Fiduciary restraints

This appeal to the Supreme Court addresses what rights or powers s in a family trust can properly be treated as “property” rights or interests falling within the ambit of the Property (Relationships) Act 1976 (the PRA).

For the background see Weakly Fiduciary.

The appeal was denied, the reasons for which are summarised at [125] and [126] as follows:

[125] It will be clear by now that we consider the combination of powers reserved to Mr Pinney under the MRWT deed to be significantly different to those powers reserved to Mr Clayton in Clayton v Clayton. A power analogous to a general power of appointment is not created. Rather, the core power in cl 15 to appoint and remove trustees remains limited by the proper purpose rule and bound by the fiduciary
obligations that it be exercised in good faith and in the interests of the beneficiaries. So too are the dispositive powers in cls 4, 6 and 7—powers which are moreover constrained by the two-trustee requirement and the requirement of unanimity. The general discretion provision in cl 13 does not alter this analysis, and nor does the limited variation power in cl 12. The distinctions between the VRPT deed in Clayton and the MRWT deed are therefore sufficiently material to warrant different classification in terms of the PRA definition of “property”. The two cases are not alike.

[126] It follows that we do not consider Mr Pinney enjoys a personal property right in respect of the bundle of powers vested in him by the MRWT deed.

The decision, which warrants careful reading, turns on the terms of the trust deed, rather than a compelling narrative. That said there is much to support the narrative, and this should not be overlooked.

With respect to the Tikanga argument that was raised on appeal as noted at [127]:

[127] Tikanga was raised for the first time in this case, before us. We have neither the benefit of evidence nor the considered views of the Courts below on the matter. While we accept, consistent with the decision of this Court in Ellis v R (Continuance), that tikanga might be influential in the long-term development of the common law of Aotearoa New Zealand, including equity, we are not persuaded that anything in the
submissions we received would necessitate a different conclusion on the narrow point before us as to whether, on the facts, a particular combination of trust powers constitutes the private property of the donee of those powers.

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For more information see CCH Trust Series 2025 – Practical Insights from Supreme Court Decisions.

References

• Cooper v Pinney [2024] NZSC 181
• Cooper v Pinney [2023] NZCA 62
• Cooper v Pinney [2018] NZFC 9120 [Family Court judgment].
• Paul Matthews and others Underhill and Hayton Law of Trusts and Trustees (20th ed, LexisNexis,
• London, 2022) at [75.7].
• Re the Marriage of Goodwin (1990) 101 FLR 386 (FamCAFC).
• Kennon v Spry [2008] HCA 56, (2008) 238 CLR 366
• In the Marriage of Ashton (1986) 11 Fam LR 457 (FamCAFC).
• Law Commission Review of Trust Law in New Zealand: Introductory Issues Paper (NZLC IP19,2010) at 6
• Chirnside v Fay [2006] NZSC 68, [2007] 1 NZLR 433
• Ellis v R (Continuance) [2022] NZSC 114, [2022] 1 NZLR 239