Trustees of Māori land must adhere rigidly to the terms of trust

The Māori Land Court has found that the most fundamental duty of a trustee is to adhere rigidly to the terms of trust.

In a recent case the Court found that, although the trustees were acting upon resolutions passed by beneficiaries at meetings of owners, the two payments made by the trust totaling $40k to a third party in support of treaty negotiations did not come within the objects as set out in the trust order.

While the Court expressed some sympathy for the trustees’ position and their attempts to seek a decision from the owners, the Court found that the trustees must comply with their duties and trust order.

In this case the proper course of action would have been for the trustees to seek the directions of the Court which would have included a direction to vary the trust order objects to permit such payment(s) following a general meeting of owners.

The decision as to whether the trustees will be required to repay the funds and/or be removed as trustees has been deferred to await the outcome of a Court directed meeting of owners to discuss variation to their current trust order objects.

The trustees could have avoided this situation by securing a variation to the trust order from the Māori Land Court prior to the payments being made.