It can be necessary to change trustees for many reasons. Regardless of the circumstances that require a change of trustee, the decision as to appropriate trustees can be complicated and requires a careful balancing of a range of considerations.
The interim judgment in Thomson v Riley provides a useful insight into how a court balances the skills and attributes of competing contenders in circumstances where the current trustees have agreed to resign when there is hostility and mistrust.
While the settlor’s wishes may be pertinent (see para. 36(a)), where these cannot be reliably discerned the matters taken into consideration will include:
- An absence of any perceived conflict or possible self-interest (para 36(b) and (c))
- The requisite skills (and whether proposed trustees have complementary skills)
- Appreciation of the role and responsibility of trustees
- How well the trustee is capitalised (para 43(b))
- Organisation depth and lack of reliance of only one individual (para 43(b)); and
- Whether the trustee can offer comprehensive ancillary services (such as in house legal counsel) (para 43(a)).
As replacement of incapacitated, conflicted and challenged trustees becomes an increasing occurrence, the considerations taken into account by the courts become highly pertinent.
Thomson v Riley  NZHC 2963