Vance v Turvey

[2024] NZHC 3772

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-000349

[2024] NZHC 3772

UNDER

the Trusts Act 2019

IN THE MATTER OF

a blessing application in respect of the Orana Trust

BETWEEN

DAVID STUART VANCE and IAN RONALD MILLARD

Applicants

AND

DARYN TURVEY, PATRICIA TURVEY, GLENN TURVEY and

MICHELE HALCROW

Respondents

Hearing:	29 November 2024
Counsel:	J P Bell-Connell for Applicants D Turvey in person
Judgment:	11 December 2024

JUDGMENT OF GRAU J

An application to distribute a trust

[1]                 The two court-appointed trustees (the Trustees) of the Orana Trust (the Trust) seek the Court’s “blessing” to distribute the Trust’s remaining assets of around

$80,000.1

1      Associate Judge Paulsen granted leave to commence the proceedings by way of originating application in Vance v Turvey HC Wellington CIV-2024-485-349, 12 June 2024 (Minute of Associate Judge Paulsen).

VANCE v TURVEY [2024] NZHC 3772 [11 December 2024]

[2]                 The Trust in question is the last existing trust of the Turvey family. For some years, members of the Turvey family have been litigating disputes about the family’s financial arrangements in respect of this and other trusts, and they remain bitterly divided. The Trustees’ position is that the Trust fund is now all but exhausted and there is nothing to do but finally distribute and wind up the Trust.

[3]                 The respondents, Daryn Turvey, Patricia Turvey, Glenn Turvey, and Michele Halcrow, are the “Primary Beneficiaries” of the Trust.2 The Trustees have concluded the Primary Beneficiaries should now benefit from the distribution of the remaining assets of the Trust. They have made extensive enquiries to ensure the Trust has an accurate record of its assets, they have investigated the Trust’s potential claims as far as they could, and they have sought feedback from the Primary Beneficiaries on the proposed distribution before applying to the Court to “bless” their application under s 133 of the Trusts Act 2019 (the Act). The Trustees also ask the Court to direct that the distribution of the Trust fund be subject to an appropriate indemnity/waiver of liability by the respondent beneficiaries, in line with s 134 of the Act.

[4]                 Daryn is the only respondent who has taken part in this application. Daryn does not oppose the idea of the Trust’s assets being distributed and the Trust wound up, but his view is that the Trustee’s application is premature. Daryn believes there is money owed to the Trust and the Trustees should recover it before distributing and winding up the Trust. Daryn also says one of the Trustees, Mr Vance, has a conflict of interest in this case because Mr Vance was also a trustee of two other trusts associated with the Turvey family that Daryn says owed money to the Trust. Mr Vance applied to the Court to have the other trusts wound up by way of a similar blessing application, which was granted by Gendall J in 2022.3

Background

[5]                 The Trust was established by a Deed of Trust dated 1 July 1996 (the Trust Deed), amended on 24 December 1999. The settlor was a Mr Brian Boyer, a solicitor acting for at least some members of the Turvey family at the time. The original trustees

2      For ease of reference, the parties are referred to by their first names.

3      Turvey v Vance [2022] NZHC 1167.

were Daryn and Patricia. From September 2013 to June 2016, Cornwallis Trustees Ltd was also a trustee. Daryn and Patricia remained as trustees until 27 October 2017 when this Court appointed Mr Vance and Mr Millard KC as Trustees to replace them.4

[6]                 As noted, the Primary Beneficiaries are defined in the original Deed as Daryn, Patricia, Glenn, Francis, and Michele. Patricia and Francis (who passed away in 2007) are the parents of Daryn, Glenn, and Michele.

[7]                 The original economic settlements into the Trust were made by several Turvey family members. At the time of the Trustees’ appointment, however, the Trust’s principal asset was its interest in a company, Vey Group Ltd (Vey). Originally this asset had been a 100 per cent shareholding in Vey, as well as advances to Vey. The shareholding reduced to 49 per cent, however, as a result of a claim by a trust associated with Daryn, the Chibbi trust (Chibbi).5 Two other assets of the Trust at the time the Trustees were appointed were a debt Vey owed to Trust and the balance of the proceeds held from the sale of the 51 per cent holding in Vey (being $139,032).

