Brownlee v McCaslin (High Court Auckland CIV 2011-404-004822) considers who should be liable for costs when a beneficiary filed proceedings against a trustee of a testamentary trust who would not respond to  requests for information about the estate.  Although the matter was settled outside of court, the beneficiary sought an order that the trustee meet the beneficiary’s costs.

The court ordered that the trustee meet the beneficiary’s legal costs personally on a 2B basis. 2B costs can be considered “standard” costs and while significant, will likely not meet the beneficiary’s full costs.  The sting in the tail of the matter was the court’s decision that the trustee was not permitted to recover the costs imposed against the trustee from the trust.  This means that the trustee is personally liable for the costs.  Where, as in this case, no questions were raised regarding the trustee’s competence or management of the trust estate, it may seem unfair that the trustee suffers personally.  However, where a trustee will not provide a beneficiary with information the beneficiary is entiteled to have, the reality is, court proceedings are the only way the beneficiary’s rights can be enforced.

References

• Brownlee v McCaskill [2011] NZHC 2144