King v Jacks - [2022] NZHC 918

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2021-419-292

[2022] NZHC 918

UNDER Trusts Act 2019

IN THE MATTER OF

the FA and TA King Family Trust

BETWEEN

FRASER ALEXANDER KING

Plaintiff

AND

TESSA ALEXANDRA JACKS

Defendant

SCOTT ANTHONY MCKENNA

Interested Party

Hearing: On the papers

Appearances:

M A Dempster for Plaintiff G Angus for Defendant

Judgment:

4 May 2022

JUDGMENT OF MANDER J

This judgment was delivered by me on 4 May 2022 at 3 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar Date: .

KING v JACKS [2022] NZHC 918 [4 May 2022]

[1] On 17 February 2022, I issued a judgment granting by consent Mr Fraser King’s interlocutory application to appoint Perpetual Guardian as an independent trustee in substitution for the three existing trustees, including Mr King and his estranged wife, Ms Tessa Jacks, on an interim basis.1 Costs were reserved.

[2] Mr King now seeks indemnity costs of $42,207.00, which he maintains were incurred bringing the interlocutory application, and an order that Ms Jacks not be indemnified by the trust. He also makes an ancillary argument that it is open to the court to award costs against Ms Jack’s previous counsel. For her part, Ms Jacks opposes the award of indemnity costs and seeks 2B costs in relation to the hearing of the interlocutory application and an order that costs otherwise lie where they fall

Background

[3] These proceedings concern an acrimonious relationship breakup and related trust property dispute between Mr King and Ms Jacks. The background to the proceeding was set out in my judgment which, for convenience, I reproduce here:

[1]… The plaintiff, Mr Fraser King, and the defendant, Ms Tessa Jacks, are a married couple who separated in December 2020. The state of their relationship is such that they have been unable to agree on arrangements regarding the division and distribution of matrimonial and Trust property. The main asset of the Trust is a property at 414 Matangi Road, Tamahere, Hamilton (the Property), which is currently tenanted.

[2]Mr King has commenced proceedings seeking removal of all trustees and their replacement with an independent trustee, Perpetual Guardian. Mr King also filed an interlocutory application for the appointment of this independent trustee on an interim basis which was set down for hearing before me.

[3]Until recently, Mr King’s application for an interim order was opposed by Ms Jacks. However, late last week, Ms Jacks accepted the irreconcilable breakdown in relations between the parties and their inability to work together to discharge their duties as trustees to administer the Trust and its property necessitates the removal of the current trustees and the appointment of Perpetual Guardian. Notwithstanding considerable overlap between the parties regarding ancillary orders to accompany the appointment of the independent trustee, the parties were not able to agree appropriate orders and it was necessary to hear counsel for the purpose of confirming their

1 King v Jacks [2022] NZHC…

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 King v Jacks

Details

AGLC: King v Jacks [2022] NZHC 918
Case: [2022] NZHC 918
Decision Date: 4 May 2022

CaseChat Overview and Summary

In the case of King v Jacks, the High Court of New Zealand considered the issue of indemnity costs in the context of an interlocutory application to appoint an independent trustee in substitution for the existing trustees of the FA and TA King Family Trust. The plaintiff, Fraser Alexander King, sought indemnity costs of $42,207.00 on the basis that the defendant, Tessa Alexandra Jacks, had acted vexatiously, frivolously, improperly, or unnecessarily, or had disobeyed an order or direction of the court or breached an undertaking. The court was also asked to consider an award of costs against Ms Jacks' former counsel.

The court held that questions of costs are ultimately a matter of discretion, with the overall objective being to achieve an outcome that best meets the interests of justice. The court found that the defendant's opposition to the interlocutory application was not unreasonable, as the trustees had agreed the property should be sold but took different positions regarding the process by which that should be achieved and whether it was necessary to incur the cost of an independent trustee. The court also found that Ms Jacks' conduct in defending the application was not frivolous, vexatious, or unnecessary, and that there was no basis for an award of costs against counsel. The court concluded that costs should lie where they fall on the interlocutory application, and that each party is to personally meet their individual costs on the interlocutory application.

Orders