Ipsofactoj.com: International Cases [2005] Part 5 Case 5 [NZCA]


COURT OF APPEAL, NEW ZEALAND

Coram

Young

- vs -

Hansen

KEITH J

FISHER J

HEATH J

16 SEPTEMBER 2003


Judgment

Heath J

(delivered the judgment of the court)

INTRODUCTION

  1. This appeal, from a judgment delivered in the High Court at Wellington on 11 October 2002 by Wild J (reported as Hansen v Young [2003] 1 NZLR 83), involves a question of capacity. The issue is whether a solicitor, found to have been negligent by Wild J, was acting, at material times, in his capacity as a solicitor or in his capacity as an executor and trustee of a deceased estate. Wild J concluded that the solicitor was acting, at relevant times, in his capacity as a solicitor. As a result, judgment was entered not only against the solicitor personally but also against the firm of which he is a partner.

  2. Dennis Arthur Nichols died on 9 September 1999. By his last will and testament, he appointed Mr. Young, (a partner in the firm of barristers and solicitors practising in Wellington under the name of Sladden Cochrane & Co [the solicitors]) and Mr. Hansen as co-executors and co-trustees of his estate.

  3. The will was made on 27 May 1994. Mr. Young, who had acted on various occasions for Mr. Nichols, drafted the will. The will made provision for Mr. Hansen who was described, in cl 5, as Mr. Nicholsí partner. Mr. Hansen is a Danish citizen. Mr. Hansen was introduced to Mr. Young when Mr. Nichols gave instructions for the preparation of the will. Mr. Hansen was the residuary, and major, beneficiary in the estate.

  4. When a solicitor is appointed to act as executor and trustee of a deceased estate it is customary for the will, by which the solicitor is appointed, to contain a clause entitling the solicitor to charge for his or her fees. Such a clause is necessary because, in the absence of a charging clause, equity requires a trustee to act gratuitously. Clause 11 of the will provided:

    I DECLARE that any executor, trustee or advisory trustee of this my will, being a solicitor or chartered accountant may make all usual and proper charges for work done and services rendered in the administration of my estate and the trustís hereof in the same way as a solicitor or chartered accountant not also being a trustee would be entitled to charge if employed by my executors or trustee to perform such work and services.

  5. In addition, it is not unusual for a will to contain a provision by which executors and trustees are to be indemnified out of assets of a deceased estate in respect of any losses which may be sustained as a result of the way in which the estate is administered. Clause 9(o) of the will provided:

    I direct that my trustees shall be absolutely indemnified by and out of my residuary estate for and in respect of any losses which they may sustain by reason of any act, transaction or dealing performed contracted to be performed or intended or purported to be performed under the authority conferred by this clause.

    Clause 9, generally, sets out the powers and authorities granted to the trustees in dealing with the property comprised in the estate. While cl 9(o) refers to "trustees" rather than to both "executors and trustees", nothing turns on that issue for the purposes of this case.

  6. Some of the assets of the estate of the late Mr. Nichols were shares held in corporations registered in the United States of America [the US shares]. Those shares were held in technology companies traded on the NASDAQ Index. The whole, or a substantial part, of the US shares were acquired through margin trading. At material times, the shares were subject to a margin loan of (approximately) $US160,185.

  7. A dramatic fall in the United Statesí market price for technology stocks occurred during 2000 and 2001. The parties were agreed that had all of the US shares (except shares in Digital Microwave Corporation [DMC], which it was accepted were not to be sold) had been sold in March 2000 the net value to the estate of these shares would have been $NZ1,060,868.80. The shares were ultimately sold for considerably less than that amount.

  8. As there is no issue as to quantum on appeal it is unnecessary for us to refer extensively to the evidence which is set out in the judgment under appeal. It is sufficient to note that Mr. Hansen alleged that the loss to the estate, arising from the failure to sell the shares at a time when the market value of the shares was higher, was caused by Mr. Youngís negligence.

  9. A number of different allegations were made by Mr. Hansen against Mr. Young and the solicitors. He alleged that:

    1. "the trustees" (clearly meaning both Mr. Hansen and Mr. Young) retained Mr. Young and the solicitors, as solicitors "to advise, manage and administer the estate of the deceased". Mr. Hansen alleged that Mr. Young "and/or" the solicitors agreed to act pursuant to that retainer and did in fact act as solicitors in that way. We refer to para 7 of the Statement of Claim.

    2. Mr. Young and the solicitors were "retained as solicitors to advise" Mr. Hansen in three capacities: namely, his capacity as a trustee, his capacity as a residual beneficiary and his personal capacity. This retainer was said to be "in relation to the estate of the deceased". Mr. Hansen alleged that Mr. Young "and/or" the solicitors agreed to act pursuant to that retainer and did in fact so act. We refer to para 9 of the Statement of Claim.

  10. In respect of both pleaded retainers, implied terms were alleged to the effect that Mr. Young and the solicitors would exercise the care and skill to be expected of a reasonably competent solicitor in performing their duties under the retainer. Alternatively, it was suggested that a duty of care in tort was owed to that effect. We refer to paras 8 and 10 of the Statement of Claim.

  11. The allegations of breach related solely to alleged failures to deal properly with the US shares or to communicate relevant information to Mr. Hansen. All of the allegations of breach rest on an underlying assumption that Mr. Young and the solicitors had, in their capacity as solicitors, assumed responsibility for the management of the estate, notwithstanding Mr. Hansenís status as a co-executor and co-trustee of the estate.

  12. Wild J held that a contract of retainer had been proved. The Judge held that the retainer was between the executors and trustees (on the one hand) and the solicitors (on the other). In the Judgeís view, the retainer required the solicitors "to act generally in administering and managing the estate, and to give or obtain for the executors all appropriate advice." We refer to para [76][f] of the judgment.

  13. The Judge expressly rejected the suggestion of a personal retainer between Mr. Hansen and the solicitors. In para [109] of the judgment Wild J said:

    [Mr. Hansen] has not made out his third cause of action. I accept Mr. Ringís submission that there is no evidence of a retainer of the solicitor by [Mr. Hansen] in his personal capacity, nor any evidence from which such a retainer could be inferred. Indeed, [Mr. Hansen] did not claim in his evidence that he ever asked the solicitor to advise him in a personal capacity. [Mr. Hansenís] third cause of action accordingly fails.

  14. The question on appeal is whether Wild J was right to find that a contract of retainer had been entered into between the executors and trustees (on the one hand) and the solicitors (on the other) on the basis outlined in para [76][f] of his judgment.

