Estate of Carson - [2017] NZHC 3144

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2016-442-78 [2017] NZHC 3144

IN THE MATTER OF
the Trustee Act 1956, section 53 of the

Administration Act 1969 and the Family
Protection Act 1955

AND

IN THE MATTER OF

an originating application by ROBERT ALAN LANE and ANISSAS JEAN BAIN in their capacity as trustees and executors of the estate of the late DAVID WAYDE CARSON

Trustees

Hearing:
15 November 2017

Telephone conference: 13 December 2017

Appearances:

J V Ormsby for the Applicant

G F Kelly and K H Lawrence for the Trustees of the Carson estate

P F Whiteside QC to assist the Court
R J Buchanan for M Sutherland
N Laing for Mr Kremmer

Judgment:

14 December 2017

JUDGMENT OF CULL J

[1] This case concerns the estate of a father, who made no provision for his four natural children, with whom he had no contact since his separation from their mother in 1974. The deceased’s estate is substantial, due to a lotto win during the deceased’s
life time. His four children had not been told about his death, at the deceased’s

Estate of DW Carson [2017] NZHC 3144 [14 December 2017]

instructions, but the deceased established a trust, into which the residue of his estate is to be transferred.

[2] The executors of the late Mr Carson’s (the deceased) estate filed an originating application, seeking the Court’s directions as to their obligations to locate the whereabouts of Mr Carson’s natural children. They seek the Court’s directions as to the information they are required to provide to them. This case brings into sharp relief the obligations of executor/trustees to notify potential claimants under the Family Protection Act 1955, when those potential claimants are discretionary beneficiaries as part of a larger class of beneficiaries, under a family trust.

[3] Mr Carson had four children by his first marriage but did not make any provision for them in his will. Further, he instructed his executors and trustees that he did not want his siblings nor his natural children to be told about his death. Prior to his death, Mr Carson settled the Carson Family Trust (the Trust), under which his children, together with his stepchildren and grandchildren are discretionary beneficiaries. Under his will, and after specific gifts are paid, the residuary estate passes to the Trust.

[4] This matter came to a hearing, at which counsel for the trustees of the Trust, Mr Kelly and counsel appointed to assist the Court, Mr Whiteside QC, addressed the Court on the implications of Sadler v Public Trust1 and whether s 44 of the Family Protection Act applies.

[5] Subsequent to the hearing and prior to the release of a judgment, there were further developments. These are addressed below as part of the background facts. As a result of these developments, further submissions were filed and a telephone conference was convened with counsel, enabling consent orders to be made.

Background facts

[6] Mr Carson…

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.

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Details

Case: [2017] NZHC 3144
Decision Date: 14 December 2017

CaseChat Overview and Summary

This case concerned the estate of a father who had not made provision for his four natural children in his will, and who had been estranged from them since 1974. The estate was substantial, due to a lotto win during the deceased's life time. The executors of the estate sought the Court's directions as to their obligations to locate the whereabouts of the deceased's natural children and the information they were required to provide to them. The case brought into sharp relief the obligations of executor/trustees to notify potential claimants under the Family Protection Act 1955, when those potential claimants are discretionary beneficiaries as part of a larger class of beneficiaries, under a family trust.

The Court was required to decide which category of the Sadler decision applied to the deceased's children and whether s 4(4) of the Family Protection Act applied, requiring the executors to give notice to the children. The Court also had to determine what information should the executors supply to the children and how long, after this information has been supplied, they must wait before distributing the estate.

The Court held that the subsequent events had overtaken the hearing, with all parties accepting that the Sadler category (b) applied and that the executors should supply information to the deceased's natural children now they know of their father's death. The Court also held that the parties had agreed on the information to be supplied to the deceased's children. The Court further held that the executors should make inquiries about the deceased's grandchildren, to enable the executors to make their assessment under s 4(4) of the Family Protection Act. The Court ordered the trustees/executors to disclose to the four natural children of the deceased, a copy of the deceased's death certificate, copies of his will and probate, a list summarising the estate assets and liabilities, a copy of the deed establishing the Carson Family Trust, the memorandum of guidance and the names of the trustees, advice that the children take independent legal advice urgently, advice that they are entitled to make inquiries of the trustees about the trust, and a copy of this judgment. The executors were directed to ascertain information about the deceased's grandchildren and hold the residue of the deceased's estate for six months, after the above information had been provided to the deceased's natural children, at the expiration of which, the executors can transfer the estate residue to the Trust, provided that no Family Protection Act claim had been filed. The executors were also directed to transfer a sum of money, the amount to be at their discretion but no more than $1 million, to the Trust, to enable the trustees of the Trust to exercise their discretion as to any appropriate distributions to be made, to meet the immediate needs of any of the deceased's natural children.

Orders