Pilbrow v Butler
[2015] NZHC 1255
•5 June 2015
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2015-470-000049 [2015] NZHC 1255
UNDER the Trustee Act 1956, s 64A IN THE MATTER OF
Application to vary trust deeds
BETWEEN
DONALD RAYMOND PILBROW AND INDEPENDENT TRUSTEES (2008) LIMITED
Applicants
AND
DONNA CHRISTINA BUTLER, JASON ROBERT JOHN BUTLER, SYDNEY CRYSTAL BELL, KAMRIN CHEREL BUTLER-BELL AND LEAH NICOLE BUTLER Respondents
Hearing: On the Papers Counsel:
K E Cotter for the Plaintiffs
Judgment:
5 June 2015
JUDGMENT OF COURTNEY J
PILBROW & OR v BUTLER [2015] NZHC 1255 [5 June 2015]
Introduction
[1] Section 64A of the Trustee Act confers on this Court the power to approve any arrangement varying a trust on behalf of certain persons, including those incapable of assenting because of infancy or other incapacity1 and those unborn2. Such approval cannot be given if the arrangement is to the person’s detriment, having regard to all the benefits which might accrue as a consequence of the arrangement. In determining whether any such arrangement is to the detriment of
any person the Court may have regard to all benefits that may accrue directly or indirectly, including the welfare and honour of the family.
[2] Donald Pilbrow and Independent Trustees (2008) Ltd are the independent trustees of the Robert Butler Family Trust (RBFT) and the Wendy Butler Family Trust (WBFT). They have applied under s 64A for an order approving an arrangement to vary the trusts so as to add two new discretionary beneficiaries.
[3] The current discretionary beneficiaries under the trusts are the children and grandchildren of the settlors, Wendy and Robert Butler. The trustees wish to vary the trusts so as to include as discretionary beneficiaries two children of Wendy Butler3
who were not also the biological children of Robert Butler.4 Those children had
grown up as part of the family and always been regarded and treated as children of both settlors.
[4] All the existing discretionary beneficiaries have filed affidavits confirming their agreement to the arrangement. However, one is aged 18 and an infant for the purposes of the Trustee Act 1956. She lacks capacity to approve the proposed arrangement.5 Further, one of the adult beneficiaries (Jason Butler) is a serving prisoner and has deposed to the fact that he is currently classified as a (special) patient under the Mental Health (Compulsory Assessment and Treatment) Act 1992. This raises a question as to his capacity, though it was not addressed by counsel in
the memorandum filed with the application. I consider the best course is to
1 Trustee Act 1956, s 64A(1)(a).
2 Trustee Act 1956, s 64A(1)(c).
3 Wendy Butler died in 2011.
4 Robert Butler died in 2013.
5 Age of Majority Act 1970, s 4.
determine the application on the basis that Jason does not have capacity to consent to the proposed arrangement. Finally, although the circumstances of the adult beneficiaries suggest that further children are unlikely to be born to them, this could not be ruled out.
The application
[5] The RBFT and the WBFT were settled as mirror trusts in 1992. The beneficiaries were “the children of [his/her] marriage … and the children of such children”. After both Wendy and Robert Butler died Mr Pilbrow was told that, of the four children whom he had assumed were of the marriage, only two were the biological children of both Robert and Wendy Butler. These were Donna Christina Butler (Donna) and Jason Robert John Butler (Jason). Two others, Graeme Denys Butler (Graeme) and Shelley Marie Butler (Shelley), had been born to Wendy Butler prior to her relationship with Robert Butler, were not his biological children and were never adopted by him.
[6] It is clear from the evidence, however, that Shelley and Graeme had always been viewed as Wendy and Robert’s children. Robert Butler’s will made a bequest to Graeme, describing him as “my son” and Donna and Jason have sworn affidavits describing how Shelley and Graeme were always treated as the natural children of their father. They have expressed their belief as to their parents’ intention and desire that all four children be treated the same in terms of the family trusts.
[7] It is apparent from the totality of the evidence that the only reason Graeme and Shelley are not beneficiaries under the various trusts is that the trust deeds were drafted on the erroneous assumption that all four children were Robert’s biological children. I am satisfied that Wendy and Robert Butler’s intentions were to benefit the four children, including Graeme and Shelley.
[8] The addition of two further beneficiaries has the potential to operate to the financial detriment of the current beneficiaries. However, it is evident that the members of the family who have capacity to agree all consider the arrangement to be one that will have benefits in terms of the ongoing family relationships. Donna
speaks of her belief that her parents would be upset if Shelley and Graeme were treated differently from her and Jason. She says that she wishes to show her love and affection for Graeme and Shelley by supporting the arrangement. Jason expresses similar sentiments. The grandchildren have given affidavits expressing their wish to allow Graeme and Shelley Butler to benefit under the family trusts and confirming their support for the proposed arrangement.
[9] This level of support and the reasons for it are significant. I am satisfied that the arrangement would affirm the dynamics that have always existed in this family and ensure cohesion among the various members of the family into the future. Looked at overall, there is no detriment to the infant beneficiary, nor to Jason, from the proposed arrangement.
Result
[10] The application is granted. Approval is given under s 64A of the Trustee Act
1956 to the proposed arrangement under which the Robert Butler Family Trust and the Wendy Butler Family Trust will be varied so as to include Graeme Denys Butler
and Shelley Marie Butler as discretionary beneficiaries.
P Courtney J
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