Trusts Act 2019

1: Title
This Act is the Trusts Act 2019.
2: Commencement
1: This Act comes into force on the day that is 18 months after the date on which it receives the Royal assent.
2: However, subpart 5
1: General provisions
3: Purpose
The purpose of this Act is to restate and reform New Zealand trust law by—
a: setting out the core principles of the law relating to express trusts; and
b: providing for default administrative rules for express trusts; and
c: providing for mechanisms to resolve trust-related disputes; and
d: making the law of trusts more accessible.
4: Principles
Every person or court performing a function or duty or exercising a power under this Act must have regard to the following principles:
a: a trust should be administered in a way that is consistent with its terms and objectives:
b: a trust should be administered in a way that avoids unnecessary cost and complexity.
5: Application, and relationship of Act with trust terms, common law and equity, and other enactments
Trusts to which this Act applies
1: This Act applies only to express trusts that are governed by New Zealand law.
2: However,—
a: this Act also applies to a trust that is not an express trust but that is created by or under an enactment, if the application of this Act is consistent with the purpose, text, and context of that enactment and necessary for the due administration of the trust; and
b: a court may, where necessary or appropriate, apply the provisions of this Act to any of the following that are governed by New Zealand law:
i: a resulting trust:
ii: a constructive trust:
iii: a trust that does not satisfy the definition of express trust but that is recognised at common law or in equity as being a trust. Interrelationship between Act and terms of trust
3: This Act applies to all express trusts despite anything to the contrary in the terms of a trust, except as provided in subsections (4) to (6)
4: The application of the provisions of this Act specified in column 1 of the table in Schedule 2
5: The modifications and exclusions that may be made to the provisions listed in column 1 of the table are limited to the extent specified in column 2.
6: Schedule 3
7: The terms of a trust may impose duties and restrictions on a trustee additional to those provided for in this Act. Interrelationship between Act and common law and equity
8: This Act—
a: is not an exhaustive code of the law relating to express trusts; and
b: is intended to be complemented by the rules of the common law and equity relating to trusts (except where otherwise indicated or where those rules are inconsistent with the provisions of this Act). Interrelationship between Act and other enactments
9: If there is an inconsistency between the provisions of this Act and those of any other enactment, the provisions of that other enactment prevail, unless this Act provides otherwise.
6: Overview of this Act
1: This section is only a guide to the general scheme and effect of this Act. General provisions
2: Part 1
a: state the purpose and principles of this Act; and
b: set out to which trusts the Act applies; and
c: set out the relationship of the Act with the terms of a trust, the common law and equity, and other enactments; and
d: set out how this Act is to be interpreted; and
e: define certain terms used in this Act.
3: This Act generally applies only to express trusts, but there are some exceptions ( see section 5(1) and (2) section 5(2)(b) Express trusts
4: Part 2 see sections 12 to 15
5: Part 2
a: set out the characteristics of an express trust; and
b: specify how an express trust may be created; and
c: specify the maximum duration of most express trusts (which is 125 years) and abolish the rule against perpetuities; and
d: specify the age of majority for the purposes of an express trust (which is 18). Trustees’ duties and information obligations
6: Part 3
a: set out the mandatory duties that apply to trustees of all express trusts; and
b: set out the default duties that apply to trustees of a trust unless the terms of the trust modify or exclude those duties; and
c: restrict the use of trustee exemption clauses and trustee indemnity clauses (which limit the degree to which trustees can be held accountable for certain misconduct) in the terms of a trust; and
d: set out the documents that must be kept by trustees and the information that trustees must give to beneficiaries (and that aim to ensure that beneficiaries have sufficient information to enable the terms of the trust to be enforced against the trustees). Trustees’ powers and indemnities
7: Part 4
a: provide for the general powers of trustees to manage trust property (which give trustees all the powers necessary to carry out the role); and
b: provide for certain specific powers of trustees, such as the power to invest trust property and powers to use trust property for the welfare of a beneficiary outside of the powers relating to distribution of trust property specified in the terms of the trust; and
c: set out the power of a trustee to appoint others to exercise certain powers or perform certain functions in relation to the trust and specify which powers can be given to others in this way; and
d: set out the power of a trustee to delegate all of the trustee’s powers and functions to another person in specified circumstances when the trustee is temporarily not able to carry out the role; and
e: provide for the appointment of a non-trustee adviser (a special trust adviser
f: set out certain indemnities of a trustee (that is, the right of a trustee to be reimbursed for an expense or a liability out of the trust property) and protections for trustees. Appointment and discharge of trustees
8: Part 5
a: who may be appointed as a trustee (and who is disqualified); and
b: how trustees may be appointed and by whom; and
c: how a person may accept or reject appointment as a trustee; and
d: how a trustee may retire; and
e: how a trustee may be removed (and the procedure a trustee can use to challenge the removal); and
f: how legal ownership of the trust property is changed when there is a change of trustee. Termination and variation of trusts at request of beneficiaries
9: Part 6 Court powers and dispute resolution
10: Part 7
a: set out the court’s general power to review an act, an omission, or a decision of a trustee, and the procedure for this review; and
b: set out powers of the court in relation to actions involving trusts; and
c: set out applications that a trustee may make to the court, including a general ability to apply to the court for directions; and
d: give the Family Court the power to exercise jurisdiction under this Act in specified circumstances; and
e: provide for alternative dispute resolution processes to be used to resolve internal and external trust disputes. Miscellaneous provisions
11: Part 8
a: relating to the transfer of trust property to the Crown; and
b: relating to the investigation of the condition and accounts of certain trust property; and
c: empowering the making of transitional regulations; and
d: relating to consequential amendments and repeals. Amendments to other Acts
12: Part 9 Schedules
13: Schedule 1
14: Schedule 2 section 5(4)
15: Schedule 3
16: Schedule 4
17: Schedule 5 Perpetuities Act 1964
7: Interpretation of Act
1: This Act—
a: must be interpreted in a way that promotes its purpose and principles; and
b: is not subject to any rule that statutes in derogation of the common law should be strictly construed; but
c: may be interpreted having regard to the common law and equity, but only to the extent that the common law and equity are consistent with—
i: its provisions; and
ii: the promotion of its purpose and principles.
2: Subsection (1) Interpretation Act 1999 2006 No 69 s 10
8: Inherent jurisdiction of court not affected
1: The inherent jurisdiction of a court to supervise and intervene in the administration of a trust is not affected by this Act, except to the extent that this Act provides otherwise.
2: Despite subsection (1) 2006 No 69 s 11
9: Definitions
In this Act, unless the context otherwise requires,— adult beneficiary charitable purpose section 2 charitable trust child court default duty section 28 discretionary beneficiary express trust section 12 financial product section 7(1) incorporated law firm section 6 insolvency event section 6(4) lacks capacity
a: is a child; or
b: is not competent to manage the beneficiary’s own affairs for any reason, including that the beneficiary—
i: is subject to an order appointing a manager under section 31
ii: has a trustee corporation managing the person’s property under section 32 33 mandatory duty section 22 permitted purpose person with the power to appoint trustees section 92(2) person with the power to remove trustees section 92(1) personal representative portfolio investment entity section YA 1 power of appointment security trust clause 3 settlor section 15(1)(b) specified commercial trust clause 1 statutory trustee terms
a: express written terms of the trust:
b: express oral terms of the trust:
c: implied terms of the trust trustee trustee corporation section 2 welfare
a: means the person’s maintenance, education, advancement, benefit, comfort, or well-being; and
b: includes past maintenance or education wholesale trust clause 2
10: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1
11: Act binds the Crown
This Act binds the Crown.
2: Express trusts
12: Meaning of express trust
For the purposes of this Act, an express trust
a: has each of the characteristics set out in section 13
b: complies with section 14
c: is created in accordance with section 15
13: Characteristics of express trust
The characteristics of an express trust are as follows:
a: it is a fiduciary relationship in which a trustee holds or deals with trust property for the benefit of the beneficiaries or for a permitted purpose; and
b: the trustee is accountable for the way the trustee carries out the duties imposed on the trustee by law.
14: Sole trustee cannot be sole beneficiary
A sole trustee of a trust must not be the sole beneficiary of the trust.
15: Creation of express trust
1: An express trust may be created—
a: by or under an enactment; or
b: by a person (the settlor
i: indicates an intention to create a trust; and
ii: identifies the beneficiaries (or classes of beneficiaries) or the permitted purpose of the trust; and
iii: identifies the trust property.
2: A trust created under subsection (1)
16: Maximum duration of trust
1: The maximum duration of a trust is 125 years.
2: The terms of a trust may specify or imply a shorter duration.
3: If the terms of a trust do not specify or imply a duration or a mechanism for or means of determining the date on which the trust property will be finally distributed, the trust continues until the date that is 125 years after the creation of the trust.
4: If the terms of a trust specify or imply a mechanism for or means of determining the date on which the trust property will be finally distributed, the trust continues until the earlier of—
a: the date determined by that mechanism or means; and
b: the date that is 125 years after the creation of the trust.
5: The common law rule known as the rule against perpetuities is abolished.
6: Despite anything in this section, the following trusts may continue indefinitely:
a: a charitable trust:
b: the trusts of a superannuation scheme to which section DC 7
c: the trusts of an exempt ESS (within the meaning of section YA 1
d: a trust that is created by or under, or is subject to, another enactment that allows the trust to continue indefinitely:
e: a trust that may continue indefinitely under common law or equity. 1964 No 47 s 19
17: Application of maximum duration rule to resettlements
1: This section applies to property that is held on a trust ( Trust A section 16(1)
2: The maximum amount of time that may elapse between the property being settled on Trust A and being finally distributed is 125 years.
18: Accumulation of income by trust
A trust may accumulate income to the extent that is consistent with its terms.
19: Distribution of trust property on expiry of trust
1: When a trust expires, all trust property must be distributed—
a: in accordance with the terms of the trust; or
b: if the terms of the trust do not expressly provide for the manner in which trust property is to be distributed, in a manner consistent with the objectives of the trust.
2: However, if there are surviving beneficiaries and it is not possible to determine under subsection (1)
20: Age of majority
1: For the purposes of an express trust, the age of majority is 18.
2: In the terms of a trust the expressions adult child full age infant infancy minor minority full capacity majority subsection (1)
3: This section overrides section 4(1)
3: Trustees’ duties and information obligations
1: Duties of trustee
21: Guiding principle in performing duties
In performing the mandatory duties set out in sections 23 to 27 sections 29 to 38 Mandatory duties
22: Mandatory duties
The duties set out in sections 23 to 27
a: must be performed by the trustee; and
b: may not be modified or excluded by the terms of the trust.
23: Duty to know terms of trust
A trustee must know the terms of the trust.
24: Duty to act in accordance with terms of trust
A trustee must act in accordance with the terms of the trust.
25: Duty to act honestly and in good faith
A trustee must act honestly and in good faith.
26: Duty to act for benefit of beneficiaries or to further permitted purpose of trust
A trustee must hold or deal with trust property and otherwise act—
a: for the benefit of the beneficiaries, in accordance with the terms of the trust:
b: in the case of a trust for a permitted purpose, to further the permitted purpose of the trust, in accordance with the terms of the trust.
27: Duty to exercise powers for proper purpose
A trustee must exercise the trustee's powers for a proper purpose. Default duties
28: Default duties
The duties set out in sections 29 to 38 section 5(4) and (5)
29: General duty of care
When administering a trust (other than when exercising a discretion to distribute trust property), a trustee must exercise the care and skill that is reasonable in the circumstances, having regard, in particular,—
a: to any special knowledge or experience that the trustee has or that the trustee holds out as having; and
b: if the person acts as a trustee in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession.
30: Duty to invest prudently
When exercising any power to invest trust property, a trustee must exercise the care and skill that a prudent person of business would exercise in managing the affairs of others, having regard, in particular,—
a: to any special knowledge or experience that the trustee has or that the trustee holds out as having; and
b: if the person acts as a trustee in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession. 1956 No 61 ss 13B 13C
31: Duty not to exercise power for own benefit
A trustee must not exercise a power of a trustee directly or indirectly for the trustee’s own benefit.
32: Duty to consider exercise of power
A trustee must consider actively and regularly whether the trustee should be exercising 1 or more of the trustee’s powers.