    THE JUDGE'S FINDINGS

  15. Wild J described the essence of Mr. Hansenís case as two-fold:

    1. first, the failure of Mr. Young to act on his instructions to sell US shares held by the estate;

    2. second, Mr. Youngís failures to advise Mr. Hansen that US shares held by the estate should be sold and to arrange their sale.

  16. The Judge found that Mr. Young was in breach of an obligation to advise the co-executors and co-trustees to obtain expert advice as to when the shares ought to be sold. Damages were assessed on the basis of that breach. As a result, judgment was entered against both Mr. Young and the solicitors in the sum of $698,333 together with interest on all but $10,000 of that award, being that portion of the judgment fixed as special damages.

  17. As part of his case Mr. Hansen said that he had given to Mr. Young, on 23 February 2000, an express instruction to sell all the US shares. That allegation was rejected by the Judge for the reasons which are set out in full in para [95] of his judgment. That finding against Mr. Hansen amounts, in our view, to a finding against Mr. Hansen on an issue of credibility.

  18. Accordingly, this is not a case in which the Judge has rejected the evidence of one party completely. On some issues he has preferred the evidence of Mr. Hansen; on others he has preferred the evidence of Mr. Young. It is fair to say that on the issues on which the Judge appears to have preferred Mr. Youngís evidence to that of Mr. Hansen, the evidence of Mr. Young was supported by evidence from a legal executive employed by the solicitors, Ms Gardner, whom the Judge accepted as a reliable witness.

  19. We recognise that we must give proper weight to findings of fact made by the Judge. Unlike us, he has had the advantage of seeing and hearing the witnesses. Anyone who has had any involvement with the trial process is acutely conscious that findings of credibility can turn as much on the demeanour of witnesses and the tone of voice used to express themselves as on the actual words they utter. The written words of the transcript of evidence, as found in the formal Notes of Evidence, represent a body into which the atmosphere and human dynamics of the trial process breathe life. That is why findings of credibility are rarely overturned on appeal. We approach our consideration of Wild Jís findings of fact with that view firmly in mind.

  20. The findings of fact on which Wild J based his decision are set out in para [76] of his judgment. The Judge said:

    My relevant findings on the evidence are:

    (a)

    The plaintiff had no knowledge of or experience in the administration/management of estates.

    (b)

    The solicitor held himself out to the plaintiff as experienced in administering estates and as able and willing to undertake the management and administration of the estate.

    (c)

    There was no written or formal retainer by the executors of the solicitor to manage and administer the estate. What occurred was as the plaintiff described it, that is, the solicitor, who had acted for the deceased for years, "just took over the estate", and the plaintiff agreed to that, understanding it to be the usual procedure (see para [10] above).

    (d)

    No distinction between the solicitorís roles as solicitor, and executor, was explained to or understood or accepted by the plaintiff. I do not accept the solicitorís evidence that he explained to the plaintiff the obligations of trustees/executors. In his evidence, the solicitor did not suggest that he explained to the plaintiff, and/or obtained the plaintiffís acceptance, that the solicitor would not be carrying out the management and administration of the estate in his professional capacity as solicitor to the estate, but would be acting only in his executor capacity, charging pursuant to cl 11 of the will, and indemnified in terms of cl 9(o).

    (e)

    The plaintiff had no knowledge or experience of shares or the share market or share trading generally. In particular, he had no knowledge or experience of US shares, and no knowledge of margin trading or appreciation of the risks involved in purchasing shares on a margin loan. I find that the plaintiffís only involvement with shares was the holding of Telstra shares the deceased had earlier given him.

    (f)

    In circumstances (a) Ė (e), I find that the solicitorís retainer from the executors was to act generally in administering and managing the estate, and to give or obtain for the executors all appropriate advice.

    All references in that passage to "the plaintiff" are references to Mr. Hansen. Mr. Young and Sladden Cochrane & Co are described collectively as the solicitor.

  21. The extent of the solicitorís retainer from the executors and trustees is captured in the finding set out in para [76][f].

  22. Wild Jís reasons for concluding that Mr. Young administered the estate (both generally and in respect of the US shares in particular) in his capacity as solicitor to the estate were summarised in para [88] of the judgment. Wild J said:

    (a)

    All the available evidence (and of course there is none from the deceased himself) indicates that the deceased appointed Mr. Young one of the executors of his will, and entrusted the administration of his estate to him, because he was a solicitor, that is, because of the solicitorís professional expertise and experience and the trust and confidence the deceased had built up in the solicitor in that capacity over the years.

    (b)

    The executors, in turn, retained the solicitor to manage and administer the estate because he was a solicitor. When the very reason for his retention was his professional skill and experience, I think it quite wrong to hold that, in virtually all respects (and certainly in all relevant ones), he was not acting in his professional capacity as a solicitor. In relation to this and the previous point, I noted Mr. Ring submitting for the defendants that "what makes it legal work is the solicitor accepting responsibility to do it as a solicitor".

    (c)

    That was the plaintiffís perception Ė the solicitor "just took over the estate".

    (d)

    It is the public perception in New Zealand. Mr. Gray said as much, and it is implicit if not explicit in Mr. Eadesí evidence (summarised in para [85](a) and (c) above).

    (e)

    It is the practice in New Zealand. Both Messrs Gray and Eades accepted that a distinction was seldom, if ever, drawn in practice between the solicitor and trustee roles where a solicitor was carrying out both. Mr. Gray pointed out that solicitors do not distinguish in their bills of costs, and Mr. Eades did not disagree. He explained that there is:

    .... usually no reason to differentiate between the types of work when a charge is being made, and in my experience thatís the way in which the profession generally renders accounts in that circumstance.

    Thus, the client usually receives a single solicitorís bill of costs. That is what occurred here. Mr. Eades saw no problem with it. He said it did not affect the capacity in which work was done: it was a matter of convenience and often a sensible course.

    But none of this detracts from the facts that the solicitor communicated on solicitorís letterhead, and thus in his professional capacity, and submitted a solicitorís bill(s) of costs which did not differentiate between the different capacities in which the solicitor now claims he acted.

