BURGESS v MONK [2016] NZHC 527

BURGESS v MONK [2016] NZHC 527

A residuary beneficiary suing executors for breach of fiduciary duties is entitled to discovery of communications between the executors and their lawyers that are relevant to allegations of lack of even-handedness and bad faith in administration; such communications are not immune from disclosure simply because they are legal advice, although documents created predominantly for the purpose of litigation remain protected by litigation privilege under the dominant purpose test.

Citation
[2016] NZAR 438
Parties
First Plaintiff: WARWICK JAMES BURGESS; Second Plaintiff: CTE BURGESS LTD; First Defendant: PHILLIP CHARLES MONK; Second Defendant: THE NEW ZEALAND GUARDIAN TRUST COMPANY LTD; Third Defendant: THE ESTATE OF ANTHONY RICHARD WESTERN; Fourth Defendant: ALISDAIR MORRISON; Fifth Defendant: ARMER FARMS (NI) LTD; Sixth Defendant: O'SULLIVAN CLEMENS SOLICITORS; Seventh Defendant: GRAEME WILLIAM ELVIN AND SHARLENE DARRAUGHAS TRUSTEES OF FTB TRUST; Eighth Defendant: TIHOI HOLDINGS LTD
Court
High Court
Jurisdiction
New Zealand
Judgment Date
24 March 2016
Procedural Posture
Civil Discovery Application (breach of Fiduciary Duty) / Interlocutory Discovery Hearing
Outcome
Judgment for plaintiffs: plaintiffs' application for particular discovery granted in part
Legal Topics
Discovery, Legal Professional Privilege, Litigation Privilege, Fiduciary Duty, Residuary Beneficiary Rights, Constructive Trust, Even Handedness, Good Faith
Trusts Equity Civil Procedure Evidence Probate and Estates Discovery Legal Professional Privilege Litigation Privilege +5 more

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Parties

WARWICK JAMES BURGESS

First Plaintiff

CTE BURGESS LTD

Second Plaintiff

PHILLIP CHARLES MONK

First Defendant

THE NEW ZEALAND GUARDIAN TRUST COMPANY LTD

Second Defendant

THE ESTATE OF ANTHONY RICHARD WESTERN

Third Defendant

ALISDAIR MORRISON

Fourth Defendant

ARMER FARMS (NI) LTD

Fifth Defendant

O'SULLIVAN CLEMENS SOLICITORS

Sixth Defendant

GRAEME WILLIAM ELVIN AND SHARLENE DARRAUGHAS TRUSTEES OF FTB TRUST

Seventh Defendant

TIHOI HOLDINGS LTD

Eighth Defendant

Procedural Posture

Civil Discovery Application (breach of Fiduciary Duty) / Interlocutory Discovery Hearing

Legal Issues

  1. 1 Whether a residuary beneficiary of an unadministered estate is entitled to discovery of legal advice obtained by executors
  2. 2 Whether a claimant asserting a constructive or precatory trust is entitled to privileged documents
  3. 3 Application of litigation privilege and the dominant purpose test to executor-solicitor communications

Ratio Decidendi

A residuary beneficiary suing executors for breach of fiduciary duties is entitled to discovery of communications between the executors and their lawyers that are relevant to allegations of lack of even-handedness and bad faith in administration; such communications are not immune from disclosure simply because they are legal advice, although documents created predominantly for the purpose of litigation remain protected by litigation privilege under the dominant purpose test.

Court Disposition

Judgment for plaintiffs: plaintiffs' application for particular discovery granted in part

Orders

  • Defendants must produce legal communications relevant to plaintiffs' allegations that executors breached duties of even-handedness and good faith, subject to any documents protected by litigation privilege determined by the dominant purpose test
  • If parties cannot agree on relevance or privilege they are to consult the Court under High Court Rules r 8.25