Trustees can be removed if they breach their responsibilities to the Trust.

This can include:

  1. Benefiting personally from their actions as trustees.
  2. Failing to get authority from the Trust before entering into commercial ventures.
  3. Failing to protect the Trust eg by getting legal advice.
  4. Failing to follow proper processes eg not having the required quorum for decisions and not having the required support for resolutions.

In a recent case the Māori Land Court has removed two Trustees after their conduct over a number of years consistently breached their responsibilities to an Ahu Whenua Trust.

In removing the two trustees the Court noted that their actions demonstrated a lack of understanding of their responsibilities and obligations as trustees. This included in relation to the processes to approve activities on behalf of the Trust, and also trustee obligations to avoid conflicts of interests and to not benefit personally.

In particular, the Court found that:

  • One of the Trustees had benefitted personally by grazing sheep on the Trust’s land for free;
  • The two Trustees had failed to get authority from the Trust before entering a joint venture with a third party to operate a commercial venture;
  • The two Trustees had failed to take steps to protect the Trust through the obtaining of legal advice;
  • The processes to set up a charitable trust to undertake conservation work were not followed.  In particular the required quorum and level of support for the resolution was not achieved.

The Court is still to make a decision on whether the remaining Trustees of the Trust should be removed.

When administering an Ahu Whenua Trust, it is important that Trustees understand and comply with their responsibilities and obligations to ensure they avoid the situation incurred in this case.  

If there are uncertainties about your responsibilities as a Trustee, it is wise to consult with a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.