HUNTER ESTATE

Evening Post, Volume CXXVI, Issue 7, 8 July 1938, Page 11

HUNTER ESTATE

APPEAL FAILS

JUDGMENT FOR WIDOW

QUESTION OF COSTS

The appeal by Cyril Paul Hunter, of Akitio, and Thomas Percy Hunter, cf Porangahau, against the decision of Mr. Justice Smith which removed them from the trusteeship of the estate of their uncle, the late Sir George Hunter, was dismissed by the Court of Appeal in a reserved judgment delivered today. The respondent in the case,i Edith May Hunter, widow of Sir George, was awarded costs.

In June of last year Lady Hunter began in the Supreme Court in Wellington an action for the removal of Cyril Paul Hunter and Thomas Percy Hunter from the trusteeship of the estate, alleging mismanagement, which they denied. After a hearing which occupied twenty-four ana a half days, extending over five weeks, Mr. Justice Smith found in favour of Lady Hunter and made an order removing Cyril Pauland Thomas Percy Hunter from the trusteeship of the estate and Cyril Paul Hunter from the executorship of Sir George's will, and appointing in their place the New Zealand Insurance Co., Ltd., as trustee and executor. It was against this decision that the former trustees appealed. The hearing in the Court of Appeal took place on eight days last April.

In their judgments delivered today the Chief Justice (Sir Michael !Myers), Mr. Justice Kennedy, Mr. Justice Callan, and Mr. Justice Northcroft found in favour of the respondent, Mr. Justice Blair expressing a different opinion from that of the other members of the Court, particularly as to costs. PRINCIPLE EXPOUNDED. After discussing the legal aspects of' the conflict between the interest and ] the duty of trustees the Chief Justice said: —"It is quite possible that, on some of the grounds upon which the I learned Judge has found against the appellants, I myself or some other [Judge trying the case might have i come to a different conclusion. But j

... I do not consider it necessary to discuss all these different matters in detail, or some of them at all. As I understand the principle, it is sufficient if the evidence shows (1) that there is a conflict between interest and duty, (2) that the trustees have failed to recognise this conflict and to take steps to ensure that their interest should not prevail as against their duty, and have disregarded the interests of the infant cestui que trust, and (3) that a state of hostility exists between the trustees and the immediate possessor of the trust estate which is calculated to work against the true interests of the estate. In my opinion that is the position in this case irrespective of any other grounds, though there are here other grounds found" by the learned trial Judge which make all the more necessary the removal of the trustees from their office."

His Honour dealt at length with what he conceived to be one of the fundamental issues in the case—the transaction relating to the payment t>f £1166 in 1930—and said that in his opinion the circumstances disclosed a disregard of duty which apart from any thing else he considered wassufficient to justify removal. AGREEMENT WITH TRIAL JUDGE. After further dealing with different aspects of the case his Honour said: "I do not think it necessary to discuss any of the other numerous matters of fact which, were debated at the Bar. Without discussing any of those, matters, I find myself in entire agreement with the learned trial Judge when he says: "The welfare of the beneficiaries and of the trust estate will be best secured by removing the I defendants as trustees and appointing j some independent person or persons or corporation in their place.' . . . "In my view," concluded the Chief Justice, "the whole appeal should be dismissed, with costs to the respondent in this court on the highest scale The respondent has been compelled to appear in this court and defend the judgment in the interests of the estate, and, that being so^ I think there should be an order that she should have _ her costs as between solicitor and client taxed by the Registrar of the Supreme Court at Wellington and paid out of the testator's estate, giving credit for the party and party costs which she recovers ■ from the. appellants." Mr. Justice Kennedy, Mr. Justice Callan, and Mr. Justice Northcroft concurred with the Chief Justice. AWARDING OF COSTS. Mr. Justice Blair concluded his judgment as follows:—"In the result therefore my view is that the order for removal of the trustees should stand, but such order should be based solely upon their mistaken attitude as to the £1166 item and should not in any respect be deemed a reflection upon the trustees. Ido not think that any costs should have been awarded against the trustees and as none of the complaints except as to the trustees' attitude on the £1166 item have in I my view been established I consider that the trustees should have been allowed their costs out of the estate in respect of all the items upon which in my view the respondent has failed, and they should also get their costs of this appeal. I consider it an injustice to trustees whose administration of the estate has been marked with such success that all they receive as acknowledgment for their years of labour is ignominious dismissal together with the imposition upon them of substantial financial loss."

Mr. J. D. Willis and 'Mr. R. L. A. Cresswell appeared for the respondent, and Mr. C. H. Weston, K.C., and Mr. D. R. Hoggard for the appellants.