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McCallum v McCallum

McCallum v McCallum

Case [2020] NZHC 907 5 May 2020

Breach of Trust

Unjust Enrichment

Trustee Duties

Family Protection Act

Resettlement of Trusts

Undue Influence

Trusts & Equity

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2019-404-000937

[2020] NZHC 907

BETWEEN
CARRICK ROBERT ZACHARY McCALLUM and CALLUM FRASER

McCALLUM as trustees of the McCALLUM FAMILY TRUST

First Applicants

AND

CARRICK ROBERT ZACHARY McCALLUM and CALLUM FRASER

McCALLUM as executors of the estate of WILLIAM FRASER McCALLUM SNR

Second Applicants

Hearing: 3 February 2020

Appearances:

K G Davenport QC & A M Cameron for the Applicants D A T Chambers QC for William Fraser McCallum Jnr

C V Walsh for Carrick Robert Zachary McCallum and Callum Fraser McCallum

A K Finnie as Litigation Guardian for Fiona McCallum M Selwyn as Property Manager for Fiona McCallum

Judgment:

5 May 2020

JUDGMENT OF GWYN J

[Application for Beddoe Order]

This judgment was delivered by me on 05 May 2020 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

McCALLUM v McCALLUM [2020] NZHC 907 [5 May 2020]

Introduction

[1] The applicants, Carrick Robert Zachary McCallum (Rob) and Callum Fraser McCallum (Callum), are the trustees of the WF McCallum Trust (the Old Trust) and the McCallum Family Trust (the New Trust), settled by the late William Fraser McCallum Snr (Bill Snr). They are also the executors and trustees of Bill Snr’s estate (the Estate).

[2] William Fraser McCallum Jnr (William Jnr) has brought proceedings in CIV- 2019-404-00372 (the substantive proceedings) against the applicants in their capacities both as trustees and executors, as well as against them personally.

[3] Rob and Callum, in their personal capacities, are separately represented in the substantive proceedings and will defend William Jnr’s claims against them.

Application for Beddoe orders

[4] In the present proceeding the applicants seek what are known as Beddoe orders.1 In general terms a Beddoe order is an order that confirms that trustees’ reasonable costs in the litigation will be met from the assets of the trust or estate, regardless of the outcome of the litigation. In their capacity as trustees the applicants seek orders that it is reasonable for them, in their capacity as trustees, to defend the substantive proceedings and that, as trustees, they are entitled to be reimbursed out of the assets of the Trust for their reasonable legal costs in doing so.2 In their capacity as executors of the Estate they seek orders as to whether they should defend the proceedings seeking their removal as executors, and whether they are entitled to be reimbursed out of the assets of the estate for their reasonable legal costs of doing so.

1 Named after a case of that name – Re Beddoe [1893] 1 Ch 547 (CA). Other judgments commonly referred to are Re Buckton [1907] 2 Ch 406 (Ch) and Alsop Wilkinson v Neary [1995] 1 All ER 431 (Ch). New Zealand cases include Woodward v Smith [2014] NZHC 407, [2014] 3 NZLR 525; Fundación Pimjo AC v Aguilar & Aguilar Ltd [2015] NZHC 1402; and McLaughlin v McLaughlin [2018] NZHC 3198

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 McCallum v McCallum

Details

AGLC: McCallum v McCallum [2020] NZHC 907
Case: [2020] NZHC 907
Decision Date: 5 May 2020

CaseChat Overview and Summary

This case concerns a Beddoe application made by Carrick Robert Zachary McCallum and Callum Fraser McCallum, who are the trustees of the McCallum Family Trust and the executors of William Fraser McCallum Snr's estate. William Fraser McCallum Jnr, the son of William Fraser McCallum Snr, has brought proceedings against the applicants in their capacities as trustees and executors, as well as in their personal capacities. The applicants seek Beddoe orders to confirm that their reasonable costs in the litigation will be met from the assets of the trust or estate, regardless of the outcome of the litigation. The court examines the nature of the claim, the nature of the trust, and the merits of the substantive proceedings to determine whether it is in the best interests of the trust for the trustees to defend the litigation. The court grants the Beddoe application in respect of the reasonable and proper legal and associated costs of providing the court with all relevant factual information and submissions on relevant legal principles, but not actively defending the merits of the claim for certain causes of action. The court also grants the application in respect of the reasonable and proper legal and associated costs of defending the seventh cause of action in the substantive proceedings solely in respect of the claim seeking the applicants' removal as executors of the Estate. The court encourages the parties to resolve the dispute in an alternative forum, such as mediation.

Orders