[8]                 Vey had been incorporated on 24 April 1996. It owned a property on Webb Street in central Wellington. Daryn and Patricia were Vey’s directors until Daryn was removed in November 2014 and Patricia resigned in August 2017. The remaining sole director was a Mr Fugle, whom Patricia (his cousin) had appointed. Vey had been developing the Webb Street property into apartments for letting. Daryn had planned, organised, and carried out the work, primarily financed by loans from the Bank of New Zealand (who had also part funded the purchase) and advances from the Trust. The building had weathertightness issues and no code of compliance certificate, although by the time of the Trustees’ appointment, it had been fully let. Unfortunately, it was not being maintained and it deteriorated, with a significant number of apartments becoming vacant.

4      Turvey v Turvey HC Wellington CRI 2017-485-150, 27 October 2017 (Minute of Cull J).

5      Daryn’s claim related to an advance of $381,796.66 Chibbi made to the Trust from the proceeds of the sale of a property Chibbi owned. The Trust then lent that money to Vey as part of an advance of $449,408.89. Patricia and Cornwallis Trustees Ltd (who, at the time, were trustees of the Trust) defended Daryn’s claim. The claim was resolved by a consent order on 23 June 2016.

[9]                 The Trustees faced difficulties in calculating the exact debt Vey owed to the Trust and enforcing Vey’s liability. There was a lack of proper accounting records and a high level of intertwining of affairs between the Trust and Vey. Unsurprisingly, those difficulties had a corresponding effect on the Trustees’ fees.

[10]             Vey’s sole director, Mr Fugle, steadfastly refused to acknowledge Vey owed any debt to the Trust. When the Trustees presented him with a detailed claim and supporting documents, Mr Fugle responded by attempting to sell the Webb Street property (Vey’s only asset) in a private sale at a price well below valuation. In response, the Trustees made an urgent application under s 174 of the Companies Act 1993,6 which subsequently resulted in Vey being placed into receivership.7 The Trustees were then drawn into further proceedings relating to the liquidation of Vey. In the end, the final distribution from the liquidators to the Trust was $225,198, said to represent only 18.4 per cent of the debt Vey owed to the Trust. Eventually, an agreement was reached, and Mr Fugle purchased the Trust’s remaining shares in Vey for $200,000.

[11]             By the time the remainder of the Vey shares had been sold to Mr Fugle, the legal costs associated with the various court proceedings had exhausted the available funds of the Trust. The Trustees had in fact refunded all of the fees they had charged up to that date and they had personally contributed about $6,000 to the Trust to meet outstanding legal fees.

[12]             Mr Millard has also explained that the Trustees investigated whether there were other assets, including potential claims for assets, that ought to have been in the Trust. In the course of their investigation, Daryn and Patricia made multiple allegations against each other, many of which related to other Turvey trusts. To the extent that the allegations related to the Trust they are concerned with, the Trustees investigated them as far as they could but decided the amounts were too small to warrant pursuing what would be disputed claims. Two claims, however, were of greater significance:

6      Vance v Vey Group Ltd [2019] NZHC 1676, [2020] NZCCLR 5.

7      Vey Group Ltd v Vance [2020] NZCA 232, [2021] 2 NZLR 541.

(a)An asset of the Trust, a house in Lowry Bay occupied by Daryn’s brother, Glenn, was sold in 2014. Daryn’s understanding was that the property was to be sold on the open market to a third party. But the purchaser, which had appeared to be a trust, was actually Patricia and Glenn. Daryn nevertheless proceeded with the sale. The Trustees decided not to pursue any claim against Patricia and Glenn because Daryn had proceeded despite knowing they were the purchasers, and the property had been sold by an independent real estate agent. Thus it was unclear what, if any, loss had occurred.

