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Removal of trustees, Trustee retirement, Trustees

Abandonment issues

In the Matter of the Zoanz Trust provides a practical solution where the settlor trustees no longer wish to participate in day-to-day trust administration.  As noted at [11]:

“The property requires remedial works due to weathertightness issues and the body corporate has issued levies to the Trust. Approximately $250,000 is outstanding. It is necessary for the trustees to make prompt decisions to enable the Trust to borrow funds to pay this and avoid loss of the property. Denis Zaitsev has attempted to get Oleg Zaitsev and Olga Zaitceva to deal with these issues but they have taken no steps as trustees.”

As then noted at [17]:

“I am satisfied that Oleg Zaitsev and Olga Zaitceva have refused to act as trustees. The evidence shows they take no interest in the Trust and consider that the Trust and the property are Denis Zaitsev’s problem. The Trust cannot function at present, to the disadvantage of all beneficiaries. The Trust has not been properly administered and Denis Zaitsev wishes to put it on a proper footing. I also accept that carrying out the repairs to the property is in the best interests of the beneficiaries of the Trust, rather than risking a forced sale of the property as is. Given the position of Oleg Zaitsev and Olga Zaitceva, and notwithstanding they are beneficiaries, I consider it is expedient to appoint new trustees in substitution for them under s 51(1) of the Act.

The result was that the settlor trustees were removed and Denis Zaitsev’s partner was appointed a trustee, notwithstanding that she is not a beneficiary the court recognising that her financial assistance would be required but that “Ms Jezowska’s position can be addressed at least in the short term by properly documenting payments she has made or will make to the Trust.”

The decision is a practical decision in light of the realities of trustees who are no longer able or willing to act in accordance with the office of trustee.

References

  • In the Matter of the Zoanz Trust [2019] NZHC 1570

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