Appointing new Trustees to (or Removing Trustees of) a Trust

General principles This article appears in a section of this website devoted to societies and charities, but the principles discussed apply to all trusts, whether or not they are charitable. The Court of Appeal decision in New Zealand Māori Council v Foulkes [2015] NZCA 552 discussed below related to the removal and appointment of trustees to the Crown Forestry Rental Trust, but the principles set out in the Judgment are of universal application to trustee appointments and removals. As the Judgment noted (paragraph [2]), “Sadly, what lies beneath these questions is a divisive and expensive dispute between representatives of the New Zealand Māori Council (the NZMC) and the Federation of Māori Authorities (FOMA), the two bodies jointly responsible for appointing Māori trustees under the Crown Forestry Rental Trust (the CRFT or the Trust).”  To resolve the dispute NZMC and FOMA agreed to form a body to exercise their joint power of appointment, but the agreement did not last long and was also held to be unlawful. How Power to Appoint or Remove Trustees of a Trust should be Exercised The Court of Appeal decision noted that “Any decision about appointing or removing trustees must always be made on a measured evaluation by reference to the deed, consistent with the fiduciary nature of the power, and not for any collateral purpose” (paragraph [27]).  Ironically, the “collateral purpose” was a delegation to the body formed to resolve disputes between NZMC and FOMA. The Court had earlier said that “… the power to appoint new trustees is of a fiduciary nature because the subject matter of the power is the office of...