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Directions, Removal of trustees, Trustee liability, Trustee retirement, Trustees

No one likes me, I’m going down the garden to eat snails

Being a trustee is hard. Hallmark persistently fails to produce a Love your trustee card. There is no national, or international trustee day. It can be hard slog. And yet, when the beneficiaries say we don’t want you, we want someone else, trustees turn up all guns blazing overflowing with umbradge.

The difficulty is knowing when to stay, because some trustees do know best; and when to go. Better hurt feelings that head-lining in proceedings in the nature of rearranging the deck chairs on the Titanic.

Often the fundamental issue is about fees or an unpopular decision. Sometimes the correct course of action is to brave it out, sometimes it is to gracefully accept that it is time for someone else to take over.

Delaying retirement when the writing is on the wall is often foolhardy. There are of course trustees who need to stand their ground to ensure the proper protection of the beneficiaries. Sometimes from themselves.

Sometimes it is all about ego. Or fees. The tricky bit is to tell the wheat from the chaff. If you are a trustee with questions, or musings about the hard stuff, you may wish to consider the STEP presentation Trustees in trouble: How to navigate through stormy waters.

Or if its too late for that, perhaps a good hard look at your lien. See for example In the Matter of the Velloz Settlement, which provides useful guidance regarding when the court will direct retirement and suitable security for disputed fees. In that case it was noted at [17] that:

In the Matter of the Velloz Settlement the outstanding fees were significant and in the order of £3.5 million. No security was ordered to be provided. However, in that case the Court was satisfied that there was an undertaking regarding a “ringfenced fund” within the Trusts of £4 million for the period necessary to resolve claims regarding the retiring trustee’s costs, fees and expenses.

The court also considered the trustee’s equitable lien noting at [26] as follows:

It is suggested that any trustee who resists retirement is wise to consider the propriety of any costs that flow from this. Where trustees and beneficiaries are not collectively in alignment it must be asked how the trustees will best serve the beneficiaries for whom they act. importantly, this statement refers to alignment in a global sense; not a partisan relationship between a trustee or trustees with one or more beneficiaries to the potential detriment of others. In this regard we refer to the following passage from the Supreme Court decision in Lambie v Addleman.

References:

In the Matter of the Velloz Settlement [2021] JRC 140

Carmine v Ritchie [2012] NZHC 1514

Waho v Te Kōhanga Reo National Trust [2018] NZHC 3388 (Costs judgment)

Waho v Te Kōhanga Reo National Trust [2018] NZHC 1935 (Substantive judgment)

Fenwick v Naera [2015] NZSC 68

Worral v Harford (1802) 8 Ves 4

Carmine v Ritchie [2012] NZHC 2279

Re O’Donoghue [1998] 1 NZLR 116

Bradbury v Westpac Banking Corporation (2008) 18 PRNZ 859

High Court Rules 2016, r 14.6(3)(v)

Williams v Waimate District Council [2013] NZHC 2922

Lambie v Addleman [2021] NZSC 54

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