Monk v Burgess - [2019] NZHC 324

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2018-463-73

[2019] NZHC 324

UNDER Part 18 of the High Court Rules and Section 66 of the Trustee Act 1956 and the inherent jurisdiction of the High Court

IN THE MATTER

Of the Estates of Mary Alice Burgess and Christian Theodore Emil Burgess

AND

In an application for directions as to distribution of the estates pursuant to section 66 of the Trustee Act 1956 and the inherent

jurisdiction of the Court

BETWEEN

PHILLIP CHARLES MONK AND THE NEW ZEALAND GUARDIAN TRUST COMPANY LIMITED

Plaintiffs

AND

WARWICK JAMES BURGESS

First Defendant

AND

JANET BURGESS

Second Defendant

Hearing: 26 November 2018

Appearances:

R J Latton for Plaintiffs

M K Brady for Second Defendant
C T Walker QC for the Armer Parties

Judgment:

1 March 2019

JUDGMENT OF PAUL DAVISON J

Solicitors:

This judgment was delivered by me on 1 March 2019 at 4:30 pm Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar

Richard Broad, Auckland Tompkins Wake, Hamilton Gilbert Walker, Auckland

MONK AND ANOR v BURGESS & ORS [2019] NZHC 324 [1 March 2019]

Introduction

[1] The applicants, Philip Monk and The New Zealand Guardian Trust Company (Guardian), are the executors and trustees (the executors) of the estates of Mary Burgess (Molly) and Christian Burgess (Christian). Warwick Burgess (Warwick) unsuccessfully sued the executors alleging various breaches of tortious contractual and fiduciary duties between 1980 and 2010. Several other parties were joined as defendants. Following a hearing that occupied 32 court sitting days, Heath J delivered a reserved judgment in which he dismissed all of Warwick’s causes of action, and ordered that the executors were entitled to be indemnified for their reasonable fees and expenses incurred in relation to the proceeding from the funds of the estate, pursuant to s 38(2) of the Trustee Act 1956 (the Act).1

[2]The executors have calculated their reasonable costs and expenses at

$1,264,908.05.2 In a schedule detailing their costs and served on all other parties to the proceeding on 2 February 2018, the executors advised that they intended to deduct their costs and expenses from the assets of the estate, pursuant to the decision of Heath J.3 No party gave notice that they wished to challenge and review the schedule of costs and expenses.

[3]                   Prior to filing their present application on 2 July 2018, the executors had already deducted their costs and expenses from the estate. The executors calculated the balance of the estate prior to the deduction of their costs and expenses at
$2,050,000.4    In accordance with the terms of Molly’s Will, Warwick and his brother
Hilton Burgess (Hilton), are to share the net assets of the estate on the basis of a 60/40 division respectively.   Such a distribution would yield prospective distributions of
$1,311,000 to Warwick and $739,000 to Hilton.

[4] However, Hilton had died prior to the proceedings determined by Heath J, and his estate played no active part in the proceedings.

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 Monk v Burgess

Details

AGLC: Monk v Burgess [2019] NZHC 324
Case: [2019] NZHC 324
Decision Date: 1 March 2019

CaseChat Overview and Summary

The case of Monk v Burgess is an application for directions regarding the distribution of the estate of Molly and Christian Burgess. The applicants, Philip Monk and The New Zealand Guardian Trust Company, are the executors and trustees of the estates. Warwick Burgess unsuccessfully sued the executors for various breaches of duties between 1980 and 2010. The executors have calculated their reasonable costs and expenses at $1,264,908.05 and have already deducted their costs from the estate. Warwick and his brother Hilton are to share the net assets of the estate on the basis of a 60/40 division, respectively. However, if the executors deduct their costs from Warwick's share of the estate, Hilton's estate would still receive a distribution of $739,000, while Warwick would receive only $210,000. The executors apply for an order that their costs and expenses indemnity be paid entirely out of Warwick's share of the estate to avoid reducing the share of the estate to be distributed to Hilton's estate. Warwick, as the first defendant, has not opposed the present application. Janet Burgess, as the second defendant, supports the application made by the executors. The Armer Parties, however, oppose the order sought. The essential issue is whether, having regard to the terms of the will, s 38(2) of the Act and the interests of Warwick and Hilton in the residue of the estate, the Court has power to and should make a directions order that the executors are able to apply the whole of their indemnity costs against Warwick's share of the residue. The court found that the terms of Molly's Will do not permit the executors to apply an indemnity in respect of the costs they have incurred in relation to the actions of one of the two beneficiaries, to that particular beneficiary's prospective share of the residue. The executors' application for the directions sought is declined. The executors are nevertheless entitled to be indemnified for their reasonable legal costs and disbursements incurred in connection with this proceeding and in accordance with clause 4 of Molly's Will.

Orders