33: Duty not to bind or commit trustees to future exercise of discretion
A trustee must not bind or commit trustees to a future exercise or non-exercise of a discretion.
34: Duty to avoid conflict of interest
A trustee must avoid a conflict between the interests of the trustee and the interests of the beneficiaries.
35: Duty of impartiality
1: A trustee must act impartially in relation to the beneficiaries, and must not be unfairly partial to one beneficiary or group of beneficiaries to the detriment of the others.
2: This section does not require a trustee to treat all beneficiaries equally (but all beneficiaries must be treated in accordance with the terms of the trust).
36: Duty not to profit
A trustee must not make a profit from the trusteeship of a trust.
37: Duty to act for no reward
A trustee must not take any reward for acting as a trustee, but this does not affect the right of a trustee to be reimbursed for the trustee's legitimate expenses and disbursements in acting as a trustee ( see section 81(2)
38: Duty to act unanimously
If there is more than 1 trustee, the trustees must act unanimously.
39: Adviser must alert settlor to modification or exclusion of default duty
1: This section applies to a person who—
a: is paid to—
i: advise on the creation of a trust; or
ii: prepare the terms of a trust; and
b: recommends that the initial settlor should, or causes the initial settlor to, modify or exclude 1 or more default duties in the terms of the trust.
2: Before the creation of the trust, a person to whom this section applies must take reasonable steps to ensure that the initial settlor is aware of the meaning and effect of the modification or exclusion.
3: Failure to comply with subsection (2)
4: In this section, initial settlor
2: Exemption and indemnity clauses
40: Restriction on trustee exemption clauses
The terms of a trust must not limit or exclude a trustee’s liability for any breach of trust arising from the trustee’s dishonesty, wilful misconduct, or gross negligence.
41: Restriction on trustee indemnity clauses
The terms of a trust must not give a trustee any indemnity against the trust property for liability for any breach of trust arising from the trustee’s dishonesty, wilful misconduct, or gross negligence.
42: Invalidity of exemption clause or indemnity clause
A clause in the terms of a trust is invalid to the extent that it purports to have the effect prohibited by section 40 41
43: Adviser must alert settlor to liability exclusion or indemnity clause
1: This section applies if—
a: a person (the adviser
i: advise on the creation of a trust; or
ii: prepare the terms of a trust; and
b: the adviser recommends that the settlor should, or causes the settlor to, include a liability exclusion or indemnity clause in the terms of the trust.
2: Before the creation of the trust, the adviser must take reasonable steps to ensure that the settlor is aware of the meaning and effect of the clause.
3: The liability exclusion or indemnity clause has no effect with respect to an adviser who is or becomes a trustee of the trust and who is in breach of subsection (2)
4: Failure to comply with subsection (2) subsection (3)
5: In this section, liability exclusion or indemnity clause
a: limiting or excluding the liability of a trustee for breach of trust; or
b: granting a trustee an indemnity against the trust property for the trustee’s liability for breach of trust.
44: Court consideration of gross negligence
1: This section applies when a court is deciding whether a trustee has been grossly negligent for the purposes of section 40 41 75 82
2: The court must consider, having regard to the factors in subsection (3)
3: The factors to which the court must have regard are—
a: the circumstances, nature, and seriousness of the breach of trust; and
b: the trustee’s knowledge and intentions relating to the breach of trust; and
c: the trustee’s skills and knowledge that are relevant to the role of trustee; and
d: the purpose for which the trustee was appointed; and
e: any other circumstances, including whether the trustee has been remunerated for the role, or characteristics of the trustee that are relevant to the role of trustee; and
f: the type of trust, including, without limitation, the degree to which the trust is part of a commercial arrangement, the assets held by the trust, how the assets are used, and how the trust operates; and
g: the purpose of the trust, including, without limitation, what the trust is intended to achieve, and whom the trust is intended to benefit and in what ways; and
h: any other factor the court considers relevant.
3: Trustees’ obligations to keep and give trust information
Documents to be kept by trustees
45: Trustee must keep core documents
Each trustee of a trust must keep, so far as is reasonable, the following documents relating to the trust:
a: the trust deed and any other document that contains terms of the trust:
b: any variations made to the trust deed or trust:
c: records of the trust property that identify the assets, liabilities, income, and expenses of the trust and that are appropriate to the value and complexity of the trust property:
d: any records of trustee decisions made during the trustee's trusteeship:
e: any written contracts entered into during that trustee's trusteeship:
f: any accounting records and financial statements prepared during that trustee's trusteeship:
g: documents of appointment, removal, and discharge of trustees (including any court orders appointing or removing trustees):
h: any letter or memorandum of wishes from the settlor:
i: any other documents necessary for the administration of the trust:
j: any documents referred to in paragraphs (a) to (i)
46: Keeping documents where there is more than 1 trustee
If there is more than 1 trustee of a trust, each trustee must comply with the obligation in section 45
a: holding the documents specified in section 45(a) and (b)
b: being satisfied that at least 1 of the trustees holds the other documents specified in section 45
47: Documents must be kept for duration of trusteeship
A trustee must keep, so far as is reasonable, the documents for the duration of the trustee’s trusteeship.
48: Trustee must pass on documents
At the time that the trusteeship of a trustee ends, if the trust continues, the trustee must give at least 1 replacement trustee or continuing trustee the documents that the trustee holds at that time. Giving information to beneficiaries
49: Definitions for purposes of sections 50 to 55
In this section and in sections 50 to 55 representative trust information
a: means any information—
i: regarding the terms of the trust, the administration of the trust, or the trust property; and
ii: that it is reasonably necessary for the beneficiary to have to enable the trust to be enforced; but
b: does not include reasons for trustees’ decisions.
50: Purpose and application of sections 51 to 55
1: The purpose of sections 51 to 55
2: Sections 51 to 55
51: Presumption that trustee must notify basic trust information
1: There is a presumption that a trustee must make available to every beneficiary or representative of a beneficiary the basic trust information set out in subsection (3)
2: However,—
a: before giving the information, the trustee must consider the factors set out in section 53
b: if the trustee reasonably considers (after taking into account those factors) that the information should not be made available to every beneficiary,—
i: the presumption does not apply; and
ii: the trustee may decide to withhold some or all of the basic trust information from 1 or more particular beneficiaries or classes of beneficiaries.
3: The basic trust information is—
a: the fact that a person is a beneficiary of the trust; and
b: the name and contact details of the trustee; and
c: the occurrence of, and details of, each appointment, removal, and retirement of a trustee as it occurs; and
d: the right of the beneficiary to request a copy of the terms of the trust or trust information.
4: A trustee is required to consider at reasonable intervals whether the trustee should be making the basic trust information available under this section.
52: Presumption that trustee must give information on request
1: There is a presumption that a trustee must within a reasonable period of time give a beneficiary or the representative of a beneficiary the trust information that person has requested.
2: However,—
a: before giving the information, the trustee must consider the factors set out in section 53
b: if the trustee reasonably considers (after taking into account those factors) that the information should not be given to the person,—
i: the presumption does not apply; and
ii: the trustee may decide to refuse the request for trust information.
53: Procedure for deciding whether presumption applies
The factors that the trustee must consider (for the purposes of sections 51(2)(a) 52(2)(a)
a: the nature of the interests in the trust held by the beneficiary and the other beneficiaries of the trust, including the degree and extent of the beneficiary’s interest in the trust and the likelihood of the beneficiary receiving trust property in the future:
b: whether the information is subject to personal or commercial confidentiality:
c: the expectations and intentions of the settlor at the time of the creation of the trust (if known) as to whether the beneficiaries as a whole and the beneficiary in particular would be given information:
d: the age and circumstances of the beneficiary:
e: the age and circumstances of the other beneficiaries of the trust:
f: the effect on the beneficiary of giving the information:
g: the effect on the trustees, other beneficiaries of the trust, and third parties of giving the information:
h: in the case of a family trust, the effect of giving the information on—
i: relationships within the family:
ii: the relationship between the trustees and some or all of the beneficiaries to the detriment of the beneficiaries as a whole:
i: in a trust that has a large number of beneficiaries or unascertainable beneficiaries, the practicality of giving information to all beneficiaries or all members of a class of beneficiaries:
j: the practicality of imposing restrictions and other safeguards on the use of the information (for example, by way of an undertaking, or restricting who may inspect the documents):
k: the practicality of giving some or all of the information to the beneficiary in redacted form:
l: if a beneficiary has requested information, the nature and context of the request:
m: any other factor that the trustee reasonably considers is relevant to determining whether the presumption applies.
54: Procedure when trustee decides to give no information
1: This section applies in relation to a trust if, as a result of 1 or more of the following circumstances or events, no beneficiary has any trust information:
a: the trustee cannot identify any beneficiary to whom information can be given:
b: the trustee decides under section 51(2)(b)
c: the trustee decides under section 52(2)
2: The trustee must apply to the court for directions in relation to—
a: whether the trustee’s determination that there is no beneficiary to whom information can be given, or to withhold information or refuse a request for information, is reasonable in the circumstances; and
b: the alternative means by which the trustee can be accountable and the trust can be enforced.
3: However, the trustee is not required to apply to the court for directions if—
a: the period during which no beneficiary has any trust information is less than 12 months; and
b: at the end of that period, the trustee gives to at least 1 beneficiary of the trust the basic trust information.
4: In giving directions under this section, the court must take into account the following principles:
a: trust information may be withheld from all beneficiaries only in exceptional circumstances:
b: alternative means of enforcing a trust pending disclosure of information to beneficiaries must be consistent with the objectives of the trust and not adversely affect its administration.
55: Beneficiary may be required to pay cost of giving information
1: A trustee may require the beneficiary to whom trust information is given under section 52
2: The trustee may require the beneficiary to pay some or all of that cost before the trustee gives the information to the beneficiary.
4: Trustees’ powers and indemnities
1: Powers of trustee
56: General powers of trustee
A trustee has the following general powers:
a: all the powers necessary to manage the trust property including, in relation to the trust property, all the powers of an absolute owner of the property:
b: all the powers necessary to carry out the trust, including powers incidental to those in paragraph (a)
57: Status of provisions on specific powers of trustee
Sections 58 to 79 Investment powers
58: Trustee has power to invest
A trustee may invest trust property in any property. 1956 No 61 s 13A
59: Matters which trustee may consider in exercising power to invest
1: A trustee exercising any power to invest may have regard to the following matters, so far as they are appropriate to the circumstances of the trust:
a: the objectives of the trust or the permitted purpose of the trust:
b: the desirability of diversifying trust investments:
c: the nature of existing trust investments and other trust property:
d: the need to maintain the real value of the capital or income of the trust:
e: the risk of capital loss or depreciation:
f: the potential for capital appreciation:
g: the likely income return:
h: the length of the term of the proposed investment:
i: the probable duration of the trust:
j: the marketability of the proposed investment during, and on the expiry of, the term of the proposed investment:
k: the aggregate value of the trust property:
l: the effect of the proposed investment in relation to the tax liability of the trust:
m: the likelihood of inflation affecting the value of the proposed investment or other trust property:
n: the trustee’s overall investment strategy.
2: This section does not limit the matters that a trustee may take into account. 1956 No 61 s 13E Power to determine treatment of returns and accounts
60: Power to determine whether return on investment is income or capital
For the purposes of distribution, and of preparing and completing a financial statement for a trust, a trustee may determine whether a return on an investment is to be treated as income or capital.
61: Apportionment of receipts and outgoings between income and capital
1: A trustee’s powers under subsection (2)
a: if the exercise of the power is fair and reasonable in all the circumstances; and
b: in accordance with accepted business practice.
2: A trustee may—
a: apportion any receipt or outgoing relating to any period of time between the income and capital accounts, or charge any outgoing or credit any receipt exclusively to or from income or capital:
b: transfer funds between capital and income accounts—
i: to recover or reimburse an outgoing previously charged to the account that is to receive the funds:
ii: to recover or deduct any receipt previously credited to the account from which the funds are to be recovered:
c: deduct from income an amount to meet the cost of depreciation, and add the amount to capital.
3: This section extinguishes the rules of common law and equity relating to the apportionment of receipts and outgoings.
