Monkcom & Anor Re JC Druce Settlement

Where a trust instrument uses traditional terms that exclude illegitimate or adopted descendants, the court may interpret relevant legislation compatibly with Convention rights under section 3 of the Human Rights Act 1998, including by reading down transitional provisions, provided the result remains consistent with the statutory scheme. Applying such legislation to future distributions under an existing trust is not impermissibly retrospective merely because the trust was created earlier. Article 14 may prohibit discrimination based on a relative’s protected status. A child in ventre sa mère may fall within a gift to children born before a specified date where that construction accords with the reason and motive of the gift. A child legitimated under the law of the father’s domicile may qualify as a legitimate descendant.

The trustees of the JC Druce Settlement sought directions concerning the identity of beneficiaries before the trust’s vesting day. The disputed categories concerned children born outside marriage, a child whose mother had been adopted overseas, a child potentially legitimated by his parents’ later marriage, and an unborn child expected after the vesting day.

The trustees obtained written opinions from leading counsel and applied under section 48 of the Administration of Justice Act 1985 for authority to act on those opinions without a contested hearing. They also sought a Benjamin order permitting distribution on the footing that the persons listed in the Schedule were the beneficiaries.

1. Relief under section 48. The claim was unopposed. The court was satisfied that the trustees could rely on counsel’s opinions and granted the primary relief under section 48 of the Administration of Justice Act 1985. It also granted permission to distribute on the basis of the Schedule and authorised payment of a minor’s share to the minor’s parents.
2. Illegitimacy. Although the Family Law Reform Act 1987 was enacted after the 1959 Settlement, sections 1 and 19 could be read down compatibly with Convention rights. The approach in In re Hand’s Will Trust was applicable. Supplying words that alter the legislation’s effect is permissible where the result remains consistent with its scheme and does not go against its grain.
3. The Human Rights Act 1998 could not retrospectively alter beneficiary rights in respect of distributions already made. It could, however, affect the composition of the beneficiary class for duties or powers arising after the Act came into force. The settlement was continuing, so applying the Convention-compatible interpretation to future distributions was not impermissibly retrospective.
4. Adoption and relational discrimination. An overseas adoption made no material difference to the analysis. Discrimination against a child because the child’s parent was adopted could fall within article 14 of the Convention. The reasoning in Sali v Greece supported recognition of discrimination based on another person’s protected characteristic.
5. Legitimation. Whether the child was legitimated depended on the law of the father’s domicile. As New Zealand law recognised legitimation by subsequent marriage, the child was a legitimate descendant.
6. Unborn child. The established construction in Trower v Butts treated a child in ventre sa mère as within a gift to children born before a specified event where the child was within the reason and motive of the gift. The unborn child therefore fell within the class.

First-instance decision. No prior appellate decision was stated in the judgment.