(b)There were costs incurred by the Trust in opposing the litigation by the Chibbi trust, associated with Daryn. The Trustees decided not to pursue this claim as the amount in issue, about $7,110.73, was not large in the scheme of the litigation and would inevitably cause long delays and costs, which the Trustees were not prepared to incur, given they were already writing off a significant part of their fees.

This application and the Trust Deed

[13]             As noted above, the Trustees seek to distribute the remaining funds in the Trust. They have proposed a fund of $80,000. This figure has been settled on after the final distribution of $225,198 from Vey, which was not even sufficient to meet the Trustees’ fees and costs incurred in administering the Trust. The Trustees are nevertheless prepared to accept a 32 per cent reduction in their fees in order to provide funds for distribution to the Trust’s beneficiaries.8 The proposed $80,000 fund accounts for these fees, as well as a further $28,245 that has been set aside for the funding of this application. Costs over that amount (which I was advised at the hearing had already occurred) will lead to a downward adjustment to the distribution. By the time of the hearing, the amount available for distribution was said to have reduced to around

$60,000.

8      A statement of receipts and payments for the period of the trusteeship has been provided to the Court.

[14]             The Trustees therefore consider it is an appropriate time to wind up and distribute the Trust to the Primary Beneficiaries. In the usual course, trustees wishing to wind up and distribute a trust fund would seek to obtain indemnities from the beneficiaries against the risk of subsequent claims. However, in the long and litigious history of this family, the Trustees do not believe that is a “realistic or sufficient” course of action. Therefore, a blessing order is sought, along with a waiver and indemnity from the Primary Beneficiaries. A draft deed of distribution has been provided.

[15]Turning to the relevant clauses in the Trust Deed, cl 5.1 provides that:

5.1The Trustees may in their discretion before the Date of Distribution apply towards the maintenance, education, advancement well being or benefit of any of the Beneficiaries excluding any one or more of them:

a.The income of the Trust Fund as provided in clause 6;

b.The capital of the Trust Fund as provided in clause 8.

[16]             The beneficiaries are listed in cl 4.1 of the Trust Deed. Alongside the Primary Beneficiaries, other beneficiaries include any of their children or grandchildren. The 1999 amendment to the Trust Deed inserted a new cl 5.3, which stated that the Trust was primarily created for the benefit of those beneficiaries for whom the settlor has “natural love and affection”. The interests of those persons are described in cl 5.3 as “paramount” and the trustees are to exercise their powers and discretions accordingly. Given, however, that a solicitor, Mr Boyer, was the original settlor, it does not make sense to read cl 5.3 as relating to persons in respect of whom Mr Boyer has a natural love and affection. Thus, I agree with the Trustees that cl 5.3 should be read so as to mean that beneficiaries to whom one of the Primary Beneficiaries has a natural love and affection can be named.

[17]             The Date of Distribution detailed in the Trust Deed is 80 years from the Trust Date (1 July 1996). Had there been no issues, the Trust fund would have been distributed to Daryn, Michele, and Glenn in equal shares on the date of distribution.

[18]             However, in the current circumstances, and where there is no memorandum of wishes, the Trustees propose that $80,000 be distributed as follows:

(a)Michele — $23,000;

(b)       Glenn — $15,000;

(c)Daryn — $28,000; and

(d)Patricia — $14,000.

[19]This proposed distribution was calculated taking the following into account:

(a)Patricia had been paid about $86,666 by Vey in September 2017. There was no shareholder resolution or director’s certificate authorising such a payment. If this payment had not been made, it is likely that the Trust could have had a higher amount of funds for distribution. The Trustees consider that Patricia should suffer some diminution to reflect this unauthorised benefit.

(b)Daryn did a lot of work on the Webb Street property. Notwithstanding that Daryn was able to claim $15,000 in respect of this work during Vey’s liquidation, the Trustees consider that Daryn should enjoy some uplift in recognition of his efforts.

