Court consent to variation, but no order for costs

Re Turner Family Trust No 2 relates to an application pursuant to section 124 of the Trusts Act 2019 for an order to approve a variation on behalf of any person who may acquire a beneficial interest in the trust at a future date.

All living beneficiaries were adult, have capacity and approved of the proposed variations. However, as there was a notional possibility of further children being born to the settlor’s children (currently aged 69, 68 and 64) the court was required to consent on behalf of any further grandchildren.

The variations sought were summarised at [13] as being to:

• empower the trustees to add and remove beneficiaries—to enable future Turner generations to benefit and to enable some more senior beneficiaries who have been sufficiently provided for to be removed, if necessary, to ease administrative burden
• exclude default duties imposed under the Act—to produce consistency with many modern trust deeds, still reflective of the intention of the existing Deed, to encourage other family members to take on the role of trustee in due course
• include an acknowledgment there is no duty to diversify investment— to encourage maintenance of the Trust’s currently successful investment approach
• include an express general trustee indemnity—to encourage other family members to take on the role of trustee, and
• empower the trustees to appoint a special trust adviser under the Act— to incorporate, in the context of an existing power to appoint an advisory trustee, reference to the relevant provision under the 2019 Act.

As stated at [18]:

“The breadth of the Court’s discretion in considering an application under s 124 may be seen in practice in a number of recent cases. In Re Oakridge Trust Co Ltd, Re the Hamilton Family Trust and in Re Trustee Company the Court approved trust variations where the effect included addressing the default duties under the Act (including in one case by excluding or modifying their application). In
Re New Zealand Medical Association Inc, a new deed for a charitable trust was approved where default duties, including the duties to invest prudently, to not take any reward for acting as a trustee, to avoid a conflict of interest between the interests of the trustee and the beneficiaries of the trust, and to act unanimously were excluded or modified. In two of the mentioned cases, the Court also approved variations relating to trustee indemnity.”

The order for variation was granted, Eaton J noting at [19] that:

“Ross’s affidavit evidence comprehensively explains the benefits the applicants identify in varying the Trust. Ross, wearing the hat of both trustee and beneficiary, as well as being an experienced solicitor, has excellent credentials to view the proposed Variations from all sides. The perceived benefits of the Variations, which I have summarised above at [13], are clearly in my view in the interests of the Trust and its beneficiaries.”

However, costs were not ordered, as sought, Eaton J stating at [22] that:

“I do not understand there to be a need for an order. The trustees have their right (in equity) of indemnity for properly incurred expenses, entitling them to be indemnified out of the trust fund against the the reasonable costs and expenses they properly incur in the course of their office.”

References:

• Re Turner Family Trust No 2 [2025] NZHC 4033
• Trusts Act 2019, s 124
• Re Oakridge Trust Co Ltd [2024] NZHC 2860 at [17(e)];
• Re T J & H M Hamilton Family Trust [2024] NZHC 3893 at [11(g)(i)]
• Re Trustee Company [2025] NZHC 653 at [20(h)(i)]
• Re New Zealand Medical Association Inc [2025] NZHC 1957 at [50].
• Butterfield v Public Trust [2017] NZCA 367, (2017) 23 PRNZ 575 at [20]–[21]