SHANKS AND ORS V SHANKS AND ORS HC DUN CIV-2010-412-000310

SHANKS AND ORS V SHANKS AND ORS HC DUN CIV-2010-412-000310

The court granted approval under s64A because, judged from the perspective of the minor and unborn beneficiaries, the benefits of the proposed deed of variation (preventing extinguishment of contingent interests, protecting trust assets, enabling charitable gifting, and providing flexibility to respond to future circumstances) outweighed the possible detriments (potential delay of vesting and broad resettlement power). All adult beneficiaries consented and counsel for the protected beneficiaries supported approval, so the practical, business-like assessment warranted approval in terms of the draft consent order.

Citation
openlaw-1006697c_257a_407b_a493_7cb146c0cb2b.pdf
Parties
First Plaintiff (trustee): Daphne Kay Shanks; First Plaintiff (trustee Company): Polson Higgs Nominees Limited (as trustees in the R N Shanks Family Trust); Second Plaintiff (trustee): Roy Norman Shanks; Second Plaintiff (trustee Company): Polson Higgs Nominees Limited (as trustees in the D K Shanks Family Trust); Defendant: Roy Norman Shanks; Defendant: Daphne Kay Shanks; Defendant: Alison Kay Shanks; Defendant: Nicola Anne Nike Shanks; Defendant: Derek Norman Shanks; Protected Beneficiaries (represented): Minor child, unborn children and unborn grandchildren
Court
High Court
Jurisdiction
New Zealand
Judgment Date
2 July 2010
Procedural Posture
Application Under Section 64 a of the Trustee Act 1956 for Court Approval of Trust Variations / Judgment on the Papers; Final Order Approving Variation Granted
Outcome
Application granted; deed of variation approved under s64A on behalf of minor and unborn beneficiaries
Legal Topics
Variation of Trust, Section 64 a Trustee Act 1956, Resettlement Power, Discretionary Beneficiaries, Powers of Appointment and Removal of Trustees, Court Consent for Minors and Unborn Beneficiaries
Trusts Equity Succession Charity Law Family Property Variation of Trust Section 64 a Trustee Act 1956 Resettlement Power +3 more

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Parties

Daphne Kay Shanks

First Plaintiff (trustee)

Polson Higgs Nominees Limited (as trustees in the R N Shanks Family Trust)

First Plaintiff (trustee Company)

Roy Norman Shanks

Second Plaintiff (trustee)

Polson Higgs Nominees Limited (as trustees in the D K Shanks Family Trust)

Second Plaintiff (trustee Company)

Roy Norman Shanks

Defendant

Daphne Kay Shanks

Defendant

Alison Kay Shanks

Defendant

Nicola Anne Nike Shanks

Defendant

Derek Norman Shanks

Defendant

Minor child, unborn children and unborn grandchildren

Protected Beneficiaries (represented)

Procedural Posture

Application Under Section 64 a of the Trustee Act 1956 for Court Approval of Trust Variations / Judgment on the Papers; Final Order Approving Variation Granted

Legal Issues

  1. 1 Whether the court should approve the proposed deed of variation under s64A on behalf of minor and unborn beneficiaries
  2. 2 Whether adding settlors (Mr and Mrs Shanks) and charities as discretionary beneficiaries and introducing a resettlement power and altered trustee appointment provisions is to the detriment of any beneficiary
  3. 3 Whether the proposed changes conflict impermissibly with settlor intent and whether the benefits outweigh potential detriments

Ratio Decidendi

The court granted approval under s64A because, judged from the perspective of the minor and unborn beneficiaries, the benefits of the proposed deed of variation (preventing extinguishment of contingent interests, protecting trust assets, enabling charitable gifting, and providing flexibility to respond to future circumstances) outweighed the possible detriments (potential delay of vesting and broad resettlement power). All adult beneficiaries consented and counsel for the protected beneficiaries supported approval, so the practical, business-like assessment warranted approval in terms of the draft consent order.

Court Disposition

Application granted; deed of variation approved under s64A on behalf of minor and unborn beneficiaries

Orders

  • Application under s64A of the Trustee Act 1956 granted in terms of the filed draft consent order
  • Deed of variation approved to (a) add Mr and Mrs Shanks as discretionary beneficiaries in their respective trusts, (b) vary powers of appointment and removal of trustees for increased flexibility, (c) permit nominated charitable organisations as discretionary beneficiaries, and (d) introduce a resettlement provision...