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Beddoe Order, Trustee liability

Blessing of one

PR Law Queenstown No 1 Trustees Limited (In Liquidation) relates to an urgent application by PR Law Queenstown No 1 Trustees Limited (In Liquidation) (the Company) who is one of two corporate trustees for directions under s 66 of the Trustee Act 1956 for the sale of trust owned shares to meet liabilities incurred as a trustee and to meet the costs of liquidation.    The application was made because the Company’s co-trustee had refused to agree to sell the share in question so that Company debts could be met.  The background of the matter includes a relationship breakdown that culminated in the Trust’s settlor and the Company entering in a relationship property settlement agreement with the Trust’s settlor’s former partner that required that the Company and Settlor were jointly and severally liable to pay the Settlor’s former partner $2.6 million by 31 October 2017, such payment not having been made.

The High Court has previously held that s 66 cannot be used to determine substantive issues such as contests between trustees.   However, there are instances where the High Court has been prepared to resolve factual disputes on a s 66 application.

Note that a trustee company’s creditors have no standing in an application that relates to a trustee company’s recourse to trust assets in its capacity as a trustee of a trust.

The application was made in circumstances where there was no real doubt regarding the trustees’ powers, but that the decision in question was momentous and accordingly the trustees sought to obtain the Court’s blessing.

When an application is made for the Court’s blessing the Court must be given all the material necessary to allow the Court to oversee or sanction the proposed course of action.  As noted in the decision regarding the Honoris Trust  that case “it is imperative that when considering such an application, a judge only make the orders sought after “scrupulous consideration” of the evidence.” The Court was satisfied that the trustee company had taken all reasonable steps to obtain the best price possible and that the risks of waiting for a better offer were too high.  The question of liquidator’s costs was not determined although the distinction between the recovery of liquidator’s costs and fees under the Companies Act 1993 and the rules of equity that apply when a trust is wound up was noted.


  • PR Law Queenstown No 1 Trustees Limited (In Liquidation) [2020] NZHC 1397
  • Neagle v Rimmington [2003] 3 NZLR 826
  • Walker v Collins Christchurch CIV-2007-409-2209, 25 February 2009
  • Re Honoris Trust [2017] NZHC 2957
  • Public Trustee v Cooper at 925. See also David Hayton et al Underhill and Hayton Law of Trusts and Trustees (19th ed, LexisNexis, London, 2016) at [85.7]
  • Camray Farms Ltd (in liq) v BL (Nature Sunshine) Trustee Ltd [2019] NZHC 2536


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