ALEXANDER v ALEXANDER [2021] NZHC 3056

ALEXANDER v ALEXANDER [2021] NZHC 3056

Trustees are entitled to indemnity from trust assets for legal costs under Trusts Act s81 and Trustee Act s38(2) only to the extent the costs were reasonably and properly incurred; where costs were partly unnecessary or pursued without regard to all beneficiaries the court must apportion liability between the trust and the trustees personally. Applying that standard the court apportioned specified percentages of various invoices to the trust and the trustees and removed the current trustees, appointing Perpetual Trust Ltd as replacement trustee; the court further ordered 25% of the applicant's costs be met from the trust and the balance personally.

Citation
[2021] NZHC 3056
Parties
Plaintiff: Maree Therese Alexander; Defendant Trustee: Karen Mary Alexander; Defendant Trustee: Benjamin Dominic Alexander-Witty; Defendant Trustee: Christopher Ashton Alexander-Witty
Court
High Court
Jurisdiction
New Zealand
Judgment Date
11 November 2021
Procedural Posture
Trusts/equity Application Under Trustee Act and Part 18 High Court Rules / Judgment (final Hearing)
Outcome
Orders removing existing trustees, appointment of Perpetual Trust Ltd as trustee, and a detailed apportionment of legal costs between the trust fund and trustees personally and between the trust fund and the applicant
Legal Topics
Appointment of Trustees, Trustee Indemnity for Legal Costs, Removal of Trustees, Distribution of Discretionary Trust, Memorandum of Wishes, Costs Allocation
Trusts Equity Probate Civil Procedure Appointment of Trustees Trustee Indemnity for Legal Costs Removal of Trustees Distribution of Discretionary Trust +2 more

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Parties

Maree Therese Alexander

Plaintiff

Karen Mary Alexander

Defendant Trustee

Benjamin Dominic Alexander-Witty

Defendant Trustee

Christopher Ashton Alexander-Witty

Defendant Trustee

Procedural Posture

Trusts/equity Application Under Trustee Act and Part 18 High Court Rules / Judgment (final Hearing)

Legal Issues

  1. 1 Whether trustees are entitled to indemnity from trust assets for legal costs
  2. 2 Whether the costs incurred were reasonably and properly incurred
  3. 3 Whether trustees breached fiduciary duties or acted partially such that indemnity is defeated

Ratio Decidendi

Trustees are entitled to indemnity from trust assets for legal costs under Trusts Act s81 and Trustee Act s38(2) only to the extent the costs were reasonably and properly incurred; where costs were partly unnecessary or pursued without regard to all beneficiaries the court must apportion liability between the trust and the trustees personally. Applying that standard the court apportioned specified percentages of various invoices to the trust and the trustees and removed the current trustees, appointing Perpetual Trust Ltd as replacement trustee; the court further ordered 25% of the applicant's costs be met from the trust and the balance personally.

Court Disposition

Orders removing existing trustees, appointment of Perpetual Trust Ltd as trustee, and a detailed apportionment of legal costs between the trust fund and trustees personally and between the trust fund and the applicant

Orders

  • Karen Mary Alexander, Christopher Ashton Alexander-Witty and Benjamin Dominic Alexander-Witty are removed as trustees of the S E Brown Family Trust and Perpetual Trust Ltd is appointed as trustee in their place
  • Costs payable to Wynyard Wood, Brett Norris Lawyers and 50% of the mediation fees are payable out of the trust fund