M I Clifford Trust No 2 - [2022] NZHC 2015

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000557

[2022] NZHC 2015

UNDER section 124 Trusts Act 2019

IN THE MATTER OF

an application of DEIDRE COWLISHAW WOOD and PAUL JOSEPH DORRANCE

as Trustees of the M I Clifford Trust No 2 for approval of variation

Hearing: 16 May 2022 via telephone conference

Appearances:

A V Foote for the Applicants O D Peers for Mr Palmer

Judgment:

15 August 2022

JUDGMENT OF NATION J

[1] Under s 124 of the Trusts Act 2019, the trustees of the M I Clifford Trust 2 seek orders approving a variation of that trust on behalf of unborn beneficiaries.

[2] Mr William Palmer of Buddle Findlay was appointed to present a report on behalf of the unborn beneficiaries and a comprehensive report as to the proposed variation was provided by Mr Palmer and Olly Peers of Buddle Findlay (the Buddle Findlay report).1

[3] I discussed various aspects of the report and the application with counsel in a telephone conference on 16 May 2022.

1 The report has been of considerable assistance to me.

Re M I Clifford Trust No 2 [2022] NZHC 2015 (15 August 2022)

Background

[4] The M I Clifford Trust No 1 was established by a deed of trust on 22 November 1963. The effective settlor was Ogilvie Garth Clifford. The beneficiaries were his children except Deidre Wood. It is not affected by the current application.

[5] Ogilvie Clifford established the M I Clifford Trust No 2 (the Trust) by deed dated 12 December 1966 to provide for Deidre to the same extent as her siblings had been provided for in the first trust and to make further provision for all four siblings.

[6] The Trust was varied by deed of variation dated 17 May 1993 as approved by an order of the High Court of New Zealand on 22 July 1993.2 It is this deed which the trustees seek to vary. I refer to it as the Trust Deed.

[7] The Trust Deed provided, amongst other matters, for income of the trust to be held:

(a) until 20 August 2016, for the four children of Ogilvie Garth Clifford and his wife Mary Ida Clifford (the siblings); and

(b) from 20 August 2016, for the living and any unborn children of the four siblings.

[8] The Trust Deed directed that from 20 August 2016 the balance of the capital of the Trust is to be held for the children of the siblings, the grandchildren of Ogilvie Clifford, in two funds of equal size:

(a) Fund A and its income arising for grandchildren living on 20 August 2016 (the older grandchildren); and

(b) Fund B and its income arising for grandchildren born after 20 August 2016 (the younger grandchildren).

2 Re Clifford (1993) 1 NZTR 3-001 (HC).

[9] Three of the siblings each had three children, all of whom have reached the age of majority. These are the older grandchildren. One of the…

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 2015
Decision Date: 15 August 2022

CaseChat Overview and Summary

The case involves an application by Deidre Cowlishaw Wood and Paul Joseph Dorrance, as trustees of the M I Clifford Trust No 2, to seek approval for a variation of the trust under section 124 of the Trusts Act 2019. The application was heard via telephone conference on 16 May 2022, with A V Foote representing the applicants and O D Peers representing Mr Palmer. The judgment was delivered on 15 August 2022 by Justice Nation.

The primary legal issue before the court was whether to approve the proposed variation of the trust deed, which seeks to combine two trust funds into a single trust fund and allow for earlier final distribution. The court was required to consider the interests of both the younger and great-grandchildren of the settlor, Ogilvie Garth Clifford, and whether the variation would be in their best interests.

The court found that the proposed variation was likely to be beneficial for the younger grandchildren, as it would allow for an earlier distribution of the trust fund, which would be of more use to them. The court also found that the variation would not be detrimental to the great-grandchildren, as an earlier distribution would likely be of benefit to their parents, the existing grandchildren. The court considered the settlor's intentions and found that the variation was consistent with his insistence on equality between beneficiaries.

In light of these findings, the court approved the variation of the Trust Deed in terms of the draft Trust Deed attached to the amended notice of application for the variation of the Trust dated 30 March 2022. The applicants' costs will be costs for the Trust, and leave is reserved to the applicants to apply for any further order that might be necessary to give effect to this judgment or as to costs.

Orders