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Spencer v Spencer

Spencer v Spencer

Case [2013] NZCA 449 27 September 2013

Civil Litigation & Procedure

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA108/2012 [2013] NZCA 449

BETWEEN
BARRY ROBERT SPENCER

First Appellant

DAVID JAMES UNDERWOOD AND PHILIP JOSEPH VAVASOUR

Second Appellants

AND

BARRY ROBERT GIUSEPPE SPENCER First Respondent

SPENCER GROUP LIMITED Second Respondent

Hearing:
16 and 17 April 2013 (further submissions received on

13 August 2013)

Court:

Arnold, Randerson and White JJ

Counsel:

C J Hodson QC for First Appellant
H A Cull QC and P A Walker for Second Appellants
J C Corry for First Respondent
No appearance for Second Respondent (struck off)

Judgment:

27 September 2013 at 3:00pm

JUDGMENT OF THE COURT

AWe decline the application for leave to adduce further evidence on appeal.

B The appeal is allowed in part.

C The judgment entered in the High Court is set aside.

SPENCER v SPENCER CA108/2012 [2013] NZCA 449 [27 September 2013]

DThe appellants are ordered, jointly and severally to pay to the first respondent’s solicitor, Mr David Booth, a total of $155,184 plus interest calculated in accordance with [156] hereof on the following terms:

(a)The judgment debt and interest thereon due to the first respondent in accordance with [160] hereof is to be paid to him; and

(b)Any balance is to be held by Mr Booth in trust pending the appointment of new trustees for the No.2 Trust and otherwise upon the terms of that Trust.

EThe first respondent is entitled to judgment against all appellants jointly and severally for $65,000 together with interest calculated in accordance with [156] hereof.

F The costs order in the High Court is undisturbed.

G The appellants must pay jointly and severally the first respondent’s costs
in this Court for a standard appeal on a Band A basis and his usual disbursements.

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No

Introduction

The facts

Did the No.2 Trust or the obligations under it ever come into effect?

Interpretation of the condition

Waiver/estoppel

The breaches alleged

Failure to pay Robert the $200 per week
The SGL debt

Origins

[1] [12]

[26] [30] [34] [38] [38] [44] [44]

Were the trustees in breach of trust by failing to take steps to recover the SGL debt?
The onus of proof of loss
What was the evidence of SGL’s ability to satisfy the debt?

The management fees charged by SGL
The fees charged
Was it a breach of trust for the trustees to employ Barry Spencer and thereby incur management fees? Retrospective application
The effect of clause 5(m)
Were the management fees excessive? Conclusion

Should SGL have been charged rent for the use of the premises?
Interest on Barry Spencer’s drawings and amounts debited to
the children’s current accounts
Conclusions to this point
Were the trustees entitled to protection under the terms of the trust deed or entitled to relief under s 73 of the Trustee Act
1956?
Discussion
This case
Conclusion on whether the trustees were entitled to protection under the trust deed…

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 Spencer v Spencer

Details

AGLC: Spencer v Spencer [2013] NZCA 449
Case: [2013] NZCA 449
Decision Date: 27 September 2013 at 3:00pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from Barry Robert Spencer and two other trustees against a decision of the High Court that they had breached their fiduciary duties as trustees of a trust. The appeal was allowed in part. The Court found that the trustees were in breach of trust in three respects. First, they failed to deal properly with a debt owed to the trust by a company managed by Barry Spencer. Second, they made payments of $53,784 in cash to the company in part payment of management fees. Third, they failed to require the payment of rent for the space occupied by the company in the trust’s property. The Court also found that the trustees were not entitled to protection under the terms of the trust deed or under s 73 of the Trustee Act. The Court held that the trustees were liable to pay $65,000 to Robert Spencer, who is one of the beneficiaries of the trust, together with interest calculated in accordance with the Court's directions. The Court also ordered that the trustees jointly and severally pay $155,184 plus interest to the solicitor of Robert Spencer, who would hold the money in trust pending the appointment of new trustees for the trust. The Court did not disturb the costs orders made in the High Court.

Orders