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Re Honoris Trust

Re Honoris Trust

Case [2017] NZHC 2957 30 November 2017

Trust Administration

Discretionary Trusts

Distribution of Trust Assets

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1605

[2017] NZHC 2957

IN THE MATTER of the Honoris Trust

IN THE MATTER

of an application for directions by

PV TRUST SERVICES LIMITED as sole
trustee of the Honoris Trust, pursuant to section 66 of the Trustee Act

PV TRUST SERVICES LIMITED

Applicant

Hearing: 13 September 2017

Counsel:

TM Molloy for applicant

Judgment:

30 November 2017

JUDGMENT OF FITZGERALD J

[As to trusteeʼs application for directions]

This judgment was delivered by me on 30 November 2017 at 4 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Re PV Trust Services Limited [2017] NZHC 2957 [30 November 2017]

Solicitors: Cone Marshall Ltd, Auckland (G Cone)

Introduction

[1] PV Trust Services Ltd (“PVTS”) is the sole trustee of the Honoris Trust (“Trust”). It has applied to the Court under s 66 of the Trustee Act 1956 for a direction that a proposed course of dealing in relation to the trust estate is “proper and lawful”.

[2] There is no doubt PVTS has the powers to administer and distribute the trust estate in the manner proposed. Rather, the directions are sought because the proposed distribution will be “particularly momentous”, in that it will result in the distribution of the entire trust estate. PVTS therefore considers it appropriate to seek the Court’s “blessing” of the proposal.

[3] The two remaining named beneficiaries of the Trust are based in Argentina.1 They have been served with the proceedings, which include information concerning PVTS’s proposed distribution of the trust estate. Neither has filed an opposition or has otherwise indicated a wish to participate.

Factual background2

[4] It is necessary to detail the unusual circumstances giving rise to PVTS’s proposed course of dealing. Counsel for PTVS has provided comprehensive affidavit evidence from a number of people as to these matters. I am grateful to Mr Molloy for his helpful synopsis of the material and his guidance through it.

[5] Alsira Rosa Heche de Libedinsky (“Alsira”) was an Argentine citizen. She was married to Jorge Libedinsky, a successful businessman. Together, they had three daughters. Jorge died in 1999, leaving significant assets to Alsira and their children.

[6] After Jorge's death, two of the daughters commenced legal proceedings against Alsira and the third daughter, Dulce. The case was ultimately dismissed but it caused

1 The other two named beneficiaries (one of which was the settlor of the Trust) have died.
2 I have anonymised names where it is not necessary or relevant for their full name to be set out in this judgment.

an irreparable rift between Alsira and Dulce on the one hand, and the remaining two daughters on the other.

[7] In 2010, Alsira and Dulce instructed Mr Juan Carlos Oreggia Carrau (a Uruguayan lawyer) to establish the Trust. Mr Carrau has provided an affidavit in this proceeding. He explains that at that…

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 Re Honoris Trust

Details

AGLC: Re Honoris Trust [2017] NZHC 2957
Case: [2017] NZHC 2957
Decision Date: 30 November 2017

CaseChat Overview and Summary

The application in this case was brought by PV Trust Services Limited (“PVTS”) who are the sole trustee of the Honoris Trust (“Trust”) under the Trustee Act 1956. The Trust is governed by New Zealand law and PVTS seeks the Court’s direction that its proposed course of dealing in relation to the trust estate is “proper and lawful”. The Trust is unique in that it was established by Alsira and Dulce in 2010. After Alsira died, Dulce became the sole beneficiary of the Trust but she died unexpectedly in 2015. The Trust has no final beneficiaries and the Court must decide whether it can direct PVTS to distribute the trust estate to Dulce’s heirs under her will.

PVTS seeks directions from the Court that its proposed course of dealing in relation to the trust estate is “proper and lawful”. It has argued that it is not appropriate for the Court to require PVTS to be in “genuine doubt” about the propriety of its proposed course of action before applying to the Court for directions. The Court of Appeal has confirmed that the High Court’s jurisdiction under s 66 is not restricted to minor or procedural issues and is instead an enactment of the English Chancery Court’s “broad equitable jurisdiction”. I agree with PVTS that the Court’s jurisdiction can extend to the type of directions described by Robert Walker J and Hart J in Public Trustee v Cooper. I am also of the view that, so long as appropriate procedural safeguards are put in place to minimise potential prejudice to beneficiaries, such a jurisdiction could indeed be useful in the New Zealand context.

Having considered the evidence filed in support of the application, I conclude that the proposed distribution is proper. PVTS has the power to administer and distribute the estate in the manner proposed and the proposed distribution is lawful. I consider it reasonable for PVTS to take into account what would happen upon the Trust’s expiry and that it is reasonable for PVTS to also have regard to Dulce’s will, given the lack of any other clear or reliable evidence as to either Alsira or Dulce’s wishes in respect of the balance of the trust fund.

Pursuant to s 66 of the Trustee Act 1956, the Court directs that it is proper and lawful for PV Trust Services Ltd to administer and distribute the Trust estate as set out at [1](a)(i) to (v) of the amended originating application dated 3 October 2017.

Orders