Law v Law relates to an application by trustees for directions under s 66 of the Trustee Act regarding the proposed distribution of trust assets. The background of the case is essentially set out at  as follows:
“Again, the Trustees appear to have approached the question of the payments to Elena with a primary focus on preservation of the Trust capital, not on addressing Elena’s needs in accordance with Tige’s clear wishes. The evidence for the Trustees refers to the Trust minutes showing “a continuing tension between the ambitions of Elena to receive payments from the Trust and the desire of the trustees to try and preserve a share of the capital for distribution to the children on Elena reaching 65 years.” The evidence goes on “… it is unknown what happened to funds she received from the joint account, the insurance policy, the contribution from Donald Law’s estate, and funds settled on her trust as a result of the Relationship Property settlement. As it was, she was living rent free, expense free, in a house provided by the Trust and was receiving $12,000 a year from the Trust.” The tone is judgemental and pejorative and the approach taken is not consistent with Tige’s memoranda of wishes in which he made plain that he did not want the Trustees to have regard to Elena’s other assets in considering what financial assistance should be paid to her from the Trust.“
Importantly, clause 8(c) of each of the Settlor’s memoranda of wishes of the
stated that “it is my wish that my wife ELENA until she attains the age of sixty five years should, upon my death, and until she qualifies for New Zealand Superannuation receive a distribution of weekly income
from the Trust of $500 per week net to her.”
It was common ground that this did not occur and that the trustees provided minimal income to Elena, together with provision of a property not of her choosing with stringent conditions attaching to her occupation of the property.
As noted by Gwyn J:
 When one reads the other provisions of the Memoranda of Wishes it is plain that Tige’s overwhelming intention was that Elena’s interests were to be paramount; she was to be adequately provided for, without the need for her to resort to her own capital or income. The Memoranda read as a whole do not indicate that Tige intended that Elena receive the weekly payments at the level he stipulated only if the Trust income was sufficient to fund them. Nor do the terms of the Trust Deed mandate that approach. On the contrary, cls 7.1 and 20.4 of the Deed are entirely consistent with the weekly payments to Elena coming from Trust capital, as well as Trust income, where necessary. This latter approach is also consistent with the themes clearly articulated in the memoranda of wishes.
 I conclude that the better interpretation of cl 8(c) is that Elena is to receive a “weekly income” of $500 and that it does not limit the source of that payment to only the income of the Trust. It therefore follows that the Trustees have acted on an incorrect interpretation.
In reaching a decision Gwyn J considered the desired outcome put forward by all parties concluding at  that ” … the proposal advanced by
Elena is an outcome that is fair to all beneficiaries, best meets Tige’s plainly expressed wishes and is consistent with the Trustees’ obligations.”
It was noted that the trustees’ approach was not consistent with the settlor’s wishes, but rather the trustees imposed their own views as to how Elena should be provided for.
 I acknowledge what Mr Gordon says about the capital loss that will inevitably occur from the purchase of a Masonic Village property. There are two points to be made in response. First, it might be regarded as a likely consequence of the Trustees’ approach to the initial acquisition of a property which was not suitable for Elena’s ongoing needs. Second, of course it would have been preferable to have avoided that cost to the Trust, but as I have already noted, the terms of the Trust Deed specifically state that the Trustees are not bound by a duty to have regard to the need to maintain the real value of the capital of the Trust, or the likely income return or the length of time of the proposed investments, or the marketability of the proposed investments on determination
- Law v Law  NZHC 1243
- Trustee Act 1956