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Mark Arnold Clayton and others v Melanie Ann Clayton - SC 23/2015

Media releases

Summary

Civil Appeal – Property (Relationships) Act 1976 – Whether the Court of Appeal erred in finding that a power of appointment could be relationship property under the Property (Relationships) Act – Whether the Court of Appeal erred in finding that there had been a disposition with intent to defeat rights in terms of s 44 of the Act in relation to various trusts – Whether the Court of Appeal erred in relation to valuation.[2015] NZCA  30  CA 473/2013; CA 474/2014

Result

A The applications for leave to appeal are granted in respect of the questions identified in B and C below (Clayton v Clayton [2015] NZCA 30).  In all other respects, the applications for leave to appeal are dismissed.
B In relation to the Vaughan Road Property Trust (VRPT):Was the Court of Appeal correct to find that there is no distinction between a sham trust and what the Family Court and the High Court described as an illusory trust?Was the Court of Appeal correct to find that the VRPT was neither a sham trust nor what the Family Court and the High Court described as an illusory trust?If so:
Was the bundle of rights and powers held by Mr and/or Mrs Clayton under the VRPT Trust Deed “property” for the purposes of the Property (Relationships) Act 1976 (PRA)?Was the Court of Appeal correct to find that the power of appointment under clause 7.1 of the VRPT Trust Deed was “relationship property” for the purposes of the PRA?If so, did the Court of Appeal err in its approach to the valuation of the power?
C In relation to the Claymark Trust, was the Court of appeal correct in its interpretation and application of:
Section 44C of the PRA?
Section 182 of the Family Proceedings Act 1980?
18 June 2015
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A The appeal is allowed in part.
B We set aside the findings of the Court of Appeal that cl 7.1 of the Vaughan Road Property Trust (VRPT) trust deed (the VRPT deed) is a general power of appointment and that the power is both property and relationship property, having a value equal to that of the net assets of the VRPT.
C We substitute a finding that the powers of Mr Clayton as Principal Family Member and Trustee under cls 6.1, 7.1, 8.1 and 10.1 of the VRPT deed (read in light of cls 11.1, 14.1 and 19.1(c) of that deed) are property and relationship property having a value equal to that of the net assets of the VRPT.
D We set aside the finding of the Court of Appeal that the VRPT is not an illusory trust (i.e. that it is a valid trust).  We decline to make a ruling on that issue.
E We uphold the finding of the Court of Appeal that the VRPT is not a sham.
F We make no award of costs
23 March 2016

Hearing Transcripts

Related Documents

Court of Appeal decision — CLAYTON v CLAYTON CA438/2013 [2015] NZCA 30 [26 February 2015]

Leave judgment - leave granted — MARK ARNOLD CLAYTON v MELANIE ANN CLAYTON [2015] NZSC 84 [18 June 2015] (PDF 134 KB)

Substantive judgment — MARK ARNOLD CLAYTON v MELANIE ANN CLAYTON [2016] NZSC 29 [23 March 2016] (PDF 426 KB)