This category contains 119 posts

More trustees sent to the naughty corner

Clement v Lucas concerns a family farming enterprise and illustrates the difficulties when beneficiaries cannot agree on how to give effect to the protections parents have put in place for the benefit of the beneficiaries. The contest at the heart of the matter was whether the trustees should distribute the trust assets equally between the … Continue reading

Myths and liability

Trustees act personally.  As noted in the Supreme Court judgment in Macalister Todd Phillips Bodkins v AMP (emphasis added): “Liabilities incurred by a trustee in relation to a trust are always the personal liabilities of the trustee … A creditor has a personal right to sue a trustee and to get judgment and make the … Continue reading

The blessing of the court

Being a trustee is hard, and at times quite possibly boring (to paraphrase from the movie An Education: Emma Thompson and Carey Mulligan).  And worse, if you get it wrong the beneficiaries can sue you, no matter how hard a trustee might try to get it right. Fortunately, help is at hand in the form of … Continue reading

Trustees “fortunate” to be liable for only 50%

The Rex White Family Trust (RWFT) was found to have failed by reason of uncertainty. While the Court accepted it was appropriate for the trustees to have sought directions from the Court, it was found that they had acted unreasonably by pursuing an argument as to the existence of the RWFT, which was lacking in merit.  … Continue reading

Protecting the trustee’s position on the changing of the guard

The decision in Meritus Trust Company Limited v Butterfield Trust, a decision of the Supreme Court of Bermuda, considers the practical matter of whether a removed trustee can retain sufficient trust assets against which to enforce its indemnity in relation to a contingent costs liability.  In this case the contingent costs liability was estimated at $5 million and … Continue reading

Bankruptcy and abuse and of course a trust or two

Boy meets girl. Boy marries girl. Boy bankrupts girl after she fails to pay $12,263.50 of court costs. Girl’s appointment as trustee and appointor of two family trusts is terminated by her bankruptcy. Aint love grand? Anne (the girl in this narrative) remains a beneficiary of the trust that owns the family home where she … Continue reading

Home is where the trust is?

The decision in Van Uden v CIR highlights the importance of recognising when a property owned by a trust can comprise a permanent place of abode.  The significance of a property being a permanent place of abode is that a person who is otherwise non-resident for tax purposes, will be treated as resident in New Zealand … Continue reading

The curious story of the Angora cat

Para 438 in the decision of MezhProm Bank v Pugachev refers to a phenomenon in patent law known as the Angora cat problem first identified by Professor Franzosi, an eminent academic expert in the field: “Professor Mario Franzosi likens a patentee to an Angora cat. When validity is challenged, the patentee says his patent is … Continue reading

Family dispute ends in a subpoena too far

Some disputes have the plots of a war movie. Everything starts fine until the hostilities begin and everything gets messy. Sometimes this just leads to someone carrying out an attack that doesn’t make sense… The defendants in the case of Triezenberg and Dodd v Mason, Alexander and Wendy Mason, were married in 1959 and had three … Continue reading

The future of trust administration

The roles of trustees and trust administrators can be a rewarding but difficult role.  With the prospect of a Trusts Act in the foreseeable future (see Trusts Bill released 1 august 2017) trustees and trust administrators need to be match fit.  Increased reporting obligations under CRS, AML/CFT and FATCA are another matter for consideration. For … Continue reading