Sham trust

This category contains 20 posts

Sham trust – a rose by any other name

Allegations of sham are commonly made, but rarely made out. Accordingly the case of Rosebud Corporate Trustee Limited v Bublitz makes interesting reading.  The judge does not keep us in suspense long, coming out with his finding at p. 5 that the trust is a sham. One of the major players in this story is one … Continue reading

Can a settlor have de facto control of a trust?

Trusts involve a lot of just that, trust.  Once settled, the settlor has limited, if any, real control.  This is difficult for many settlors to deal with due to misunderstandings and misinformation regarding how trusts work. By way of illustration – the earliest trusts, called a use, can be dated back to medieval England.  At … Continue reading

Trust Fundamentals Webinar

Trusts are the best long-term intergenerational form of asset protection.  However, as litigation involving trusts increases, questions are reasonably asked regarding the “safety” of trusts.  If you are looing for answers or guidance Vicki Ammundsen is presenting a webinar on February 19th discussing the fundamentals of trusts.  Topics covered by the webinar include: Requirements of a valid trust Differentiation between … Continue reading

Know thy beast

A constructive trust claim provides instructive reading into recognising what it is that you are after before you begin.  It begins, as is so often the case with trust cases, with a failed relationship.  There was a home owned and constructed by a trust that was settled well before the relationship began.  After the relationship ended … Continue reading

A ruse is not a sham even if it is …

This blog could equally be entitled “Distribute in haste, repent at leisure”.  It concerns a case about a relationship breakdown and some ill-conceived tinkering with trust property in an attempt to better protect some trust assets.  The means by which this tinkering was carried out included a purported distribution of trust assets to a new trust, together with … Continue reading

Another shot across the trust bow

This blog explores the increasing difficulties the asset rich party has hiding assets from his or her former partner in the face of judges who really want to help. The case in question (Prest v Petrodel) is a UK case, and accordingly, it is important to appreciate that the equivalent relationship property legislation includes broader powers … Continue reading

The Trust Illusion

The recent High Court decision in Clayton v Clayton has been appealed and cross-appealed.  Leave has also been given for certain appeals to be made out of time. The appeal will be heard on 14 July 2014.  In the meantime, Mrs Clayton has served a bankruptcy notice on her former husband in respect of costs … Continue reading

Should you be my trustee?

I reviewed a couple of trust deeds today.  Nothing unusual, it’s what I do.  For the record when reviewing a deed of trust I start of with my trust review check list and I finish off with a summation of what I feel.  While the check list elements are helpful in highlighting drafting errors and shaping my … Continue reading


In December 2010 the High Court granted interim asset preservation orders in respect of assets owned by the trustees of the KA3 and KA4 Trusts and former Hanover director Mark Hotchin. The trustees of the KA3 and KA4 trusts challenged the High Court’s refusal to strike out certain aspects of the Financial Market’s Authority (FMA) claim, … Continue reading

How to lose control of trust assets in three easy steps

The recent case of Rabson v Gallagher provides an excellent example of how not to use trusts in the context of protecting property from a relationship partner. The first mistake made was to intermingle relationship property and trust property.  Where this happens any party should expect the court to ensure that the disaffected former partner is compensated.  It is entirely possible and permissible … Continue reading