Unkovich v Clapham - [2020] NZHC 952

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2855

[2020] NZHC 952

BETWEEN LARA ALIX UNKOVICH by her litigation guardian, ALAN JOHN UNKOVICH
Plaintiff

AND

MARGARET ANNE CLAPHAM

Defendant

Hearing: 13 March 2019

Counsel:

V T M Bruton QC and C R Tataru for Plaintiff T M Molloy for Defendant

Judgment:

11 May 2020

JUDGMENT OF WHATA J

This judgment was delivered by me on 11 May 2020 at 2.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Simpson Grierson, Auckland

UNKOVICH v CLAPHAM [2020] NZHC 952 [11 May 2020]

[1] Lara is a beneficiary of a trust created by the Will of her grandfather, Noel, executed in 2016 (the Will). Lara sought to be advanced the full sum set aside for her when she turned 21 (the Trust funds). The trustee, Margaret (also Lara’s aunty), refused. Lara commenced proceedings against Margaret. Lara claimed the Will was invalid; that Margaret’s refusal was unreasonable; and that Margaret should be removed as the trustee. Margaret denied the Will was invalid and that she had acted unreasonably, but she signalled at an early stage in the proceedings that she was prepared to relinquish her trusteeship, provided she did not have to reimburse the legal fees she incurred, or pay litigation costs. Lara rejected this offer and similar subsequent offers. Lara wanted the legal fees paid out of the Trust funds reimbursed to her.

[2] The matter came before me, and I directed Lara (among other things) to make an election about whether to enforce the Will or have it set aside.1 Eventually, Lara elected to seek orders setting aside Margaret’s refusal and a direction that Margaret transfer the Trust funds to Lara. They are not opposed, and I am satisfied that the funds should be transferred for the specific purpose of advancing Lara’s education. I make those orders accordingly.

[3]That leaves the following matters to be resolved:

(a)Did Margaret breach her duty to the Trust?

(b)Is Margaret entitled to be indemnified from the Trust funds?

(c)What is Margaret’s liability for the litigation costs, if any?

Involvement of counsel

[4] All counsel appearing were active in the background to this dispute. However, there was no objection to counsel appearing and I was content to proceed on that basis because it was cost effective do so.

1 Minute dated 16 September 2019.

Background

[5] The Will specified that Lara would be paid her share of her grandfather’s residuary estate when she turned 21. More specifically, cl 3 of the Will states:

Residue
I give the whole of my estate to my Trustee on trust:
3.1To pay my debts and funeral expenses, my Trustee’s administration expenses, and any death duty payable on my dutiable estate.
3.2To dispose of or sell the residual estate as my trustee sees fit and to divide the residue equally into six parts and to pay each part as follows:
3.2.1To pay one part to…

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 Unkovich v Clapham

Details

AGLC: Unkovich v Clapham [2020] NZHC 952
Case: [2020] NZHC 952
Decision Date: 11 May 2020

CaseChat Overview and Summary

Unkovich v Clapham involved a dispute between Lara Unkovich and Margaret Clapham over the advancement of a trust fund set aside for Lara in her grandfather's will. Lara sought to be advanced the full sum of her trust fund to help her obtain a tennis scholarship in the United States. Margaret, as the trustee, refused to advance the funds, citing concerns about the contingent nature of Lara's interest and the potential misuse of the funds by Lara's parents. The court found that Margaret breached her fiduciary duty as trustee by failing to properly consider the relevant factors and making material errors in her decision-making process. However, the court held that Margaret was entitled to be indemnified for her legal fees incurred before the commencement of the litigation, as she acted reasonably and honestly in seeking legal advice. Margaret was ordered to personally bear her own litigation costs and any liabilities she may have in relation to Lara's costs. The court also directed that the remaining trust funds be transferred to Lara's parents for the specific purpose of assisting Lara's education.

Orders