In re Taimata Pokoati [1983] CKHC 11 (24 August 1983)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
CIVIL DIVISION
04/10/1982

IN THE MATTER
of an application brought by TAIMATA POKOATI,
as trustee (by Deed of Appointment dated 26^th January 1973)
in respect of a certain trust created by Deed of Trust
dated the 25^th day of June 1971 and made between
RAUI POKOATI of Rarotonga as settlor
and RAUl POKOATI,
GEORGE FORREST BROWN and
TANGATA NEKEARE
all of Rarotonga, as trustees.

AND

IN THE MATTER
of the Declaratory Judgments Act 1908.

Counsel: Mr. Arnold for applicant

Hearing: 9 June 1983
Decision: 24 August 1983

JUDGMENT OF SPEIGHT C.J.

By a deed of trust dated 25^th June 1971, the late Raui Pokoati (the settlor) settled his leasehold interest in certain lands along with other funds upon 3 trustees (including himself) for certain stated purposes - principally to pay the interest from the corpus of the fund for himself and members of his family. These purposes were primarily set out in Clause 1 of the deed as follows:

"1. TO pay all the expenses concerned in the management and administration of the trust created by these presents and to apply the net income of the trust fund or such part thereof as the trustees shall consider expedient in or towards the maintenance support benefit or advancement in the life of the settlor and his wife TAIMATA POKOATI, the children of the settlor namely:- TAUU POKOATI, MOU POKOATI, TUNGANE POKOATI, AKE POKOATI, TAUKEA POKOATI and any grandchildren of the settlor as shall survive the settlor and attain the age of twenty one years and in equal shares."

Other discretionary powers as to the management of the trust are contained in clauses 2-7 but none of these affect the problems which arise from the foregoing clause which is the subject of an application to the Court for interpretation.

At various times the trustees have been changed, by retirement or otherwise, and now the sole trustee is the settlor's widow Taimata Pokoati, who brings this application. Persons whose interest may be affected, other than the beneficiaries are Mr Laszlo Kajer, Mr Vital Schoebe and Mr & Mrs Raui for these persons have become sub lessees from the trustees of different parts of the land in the trust.

The remaining trustee, Mrs Pokoati has however applied to the Court raising questions as to the validity of the Deed.

Two principles matters have been drawn to the attention of Court by Mr Arnold, counsel for the applicant. All other persons interested were served with copies of the proceedings, but none has been represented, with the exception of Mr Laszlo who appeared in person to point out the hardship he will suffer if his sublease is invalid. This point is recognised and the Court is appropriately sympathetic, but it is solely a question of law, not of merit or of discretion.

The difficulties in the way of upholding the trust have been pointed out by Mr. Arnold, and they appear insoluble.

The first question is as to the time span of the purported trust. It is fundamental that if the income from a trust fund is to be used for a period exceeding the perpetuity period the trust is void ab initio.

Apart from the difficulty that there is no provision as to eventually vesting of the future interest, the time for which income is payable under Clause 1 extends beyond 21 years after the birth of grandchildren some of whom may well be born (indeed are quite likely to be born) after the date of the Deed, and hence are not lives in being at the outset. On this simple point alone the deed must be declared to be void ab initio and consequently the subleases created under it are void. I recognise the hardship to the sublessees - there are other defects in the trust Deed - for these is no provisions made as to the settlor's intention as to the eventual destination to the trust property when (if ever) the trust terminated. In the absence of any disclosed or implies intention that the trustee should take the beneficial interest there would be a resulting trust in favour of the donors personal representatives.

Such a result might have enabled the court to hold that interests such as subleases created, during the life of the trust, were valid, but unfortunately the earlier recorded finding as to voidness prevents such a finding.

There is a declaratory order that all the deeds recited in paragraphs (a) to (d) inclusive, on page 2 of the application, are void.

SPEIGHT
CHIEF JUSTICE