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Removal of trustees, Trustee retirement, Trusts, Vesting order

Lost in translation

Orders removing trustees and appointing replacement trustees are not uncommon.  Such orders can be required in circumstances including incapacity, absence, deadlock or because it is expedient in the administration of the trust for a trustee to be removed and perhaps replaced.  However, it is important to appreciate that whether a trustee is removed / appointed by court order, or by deed; the trust’s assets must be transferred to the continuing and / or new trustees.  This step, which is commonly overlooked when trustees retire or are removed by deed, can also be overlooked even when the removal and appointment occurs by court order.

This was the case in Vance v Vey Group Limited where an order was made for the removal of trustees and the appointment of new trustees to the Orana Trust (the Trust); but no order was made vesting the shares in a company registered to the former trustees in the new trustees.  Fast forward to 2018 when a property owned by the company is to be sold.   The new trustees of the Trust believed the shares had been transferred to them, and acted on that basis.  A successful application for a vesting order was made on grounds including:

  • a vesting order could have been sought when the trustees were appointed
  • the trustees’ appointment was made with the consent of the removed trustees
  • the new trustees communicated with all parties including the former trustees regarding the shares owned by the Trust (as if the trustees were the registered owners of the shares), and
  • it was in the best interests of the beneficiaries of the Trust.


  • Vance v Vey Group Limited [2018] NZHC 1994
  • Trustee Act 1956, s 59



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