Daniel v Cundall - [2017] NZHC 2339

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-3051 [2017] NZHC 2339

UNDER Part 18 of the High Court Rules

IN THE MATTER OF

a trust settled by CH and JD Cundall under a Deed of Trust dated 13 September 1991 ("the Trust")

IN THE MATTER OF

an application to obtain the Trust's accounts

BETWEEN

DAVID GLOSTER DANIEL Plaintiff

AND

STEPHEN BRUCE CUNDALL Defendant

On thepapers:

Appearances:

R O Parmenter/P Oliver for the Plaintiff
L Ponniah/C Orton for the Defendant

Judgment:

26 September 2017

COSTS JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 26 September 2017 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

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

Solicitors:
Daniel Overton & Goulding (Peter Oliver), Onehunga, Auckland, for the Plaintiff
Corban Revell (Craig Orton), Henderson, Auckland, for the Defendant

Copy for:
R O Parmenter, Auckland, for the Plaintiff
L Ponniah, Auckland, for the Defendant

DANIEL v CUNDALL [2017] NZHC 2339 [26 September 2017]

[1] The parties cannot agree on costs on the plaintiff’s discontinuance. The plaintiff and the defendant are trustees of the CH and JD Cundall Family Trust established under a deed dated 13 September 1991. Mr and Mrs Cundall, the settlors, wished to provide for their daughter, Dianne, and their son, Stephen. Mr Daniel was the family lawyer. He has now retired but has remained the trustee ever since the trust was established. Dianne is disabled. A property in Onehunga for her to live in was settled on the trust. Mr Daniel says that he left Mr Cundall to attend to the day-to-day administration of the trust.

[2] Later, he became aware that Dianne had moved into hospital care and was no longer living in the Onehunga property. Although he had left matters to Mr Cundall for many years, he decided to concern himself actively with the affairs of the trust. He asked Mr Cundall to provide copies of financial records for the trust – first orally, then in writing. Later, Mr Daniel’s lawyers followed up with written requests. When there was no response, Mr Daniel started this proceeding. He sought an order for Mr Cundall to give him the trust’s accounts since settlement.

[3] Once served, Mr Cundall took legal advice and provided Mr Daniel with documents, including financial statements for the trust from 2006-2016. Having received those documents, Mr Daniel filed a discontinuance.

[4] He seeks costs because he considers that he has been vindicated in bringing the proceeding. He has incurred fees as follows:

28 February 2017 Daniel Overton Goulding $4,690.80 (including disbursements of $1,240.80)

14 July 2017 $2,817.50

7 February 2017 Mr Parmenter $6,900.00

23 June 2017 $1,955.00

14 July 2017 _$1,725.00

$18,088.30

These are all inclusive of GST. Mr Daniel is not registered for GST.

[5] Mr Daniel sought costs under Part 14 of the High Court Rules and claimed indemnity costs, relying on r 14.6(4)(f) – “some other reason”.

[6] In opposition, Mr…

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 [2017] NZHC 2339
Case: [2017] NZHC 2339
Decision Date: 26 September 2017

CaseChat Overview and Summary

This case concerns the CH and JD Cundall Family Trust established under a deed dated 13 September 1991. The trust was intended to provide for the settlors’ daughter, Dianne, and their son, Stephen. The plaintiff, David Gloster Daniel, is a trustee of the trust and was also the family lawyer who established it. The defendant, Stephen Bruce Cundall, is the other trustee. Dianne, who is disabled, has a property settled on the trust for her to live in. The plaintiff claims that he left the day-to-day administration of the trust to the defendant for many years. However, he became concerned when Dianne moved into hospital care and he decided to concern himself actively with the trust’s affairs. He asked the defendant to provide copies of financial records for the trust, but the defendant did not respond. The plaintiff then started this proceeding, seeking an order for the defendant to give him the trust’s accounts since settlement. After being served, the defendant provided the plaintiff with documents, including financial statements for the trust from 2006-2016. The plaintiff then filed a discontinuance. He seeks costs because he considers that he has been vindicated in bringing the proceeding. The defendant contests the costs claimed and proposes that costs should lie where they fall.

The legal issue before the court was whether the plaintiff was entitled to recover his costs from the trust. The court considered the principles set out in Heugh v Scard, which state that when there has been misconduct in dealing with the trust fund, neglect or delay can be an aggravation of the latter misconduct. However, there was no suggestion in this case that the defendant had been less than honest and diligent in keeping the accounts of the trust. The court held that the defendant’s conduct was not very gross or wholly indefensible, and therefore, he should not be ordered to pay costs. The court also held that the plaintiff was entitled to recover his actual and reasonable expenses from the trust under s 38(2) of the Trustee Act 1956, as his lawyers had written to the defendant twice before issuing this proceeding. In light of the defendant’s silence, the plaintiff could not be criticised for beginning a proceeding to obtain copies of accounts.

The court held that the plaintiff was entitled to recover the costs he incurred in this proceeding from the trust assets under s 38(2) of the Trustee Act 1956, but did not order the defendant to pay costs to the plaintiff. The court considered that the defendant did not seek any order that he may recover his costs from the trust. The court did not make any orders for costs between the parties.

Orders