When her marriage ended, Leanne Little was not entitled to a half share in the net worth of her husband’s funeral business since it was owned by a family trust, but she was entitled to share in any increase in value during their relationship, the High Court ruled.
Peter Little owned C Little & Sons funeral directors based in the Auckland suburb Epsom. The business has been in family hands since 1875. The business was sold to a family trust in October 1993: the Marble Arch Trust. Prior to their marriage, Peter and Leanne could not agree on a ‘contracting-out’ agreement to avoid the 50/50 division imposed by relationship property law. Peter’s sale of the funeral business to a family trust meant the business was no longer relationship property; it was not owned by either spouse. Marble Arch beneficiaries were named as Peter Little and his children; Leanne was not a beneficiary.
The Littles separated in 2009, after a sixteen year marriage. The Family Court awarded Leanne half the net value of Marble Arch Trust. This was overturned by the High Court.
The Trust was not relationship property. The equal sharing rule did not apply. Leanne claimed a share of Trust property using ‘trust-busting’ rules in the Family Proceedings Act. The Act allows payment out of trust property where the trust was established as a nuptial trust; a trust intended to benefit family. Marble Arch was established as a nuptial trust, Justice Jagose ruled. It was intended to protect the business should the marriage fail with trust benefits favouring Peter and his children. Leanne was expected to benefit only so long as the marriage continued. She was entitled to share in any increase in the net worth of the Trust during the marriage, Justice Jagose ruled. Once their children were of school age, Leanne had assisted in the business, especially day-to-day accounting functions. Calculation of any increased net worth for the business during their marriage required further evidence.
Little v. Little – High Court (6.10.20)
20.162