All power to the settlors

In Queenin v Queenin the Court was asked to determine whether a trustee had been properly removed and for the court to review the exercise of appointor and trustee powers.

The context of the application was the settlors’ decision to wind up the trust as the settlors did not consider the trust was still necessary. However, as noted at [17] and [5] (placed in this order for explanatory purposes):

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The view taken by the Court after chronicling some rather intemperate legal communications that have done little to assist with the resolution of matters is set out at [53], [69]

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The end result was that the Court was satisfied that Aaron’s removal was proper. However, this is not necessarily the end of the matter as the Court has also order that the Trust cannot be wound up or dissolved or any changes made to the class of beneficiaries without leave of the Court.

The decision requires careful consideration as to the extent to which the settlors’ wishes and expectations can and should properly be considered. In this regard it is noted that the Trusts Act 2019 refers to settlor expectations and wishes in the context of disclosure in s 53(c); settlor intention in settling the trust with respect of the power of the court to approve indemnification in s 84(3)(c); settlor intention in settling the trust with respect to the court’s power to approve termination, variation and resettlement in section 124(4)(c) and settlor intention in settling the trust with respect to the court’s power to waive the requirement for consent to termination, variation and resettlement in section 125(3)(c).

References:

• Queenin v Queenin [2024] NZHC 1035
• Trusts Act 2019, section 107(3), section 109(1), section 126, and section 127