MACKIE LAW INDEPENDENT TRUSTEE LTD & ORS v CHAPLOW [2017] NZHC 1570

MACKIE LAW INDEPENDENT TRUSTEE LTD & ORS v CHAPLOW [2017] NZHC 1570

Trustees were entitled to an indemnity only for fees reasonably and properly incurred in execution of the trust; due to their misunderstanding of the memorandum of wishes and related unnecessary conduct, only limited amounts were indemnifiable (Mackie & Co $3,500 plus GST and disbursements; GM Legal $4,200 plus GST and disbursements); the mortgage over the trust property was unnecessary and must be discharged; removal of trustees is warranted but appointment of replacement trustees (including Public Trust) is deferred pending further evidence on the residuary estate and resettlement options.

Citation
[2017] NZHC 1570
Parties
Applicant/trustee: Mackie Law Independent Trustee Limited; Applicant/trustee: Carroll Jean Muir; Applicant/trustee: Anne Ruth Hastie; Respondent/beneficiary: Joanne Fleur Chaplow
Court
High Court
Jurisdiction
New Zealand
Judgment Date
10 July 2017
Procedural Posture
Application Under Trustee Act 1956 and Public Trust Act 2001 (trust Administration Dispute) / Judgment Following Hearing
Outcome
Partial relief to trustees on indemnity; mortgage discharged; further directions deferred pending joint memorandum and additional evidence.
Legal Topics
Trustee Removal, Trustee Indemnity, Resettlement of Trust Property, Memorandum of Wishes, Trustees' Legal Costs, Mortgage Over Trust Property
Trusts Equity Property Law Probate/estates Civil Procedure Trustee Removal Trustee Indemnity Resettlement of Trust Property +3 more

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Parties

Mackie Law Independent Trustee Limited

Applicant/trustee

Carroll Jean Muir

Applicant/trustee

Anne Ruth Hastie

Applicant/trustee

Joanne Fleur Chaplow

Respondent/beneficiary

Procedural Posture

Application Under Trustee Act 1956 and Public Trust Act 2001 (trust Administration Dispute) / Judgment Following Hearing

Legal Issues

  1. 1 What were the trustees' obligations in relation to the memorandum of wishes?
  2. 2 Were the trustees entitled to grant a mortgage over the trust property to secure payment of legal fees?
  3. 3 Are the trustees entitled to indemnity for all legal fees incurred and if not to what extent?

Ratio Decidendi

Trustees were entitled to an indemnity only for fees reasonably and properly incurred in execution of the trust; due to their misunderstanding of the memorandum of wishes and related unnecessary conduct, only limited amounts were indemnifiable (Mackie & Co $3,500 plus GST and disbursements; GM Legal $4,200 plus GST and disbursements); the mortgage over the trust property was unnecessary and must be discharged; removal of trustees is warranted but appointment of replacement trustees (including Public Trust) is deferred pending further evidence on the residuary estate and resettlement options.

Court Disposition

Partial relief to trustees on indemnity; mortgage discharged; further directions deferred pending joint memorandum and additional evidence.

Orders

  • Trustees are entitled to be indemnified for legal fees incurred to Mackie & Co to the extent of $3,500 plus GST and disbursements.
  • Trustees are entitled to be indemnified for legal fees incurred to GM Legal to the extent of $4,200 plus GST and disbursements.