4: If a trustee is the landlord, tenant, vendor, or purchaser of land, the apportionment rules in the Property Law Act 2007 Powers to apply trust property for beneficiary’s welfare
62: Trustee’s power to pay or apply income for child beneficiary’s welfare
1: A trustee may pay or apply some or all of the income on the interest of the beneficiary in respect of whom this section applies for the beneficiary’s welfare.
2: This section applies in respect of a beneficiary who is a child with an interest (whether vested or contingent) in some or all of the trust property.
3: In this section and section 63 income
a: means the income on the beneficiary’s interest that arises in the most recent year; and
b: where they have not been previously paid in respect of the beneficiary but have been accumulated and held for the beneficiary’s entitlement in the future, means the income on the beneficiary’s interest from previous years and the interest earned from the investment of that income; and
c: where the beneficiary has an absolute interest in an annuity, includes the income from the annuity.
4: In deciding whether to make a payment and the amount of any payment, the trustee must consider all of the relevant circumstances, including the beneficiary’s age and requirements.
5: The trustee may make the payment under subsection (1)
6: This power is subject to any prior interests or charges affecting the income. 1956 No 61 s 40(1), (2), (4)
63: Trustee’s powers with respect to income of child beneficiary
1: While a beneficiary is a child, a trustee may use the income on the beneficiary’s interest in 1 or more of the following ways:
a: invest the income (as defined in section 62
b: accumulate the income:
c: make a payment under section 62
2: If either of the following applies, the trustee must hold the income for the beneficiary absolutely:
a: the beneficiary’s interest is a vested interest and the child turns 18:
b: the beneficiary, on turning 18, is entitled to the property from which the income arose. 1956 No 61 s 40(2)
64: Trustee’s power to pay or apply capital for beneficiary’s welfare
1: A trustee may pay or apply some or all of a beneficiary’s interest in the capital money or other capital assets of the trust property for the beneficiary’s welfare, if this section applies to the beneficiary.
2: This section applies in respect of a beneficiary with an interest (whether vested or contingent) in some or all of the capital of the trust property.
3: In deciding whether to pay or apply capital and the amount to pay or apply, the trustee must consider all of the relevant circumstances.
4: In exercising the power under this section, a trustee must not pay or apply capital for a beneficiary’s welfare if—
a: the beneficiary’s interest is subject to a double or multiple contingency:
b: the payment or application would prejudice a person entitled to a prior life or other interest (whether vested or contingent) in the amount paid or applied, unless—
i: the person whose interest may be prejudiced is an adult and consents in writing to the payment or application; or
ii: the court, on the trustee’s application, orders the amount to be paid or applied.
5: An amount paid or applied under this section must be accounted for as part of the share in the trust property to which the person is or becomes absolutely or indefeasibly entitled. 1956 No 61 s 41
65: Trustee may impose conditions on payment for beneficiary’s welfare
1: A trustee exercising a power to pay or apply an amount of income or capital for the welfare of a beneficiary may impose 1 or more conditions.
2: A condition may require the repayment of the amount, payment of interest on the amount, or giving security for the amount.
3: At any time after imposing a condition, the trustee may, either wholly or in part, waive the condition, or release an obligation undertaken or any security given because of the condition.
4: A trustee, when imposing a condition about giving security, is not affected by any restriction on the investment of trust property, whether imposed under this Act or otherwise.
5: When working out the amount of income or capital that a trustee who has imposed a condition may pay or apply, an amount repaid to the trustee or recovered by the trustee is taken not to have been paid or applied by the trustee. 1956 No 61 s 41A
66: Trustee not liable for certain losses in relation to amounts paid or applied for beneficiary’s welfare
A trustee is not liable for any loss that may be incurred in relation to an amount that is paid or applied for a beneficiary’s welfare if the loss arises—
a: because of a failure to impose any or adequate conditions under section 65
b: without limiting paragraph (a)
c: because of a failure to take action for the protection of the security (including a failure to exercise a right to enforce the security); or
d: through the release or abandonment of the security without payment; or
e: from any other matter in relation to the conditions imposed or the waiver of any condition. 1956 No 61 s 41A(4) Exercise of trustee powers and functions by others
67: Trustee’s power to appoint others to exercise or perform certain powers or functions
1: A trustee may—
a: appoint a person to exercise or perform, on behalf of the trustee, specified powers or functions in relation to the trust:
b: appoint a person to make specified decisions in relation to all or part of the trust property:
c: appoint an eligible person to hold or deal with all or part of the trust property as nominee or custodian and vest all or part of the trust property in that person.
2: However, a trustee may not under this section or under any comparable power in the terms of the trust appoint a person to exercise or perform, on behalf of the trustee, any of the following powers or functions:
a: a function that is, or is related to, the determination of whether, when, or in what way any trust property should be distributed, used, possessed, or otherwise beneficially enjoyed, including a power of appointment:
b: a power to decide whether any fees or other payment due to be made out of the trust funds should be made out of income or capital (where the decision affects a beneficiary’s entitlement to trust property):
c: a power to decide whether payments received by, or payable to, the trustee should be appropriated to income or capital (where the decision affects a beneficiary’s entitlement to trust property):
d: a power to appoint a person to be, or to remove, a trustee of the trust:
e: a power to set or change the distribution date of trust property:
f: a power to resettle the trust, or to amend, revoke, or replace all or any terms of the trust:
g: a right to apply to the court:
h: the trustee’s powers conferred by subsection (1)
3: A person appointed under subsection (1)
a: does not take on the duties of the trustee under this Act, but must act in accordance with the terms of the appointment and with any directions of the trustee; and
b: is liable to the trustee for any failure to comply with those terms or directions.
4: For the purposes of subsection (1)(c) eligible person
a: a person who carries on a business that consists of or includes acting as a nominee or custodian; or
b: a body corporate that is controlled by the trustee; or
c: an incorporated law firm.
5: For the purposes of subsection (4)(b) controlled by the trustee
a: the trustee has a controlling interest in the body corporate; or
b: the trustee has the capacity (for example, because of practical influence) to determine the outcome of decisions about the body corporate’s financial and operating policies.
68: Trustee’s duties to keep appointments under review and to fulfil general duty of care
1: If a trustee exercises a power under section 67(1)
a: keep under review the arrangements under which the appointee acts and how those arrangements are being put into effect; and
b: if the circumstances make it appropriate to do so, consider whether the trustee should exercise any power to intervene (for example, a power to give directions to the appointee, or to amend, revoke, or replace the appointment).
2: The general duty of care in section 29 section 67(1)
3: This section applies despite section 28
69: Trustee’s liability for acts of appointee limited
A trustee is not liable in a proceeding brought by or on behalf of a beneficiary for any act or default of an appointee of the trustee unless the trustee failed—
a: to fulfil any of the trustee’s mandatory duties or the trustee’s default duties (where applicable) in appointing the person under section 67
b: to fulfil the trustee’s duties under section 68
70: Trustee’s power to delegate powers and functions in specified circumstances
1: Despite sections 67 68 section 96
2: However, the power to delegate may be exercised only in the circumstances where the delegation is necessary (or the trustee expects that it may from time to time become necessary) because of the trustee’s—
a: absence from New Zealand; or
b: temporary inability to be contacted; or
c: temporary physical incapability; or
d: temporary lack of capacity to perform the functions of a trustee.
3: The delegation—
a: commences when the circumstance in subsection (2)
b: continues for the shorter of—
i: the duration of the circumstance in subsection (2)
ii: 12 months.
4: If a delegation has been in place for 12 months and the circumstance in subsection (2) subsection (2)(d)
a: the remaining duration of the circumstance in subsection (2)
b: a further 12 months.
5: A trustee may delegate powers to a sole co-trustee only if that sole co-trustee is a statutory trustee.
6: A delegate may exercise the delegating trustee’s power to resign. Trustee Act 1925 s 25 (UK)
71: Notice of delegation of trustee’s powers and functions
1: Not later than 5 working days after a delegation under section 70
a: the date on which the delegation commenced:
b: the duration of the delegation:
c: the name and contact details of the delegate:
d: the reason for the delegation:
e: which powers are delegated, if only some are delegated.
2: In the case where a power of attorney authorising delegation under section 70 see section 70(2)
a: the date on which the power of attorney was signed:
b: the name and contact details of the delegate:
c: in which of the circumstances specified in section 70(2)
3: For a sole delegating trustee, it is sufficient compliance with subsections (1) and (2)
a: any person with the power to remove or to appoint trustees; or
b: if there is no person authorised under paragraph (a)
c: if, in the circumstances, it is unreasonable or impracticable to comply with paragraph (b)
4: However, a trustee or delegate is not required to comply with notification requirements under subsection (3)(b) or (c) section 53
5: Failure to comply with a notification requirement under this section does not invalidate any act done or document executed by the delegate in favour of a person dealing with a trustee’s delegate. Trustee Act 1925 s 25 (UK)
72: Trustee’s liability for acts of delegate limited
The trustee is not liable in a proceeding brought by or on behalf of a beneficiary for any act or default of a delegate appointed under section 70 section 29
73: Application to Public Trust to consent to become delegate
1: This section applies in relation to a trust where—
a: a trustee is, for any of the reasons listed in section 70(2)
b: that trustee has not delegated the trustee’s powers.
2: A co-trustee or a beneficiary of the trust may apply to Public Trust for consent for Public Trust to be made the delegate of the trustee.
3: Public Trust—
a: may refuse to consent to be the delegate of the trustee for any reason; and
b: must refuse to consent to be made the delegate of the trustee if Public Trust reasonably believes that an application under subsection (2)
4: Public Trust may charge fees for providing services as a delegate under this section.
5: If Public Trust consents to be made the delegate of the trustee, sections 70 to 72 Special trust advisers
74: Role and appointment of special trust advisers
1: A special trust adviser—
a: may advise the trustee on any matter relating to the trust; but
b: is not a trustee of the trust and does not have the powers or duties of a trustee.
2: A special trust adviser may be appointed—
a: in, or in accordance with, the terms of the trust; or
b: by order of the court made on the application of—
i: a beneficiary or trustee; or
ii: a person on whose application the court would have the power to appoint a new trustee; or
c: by a person with the power to remove or to appoint trustees; or
d: in respect of property for which the court has jurisdiction under Part 3
i: the manager or person authorised to administer the property; or
ii: a person specified in section 26 of that Act; or
e: in respect of property of a person subject to a property order made under the Protection of Personal and Property Rights Act 1988
i: the manager of the property; or
ii: a person specified in section 26 of that Act.
3: In this section, manager property order section 2 1956 No 61 s 49(2), (3)(a), (b)
75: Reliance on special trust adviser’s advice
1: If there is a special trust adviser, a trustee—
a: may consult the special trust adviser on any matter relating to the trust; and
b: is not required to follow the special trust adviser’s advice; and
c: is not liable in a proceeding brought by or on behalf of a beneficiary for an act or omission the trustee makes as a result of following the special trust adviser’s advice unless the act or omission involves the trustee’s dishonesty, wilful misconduct, or gross negligence ( see section 44
2: A special trust adviser’s disagreement with or objection to a proposed action to be taken by a trustee in respect of trust property does not affect a person dealing with the trustee in the matter. 1956 No 61 s 49(3)(c), (4)
76: Remuneration of special trust advisers
1: If remuneration is payable to a trustee, remuneration may also be paid to a special trust adviser.
2: The amount of remuneration for a special trust adviser is to be determined,—
a: if the trustee is the Māori Trustee, by or under regulations made under the Māori Trustee Act 1953
b: if the trustee is Public Trust, in accordance with Public Trust’s fees as notified from time to time; or
c: if the trustee is a trustee company within the meaning of section 2
d: if the trustee is entitled to fix the trustee’s remuneration, by the trustee; or
e: in all other cases, by the court. 1956 No 61 s 49(5) Other powers and rights of trustee
77: Application of insurance money for loss or damage of trust property
1: This section applies if—
a: a trustee or a beneficiary receives or is entitled to receive money under an insurance contract against the loss of or damage to trust property ( insurance money
b: the insurance contract has been arranged—
i: under the terms of a trust; or
ii: under a statutory or other power; or
iii: in performance of an agreement, or of a statutory or other obligation; or
iv: by a life tenant who would be liable for damage or loss to the property.
