Estate of Tuck

[2024] NZHC 174

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-000772

[2024] NZHC 174

UNDER

Part 18 of the High Court Rules 2016

AND UNDER

Sections 124, 125 and 133 of the Trusts Act

2019

IN THE MATTER

of the Estate of Josephine Mary Tuck and the Tuck Family Trust

BETWEEN

PUBLIC TRUST of Auckland as executor of the estate of Josephine Mary Tuck and

trustee of the Tuck Family Trust Plaintiff

Hearing:	On the papers
Counsel:	A S Cavanaugh for Plaintiff
Judgment:	14 February 2024

JUDGMENT OF RADICH J

[1]    The Public Trust, as executor of the estate of Josephine Mary Tuck, seeks orders that in essence will give effect to a conditional deed of settlement entered into between the Public Trust and the deceased’s three adult children.1 The late Mrs Tuck’s will leaves the residue of her estate to the Tuck Family Trust. The Public Trust is the sole trustee of the Tuck Family Trust.2

1      Probate of Mrs Tuck’s will was granted to her children, Craig Garry Tuck and Carlene Joy Bone. By a Court order dated 7 July 2020, Craig and Carlene were removed as executors of the estate and the Public Trust was appointed as sole administrator.

2      Following a Court order on 12 February 2019 which removed Craig Tuck as a trustee of the trust.

ESTATE OF JOSEPHINE MARY TUCK [2024] NZHC 174 [14 February 2024]

[2]    The trust was settled through a deed of 20 September 2001, by the late     Mrs Tuck and her late husband, Donald Garry Tuck. Its final beneficiaries are “the children of the marriage between the settlors”.

[3]    In a decision of 7 July 2023, Palmer J confirmed that “the children of the settlors” under the trust deed include the settlors’ foster daughter, Michelle Thompson. Accordingly, the final beneficiaries of the trust are Craig Garry Tuck, Carlene Joy Bone and Michelle Thompson.

[4]The “discretionary beneficiaries” in the trust are:

(a)the final beneficiaries;

(b)any parent of the settlors;

(c)any lineal descendants of the parents of the settlors; and

(d)any other person declared to be a discretionary beneficiary by the trustees.

[5]    The parents of the late Mr and Mrs Tuck predeceased them and no other person has been declared to be a beneficiary of the trust. The “lineal descendants of the parents of the settlors” would include the aunts, uncles, cousins, children and grandchildren of the final beneficiaries.

[6]    In reports prepared by Grant Thornton,3 it was concluded that Craig Tuck owed:

(a)between $380,960 and $841,500 to the estate; and

(b)between $685,811 and $987,453 to the trust.

3      Commissioned by the Public Trust to investigate financial transactions through the late Mrs Tuck’s accounts and through the accounts of the trust to determine sums owing by Craig Tuck to the estate and the trust.

[7]    The plaintiff, Craig Tuck, Carlene Bone and Michelle Thompson have entered into a settlement agreement, conditional on the consent of the Court, relating to the repayment of sums owing by Craig Tuck to the estate and to the trust and the final distribution of the assets of the trust.

[8]Under the deed:

(a)Craig will pay $375,000 to the estate in full and final settlement of the debts owing by him to the estate and the trust.

(b)The executor phase of the estate will then be complete and the assets of the estate will be distributed to the trust in accordance with the terms of the late Mrs Tuck’s will.

(c)Craig Tuck’s entitlements under the trust will be offset against advances that he has already received from the trust with the effect that he will not receive any further distribution from the trust.

(d)Michelle Thompson will receive a final distribution from the trust of

$579,000.

(e)Carlene Bone will receive a final distribution from the trust of

$792,197.33.

[9]    The Public Trust’s application for directions is made under s 133 of the Trusts Act 2019 which provides, amongst other things, that a trustee may apply to the court for directions about the exercise of any power or the performance of any function by a trustee. The provision in essence enables trustees to seek the Court’s blessing for a contemplated course of action.4 The question that the Court is to ask itself is whether the proposed course of action is a proper exercise of the trustee’s powers where there is no real doubt about those powers.5

4      Chambers v S R Hamilton Corporate Trustee Ltd [2017] NZCA 131, [2017] NZAR 882.

5      Being the second of four categories in relation to which trustees may call upon the Court for directions under s 133: Chambers v S R Hamilton Corporate Trustee Ltd, above n 4, at [24] and Re Honoris Trust [2017] NZHC 2957, [2018] 3 NZLR 160 at [42].

[10]   I am satisfied that the proposed course of action is a proper exercise of the trustee’s powers. I am satisfied that it is a sensible negotiated outcome that a reasonable trustee with knowledge of all relevant background matters could properly arrive at.6

[11]   I am satisfied, in terms of the amount that Craig Tuck is to repay, that there would inevitably be litigation risk and cost to the estate and trust associated with the Public Trust beginning formal recovery action against Craig Tuck and that the figure is reasonable in all of the circumstances. I am satisfied that the different levels of distribution to Carlene Bone and to Michelle Thompson are reasonable in circumstances in which they have each expressed differing views on whether the Public Trust should take enforcement steps against Craig Tuck. And I am satisfied that it is appropriate to proceed as proposed despite provision for “lineal descendants” as discretionary beneficiaries on the basis that it is not apparent that any of those discretionary beneficiaries have benefited previously from the trust or would be likely to benefit from it if the trust was to continue. Moreover, the interests of the children and grandchildren of the final beneficiaries are coextensive with those of their parents.

[12]   This view leads me to the conclusion that, in addition, it is not necessary to consider further the alternative approach suggested by counsel for the Public Trust under ss 124 and 125 of the Trusts Act 2019, which allows the Court to consent to the termination of a trust on behalf of minor, unborn or future beneficiaries and to waive the consent of those adult beneficiaries whose consent would otherwise have been required on termination of the trust.

[13]Accordingly, I make the following orders:

(a)The plaintiff shall accept the payment of the settlement sum of

$375,000 in full and final settlement of all sums owing by Craig Garry Tuck to the estate of Josephine Mary Tuck and to the Tuck Family Trust.

6      Re Honoris Trust, above n 5, at [56].

(b)The Public Trust will transfer the assets of the estate of the late Josephine Mary Tuck to the Tuck Family Trust in accordance with the terms of the will of the late Josephine Mary Tuck.

(c)The plaintiff will make the final distributions recorded in the deed, dated 17 October 2023 and entered into between the Public Trust, Carlene Joy Bone, Michelle Thompson and Craig Garry Tuck.

(d)The plaintiff will take all other actions reasonably necessary to give effect to the terms of settlement as set out in the deed referred to in subparagraph (c) above.

Radich J

Solicitors:

Greg Kelly Law, Wellington for Plaintiff