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This category contains 12 posts

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

How afraid should we be of Clayton?

The Supreme Court decision in Clayton v Clayton changed the trust landscape.  But how afraid should we be?  Are all trusts vulnerable to Clayton-style challenge?  Or just the ones that push the envelope?  And, if the latter, how far can one push before there is a problem? A recent decision of Moore J has provided … Continue reading

A sorry tale …

As noted in the judgment McLaren v McLaren at [1]  this case relates to “… a sorry tale of what can occur when a family adopts an inappropriate form of trust deed without adequate advice or sufficient understanding of the legal effect of its terms. In this case, a son who was given a power … Continue reading

The trustee did it

One of the stated purposes behind the proposed new Trusts Act (currently in the form of a draft bill) is to make trust law clearer and more accessible.  Laudable,  but is it realistic?  The naysayers need not go much further than the decision in NZ Natural Therapy Limited (in Liquidation) v Little.  A little bit of background … Continue reading

Taxation of Trusts ed 3

  The taxation of trusts is a dynamic and ever-changing landscape. The third edition of Taxation of Trusts published this week (September 2016) has been up-dated to incorporate recent case law developments and legislative amendments.  The text also considers the application of FATCA to trusts and proposed new reforms to the disclosure rules and closely … Continue reading

The Supreme Court Writes Back

The long-awaited decision (issued in fact as two separate decisions) in Clayton v Clayton were released today (23 March 2016). The first decision relates to the Vaughan Road Property Trust (VRPT) and the second to the Claymark Trust. Background Mr and Mrs Clayton commenced a de facto relationship in 1986 and married in 1989. They … Continue reading

Dis-illusion

The long awaited Court of Appeal decision on the subject of illusory trusts should make unsettling reading for many a settlor, and perhaps their advisers too. The decision, which runs to 96 pages is substantial.  The message is mixed.  While the trust in question was found to be valid (illusion it turns out, is just … Continue reading

Do it right or don’t bother?

Trusts are a bit like plants – tend them and nourish them and you can reap the rewards for years.  Leave them alone and even if once well tended to, the plant can bolt or fail.  The story that became  Murrell v Hamilton provides a sad example of what can happen when trustees fail to collectively … Continue reading

Rosebud 2 – the edifice collapses further

If it were a movie the title might be: “Rosebud 2 – the edifice collapses further. The case of Rosebud Corporate Trustee Limited v Bublitz focused on whether the trust for which Rosebud Corporate Trustee Limited (Rosebud) acted was a sham.  As a result of the court finding the trust to be a sham an agreement that Rosebud Trust purported to … Continue reading

No sham decision upheld

The Supreme Court has dismissed an appeal against the decision of the Court of Appeal (upholding the High Court decision) in Glover v Glover where the court found that a ruse was not a sham.  Briefly a bare trust arrangement entered into to avoid a tax impost was found to have achieved its object and accordingly … Continue reading