2: If a beneficiary is entitled to receive insurance money, the beneficiary must—
a: take reasonable steps to recover and receive the money; and
b: pay the money received less any recovery costs to the trustee or, if there is no trustee capable of giving a discharge for the money, to the Crown under section 149
3: The trustee must hold the insurance money in trust on the same terms and subject to the same powers and provisions as (or those corresponding as nearly as possible to) those to which the lost or damaged property is subject.
4: The trustee may apply the insurance money (or part of it) to rebuilding, reinstating, replacing, or repairing the lost or damaged property.
5: If the insurance money is held by the Crown, the court may direct that the money (or part of it) be applied to rebuilding, reinstating, replacing, or repairing the lost or damaged property.
6: This section does not affect any right a person may have to require the insurance money (or part of it) to be applied to rebuilding, reinstating, replacing, or repairing the lost or damaged property. 1956 No 61 s 25
78: Trustee’s power to adjust interests in trust property of portfolio investment entity
1: This section applies where any trust property is employed in an activity that the trustee is empowered or authorised to carry on as a portfolio investment entity.
2: The trustee may adjust the interest of the beneficiaries in the property in any of the ways specified in section HM 48
3: This section applies despite any other provision in this Act or in the Financial Markets Conduct Act 2013 1956 No 61 s 42E
79: Trustee’s liability limited where notice given to distribute trust property without regard to unknown claims
1: A trustee is not liable in a proceeding brought by or on behalf of a person in relation to the distribution of trust property if—
a: the trustee has first given a notice to potential creditors and other claimants in accordance with subsection (2)
b: the distribution is made after the notice deadline mentioned in subsection (2)(c)
c: the trustee did not have notice of the person’s claim at the time of the distribution.
2: A notice to potential creditors and other claimants must—
a: be given in a manner likely to come to their attention; and
b: identify the trust or estate affected; and
c: state that any creditor or other claimant who asserts a right or an interest relating to that trust property must give notice of their claim to the trustee before a date specified in the notice that is at least 30 days after the date the notice is given (the notice deadline
d: set out the physical and email addresses to which a notice of claim and details of a claim may be sent or delivered; and
e: state that the proposed distribution may be made without regard to any claim of which the trustee does not have notice before the notice deadline.
3: A trustee may apply to the court for directions under section 133
4: This section does not apply to any claim—
a: under the Family Protection Act 1955
b: under the Law Reform (Testamentary Promises) Act 1949
c: arising out of any contract—
i: to make a will containing certain provisions; or
ii: not to revoke an existing will or a specified provision within a will; or
iii: not to make a will; or
d: by a person to be—
i: a beneficiary under a will; or
ii: entitled in the intestacy of a deceased person; or
iii: beneficially interested under a trust.
5: Nothing in this section affects a remedy that a person may have under section 49(1) 1956 No 61 s 35 Protection of purchasers and mortgagees dealing with trustees
80: Protection of purchasers and mortgagees dealing with trustees
1: This section applies if a trustee purports to exercise a power (whether statutory, under the terms of a trust, or otherwise) to sell or mortgage trust property or an interest in trust property.
2: The purchaser or mortgagee is not under any obligation to inquire into whether the money received by the trustee as a result of the sale or mortgage is needed, or how that money is later dealt with, by the trustee.
3: This section is subject to the Land Transfer Act 2017 Personal Property Securities Act 1999
4: In this section, mortgage mortgagee section 4 1956 No 61 s 22
2: Trustees’ indemnities
81: Trustee’s liability for expenses and liabilities incurred, and trustee’s right to indemnity
1: A trustee is personally liable for an expense or a liability incurred by the trustee when acting as a trustee.
2: However, a trustee who incurs an expense or a liability when acting reasonably on behalf of the trust is entitled,—
a: if the trustee has paid the expense or discharged the liability out of the trustee’s own funds, to reimbursement from the trust property; or
b: in any other case, to pay the expense or discharge the liability directly from the trust property (or to have it paid or discharged by a remaining trustee).
3: The operation and enforcement of the indemnity in this section is governed by the rules of the common law and equity relating to trusts.
4: This section does not limit any indemnity available at common law or in equity. 1956 No 61 s 38(2)
82: Indemnification of trustee with agreement of beneficiaries where indemnity impaired
1: A trustee may be indemnified from the trust property for a breach of trust if all of the beneficiaries who together hold all of the beneficial interest in the trust property agree and if the conditions set out in subsection (2)
2: The conditions are that—
a: every beneficiary consents to the indemnification; and
b: if the breach of trust arises from the trustee’s gross negligence, the beneficiaries receive independent legal advice before consenting to the indemnification; and
c: if any beneficiary is a beneficiary described in section 83(2) section 83
3: However, the beneficiaries cannot indemnify the trustee if the breach of trust arises from the trustee’s dishonesty or wilful misconduct.
4: See section 44
83: Power of court to approve indemnification
1: The court may, on behalf of any of the beneficiaries described in subsection (2) section 82
2: The beneficiaries are—
a: a beneficiary who lacks capacity:
b: a person who may acquire a beneficial interest at a future date or on the happening of a future event or on becoming a member of a certain class of persons:
c: a future person who may acquire a beneficial interest.
3: An application for an order of approval may be made by—
a: the trustees or any one of them:
b: any person with a beneficial interest in the trust property.
4: On an application for an order of approval, the court must take into account each of the following factors:
a: the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
b: the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
c: the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
5: An order of approval binds the person on whose behalf it is made and takes effect without any further step.
84: Power of court to waive requirement of consent to indemnification
1: The court may waive the requirement that a beneficiary consent to the indemnification of a trustee for a breach of trust under section 82
2: An application for an order of waiver of consent may be made by—
a: the trustees or any one of them:
b: any person with a beneficial interest in the trust property.
3: On an application for an order of waiver of consent, the court must take into account each of the following factors:
a: the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
b: the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
c: the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
4: An order of waiver of consent binds the person on whose behalf it is made and takes effect without any further step.
85: Ranking of trust property
1: For the purposes of section 81(1) section 81(2)
2: However, the court may set aside the ranking of trust property on the application of—
a: the trustee; or
b: a creditor; or
c: a beneficiary.
86: Creditor’s limited claim to trust property through trustee’s indemnity
1: This section applies if a trustee incurs an expense or a liability to a creditor and the trustee—
a: has a right to be indemnified from the trust property; or
b: for any reason is not entitled to be indemnified or fully indemnified from the trust property (for example, because the trustee incurred the liability in breach of trust) but—
i: the creditor has given value; and
ii: the trust has received a benefit from the transaction between the trustee and the creditor; and
iii: the creditor has acted in good faith.
2: The creditor has a claim against the trustee that may be satisfied by the creditor being indemnified from the trust property as if the creditor were in the position of a trustee who has a right to be indemnified from the trust property.
3: The creditor has not acted in good faith for the purposes of subsection (1)(b)(iii)
4: For the purposes of subsection (1)(b)
a: is limited to the benefit received by the trust (together with interest calculated in accordance with Schedule 2
b: must be paid in priority over any payment to a beneficiary, unless the court orders otherwise; and
c: does not alter the priority of creditors who are entitled to claim from the trust property.
5: This section applies in respect of a former trustee who incurs an expense or a liability as a trustee acting on behalf of the trust.
87: Trustee’s lien on insurance money for premiums
1: This section applies if a trustee pays any premiums in respect of any insurance contract for trust property for which the trustee has not previously received reimbursement from the trust property.
2: The trustee has a lien on—
a: the insurance money for the amount of the premiums paid; and
b: interest on that amount calculated in accordance with Schedule 2 1956 No 61 s 34A
88: Trustee’s indemnity for rent, covenant, or agreement under lease
1: This section applies if a trustee is, for any reason, liable in relation to—
a: any rent, covenant, or agreement reserved by or contained in a lease; or
b: any indemnity given for any rent, covenant, or agreement mentioned in paragraph (a)
2: The trustee may assign the lease to a person entitled to call for an assignment of the lease if the trustee—
a: satisfies all liabilities under the lease that may have accrued, and been claimed, up to the date of the assignment; and
b: if necessary, sets apart a fund that is enough to pay any future claim that may be made in relation to a fixed and ascertained amount that the lessee agreed to expend on the leased property (even though the time for expending the amount may not yet have arrived).
3: If the trustee acts under subsection (2)
a: is not required to appropriate any further amount from the trust property to meet any future liability under the lease; and
b: may distribute the remaining trust property, other than any fund set apart under subsection (2)(b)
4: A trustee who acts under subsection (2) subsection (3)(b)
5: This section does not affect the right of the lessor, or a person deriving title under the lessor, to follow the trust property into the hands of the persons to whom it was distributed. 1956 No 61 s 34
89: Protection of trustee in handing over personal property to life tenant
1: If personal property is given by will to a person (including a child) for a life interest or another limited interest, the trustee may deliver the personal property to the person (or in the case of a child, to the child’s parent or guardian) on the terms and conditions that the trustee thinks fit.
2: However, before delivering the personal property to the person, the trustee must—
a: prepare an inventory of the property; and
b: ensure that the inventory is signed by the person and by the trustee; and
c: give the person a copy of the inventory and keep a copy.
3: On and after the delivery of the property, the trustee—
a: is not required to repair or insure the property; and
b: is not liable for any loss or destruction of the property or the failure of the person to repair or insure the property.
4: A copy of the inventory signed by the person and the trustee is a security interest for the purposes of the Personal Property Securities Act 1999 1956 No 61 s 39A
90: Protection of trustee in handing over personal property to child
1: A trustee may deliver to a child, or the child’s parent or guardian, any tangible personal property that is absolutely vested in the child.
2: The receipt of the child or parent or guardian is a good discharge to the trustee for the property. 1956 No 61 s 39B
91: Protection relating to notice when person trustee of more than 1 trust
1: This section applies to a trustee acting for more than 1 trust.
2: The trustee is not, unless the trustee is acting in bad faith, to be taken to have notice of a matter in relation to a trust only because notice of the matter is, or was, given to the trustee when acting for another trust.
3: In this section, matter 1956 No 61 s 36
5: Appointment and discharge of trustees
Power to remove or to appoint trustee
92: Who may remove trustee and appoint replacement
1: The following persons have the power to remove a trustee in writing under section 103
a: the person nominated in the terms of the trust as having the power to remove trustees:
b: if there is no person authorised under paragraph (a)
c: if there is no person authorised under paragraph (a) or (b)
i: a property manager appointed under the Protection of Personal and Property Rights Act 1988
ii: a person holding an enduring power of attorney over the property of a trustee who is mentally incapable:
iii: the liquidator of a corporate trustee that is in liquidation.
2: The following persons have the power to appoint a replacement trustee in writing:
a: in the case of an appointment to replace a retiring trustee,—
i: the person nominated in the terms of the trust as having the power to appoint trustees:
ii: if there is no person authorised under subparagraph (i)
iii: if there is no person authorised under subparagraph (i) or (ii)
b: in the case of an appointment to replace a trustee who has been removed,—
i: the person nominated in the terms of the trust as having the power to appoint trustees:
ii: if there is no person authorised under subparagraph (i) subsection (1)(b) or (c)
c: in the case of an appointment of a trustee to replace a trustee who dies while in office,—
i: the person nominated in the terms of the trust as having the power to appoint trustees:
ii: if there is no person authorised under subparagraph (i)
iii: if there is no person authorised under subparagraph (i) or (ii)
3: Subsection (4)
4: This section does not authorise the person to exercise a power to appoint or remove a trustee for any purpose or in any circumstances beyond those specified in the terms of the trust.
93: Person with power to remove or appoint trustee may apply to court for directions
1: A person with the power to remove or to appoint trustees may apply to the court for directions on the exercise of a power of removal or appointment.
2: The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.
94: Duty to exercise power to remove or appoint trustee honestly and for proper purpose
A person with the power to remove or to appoint trustees must exercise any power of removal or appointment—
a: honestly and in good faith; and
b: for a proper purpose.
95: Application to review exercise of power to remove or to appoint trustee
1: A beneficiary may apply to the court for the review of the exercise, by a person with the power to remove or to appoint trustees, of a power to remove or to appoint a trustee.
2: Sections 126 127 Appointment of trustee
96: Who may be appointed as trustee
1: Any person may be appointed as a trustee of a trust, unless the person is disqualified.
