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The power of the High Court of New Zealand to decide disputes or interpretations of trust under the Trustee Act 1956, by Eugene Duhovnikoff BA/LLB

Subject to any contrary intention expressed in the instrument (if any) which created the trust and it is thought to be inexpedient, difficult or impracticable to effect the same without the assistance of the Court (or the same cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law) the Court may order a trustee to sell, lease, mortgage, surrender, release or otherwise dispose of or purchase, invest in, acquire, retain, expend trust funds or enter into any other transaction such as would be an expedient way to manage or administer any property vested in a trustee or would be in the best interests of the persons beneficially interested under the trust.

The Court may order that a trustee (either generally or in any particular instance) should have the necessary power for the above purposes and may impose provisions and conditions (if any) as it might think fit. It may direct the manner in which any money so authorised is to be expended and the costs of any transaction, how they are to be paid or borne, and the incidence thereof between capital and income: ‘provided that, notwithstanding anything to the contrary in the instrument (if any) creating the trust, the Court, in proceedings in which all trustees and persons who are or may be interested are parties or are represented or consent to the order, may make such an order and may give such directions as it thinks fit to the trustee in respect of the exercise of any power conferred by the order. ’” …

 

Thus the Court has wide powers to assist and regulate trustees in their administration of trusts. Application to the Court for such assistance may be made by the trustees or by any beneficiary. For example the Court can make an order empowering a trustee to enter into a transaction regardless of whether or not the trust deed already provides the trustee with that power.

 

In a case of any contrary intention being found in the trust deed the Court can still make an order. However it may only do so where all persons who may be interested in the proposed transaction are parties to the application or where they are represented or they consent to the order sought.

 

 

In case the absence of consent by an interested party the Court may therefore make an order if that party is either present or legally represented at the hearing. Whether or not the trust deed already contains the power sought by applicants, the Court must either be of the opinion that the proposed transaction is expedient in the management or administration of any property vested in the trustee, or that it is in the interests of all persons beneficially interested under the trust.

Where the instrument already provides the trustee with the power sought, the Court must also be satisfied that it will be “inexpedient or difficult or impracticable” for the trustee to effect the transaction without the assistance of the Court.

 

So s. 64 is often used to approve the sale of a property which is owned by a trust despite a specific prohibition in the trust deed or the refusal of consent by a person whose consent was required for the sale. There are other situations where this section.

 

 

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. Reeves Duhovnikoff & Associates Limited makes no representations or warranties in relation to the legal information on this website. Without prejudice to the generality of the foregoing paragraph, Reeves Duhovnikoff & Associates Limited does 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.

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Reeves/Duhovnikoff & Associates Ltd. 2017

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