We are regularly consulted by clients in respect to disputes concerning the operation and/or administration of trusts.
While the traditional methods of litigation between trustees and beneficiaries, or between trustees and trustees, has and continues to be available with the costs and time delays associated with court litigation this often mean that litigation to resolve disputes is not realistic.
The New Trusts Act 2019 provides additional options for dispute resolution where the dispute is an “internal matter” in other words, a dispute between trustees and beneficiaries or between trustees themselves.
Section 145 of the Trusts Act 2019 now allows a trustee or beneficiaries of a trust to seek an order from the Court submitting the issues between the parties to an “ADR process”. An “ADR process” means an alternative dispute resolution process such as mediation or arbitration, what is designed to facilitate resolution of the matter.
One question that has recently been clarified by the court is where the trust deed does not provide for alternative dispute resolution as an option for settling disputes, in that situation is mediation still available. The High Court has indicated that notwithstanding the trust document has no provision requiring the matter to be subject to ADR, section 145 of the Trusts Act provides a general discretion to the court to submit a matter to an ADR process, unless the trust deed expressly and clearly indicates such an option is not to be available.
Mediation and ADR as a means of settling disputes in respect to internal trust matters can add a significant additional step to be able to resolve disputes before full litigation.
We are able to advise clients on all aspects associated with this and the options in terms of available dispute resolution.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry Law who normally advises you, or alternatively contact:
Paul Farry
pfarry@farry.co.nz
09 353 0055
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry Law does not accept liability for any errors it may contain.