnity for reasonable costs and expenses in bringing and prosecuting the three applications in the High Court is remitted to that Court for reconsideration in accordance with the terms of this judgment.
CThe first respondent is to pay the appellants costs for a standard appeal on a band A basis and usual disbursements.
Should trustees whose terms have expired (but who have not been replaced), or who have been invalidly appointed to the trust, be entitled to an indemnity from the trust fund for reasonable costs and expenses incurred in bringing applications for directions from the High Court?
Background
The Burnett family have farmed Mount Cook Station and Cox’s Downs Station in the South Island of New Zealand since 1860. The sole owner in recent years was Mr Donald Burnett. In December 2009 when he was 94 years of age he made a will providing for the properties to be acquired at current market value by the Burnett Mount Cook Station Charitable Trust (the Trust). Mr Burnett was settlor of the Trust by a Trust Deed made shortly before the will, in November 2009. The purchase price was payable only on demand. The residue of the estate (including the loan to the Trust) would in due course vest in the Trust. The objects of the Trust were broadly to preserve the properties’ historical and natural heritage and environmental value for the benefit of the public. Mr Burnett died in July 2010.
The initial trustees were Messrs Joseph Butterfield and Derek Taylor. For reasons that need not concern us, transfer of the farming properties from the estate to the Trust did not occur until 30 November 2015. Immediately prior to that Messrs Butterfield and Taylor purported to appoint Mr Euan Hilson as a third and further trustee. In March 2016 they entered into an agreement to sell the properties to a Mr David Gould of Guide Hill Station Ltd. In April 2016 they purported to appoint a Mr Michael Askin as a fourth and further trustee. He alone was then appointed interim trustee by the Court in July 2016.
Beneath all this activity lay an unappreciated problem: Messrs Butterfield and Taylor’s terms of appointment as trustees were limited to five years. Their terms had expired therefore in November 2014. That was not appreciated by the appellants (or their legal advisers) until early April 2016. Having…
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.
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Details
AGLC
Butterfield v Public Trust [2017] NZCA 367
Case
[2017] NZCA 367
Decision Date
CaseChat Overview and Summary
The Court of Appeal of New Zealand heard an appeal from Joseph Gordon Butterfield, Derek John Taylor, and Euan Boyd Hilson (appellants) against the Public Trust (first respondent) and the Attorney-General (second respondent). The appellants, who had been trustees of the Burnett Mount Cook Station Charitable Trust, sought an indemnity for the reasonable costs and expenses they incurred in bringing applications for directions from the High Court. The High Court had denied their request for an indemnity. The appellants argued that they were entitled to indemnity under clause 22.3(a) of the Trust Deed or, in the alternative, pursuant to equity's general jurisdiction.
The legal issues before the Court of Appeal were whether the appellants, as trustees whose terms had expired or who had been invalidly appointed, were entitled to an indemnity from the trust fund for the reasonable costs and expenses incurred in bringing the applications for directions from the High Court. The Court of Appeal found that the appellants were trustees de son tort and, as such, were entitled to an indemnity for reasonable costs and expenses incurred in the administration of the trust. The Court of Appeal held that the Judge had inadvertently misdirected himself as to the question of costs and, therefore, the matter must be remitted to the High Court for the determination of what amount should properly be awarded the appellants by way of reasonable costs and expenses in bringing and prosecuting the three applications.
The Court of Appeal allowed the appeal and remitted the application by the appellants for indemnity for reasonable costs and expenses in bringing and prosecuting the three applications in the High Court to that Court for reconsideration in accordance with the terms of this judgment. The first respondent was to pay the appellants costs for a standard appeal on a band A basis and usual disbursements.