(c)Glenn had been living in the Lowry Bay property for six years and made some money from rent paid by another tenant. This was a benefit that none of the other Primary Beneficiaries received.

[20]             As I have noted, since the application was filed the $80,000 proposed for distribution has been further eroded, thus this proposed distribution would need to be reduced pro rata.

Blessing orders

[21]             The distribution and winding up of the Trust is a momentous decision and one which has not received the agreement of all the final beneficiaries.9 As such, a

9      See Re PV Trust Services Ltd [2017] NZHC 2957, [2018] 3 NZLR 160 at [42].

“blessing” order is sought under s 133 of the Act, which allows a trustee to apply to the Court for directions:

133     Trustee may apply to court for directions

(1)A trustee may apply to the court for directions about—

(a)the trust property; or

(b)the exercise of any power or performance of any function by the trustee.

(2)The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.

(3)On an application under this section, the court may give any direction it thinks fit.

(4)This section does not restrict the availability of alternative proceedings within the court’s jurisdiction, including a declaration interpreting the terms of the trust.

[22]             Section 134 effectively indemnifies trustees in the event that a s 133 order is made; a trustee who has acted in accordance with any direction of the Court issued under s 133 must be treated as having discharged the trustee’s duties, even if the order is later declared invalid or set aside. However, there is no indemnification of a trustee if the trustee has acted in bad faith in getting the direction or acquiescing in the court making the order or giving the direction.10

[23]             The relevant questions for the Court to answer are: whether the trustees have in fact formed a relevant opinion which the Court is asked to bless; whether the opinion is one which a reasonable body of trustees could properly have arrived at; and whether the opinion of the trustees is vitiated by a conflict of interest.11

[24]             Further guidance was provided by Gendall J in Turvey v Vance as to the principles applicable to blessing applications:12

(a)The Court is not a rubber stamp and it must be satisfied that the trustees are indeed justified in proceeding in accordance with their

10     Trusts Act 2019, s 134(2)(b).

11     Calver v Fogarty [2024] NZHC 961 at [19].

12     Turvey v Vance, above n 3, at [25] (footnotes omitted).

decision. But the Court should not place insurmountable hurdles in the way of trustees.

(b)The Court may disagree with a trustee’s decision, but if it is within the range of reasonable decisions the trustee could make, the Court should not hesitate to bless it.

(c)The lengths to which the Court must go in examining the process by which the trustee arrived at the decision must depend upon the particular decision. In some cases, the decision may be a difficult and doubtful one, requiring fine judgment in the face of competing considerations, in others it may be obvious.

(d)Deciding whether the decision is one at which a reasonable trustee properly could have arrived requires “scrupulous consideration of the evidence” but does not “require second guessing or a line by line micro analysis” by the Court.

(e)The Court will sometimes engage in a dialogue with the trustees as a result of which the trustee’s decision is modified; but, properly analysed, that is no more than a process by which the Court identifies the circumstances in which it will be satisfied that the proposed exercise of the power is within the proper range of such an exercise.

Positions of the parties

[25]             As detailed in the proposed distribution set out above, the Trustees have concluded that only the Primary Beneficiaries of the Trust should benefit from the distribution of the Trust Fund. This is because:

(a)they are the only named beneficiaries in the Trust;

(b)their name as the “Primary Beneficiaries” indicates primacy over the other beneficiaries;

(c)the other family members who are beneficiaries are offspring of the Primary Beneficiaries, and so the Primary Beneficiaries can distribute any funds to their children as required; and

(d)all four Primary Beneficiaries would likely fall in the “natural love and affection” category of beneficiaries.

[26]             The Trustees say that they adopted a structured decision-making process for determining the proposed distribution, including:

(a)undertaking extensive inquiries to ensure that the Trust has an accurate record of its assets;

(b)circulating a proposed distribution on 13 December 2023 to the Primary Beneficiaries for comment, to which adjustments were made after having received Daryn and Patricia’s comments;

(c)communicating the adjusted proposal to Glenn (the only beneficiary who receives less under the proposal), from whom no response has been received; and

(d)providing copies of the originating application, Mr Millard’s affidavit, and the corresponding memorandum of counsel to the Primary Beneficiaries at the earliest opportunity and prior to formal service.