    (f)

    Such a retainer is to be inferred from all the circumstances and evidence. Mr. Eades gave evidence that, in the absence of an express retainer, its terms were to be implied. Mr. Eades I think used the word "terms" as synonymous with "scope". For the defendants, Mr. Ring argued that there could not be implied into the solicitorís retainer an obligation to do work not strictly of a legal nature (that is, an obligation generally to manage and administer the estate), since Mr. Young already had that obligation in his executor capacity. Implication accordingly did not meet the test laid down by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 at p 376. I do not accept either Mr. Eadesí approach or Mr. Ringís argument. They confuse the inferring of the existence and scope of a retainer, with the implication of a term(s) into that retainer. From the circumstances and evidence here I infer that the solicitor accepted from the two executors (Mr. Young was one of them) a retainer generally to manage and administer the estate, and in particular to assume responsibility for the estateís US shares. I rely particularly on the evidence about the solicitorís various communications with the US stockbrokers, and with the plaintiff, in relation to the US shares. This is the evidence summarised in paras [22] Ė [29], [31], [35] Ė [38], [40] Ė [43], [49], [50], [52], [53], [56] and [59] Ė [62] of the "Factual background" section of this judgment. It was the solicitor who had all the dealings in relation to the US shares. For authority to infer a retainer in this way, I rely on Pegrum v Fatharly (1996) 14 WAR 92, and Dal Pontís text Lawyersí Professional Responsibility in Australia and New Zealand (cited in para [78] above) at pp 42 Ė 43:

    Retainers, like other contracts, need not be created by express words, whether written or oral Ė their existence can be inferred or implied from the circumstances. The onus rests on the person who alleges the existence of a retainer to prove its existence and, where this is material to the claim, to prove also its terms. It may also involve issues as to the capacity in which the lawyer acted, for a lawyer may give non-legal advice or otherwise act in a capacity other than a legal one.

    ....

    Importantly, the existence of a retainer is determined by inference from objective facts Ė it is not per se determined by the belief of the lawyer as to which clients he or she was acting for. To this end, Ďthe retainer will be presumed if the conduct of the two parties shows that the relationship of solicitor and client has in fact been established between themí. In other words, proof of a retainer rests on proof of facts and circumstances sufficient to establish a tacit agreement to provide legal services.

    Into the retainer thus inferred, I imply the obligation of professional skill and care, set out in para [79] above. Such implication meets the BP Refinery test.

    (g)

    I do not consider that work which is widely given to solicitors because they are solicitors, and which is widely regarded by the public as solicitorsí work, and which is not distinguished by solicitors and clients alike from solicitorsí work, can properly be classified retrospectively, or "in hindsight" (Mr. Eadesí term), as executorsí work on the basis that it is outside some strict definition of legal work.

    (h)

    My finding is that the solicitor did not explain to the plaintiff that he would be managing and administering the estate as one of its executors, and not in his professional capacity as solicitor retained by the estate. In short, nothing was said or done to disturb the plaintiffís perception that the solicitor was acting in his professional capacity. Even Mr. Eades accepted that a solicitor administering an estate and not acting in his professional capacity should make that clear to the client, and would normally do so. That is no doubt because, if a solicitor/executor seeks to relieve himself of professional liability for most of what he does in administering an estate, he at least needs to make that clear to the client at the outset.

    It is unnecessary for us to refer in detail to the evidence highlighted by the Judge in para [88][f]; the relevant evidence is set out fully in the reported judgment.

    COUNSEL'S SUBMISSIONS

  23. For the appellants, Mr. Ring challenged the finding that Mr. Young was acting, for relevant purposes, in his capacity as a solicitor. There were three grounds for that challenge. Mr. Ring submitted:

    1. First, that the Judge erroneously inferred a retainer, the purpose of which was to manage and administer the estate. Mr. Ring did not dispute that a contract of retainer existed between the co-executors and co-trustees (on the one hand) and the solicitors (on the other); rather he submitted that the contract of retainer was proved from direct evidence. He added that, in his submission, the scope of the retainer inferred went beyond what was established by the evidence.

    2. Second, that the learned Judge confused the concepts of inferring the existence of a retainer with the implication of terms as to its scope. Accordingly, it is submitted that the Judge failed to approach the issue by reference to the test for implication of terms into a contract: namely, the test enunciated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 (PC) at 376.

    3. Third, the Judge based his primary conclusion about the nature and scope of the retainer both on flawed factual findings and on an erroneous interpretation of the expert evidence. In essence, Mr. Ringís complaint is that the Judge, despite referring to the onus of proof in direct terms in para [88][f] of his judgment, failed to apply the test from Dal Pont to which he referred.

  24. For Mr. Hansen, Mr. Stevenson supported the reasons for judgment given by Wild J. Mr. Stevenson submitted that the Judge made no error of law in his approach to the capacity issue. Further, he submitted that the findings of fact made by the Judge were open to him on the evidence. Hence, Mr. Stevenson submitted that there was no basis on which this Court could interfere with those findings.

    ANALYSIS OF COMPETING SUBMISSIONS

    (a) General

  25. The issues raised by counsel can be considered under the following two headings:

    1. The appropriate legal test to apply: namely, did the Judge adopt the correct approach to ascertaining whether a contract existed, and, if so, its terms? and

    2. The evidential issues: namely, does the evidence establish that a contract of retainer was entered into between the executors and trustees and the solicitors? If so, what were the agreed terms?

  26. Before analysing the points raised we discuss some relevant legal principles which must be borne in mind when approaching the specific issues raised.

    (b) Legal principles

  27. In approaching the issues raised in this case it is necessary to remind ourselves of the functions which, in the absence of agreement to the contrary, would have been undertaken by Mr. Young in his respective capacities as executor, trustee and solicitor.

  28. An executor is a person appointed to administer a deceased estate. Ordinarily, the appointment will be made by the testator or testatrix in his or her will. An executor must carry into effect the provisions of the will: see 17 Halsburyís Laws of England (4th ed, 1976) at para 702, Laws NZ, Administration of Estates (Vol 1) para 189 and Re Chamberlain [1958] NZLR 1176. In re Branson (deceased) (1911) 31 NZLR 79 at 82, Williams J summarised the essential duties of an executor as:

    1. to collect and get in the assets of the deceased;

    2. to pay the funeral and testamentary expenses and debts and

    3. to discharge the legacies.

  29. The essential duties of a trustee of a trust created by a will are to obtain possession or control of the trust property, get in funds due to the trust estate, preserve the trust property and secure it from loss or risk of loss and to conform to and carry out the terms of the trust: 48 Halsburyís Laws of England (4th ed, 1984) at 818-820. As regards the residue of an estate, the change in character from personal representative (executor) to trusteeship occurs when the estate has been fully administered, in the sense that all the debts and liabilities have been discharged and the residue ascertained: see Laws NZ, Administration of Estates Vol. 2, para 463 and the cases collected in footnote 4.

  30. In the absence of any relevant instruction to the contrary contained in the trust instrument, the provisions contained in ss13A-13Q of the Trustee Act 1956 set out the obligations of a trustee in relation to investments. The "prudent person" test is created by s13B of the Trustee Act 1956 which states:

    13B

    Duty of trustee to invest prudently

    Subject to sections 13C and 13D of this Act, a trustee exercising any power of investment shall exercise the care, diligence, and skill that a prudent person of business would exercise in managing the affairs of others.

