Edge v Bourke - [2020] NZHC 1185

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IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2019-419-259

[2020] NZHC 1185

UNDER the Trustee Act 1956 and in the inherent jurisdiction of the High Court

IN THE MATTER

of the HJ BOURKE FAMILY TRUST

BETWEEN

RICHARD OWEN EDGE and MARY

LOUISE BOURKE as trustees of the HJ BOURKE FAMILY TRUST

Applicants

AND

JOHN HENRY BOURKE

First Respondent

MARY ANNE BOURKE
Second Respondent

LOUISE RITA BOURKE
Third Respondent

CAITLIN ANNE BOURKE

Fourth Respondent

Hearing: 22 April 2020

Appearances:

W M Patterson for the Applicant

S Hughes QC for the First Respondent
K Sullivan for the Second and Third Respondents M D Peploe for the Infant Grandchildren

Judgment:

2 June 2020

JUDGMENT OF DUFFY J

This judgment is delivered by me on 2 June 2020 at 2.15 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

EDGE v BOURKE [2020] NZHC 1185 [2 June 2020]

[1] The applicants are the trustees of the H J Bourke Family Trust (the Trust). They seek directions from the Court on the proper interpretation of cl 2 of the deed establishing this trust (the Trust Deed).

[2] The Trust was settled by the late Henry John Bourke. The beneficiaries are the children and grandchildren of the settlor. The first, second and third respondents are the children of the settlor. The fourth respondent is an adult grandchild of the settlor. There are six other grandchildren who, at the time the proceeding was commenced, were all minors and are represented by counsel, Mr Peploe. Since then one of those grandchildren, Taylor Mary Bourke, has turned 20 however, at the hearing she continued to be represented by Mr Peploe.

[3] Clause 2 of the Trust Deed provides for the distribution of the Trust funds after the expiration of the settlement period, which expired in May 2019. Those funds comprise a dairy and cattle farm, live and dead stock and other assets, all of which have a net value of approximately $4,450,000.

[4] The trustees have been unable to agree with Mr Peploe on the correct interpretation of cl 2, hence this proceeding. The first respondent supports the interpretation taken by the trustees. The second and third respondents abide the decision of the Court. The fourth respondent has chosen to take no part in the proceeding.1

[5]Clause 2 of the Trust Deed reads as follows:

AFTER the expiration of the settlement period to stand possessed of the trust fund (including the said accumulations if any) being so much of the trust fund as has not previously been paid applied or appropriated pursuant to the foregoing provisions of this deed UPON TRUST for such of the children of the marriage of the said HENRY JOHN BOURKE and MARY LOUISE BOURKE and the children of the children of the marriage of the said HENRY JOHN BOURKE and MARY LOUISE BOURKE living at the expiration of…

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 Edge v Bourke

Details

AGLC: Edge v Bourke [2020] NZHC 1185
Case: [2020] NZHC 1185
Decision Date: 2 June 2020

CaseChat Overview and Summary

Edge v Bourke is a case before the New Zealand High Court, which involves a dispute over the interpretation of a Trust Deed, specifically clause 2. The applicants, trustees of the HJ Bourke Family Trust, seek directions from the Court on the proper interpretation of the Trust Deed. The Trust was settled by the late Henry John Bourke, and the beneficiaries are the children and grandchildren of the settlor. The first, second, and third respondents are the children of the settlor, and the fourth respondent is an adult grandchild of the settlor. The trustees have been unable to agree on the correct interpretation of clause 2 with Mr. Peploe, who represents the infant grandchildren, hence this proceeding.

The central legal issues in this case are: (a) how wills and trusts should be construed; and (b) the general effect of a stirpes division and the language required to displace this general effect. The Court has considered the relevant principles of construction, including the approach in Marley v Rawlings and Powell v Powell, and has determined that the construction of wills and trusts should be approached in the same manner as the construction of contracts. The Court has also examined the general form of a stirpes division and whether clause 2 of the Trust Deed displaces the general rule against multi-generational competition between living beneficiaries.

The Court has concluded that clause 2 of the Trust Deed should be interpreted as a per stirpes division, which precludes members of a more remote generation from taking in competition with their living ancestor. The Court has found that the language used in clause 2 does not explicitly displace the general understanding of a per stirpes division, and therefore, the rule against multi-generational competition should apply. The Court has directed that, for as long as the children of the settlor remain alive, the Trust Funds be divided equally between them, to the exclusion of the grandchildren. Should this direction require alteration, leave is reserved to the parties to return to Court for that purpose. The Court has also decided that the costs of the proceeding should be met from the Trust Funds, but if any party has a contrary view, they and the other parties have leave to file memoranda as to costs.

Orders