2: The following persons are disqualified from being appointed as a trustee:
a: a child:
b: an undischarged bankrupt:
c: a person who lacks the capacity to perform the functions of a trustee:
d: a body corporate that is subject to an insolvency event.
3: Despite subsection (2)(b)
4: For the purposes of subsection (2)(c) lacks the capacity to perform the functions of a trustee
a: is subject to an order appointing a manager under section 31
b: has a trustee corporation managing the person’s property under section 32 33
97: Statutory trustee may be sole trustee
1: A statutory trustee may be appointed and may lawfully act as the sole trustee of any trust, even if the terms of the trust provide for or require the appointment of 2 or more trustees.
2: This section does not permit the appointment of a body corporate as trustee if the terms of the trust forbid the appointment of the body corporate. 1956 No 61 s 48
98: How trustee is appointed
A trustee may be appointed—
a: by the settlor on the creation of the trust; or
b: by the person or persons nominated for the purpose of appointing new trustees in the terms of the trust in the manner specified in those terms; or
c: under section 113 114
99: How trustee accepts or rejects appointment
1: An appointment of a trustee does not take effect until the appointee accepts the appointment.
2: The acceptance of an appointment may be given expressly or may be implied through conduct unless there is a contrary intention in the terms of the trust.
3: The rejection of an appointment—
a: may be given expressly; or
b: will be implied if the appointee—
i: gives no express indication of acceptance or rejection of the appointment; and
ii: is inactive in relation to the trust for 90 days after the appointment.
100: Acts of trustee not invalidated by defect in appointment
The act of a trustee is not invalid by reason only of any defect in the appointment of the trustee. Retirement of trustee
101: How trustee retires
A trustee who expresses in writing a wish to retire may be discharged in writing—
a: by a person with the power to remove trustees; or
b: if there is no person authorised under paragraph (a)
c: if there is no person authorised under paragraph (a) or (b) or that person is unable or unwilling to act, and the trustee’s retirement will reduce the number of trustees below the minimum number of trustees required by the terms of the trust, by the retiring trustee and a replacement trustee (selected by the retiring trustee) together; or
d: if there is no person authorised under paragraph (a) or (b) Death of trustee
102: Devolution of powers on death of trustee
1: If a power or function is vested in or imposed on 2 or more trustees jointly and 1 or more of those trustees dies, the surviving trustees (if any) may exercise the power or perform the function until a replacement trustee (if any) is appointed.
2: If a sole trustee or the last surviving or continuing trustee dies, the personal representative of the trustee—
a: may exercise, for a reasonable period of time, any power or perform any function that was vested in, or capable of being exercised or performed by, that trustee; but
b: is not a trustee for the purposes of subsection (1) 1956 No 61 s 23 Removal of trustee
103: How trustee is removed
1: A person with the power to remove a trustee,—
a: under section 92(1)(a)
i: a power in the terms of the trust; or
ii: the power to remove a trustee on compulsory grounds under section 104 section 105
b: under section 92(1)(b) or (c) section 104 section 105
2: A person exercising a power to remove a trustee under the terms of the trust may exercise that power on the basis of any ground for the removal of a trustee that is stated in the terms of the trust.
3: The power to remove a trustee under section 104 105
4: If a ground for the removal of a trustee that is included in both the terms of the trust and—
a: section 104(1)
i: under the terms of the trust; or
ii: under section 104
b: section 105(1)
i: under the terms of the trust; or
ii: under section 105
5: Sections 106 to 111
a: apply only if the power to remove a trustee is exercised under section 104 105
b: if they do apply, prevail over any procedure in the terms of the trust.
104: Compulsory removal of trustee
1: A person with the power to remove trustees must act to remove a trustee if—
a: a trustee loses the capacity to perform the functions of a trustee; and
b: that trustee’s powers have not been delegated in a manner authorised by an enactment or by the terms of the trust.
2: For the purposes of subsection (1)(a) loses the capacity to perform the functions of a trustee
a: is subject to an order appointing a manager under section 31
b: has a trustee corporation managing the person’s property under section 32 33
105: Optional removal of trustee
1: A person with the power to remove trustees may act to remove a trustee if—
a: it is desirable for the proper execution of the trust; and
b: 1 or more of the following grounds for removal are met:
i: the trustee repeatedly refuses or fails to act as trustee:
ii: the trustee becomes an undischarged bankrupt:
iii: the trustee is a corporate trustee that is subject to an insolvency event:
iv: the trustee is no longer suitable to hold office as trustee because of the trustee’s conduct or circumstances.
2: For the purposes of subsection (1)(b)(iv)
a: the trustee is convicted of an offence involving dishonesty:
b: it is not known where the trustee is and the trustee cannot be contacted:
c: the trustee is prohibited from being a director or promoter of, or being concerned or taking part in the management of, a company under the Companies Act 1993
d: the trustee is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Financial Markets Conduct Act 2013 Takeovers Act 1993
106: Notice of decision to remove
1: A person who makes a decision under section 103
2: However, the person is not required to give notice of the decision if, despite the person’s reasonable efforts to locate and contact the trustee, it is not known where the trustee is and the trustee cannot be contacted.
107: Effect of notice
1: This subsection applies in relation to a person who is removed under section 103(1)
a: is subject to an order appointing a manager under section 31
b: has a trustee corporation managing the person’s property under section 32 33
2: If subsection (1)
a: is the document of removal for the purposes of section 116
b: is executed and takes effect when it is given under section 106(1)
3: In the case of a trustee who receives a notice under section 106(1) subsection (1)
a: is the document of removal for the purposes of section 116
b: is executed and takes effect—
i: 20 working days after the trustee receives the notice, if the trustee has not made an application under section 109
ii: only if and when ordered by the court, if the trustee has made an application under section 109
108: Removal where notice cannot be given
1: If the person who makes the decision to remove a trustee is not required to give notice of the decision because section 106(2)
a: the person’s decision; and
b: the efforts the person has made to locate and contact the trustee.
2: The declaration—
a: is the document of removal for the purposes of section 116
b: is executed and takes effect when it is made in accordance with section 9
109: Application to prevent removal
1: A trustee may (unless section 107(1)
2: The application must be made within 20 working days after the trustee receives notice of the decision to remove the trustee.
110: Procedure on trustee’s application to prevent removal
1: An applicant under section 109
2: If the court is satisfied that the applicant has established a genuine dispute, the onus is on the person who made the removal decision to establish that the decision was reasonably open to the person in the circumstances.
111: Court may make order preventing removal
The court may make an order preventing the removal of the trustee only if the court is satisfied that none of the grounds for removal specified in section 104 105
112: Court may make order for removal
Whenever it is necessary or desirable to remove a trustee and it is difficult or impracticable to do so without the assistance of the court, the court may make an order removing a trustee. Replacement of trustee
113: How trustee is replaced
1: If a trustee retires or is removed or dies while in office and it is necessary (because the trustee was a sole trustee or because the terms of the trust require it) to replace the trustee, a person with the power to appoint trustees must appoint a replacement trustee.
2: If a trustee retires or is removed or dies while in office and it is not necessary to replace the trustee (because the number of remaining trustees meets or exceeds the minimum number specified in the terms of the trust), a person with the power to appoint trustees may, but need not, appoint a replacement trustee.
3: The appointment of a trustee to replace a trustee who has been removed takes effect only when the removal takes effect under section 107(2) or (3) 108(2) 112
114: Court may appoint or replace trustee
1: Whenever it is necessary or desirable to appoint a new trustee and it is difficult or impracticable to do so without the assistance of the court, the court may make an order appointing a new trustee.
2: However, this section does not empower the court to appoint an executor or administrator.
3: If the court proposes to appoint Public Trust as the replacement trustee, the court must, before making the appointment, give Public Trust an opportunity to be heard on the matter.
4: If the court (except on application by a supervisor within the meaning of section 6(1)
a: must accept the appointment; and
b: may charge fees for acting as trustee. 1956 No 61 ss 46(4), (5) 51(1), (4)
115: Replacing sole trustee with multiple trustees
If a sole trustee retires or is removed or dies while in office, the trustee may be replaced with more than 1 replacement trustee unless there is a contrary intention in the terms of the trust. Divesting and vesting of trust property
116: Divesting and vesting of trust property on change of trustees
1: This section applies if—
a: a new trustee of a trust is appointed; or
b: a trustee of a trust retires or is removed.
2: The execution of the document of appointment, removal, or discharge—
a: divests the trust property from the persons who were the trustees immediately before the document was executed; and
b: vests the property in the persons who become and are the trustees as joint tenants without any conveyance, transfer, or assignment (but subject to any liabilities attaching to the property).
3: This section does not affect any lien to which a trustee may otherwise be entitled.
4: Subsection (2) section 117
5: In this section and in section 117
a: is a document of appointment, removal, or discharge (unless the court otherwise orders); and
b: is, for the purposes of section 89
117: Requirements to notify, register, or record divesting and vesting of trust property
1: If, or to the extent that, the divesting and vesting of trust property must be notified, registered, or recorded under the requirements of another Act,—
a: the divesting and vesting are subject to the requirements and do not take effect until the requirements are satisfied; and
b: the execution of the document of appointment, removal, or discharge vests in the persons who become and are the trustees a right to call for the transfer of the trust property; and
c: a copy of that document or those documents and a statutory declaration by a continuing or new trustee of the trust that each relevant document was validly executed are sufficient proof of a right claimed under paragraph (b)
2: Subsection (1)(c) subsection (1)(b)
118: Requirement to assist in transfer of trust property
1: The following persons must do all things necessary to assist in any transfer and any required notification, registration, or recording of the divesting and vesting of the trust property:
a: a trustee who has retired or been removed:
b: a continuing trustee of the trust:
c: a new trustee of the trust.
2: The persons who become and are the trustees may complete any formal requirements necessary for the divesting and vesting of trust property on behalf of a former trustee who loses the capacity to perform the functions of a trustee or who fails or refuses to act under subsection (1)
3: For the purposes of subsection (2) loses the capacity to perform the functions of a trustee
a: is subject to an order appointing a manager under section 31
b: has a trustee corporation managing the person’s property under section 32 33
119: Protection in relation to notifying, registering, or recording transfer of trust property
A person who, in good faith, notifies, registers, or records the transfer of property in reliance on section 116(5) 117(1)(c) or (2) 118(2)
120: Departing trustee must be given certain documents
1: A continuing or new trustee must give to a trustee who retires or is removed (the departing trustee
2: The documents must be given as soon as any requirements relating to the transfer, or notification, registration, or recording of the transfer, of trust property referred to in section 117
6: Termination and variation of trusts
121: Termination of trust by unanimous consent of beneficiaries
1: A trustee must terminate the trust and distribute the trust property on being required to do so by all of the beneficiaries who together hold all of the beneficial interest in the trust property if the conditions set out in subsection (2)
2: The conditions for the termination of the trust are that—
a: every beneficiary consents to requiring the trustee to terminate the trust and distribute the trust property; and
b: the trustee receives a request to terminate the trust and distribute the trust property from or on behalf of each beneficiary; and
c: if any of the beneficiaries is a beneficiary described in section 124(2) section 124
3: The condition in subsection (2)(b)
a: the beneficiaries provide a written request to the trustee to terminate the trust and distribute the trust property; and
b: the notice is signed by each beneficiary or by the duly authorised agent of that beneficiary.
122: Variation or resettlement of trust by unanimous consent of beneficiaries
1: A trustee may do either of the following on being required to do so by all of the beneficiaries who together hold all of the beneficial interest in the trust property, if the conditions set out in subsection (2)
a: vary the terms of the trust:
b: consent to the resettlement of the trust.
2: The conditions for an action in subsection (1)
a: every beneficiary consents to requiring the variation or resettlement; and
b: the trustee receives a request to vary the terms of the trust or resettle the trust from or on behalf of each beneficiary; and
c: if any of the beneficiaries is a beneficiary described in section 124(2) section 124
d: the trustee has agreed to the proposal.
3: In this section and in sections 124 125 variation
123: Beneficiary’s right to share of trust property
1: A trustee must transfer a fixed share of the trust property to the beneficiary of that fixed share if—
a: the beneficiary is absolutely entitled to that share (for example, because any condition relating to the vesting of that share set by the terms of the trust has been met); and
b: the property is in a form, or can be changed into a form, that can be transferred to the beneficiary; and
c: the transfer is not detrimental to the interests of the other beneficiaries.
