Judd v Cowley - [2020] NZHC 184

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000749

[2020] NZHC 184

IN THE MATTER of the Jeanette Reid Trust

BETWEEN

ROBERT DUDLEY JUDD and DRURY NOMINEES LIMITED

Plaintiffs

AND

BROOKE MORAL COWLEY

Defendant

Hearing: 3 February 2020

Appearances:

S A Grant for the Plaintiffs S Round for the Defendant

Judgment:

17 February 2020

JUDGMENT OF MOORE J

This judgment was delivered by me on 17 February 2020 at 2:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

JUDD & ANOR v COWLEY [2020] NZHC 184 [17 February 2020]

Introduction

[1] The plaintiffs, Robert Dudley Judd and Drury Nominees Limited, are the trustees of the Jeanette Reid Trust (“the Trust”).

[2] The settlor is Jeanette Reid who resides alone in an assisted-living apartment in a Remuera retirement village. She suffers from dementia.

[3] In 1994, as settlor, she executed the trust deed (“the Deed”) which is at the centre of these proceedings. The trustees were her brother-in-law, Mr Judd,1 and her then solicitor (“first solicitor”). One of the primary purposes of the Trust was to hold assets and to make distributions for the purpose of providing financial support for Ms Reid during her life.

[4] In 1998, certain manual changes were made to original deed by the first solicitors. This followed Ms Reid discovering that the Deed, as drafted, did not reflect her intentions. The changes were not the subject of a deed of variation nor were they made by way of application to this Court.

[5] Ms Reid then changed solicitors. She instructed Mr Shaun Kelly (“second solicitor”) to review her affairs including the Trust. The second solicitors pointed out there were some material omissions and errors in the Deed, most notably that she was not listed as a discretionary beneficiary. Again, manual changes were made to the Deed.

[6] The trustees now seek to rectify the Deed to align it with Ms Reid’s intentions at the time she settled the Trust. They do so on the grounds that the original Deed contains no power to amend or vary and thus the changes made by the first and second solicitors were of no effect. This means that distributions made to Ms Reid for her care and maintenance are and will continue to be contrary to the provisions of the Deed.

1 Married to Ms Reid’s sister.

[7] Initially, the orders sought were opposed by the defendant, Brooke Moray Cowley. Ms Cowley, who is Ms Reid’s daughter and a beneficiary under the Trust.2 At the hearing before me she appeared through counsel, Ms Round. She no longer opposes the orders sought.

Factual background

[8] The original Deed was executed on 19 May 1994. Over the next four or so years Ms Reid proceeded with her plan to build the assets of the Trust by transferring or funding the acquisition of properties to the Trust. These included the following:

(a)on 26 August 1994 she transferred…

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 Judd v Cowley

Details

AGLC: Judd v Cowley [2020] NZHC 184
Case: [2020] NZHC 184
Decision Date: 17 February 2020

CaseChat Overview and Summary

The case of Judd v Cowley was heard by the High Court of New Zealand, Auckland Registry. The plaintiffs, Robert Dudley Judd and Drury Nominees Limited, who are trustees of the Jeanette Reid Trust, sought to rectify the original trust deed to align it with Ms Reid's intentions. Ms Reid, who suffers from dementia, is the settlor of the trust, which was established to provide financial support for her. The plaintiffs sought to rectify the deed to include Ms Reid as a beneficiary and to restrict the definition of 'children' to her natural born children and grandchildren. Ms Reid's daughter, Brooke Moray Cowley, initially opposed the orders sought but later withdrew her opposition. The court found that the original trust deed did not reflect Ms Reid's intentions and granted the order for rectification, excluding Ms Reid's nephews as beneficiaries.

The legal issues the court had to decide included whether the trust deed contained an operative mistake, whether the mistakes were of sufficient gravity to justify rectification, and whether there was convincing proof of Ms Reid's intentions. The court found that the omissions and errors in the deed were indeed operative mistakes that did not reflect Ms Reid's intentions and were of sufficient gravity to justify rectification. The court also found that there was convincing proof of Ms Reid's intentions, despite the lack of contemporary documentary evidence from 1994.

The court's reasoning was that the original trust deed did not reflect Ms Reid's intentions, and the mistakes were serious enough to justify rectification. The court found that it would be unjust not to order rectification, as it would prevent the trustees from carrying out Ms Reid's intentions without acting in breach of the deed. However, the court declined to rectify the deed to include Ms Reid's nephews as beneficiaries, as they had expressly renounced any interest under the trust. The court concluded that the Jeanette Reid Trust Deed should be rectified to include Ms Reid as a beneficiary and to restrict the definition of 'children'. The court made orders to that effect, and no further order as to costs was required.

Orders