In Little v Howick Trustee DL Limited a beneficiary sought a review of trustee decisions and the removal of a court appointed trustee. Perhaps surprisingly, considering the position taken in the Law Commission’s draft Trusts Bill and the Trusts Bill currently before Parliament regarding beneficiary rights, Brewer J found that a discretionary beneficiary had no standing to seek a review of trustee decisions under s 68 of the Trustee Act 1956. Notably in this regard Brewer J stated at  that:
“It appears that provision, if it comes into law, will remove any ambiguity. However, for the purposes of the law today, I consider that discretionary beneficiaries are excluded from making applications. A mere expectancy cannot be said to amount to a beneficial interest. As has been made clear, the interest held by a discretionary beneficiary does not crystallise into a right to trust property until and unless the trustee’s discretion is exercised in the beneficiary’s favour. This may never happen. In circumstances where the fruition of a beneficiary’s interest in trust property depends entirely on the unfettered discretion of the trustee, I do not think the beneficiary can be said to be beneficially interested in the said property for the purposes of s 68.
 This conclusion does not deprive discretionary beneficiaries of redress in the face of an unreasonable exercise of trustee discretion. It is material to note that, in certain circumstances, discretionary beneficiaries may compel proper administration of a trust by engaging the Court’s supervisory jurisdiction. Established grounds for intervention are when the trustee exercises their discretion in bad faith or ultra vires.
 This existing avenue of redress is a factor which I consider goes towards the barring of discretionary beneficiaries from s 68. In the face of truly egregious trustee decision-making, a deserving beneficiary will not be left without a remedy, regardless of the nature of their interest in the trust. This is an appropriately high threshold given the slight nature of a discretionary beneficiary’s interest in trust property. It is nothing more than a spes. To allow discretionary beneficiaries access to the Court’s protection in the form of a s 68 review would be essentially to upgrade the nature of their interest in the trust property. If the Trusts Bill is passed in its current form, this may in fact be how Parliament intends future cases to be addressed. However, I do not consider that s 68, as it stands, can support such an interpretation. Expanding the natural definition of a “beneficial interest” to include a mere expectancy would do violence to the statutory language. For the abovementioned reasons, I do not consider that s 68 is open to discretionary beneficiaries.”
Brewer J also went on to hold that Ms Little could not apply to replace a trustee under s 51 of the Trustee Act, noting that:
“ A person bringing an application under s 51 therefore needs to have a beneficial interest in the relevant trust property. I have already found that Mrs Little, as a discretionary beneficiary, has no such interest. This bars her from s 51.
 However, the Court has inherent jurisdiction to remove a trustee if the welfare of the beneficiaries and the trust property requires it. This jurisdiction is ancillary to the Court’s principal duty to see that a trust is properly executed:
The principle to be applied in a proceeding is laid down by their Lordships of the Privy Council in Letterstedt v Broers. It is said that the jurisdiction is merely ancillary to the principal duty of the Court to see that the trusts are properly executed, and that, therefore… if satisfied that the continuance of the trustees would prevent the trusts being properly executed, the trustees may be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.
 The main guide is the welfare of the beneficiaries. Breaches of the trust or incompatibility with beneficiaries are not grounds for removal in and of themselves. As the Court of Appeal commented in Kain v Hutton:
 Merely showing breaches of trust would not necessarily be sufficient to justify removal of the trustees. This would depend on the gravity and nature of the breaches and the particular circumstances of the trust and the trustees, including the level of culpability of the trustees… To allow trustees to be removed for relatively inconsequential mistakes would be to usurp the settlor’s wishes in entrusting the assets to the trustees. In the same way, mere incompatibility between trustees and beneficiaries is not enough… Any incompatibility must be at such a level that the proper administration of the trust is seriously adversely affected and it has become difficult for a trustee to act in the interests of the beneficiary…”
- Little v Howick Trustee DL Limited  NZHC 1884
- Trustee Act 1956, s 51, 68
- Kain v Hutton  NZCA 199
- Letterstedt v Broers (1884) 9 App Cas 371