//
you're reading...
Beddoe Order, Beneficiaries, Beneficiary rights, breach of trust, Directions, Testamentary trusts, Trustees, Trusts, Trusts Act, Will trusts

Disclosure of legal advice

McCallum v McCallum relates to applications for discovery of information including trustee legal fees, trustee resolutions and legal advice received by trustees.

The case considers important procedural aspects of when discovery can be sought, the rules that apply to originating applications and the extent of discretion available to the High Court regarding such matters.  Of interest in this case was that:

  • the trustees were required to disclose gross legal fees paid, but not provide individual invoices
  • discovery of resolutions, correspondence, minutes, trustee memoranda was not ordered
  • prior wills were not required to be disclosed
  • legal advice, with some redaction was required to be disclosed.  Arguments that such advice was subject to litigation privilege were largely unsuccessful.  As noted by Bell AJ at [46] (editor’s emphasis):

“I accept that, in November 2017, the trustees could reasonably apprehend litigation. That is because counsel acting for William had written, threatening litigation if they went ahead with the settlement. I do not, however, accept that litigation was the dominant purpose in obtaining the legal advice. A lawyer had been instructed for William and had given notice that the trustees’ actions would be under scrutiny and could be challenged in court. A trustee who then seeks advice as to what they ought to do and whether they could go ahead with a planned course of action is doing so to ensure that they do so in a lawful manner. Litigation is a secondary consideration in those circumstances. Trustees seeking advice to ensure that the course they intend can be lawfully carried out obtain the advice to make sure that they can do so effectively, independently of any litigation. There may well be litigation downstream, but their purpose is to ensure that they have carried out their transactions in a way that is legally sound. Accordingly, the prospect of litigation is, on my assessment, a secondary consideration in much the same way as it was in the litigation privilege case of Guardian Royal Exchange Assurance of NZ Ltd v Stuart.”

The case is fact specific and is a precursor to a Beddoes and Prospective Costs Orders.  However, it canvasses important procedural considerations and warrants careful reading.

References: 

  • McCallum v McCallum [2019] NZHC 1925
  • Guardian Royal Exchange Assurance of NZ Ltd v Stuart [1985] 1 NZLR 596
  • Re Beddoe, Downes & Cottam [1893] 1 Ch 547

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: