Cooney v St Columbans Mission Society of Lower Hutt

[2020] NZHC 1958

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2020-470-000063

[2020] NZHC 1958

UNDER

the Trustee Act 1956, ss 64A, 66, 71 and 73

IN THE MATTER OF

the estate of BEATRICE REAM BERRY and the B R BERRY CHARITABLE

TRUST

BETWEEN

HUGH OWEN COONEY, solicitor of Tauranga, and FATHER PHILIP BILLING, of Tauranga, priest

Plaintiffs

AND

ST COLUMBANS MISSION SOCIETY OF

LOWER HUTT, charitable organisation First Defendant

PACIFIC LEPROSY FOUNDATION, of

Christchurch, charitable organisation Second Defendant

Hearing:	On the papers
Counsel:	K J Catran for Plaintiffs
Judgment:	7 August 2020

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 7 August 2020 at 4.00 pm

pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date………………………

COONEY v ST COLUMBANS MISSION SOCIETY OF LOWER HUTT [2020] NZHC 1958 [7 August 2020]

Introduction

[1]                 The plaintiffs are the trustees of the trust known as the B R Berry Charitable Trust, established by the late Beatrice Ream Berry in her Will of 19 May 1983.

[2]                 The trustees of the Trust are the senior partner of the firm Cooney Lees Morgan and the Catholic Parish priest from time to time of the Parish of Tauranga.

[3]                 The beneficiaries of the Trust are the first and second defendants, namely the St Columbans Mission Society of Lower Hutt and the Pacific Leprosy Foundation, previously known as the Leprosy Trust Board Incorporated.

[4]                 The plaintiffs seek by way of originating application an order under s 64A of the Trustee Act 1956, varying the terms of the Trust to authorise them to wind up the Trust and distribute the net proceeds to the defendants in equal shares as a capital distribution.

Application for directions for service

[5]                 I grant the application by the plaintiffs that service of these proceedings be dispensed with. The two defendant charities are the only beneficiaries of the Trust and they support the trustees’ application. There would be no point in requiring service of the proceedings in this case.

Factual background

[6]                 The Trust Deed provides that the trustees are to pay the beneficiary defendants each half of the net income of the Trust each year in perpetuity.

[7]                 The capital of the Trust is an investment of $116,000. The capital was initially invested by the trustees with Cooney Lees Morgan’s nominee company, but with the winding up of that entity’s activity, has since been invested with First Mortgage Trust in Tauranga, and is currently earning interest at 5.3 per cent per annum, producing a gross income of the order of $6,000 per annum.

[8]                 After deduction of administrative costs, the net distributions to each of the charities have varied between $7,500 in the mid-1990s down to around $2,000 a year since the estate administration was completed and the Trust established in 1995.

[9]                 The trustees are concerned that the Trust risks falling income increasing costs, and there is a continuing need to undertake updating of the trustees as the persons occupying the positions required under the Trust move or retire. As the Trust is a charitable trust, it will run in perpetuity.

[10]            The trustees consider that it would be in the best interests of the beneficiaries that the Trust be wound up and the capital be distributed to the beneficiaries, and that such a course would be consistent with the settlor’s desire to adequately support both beneficiaries, with whom she had a lifelong connection.

[11]            The trustees have enquired of the beneficiaries if they would support the Trust being wound up and the capital distributed to them in equal shares. Both beneficiaries have expressed a desire for that to happen.

Decision and orders

[12]            The application is unopposed; the defendants consent to the orders sought. The grounds for the making of the order sought have clearly been made out. As a matter of common-sense and sound judgment, the clearly appropriate course is for the Trust to be wound up and the capital to be distributed to the beneficiaries as proposed.

[13]            I accordingly make an order under s 64A of the Trustee Act 1956 varying the terms of the Trust so as to authorise the trustees to wind up the Trust and to distribute the net proceeds to the defendant beneficiaries in equal shares as a capital distribution.

[14]            I further order that the costs and expenses of the trustees in relation to this application are to be paid out of the assets of the Trust prior to any distribution.

[15]            Leave is granted to the trustees to make any further application as might be appropriate.

Associate Judge P J Andrew