Fidelis Trust Limited - [2024] NZHC 2740

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-1614

[2024] NZHC 2740

UNDER sections 122, 124, 133 and 144 of the Trusts Act 2019 and the inherent jurisdiction of the High Court of New Zealand

IN THE MATTER OF

an application for directions and approvals under the Trusts Act 2019

BY

FIDELIS TRUST LIMITED

Applicant

Hearing: on the papers

Counsel:

A S Butler KC, N L Walker and J B C Trezise for applicant

W Aldred KC and P Cassin, P Dale KC and J Ewart, D Grove and G Halse, S Robertson KC and A Gilbert, and R Thompson for the beneficiaries

Judgment:

20 September 2024

JUDGMENT OF JOHNSTONE J

This judgment was delivered by me on 20 September 2024 at 4pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Russell McVeagh, Auckland Paul Cassin, Auckland Ewart & Ewart, Auckland Foy & Halse, Auckland Brookfields, Auckland

FIDELIS TRUST LIMITED [2024] NZHC 2740 [20 September 2024]

[1] By originating application dated 8 July 2024, Fidelis Trust Limited seeks three types of orders, pursuant to the Trusts Act 2019, facilitating the settlement of family negotiations relating to substantial assets held in trust.

[2] On 19 July 2024, I granted leave to commence by originating application, appointed Richard Thompson, barrister, as counsel for minor and unascertained beneficiaries, and made directions as to service, the filing of papers in opposition, and otherwise for the purpose of progressing the proceeding. The application has been served as directed. Albeit Mr Thompson’s position for the minor and unascertained beneficiaries requires further explanation below, no papers were filed in opposition.

[3] Counsel for all interested parties filed joint memoranda dated 12 August 2024 and 17 September 2024, setting out the basis on which they propose that the Originating Application should now be determined on the papers, and granted, subject to amendment of the terms in which one of the order types is made.

[4] I agree it is appropriate that I should determine the application on the papers, and proceed to do so.

Background

[5]James Victor Davern (James) is 94 years old. He has three families:

(a)his ex-wife Daphne Fay Kingston (Daphne) and his children and grandchildren from that marriage (Family No 1);

(b)his son from a relationship outside his marriage to Daphne, Samuel James Middlemiss, Samuel's wife Tori Ovedal Middlemiss, and their children Johanna and Annika (Family No 2); and

(c)his current wife, Jeanette, and her children from a previous marriage (Family No 3).

[6] Throughout his life, James built up significant personal wealth. In December 1965, he settled the James Davern Family Trust (No 1 Trust). James also built significant wealth in the No 1 Trust. Fidelis is the sole trustee of the No 1 Trust.

[7] James no longer has capacity. Some years ago, James and Jeanette began looking to arrange James’ affairs before his death.

[8] James (through Jeanette and independent counsel), Jeanette, Fidelis, Family No 1 and Family…

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

AGLC: Fidelis Trust Limited [2024] NZHC 2740
Case: [2024] NZHC 2740
Decision Date: 20 September 2024

CaseChat Overview and Summary

The High Court of New Zealand was asked to approve a family arrangement for the substantial assets held in the James Davern Family Trust, managed by Fidelis Trust Limited. The application sought orders to bless the restructuring of trust assets, approve variations to the trust deed, and confirm an alternative dispute resolution settlement. The trust involves three families and significant wealth accumulated by James Davern over his lifetime. After lengthy negotiations and mediations, an agreement was reached and documented in a deed (DRFAIT). The application was heard on the papers with counsel for all interested parties filing joint memoranda in support of the application. The court considered the legal issues relating to the appropriateness of the blessing orders, the variation order, and the alternative dispute resolution settlement approval orders. The court found that the restructuring and settlement were in the best interests of the beneficiaries and aligned with the trust deed provisions. The court exercised its discretion to approve the variation of the trust deed and the alternative dispute resolution settlement, ensuring that the interests of all beneficiaries were adequately protected. The court granted the blessing orders, the variation order, and the amended alternative dispute resolution settlement approval orders as sought by the applicant, subject to the modifications outlined in the joint memoranda. The court's judgment provided detailed reasoning for each decision, ensuring that the trust's administration would proceed in a manner that was fair and in line with the intentions of the settlor and the interests of all beneficiaries.

Orders