    In relation to the obligations set out in ss13A-13Q of the Trustee Act, see, generally, Re Mulligan (Deceased) [1998] 1 NZLR 498.

  31. As a general rule a trustee may not delegate his or her functions as a trustee. That prohibition extends to a purported delegation to a co-trustee: Niak v MacDonald [2001] 3 NZLR 334 (CA) at 338, para [16]. In that case this Court concluded that s29(2) of the Trustee Act does not empower trustees to delegate powers on a general basis: rather, it is an empowering section which enables trustees to appoint agents to implement decisions once the trustees have, in accordance with the powers conferred upon them, made the appropriate decisions: at 338, para [16]. Paterson J, delivering the judgment of this Court, continued:

    Delegation is, however, allowed where such delegation is specifically permitted by the trust instrument, is specifically permitted by statute, or is practically unavoidable and is usual in the ordinary course of business and the particular agent is employed in the ordinary scope of his or her business Ė see Garrow and Kellyís Law of Trust and Trustees (5th ed, 1982) at 256 ....

    We note that Mr. Hansenís case in the High Court was put squarely on the basis that the scope of the retainer agreed subsumed both Mr. Youngís and Mr. Hansenís roles as co-executors and co-trustees. The case for Mr. Hansen was never put on the basis of employment of the solicitors to undertake specific tasks on behalf of the executors and trustees, so as to give rise to the type of agency contemplated by s29(2) of the Trustee Act.

  32. Executors and trustees may retain a solicitor to act for them in matters with which they are concerned in that capacity. Generally, the executors and trustees are personally liable to pay the costs of the retainer but will be entitled to an indemnity from the estate in respect of costs properly incurred. The retainer should, ordinarily, be given by all executors or trustees, "since a retainer by one does not bind the rest in the absence of express authority": see the cases collected in 44 Halsburyís Laws of England (4th ed) para 94. Further, Re Graham Pitt and Bennett, ex parte Nolan & Skeet (1881) 9 NZLR 617 (CA) at 621 established that the contract is a personal one between the executors and trustees (on the one hand) and the solicitors (on the other). It is not a retainer to act on behalf of "the estate".

  33. Once contracted under a retainer the role of a solicitor is, generally, to advise. Mr. Ring drew a sharp distinction between the giving of advice and the making of decisions: the role of the solicitor being to give advice to the decision-makers (the executors and trustees).

  34. As a practical example of the distinction he drew between advice and decisions Mr. Ring referred us to observations made by Lord Millett in Dubai Aluminium Co Ltd v Salaam [2003] 1 All ER 97 (HL) at 129, para [134]. In the context of a discussion of what might be expected by a client from a solicitor/trustee, Lord Millett observed that it was part of a solicitorís business to advise whether (for example) trust money may lawfully be invested in an overseas hedge fund or used to pay a discretionary beneficiaryís school fees but that it was not part of the solicitorís business to make the decision whether to do so or not.

  35. The distinction between adviser and decision-maker is important for another reason. Acting in his capacity as a solicitor, Mr. Young was acting in the ordinary course of the business of his firm, thus rendering his partners potentially liable for any negligent conduct in his capacity as a solicitor: see ss13, 14 and 16 of the Partnership Act 1908. In Walker v Stones [2000] 4 All ER 412 (CA) at 453-454, Sir Christopher Slade, delivering the principal judgment of the Court, took the view that the equivalent provisions of the Partnership Act 1890 (UK) (on which our Partnership Act is based):

    .... are all drafted on the assumption that individual trusteeships which a partner may undertake are not undertaken 'in the ordinary course of business of a firm'.

    ....

    The assumption that individual trusteeships which a partner may undertake are not something undertaken in the ordinary course of the business of a firm might nowadays appear somewhat outdated, at least in the case of solicitors' partnerships. However, it is important to note that ss 10 to 13 apply to all partnerships, not merely solicitors' partnerships. Furthermore, it appears that, at least in the mid-nineteenth century, even a solicitor was not regarded as having the implied authority of his co-partners to accept office as a trustee and so make his co-partners liable for a misapplication of the trust property: see Re Fryer, Martindale v Picquot (1857) 3 K & J 317, 69 ER 1129, where it was held that the partner of a solicitor who received money as a trustee which was lost was not liable for his default, the moneys having been received by him as a trustee and not as a solicitor.

    Nourse and Mantell LJJ agreed with the judgment delivered by Sir Christopher Slade. That judgment, although given prior to the decision of the House of Lords in Dubai Aluminium, is entirely consistent with the principles stated in that decision.

  36. We emphasise that the principles to which we have referred apply in the absence of agreement to the contrary. In this case the question is whether those default rules have been altered by an agreement reached between the co-executors/ co-trustees and the solicitors.

    (c) The applicable test

  37. It is common ground between the parties that the person who asserts a contract of retainer bears the onus of establishing both the existence and terms of the contract. That proposition was also accepted by Wild J: see the passage from Dal Pontís text, Lawyersí Professional Responsibility in Australia and New Zealand (2nd ed Law Book Company, Sydney, 2001) at 42-43 set out at para [88][f] of Wild Jís judgment.

  38. The Judge found that the solicitor "just took over the estate" and Mr. Hansen agreed to that, understanding it to be the usual procedure. That conclusion was based on an express finding that Mr. Young had failed to explain the different roles of solicitor and executor to Mr. Hansen. Indeed, the need for the solicitor to explain certain things to make a general retainer more specific is a theme which appears to permeate different aspects of the Judgeís reasons for judgment: see in particular, paras [76][d] and [88][h] of the judgment. We note that the Judge developed this point further in paras [90] and [91] of his judgment. He said:

    [90]

    A burden so onerous as to dissuade them from doing estate work should not be imposed upon solicitors. On the other hand, the Court should not permit solicitors administering estates to fall back on trustee indemnities as a means of evading liability for substandard work.

    [91]

    In the end "solicitorís work" or "legal work" is what solicitors or lawyers do with professional skill and care. It must be a concept which keeps pace with a profession which is itself changing and evolving with the times. It is not to be determined by some inflexible and outmoded concept of what is "strictly" (whatever that means) legal work. Indeed, the word "strictly" carries a connotation of over-refinement or fastidiousness of view, and is almost in counterpoise to "generally regarded as".

  39. Those observations appear, in our respectful view, to have coloured the Judgeís approach to the two questions he was required to answer. Those two questions were, put simply:

    1. Did the executors and trustees agree with the solicitors that the solicitors would act for them? and

    2. If so, on what terms did the solicitors agree to act?

  40. Thus, while the Judge was careful, throughout his judgment, to state that the onus of proving both the existence and terms of a contract of retainer rested on Mr. Hansen, the emphasis which he gave to the need for the solicitor to explain the respective roles raises a doubt, in our minds, whether the correct test was, in fact, applied. For that reason, we consider afresh whether a contract of retainer can be found to exist from the evidence. In undertaking that task we emphasise that findings of credibility made by the Judge are to be respected.

