Jury Family Trusts - [2022] NZHC 568

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV-2022-443-000012

[2022] NZHC 568

UNDER Part 19 of the High Court Rules and the Trusts Act 2019

IN THE MATTER OF

The I K JURY FAMILY TRUST

BETWEEN

IAN KEITH JURY

First Applicant

CIV-2022-443-000011

IN THE MATTER OF

The D L JURY FAMILY TRUST

AND

DEBBIE LEE JURY

Second Applicant

Hearing: On the papers

Appearances:

W M Patterson for Applicants

G F Kelly and K H Lawrence as Counsel to Assist

Judgment:

24 March 2022

JUDGMENT OF CULL J

[1] Two applications come before the Court in relation to proposed variations of mirror trusts, settled by Debbie Lee Jury (D L Jury Family Trust) and Ian Keith Jury (I K Jury Family Trust). The applications are identical and I deal with them together.

[2] The trusts were each settled on 12 October 1992. They have a vesting date of 30 years and are due to vest on 31 March 2022 which will cause significant difficulty for the settlors and the beneficiaries of the trusts.

Re Jury Family Trusts [2022] NZHC 568 [24 March 2022].

[3] Initially, the applications sought the Court’s consent to extend the vesting date from 31 March 2022 until the deaths of Mr Ian Jury and Ms Debbie Jury (to whom I refer as Ian and Debbie respectively). They are relatively young and their business is still held by the trusts. They wish to continue to protect their assets using the trusts for their own and their children’s benefits. Various amendments to the existing terms of the mirror trusts are sought.

[4] On receipt of the applications and in view of the relatively significant changes sought, the Court appointed Counsel to assist, Mr Greg Kelly to provide the Court with independent advice on the variations sought.1 The memorandum of Counsel, Mr Kelly and Mr Lawrence, dated 14 March 2022, provided a useful commentary on the applications and it also suggested amendments which have now been adopted by the applicants. I have incorporated the comments of Counsel to assist in this judgment.

[5] Following receipt of the memorandum of Mr Kelly, the applicants accepted Counsel’s suggestion that it was preferable for the life of the trusts to be extended to 80 years from the trust formation date. This would allow the trustees to exercise their discretion to distribute trust capital prior to vesting day, if appropriate, but it would not force the vesting of the trust capital in the event of both settlors’ unexpected passing. Mr Kelly also suggested that it may be helpful for cl 8 of the existing trust deeds (cl 6 of the proposed amended trust deed) to provide for the “power to appoint new trustees and remove existing trustees.” Both of those suggested amendments have been accepted by the applicants and by a further memorandum of Counsel for the applicants dated 15 March 2022, a revised deed with those variations is annexed to Counsel’s memorandum and…

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: [2022] NZHC 568
Decision Date: 24 March 2022

CaseChat Overview and Summary

The applicants, Ian Keith Jury and Debbie Lee Jury, sought approval from the Court for variations to the terms of the I K Jury Family Trust and D L Jury Family Trust, which were established in 1992. The primary issue was whether the Court should consent to extending the vesting date of the trusts, which was set to occur on 31 March 2022, leading to potential tax liabilities and reduced asset protection. The applicants proposed extending the vesting date to the 12th day of October 2072, which would allow for better asset management and protection during the settlors' lifetimes.

The Court addressed the legal issues by examining the settlors' intentions, the nature of the interests of the beneficiaries, and the applicability of sections 124 and 125 of the Trusts Act 2019. The Court concluded that the variations were in the best interests of the beneficiaries, including the minor grandchildren, as they would avoid significant tax liabilities and provide better asset protection. The Court also determined that the variations did not reduce or remove vested interests in the trust property and that the benefits significantly outweighed any potential detriments.

The Court approved the variation of the trust deeds as proposed, allowing the trusts to continue until 12 October 2072, providing more flexibility in the trustees' powers to manage the trust assets, and removing certain discretionary powers that were deemed redundant. The Court also waived the requirement for consent from Ashleigh's estranged husband, Trent Murray, as he had no realistic prospect of benefiting from the trusts. The Court directed that the costs of the Counsel to assist be borne by the applicants.

Orders