[1] This case concerns a family trust established on 17 January 1990. This was at the instance of Mr Anthony van den Brink who is the father of the first respondent, Mr Stephen van den Brink. Anthony van den Brink’s children, Stephen van den Brink and his four siblings, are the primary beneficiaries but the discretionary beneficiaries include any spouse, widow or widower, child or remoter issue of Stephen van den Brink and his siblings.
[2] Ms Nicola Kidd and Stephen van den Brink started to live together in August 1998. They married in 2001. Their child was born in 2004. They eventually separated in 2006 and the marriage was dissolved in August 2008.
[3] This case concerns Ms Kidd’s attempt to obtain orders in relation to the trust under s 182 of the Family Proceedings Act 1980. This section is in these terms:

182 Court may make orders as to settled property, etc.

(1) On, or within a reasonable time after, the making of an order under Part 4 of this Act or a final decree under Part 2 or Part 4 of the Matrimonial Proceedings Act 1963, a Family Court may inquire into the existence of any agreement between the parties to the marriage or civil union for the payment of maintenance or relating to the property of the parties or either of them, or any ante-nuptial or post-nuptial settlement made on the parties, and may make such orders with reference to the application of the whole or any part of any property settled or the variation of the terms of any such agreement or settlement, either for the benefit of the children of the marriage or civil union or of the parties to the marriage [or civil union] or either of them, as the Court thinks fit.

...

(3) In the exercise of its discretion under this section, the Court may take into account the circumstances of the parties and any change in those circumstances since the date of the agreement or settlement and any other matters which the Court considers relevant.

(Emphasis added)

[4] Ms Kidd’s application for orders under this section was struck out in the Family Court by Judge Adams in a judgment delivered on 2 July 2009,[1] with a consequential refusal to order discovery against the trustees. Her subsequent appeal against that judgment was dismissed by the High Court (Harrison and Winkelmann JJ) by judgment delivered on 21 December 2009.[2] Before us is an application for leave to appeal against the latter judgment.
[5] The case raises two issues: first, whether the trust is an ante-nuptial settlement for the purposes of s 182; and secondly, if not, whether dispositions of property to the trust made during the currency of the marriage are relevantly post-nuptial settlements.
[6] The jurisdiction in relation to s 182 was extensively considered by the Supreme Court in Ward v Ward in a judgment delivered on 8 December 2009.[3] It is appropriate to set out some of the comments made by the Court:

[14] The section can be traced back as far as s 37 of the Divorce and Matrimonial Causes Act 1867 which was itself based on English legislation enacted eight years earlier: s 45 Matrimonial Causes Act 1859 (UK) which was based on divorce on the grounds of adultery. At that time marriage settlements were relatively common in families with property of any consequence. Settlements of this kind were generally made on or shortly before the marriage and, as it was often put, in consideration of the marriage. The beneficiaries were conventionally either the wife, or the husband and wife, and their children and grandchildren. That was a classic ante-nuptial settlement, as the section now describes it. Post-nuptial settlements were sometimes of the same general kind, effected shortly after the marriage. But more often they were made on account of some event during the marriage which rendered the establishment of a settlement trust necessary or desirable.

[15] Both ante and post-nuptial settlements had one fundamental thing in common. They both envisaged and were premised on the continuance of the marriage. If that premise ceased to apply, a fundamental change in circumstances came about. Parliament recognised that injustices could arise as a consequence and it was desirable to empower the Court to review the settlement on dissolution of the marriage. Associated with that review power was a power to make orders, either varying the terms of the settlement, or allocating the property subject to it, in whatever way was appropriate to remedy the consequences of the failure of the premise on which the settlement had been made, and the property had been vested in the trustees.

...

[25] Based on the foregoing discussion we consider the proper way to address whether an order should be made under s 182, is to identify all relevant expectations which the parties, and in particular the applicant party, had of the settlement at the time it was made. Those expectations should then be compared with the expectations which the parties, and in particular the applicant party, have of the settlement in the changed circumstances brought about by the dissolution. The court’s task is to assess how best in the changed circumstances the reasonable expectations the applicant had of the settlement should now be fulfilled. If the dissolution has not affected the implementation of the applicant’s previous expectations, there will be no call for an order.

[7] In the High Court, the Judges concluded that a settlement would only be relevantly ante-nuptial if “premised on the existence and continuation of the marriage, that is both its rationale and purpose”.[4] They saw this as consistent with the approach taken in England in Brooks v Brooks:[5]

... These expressions [ante-nuptial and post-nuptial] are apt to embrace all settlements in respect of the particular marriage, whether made before or after the marriage.