2: Subsection (1)
3: In this section, fixed share of the trust property
124: Power of court to approve termination, variation, or resettlement of trust
1: The court may, on behalf of any of the beneficiaries described in subsection (2)
2: The beneficiaries are—
a: a beneficiary who lacks capacity:
b: a person who may acquire a beneficial interest at a future date or on the happening of a future event or on becoming a member of a certain class of persons:
c: a future person who may acquire a beneficial interest.
3: An application for an order of approval may be made by—
a: the trustees or any one of them:
b: any person with a beneficial interest in the trust property.
4: On an application for an order of approval, the court must take into account each of the following factors:
a: the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
b: the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
c: the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
5: The court must not make an order of approval if its effect would be to reduce or remove any vested interest in the trust property.
6: An order of approval binds the person on whose behalf it is made and takes effect without any further step.
125: Power of court to waive requirement of consent to termination, variation, or resettlement of trust
1: The court may waive the requirement that a beneficiary consent to the termination of a trust under section 121 section 122
2: An application for an order of waiver of consent may be made by—
a: the trustees or any one of them:
b: any person with a beneficial interest in the trust property.
3: On an application for an order of waiver of consent, the court must take into account each of the following factors:
a: the nature of any person’s interest in the trust property and the effect of the proposed order on that interest:
b: the benefit or detriment that may result to any person with an interest in the trust property if the court makes or refuses to make the proposed order:
c: the intentions of the settlor of the trust in settling the trust, if it is practicable to ascertain those intentions.
4: The court must not make an order of waiver of consent if its effect would be to reduce or remove any vested interest in the trust property.
5: An order of waiver of consent binds the person on whose behalf it is made and takes effect without any further step.
7: Court powers and dispute resolution
126: Court may review trustee's act, omission, or decision
1: The court may review the act, omission, or decision (including a proposed act, omission, or decision) of a trustee on the ground that the act, omission, or decision was not or is not reasonably open to the trustee in the circumstances.
2: The court may undertake a review on the application only of a beneficiary.
3: The review must be conducted in accordance with section 127
4: This section and section 127
a: the court’s jurisdiction to supervise trusts, including its jurisdiction under the Charitable Trusts Act 1957
b: the Attorney-General’s powers and duties with respect to charitable trusts, including powers and duties under the Charitable Trusts Act 1957
127: Procedure for court’s review of trustee’s act, omission, or decision
1: An applicant for a review under section 126
2: If the court is satisfied that the applicant has established a genuine and substantial dispute, the onus is on the trustee to establish that the act, omission, or decision was or is reasonably open to the trustee in the circumstances.
3: If the court is satisfied on the balance of probabilities that the act, omission, or decision was not or is not reasonably open to the trustee in the circumstances, the court may (but subject to subsection (4)
a: set aside the act or decision, or direct the trustee to act in the case of an omission:
b: restrain the trustee from acting or deciding in the case of a proposed act or decision, and direct the trustee to act in the case of a proposed omission:
c: make any other orders that the court considers necessary.
4: The court must not make an order that affects—
a: a valid distribution of the trust property that was made before the trustee had notice of the application; or
b: any right or title acquired by a person in good faith and for value.
128: Court may take into account investment strategy in action for breach of trust
In considering whether a trustee is liable, in respect of any investment made by that trustee, for any breach of trust in respect of any duty under section 30
a: whether the trust investments have been diversified, so far as is appropriate to the circumstances of the trust; and
b: whether the investment was made in accordance with any investment strategy. 1956 No 61 s 13M
129: Court may set off gains and losses arising from investment
1: This section applies to a proceeding for breach of trust in relation to an investment by a trustee if a loss has been or is suspected to have been incurred by the trust.
2: The court may set off all or part of the loss resulting from the investment against all or part of any gain resulting from any other investment whether in breach of trust or not.
3: The power does not limit or affect any other power or entitlement to set off all or part of any loss against any property. 1956 No 61 s 13Q
130: Power of court to vary or extend trustees’ powers in relation to property
1: The court may vary or extend the powers of the trustees of a trust if—
a: the court considers that the variation or extension is necessary or desirable for the proper management or administration of the trust property; and
b: the variation or extension does not alter a beneficiary’s interest under the trust; and
c: the variation or extension does not involve a power to distribute trust property to a beneficiary.
2: An application for an order may be made by—
a: a trustee of the trust; or
b: a beneficiary of the trust.
131: Court may relieve trustee from personal liability
1: The court may relieve a trustee who is or may be personally liable for any breach of trust from personal liability for the breach if it appears to the court that—
a: the trustee has acted honestly and reasonably; and
b: the trustee ought fairly to be excused for the breach of trust.
2: The court may relieve the trustee in whole or in part.
132: Court may make beneficiary indemnify trustee for breach of trust
1: This section applies if a trustee commits a breach of trust at the instigation or request or with the written consent of a beneficiary.
2: The court may, if it considers it appropriate, make an order indemnifying the trustee out of the beneficiary’s interest in the trust property. 1956 No 61 s 74
133: Trustee may apply to court for directions
1: A trustee may apply to the court for directions about—
a: the trust property; or
b: the exercise of any power or performance of any function by the trustee.
2: The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.
3: On an application under this section, the court may give any direction it thinks fit.
4: This section does not restrict the availability of alternative proceedings within the court’s jurisdiction, including a declaration interpreting the terms of the trust. 1956 No 61 s 66
134: Protection of trustee while acting under direction of court
1: A trustee acting under any direction of the court must be treated as having discharged the trustee’s duties as a trustee in relation to the direction, even though the order giving the direction is later declared invalid, overruled, set aside, or found to be otherwise ineffective.
2: However, subsection (1)
a: getting the direction; or
b: acquiescing in the court making the order or giving the direction. 1956 No 61 s 69
135: Trustee may apply to court to bar claims
1: The court may, on an application by a trustee,—
a: bar a claim by any person that directly or indirectly affects the trust property, including a claim against the trustee personally; or
b: authorise the trustee to administer the trust property without regard to the person’s claim.
2: Before making an application, a trustee must have served on the person, in accordance with the rules of court, a notice—
a: describing the general nature of the claim as the trustee understands it to be; and
b: stating that if a legal proceeding is not, within 90 days after the service of the notice, commenced to enforce the claim, a court may bar the claim or authorise the trustee to administer the trust property without regard to it.
3: The court may not make an order under this section barring—
a: a claim under the Family Protection Act 1955
b: an application for revocation of a grant of administration.
4: An order made by the court does not affect the right of any beneficiary of the trust to contest a claim by the trustee to any payment or indemnity from the trust property unless the beneficiary is a party to the proceeding. 1956 No 61 s 75
136: Trustee may apply to court to allow distribution of missing beneficiaries’ shares
1: The court may, on application by a trustee, make an order authorising the trustee to distribute trust property—
a: as if a potential beneficiary or a class of potential beneficiaries does not exist or never existed or has died before a date or an event specified; and
b: if, because of the order, it is not possible or practicable to determine whether any condition or requirement affecting a beneficial interest in the property or any part of it has been complied with or fulfilled, as if that condition or requirement had been or had not been complied with or fulfilled.
2: The court may make an order only if it is satisfied that—
a: reasonable measures have been taken to bring to the notice of the potential beneficiary or beneficiaries their potential beneficial interest or interests; and
b: at least 60 days have passed since the last of those measures was taken; and
c: no potential beneficiary with respect to whom an order is sought has come to the attention of the trustee as a result of those measures, or the claim of any such beneficiary may be disregarded in the circumstances. 1956 No 61 s 76
137: Trustee may sue self in different capacity
1: Despite any rule of law or practice to the contrary, a trustee in that capacity may sue, and be sued by, the trustee in any other capacity, including the trustee’s personal capacity.
2: However, in every such case the trustee must obtain the directions of the court in which the proceeding is taken about the way in which the opposing interests are to be represented. 1956 No 61 s 33A
138: Court may appoint receiver for trust
1: The court may, on an application by an interested person or on its own motion, appoint a receiver to administer a trust.
2: The court must be satisfied that the appointment of a receiver to administer the trust is—
a: reasonably necessary in the circumstances of the trust; and
b: just and equitable.
3: Only a person qualified to be a trustee may be appointed under subsection (1)
4: When appointing a receiver under this section, the court (having regard to the terms of the trust and the interests of justice) must determine—
a: the extent of the duties and powers of the receiver; and
b: the duration of the receivership; and
c: the principles that the receiver is to apply in determining priorities; and
d: whether the receiver is to be paid from the trust assets.
5: If a court determines under subsection (4)
139: Court may order payment of remuneration to trustee
1: Despite section 37
2: In determining under subsection (1)
a: the total amount that has already been paid to any trustee of the trust:
b: the number and difficulty of the services provided by the trustee:
c: the liabilities to which the trustee is or has been exposed, and the responsibilities imposed on the trustee:
d: the skill and success of the trustee in administering the trust:
e: the value of the trust property:
f: the time and services reasonably required of the trustee:
g: whether any payment that might otherwise have been allowed or ordered should be refused or reduced due to the conduct of the trustee in the administration of the trust:
h: any other circumstances that the court considers relevant.
3: If there are 2 or more persons who are or have been trustees, an order may specify whether and how the commission is to be apportioned among the trustees. 1956 No 61 s 72
140: Court may charge costs on trust property
The court may order that the costs of an application to the court under this Act—
a: be paid or raised out of—
i: the trust property to which the application relates; or
ii: the income of the trust property to which the application relates; or
b: be borne and paid in the way and by the persons that the court considers just. 1956 No 61 s 71 Jurisdiction of Family Court
141: Jurisdiction of Family Court
1: This section applies where the Family Court has jurisdiction under section 11
2: The Family Court may during the proceeding make any order or give any direction available under this Act if the Family Court considers the order or direction is necessary—
a: to protect or preserve any property or interest until the proceeding before the Family Court can be properly resolved; or
b: to give proper effect to any determination of the proceeding.
3: If the parties to the proceeding consent, the Family Court may make any order available under this Act to resolve an issue or a dispute between the parties that is closely related to the proceeding (but only if the Family Court considers that making the order is necessary or desirable to assist the resolution of the proceeding).
4: Despite subsections (2) and (3) section 138
5: To avoid doubt, an exercise by the Family Court of jurisdiction under this section is not subject to financial limits in relation to the value of any property or interest.
6: In any case to which this section applies, the High Court or Family Court may order, on the application of a party to the proceedings, that the proceedings be transferred to the High Court. Alternative dispute resolution
142: Definitions for purposes of sections 143 to 148
In sections 143 to 148 ADR process ADR settlement
a: means an enforceable agreement reached through an ADR process that resolves the matter; but
b: does not include an arbitral award arbitral award section 2(1) arbitration agreement section 2(1) external matter internal matter matter
a: means—
i: a legal proceeding brought by or against a trustee in relation to the trust; or
ii: a dispute in relation to the trust between a trustee and a beneficiary, or between a trustee and a third party, or between 2 or more trustees, that may give rise to a legal proceeding; but
b: does not include a legal proceeding or a dispute about the validity of all or part of a trust. 1991 No 69 s 268(4)
143: Power of trustee to refer matter to alternative dispute resolution process
1: This section applies if there is no provision in the terms of a trust that requires or empowers a trustee to refer a matter to an ADR process.
2: A trustee may, with the agreement of each party to the matter, refer the matter to an ADR process.
3: For the purposes of this section, a beneficiary is not a party to an external matter.
144: ADR process for internal matter if trust has beneficiaries who are unascertained or lack capacity
1: If a trust has any beneficiaries who are unascertained or lack capacity, then, for a matter relating to that trust that is subject to an ADR process,—
a: the court must appoint representatives for those beneficiaries; and
b: those representatives may agree to an ADR settlement, or agree to be bound by an arbitration agreement and any arbitral award under that agreement, on behalf of the beneficiaries who are unascertained or lack capacity; and
c: any ADR settlement must be approved by the court.
2: If representatives have been appointed under subsection (1)
a: the representatives must act in the best interests of the beneficiaries on whose behalf they have been appointed; and
b: the court may order that a representative’s costs be paid out of the trust property; and
c: the court may make any order that it thinks fit regarding the terms of a representative’s appointment.
