Neumegen v Durrans relates to an application under s 75 of the Trustee Act 1956. While such applications have not been common to date, moving forward, as more beneficiaries become aware of trust and their rights, it might be expected that such applications will become more common place.
In Neumegen v Durrans the executor applied to bar a residuary beneficiary from bringing The executor had previously served the defendant pursuant s 75 of the Trustee Act 1956 to “put up or shut up”. No proceedings had been brought by the defendant in respect of these other claims and the executor wished to distribute the estate.
Background to s 75 of the Trustee Act
Section 75 allows trustees dealing with unresolved claims that compromise the administration of a trust to require that the claimant “put up or shut up”, by setting a three-month deadline for issuing proceedings to enforce the claims, failing which any claims can be barred.
 to  sets out useful guidance to s 75.
 In New Zealand Guardian Trust Co Ltd v Lipsitt Master Venning, as he then was, said that:
Section 75 recognises that of (sic) claims are often raised with executors and trustees of a deceased’s estate. If the executors and trustees do not feel able to accept those claims then s 75 provides a mechanism for giving fair notice to the claimant to issue proceedings and in the absence of such proceedings to obtain an order from the Court barring the proposed claim so that the estate may be administered, despite the threatened claims.
While a Court is reluctant to bar a party from pursuing a claim which may have merit, the period of notice and the requirement of an application of this kind recognises that such may be the outcome in certain circumstances. It will only be the case where the trustee has not felt able to accept the claim, and despite being requested to issue, a claimant has failed to do so.
 In Graham v Graham Dunningham J drew the following principles from Master Venning’s judgment:
- the Court is not required to undertake a substantive assessment of the merits of the claimant’s claim. However, whether the claim has any merit may be taken into account when considering if it should be barred;
- a lack of action both before and after the three month period will count against a claimant;
- an explanation will be required as to why no steps were taken to initiate proceedings from the time the claimant had knowledge that the trustee was not going to meet their claim;
- evidence that a claim may not be prosecuted with all due diligence will count against a claimant;
- even where the claim is meritorious, and there is an explanation for the failure to initiate one to date, it would only extend the time for bringing a claim on conditions requiring the claimant to initiate his or her proceedings in a specified period of time, failing which it would be barred.
 Her Honour considered s 75 would usually be used to safeguard the disposal of claims within finite periods, with a full bar reserved for clear-cut cases:
 Section 75 is, therefore, designed to provide a process by which threatened claims can be brought to a head and determined one way or the other so that administration of the estate or property can proceed with certainty. While the Court has the power to bar a claim under s 75(3), that would normally only be used when the claim lacks obvious merit or where there is reason to believe the claim will not be prosecuted diligently. In other cases, the more appropriate course of action would be to make orders under s 75(3)(b) imposing conditions, and giving directions, including as to payment of costs, to ensure the object of s 75 is achieved and the claim is disposed of in a finite time period. That could, of course, include the making of unless orders.
The s 75 application, which proceeded by way of formal proof, was granted. Also see Poulter v Poulter, another successful s 75 application.
The corollary provision to s 75 of the Trustee Act, which will be repealed on 30 January 2021 when the Trusts Act 2019 comes into full force and effect, can be found in s 135 of the Trusts Act.
- Neumegan v Durrans  NZHC 2018
- New Zealand Guardian Trust Co Ltd v Lipsitt HC Christchurch P386/91, 14 August 1998 at 4–5
- Graham v Graham  NZHC 1571
- Trustee Act 1956, s 75
- Trusts Act 2019, s 135
- Poulter v Poulter  NZHC 3095