Wong v Burt - [2004] NZCA 174

IN THE COURT OF APPEAL OF NEW ZEALAND
CA100/03
BETWEENL S WONG AND OTHERS

Appellants

ANDL W BURT AND OTHERS

Respondents

Hearing:29 and 30 March 2004

Coram:Anderson P
Hammond J
William Young J
Appearances: M A Peters and M V Robinson for Appellants

B A Scott and E A France for Respondents

Judgment:4 August 2004

JUDGMENT OF THE COURT DELIVERED BY HAMMOND J

Introduction
[1] The broad issues in this appeal from a judgment of Ronald Young J (now reported in [2003] 3 NZLR 526) concern the lawfulness of two distributions made by the trustees in the estate of the late William Wong.
[2]       More distinctly, we have before us an appeal by the appellants in relation to one distribution, which is said to constitute a somewhat unusual case of a fraud upon a power. There is also a cross-appeal by the respondent trustees against certain findings of the trial Judge which essentially turns on whether certain income said to have been paid out of the estate was capital, and was therefore wrongly distributed to William Wong's wife, Estelle.
The parties
[3]       William Wong was married to Phillipa Estelle Wong (Estelle). William died on 16 August 1984; Estelle on 17 December 1999. The Wongs were successful business people in the Wairarapa. This couple had three children, two of whom are now deceased: William (jnr) (who died in 1958), and Phillipa (who died in 1995). Phillipa had two children, Mei-Ling (1978) and Matthew (1981). Wong Liu Sheung (the third child, who is the first appellant), was born in 1944. Wong Liu Sheung has two children, Simone (1969) and Blair (1972) (who are also appellants).
[4]       William Wong settled three inter vivos trusts: the William Wong Family Trust (WWF), the Janice Deidre Wong Trust (JDW), and the Phillipa Estelle Wong (PEW) Trust. William and Estelle were trustees of all three trusts. Ms Marie Chun (Estelle’s niece) was a trustee of PEW and JDW, from their inception. Mr Lionel Burt, who was for many years an accountant at Chapman Tripp, solicitors in Wellington was made a trustee of WWF in 1985, and of PEW in 1996.
[5]       Probate of Mr William Wong’s will was granted to Phillipa Estelle Wong, Mr Lionel Burt, and a Mr Soon, in 1984. Mr Soon died in 1987. In 1990 Estelle was appointed a trustee in Mr Wong’s estate.
[6]       Estelle’s trustees and executors are Mr Lionel Burt, and Mr Paul Barnett, a solicitor in Wellington.
[7]       The respondents in this proceeding are the trustees of the William Wong Estate.
The challenge to the distribution of $250,000 from the estate of William Wong to Estelle Wong
The facts
[8]       The essential facts relating to this issue can be shortly stated.
[9]       Clause 5 of William Wong's will, in summary, provided as follows:
·The residuary estate was to be held in trust with the net annual income payable to Estelle Wong until her death.
·After the death of Estelle Wong, the net annual income was to be payable…

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 Wong v Burt

Details

AGLC: Wong v Burt [2004] NZCA 174
Case: [2004] NZCA 174
Decision Date: 4 August 2004

CaseChat Overview and Summary

The appeal in Wong v Burt concerns the distribution of $250,000 from the estate of William Wong to Estelle Wong, and the subsequent distribution of dividends from Wairarapa Fruit Agencies Limited. The appellants, Wong Liu Sheung and others, argue that the distribution to Estelle was unlawful, amounting to a fraud upon a power, and that the trustees wrongly treated certain dividends as income. The respondents, the trustees of the William Wong estate, counter-appealed, arguing that the distribution to Estelle was lawful and that the dividends were correctly treated as income.

The Court of Appeal found that the distribution to Estelle amounted to a fraud upon a power, as the trustees deliberately circumvented the terms of the will to achieve an improper purpose. The trustees' actions were not honest, as they knowingly proceeded with a scheme that could be challenged legally. The Court held that the trustees were liable to restore the $250,000, with interest, and potentially in their personal capacities if the funds could not be restored from the PEW Trust.

Regarding the cross-appeal, the Court dismissed the appeal, finding that the appellants had not provided sufficient evidence to prove that the dividends were capital rather than income. The Court also noted the late attempt by the respondents to introduce new evidence, which it refused to admit, finding that it would necessitate a rehearing in the High Court. The Court held that the original finding by Ronald Young J on the nature of the dividends was correct based on the evidence before him.

The appeal was allowed, and the cross-appeal was dismissed. The appellants were awarded costs of $10,000, together with their disbursements, including reasonable travel and accommodation expenses for two counsel.

Orders