3: This section applies only to internal matters.
145: Power of court to order ADR process for internal matter
1: The court may, at the request of a trustee or a beneficiary or on its own motion,—
a: enforce any provision in the terms of a trust that requires a matter to be subject to an ADR process; or
b: otherwise submit any matter to an ADR process (except if the terms of the trust indicate a contrary intention).
2: In exercising the power, the court may make any of the following orders:
a: an order requiring each party to the matter, or specified parties, to participate in the ADR process in person or by a representative:
b: an order that the costs of the ADR process, or a specified portion of those costs, be paid out of the trust property:
c: an order appointing a particular person to act as a mediator, an arbitrator, or any other facilitator of the ADR process.
3: This section applies in relation to internal matters only.
146: Trustee may give undertakings for purposes of ADR settlement or arbitration agreement and any arbitral award
Despite section 33
147: Trustee’s liability in relation to ADR settlement or arbitration agreement and any arbitral award limited
1: This section applies to a proceeding brought by or on behalf of a beneficiary and arising from or relating to an ADR settlement or arbitration agreement and any arbitral award under that agreement.
2: An ADR settlement or arbitration agreement and any arbitral award under that agreement is valid and a trustee is not liable in the proceeding unless, in relation to the settlement, agreement, or award, the trustee failed to comply with—
a: the trustee’s mandatory duty under section 25
b: any duty specified in the terms of the trust for the purposes of establishing liability under this section.
3: Despite subsection (2)(a)
148: Application of Arbitration Act 1996
If arbitration is the ADR process to which a matter is referred under this Act or under the terms of the trust, the Arbitration Act 1996
8: Miscellaneous provisions
Transfer to the Crown
149: Transfer to the Crown of non-distributable trust property
1: A trustee who is administering trust property that the trustee is not able to distribute in accordance with the terms of the trust may transfer the trust property to the Crown if the trust property consists of money or of financial products that can legally be transferred to the Crown.
2: The trustee must provide to the Secretary to the Treasury all the information that the Secretary reasonably considers necessary to allow the Secretary to know—
a: the terms of the trust; and
b: the persons having a beneficial interest in the trust property; and
c: the state of the trust accounts with respect to the trust property being transferred; and
d: the measures taken by the trustee to attempt to distribute the trust property and the reasons why it was not possible to do so.
3: The Secretary to the Treasury may refuse a transfer if the required information has not been provided by the trustee.
4: The Secretary to the Treasury may, before accepting a transfer, require the trustee to sell, or convert into money, any trust property that consists of financial products.
5: A trustee is discharged from any further responsibility with regard to trust property transferred to the Crown under this section. 1956 No 61 s 77
150: Financial products transferred to the Crown
1: The Secretary to the Treasury may at any time sell, or convert into money, any financial products transferred to the Crown under section 149
2: All proceeds of any financial products transferred to the Crown under section 149 section 149(4) subsection (1)
151: Administration by the Crown of transferred property
1: The Secretary to the Treasury must hold trust money transferred to the Crown under section 149 section 67
2: The Secretary to the Treasury must deal with trust property transferred to the Crown under section 149
a: if the court makes an order in relation to the transferred property, in accordance with the order:
b: if any person claims that the person is the beneficiary entitled to any part of the transferred property and the Secretary is satisfied that the person is so entitled, in accordance with the directions of that person:
c: if the trustee requests that the transferred property be returned to the trustee, in accordance with the request.
3: The Secretary to the Treasury is not liable for any interest on the transferred property that is trust money and may deduct from any payment made under subsection (2)
4: After the expiry of a period of 6 years after the date on which the transferred property was transferred to the Crown, the Secretary to the Treasury may transfer the trust property that consists of trust money to a Crown Bank Account.
5: Any trust money that is transferred to a Crown Bank Account under subsection (4) subsection (2)
6: The Crown is not subject to the duties or liabilities of a trustee in respect of any transferred property, and no claim lies against the Crown or the Secretary to the Treasury if a payment was made under subsection (2) 1956 No 61 s 78
152: Public notice of property transferred to the Crown
1: The Secretary to the Treasury must arrange, before 31 March in each year, for a notice to be published on an Internet site maintained by or on behalf of the Treasury setting out all property transferred to the Crown under section 149
2: The Secretary must ensure that the notice remains available on the Internet site for inspection by members of the public for at least 3 years. Investigation of condition and accounts of certain trust property
153: Application to Public Trust for investigation of condition and accounts of trust property
1: A trustee or a beneficiary of a trust may apply to Public Trust for the conduct of an investigation of the condition and accounts of the trust property (unless the trustee is a trustee corporation).
2: However, Public Trust must not proceed with the application if—
a: an investigation of the trust property under this Part has been concluded in the previous 12 months (unless the applicant has been given the leave of the court to make the application); or
b: the court has ordered that an investigation must not proceed.
3: Before proceeding with the application, Public Trust may require the applicant to pay a deposit or give security for the costs of the investigation (including Public Trust’s charges). 1956 No 61 s 83B(1)
154: Appointment of investigator by Public Trust
1: When proceeding with an application under section 153 investigator subsection (2)
a: either—
i: a lawyer; or
ii: a qualified statutory accountant (within the meaning of section 5(1)
b: not a beneficiary of the trust.
2: The investigator may be appointed—
a: by agreement between—
i: the applicant trustee, the co-trustees, and Public Trust; or
ii: the applicant beneficiary, the trustees, and Public Trust; or
b: if no agreement can be reached, by Public Trust. 1956 No 61 s 83B(1), (1A)
155: How investigator is to conduct and report on investigation
1: The investigator appointed under section 154
2: When the investigation is complete, the investigator must forward to the applicant, and to each trustee, and to Public Trust, a report signed by the investigator showing the state of affairs of the trust property. 1956 No 61 s 83B(2), (3), (4)
156: Costs of investigation borne by trustees
1: Unless the court makes an order under section 157
2: All expenses and costs for which the trustees of the trust are liable under this section or section 157 1956 No 61 s 83B(6), (11)
157: Application to court to determine who bears costs of investigation
Public Trust, a trustee, or a beneficiary may apply to the court for an order for directions on how the remuneration of the investigator and the other expenses of the investigation (including Public Trust’s charges) should be apportioned between the trustees (as a charge on the trust property), 1 or more trustees in a personal capacity, and 1 or more beneficiaries.
158: Application to court to cease investigation
At any time after an application for an investigation is made and before the end of an investigation, a trustee or a beneficiary may apply to the court for an order directing that the investigation must not proceed. Life tenant to have powers of trustee in certain cases
159: Life tenant to have powers of trustee in certain cases
1: This section applies in relation to land if—
a: there is no trustee of the land; but
b: the land is vested in a person (the life tenant
i: a life estate; or
ii: another limited estate.
2: The life tenant may (subject to subsection (4)
3: Anything done by the life tenant in exercise of that power has the same force and effect as if it had been exercised by a trustee.
4: However, this section does not authorise the life tenant to sell the land or to raise money by a mortgage or other dealing with the land, unless the money paid on the sale or raised by the mortgage or other dealing is paid to a trustee who is duly appointed and entitled to receive it. 1956 No 61 s 88 Transitional regulations
160: Regulations providing for transitional matters
1: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations—
a: providing transitional and savings provisions concerning the coming into force of this Act that may be in addition to, or in place of, the transitional and savings provisions in Schedule 1
b: providing that, subject to any conditions specified in the regulations, during a specified transitional period,—
i: specified provisions of this Act (including definitions) do not apply:
ii: specified terms have the meaning given to them by the regulations:
iii: specified provisions repealed or amended or revoked by this Act continue to apply:
c: providing for any other matters necessary for facilitating or ensuring an orderly transition from the provisions of any enactments replaced by this Act to the provisions of this Act.
2: No regulations under this section may be made, or continue in force, later than 3 years after the date of commencement of this section.
3: Regulations under this section are secondary legislation ( see Part 3 2015 No 70 s 216 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 160(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021 Consequential amendments and repeals
161: Consequential amendments
Amend the enactments specified in Schedule 4 Schedule 5 2021-01-30 Administration Act 1969 Affiliate Te Arawa Iwi and Hapu Claims Settlement Act 2008 Anglican (Diocese of Christchurch) Church Property Trust Act 2003 Anglican Church Trusts Act 1981 Anti-Money Laundering and Countering Financing of Terrorism Act 2009 ANZ Banking Group (New Zealand) Act 1979 Bank of New Zealand Act 1988 Burial and Cremation Act 1964 Cadastral Survey Act 2002 Canterbury Museum Trust Board Act 1993 Care of Children Act 2004 Charitable Trusts Act 1957 Christchurch District Drainage Act 1951 Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010 Community Trusts Act 1999 Companies Act 1993 Construction Contracts Act 2002 Contract and Commercial Law Act 2017 Deaths by Accidents Compensation Act 1952 District Court Rules 2014 Eastwoodhill Trust Act 1975 Education Act 1989 Energy Companies Act 1992 Financial Markets Conduct Act 2013 Friendly Societies and Credit Unions Act 1982 Gambling Act 2003 Heretaunga Tamatea Claims Settlement Act 2018 High Court Rules 2016 Hineuru Claims Settlement Act 2016 Hutt Valley Drainage Act 1967 Income Tax Act 2007 Insolvency Act 2006 Insurance Intermediaries Act 1994 Iwi and Hapū of Te Rohe o Te Wairoa Claims Settlement Act 2018 Kirkpatrick Masonic Trust Empowering Act 1998 KiwiSaver Act 2006 Law Reform (Testamentary Promises) Act 1949 Life Insurance Act 1908 Limitation Act 2010 Local Legislation Act 1971 Maori Fisheries Act 2004 Māori Land Court Fees Regulations 2013 Māori Purposes (Wi Pere Trust) Act 1991 Maori Trust Boards Act 1955 Māori Trustee Act 1953 Maraeroa A and B Blocks Claims Settlement Act 2012 Marlborough Agricultural and Pastoral Association Empowering Act 1974 Masterton Borough Council Staff Retiring Fund Act 1962 Masterton District Council (Montfort Trimble Foundation) Act 2003 Masterton Trust Lands Act 2003 Mauao Historic Reserve Vesting Act 2008 Maungaharuru-Tangitū Hapū Claims Settlement Act 2014 Medical Assurance Society Members' Trust (Exemption from Perpetuities) Act 1997 Methodist Charitable and Educational Trusts Act 1911 Mining Tenures Registration Act 1962 Motor Vehicle Sales Act 2003 Music Teachers Act 1981 National Provident Fund Restructuring Act 1990 New Zealand Horticulture Export Authority Act 1987 New Zealand Maori Arts and Crafts Institute Act 1963 New Zealand Railways Staff Welfare Society Dissolution Act 1999 Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act 2014 Nga Wai o Maniapoto (Waipa River) Act 2012 Ngaa Rauru Kiitahi Claims Settlement Act 2005 Ngāi Tahu Claims Settlement Act 1998 Ngāi Tai ki