MACKIE LAW INDEPENDENT TRUSTEE LTD & ORS v CHAPLOW [2017] NZHC 2966

MACKIE LAW INDEPENDENT TRUSTEE LTD & ORS v CHAPLOW [2017] NZHC 2966

Because the trustees had acted in breach of their obligations by failing to re-settle the trust asset and by incurring substantial unjustified fees, the court declined to allow full indemnity from the trust for those fees and awarded the respondent costs on a 2B basis with a 25% uplift to reflect the trustees' unreasonable conduct; parties to agree calculation with leave to apply for directions.

Citation
[2017] NZHC 2966
Parties
Applicants / Trustees: Mackie Law Independent Trustee Limited; Carroll Jean Muir; Anne Ruth Hastie as trustees of the Donald Trust; Respondent / Beneficiary: Joanne Fleur Chaplow
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 December 2017
Procedural Posture
Application Under the Trustees Act 1956 and Public Trust Act 2001 for Removal of Trustees and Indemnity for Legal Costs / Costs Determination Following Substantive Judgment and Consent Orders
Outcome
Respondent awarded costs on a 2B basis with a 25% uplift; parties to agree calculation; leave reserved to seek directions if agreement cannot be reached.
Legal Topics
Removal of Trustees, Trustees' Indemnity From Trust Assets, Breach of Trust, Costs Awards and Indemnity, Settlement/resettlement of Trust Assets
Trusts Civil Procedure Costs Removal of Trustees Trustees' Indemnity From Trust Assets Breach of Trust Costs Awards and Indemnity Settlement/resettlement of Trust Assets

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Parties

Mackie Law Independent Trustee Limited; Carroll Jean Muir; Anne Ruth Hastie as trustees of the Donald Trust

Applicants / Trustees

Joanne Fleur Chaplow

Respondent / Beneficiary

Procedural Posture

Application Under the Trustees Act 1956 and Public Trust Act 2001 for Removal of Trustees and Indemnity for Legal Costs / Costs Determination Following Substantive Judgment and Consent Orders

Legal Issues

  1. 1 Whether the trustees' legal fees should be indemnified from the trust assets
  2. 2 Whether the trustees should be personally liable for costs because of unreasonable conduct
  3. 3 Whether the trustees breached duties by failing to re-settle the trust asset and incurring unjustified fees

Ratio Decidendi

Because the trustees had acted in breach of their obligations by failing to re-settle the trust asset and by incurring substantial unjustified fees, the court declined to allow full indemnity from the trust for those fees and awarded the respondent costs on a 2B basis with a 25% uplift to reflect the trustees' unreasonable conduct; parties to agree calculation with leave to apply for directions.

Court Disposition

Respondent awarded costs on a 2B basis with a 25% uplift; parties to agree calculation; leave reserved to seek directions if agreement cannot be reached.

Orders

  • Costs awarded to the respondent (Ms Chaplow) on a 2B basis with a 25% uplift to reflect the trustees' unreasonable conduct
  • Parties to agree on the calculation of the costs award; leave reserved to either party to seek directions from the court if they cannot agree