If the terms of a charitable trust whose purposes have become frustrated contain a power of variation the trustees are confronted with whether to vary pursuant to the terms or to seek approval for a scheme under Part 3 of the Charitable Trusts Act 1957.
In Re Trevor Wilson Trustee Limited [2022] NZHC 2118 Dunningham J, without finding that the variation could not be made pursuant to the power of variation, considered the better course of action was to seek approval of a scheme.
As stated by Dunningham J at [24] and [25]:
Also see Re Kathleen Dorothy Kirkby Charitable Trust where Jagose J approved a variation to a charitable trust “… to enable the trustee to give effect to the trust’s charitable purposes and the settlor’s ultimate intentions to all beneficiaries’ benefit, and without which all beneficiaries would detrimentally be affected by the trustee’s likely inability to make significant distributions after the settlor’s death, including by modernising its terms consistently with the Trusts Act 2019.” As noted at [9]:
“… I am satisfied any s 124(2)(b) or (c) beneficiary also would consent if properly advised. Given those persons’ futurity, I also am satisfied the variation is not to reduce or remove any vested interest in the trust property. And I am satisfied in any event the variation is not otherwise to their detriment. None would benefit if the variation was not approved. Last I am satisfied the trust deed’s consistency with the new Trusts Act could not have been foreseen at the time of its making, and it is desirable such consistency be achieved.”
References:
- Trusts Act 2019, s 124, 133
- Re Trevor Wilson Trustee Limited [2022] NZHC 2118
- Charitable Trusts Act 1957, part 3
- Re Kathleen Dorothy Kirkby Charitable Trust [2024] NZHC
Matters of Trust 
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