[27]             On the basis of the above, the Trustees say there can be no doubt that they have in fact formed the opinion which the Court is asked to bless, acting in good faith and in the best interests of the beneficiaries. They say there is no question of any conflict of interest. Finally, the Trustees assert that the proposed distribution is an opinion formed which a reasonable body of trustees, properly instructed, could properly have arrived at. Because they do not seek to wind up the Trust by bringing forward the Date of Distribution, the proposed distribution under the current application is not a “Final Distribution” under cls 9.1–9.3 of the Trust Deed. Instead, it is a decision taken under cl 5.1 of the Trust Deed, which allows the Trustees a discretion before the Date of Distribution to apply the income and/or capital of the Trust towards the beneficiaries.

[28]             Daryn’s position is that, if there is still money owing to the Trust, it should be accounted for. He says the winding up of the Trust is premature and that his parents’ wills will not be able to survive. Daryn maintains that the Trustees have not acted innocently or reasonably and seek to wind up the Trust now only because they have depleted it of all its funds. As noted, he also says Mr Vance has a conflict of interest.

[29]             In a significant amount of written material filed in response to the Trustees’ application, Daryn details a number of complaints about the conduct of Patricia and

Mr Reeves (who was the lawyer for Cornwallis Trustees). Patricia and Cornwallis Trustees opposed Chibbi’s claim against the Trust. In particular, Daryn says that Patricia and Mr Reeves should not have engaged in litigation with Chibbi. He says that between 1996 and 2010, he loaned approximately $800,000 to the Trust which has never been repaid, and he also spent his time and money fixing up buildings (including the Webb Street property) the Trust had an interest in. Daryn says this has not been accounted for by the Trustees in their proposal.

[30]             Daryn claims that, during the time Mr Vance and Mr Millard have been involved as professional trustees, the beneficiaries have lost $6,000,000 in assets and lost millions in revenue, future income, and asset building. He argues that the Trustees have an obligation to hold Mr Reeves and Patricia accountable for the loss to the beneficiaries that will be sustained as a result of their actions. He says that the claim Mr Reeves and Patricia’s costs cannot be quantified is misleading.13 Daryn also submits that Glenn (and/or Patricia) need to account for any rental income Glenn benefitted from whilst living in the Lowry Bay property.

[31]Daryn also says that the following is owed to the Trust:

(a)A total of $278,594 is allegedly owed by the FB Turvey Family Trust and the P Turvey Family Trust (the Mirror Trusts). These were mirror trusts set up by Francis and Patricia in 1989 that were finally distributed and wound up following the blessing order made by Gendall J in 2022.14

(b)$6,818 is owed by Glenn for outgoings in respect of the Lowry Bay property.

(c)A minimum of $10,000 is owed by the mirror trusts to account for overcharged fees by Reeves Lawyers for the time Mr Reeves spent as trustee of the those trusts.

13     It is unclear what in particular Daryn means by Patricia and Mr Reeves’ “costs”.

14     See Turvey v Vance, above n 3.

(d)$150,000 in unaccounted rent from Glenn.

[32]             Daryn’s oral submissions at the hearing focused on his enduring sense of unfairness arising out of the various trusts associated with the Turvey family. There are three particular debts he believes are owed to the Trust that in his view ought to be pursued. The most significant is what he says is a $212,000 loan owed by the Mirror Trusts. He believes the Trustees should not be indemnified and released from any ongoing obligations.

Discussion

[33]             I acknowledge Daryn’s firmly held views and his sense of injustice arising out of his family’s financial affairs. But the short point is that this last remaining Trust does not have much money left, the Trustees have done their best (at considerable personal expense) to try to sort out its affairs, and the Trust needs to be distributed now before there is nothing left.