[8] The approach of the English courts to the equivalent legislation has focused on whether the settlement in question was made in respect of the particular marriage. In the case of post-nuptial settlements, this test is likely to be easily satisfied if, for instance, the settlement makes provision for either of the spouses qua spouse (or both of them) or for any children of the marriage, and the jurisdiction is not confined to traditional marriage settlements.[6] In the case of ante-nuptial settlements, this test in practice operates more restrictively. In particular, the courts have held that the jurisdiction is not engaged merely because the settlement in question was before marriage and by its terms provided for a future spouse of one of the primary beneficiaries to take a beneficial interest.[7] Instead the cases indicate that the expression “ante-nuptial settlement” encompasses only:[8]

... a settlement made in contemplation of, or because of, marriage, and with reference to the interests of married people, or their children.

[9] A similar but not identically worded provision (applicable to “settlements made in relation to the marriage”[9]) was considered by Heydon and Keifel JJ in Kennon v Spry[10] in the context of a trust which was, at least broadly, similar to the trust we are concerned with (ie a trust which was set up before marriage, not in contemplation of the particular marriage in question but under which spouses of the primary beneficiaries themselves became beneficiaries along with a wide range of beneficiaries). Heydon J applied the English authorities and concluded the trust in question was not within the scope of the jurisdiction. Keifel J, however, was of the other view, albeit that she proceeded on the basis that the differences in statutory language permitted a more expansive approach than was available under the English statute.
[10] If the application for leave to appeal rested on the ante-nuptial settlement argument, we would not grant leave. Essentially this is because we take the view that Ward v Ward proceeds on the basis that that s 182 is to be applied consistently with the established interpretation of the English equivalent. We consider that a broader approach to the section as advocated by Ms McCartney SC could only be adopted by the Supreme Court.
[11] Rather different considerations apply in relation to the second argument advanced on behalf of Ms Kidd, namely that dispositions to the trust made during the currency of the marriage engage s 182 as post-nuptial settlements. A similar issue was discussed in Kennon v Spry by Heydon and Keifel JJ, with the former adopting a view which supported the respondents and the latter preferring an approach which is effectively the same as that advanced by Ms McCartney.
[12] The position which the High Court took,[11] and which was urged on us by Mr Thorp, is that if a trust settled before marriage was not, when established, an ante-nuptial settlement, that trust and all property subsequently settled on it retain a “non-nuptial” character. Mr Thorp suggested that his argument was supported (and indeed established conclusively) by what was said by this Court in Ward v Ward:[12]

[32] There is an issue as to whether after-acquired property by a trust comes within the definition of “settlement”. We mention this only because Heath J’s judgment has been interpreted as suggesting that it does not, by apparently endorsing at para [82] of his judgment the decision of T v T [2004] NZFLR 891 (see Grant, “Changing a Trust By the Use of s 182 of the Family Proceedings Act 1980”, paper to Auckland District Law Society at its conference, Cradle to the Grave, on 14 April 2008). In T v T the parties had established a trust during their marriage. The property settled on the trust at its inception was a residential property, a section and company shares. Since the trust was formed the trust had acquired three further properties and a business in its own right. The issue arose as to whether the Court had jurisdiction to determine the status of assets acquired by the trust at a later date. Judge Clarkson at para [13] held that the use of the past tense in s 182 lent weight to the proposition that the section intends consideration to be of that property transferred or disposed of at the time of settlement; that is, when the trust was created.

[33] The approach taken by Judge Clarkson in T v T does not accord with the other judicial approaches that have been taken towards after-acquired assets by trusts (see Taylor v Taylor [1993] NZFLR 505, Fielding v Burrell and Cooper v Cooper). Grant is critical of the approach in T v T. In his view, the utility of s 182 of the FPA would be greatly decreased if the scope of the term “settlement” were restricted to property that was originally settled on the trust. Although the issue is of limited relevance in this case, we are of the view that T v T does not correctly state the law. The settlement is the trust itself and any trust property (whenever acquired) must be part of the settlement. This may, in fact, have been the point Heath J was making at para [82] of his judgment (see discussion at para [35] below).

Application of the test

[34] In this case, it is clear both from the terms of the Cahirdean Trust deed itself and the memorandum of intention that it was envisaged that Mr and Mrs W (and, as a second priority, their children and grandchildren) would receive continuing provision from the Cahirdean Trust’s property, including the shares in LP Ltd. It was envisaged that the family would remain living on the farm and that the shares (through the Cahirdean Trust) would provide their livelihood (albeit via the farming partnership). In this context, both the settlement of the Cahirdean Trust and the share transfer to it were clearly made in Mr and Mrs W’s capacity as husband and wife with the intention that there be, through the Trust, continuing provision for the parties in their capacity as spouses.

