Legal Research
Cases
Waters v Waters

Waters v Waters

Case [2021] NZHC 1832 20 July 2021

Trustee Appointment

Validation of Trust Transactions

Removal of Trustees

Trustee Powers

Trusts & Equity

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2020-470-27

[2021] NZHC 1832

IN THE MATTER OF the Trustee Act 1956, sections 51 and 64

IN THE MATTER OF

THE J.W. AND E.T. WATERS FAMILY TRUST

BETWEEN

JAMES WILLIAM WATERS

Plaintiff

AND

MARK LEWIS WATERS

First Defendant

WILLIAM DAVID WATERS

Second Defendant

On papers

Counsel:

K J Catran for plaintiff

P M Hunter for first defendant
M P Ward-Johnson for second defendant

Judgment:

20 July 2021

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 20 July 2021 at 12.30pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Cooney Lees Morgan, Tauranga for plaintiff Simpson Western, Auckland for first defendant
Chris Rejthar & Associates, Tauranga for second defendant

WATERS v WATERS [2021] NZHC 1832 [20 July 2021]

[1] The plaintiff (Jim), together with his late wife Elena Tuira Waters (Wira), were the settlors and initial trustees of the J.W. and E.T. Waters Family Trust set up by a deed of trust dated 31 May 2000 (the Trust). Wira died on 21 July 2019.

[2] Following Jim and Wira’s retirement as trustees on 24 November 2011, their sons William David Waters (Willie) and Mark Lewis Waters (Mark) were appointed as trustees. The discretionary beneficiaries of the Trust are:

(a)the settlors;

(b)the final beneficiaries: Willie, Mark, and their sister Reina Christine Harry, who lives in California;

(c)any children of the final beneficiaries;

(d)any wife, husband, widow or widower of a final beneficiary or a grandchild of the settlors, not for profit association or organisation whose funds are applied to community or philanthropic or similar purposes;

(e)any other person related to the settlors by blood, marriage or adoption;

(f)the trustees of any superannuation fund, or trust, of which any of the beneficiaries are beneficiaries or members, and any company in which any of the beneficiaries holds at least a 50 per cent interest;

(g)any charitable, educational or religious organisation declared by the trustees in writing to be a beneficiary (none has been appointed).

[3] The settlors had the power of appointment of trustees during their lifetime, but there is no power of removal of trustees. The minimum number of trustees is two, unless a corporate trustee is appointed as a sole trustee. The trustees are required to act unanimously and have full discretion to distribute trust income or capital to any beneficiary during the term of the Trust. The date of final distribution of the Trust is 80 years from the date of execution of the trust deed.

[4]The principal assets of the Trust are:

(a)land established as a kiwifruit orchard by the settlors at Matapihi (Record of Title SA69B/988) (the land), together with a residence, associated orchard buildings and other infrastructure and fixtures, plant and equipment, and a Zespri licence, together having a book value as at 31 March 2018 of approximately $545,000;

(b)an investment portfolio of shares and fixed interest assets valued as at March…

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 Waters v Waters

Details

AGLC: Waters v Waters [2021] NZHC 1832
Case: [2021] NZHC 1832
Decision Date: 20 July 2021

CaseChat Overview and Summary

In the case of Waters v Waters, the High Court of New Zealand considered an application by Jim Waters to replace trustees of a family trust, validate certain trust transactions, and address other related issues. The J.W. and E.T. Waters Family Trust was established by Jim and his late wife, Wira, with their sons, Willie and Mark, appointed as trustees following the parents' retirement. However, due to an administrative error, trust transactions from 2011 onwards were executed under the names of Jim and Wira instead of the appointed trustees. Mark objected to some transactions, alleging them to be illegal and fraudulent, although they were within the trustees' powers under the trust deed. The trustees, Willie and Mark, were also in dispute and unable to function effectively.

The court was tasked with deciding whether to validate the transactions executed under the apparent authority of the settlors, remove Willie and Mark as trustees, and appoint a new trustee. Jim sought the removal and replacement of the trustees to resolve the family disputes and ensure the trust's proper administration. Perpetual Trust Limited, a professional corporate trustee company, agreed to accept appointment as sole trustee. Mark consented to the removal and replacement of the trustees but reserved his position on the validation application.

The court ruled that the proceeding should be brought under Part 18 of the High Court Rules 2016. It validated the transactions carried out by the Trust from the date of the settlors' retirement and the appointment of Willie and Mark as trustees. The court also removed Willie and Mark as trustees and appointed Perpetual Trust Limited as the sole trustee, vesting the Trust's assets in Perpetual. The court declined to order the Registrar-General of Lands to record the change of ownership, as it was not necessary to achieve Jim's purposes. Any party could apply for further orders if required to implement the court's decisions or if deemed just in the circumstances. There were no issues regarding costs.

Orders