High Court rules trustees fulfilled settlement obligations, rejects appeal

The case concerns a dispute over the interpretation of consent orders from a property settlement

High Court rules trustees fulfilled settlement obligations, rejects appeal

The High Court dismissed an application for leave to appeal in a dispute over the interpretation of consent orders from a property settlement, finding no error in its earlier decision that the trustees of a family trust had complied with the agreement’s terms.

The consent orders formalised the settlement agreement, including terms for dividing a substantial property pool. However, one party later argued that the trustees of the family trust failed to comply with the terms of the settlement. Specifically, it was alleged that the trustees did not provide the required final accounts for the 2023 financial year and incorrectly labelled payments as “distributions” rather than “relationship property,” contrary to the terms of the agreement.

In a previous judgment issued in August 2024, the court dismissed the request for further directions, finding no breach of the settlement terms. The party seeking to appeal claimed the court erred in its interpretation of the agreement and its reliance on a prior case. It was argued that the agreement, which settled relationship property claims, implicitly required the trustees to identify all payments as distributions of “relationship property.” The applicant also asserted that the court should have recognised the public importance of determining when agreements under the Property (Relationships) Act 1976 can apply to litigation involving trust property.

The trustees opposed the application for leave, describing the appeal as unmeritorious and arguing that the issues raised did not meet the high threshold required for appeals of interlocutory orders. They emphasised that the settlement agreement resolved all disputes between the parties, including those involving the trust. The trustees maintained that any additional obligations now claimed by the applicant were not part of the original agreement.

The High Court found no arguable error in its earlier decision and rejected claims that the consent orders imposed obligations on the trustees to classify payments as “relationship property.” It held that the terms of the agreement were clear and that the applicant’s arguments sought to introduce obligations not expressly included in the settlement. The court also concluded that the prior case cited in its judgment had been appropriately applied.

The judge ruled that the application for leave to appeal lacked sufficient importance or public interest to justify further delay. The judge noted that the trustees had fulfilled their settlement obligations and that the ongoing litigation was unnecessarily costly and time-consuming for the trust’s beneficiaries. The judge dismissed the application and invited costs submissions from the parties.