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An application under s 66 of the Trustee Act- the main principles, by Eugene Duhovnikoff BA/LLB

One can apply for an order to the High Court that the assets of a trust be distributed in accordance with the provisions of the trust deed constituting it. Such an application is available under section 66 of the Trustee Act 1956. The legal principles related to the application of section 66 are[1]:

“(a) Section 66 is an inexpensive procedure which allows trustees to obtain the Court’s assistance “on points of minor importance arising in the management of the trust”;

(b) Questions of substance or importance, in particular involving matters of controversy or contest between trustees do not lend themselves to an application under s 66. Allegations of breach of trust, whether made expressly or implicitly are inappropriate for application under the section; and

(c) An application under s 66 must be made upon stated, that is, agreed facts, such facts “cannot be inquired into, and if not agreed should be established in the normal manner.”

 Section 66 reads:

Right of trustee to apply to Court for directions

(1) Any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of any such property, or respecting the exercise of any power of discretion vested in the trustee.

(2) Every such application shall be served upon, and the hearing may be attended by, all persons interested in the application or such of them as the Court thinks expedient.

The scope and jurisdiction of section 66 is described below[2]:

“The scope of s 66 and equivalent Australian sections is to give to the trustee a right to seek the opinion, advice or direction of the Court on any question respecting the management or administration of the trust property. Provided that the trustee acts in accordance with the advice or directions and that the relevant facts are substantially as submitted upon the application, the trustee is deemed to have discharged his or her duty as trustee in the subject- matter of the application (s 69 of the Act). Parties represented on the application are bound by the judicial advice and directions given. The jurisdiction is intended essentially for private advice by the Court to trustees and, in Australia, is usually made on an ex parte application. The Court advises trustees as to what course of action they should follow, where they are in doubt as to the propriety of the action contemplated. The procedure should not be used to determine substantive issues, such as issues of interpretation of the trust document which involved the question of breach of trust by any of the trustees; for the purposes of securing additional powers for the trustees; or for resolving a contest between the trustees; see Dal Pont and Chalmers, Equity and Trusts in Australia and New Zealand (2nd ed), pp 667 – 669.”

One must be careful when invoking section 66 because applying under this section is inappropriate where there are substantial factual disputes and/or possibility of a breach of trust. It is certainly inappropriate where there is, explicitly or implicitly, an allegation of breach of trust.” [3]

The procedure is limited and should not be used to determine substantive issues such as:[4]

  1. issues of interpretation of a trust instrument;
  2. issues involving suggestion of breach of trust by trustees;
  3. and for securing additional powers for the trustees or for resolving conflicts between them.

 

No advice

This article contains general information about legal matters. The information is not advice, and should not be treated as such

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The legal information on this website is provided “as is” without any representations or warranties, express or implied. East Asian Business Development Center L.P. and Simon Reeves Law Office make no representations or warranties in relation to the legal information on this website. Without prejudice to the generality of the foregoing paragraph, East Asian Business Development Center L.P. and Simon Reeves Law Office do not warrant that: the legal information on this website will be constantly available, or available at all; or the legal information on this website is complete, true, accurate, up-to-date, or non-misleading.

Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

 

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[1] Melville v NRMA Insurance NZ Ltd (High Court, Wellington, CP 70/01, 17 April 2002.

[2] Neagle v Rimmington [2002] 3 NZLR 826, at [23]–[24].

[3] Melville v NRMA Insurance NZ Ltd (High Court, Wellington, CP 70/01, 17 April 2002 at para 65.

[4] Mitchell v Griffiths [2014] NZHC 751 at para 27.

Reeves/Duhovnikoff & Associates Ltd. 2017

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