    (d) The retainer: evidential issues

  41. Wild J found as a fact that Mr. Young held himself out to Mr. Hansen as experienced in administering estates and as able and willing to undertake the management and administration of the estate: para [76][b] of the judgment. Further, he held that Mr. Young failed to explain to Mr. Hansen the distinctions which existed between Mr. Youngís roles as solicitor and executor. The Judge expressly rejected Mr. Youngís evidence that he explained to Mr. Hansen the obligations of executors and trustees: see para [76][d] of the judgment.

  42. Those findings of fact were critical to the Judgeís conclusion that the scope of the retainer was to act generally in administering and managing the estate and to give or obtain for the executors all appropriate advice: para [76][f] of the judgment.

  43. Mr. Ring referred us to evidence tending to undermine those important findings of fact. Some of the evidence was contained in witness statements signed by witnesses and exchanged before the hearing. Other evidence was elicited by cross-examination.

  44. Because the Judge expressly stated that he did not accept Mr. Youngís evidence that he had explained to Mr. Hansen the obligations of executors and trustees we have focussed our attention on the evidence of Mr. Hansen rather than Mr. Young. Although we have referred also to evidence of Mr. Young we have done that to put the evidence of Mr. Hansen into context.

  45. For convenience, the evidence to which we were referred by Mr. Ring is reproduced in an appendix to this judgment.

  46. We asked Mr. Stevenson to point to any evidence tending to support the findings of fact made by the Judge in para [76][b] and [d] of his judgment. Mr. Stevenson was unable to refer us to evidence supporting the Judgeís finding that Mr. Young indicated, by words or conduct, to Mr. Hansen that he was able and willing to undertake the management of the estate in full.

  47. Mr. Stevenson did refer us to correspondence, on the letterhead of the solicitors, sent by Mr. Young to various third parties which suggested, in Mr. Stevensonís submission, that Mr. Young had, in fact, taken over management of the estate generally. While the correspondence may have been expressed more felicitously in explaining the capacities in which Mr. Young was acting, this is not a case of a claim by a third party who relied on what was said by Mr. Young (on the letterhead of his firm) without Mr. Young having drawn any distinction between his role as executor and his role as a solicitor. Rather, it is a dispute between parties to an alleged contract of retainer.

  48. We remind ourselves that the contract which the Judge found to exist must be proved to have been entered into by both Mr. Hansen and Mr. Young (qua executors and trustees) and the solicitors.

  49. We agree with the Judge that a contract of retainer came into existence between the executors/trustees and the solicitors. But for the reasons which follow, we respectfully disagree that the retainer extended so far as to require the solicitors "to act generally in administering and managing the estate, and to give or obtain for the executors all appropriate advice":

    1. Mr. Hansen appeared to accept that arrangements for the administration of the estate were discussed at a long meeting with Mr. Young. That meeting occurred, according to Mr. Young, on 16 September 1999, a week after Mr. Nicholsí death. Mr. Hansenís suggestion that, at that meeting, Mr. Young, assumed total responsibility for the management of the estate is at odds with his own evidence (rejected by the Judge) that on 23 February 2000 he gave instructions to Mr. Young to sell the US shares. If total responsibility rested with Mr. Young, as alleged, there was no basis upon which Mr. Hansen could have given such an instruction. We note also that, in a facsimile to the solicitors dated 18 July 2001, Mr. Hansen said that he had instructed Mr. Young to sell all his shares on 14 February 2001. Again, that facsimile is inconsistent with the suggestion that total responsibility for decisions relating to the sale of the shares rested solely with Mr. Young.

    2. Mr. Hansen acknowledged that he continued to have responsibilities as an executor and trustee of the estate. He acknowledged that during the course of the meeting on 16 September 1999 Mr. Young explained that both he and Mr. Hansen were executors and trustees and that it was both of their jobs to secure the assets, work out their value and to carry out what was stated in the will. For that reason Mr. Hansen acknowledged that he and Mr. Young would, together, administer and manage the estate. Those acknowledgements, taken together with his evidence that he knew that lawyers did "legal things" demonstrate that Mr. Young did, in fact, explain the respective functions to him, contrary to the findings to be found in para [76][d] of the judgment. We do agree that the Judge was right to find that there was no explicit explanation of the effect of the indemnity clause, another matter to which the Judge refers in para [76][d] of the judgment.

    3. The contract of retainer was limited to those terms agreed upon between Mr. Hansen and Mr. Young as executors/trustees and Mr. Young as solicitor. Mr. Hansen could not unilaterally commit the executors/trustees to an agreement with the solicitors over the terms of the retainer. Both executors/trustees, acting in that capacity, had to join in such an agreement. So, it would not have been sufficient for Mr. Hansen alone to form the impression that the retainer was as wide as is now being asserted. Mr. Young, too, had to be a knowing and willing party to a retainer in those wide terms. There is no evidence to suggest that Mr. Young agreed to terms of that nature.

  50. We are satisfied from the evidence to which we have referred that Mr. Hansen understood that the solicitors would carry out those tasks on which it was necessary for legal assistance to be given to the executors and trustees, thereby creating a contract of retainer from the discussions on 16 September 1999. The repeated acknowledgements by Mr. Hansen that he was to have a say in the administration and management of the estate and his conduct (on the occasion to which his facsimile to the solicitors of 18 July 2001 referred ) in giving an instruction for sale of the shares suggests that he was aware (at least in general terms) of the different roles to be undertaken by solicitors (on the one hand) and executors and trustees (on the other). On the basis of that evidence we hold that a contract of retainer was expressly entered into on 16 September 1999 whereby the solicitors would undertake work of a legal nature on instructions from the executors and trustees with the executors and trustees remaining responsible for management of the estate.

  51. In our view, Mr. Hansenís evidence does not prove a contract of retainer in the form found by the Judge. Given that Mr. Young would have had to have been a party to the agreement (in his capacity as joint executor and trustee) it was necessary for Mr. Hansen to establish, on a balance of probabilities, that the solicitors agreed to take over management of the estate. With respect to the Judge, a finding of that nature was not justified on the evidence.

