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Author
Emma Armstrong
Date
September 23, 2020
Source
Judicial Committee of the Privy Council

Webb v Webb

The Privy Council recently released an important decision on trust and relationship property law, Webb v Webb [2020] UKPC 22. The decision was an appeal from the Court of Appeal of the Cook Islands. The decision concerned the interpretation of the Matrimonial Property Act 1976, a New Zealand statute incorporated into Cook Islands law, and will have implications for New Zealand trust and relationship property law.

One of the issues for the Privy Council was whether two trusts that Mr Webb established during and after his relationship with Mrs Webb were valid trusts.  The Privy Council held that they were not.  Lord Kitchin (delivering the majority judgment) reviewed the powers that Mr Webb has under the trust deeds, including the powers he has as sole trustee, settlor, and consultant, and concluded that such powers were indistinguishable from ownership of the trusts’ assets.  In particular, the Privy Council noted that Mr Webb had the power to nominate himself as the sole beneficiary of the trust (as settlor, so not subject to any fiduciary duty); to pay and apply the whole of the capital and income of the trust for his personal use and advancement; to resettle the assets of the trust upon the trustees of any trust that included himself as a beneficiary; and to vary the terms of the trust deed.  In short, Lord Kitchin said, Mr Webb had the power at any time to secure the benefit of all trust property to himself and to do so regardless of the interests of the other beneficiaries.  

The decision is another example of the recent trend by the courts in relationship property cases of undertaking a critical analysis of the legal structures established by a spouse during the relationship when assessing the property pool.

The case raised several other important issues.  A copy of the decision can be found here:  https://www.jcpc.uk/cases/docs/jcpc-2019-0013-judgment.pdf

LeeSalmonLong were counsel for Mrs Webb.