McCallum v McCullum - [2021] NZHC 2104

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-372

[2021] NZHC 2104

UNDER Part 18 of the High Court Rules

BETWEEN

WILLIAM FRASER McCALLUM JNR AND FIONA CATHERINE JANE McCALLUM

Plaintiffs

AND

CARRICK ROBERT ZACHARY McCALLUM AND CALLUM FRASER McCALLUM AS EXECUTORS AND

TRUSTEES OF THE ESTATE OF WILLIAM FRASER McCALLUM SNR

First Defendants

Cont:/

Hearing: 11 March 2021

Appearances:

D A T Chambers QC for the First-Named Plaintiff

S L Robertson QC and A J Donovan for Second-Named Plaintiff K G Davenport QC and A M Camerson for First, Second, Third and Fourth Defendants

T C Weston QC and S C I Jeffs for Fifth Defendants

Judgment:

12 August 2021

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 12 August 2021 at 4:00pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Kelly Flavell Law, Auckland BSA Law, Auckland McVeagh Fleming, Auckland

McCallum v McCallum [2021] NZHC 2104 [12 August 2021]

AND
Cont:/

CARRICK ROBERT ZACHARY McCALLUM AND CALLUM FRASER McCALLUM AND McCALLUM INDEPENDENT TRUSTEES LTD AS

TRUSTEES OF THE CALLUM FAMILY TRUST

Second Defendants

AND

CARRICK ROBERT ZACHARY McCALLUM

Third Defendant

AND
CALLUM FRASER McCALLUM

Fourth Defendant

AND

ANDREW ROBERT GILL, CALLUM FRASER McCALLUM AND JAN MAUREEN McCALLUM AS TRUSTEES OF THE CF & JM McCALLUM FAMILY TRUST

Fifth Defendants

Introduction

[1] This is a dispute between family members regarding their interests and entitlements to assets transferred from one trust to another shortly before the death of the settlor, who was the plaintiffs’ father. The plaintiffs as beneficiaries of both trusts now seek further discovery and disclosure of documents held by the defendants as trustees and executors for which they claim privilege.

[2] Orders requiring tailored discovery by the first to fourth defendants were made by Associate Judge Bell on 15 July 2020. He said:1

I am satisfied that a tailored discovery order is appropriate to ensure that disclosure is focused on matters truly in issue. The tailored discovery by the defendants is to cover the documents in the schedule to [plaintiff’s counsel’s] memorandum. The defendants say they will claim privilege for some of those documents, but that does not mean that they should not be disclosed. Questions of privilege can be decided later.

[3] On 5 November 2020 Associate Judge Bell made an order directing the fifth defendants to provide standard discovery and to have regard to the categories of documents set out in a memorandum filed by the plaintiffs’ counsel.2

[4] All five defendants have filed affidavits of documents pursuant to the discovery orders.

[5] The plaintiffs, William Fraser McCallum Jnr (William Jnr) and Fiona Catherine Jane McCallum (Fiona), apply for orders directing the first and second defendants to file amended affidavits of documents, particularising the documents for which they claim either legal professional privilege or litigation privilege.3 The plaintiffs say that by “bulk listing” the documents without specifying, particularising, or describing the documents for which they claim privilege…

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 McCullum

Details

AGLC: McCallum v McCullum [2021] NZHC 2104
Case: [2021] NZHC 2104
Decision Date: 12 August 2021

CaseChat Overview and Summary

The plaintiffs, William Fraser McCallum Jnr and Fiona Catherine Jane McCallum, sought orders requiring the defendants to individually list and describe the documents for which they claimed privilege. The defendants were the executors and trustees of the estate of William Fraser McCallum Snr and trustees of the McCallum Family Trust. The plaintiffs claimed that the defendants had failed to comply with the requirements of the High Court Rules 2016, rule 8.16, and Part 2 of Schedule 9, by not providing particularised descriptions of the documents for which they claimed privilege. The plaintiffs sought orders directing the defendants to file amended affidavits of documents, particularising the documents for which they claimed either legal professional privilege or litigation privilege. The defendants opposed the making of the orders sought by the plaintiffs. The plaintiffs were the children of William Fraser McCallum Snr and Heather Diane McCallum, who died in 2017. Upon their mother’s death the plaintiffs were the only remaining discretionary and final beneficiaries of the WF McCallum Trust which had been settled by their father on 3 December 1986 (the Original Trust). In their statement of claim the plaintiffs alleged that shortly prior to his death their late father collaborated with his younger brother Carrick Robert McCallum and his nephew Callum McCallum, and undertook an asset restructuring programme designed to transfer the legal and equitable ownership of Bill Snr’s and their mother Heather’s collective property assets to ownership by other entities, for the benefit Robert, Callum, and Callum’s children. The plaintiffs say that a central part of the 2016 restructuring was Bill Snr’s settlement of a new trust on 18 August 2016 known as the McCallum Family Trust, (the New Trust). The discretionary beneficiaries of the New Trust were Bill Snr himself, Heather, William Jnr and Fiona. The final beneficiaries of the New Trust are any child of William Jnr or Fiona, any charitable trust or charitable purpose classified as “charitable” in accordance with the laws of New Zealand. The plaintiffs alleged that the restructuring was undertaken without proper or any consideration being given by Bill Snr and Robert as trustees of the Original Trust regarding the plaintiffs’ interests as the final beneficiaries of the Original Trust, and that the restructuring and transfer of assets to the New Trust was significantly disadvantageous to them. The substantive assets of the Original Trust having been transferred to the New Trust, they went from being the only final beneficiaries of the Original Trust, and had become merely discretionary beneficiaries of the New Trust. The plaintiffs alleged that but for the 2016 restructure, they would have inherited assets worth approximately $22 million as the final beneficiaries of the Original Trust, and would also have inherited a residential property at Chilton Place Howick, as the beneficiaries of their late mother’s estate. The defendants denied all of the plaintiffs’ claims and said that the transfer of the assets of the Original Trust to the New Trust was approved by the High Court which observed that the proposed deed of exchange was in the best interests of the beneficiaries of the original trust. The Court found that the information provided by the first and second defendants as being the basis on which they claimed privilege was inadequate and failed to meet the standard required of enabling the plaintiffs to become aware of the documents claimed to be privileged and meaningfully consider a challenge to the claim of privilege. The Court granted the plaintiffs’ application and made orders directing the first and second defendants to file and serve an amended affidavit of documents in which they separately and individually list and identify each document for which they claim privilege as against the plaintiffs.

Orders