Eye watering

Aaron Adams Trustee Ltd v Jones relates to an application for blessing order to distribute the assets of a substantial discretionary trust for the benefit of persons and charities who were not previously named as beneficiaries of the trust. 

By way of background:

• Aaron Adams was seriously disabled following an overseas motor vehicle accident
• Compensation awarded on account of the accident was transferred to the Zenith Trust
• Aaron had the power to appoint trustees and was also the Zenith Trust’s protector
• A memorandum of wishes signed by Aaron in December 2012 provided that following his death the Zenith Trust assets should be distributed as to 40% to the Better Life Charity; as to 30% to other charities and as to 30% to members of the Lewis family
• Two deeds of resettlement were urgently executed after Aaron suffered a stroke to ensure that his wishes could be adhered to. These deeds effected the transfer of assets held by the Zenith Trust and Aaron’s estate to the Aaron Adams Trust. On the same day any spouse or partner of Aaron Adams, the Better Life Charity, other charities and members of the Lewis family were appointed beneficiaries of the Aaron Adams Trust, effective on Aaron’s death
• The Aaron Adams Trust is the subject of the blessing order as the trustee of that trust wishes to wind up and finally distribute the trust fund in accordance with Adam’s wishes.

The Trustee has sought directions, notwithstanding that there is no live dispute. Nothing turns on this. As noted at [45]:

[45] There is no need for me to repeat them all. Suffice to say that this application falls into the second category. This category:

…is where the issue is whether the proposed course of action is a proper exercise of the trustees’ powers where there is no real doubt as to the nature of the trustees powers and the trustees have decided how they want to exercise them but, because the decision is particularly momentous, the Trustees wish to obtain the blessing of the court for the action on which they have resolved and which is within their powers.

As noted at [47] and [48]:

[47] Here it is proposed that eye-watering amounts of money be gifted to people of apparently modest wealth, beyond the realm of most New Zealanders. For the proposed beneficiaries this would seem to be akin to winning Lotto. This is indeed what the Privy Council in Grand View Private Trust Co Ltd v Wong described as a “momentous decision.” The Privy Council criticised the trustee in Grand View for failing to seek court approval before making a decision that effectively distributed the entire trust fund. The Privy Council went on to comment that “a trustee who is in genuine doubt about the propriety of any contemplated course of action in the exercise of fiduciary duties and discretions is always entitled to seek the guidance of the court”.

[48] It is therefore appropriate that an independent and watchful eye is passed over the proposed distributions. This acts as a cross-check to the proposed distribution and a reassurance to all those involved that proper and careful processes have been undertaken, without any bias, undue influence, self-interest, or conflict of interest.  

Analysis

As set out at [52] to [

The Court also noted that two of the Trustee’s directors knew Aaron for 12 years before his death, were experienced practitioners, independent of the matter and had no interest in the outcome.

With respect to the Court consenting pursuant to section 124 of the Trustee Act on account of minor, unborn and future beneficiaries, as set out at [60]:

References:

• Aaron Adams Trustee Ltd v Jones [2026] NZHC 1901
• Trusts Act 2019, ss 124 and 133
• Peng & Ors v Rothschild & Ors [2017] NZHC 25 at [1].