Tāmaki Claims Settlement Act 2018 Ngai Tāmanuhiri Claims Settlement Act 2012 NgāiTakoto Claims Settlement Act 2015 Ngāruahine Claims Settlement Act 2016 Ngāti Apa (North Island) Claims Settlement Act 2010 Ngāti Apa ki te Rā Tō, Ngāti Kuia, and Rangitāne o Wairau Claims Settlement Act 2014 Ngāti Awa Claims Settlement Act 2005 Ngāti Hauā Claims Settlement Act 2014 Ngāti Kōata, Ngāti Rārua, Ngāti Tama ki Te Tau Ihu, and Te Ātiawa o Te Waka-a-Māui Claims Settlement Act 2014 Ngāti Koroki Kahukura Claims Settlement Act 2014 Ngāti Kuri Claims Settlement Act 2015 Ngāti Mākino Claims Settlement Act 2012 Ngāti Manawa Claims Settlement Act 2012 Ngāti Manuhiri Claims Settlement Act 2012 Ngāti Mutunga Claims Settlement Act 2006 Ngāti Pāhauwera Treaty Claims Settlement Act 2012 Ngati Porou Claims Settlement Act 2012 Ngāti Pūkenga Claims Settlement Act 2017 Ngāti Rangiteaorere Claims Settlement Act 2014 Ngāti Rangiwewehi Claims Settlement Act 2014 Ngati Ruanui Claims Settlement Act 2003 Ngati Tama Claims Settlement Act 2003 Ngāti Tamaoho Claims Settlement Act 2018 Ngati Toa Rangatira Claims Settlement Act 2014 Ngāti Tūrangitukua Claims Settlement Act 1999 Ngāti Tuwharetoa (Bay of Plenty) Claims Settlement Act 2005 Ngati Tuwharetoa, Raukawa, and Te Arawa River Iwi Waikato River Act 2010 Ngāti Whare Claims Settlement Act 2012 Ngāti Whātua o Kaipara Claims Settlement Act 2013 Ngāti Whātua Ōrākei Claims Settlement Act 2012 Ngatikahu ki Whangaroa Claims Settlement Act 2017 Official Information Act 1982 Ombudsmen Act 1975 Otago Museum Trust Board Act 1996 Otago Regional Council (Kuriwao Endowment Lands) Act 1994 Otaki and Porirua Trusts Act 1943 Pacific Education Foundation Act 1972 Patriotic and Canteen Funds Act 1947 Plumbers, Gasfitters, and Drainlayers Act 2006 Port Nicholson Block (Taranaki Whānui ki Te Upoko o Te Ika) Claims Settlement Act 2009 Pouakani Claims Settlement Act 2000 Property Law Act 2007 Protection of Personal and Property Rights (Enduring Powers of Attorney Forms and Prescribed Information) Regulations 2008 Protection of Personal and Property Rights Act 1988 Public Trust Act 2001 Queen Elizabeth the Second National Trust Act 1977 Racing Act 2003 Rangitāne o Manawatu Claims Settlement Act 2016 Rangitāne Tū Mai Rā (Wairarapa Tamaki nui-ā-Rua) Claims Settlement Act 2017 Raukawa Claims Settlement Act 2014 Roman Catholic Bishops Empowering Act 1997 Rongowhakaata Claims Settlement Act 2012 Rotorua High Schools Board Empowering Act 1979 Sale and Supply of Alcohol Act 2012 Soil Conservation and Rivers Control Act 1941 St Peter’s School Board Trust Act 1985 Tapuika Claims Settlement Act 2014 Taranaki Iwi Claims Settlement Act 2016 Taranaki Scholarships Trust Board Act 1957 Te Arawa Lakes Settlement Act 2006 Te Atiawa Claims Settlement Act 2016 Te Aupouri Claims Settlement Act 2015 Te Awa Tupua (Whanganui River Claims Settlement) Act 2017 Te Kawerau ā Maki Claims Settlement Act 2015 Te Rarawa Claims Settlement Act 2015 Te Roroa Claims Settlement Act 2008 Te Runanga o Ngai Tahu Act 1996 Te Runanga o Ngati Awa Act 2005 Te Ture Whenua Maori Act 1993 Te Uri o Hau Claims Settlement Act 2002 Te Whanau-a-Taupara Trust Empowering Act 2003 Thomas Cawthron Trust Act 1924 Timaru Borough Drainage, Sewerage, and Loans Act 1905 Trust Estates Audit Regulations 1958 Trustee Companies Act 1967 Trustee Companies Management Act 1975 Tūhoe Claims Settlement Act 2014 Veterans’ Support Act 2014 Waikato Raupatu Claims Settlement Act 1995 Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 Waitaha Claims Settlement Act 2013 Wellington Methodist Charitable and Educational Trusts Act 1916 Wellington Regional Water Board Act 1972 Westpac Banking Corporation Act 1982 Whakarewarewa and Roto-a-Tamaheke Vesting Act 2009 Wheat Industry Research Levies Act 1989 Winston Churchill Memorial Trust Act 1965
162: Repeals
The following enactments are repealed:
a: the Trustee Act 1956
b: the Perpetuities Act 1964
c: the Trustee (Prescribed Rate of Interest) Order 2011 2021-01-30 Trustee Act 1956 Perpetuities Act 1964 Trustee (Prescribed Rate of Interest) Order 2011
9: Amendments to other Acts
1: Amendments to Arbitration Act 1996
163: Amendments to Arbitration Act 1996
This subpart amends the Arbitration Act 1996 2021-01-30 Arbitration Act 1996
164: New section 10A inserted (Arbitration of trust matters)
After section 10
10A: Arbitration of trust matters
1: If an arbitration relates to a trust matter, sections 142 to 148
2: In this section, trust matter section 142
2: Amendments to Financial Markets Conduct Act 2013
165: Amendments to Financial Markets Conduct Act 2013
This subpart amends the Financial Markets Conduct Act 2013 2021-01-30 Financial Markets Conduct Act 2013
166: New section 110A and cross-heading inserted
After section 110 Application of Trusts Act 2019
110A: Application of Trusts Act 2019
1: This section applies to a trust constituted (or to be constituted) under a trust deed for a debt security if the trust deed—
a: has been lodged under section 103; or
b: has been or will be entered into with the intention that the deed will be lodged under section 103.
2: The following provisions of the Trusts Act 2019 do not apply to a trust referred to in subsection (1)
a: section 25
b: section 29
c: section 39
d: sections 40 to 42
e: section 43
f: section 44
g: sections 45 to 48
h: sections 49 to 55
i: section 56
j: sections 67 to 73
k: sections 74 to 76
l: sections 81(2) and (3) and 82 to 85
m: sections 92 to 115
n: sections 121 to 123
o: sections 142 to 148
p: sections 153 to 158
167: Section 112 amended (General duties applying in exercise of supervisor’s functions)
In section 112(1)(a) honestly and in good faith
168: Section 143 amended (General duties applying in exercise of manager’s functions)
In section 143(1)(a) honestly and in good faith
169: Section 153 amended (General duties applying in exercise of supervisor’s functions)
In section 153(1)(a) honestly and in good faith
170: New section 155A and cross-heading inserted
After section 155 Application of Trusts Act 2019
155A: Application of Trusts Act 2019
1: This section applies to a managed investment scheme constituted (or to be constituted) as 1 or more trusts or as including 1 or more trusts (or both) if the scheme—
a: has been registered under this subpart; or
b: has been or will be constituted as 1 or more trusts or as including 1 or more trusts (or both) with the intention that the scheme will be registered under this subpart.
2: The following provisions of the Trusts Act 2019 do not apply to any relevant trust:
a: section 25
b: section 29
c: section 30
d: section 35
e: section 38
f: section 39
g: sections 40 to 42
h: section 43
i: section 44
j: sections 45 to 48
k: sections 49 to 55
l: section 56
m: sections 60 and 61
n: sections 67 to 73
o: sections 74 to 76
p: sections 81(2) and (3) and 82 to 85
q: sections 92 to 115
r: sections 121 to 123
s: sections 142 to 148
t: sections 153 to 158
3: In this section, relevant trust subsection (1)
4: Despite section 16(1)
171: Section 548 amended (Other regulations)
1: After section 548(1)(h) Trusts Act 2019 disapplied
ha: providing that specified provisions of the Trusts Act 2019 do not apply to a trust, or a class of trusts,—
i: that is or will be regulated by or under this Act:
ii: that would be regulated by or under this Act except for the fact that an exclusion under Schedule 1 applies:
2: In section 548(2) and (h) (h), and (ha)
172: Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
1: In section 550(1)(d) regulations regulations; and
2: After section 550(1)(d)
e: subsection (2)(h)
3: After section 550(2)(g)
h: section 548(1)(ha)
173: Section 556 amended (FMA may grant exemptions)
After section 556(3)
3A: The FMA may, on the terms and conditions (if any) that it thinks fit, exempt any trust or class of trusts (or any person or class of persons in respect of a trust or class of trusts) from any provision or provisions of the Trusts Act 2019 if—
a: the trust or that class of trusts is constituted (or is to be constituted) under a trust deed or trust deeds that would be required to be lodged under section 103 except for the fact that the FMA has granted or will grant an exemption from that requirement under subsection (1); or
b: both of the following apply:
i: a managed investment scheme is constituted (or is to be constituted) as 1 or more trusts or as including 1 or more trusts (or both):
ii: the scheme would be required to be registered under subpart 2 of Part 4 except for the fact that the FMA has granted or will grant an exemption from that requirement under subsection (1).
174: Section 557 amended (Restriction on FMA’s exemption power)
In section 557
2: In the case of section 556(3A)
175: Schedule 3 amended
In Schedule 3, after clause 7
8: Application of Trusts Act 2019
Section 14
a: an approved Schedule 3 scheme; or
b: a scheme that has been or will be constituted with the intention that the scheme will be approved as a Schedule 3 scheme.
3: Amendments to Financial Advisers Act 2008
176: Amendments to Financial Advisers Act 2008
1: This subpart amends the Financial Advisers Act 2008
2: However, if the Financial Advisers Act 2008 section 2(1) 2021-01-30 Financial Advisers Act 2008
177: New section 77TA and cross-heading inserted
After section 77T Application of Trusts Act 2019
77TA: Application of Trusts Act 2019
1: This section applies to a trust constituted (or to be constituted) for the purposes of section 77P.
2: The following provisions of the Trusts Act 2019 do not apply to a trust referred to in subsection (1)
a: section 29
b: section 39
c: sections 45 to 48
d: sections 49 to 55
e: section 56
f: section 72
g: sections 81 to 85
h: sections 142 to 148
i: sections 153 to 158
178: Section 154 amended (General regulations)
1: After section 154(1)(l)
la: providing that specified provisions of the Trusts Act 2019 do not apply to a trust, or class of trusts, that are or will be regulated by or under this Act:
2: After section 154(5)
5A: The Minister must not recommend the making of regulations under subsection (1)(la)
a: the regulations are consistent with the purposes of this Act; and
b: the extent to which the Trusts Act 2019 is disapplied is not broader than is reasonably necessary to address the matters that gave rise to the regulations.
4: Amendment to Financial Markets Authority Act 2011
179: Amendment to Financial Markets Authority Act 2011
This subpart amends the Financial Markets Authority Act 2011 2021-01-30 Financial Markets Authority Act 2011
180: Schedule 1 amended
In Schedule 1 Trusts Act 2019
5: Amendments to Financial Services Legislation Amendment Act 2019
181: Amendments to Financial Services Legislation Amendment Act 2019
This subpart amends the Financial Services Legislation Amendment Act 2019 2019-07-31 Financial Services Legislation Amendment Act 2019
182: Section 29 amended (New subparts 5A and 5B of Part 6 inserted)
In section 29 Application of Trusts Act 2019
431ZJ: Application of Trusts Act 2019
1: This section applies to a trust constituted (or to be constituted) for the purposes of section 431ZC.
2: The following provisions of the Trusts Act 2019 do not apply to a trust referred to in subsection (1)
a: section 29
b: section 39
c: sections 45 to 48
d: sections 49 to 55
e: section 56
f: section 72
g: sections 81 to 85
h: sections 142 to 148
i: sections 153 to 158
3: If this section commences before the commencement of the Trusts Act 2019 under section 2(1)
6: Amendment to Retirement Villages Act 2003
183: Amendment to Retirement Villages Act 2003
This subpart amends the Retirement Villages Act 2003 2021-01-30 Retirement Villages Act 2003
184: New section 105A inserted (Regulations exempting from provisions of Trusts Act 2019)
After section 105
105A: Regulations exempting from provisions of Trusts Act 2019
1: The Governor-General may, by Order in Council, make regulations exempting any trust, trustee, statutory supervisor, operator, or other person, or any class of trust or person, from the application of any provision or provisions of the Trusts Act 2019 and prescribing the terms and conditions (if any) of the exemption.
2: Regulations may only be made under this section on the recommendation of the Minister, and the Minister may make a recommendation only if satisfied that—
a: the application of the provision or provisions of the Trusts Act 2019 would, in the circumstances, be unnecessary in respect of the trust or class of trust, or would require the trustee, statutory supervisor, operator, or other person or class of person to comply with requirements that were unduly onerous or burdensome; and
b: having regard to the purpose and principles of the Trusts Act 2019 and the purpose of this Act, the extent to which the application of the provisions of the Trusts Act 2019 is disapplied is not broader than is reasonably necessary to address the matters that gave rise to the regulations.