Daniel v Cundall - [2020] NZHC 2309

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-3033

[2020] NZHC 2309

UNDER Section 51 Trustee Act 1956 and Part 18 High Court Rules

IN THE MATTER

of a trust settled by CH and JD Cundall under a certain Deed of Trust dated

13 September 1991 (the “trust”)

AND

IN THE MATTER

of an application to replace the defendant as a trustee

BETWEEN

DAVID GLOSTER DANIEL

Plaintiff

AND

STEPHEN BRUCE CUNDALL

Defendant

Hearing: On the papers

Counsel:

R O Parmenter for Plaintiff L Ponniah for Defendant

Judgment:

4 September 2020

COSTS JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 4 September 2020 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ...................................

DANIEL v CUNDALL [2020] NZHC 2309 [4 September 2020]

Introduction

[1] I issued a judgment in this matter on 6 July 2020.1 This judgment is to determine costs in the proceeding.

[2] My judgment concerned the CH & JD Cundall Trust (“trust”). The trust was settled by Mr and Mrs Cundall Snr, both deceased.

[3] By his statement of claim, Mr Daniel, a trustee of the trust, sought an order pursuant to s 51 Trustee Act 1956 (“Act”) and the inherent jurisdiction of the Court, substituting another trustee in place of Mr Daniel’s then co-trustee, Mr Cundall. Mr Daniel was the settlors’ solicitor and Mr Cundall is their son.

[4] Of relevance to what follows, Mr Daniel also sought in his statement of claim various orders as to costs. These were that Mr Cundall pay his, Mr Daniel’s, costs in the proceeding on an indemnity basis; and/or he, Mr Daniel, be entitled to recover his costs, or any shortfall, from the trust fund pursuant to s 38(2) of the Act; and Mr Cundall not be indemnified by the trust fund for his own costs in the proceeding.

[5] Mr Cundall defended Mr Daniel’s proceeding, and counterclaimed for an order Mr Daniel be removed as a trustee, with Mr Livingstone, a chartered accountant, to be appointed in substitution. Mr Cundall sought the same orders as to costs as Mr Daniel, and also an order Mr Daniel reimburse the trust more than $18,000 deriving from earlier proceedings between the two referred to in [24] of my judgment. Mr Daniel had applied to the High Court for an order Mr Cundall supply him with the trust’s financial statements, Mr Daniel having requested the same and they not having been forthcoming. Ultimately, Mr Cundall agreed to provide the information, and Mr Daniel discontinued the proceedings and sought costs. In September 2017, Bell AJ ordered Mr Daniel was entitled to be indemnified for all his costs from the trust fund, pursuant to s 38 of the Act.2 Accordingly, this part of Mr Cundall’s prayer for relief was an attempt to revisit the Associate Judge’s order.

1 Daniel v Cundall [2020] NZHC 1590.
2 Daniel v Cundall [2017] NZHC 2339.

[6] I…

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 Daniel v Cundall

Details

AGLC: Daniel v Cundall [2020] NZHC 2309
Case: [2020] NZHC 2309
Decision Date: 4 September 2020

CaseChat Overview and Summary

Daniel v Cundall was a case heard in the High Court of New Zealand where David Gloster Daniel, a trustee of the CH and JD Cundall Trust, sought to replace Stephen Bruce Cundall as a co-trustee. Daniel sought to be substituted as the trustee due to Cundall's refusal to engage with him, his hostility, and a conflict of interest. The legal issues before the court were whether Cundall should be removed as a trustee, and if so, who should bear the costs of the proceeding.

Justice Peters found that Cundall should be removed as a trustee, as his behaviour and conflict of interest were detrimental to the trust's interests. The court also decided that Daniel was not to be removed as a trustee. As for costs, the court ruled that Cundall should bear his own costs in the litigation on a 2B basis, while Daniel's costs, or any shortfall, should be paid by the trust fund pursuant to s 38(2) of the Trustee Act 1956. The court found that Cundall's own costs were not reasonably incurred in or about the execution of the trust, and that his best offer to resolve the impasse between the trustees was unreasonable.

In conclusion, Justice Peters ordered that Cundall pay Daniel's costs on a 2B basis, plus all usual disbursements, while Daniel was to be reimbursed by the trust fund for his expenses. Cundall was not to be reimbursed by the trust fund for his own costs or those of Daniel. The court reserved the right to apply for further orders.

Orders