Collinson v Collinson & Co Limited

[2024] NZHC 3208

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-001797 [2024] NZHC 3208

UNDER

Part 19 of the High Court Rules 2016

IN THE MATTER

of the Collinson Family Trust

BETWEEN

JOHN ROBERT COLLINSON

Applicant

AND

COLLINSON & CO LIMITED as Trustee of the COLLINSON FAMILY TRUST

Respondent

Hearing:	31 October 2024
Appearances:	J Leenoh for Applicant
Judgment:	31 October 2024

JUDGMENT OF VENNING J

[Application to vary terms of trust deed]

This judgment was delivered by me on 31 October 2024 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           K3 Legal Ltd, Auckland

COLLINSON v COLLINSON & CO LIMITED [2024] NZHC 3208 [31 October 2022]

[1]John Collinson seeks orders:

(a)declaring the settlement of the Collinson Family Trust (the Trust) in 1995 as valid; and

(b)varying the terms of the Trust.

[2]        The orders are sought under ss 122, 124 and 133 of the Trusts Act 2019 and the Court’s inherent jurisdiction. There is no opposition to the applications, indeed they are consented to by the existing beneficiaries of the Trust. The Court’s approval is, however, still necessary.

Background

[3]        Mr Collinson and his ex-wife Catherine Collinson (Ms Collinson) settled the Trust in 1995. Unfortunately at the time the Deed was not signed due to an oversight. The evidence is, however, that the Trust was operated in accordance with the provisions of the Deed and on the basis the Trust was properly settled at the time and that the Trust owns the assets administered by it.

[4]        In 2006 Mr Collinson and Ms Collinson separated. Their relationship property was subsequently divided and formalised by Court order. As part of that division shares in various companies held by the Trust remained held by the Trust and all rights, interests, powers and entitlements as settlor trustee and beneficiary of the Trust were vested in Mr Collinson. The intention was that Ms Collinson would be divested of her powers of appointment and be removed as a beneficiary of the Trust.

[5]        In 2006 Mr Collinson commenced a new relationship with Tracey Flooks. They have one child together, Jaimee Rose Collinson.

[6]        Pursuant to the terms of the existing trustees the beneficiaries of the Trust include:

(a)Mr Collinson;

(b)Ms Collinson;

(c)Ms Flooks as Mr Collinson’s de facto partner;

(d)Any child or remoter issue of the applicant and Ms Collinson, currently being Jack Collinson and Amy Collinson.

[7]        On advice Mr Collinson understands that his and Ms Flooks’ daughter, Jaimee Collinson, does not qualify as a beneficiary of the Trust. One of the proposed amendments would include her as a beneficiary of the Trust.

[8]        As noted, the provisions of the Trust Deed provide for “remoter issue” to be eligible beneficiaries of the Trust. There is no “remoter issue” at present, however, there could be in the future. For that reason the Court’s approval is sought to the variation and resettlement of the Trust.

[9]        Ms Collinson and Ms Flooks consent to the application as do Jack and Amy Collinson.

[10]      Given that the Trust has operated on the basis that the Trust Deed was validly executed I accept it is appropriate to make an order declaring that the settlement of the Trust Deed in 1995 was valid.

[11]      The remaining issue is the application to vary and resettle the Trust under s 122 and the Court’s approval under s 124. The Court is being asked to approve the variation and resettlement of the Trust on behalf of Jaimee (in the event she is a beneficiary) and, more relevantly, on behalf of a future person who may acquire a beneficial interest.

[12]Under s 124 the Court must take into account:

(a)the nature of the person’s interest in the trust property and the effect of the order on that interest;

(b)the benefit or detriment that may result to any person with such an interest in the trust property of the order sought; and

(c)the intentions of the settlor of the trust in settling the trust if practical to ascertain those intentions.

[13]      Although the existing wording of the eligible beneficiaries is potentially ambiguous I accept that the favoured interpretation is that Jaimee Collinson is presently not a beneficiary of the Trust. Under the proposed variation she will be included as a beneficiary. Consent on her behalf under s 124 is strictly not required. But, if it were, as the variation is to her advantage, the Court would have no difficulty approving the variation sought.

[14]      The more relevant consideration is the approval on behalf of future persons, “remoter interest” who may acquire a beneficial interest in the future.

[15]      The particular effect of the variation sought will be to remove Ms Collinson (who has consented), superannuation funds and charities and any wife, husband, widow, widower or de facto partner of Mr Collinson and any wife, husband, widow, widower or de facto partner of any child or “remoter issue” of Mr Collinson.

[16]      The intent of the settlor when the Trust is initially established appears to have been to primarily benefit Mr Collinson, his then wife, and children. I also note the consent of Jack and Amy who have the most direct connection with the potential “remoter issuer” in this case.

[17]      I consider it appropriate to make orders in accordance with the originating application dated 24 July 2024. Orders accordingly.

Venning J