The family trust in New Zealand and the claims of ‘Unwelcome Beneficiaries’

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dc.contributor.authorTappenden, Sue
dc.date.accessioned2010-02-22T00:44:17Z
dc.date.available2010-02-22T00:44:17Z
dc.date.issued2009
dc.description.abstractIn June 2009, at the Transcontinental Trusts conference in Geneva, His Honour Justice David Hayton said that the New Zealand Court of Appeal had got aspects of the law of trusts wrong in its decision in Official Assignee v Wilson [2008] 3 NZLR 45. The Court held that the test for proving a trust was a sham was whether the trustees and settlor had a common intention that the trust was not to be a genuine entitiy. Hayton prefers a more objective approach and looks to the objective effect of a shammer’s conduct and not look for secret dishonest intentions which will hardly ever be revealed. Hayton’s approach would ensure that trust property would be made available to creditors so that they were paid what they were due by declaring the trusts to be shams. Family trusts have become big business in New Zealand and are commonly used to protect a businessman’s assets from creditors. While there is nothing illegal in setting up a family trust, it is my contention that the law pertaining to family trusts in New Zealand has become so far removed from the accepted principles of equity as to demand investigation. This paper explores the origins of equity and compares the modern family trust against the equitable principles which have been developed over hundreds of years, even as far back as Plato’s Greece. The paper links the equity of Ancient Greece to Cicero in Rome, through the early Roman Church to the Chancellors serving English Kings. The law of England leads to the law of modern New Zealand. The paper goes on to examine the way the family trust has been used to defeat the legitimate claims of creditors. I aim to show that the approach taken by the New Zealand Court of Appeal is too narrow and favours the ‘shamming’ settlor at the expense of creditors who have given good consideration in comparison with volunteer beneficiaries. Moreover the family trust has become a mechanism that bears little relationship to recognised equitable principles and should lose the protection accorded to properly constituted trusts.en
dc.format.mimetypeapplication/pdf
dc.identifier.citationTeppenden, S. (2009). The family trust in New Zealand and the claims of ‘Unwelcome Beneficiaries’. Journal of Politics and Law, 2(4), 17-25.en
dc.identifier.urihttps://hdl.handle.net/10289/3630
dc.language.isoen
dc.publisherCanadian Center of Science and Educationen_NZ
dc.relation.isPartOfJournal of Politics and Lawen_NZ
dc.relation.urihttp://ccsenet.org/journal/index.php/jpl/article/view/4498en
dc.rightsThis article has been published in the journal: Journal of Politics and Law. © 2009 S. Tappenden.en
dc.subjectHaytonen
dc.subjectobjectiveen
dc.subjectintentionen
dc.subjectNew Zealanden
dc.titleThe family trust in New Zealand and the claims of ‘Unwelcome Beneficiaries’en
dc.typeJournal Articleen
pubs.begin-page17en_NZ
pubs.elements-id34658
pubs.end-page25en_NZ
pubs.issue4en_NZ
pubs.volume2en_NZ
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