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Settlor; settlors, sham, Trusts

No sham decision upheld

The Supreme Court has dismissed an appeal against the decision of the Court of Appeal (upholding the High Court decision) in Glover v Glover where the court found that a ruse was not a sham.  Briefly a bare trust arrangement entered into to avoid a tax impost was found to have achieved its object and accordingly could was upheld (rather than ignored so that the trust assets could be found to have been validly distributed).

See Equity as a Sword Upholds Ruse and A ruse is not a sham even if it is

Post script

Perhaps not surprisingly, the Supreme Court decision was not the end of the matter.  In the next part of this excursion through the courts, CIT Holdings Limited (the trustee of the Glover Trust) filed proceedings against Glover No. 2 Limited seeking to liquidate Glover No.2 Limited on account of costs awarded against it.  Glover No. 2 then sucessfully sought to have the statutory demand set aside on the basis that there was a right of set off due to a counter claim on account of advances made to  CIT Holdings Limited on account of the orignal joint venture.  The court also found that in the circumstances the statutory demand represented undue pressure due to the relationship between Mr Olliver and Ms Sparks.

Also see  CIT holdings Limited v Glover No 2 Limited regarding caveats lodged over various properties in a related matter.

References

  • Glover v Glover [2014] NZSC 54
  • Glover No.2 Limited v CIT Holdings Limited [2014] NZHC 2786
  • CIT holdings Limited v Glover No 2 Limited [2014] NZHC 2114
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