  52. There was no real dispute between the experts called on behalf of the solicitors and Mr. Hansen (Mr. Eades and Mr. Gray respectively) about the ordinary duties of solicitors when acting for executors and trustees of an estate. Those duties were summarised in Mr. Eadesí evidence as follows:

    1. to consider material provided and advise on necessity for and nature of grant of administration; on likely course of administration of estate; on rights of beneficiaries etc

    2. to prepare application for grant of administration and supporting papers, verify identity and value of assets

    3. On behalf of executors/trustees, to instruct estate agents, share brokers, etc on realisation of assets; receive progress reports, and convey to trustees for any further instructions required; arrange for completion of sales (including "conveyancing" in respect of real property)

    4. to act on the trusteesí instructions to pay out beneficiaries.

  53. Mr. Gray did not address, in his witness statement, the issue of capacity. Instead, he approached his task by considering what Mr. Young ought to have done in his capacity either as executor or solicitor. He undertook that analysis on the basis of knowledge that Mr. Young was an experienced solicitor. He considered what an experienced solicitor ought to have done in the circumstances. Mr. Gray did not dispute that the functions of a solicitor to which Mr. Eades referred were, ordinarily, the obligations of a solicitor. Rather, his evidence that Mr. Young ought to have advised Mr. Hansen in relation to the US shares was based on his understanding of the specific retainer agreed.

  54. At the commencement of cross-examination of Mr. Gray by Mr. Ring the following exchange occurred:

    Mr. Gray, your aware that there is an issue in this case where a person is a solicitor to the estate and also an executor trustee, what are the personís duties in capacity only as a solicitor? That would depend on the nature of the retainer.

    Just want to clarify for the moment that you understand that when you did your brief, did you understand that that was a major issue? I didnít realise the point would be taken because thereís no reference to that in my brief because I viewed that in the circumstances the solicitor in a firm holding itself out as offering services in estate administration where there is what I would call a lay co-executor and not a professional executor there is a reliance on the solicitor to provide full service in advising, managing, administration obviously.

    I put to you some propositions and you tell me whether you accept them. That a person may act in different capacities at the same time. Do you accept that? Yes with a solicitor within the same firm.

    That a solicitor can act in different capacities at the same time, do you accept that? I accept that but whether his client is aware of that distinction is open to discussion.

    ....

    Do you accept the primary role of a solicitor is legal work, advice and legal services? Not generally in New Zealand unless other executors are professional executors such as trustee companies, the Public Trustee, the Maori Trustee and persons like chartered accountants who have experience in acting as executors ....

  55. No issue of credibility arises as between Mr. Eades and Mr. Gray. Both are experienced and able solicitors. On the view of the facts which we have taken we do not derive much assistance from Mr. Grayís evidence. Through no fault of his own, Mr. Gray was obliged to respond spontaneously to cross-examination on the capacity point from Mr. Ring. We prefer the evidence of Mr. Eades about the tasks usually undertaken by solicitors acting for executors and trustees of an estate in the absence of agreement to the contrary.

  56. The Judge also placed some weight on Mr. Grayís evidence of public perception in New Zealand of the role of solicitors. With respect, we regard Mr. Grayís evidence on that subject as beside the point. The question is what was actually agreed between the parties. The question was not what Mr. Hansen (or any other member of the public) would perceive a lawyer as doing and in what capacity. Once that issue is clearly stated no weight can attach to Mr. Grayís views as to the public perception of the role played by solicitors when a solicitor is one of two or more co-executors and co-trustees.

  57. We add concerns about the general tenor of Mr. Grayís evidence. In effect, Mr. Gray was saying that unless a co-executor and trustee (to which Mr. Gray refers as a "client" in the penultimate answer set out in para [54] above) is told of the distinction between the capacities in which the solicitor is acting the solicitor will be taken, in his capacity as a solicitor, to have agreed to carry out work entrusted to named executors and trustees by a testator or testatrix. Such a wide statement, mislocates the legal responsibility for the administration and management of estates. The ultimate responsibility resides with the executors and trustees, not their solicitors. The executors and trustees can assign selected tasks to their solicitors, but only to the extent that the tasks fall within a proved retainer. The statement is wrong in law because it ignores the need for the person asserting a retainer to prove its existence and its terms. It has often been said that solicitors should not be regarded as insurers in these circumstances. We endorse that proposition.

  58. In our view, it is unnecessary to consider whether any terms need to be implied into the contract of retainer we have found to exist. The claimed negligence arises out of functions which remained within the scope of Mr. Youngís and Mr. Hansenís roles as co-executors and co-trustees. It therefore falls outside of the scope of the retainer on any view of the facts.

  59. While we agree with the Judge that Mr. Youngís conduct fell well below that which is to be expected of a legally qualified person, it is not for this Court to consider possible alternative sources of liability such as a tortious duty of care owed to Mr. Hansen personally, deceit, or breach of trust. Deliberate decisions were made by Mr. Hansenís advisers to frame the pleadings in the present case to focus attention solely on the contract of retainer. We do not know what considerations led to those decisions. But the way in which the pleadings were drawn precluded the possibility of a cross claim based on the way in which Mr. Hansen carried out his duties as co-executor and co-trustee and also provided limitations on the evidence which could properly be led, by the solicitors, on the standard to which Mr. Hansen fulfilled those roles. In our view, it is now much too late to consider the claim on any alternative basis.

    RESULT

  60. A retainer in the form found by the Judge cannot, on the evidence, be sustained. The evidence does not, when analysed, demonstrate an agreement reached between Mr. Young and Mr. Hansen (in their capacities as co-executors and co-trustees) and Mr. Young (in his capacity as a partner of the solicitors) whereby the solicitors would assume responsibility, in their capacity as solicitors, for the general management and administration of the estate and, in particular, the sale of the US shares.

  61. The appeal is allowed. The judgment entered in favour of Mr. Hansen in the High Court is set aside and judgment is entered in favour of Mr. Young and the solicitors.

  62. Costs in favour of the appellants are fixed in this Court in the sum of $6000, together with disbursements to be fixed by the Registrar. Disbursements are to include the reasonable travelling and accommodation expenses of two counsel.

  63. Costs are also awarded in favour of the appellants in the High Court. Those costs, if not agreed, are to be fixed by the High Court.

    APPENDIX

  64. What follows is the evidence to which Mr. Ring referred the Court: see para [45] of the judgment.

  65. In paras 4.1-4.4 (inclusive) of his witness statement, Mr. Hansen said:

    4.1

    I have never had the experience previously of being an executor and trustee. I do not know if there are similar positions under the law of Denmark.

    4.2

    Mr. Young did not at any time give me any advice in relation to his or my responsibilities as an executor and trustee.

    4.3

    Following the death of [Mr. Nichols], Mr. Young took over the administration of the estate. He had the will and had been [Mr. Nicholís] lawyer. I understood that this was the usual procedure.

