Yes, but not the sole trustee and sole beneficiary.

 E.g. A could hold property on trust for A and B. However if B assigns his beneficial interest to A, then as the sole holder of the legal and benficial title, the trust would cease. (NB: it is called a merger of beneficial interest)

Limitation on the number of Trustees 

General rule - No more than 4 trustees 

NB: limitation does not apply to - 

(a) charitable purpose trusts

(b) trusts with Minister's approval for more members

(a) if misappropriation of trust ppty, it would reuire collaboration of both trustees therefore less likely 

(b) trust ppty generally vested in trustees as JTs, so legal title automatically vests in the other trustee if one dies

s12 Power of Appointing New Trustees 

Where a trustee, whether original or substituted, and whether appointed by the Ct or otherwise - is (a) dead; (b) remains out of the State for over a yr w/out having delegated execution of trust; (c) seeks to be discharged, (d) refused to act therein, (e) is unfit to act therein, (f) in incapable of acting therein, (g) is an infant; (h) being a corporation, has ceased to carry on business, is under official management, is in liquidation or has been dissolved...  

A new person may be appointed IN WRITING to be a trustee by - (1) THE APPOINTER; (2) the surviving or continuint trustee(s) or (3) the personal rep (ie. EXECUTOR) of last surviving or continuing trustee

s15 Trusts Act Vesting of Trust Property

Where a new trustee is appt'ed the instrument of appt'ment VESTS, subject to the provisions of any other act, the trust ppty in the persons who become and are the trustees AS JOINT TENANTS without any conveyance, transfer or assignment.  

E.g. 'subject to any act' includes LTA land registration provisions - still need to comply with that for example.

s80 Power of Court to Appoint New Trustees

The court may, when expedient to do so, of it is inexpedient, difficult to impractical to do so w/out the assistance of the court, make an order appointing a new trustee. 

NB - s5 "Court" = QSC or judge thereof. 

s82 Vesting Orders

Court may make a vesting order which has the effect as provided in s 90 (order vests the ppty in the persons named in the order w/out any conveyance, transfer or assignment)

Vesting order may be made where the court appt's or has appt'ed a new trustee etc

1. Under an express power in the trust instrument 

2. Application can be made to the SC to administer trusts - Guazzini v Pateson; Re Whitehouse

A mere mistake or neglect of duty is not a reason to remove a trustee under the inherent jurisdiction of the Ct. Trustee may be removed where the trustee's act or omission is such as to: 

(a) endanger trust ppty

(b) show a want of honesty

(c) a want of proper capacity to execute the duties

(d) a want of reasonable fidelity

(ie trust ppty must be in jeopardy, or the person shows "unfitness" to be trustee)

Whitehouse family operated Carlton Hotel, Mr W & wife trustees; 2 sons beneficiaries. Evidence was Mr W considered himself the boss and acted dictatorially. Ongoing disputes.

Findings: The mere fact of dispute b/w a trustee and beneficiaries is not of itself a reason for removing a trustee. In this case, it was the ongoing animosity and Mr W's attitude that he was not accountable to anyone that endangered the trust ppty. Appropriate to remove mr W as trustee. Mrs W removed - evidence she was a puppet of Mr W. 

Duty = Obligatory

Power = Not obligatory

Failure to perform duty -> breach of trust, can be sued

Failure to exercise a power -> not automatically liable for breach of trust, however if the trustee makes the dec'n re: exercise of the power in an improper way, they can be still held accountable.

Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd

What is the principle?

Where a trustee exercises a discretion(ie a power) it may be impugned on a no. of different bases - 

"bad faith, arbitrarily, capriciously, wantonly, irresponsibly, miscieviously or irrelevantly to any sensible expectation of the settlor or without giving a real of genuin consideration to the exercise of the discretion." 

NB: cannot be impugned on the basis the dec'n was unfair, unreasonable or unwise.

Karger v Paul 

What is the question to be considered and the principle?

Q: Has the trustee relied upon relevant considerations and acted upon the info that should have been acted upon?

If you have a trustee that is already well informed, there is not necessarily an obligation to engage in new investigation every time the power is exercised. 

Held: trustee's discretion must be exercised in good faith upon real and genuine consideration in accordance with the purposes for which the discretion is conferred and not for some ulterior purpose. HOW IT IS EXERCISED is not considered by the Ct. 

NB: Do not necessarily need to bring an action for breach of trust to bring the trustee's manner of the exercise of a power before a court. 

A beneficiary OR a person with a right of due administration AND who is aggrieved by any act, omission or decision of a trustee, may apply to the court to review or give directions re: the act/omission/decision; and the court may require the trustee or other person to appear and substantiate and uphold the grounds of the act and may make such order in the premises as the circumstances require. 

NB: Breach of trust action vs s8 - it is enough that we anticipate the trustee is going to do something AND the person will be aggrieved by it. (Fun fact! Re Whitehouse filed application under s8)

A court should be reluctant to impugn a trustee's exercise of discretion and will only do so on the grounds of: 

(1) Bad Faith

(2) Irrelevant Considerations

(3) And the other things referred to in Wilkinson's Case

What case authority is this?

1. General Law

2. Statute - Trusts Act 1973

3. Trust instrument i.e. a will

NB: Trust instrument has the last say. BUT some powers in Trusts Act cannot be overridden by trust instrument.

s4(4) The powers under this Act are in addition to the powers given by any other act and by the instrument creating the trust.

But the powers, unless otherwise provided, apply if and so far only as a contrary intention is not expressed in the instrument creating the trust, and have effect subject to the terms of the instrument. 

1. Duty to preserve trust property (Duty of Administration)

2. Duty of fidelity and Loyalty (Loyalty and Confidence)

Duty of Care and Skill

Bank of NZ v NZ Guardian Trust Co Ltd