[34]             The first point is that the Mirror Trusts have been finally distributed and wound up as a result of the order made by Gendall J in 2022.15 As a result, it is not possible for the Trustees to attempt to make any claim for any alleged debts owed by these trusts as Daryn says should happen. Issues of limitation would also likely arise. The Trustees make the point that the beneficiaries of the Trust are the same as those for the Mirror Trusts, meaning there is no benefit to the Trust’s beneficiaries in seeking to enforce inter-trust loans—as the loan would effectively be enforced against the beneficiaries themselves. In any case, given this family’s unhappy history, such a claim would inevitably be hotly contested, and it would be difficult, given the state of the accounts. The Trust simply does not have sufficient assets to fund any more litigation.

[35]             Nor do I accept that Mr Vance has any conflict of interest. As indicated, it is now Daryn’s view that Mr Vance acted in breach of his duties as trustee when he applied to wind up the Mirror Trusts in 2022, when Mr Vance did so knowing those trusts still owed money to the Trust in this case. I do not accept Daryn’s argument. It

15     See Turvey v Vance, above n 3.

appears to me to be a collateral attack on Gendall J’s 2022 decision. As counsel for the Trustees said, the Primary Beneficiaries of the Mirror Trusts and the Trust in this case are the same, such that inter-trust lending was not a matter Mr Vance was concerned with. It only became apparent in the course of the previous proceeding that Daryn was to be treated as a “notional settlor”, rather than a discretionary beneficiary and his share in the distribution was to pass to his children.16 That is borne out by the decision itself.

[36]             As to the unaccounted rent and outgoings from Glenn, apart from Daryn’s assertions as to the amount owed, there is nothing to suggest that the figure is as great as $150,000. That being said, the Trustees do acknowledge that Glenn has benefitted from being able to rent out the Lowry Bay property, hence the downwards adjustment in the amount he is supposed to receive in the proposed settlement. Again, any attempt to claim such a sum would inevitably be contested (and costly).

[37]             In respect of the allegations of overcharged legal fees by Reeves Lawyers, I do not understand whether this issue is in respect of legal advice Mr Reeves charged the Trust or Daryn personally. Much like Daryn’s suggestion that the Trustees need to pursue the costs resulting from the Chibbi litigation, this is also an insignificant amount that is not worth the time and expense to chase.

[38]             Turning to the costs resulting from the litigation between the Trust and Chibbi, as above, I agree with the Trustees that it would be a futile exercise to try and recover those costs. Any legal fees associated with such recovery would end up dwarfing the costs themselves, which are only about $7,000. When the Trust fund is quite modest, and given the litigious history of the parties, I agree with the Trustees that any litigation and/or further legal proceedings should be avoided.

16 Under the deeds for the Mirror Trusts, if the trustees of those trusts accepted an “addition or accretion to the capital” to the trusts’ funds from any person other than the settlor, and that transaction was a gift (in whole or in part), that donor would be deemed a “notional settlor” and was disqualified from being a discretionary beneficiary of the trusts. Daryn had made a loan to each of the trusts and so was deemed a “notional settlor”. The distribution he would have otherwise received from the winding up of the Mirror Trusts thereby passed to his children; see Turvey v Vance, above n 3, at [30]–[31] and [95]–[97].

[39]             As to the sale of the Lowry Bay property, I agree that it would be unlikely there is anything the Trustees could do. Daryn proceeded with the sale despite learning that the real purchasers were his mother and brother. Although he says he received legal advice that he could not back out of the sale, at the time he became aware who the purchasers were, the property had been marketed for sale through an independent real estate agent on the open market. It would be difficult, therefore (and involve more cost), to establish that Daryn and the Trust would have suffered any real loss.

[40]             For Daryn’s benefit, I note also that the termination of the Trust would have no impact on the wills of his parents. It is not an estate trust; it was not established as a result of any will.

