Nadan v Sharma relates to an application for the removal of trustees and the appointment of an independent corporate trustee in circumstances where the trustees’ marriage has ended and the trustees are deadlocked. Of note is that prior to the application for removal was made following two arbitral awards in respect of the jointly settled family trust (the Trust) and that while Public Trust was the first choice as trustee, Public Trust declined the appointment.
Each of the arbitral awards considered the interests of the children beneficiaries (who are both now adults) as well as the interests of the settlor / beneficiaries.
The second award provided for the sale of the Trust’s sole asset, the former family home.
Mr Naden sought the removal of both trustees pursuant to section 112 of the Trusts Act on the basis that Ms Sharma had unilaterally commandeered the administration of the Trust and refused to comply with the second arbitral award and that neither of the trustees were able to fulfil their duties as trustees.
Ms Sharma opposed the application. Her arguments were directed at the merits of the arbitral awards, Mr Nadan’s conduct and related matters rather than removal application.
Cases where threshold for removal have been made out include where:
- a trust is deadlocked because a trustee refuses to make decisions
- there has been a fundamental breakdown in the relationship between one trustee and the beneficiaries such that the impartiality of a trustee cannot be relied upon
Moore J was satisfied that the latter case above applied concluding at [29] to [31]:
Ms Sharma was subsequently ordered to pay Mr Nadan’s costs on a 2B basis.
References:
- Nadan v Sharma [2022] NZHC 2553
- Trusts Act 2019, s 122
- Oldfield v Oldfield [2019] NZHC492
- Taylor v Taylor [2021] NZHC992
- Nadan v Sharma [2022]NZHC 3516 (costs)
Matters of Trust 
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