Rational

Wallace v Wallace relates to a decision of the trustees of the Ione Wallace Trust (the Trust) to bring forward the Trust’s vesting date. As set out at [4]:

“The trustees wish to bring forward the vesting date and distribute the funds they currently hold to the six final beneficiaries named in the Trust. One of those beneficiaries, Mr Gavin Wallace (Gavin), opposes the application. He considers the Court, and not the trustees, should be responsible for making the decision as to what should happen to the assets owned by the Trust.“

Prior to the court proceedings the trustees resolved to bring forward the Vesting Day and for the Trust’s assets to vest in accordance with clause 11 of the terms of the Trust, which provides that:

As stated at [10]:

The trustees decided to seek directions from the court on the following basis:

The court considered the application on the basis set out at [26] to 33]:

…

The court considered the trustees’ resolution and the factors the trustees took into account. Teh court considered that the decision was “rational.” In support of this the court considered:

• who the settlor intended to benefit
• the value of the Trust’s assets
• the desirability of ending the family disharmony

Costs were awarded against Mr Wallace on a 2B basis. The court was of the view that Mr Wallace’s argument was not misconceived or hopeless from the outset as it “would not have been easy for a layperson to interpret and understand the meaning of cl 11.” Accordingly an increased award of costs was not appropriate.

References:

• Wallace v Wallace [2023] NZHC 2828
• Wallace v Wallace (Costs) [2024] NZHC 3702
• Re Honoris Trust [2017] NZHC 2957
• Trusts Act 2019, s 133