McGUIRE v EARL [2021] NZHC 129

McGUIRE v EARL [2021] NZHC 129

Because the trustees unreasonably and negligently refused adequate disclosure despite a revealed unauthorised distribution, the plaintiff was awarded costs on a 2B basis with a 50% uplift; trustees must personally pay two-thirds of that costs award with one-third to be paid from the Trust fund, and trustees bear two-thirds of their own costs with indemnity from the Trust limited to one-third, as a proportionate remedy balancing detriment to beneficiaries and the public interest in not deterring trustees.

Citation
[2021] NZHC 129
Parties
Plaintiff/applicant Beneficiary: Christopher Alan Leslie McGuire; Defendant/trustee: Christopher Knox Earl; Defendant/trustee: Errol Mannering Barnes; Defendant/trustee: Geoffrey William James Rochester
Court
High Court
Jurisdiction
New Zealand
Judgment Date
10 February 2021
Procedural Posture
Civil Proceeding Concerning Trust Disclosure and Alleged Breach of Trust / Costs Judgment Following Substantive Disclosure Judgment
Outcome
Costs judgment in favour of plaintiff; allocation of costs between trustees personally and the Trust fund; trustees' entitlement to indemnity limited.
Legal Topics
Disclosure of Trust Information, Breach of Trust, Trustee Indemnity, Costs Allocation, Unauthorised Distribution
Trusts Civil Procedure Costs Disclosure of Trust Information Breach of Trust Trustee Indemnity Costs Allocation Unauthorised Distribution

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Parties

Christopher Alan Leslie McGuire

Plaintiff/applicant Beneficiary

Christopher Knox Earl

Defendant/trustee

Errol Mannering Barnes

Defendant/trustee

Geoffrey William James Rochester

Defendant/trustee

Procedural Posture

Civil Proceeding Concerning Trust Disclosure and Alleged Breach of Trust / Costs Judgment Following Substantive Disclosure Judgment

Legal Issues

  1. 1 Whether the plaintiff was entitled to disclosure of trust documents
  2. 2 Whether the trustees acted unreasonably/negligently in withholding information
  3. 3 Whether costs should be uplifted and/or paid from the trust fund

Ratio Decidendi

Because the trustees unreasonably and negligently refused adequate disclosure despite a revealed unauthorised distribution, the plaintiff was awarded costs on a 2B basis with a 50% uplift; trustees must personally pay two-thirds of that costs award with one-third to be paid from the Trust fund, and trustees bear two-thirds of their own costs with indemnity from the Trust limited to one-third, as a proportionate remedy balancing detriment to beneficiaries and the public interest in not deterring trustees.

Court Disposition

Costs judgment in favour of plaintiff; allocation of costs between trustees personally and the Trust fund; trustees' entitlement to indemnity limited.

Orders

  • Award costs to the plaintiff on a 2B basis with a 50% uplift together with disbursements as set out in the plaintiff's schedule
  • Defendants to pay personally two-thirds of the costs award in favour of the plaintiff