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Merona Trustees Limited

Merona Trustees Limited

Case [2022] NZHC 1971 10 August 2022

Trust Interpretation

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-345

[2022] NZHC 1971

UNDER Section 133 Trusts Act 2019

IN THE MATTER

of an application for declarations relating to the M & R Cooper No. 2 Trust

BETWEEN

MERONA TRUSTEES LIMITED and

HAMISH PATRICK BENNETT, as trustees of the M & R Cooper No. 2 Trust

Plaintiff

Hearing: 5 July 2022

Appearances:

D Kalderimis and K H Lawrence for Plaintiff P Brown for M Dasilva

J V Ormsby and K Wood for R Moody G Jones for S Cooper

Judgment:

10 August 2022

Reissued:

19 August 2022 and 16 September 2022

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 10 August 2022 at 2.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE: MERONA TRUSTEES LTD [2022] NZHC 1971 [10 August 2022]

Introduction

[1] This is a case about what the words “the children of the settlors” mean in a trust deed. Do they mean:

(a)the natural children of the settlors (who are husband and wife);

(b)the settlors’ natural children, plus the natural child of the wife whom the settlors raised together; or

(c)the settlors’ natural children, plus any natural child of either one of them, whether or not that child was raised as their own?

[2] The meaning of those seemingly plain words is hotly contested by the parties, has been the subject of multiple legal opinions, and will have significant financial consequences for some of the parties depending on how they are interpreted.

[3] To resolve this dispute, the trustees have applied to the Court under s 133 Trusts Act 2019 for direction as to how this and related clauses of the trust deed are to be interpreted.

Factual background

[4]Mervyn Cooper (Merv) and Sylvia Cooper (Rona) were married in 1958.

[5] Rona had two children from a prior marriage, being Robert Cooper (Rob), born 10 February 1949, and Ray Moody (Ray), born 21 July 1950. Rona’s first husband abandoned her when the children were very young. At the time there was no domestic purposes benefit, and Rona was unable to keep her children. Rob was sent to live with Rona’s mother, and Ray was sent to live with Rona’s favourite aunt, Edna Moody, and her husband, Maurice.

[6] After Rona married Merv, Rob went to live with them. He was about 10 years old at the time. Rob kept his father’s surname, McLean, while he was growing up, but he changed his last name to Cooper by deed poll as an adult. However, he did not know about the existence of his brother Ray. Rona never told her children about Ray,

nor had any contact with him as he grew up. It is uncertain whether this was because she was told she must sever contact with him if her aunt took over his care, or because was simply too painful for her to do so.

[7] Merv and Rona also had…

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 Merona Trustees Limited

Details

AGLC: Merona Trustees Limited [2022] NZHC 1971
Case: [2022] NZHC 1971
Decision Date: 10 August 2022

CaseChat Overview and Summary

This case involves a dispute over the interpretation of the terms of a trust deed, specifically the phrase "the children of the settlors." The trust deed in question is the M & R Cooper No. 2 Trust, which was established by Mervyn and Sylvia Cooper. The trust deed provides for the distribution of assets to the children of the settlors, but there is a disagreement among the parties as to who qualifies as a child of the settlors. The three possible interpretations of the phrase are: (a) the natural children of both settlors, (b) the natural children of the settlors, as well as the son they raised together, and (c) the natural children of the settlors, as well as any natural child of either one of them, whether or not that child was raised as their own. The court was asked to provide direction on how the trust deed should be interpreted.

The court found that the phrase "the children of the Settlors" should be interpreted to include not just the natural children of both settlors, but also the child they brought up within their family unit as if he was the natural child of both of them. This interpretation was based on the context in which the trust deed was created, the express purpose of the trust, and the understanding of the settlors' professional advisors. The court concluded that Ray, who was not brought up as the child of Mervyn and Sylvia, does not qualify as a beneficiary of the trust deed.

As a result of this interpretation, the court made the following declarations: Robert William Cooper is a discretionary beneficiary of the trust, his children are discretionary beneficiaries, spouses and partners of Robert William Cooper's children are discretionary beneficiaries, Suzanne Cooper is a discretionary beneficiary, Robert William Cooper is a final beneficiary, and his children are final beneficiaries. The court also determined that the trustees' costs in respect of this application should be paid from the trust fund, and that the legal costs of the other parties participating should also be paid from the trust fund, reserving the issue of costs for any potential dispute.

Orders