McGuire v Earl - [2021] NZHC 129

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-278

[2021] NZHC 129

BETWEEN
CHRISTOPHER ALAN LESLIE

McGUIRE, as a beneficiary of the Dennis Patrick McGuire Trust

Plaintiff

AND

CHRISTOPHER KNOX EARL, ERROL MANNERING BARNES and GEOFFREY WILLIAM JAMES ROCHESTER as

trustees of the Dennis Patrick McGuire Trust Defendants

Hearing: (Determined on the papers)

Counsel:

J R Pullar and M P Davis for the Plaintiff

G A Cooper and M L Rhodes for the Respondents

Judgment:

10 February 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs Judgment)

This judgment was delivered by me on 10 February 2021 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 10 February 2021

McGUIRE v EARL [2021] NZHC 129 [10 February 2021]

[1] This costs judgment follows my judgment of 20 November 2020 (the November decision).1 The plaintiff/applicant had sought disclosure of information relating to the trust settled by his late father, Dennis Patrick McGuire (the Trust). The plaintiff is one of only two discretionary beneficiaries of the Trust, with the other beneficiary being one of the trustees.

[2] My November decision records that the plaintiff had made multiple requests for disclosure of information relating to the Trust. The request for disclosure was not novel in that it was for statements of accounts, copies of Minutes and Resolutions, and documents relating to any distributions and any gifting or debt incurred.

[3] Plaintiff’s counsel notes the plaintiff had made some 10 requests for disclosure from the trustees between December 2018 and May 2020. On occasions, those requests referred to the possibility of an application being made to the Court for orders of disclosure.

[4] After the proceedings had been issued and a notice of opposition filed, the trustees disclosed the financial statements for the Trust. Disclosure took place on the plaintiff’s submissions were to be filed.

[5] As recorded in my November decision, the provision of the financial accounts prompted plaintiff’s counsel to raise a number of queries with the defendants. The response to those queries confirmed, amongst other things, that a distribution from the Trust had been made to a non-beneficiary. Notwithstanding that, I recorded in the November decision at [20]:

With the issuing of these proceedings, some further documents were provided, including Dennis’ Will, but the trustees maintained they had provided sufficient information to Christopher to permit him to determine whether the trustees had acted in accordance with the Trust Deed. In addition to the claim the trustees had met their disclosure obligations, they also relied on the information sought as being confidential.

1 McGuire v Earl [2020] NZHC 3083.

[6] The trustees’ assertion that they had provided sufficient information to permit the plaintiff to determine whether the trustees had acted in accordance with their Trust Deed was patently wrong.

[7] In my November decision I was also critical of the information provided by the trustees in response to the queries of plaintiff’s counsel that had been prompted by the…

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 McGuire v Earl

Details

AGLC: McGuire v Earl [2021] NZHC 129
Case: [2021] NZHC 129
Decision Date: 10 February 2021

CaseChat Overview and Summary

In this case, the plaintiff, Christopher Alan Leslie McGuire, sought disclosure of information relating to the Dennis Patrick McGuire Trust, of which he is a beneficiary. The defendants were the trustees of the Trust. The primary legal issue before the court was whether the trustees had acted reasonably in their refusal to disclose information, and whether the plaintiff was entitled to costs on an indemnity basis or with an uplift. The court also considered whether the trustees should bear their own costs.

The court found that the trustees' refusal to provide information was unreasonable, particularly in light of the unauthorised distribution to a non-beneficiary. The court was critical of the trustees' incomplete response to the plaintiff's queries. The court ordered costs to the plaintiff on a 2B basis with a 50% uplift, and determined that the defendants should bear two-thirds of the plaintiff's costs personally, with the remaining one-third to be paid from the Trust fund. The court also found that the defendants should bear two-thirds of their own costs, with the remaining one-third to be indemnified from the Trust fund.

The court based its decision on the principles established in previous cases, such as Bradbury v Westpac Banking Corporation and The Cats' Protection League v Deans. The court found that the trustees' actions were unreasonable, but not motivated by bad faith. The court also considered the potential disincentive for individuals to take on the role of a trustee if they were required to bear all of the costs personally. The court held that the trustees should bear a higher percentage of the plaintiff's costs in this case, due to their indefensible refusal to provide information.

The final orders of the court were that the plaintiff was awarded costs on a 2B basis with a 50% uplift, with the defendants to pay two-thirds of those costs personally and the remaining one-third from the Trust fund. The defendants were to bear two-thirds of their own costs, with the remaining one-third to be indemnified from the Trust fund. The court declined to make an order for the defendants to be indemnified for their own costs from the Trust fund, finding that the application did not concern a difficult question of trust administration which required the court's guidance.

Orders