Lee v Lee - [2019] NZSC 124

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 81/2019
[2019] NZSC 124

BETWEEN	ROBERT LEE AS TRUSTEE OF THE ESTATE OF J G LEE Applicant
AND	GREGORY LEE First Respondent GREGORY LEE AND JANE LOIS LEE AS TRUSTEES OF THE LEEROY FAMILY TRUST Second Respondents

Court:	Glazebrook, O’Regan and Ellen France JJ
Counsel:	Applicant in person D A T Chambers QC and A H H Choi for Respondents
Judgment:	8 November 2019

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant must pay costs of $2,500 to the respondents.
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REASONS

Introduction

In a judgment delivered on 30 July 2019 the Court of Appeal dismissed an appeal by the applicant (Mr Lee) against a decision of the High Court requiring him to provide security for costs.[1] The Court directed security for costs in the sum of $75,000 be provided to the satisfaction of the Registrar. Mr Lee now seeks leave to appeal from that decision to this Court.

Background

[1]Lee v Lee [2019] NZCA 345 (Stevens, Venning and Dunningham JJ) [CA judgment].

The present application arises in the context of a family dispute between Mr Lee and his brother Gregory Lee, the first respondent, involving the transfer of shares in their parents’ company, High Duty Plastics Limited (HDP). Mr Lee filed a statement of claim in the High Court in late September 2011 on behalf of himself and his sister in their capacity as trustees of the estate of their late mother. The proceeding challenges transactions through which shares in HDP were transferred to the first respondent. The statement of claim alleges three causes of action, namely that: the first respondent exercised undue influence over his parents, in particular, in 2000 to procure the transfer of shares in HDP to himself at an undervalue; that the first respondent acted in breach of the fiduciary duty he owed to his parents as shareholders in HDP; and/or that the first respondent obtained the shares through an unconscionable bargain. The relief sought includes an account of profits and that the transfer of the shares be set aside.
In his statement of defence and counterclaim of November 2011, the first respondent accepted the shares were transferred to him but, in essence, says that this occurred as part of an estate planning exercise reflected in a deed of trust signed in October 1997.
The claim has a chequered history.[2] It was initially struck out on limitation grounds.[3] The decision to strike out the claim was reversed by the Court of Appeal in November 2015.[4] There have also been various other interlocutory applications, including in relation to security for costs which was initially set at $150,000.[5] The proceedings were stayed for a period to allow security to be provided in the form of a mortgage over a property occupied by Mr Lee and owned by the RB and JG Lee Family Trust. The sum of $150,000 imposed by way of security for costs…

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 Lee v Lee

Details

AGLC: Lee v Lee [2019] NZSC 124
Case: [2019] NZSC 124
Decision Date: 8 November 2019

CaseChat Overview and Summary

The Supreme Court of New Zealand was asked to determine whether Robert Lee, as trustee of the estate of his late mother, could appeal the Court of Appeal's decision that required him to provide security for costs in a proceeding he initiated against his brother, Gregory Lee. The Court of Appeal had previously reduced the amount of security for costs from $150,000 to $75,000, but Robert Lee still refused to provide the security. This led to the Court of Appeal staying the proceedings and Robert Lee applying to the Supreme Court for leave to appeal.

The primary legal issue was whether the Supreme Court should grant Robert Lee leave to appeal the Court of Appeal's decision on the grounds that he lacked the means to provide the security for costs, and that the requirement to do so would stifle his otherwise worthy claim. The Court of Appeal had already determined that the plaintiff estate was not impecunious and that the claim's prospects of success were weak. The Court of Appeal also noted that the sum of $75,000 was appropriate, but the order should not have directed the Trust to provide security by way of a mortgage. Instead, the appropriate order was for the plaintiffs to provide security in the sum of $75,000 to the satisfaction of the Registrar.

The Supreme Court found that the appeal did not raise any questions of general or public importance, as the matters raised were specific to the particular factual circumstances. The Court also noted that Robert Lee was both a beneficiary and trustee of a trust that owned valuable property. The Court determined that there was no risk of a miscarriage of justice if the appeal was not heard. Consequently, the Supreme Court dismissed the application for leave to appeal and ordered Robert Lee to pay costs of $2,500 to the respondents.

Orders