A trustee who recently voted and participated in a resolution relating to a joint venture to establish a geothermal plant was found by the Supreme Court (SC) to have had a possible conflict of interest.

The SC found that the trustee was a beneficiary and trustee of another trust who was a party to the agreement and therefore had something to gain from the transaction.

The SC referred the case back to the Māori Land Court to consider the consequences of the breach which could include a rescission of the joint venture arrangements regarding the establishment of the proposed geothermal power station.

In order to avoid this scenario it is important that trustees have a process to deal with conflicts of interests. This includes a clear process for disclosing possible conflicts of interests and ensuring that conflicted trustees do not participate in any discussion or voting on matters in which they have a conflict.