    4.4

    I made it clear to Mr. Young in my early discussions with him that I had difficulty in reading and writing the English language. I got to know about the estate mainly from the discussions I had with Mr. Young or his personal assistant, [Ms Gardner], rather than from any of the letters or other written information he sent to me. I tried to keep in touch with him by telephone and by meetings with him.

  66. Mr. Young responded to that evidence in para 3.4 of his witness statement. He said:

    3.4

    I explained to [Mr. Hansen] that we were both trustees/executors and that it was both our obligation to secure the assets, ascertain their value and attend to the directions contained in the will. In this case the only significant directions related to the specific legacies to family members. The position is this case was somewhat unusual because the residuary estate was very large and [Mr. Hansen] was both an executor/trustee and the sole residuary beneficiary. I explain that, given his position, most of the decisions about how property should be dealt with, what should be sold and so on would be decisions that he should make rather than I because once the legacies had been met all the remaining property would simply be transferred to him alone. I explained to [Mr. Hansen] that the usual practice in administration of estates was that the trustees/executors would identify the assets and liabilities in the estate as soon as possible with a view to meeting the specified legateesí entitlements within one year.

  67. Mr. Hansen responded, by way of reply, to Mr. Youngís witness statement by stating:

    3.4

    Mr. Young will say:

    I explained that given his position, most of the decisions about how property should be dealt with, what should be sold and so on would be decisions that he should make rather than I because once the legacies had been met all the remaining property would simply be transferred to him alone.

    The general effect of the discussion was that Mr. Young or his firm would attend to the management and administration of the estate.

    There was discussion along the lines that the estate would have to pay the family beneficiaries, pay debts and other liabilities and that the balance would be paid or transferred to me. I understood there was a year to do this. Mr. Young also told me that I had a say in what was to be done.

    [our emphasis]

  68. Mr. Young also said, at para 3.8 of his witness statement, that Mr. Hansen actively participated in discussions about the shares and followed what he was being told. He continued:

    3.8

    .... He seemed to fully understand the rights and obligations I was describing as executor/trustee. These were mainly relevant in relation to his obligations towards the family members who were specific legatees under the will. In this regard, we briefly discussed the possibility of a family protection claim by [Mr. Nicholsí] mother and any possible other claims that might arise. I explained to him that such claims could end in litigation and that if matters got to that point someone else, either inside or outside the firm, would deal with it.

  69. Mr. Hansen responded to that evidence as follows:

    3.8

    I had a general understanding of what was required in respect of the management and administration of the estate, and I thought Mr. Young would carry this out and that I would have a say in the decisions that were made. At various times a family protection claim by Mrs. Nichols and other possible claims were discussed with Mr. Young. Mr. Young explained to me that such claims could land up in Court and that, if it went to Court, then Sladden Cochrane or someone outside the firm would handle it.

    [our emphasis]

  70. In para 3.10 of his witness statement Mr. Young said:

    3.9

    We did not discuss what I would charge for doing these things. We had gone through the will clause by clause and noted the charging clause so [Mr. Hansen] was aware that I was entitled to charge for my work as a trustee/executor. We however, did not discuss the amount I would charge or the manner in which it would be charged; I assumed that he would expect me to charge in the usual way, which is what I did.

  71. Mr. Hansen responded to that evidence as follows:

    Mr. Young discussed going through the will clause by clause. I said this was not necessary because I knew what was in the will and I had a copy. The will was not gone through clause by clause. I agree that there was no discussion about what Mr. Young would charge, but I expected him to charge normal fees for the work done by him.

  72. In para 4.8 of his witness statement Mr. Young gave specific evidence on what was discussed between Mr. Hansen and himself in relation to the roles which each of them would fulfil: he said:

    4.8

    [Mr. Hansen] and I never discussed which tasks would be better suited to he or I by virtue of my being a solicitor. There were obvious matters such as attending to probate and the transmission of the estate property which clearly fell to me as solicitor. But the vast bulk of work connected with this estate was work which any lay person could have done and was truly work connected with the administration of the estate. It so happened that I was better placed to attend to these tasks because I had secretarial facilities and because I was in the country whereas [Mr. Hansen] was often overseas.

  73. Mr. Hansen responded only to part of that evidence. He said:

    4.8

    I agree that "[Mr. Hansen] and I never discussed which tasks would be better suited to he or I by virtue of my being a solicitor." The position was that Mr. Young was to carry out the work involved in the administration and management of the estate subject to my having a say.

  74. In cross examination by Mr. Ring, Mr. Hansen elaborated upon his understanding of the respective roles which he and Mr. Young were to play in the administration of the estate as follows:

    When Dennis Nichol died you knew the will appointed you as executor and trustee?

    Yes. Not before, but after, I know I was mentioned in the will. For what I got in 99.

    You knew that Bruce Young had been appointed as the other executor and trustee?

    That is stated in the will.

    Is one of your claims that Bruce Young didnít go through the will with you?

    Is that a claim, so it must be right.

    Didnít you tell His Honour just before that you already knew what was in the will?

    I know what was mentioned. I havenít lied.

    Did Mr. Young discuss going through the will with you clause by clause?

    You mean about the will.

    Did Mr. Young discuss going through the will with you clause by clause?

    If my claim is he hadnít done it I would say no.

    Did you tell him this wasnít necessary because you knew what was in the will and you had a copy?

    I repeat again I know I was mentioned in the will but I didnít know all the details, what would happen.

    Did you tell him it wasnít necessary for him to go through the will clause by clause because you knew what was in it and you had a copy?

    I donít think I want to say to that.

    Look at your reply brief, p3, under heading para 3.10. [see para [51] above] Do you see there the things I just asked you which you just denied?

    What you just told me is the opposite of what you said on that page? I can see it says clause by clause. I also said I canít remember.

    Whatís the truth? Did Mr. Young discuss going through the will?

    I will say I canít remember.

    You can remember when you prepared this reply brief?

    Some time you have something coming up step by step but in the present you forget things. Thatís my answer.

    The reply brief is right and what you just told me before is wrong?

    I wouldnít say itís wrong, I would say maybe I shouldnít have said no I should say I canít remember, so had better say I canít remember, because I havenít lied.

    You knew that Mr. Young was also a solicitor as well as appointed executor and trustee?

    Thatís correct.

    You knew these were different roles?

    Repeat.

    You knew that executor and trustee is a different position to solicitor?

    Not specially.

    You were an executor and trustee?

    Yes 50%.

    You werenít a solicitor were you?

    I am not a solicitor. Thatís like a lawyer is that correct?

    Mr. Young was an executor and trustee just like you?

    Thatís for the estate.

    You knew that he was an executor and trustee just like you were?

    Yes 50% what I was.

