Borthwick - [2023] NZHC 3685

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-747

[2023] NZHC 3685

UNDER the Trusts Act 2019 and the Inherent Jurisdiction of the High Court

IN THE MATTER

of the Te Whanga Farm Trust, the Pukimuke Trust and the Te Whanga Trust

BETWEEN

ROBIN GAY BORTHWICK AND GUY COLDHAM WILLIAMS

First Applicants

AND

AND

ROBIN GAY BORTHWICK, GUY

BENNETT SARGENT AND GRAEME ALBERT BAYLISS
Second Applicants

ROBIN GAY BORTHWICK, PATRICK ANDREW BORTHWICK, GUY BENNETT SARGENT AND GRAEME ALBERT BAYLISS

Third Applicants

Hearing: On the papers

Appearances:

A S Butler KC, E M S Cox and D Viatos for Applicants V T M Bruton KC, N L Walker and M C Grant for

Belinda Murray

Judgment:

14 December 2023

JUDGMENT OF LA HOOD J

Re BORTHWICK [2023] NZHC 3685 [14 December 2023]

Introduction

[1] The trustees of the Borthwick Trusts apply for blessing orders of the Court to enter into a deed of settlement and vary the trusts to give effect to a settlement agreement. The orders sought are necessary to resolve a dispute between the trustees and Belinda Murray, a discretionary beneficiary of a trust among the Borthwick Trusts. The applicants are trustees of the Borthwick Trusts and apply for the orders jointly with Belinda.

Background of the Borthwick Trusts and how they came to be

[2] The Borthwick Trusts are comprised of the Te Whanga Farm Trust, the Pukimuke Trust and the Te Whanga Trust. The purpose of the Borthwick Trusts has been to act as a vehicle for holding the family’s agricultural assets and supporting its operations. The Te Whanga Farm Trust, for example, has held the majority of the family’s assets for about six decades.

[3] The Te Whanga Farm Trust was settled by Patrick John Borthwick for the benefit of his sons and wife in December 1968. In August 1970, Patrick John’s son, Robin John Borthwick settled Waitui Trust. That trust has now been wound up. In September 1988, Patrick John appointed the whole of the residue of the capital and income of the Te Whanga Trust to Robin John and Patrick John’s remoter issue. In June 2001, Robin John and his wife, Robin Gay settled the Pukimuke Trust, identifying four classes of beneficiaries: class A being Robin John and Robin Gay; class B being their children, Patrick Andrew and Belinda; class C being any children or grandchildren of Patrick Andrew and Belinda; and class D being the trustees of Te Whanga Farm Trust. In November 2015, Robin John and Robin Gay settled the Te Whanga Trust in anticipation of a restructure of the assets in December 2015.

[4] The restructure involved Te Whanga Farm Trust selling all of its assets to the Te Whanga Trust. The purchase price was approximately $12 million. The Pukimuke Trust sold two blocks of land to the Te Whanga Trust for approximately $800,000. Some liabilities associated with the Te Whanga Farm and Pukimuke trusts were also transferred to the Te…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Borthwick

Details

AGLC: Borthwick [2023] NZHC 3685
Case: [2023] NZHC 3685
Decision Date: 14 December 2023

CaseChat Overview and Summary

The Borthwick Trusts, comprising the Te Whanga Farm Trust, the Pukimuke Trust, and the Te Whanga Trust, are at the centre of this dispute between trustees and Belinda Murray, a beneficiary. The trustees seek court approval to enter into a settlement agreement and vary the trusts accordingly. The settlement aims to resolve a dispute concerning the 2015 restructure of the trusts and the intended distribution of assets upon Robin Gay's passing. The trustees and Belinda have reached a settlement that involves transferring substantial land assets to Belinda, free of charges and liabilities, and excluding Belinda and her children from being beneficiaries.

The key legal issues the court had to decide involved the appropriateness of the trustees' decision to enter into the settlement agreement and vary the trusts. This included whether the proposed variation and resettlement of the trusts complied with statutory provisions, particularly sections 122 and 124 of the Trusts Act 2019. The court also had to consider whether the settlement agreement was in the best interests of all beneficiaries, including those who lack capacity, unborn beneficiaries, and future beneficiaries.

In deciding these issues, the court considered the intentions of the settlor, the benefits and detriments of the settlement to all parties, and the practical and business-like approach to the arrangement. The court found that the settlement agreement was a proper exercise of the trustees' powers and that all adult beneficiaries supported the proposal. The settlement would bring an end to a long-standing family dispute and provide financial and non-financial benefits to all parties involved. The court was satisfied that the variations were consistent with the settlor's intentions and did not conflict with any vested interests of the minor, unborn, or future beneficiaries.

The court granted leave for the proceeding to be commenced by way of an originating application and dispensed with service requirements. The court approved the orders sought by the trustees and Belinda, which included blessing the trustees' decision to enter into the settlement deed, transferring the specified land to Belinda, and varying the trusts as outlined in the settlement agreement. The court also ordered that the names and identifying details of the parties and properties be redacted in any publicly available publication of the court's reasons.

Orders