Anger within the Hawkes Bay Couper-Kain dynasty has not subsided with ongoing litigation claiming the late Tom Kain got more than his fair share of family money to fund his problematic Canterbury Applefields projects and that some Kain descendants should take a cut in the final winding up of Hawkes Bay family trusts.
For over two decades, branches of the Couper & Kain families have been disputing family trust financial benefits provided Tom Kain for his Canterbury adventures. In 1994, Tom and brother Charles had trustees agree the trusts would guarantee a one million dollar Westpac advance, funding for their Applefields orchard development on Christchurch outskirts. It was meant to be a short-term loan, refinanced after one year with the guarantee then lapsing. The Westpac loan was not refinanced on due date and Applefields itself went on to keep lawyers very busy: an investigation into Applefields’ financial reporting by the then Securities Commission; legal disputes with the then Apple & Pear Marketing Board and later involvement in unprofitable land development. Tom Kain died in 2013.
Back in Hawkes Bay, a web of family trusts had been established from 1951 by Ernest and Helen Couper to hold their farming interests. Further family farming trusts were established by their children Janet Kain and Tom Couper. Tom Kain is Janet’s son. These trusts typically gave to trustees complete discretion over distribution of capital and income; what lawyers call massively discretionary trusts. Differing trusts have different family members and their descendants as nominated beneficiaries. With consolidated farming interests spread across multiple trusts, farm accounts contain a mass of inter-trust loans. It is proving a nightmare to unwind.
As part of the unwind, Janet Kain’s children argue brothers Tom and Charles have already received an outsized share of family trust money and this should be taken into account in the final distribution. Back in 1997, Tom and Charles signed a document acknowledging the benefits received and agreed that this should be taken into account: the so-called ‘equality agreement.’ Implementation of this agreement has seen everyone back in court multiple times seeking court rulings. Family feelings ran so high that the High Court appointed the Public Trust as a neutral trustee in 2004, removing family members as trustees.
The Public Trust asked the Court of Appeal for directions on how trust assets from two family trusts established by Tom Couper should be distributed. The two trusts have some beneficiaries in common, but some are beneficiaries of one trust only. One trust has an estimated value of some ten million dollars, the other about three million.
Arguments over distribution of trust assets have been ongoing since 2004. Some family members want the strict legal provisions contained in each family trust ignored, with all assets and liabilities chucked into one bucket and the net balance distributed equally. The Applefields contributions should count as a prior distribution to Tom and Charles, they say.
The Court of Appeal ruled the Public Trust must comply with terms of each individual trust. Since the two trusts are discretionary trusts, the Public Trust can make unequal distributions from a particular trust so as to achieve a measure of global equality, but it is entirely within the discretion of the Public Trust as trustee to make these decisions, the court ruled. The 1997 ‘equality agreement’ signed by some family members is not binding on the Public Trust as trustee, it said.
Kain v. Public Trust – Court of Appeal (16.12.21)
22.021