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Directions, trust, Trustee Act, Trustee liability

Not very hidden

New Zealand may seem a long way away from the rest of the world.  However, as demonstrated in Trident Trust Company (NZ) Ltd v Bozo, not so far away as might be thought.  The case involves a New Zealand trustee of a trust settled by a non-resident settlor for the benefit of himself his wife and their children (the Trust), that was placed in a bit of a pickle when the Trust’s settlor directed the trustee to transfer trust funds to another jurisdiction.  The Trust’s assets comprised $6.5m that were transferred to the Trust 2 days after the Florida Circuit Court made orders preventing the Trust’s settlor from disposing of property (following his wife’s divorce petition).

The High Court considered a directions application from the Trustee and a freezing order application from the settlor’s wife.

 

The court considered the directions application superseded by the freezing order application, which was granted.  The judgment relates primarily to the justifiability of the matter in New Zealand.

As noted at [41]:

[41] For completeness, Trident cannot be criticised for seeking this Court’s direction. It was in an invidious position. Mr Castillo directed it to deal inconsistently with seemingly global orders of the Florida Circuit Court. Trident considered to do so might have compromised the position of the other beneficiaries to the trust, and perhaps been unlawful. Had it done so, the money would now be gone.

The significance of the decision is perhaps mostly the demonstration of the fact that New Zealand trusts are not invisible and that they are subject to robust jurisprudence.

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