The background to Legler v Formannoij is set out in No fraud here. For practical purposes the relevant background is canvassed at [24] as follows:
Fundamentally Legler v Formannoij considers whether the appointment of a corporate trustee of which a beneficiary is the sole director is improper. This question needs to be considered in light of the Privy Council decision in Grand View Private Trust Company Limited v Wong, which was released the day after the Court of Appeal decision in Legler v Formannoij.
Fundamental to the decision of the majority of the Court of Appeal was whether the trustee company was appointed for an improper purpose:
The majority of the Court of Appeal dismissed the appeal and found that it was not necessary to consider “… the appellants’ request for the appointment of an independent trustee, either in place of Maria or in addition to her.”
By way of contrast, Cull J would have allowed the appeal stating at [44]:
The decision could be argued as being limited to its fact, proper being an objective proposition. However, it warrants close reading in light of the Privy Council decision in Grand View Private Trust Company Limited v Wong. Fraud on a power may be yesterday’s news, proper exercise of powers may the news, today, tomorrow and thereafter. The fundamental question must be referenced to why any particular trust was settled.
References:
- Grand View Private Trust Company Limited v Wong UKPC [2022] 47
- Grand View Private Trust Company Ltd v Wong Civil Appeal No 5A of 2019
- Pitt v Holt [2013] 2 AC 108
- Re Manisty’s Settlement [1974] Ch 17
- Vacher v Paul [1915] 1 A..C. 372, 379
- Arnold v Britton and Wood v Capita Insurance Services Ltd [2017] UKSC 24
- Legler v Formannoij [2022] NZCA 607
Matters of Trust 
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