[35] As Heath J noted, a dual definition of “settlement” exists under the law. It can mean either the documents which express the dispositions that are the settlement, or the state of affairs which those documents bring about (42 Halsbury’s Laws of England (4th ed, 1999), para 601). We agree with Heath J that it is the latter sense in which a “settlement” has arisen in the present case. The state of affairs that the documents (that is, the Cahirdean deed of trust and the share transfer) have brought about is the subjugation of the shares in LP Ltd to the control of trustees. Albeit subject to a debt back, those assets have been settled on the trust. This approach accords with the long line of authority in New Zealand relating to family trusts, as discussed at paras [28] – [31].

[36] Even if the share transfer is looked at in isolation, however, the shares were transferred to the Cahirdean Trust in a manner which, because of gift duty issues, is the usual way in New Zealand in which settlements on a trust are effected. It would be highly artificial to hold that this was not a settlement for the purposes of s 182. The terms of the debts back to Mr and Mrs W on the sale of the shares were not on commercial terms and it was clearly envisaged that the debts owed to Mr and Mrs W on the sale of the shares would be forgiven over time. Indeed, the first stage of the gifting programme coincided with settlement of the share purchase.

[13] In effect this Court held that all property acquired by a trust which is relevantly ante-nuptial or post-nuptial is itself subject to s 182. The Supreme Court, in granting leave to appeal from this Court’s decision in Ward, denied leave to appeal on this point because it considered that this Court’s decision was undoubtedly correct.[13]
[14] It is important to recognise that the issue involved in Ward was quite different from the question we are now addressing. In particular, we do not see that what was said in that case is necessarily controlling where:

(a) under a trust set up before marriage, any future wife and children of a named beneficiary are themselves beneficiaries; and

(b) after marriage and during the course of the marriage, further property is settled on the trust pursuant to transactions which are themselves settlements (for instance in the sense envisaged in Ward at [36]).

[15] The trust in this case did acquire property during the course of the marriage but given the strike out order and consequential ruling on discovery, there has been no discovery. So it is not clear whether those transactions could fairly be viewed as settlements. For strike out purposes, the assumption must be that one or more of those transactions were settlements.
[16] On that assumption, it might be thought fairly arguable that such an assumed settlement was a post-nuptial settlement for the purpose of s 182, as by this stage there was an actual, and not merely a hypothetical, wife and (depending on timing) an actual child too. Such a settlement could perhaps be seen as relevantly made by reference to the marriage and thus to satisfy the test established by the English cases.
[17] We note that there is another possible difficulty with the argument Ms McCartney wants to advance, in that there are a significant number of other beneficiaries under the trust (including Stephen van den Brink’s siblings). On the corresponding issue in Kennon v Spry, Heydon and Keifel JJ disagreed[14] and given the judgment of Keifel J, we do not think it right to conclude that this problem is necessarily fatal to the Ms Kidd’s case.
[18] For those reasons we propose to grant leave to appeal.
[19] The appeal provision in this case, s 174(5) of the Family Proceedings Act, provides for a general appeal “against any determination of the High Court”, if leave is given by this Court. It does not refer to particular questions on which leave can be given. Although we think that only the post-nuptial argument is tenable, we do not propose to formally restrict leave to this point given the nature of the appeal provision and also because we apprehend the possibility that the case may eventually be the subject of an application for leave to appeal to the Supreme Court. A narrow grant of leave at this stage might prove to be an awkward and artificial stricture on later consideration of the case.
[20] Accordingly we grant leave to appeal.
[21] Costs are reserved.

Solicitors:
Franklin Law, Pukekohe for Applicant
LeeSalmonLong, Auckland for First Respondent
Fleming Foster, Manukau City for Second Respondents

[1] NJK v HF Trust No 2 FC Manukau FAM-2006-055-435, 2 July 2009.

[2] Kidd v Van den Brink & Anor HC Auckland CIV-2009-404-4694, 21 December 2009.

[3] Ward v Ward [2009] NZSC 125, [2010] 2 NZLR 31.

[4] At [20].

[5] Brooks v Brooks [1996] 1 AC 375 (HL) at 392 (per Lord Nicholls).

[6] See Brooks v Brooks (which concerned a pension scheme); Melvill v Melvill [1930] P 159 (which concerned a settlement made on the eve of divorce by one spouse in favour of herself and her children); and Joss v Joss [1943] P 18 (where the trust was in favour of the husband and any children without limitation to the children of the settlor’s then marriage).

[7] See Hargreaves v Hargreaves [1926] P 42.

[8] Hargreaves v Hargreaves at 45 per Hill J.

[9] Family Law Act 1975 (Cth), s 85A(1).

[10] Kennon v Spry [2008] HCA 56, (2008) 238 CLR 366.

[11] See [38]–[39].

[12] Ward v Ward [2009] NZCA 139, [2009] 3 NZLR 36.

[13] Ward v Ward [2009] NZSC 71 at [2].

[14] See [186] per Heydon J and [231]–[236] per Keifel J.

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