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Removal of trustees, Trustees, Variation

Staying at the table

In the Matter of Te Kohanga Reo National Trust considers the powers available to the High Court when one trustee is concerned to prevent his removal as a trustee; and to ensure proper participation in trust matters while still a trustee. In considering an application for an injunction to address these matters (the background being a question of whether the trustee had brought the trust into disrepute ) the court considered the scope if it’s supervisory jurisdiction regarding the exercise of trustees’ discretionary powers.

As noted by the court, as a general rule when a trustee exercises judgment the court will not intervene unless the judgment has been invalidly exercised. Accordingly, the court’s role reviewing a trustee’s decision is limited. As noted in the judgment – the court is not a court of appeal from a trustee’s decision. The court will not consider the matter itself and substitute it’s own decision. Rather, the court’ stole is to look at how the decision was reached and will set aside a decision only where trustees have acted in dad faith, for an improper motive, made an error of law, failed to consider relevant considerations, considered irrelevant considerations, or reached a perverse or capricious decision.

In the matter at hand, which involved the trustees making a decision as to the fitness of a trustee the court was satisfied that the decision in question did not fall within the range if situations reviewable by the courts. Accordingly the court would not intervene. However, the court did confirm that while the applicant was a member of the board of trustees he must be treated as such.

The case is a useful reminder of the scope if the court’s power to intervene in disputes between trustees pursuant to its inherent power.

References

In the Matter of Te Kohanga Reo National Trust Deed [2014] 2729
Wrightson v Fletcher Challenge Nominees Limited em> (1998) 1 NZSC 40,338
Sieff v Fox [2005] 3 All ER 693

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