AB and BB v CB, DB and EB relates to an application for rectification of a trust deed to remove the requirement for an independent trustee in circumstances where the original trustees were the settlors and a solicitor who was related by marriage.
The settlors were of the view that the strict requirement for independence recorded in the trust instrument was not intended and that they were unaware of this requirement.
An application was made seeking rectification of the trust deed, and ratification of non-compliant trustee decisions.
As noted by Gault J at [16] “Mistake is a ground on which a court may rectify a voluntary settlement. The Court may rectify a trust document to bring it into line with the true intentions of the settlor(s) as held at the date of execution of the document.”
As noted at [17]:
Importantly, rectification operates ex tunc (from the outset). This means that where a deed is rectified, there is no need for ratification of trustee decisions that are otherwise non-compliant.
The history of the clause in question warrants consideration, as the submissions made to the Court by Bill Patterson provided useful context (as well as pertinent guidance regarding appropriate trust terms). As noted as [23] to [26]:
References:
- AB and BB v CB, DB and EB [2024] NZHC 1397
- Allnutt v Wilding [2007] EWCA Civ 412, [2007] All ER (D) 41 (Apr)
- Re Butlin’s Settlement Trusts [1976] Ch 251
- Judd v Cowley [2020] NZHC 184, (2020) 32 FRNZ 485
Matters of Trust 
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