    So you knew being a solicitor was different to that?

    Yes

    You never discussed with him what those different roles meant?

    My answer is I canít remember that.

    You expected him to do as an executor and trustee what executors and trustees usually do?

    I donít know what they usually do.

    You didnít have to know what it was they actually did but you expected Mr. Young to do whatever was normal?

    I expected everything to be sorted out in a peaceful way so I could get peace and it sounds like I havenít got that, if a person is 50% between sides, how can I not be informed whatís going on. I just ask you.

    You say to His Honour that because he was 50% of the executor and trustees and so were you, you expected him to tell you things so you knew what was going on?

    That would be appreciated.

    You also expected him as a solicitor to do the legal things necessary?

    From that point I donít know what I expect because I donít know the New Zealand rules.

    You knew that lawyers do legal things?

    Yes but want to remind you that when you are under pressure to answer how much things you can expect to come up with you when you have a lawyer to look after your things plus I didnít live in New Zealand. I feel if I have to be honest it was Bruce Young was mentioned in the will like lawyer solicitor and trustee and executor, there shouldnít be any work for me Ė nothing can go wrong, I want to remind you I was in Denmark, wasnít living here, therefore for my point to have a lawyer to look after you so you shouldnít be worried, it sounds like everything else came up later on. I donít know a lot of things about, all I know it was a desperate position I was in so just want to have it set out for family Tom Ewing, the bank and Flowerenz [the business of the late Mr. Nichols] because that was the reason for I wanted to be here for the business, it was the business.

    Look at para 10.1 of your main brief. You said you believed Mr. Young and Sladden Cochrane were retained to advise you in your capacity as trustee as residual beneficiary and personally. You never asked Mr. Young specifically to advise you in any of those capacities should that be necessary. Yes or no Ė you didnít specially ask Mr. Young to give you that advice did you? My question is not yes or no, is that necessary. You said in para 10.2 at second point, you relied on Mr. Young to advise you on your responsibilities as a trustee, in particular on investment and administration of trust assets, by that do you mean legal advice about what you could and couldnít do?

    Yes.

    ....

    You said in the second bullet point at 10.2, that you relied on Mr. Young to advise you in relation to your responsibilities on investment and administration of trust assets? Do you mean by that legal advice on what you could and couldnít do?

    Yes.

    As well as being executor and trustee you were also a residuary beneficiary?

    Yes.

    You knew that they were different things? Maybe I have been told but I canít remember that.

    BENCH: The question is whether you understood being a beneficiary under the will was different from being a trustee and executor?

    Yes. I understand that difference two things today, that beneficiary have to be paid out before me.

    COUNSEL: Do you remember the meeting with Mr. Young on 16 September 1999?

    Is it something special I should remember.

    Do you remember a long meeting maybe 4 hours or so?

    I am not sure if it was 4 hours, but we have a meeting yes.

    Mr. Young explained to you that you were both trustees and executors?

    Yes I think he did that.

    And it was both your jobs to secure the assets, work out their value and carry out what was in the will?

    Thatís correct yes.

    So that you and he together as executors/trustees would administer and manage the estate? As executors and trustees you and he together would administer and manage the estate?

    Yes.

    He explained to you because you were the sole residuary beneficiary most of the decisions about how property should be dealt with what should be sold and so on should be yours?

    Yes.

    At the end once the legacies had been paid all the remaining property would be transferred into your name alone?

    Thatís correct. If I have 50% in charge of whatís going on why did he not do what I was telling him. Another thing I want to say, his instructions most of the time to the family, he used too much time and money for the family, I donít want to use the estate money for that. Because its stated in the will what [Mr. Nichols] wanted, if the family had a claim I couldnít understand what [Mr. Nichols] said if you make a will and people contest it or make a change on it whatís the point of making a will. I never get an answer to that. I said to him he said he was lucky that Denis Nichols change his will so the family would take a little bit, so therefore there shouldnít be any problem if they make a claim and I was happy for that because they make a claim, and I couldnít understand that.

    ....

    Look at your main brief, 10.4, you refer there to not receiving any advice from Mr. Young in relation to the US shares, what you are talking about there is information about what was happening with the shares?

    Thatís correct. I donít get informed anything what was going on.

    Keeping you up to date as a co-executor/trustee with what they were worth?

    No because I asked in my brief the date, where I write it down I remember, 740,000 US I ask him about it. But why did he not tell me the truth about all the shares was gone before I came back to New Zealand in March 2001 and it was gone. The bank get promised there was guarantee Ė Bruce Youngís guarantee, writing to the National Bank that the money was no problem he knows the money was gone all except $2,600. Thatís the answer for a lawyer is honest. They have been putting very big bad decision for me between the bank and my leaving today, I donít know what cross I took $40,000 to pay my costs to the bank but who shall promise .... without asking how much.

    BENCH: The question was about 10.4 of your evidence it was put to you Ė which page?

    COUNSEL: Look at the document brief of evidence of Steen Hansen. Look at p 24, 10.4. Your main brief. What you are talking about there is that you are unhappy as a 50% co-executor/trustee that Mr. Young wasnít keeping you informed? Is that what it is writing about here?

    I am asking you if thatís what you are talking about in para 10.4, lack of information?

    Yes. Thatís correct. I am not satisfied I donít get informed.

    [These extracts are taken from page 5 line 6 to page 8 line 33 (inclusive) of the Notes of Evidence; the underlined parts of the evidence represent our emphasis]


Cases

Hansen v Young [2003] 1 NZLR 83; BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363; Pegrum v Fatharly (1996) 14 WAR 92; Re Chamberlain [1958] NZLR 1176; Re Branson (deceased) (1911) 31 NZLR 79; Re Mulligan (Deceased) [1998] 1 NZLR 498; Niak v MacDonald [2001] 3 NZLR 334 (CA); Re Graham Pitt and Bennett, ex parte Nolan & Skeet (1881) 9 NZLR 617 (CA); Dubai Aluminium Co Ltd v Salaam [2003] 1 All ER 97 (HL); Walker v Stones [2000] 4 All ER 412 (CA); Re Fryer, Martindale v Picquot (1857) 3 K & J 317, 69 ER 1129

Legislations

Partnership Act 1908: s.13, s.14

Partnership Act 1890 (UK)

Authors and other references

17 Halsburyís Laws of England (4th ed, 1976)

Laws NZ, Administration of Estates (Vol 1)

Dal Pont, Lawyersí Professional Responsibility in Australia and New Zealand (2nd ed Law Book Company, Sydney, 2001)

Representations

M G Ring and P Courtney for Appellants (instructed by McElroys)

J B Stevenson and R K P Stewart for Respondent (instructed by Izard Weston)


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