CLEMENT v LUCAS [2018] NZHC 1799

CLEMENT v LUCAS [2018] NZHC 1799

The Court split the proceeding into two phases: the initial phase (appointment of trustees) was a necessary trust-administration matter so costs for that phase are payable from the trust; the revived substantive challenge constituted hostile beneficiary litigation (Buckton category three) so costs follow the event. Brian was the successful party on the substantive challenge and is awarded costs on a 2B basis against the unsuccessful parties. The trustees' legal costs are payable from the trust on an indemnity basis and the trustees' one-third share of Brian's 2B costs is to be paid from the trust. Keith and Derene are each personally liable for one-third of Brian's costs and otherwise...

Citation
[2018] NZHC 1799
Parties
Plaintiff / Beneficiary / Administrator of Estate: Keith Trevor Clement; First Defendant / Trustee: Colin James Lucas; First Defendant / Trustee: Samuel Michael William Bassett; Second Defendant / Beneficiary / Administrator of Estate: Brian Campbell Clement; Third Defendant / Beneficiary: Derene Wendy Clement
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 July 2018
Procedural Posture
Trust Proceedings / Costs Application Following Substantive Judgment (post Trial)
Outcome
Costs orders made as set out: initial trustee-appointment phase costs from trust; substantive challenge costs awarded to Brian on a 2B basis against trustees, Keith and Derene; trustees' legal costs indemnified by the trust; trustees' one-third share of plaintiff's costs paid from the trust; Keith and Derene...
Legal Topics
Trust Administration, Trust Construction, Breach of Trust, Costs Orders, Indemnity Costs, Apportionment of Costs
Trusts Civil Procedure Equity Costs Trust Administration Trust Construction Breach of Trust Costs Orders +2 more

Case Brief

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Parties

Keith Trevor Clement

Plaintiff / Beneficiary / Administrator of Estate

Colin James Lucas

First Defendant / Trustee

Samuel Michael William Bassett

First Defendant / Trustee

Brian Campbell Clement

Second Defendant / Beneficiary / Administrator of Estate

Derene Wendy Clement

Third Defendant / Beneficiary

Procedural Posture

Trust Proceedings / Costs Application Following Substantive Judgment (post Trial)

Legal Issues

  1. 1 Whether the revived proceeding was trust construction/administration or hostile beneficiary litigation (Buckton categories)
  2. 2 Whether costs should be paid from the trust fund or personally by beneficiaries
  3. 3 Whether trustees and/or beneficiaries are entitled to indemnity (solicitor-client) costs from the trust despite a finding of breach of duty

Ratio Decidendi

The Court split the proceeding into two phases: the initial phase (appointment of trustees) was a necessary trust-administration matter so costs for that phase are payable from the trust; the revived substantive challenge constituted hostile beneficiary litigation (Buckton category three) so costs follow the event. Brian was the successful party on the substantive challenge and is awarded costs on a 2B basis against the unsuccessful parties. The trustees' legal costs are payable from the trust on an indemnity basis and the trustees' one-third share of Brian's 2B costs is to be paid from the trust. Keith and Derene are each personally liable for one-third of Brian's costs and otherwise...

Court Disposition

Costs orders made as set out: initial trustee-appointment phase costs from trust; substantive challenge costs awarded to Brian on a 2B basis against trustees, Keith and Derene; trustees' legal costs indemnified by the trust; trustees' one-third share of plaintiff's costs paid from the trust; Keith and Derene...

Orders

  • Costs of the first phase (appointment of new trustees) to be met from the Clement Family Trust fund
  • Brian Clement entitled to costs on a 2B basis against Keith Clement, Derene Clement and the trustees of the Clement Family Trust