Gambrill v Saunders HC Auckland CIV-2008-404-2012

[2011] NZHC 235

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-2012

UNDER  Part IV of the High Court Rules

BETWEEN  C B GAMBRILL Applicant

ANDR SAUNDERS & ORS First Respondent

Hearing:         (on papers)

Appearances: Mr R J Hollyman for Applicant

Mr A F Grant for First Respondent

Judgment:      22 March 2011 at 10:00 AM

JUDGMENT OF ASSOCIATE JUDGE DOOGUE [on Costs]

This judgment was delivered by me on

22.03.11 at  10 a.m, pursuant to

Rule 11.5  of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Counsel

R J Hollyman, Barrister, P O Box 4338, Auckland

Anthony Grant, P O Box 2185, Auckland

GAMBRILL V SAUNDERS & ORS HC AK CIV-2008-404-2012 22 March 2011

The applicant’s claim to have his costs paid out of the estate

[1]      The first issue that I have to decide is whether a costs order should be made in favour of Mr Gambrill.   The issue is whether he should have his legal costs incidental to the application made to remove the trustees.   I can deal with that application briefly.

[2]      To the extent that the costs incurred by Mr Gambrill are referable to the litigation, costs orders are able to be made against any other parties under the cost rules contained in the High Court Rules.  I assume that there is power under those rules to make an order directing costs to be payable out of the trust. No party seems to have contended otherwise.

[3]      Notwithstanding the many complaints that each side appears to have against the other, it is abundantly clear that the trustees could not go on as they were and that there had to be resignations.  That was the effect of the consent arrangements that were ultimately entered into.   To that extent, the proceedings have achieved their intended object. There has had to be some compromise on each side to get to that point. But it is reasonably clear that unless proceedings had been brought the parties would not have come to the point where they compromised on ceasing to be the trustees henceforth.   I consider that Mr Gambrill is therefore entitled to his costs unless there has been disentitling conduct. Whatever criticisms are made about Mr Gambrill personally, his legal advisers appear to have managed litigation reasonably expeditiously and the proceedings have not been characterised by unnecessary steps being taken or mistakes being made etc.

[4]      The issue about Mr Gambrill’s charges for his professional attendances is a different one.  That decision does not concern the matter of costs ancillary to Court proceedings which the Court is able to determine in a summary way.

[5]      A trustee is entitled to be indemnified out of the estate he administers except where he has been guilty of misconduct: McGregor v McGregor.[1]    The type of conduct which will disentitle the trustee to his indemnity for costs is where he acts

from interested motives, conducts himself vexatiously or oppressively, or where the

conduct is “marked by fraud, evasion or neglect of duty”.[2]

[1] McGregor v McGregor (1889) 7 NZLR 538 (CA).

[2] Ibid, at 544

[6]      An alternative basis for him to claim would be under s 38 of the Trustee Act

1956.

[7]      However there are disputes about the quality of, and the necessity for, professional work done by Mr Gambrill. He sought orders in the originating proceedings which he filed:

(d)irecting that the Applicant be paid such sum as the court thinks fit in recompense for his services as Executor and Trustee (for which he has been unable to charge to date)..

[8]      That the application is not in respect of costs in the proceeding. The Court could only make an order on the application by consent or after a substantive hearing into  the  issue  of  Mr  Gambrill's  entitlement.  Neither  of  these  alternatives  has occurred. It is not the place of the Court to determine such dispute on the basis of memoranda filed for consideration of the Judge in chambers.

[9]      It seems likely that any request that Mr Gambrill might wish to make to recover the costs of his professional charges ought to be addressed to the current trustee who has replaced the other trustees, namely the Public Trust.  It might be that the Public Trust would be able to agree to a consent order being made if that were necessary.  It would seem that the decision whether or not Mr Gambrill should be indemnified is not one that previous trustees are interested in,  qua trustees.   If matters cannot be resolved in a sensible cost-effective way, and if Mr Gambrill wishes to proceed, it will be necessary for the arrangements to be made for a fixture. At any such hearing it will be necessary to consider the standing of the other former trustees to be heard on the matter; for the Court to consider whether Mr Gambrill alleged misconduct would be sufficient to disentitle him, even if proved.  Questions about the actual value of the services rendered may also arise.

[10]     I   appreciate   that   the   parties   and   counsel   have   found   this   matter, understandably, to be a difficult one.  I am encouraged  by the good judgment they have shown in the matter so far in seeking consent orders so hope that matters can be

resolved by consent rather than at the cost of the individual parties or the estate.  I therefore order that Mr Gambrill be paid his actual costs and disbursements incurred in the proceedings up to the point where they were discontinued.

[11]     I reserve leave to any party to make further submissions seeking directions in this matter.  The parties will appreciate that it is not contemplated that any party will attempt to take advantage of this reservation to renew the discussion about Mr Gambrill’s entitlement to costs in the proceedings however, should there be other

matters that counsel consider I should determine they can advise me.

J.P. Doogue

Associate Judge