[41]             Daryn repeatedly asserts that the Trustees have acted in their own interests, for example by pursuing the liquidation and receivership litigation against Vey, instead of pursuing Patricia and Mr Reeves personally. However, I consider that the Trustees appear to have acted reasonably in the litigation choices that they have made to date. Vey was the Trust’s largest debtor. In circumstances where Vey was attempting to sell its only asset at a significant undervalue, it makes sense that the Trustees would attempt to stop the sale. The sale of the Webb Street property by Mr Fugle was imminent at the time the Trustees applied to place Vey into receivership, and the Trust stood to be in a much worse position if the Webb Street property had in fact been sold.

[42]             It is clear the Trustees have formed the opinion that the remaining Trust fund should be distributed now, and the Trust wound up. Their decision is lawful and, in my view, one that a reasonable body of trustees could properly have arrived at. Clause 5.1 of the Trust Deed allows the Trustees to exercise their discretion before the Date of Distribution to apply the Trust Fund to any of the beneficiaries, excluding one or more of them. They may exercise their discretion as to amount under cl 5.1. As above, I do not consider any conflict of interest arises.

[43]             Notwithstanding that grandchildren of Patricia and Francis are listed as beneficiaries in the Trust deed, the Trustees’ proposed approach of making the distribution only to the Primary Beneficiaries is a sensible one, particularly given the modest sum that remains. It is also consistent with the intention in cl 9.1 of the Trust

Deed that, at the Date of Distribution, it was Daryn, Glenn, and Michele who would receive distributions of the Trust fund in equal shares, and their children would receive their shares if they had passed away. And it enables Patricia to receive some benefit (which she would not otherwise receive if the Trustees proceeded via cl 9.1 to bring forward the Date of Distribution). I observe this is the same approach Gendall J endorsed in relation to the Mirror Trusts.17

[44]             Finally, as to the proposed distribution amounts in the proposal, they appear to be fair. The adjustments are explained by Mr Millard in his affidavit as accounting for the benefits that Patricia and Glenn received and the work that Daryn has undertaken in respect of the Webb Street property. Although I can appreciate that Daryn will feel shortchanged, the proposal needs to be put into perspective. Daryn stands to receive almost double what his mother and Glenn will receive. As I have already noted though, these amounts will need to be adjusted downwards. It is also reasonable that the Trustees have set aside around $28,000 for their fees (although, as I understand it, that sum will now increase).

[45]             Because the blessing application was appropriate and brought in good faith, it is also reasonable for the Trustees to be indemnified for the costs associated with this application. Once again, given the enduring level of acrimony in the Turvey family, a release and discharge of the Trustees from any future liability would also be appropriate (and in accordance with s 134 of the Act).

[46]             Given the long and unhappy litigation history of this family, I agree with the Trustees that the best (indeed the only) thing to do is to distribute and wind up the Trust in line with the Proposal. There is no clear alternative pathway to resolution. Any other course would only deplete the Trust completely, so that there would be nothing left to distribute. Distributing and winding up the Trust now is the only realistic option for the Trustees in all of the circumstances.

17     See Turvey v Vance, above n 12, at [41]–[46].

Conclusion and orders

[47]             For the reasons set out above, I grant the amended originating application dated 11 October 2024. I make orders accordingly that:

(a)pursuant to s 133 of the Trusts Act 2019, it is proper and lawful for the Trustees to finally distribute and wind up the Orana Trust, in accordance with the terms of the draft deed of distribution provided with the amended originating application; and

(b)pursuant to s 134 of the Trusts Act, the Trustees are to be indemnified from any liability arising from the s 133 order and the related application, save any liability arising from dishonesty, wilful misconduct, or gross negligence, as set out in the draft deed of distribution.

[48]             The Trustees are entitled to be indemnified by the Trust for their costs in relation to this application. I am satisfied that the Trustees’ costs were reasonably and properly incurred. I make an order for costs accordingly.

Grau J

Solicitors:
Kensington Swan, Wellington