Trusts Act 2019 s 38 – application for appointment of receiver of trust – applicable principles – procedure – inherent jurisdiction versus statutory jurisdiction – weighing of evidence – “reasonably necessary” – “just and equitable” – extent of receiver powers – priority of claims – duration of receivership – precedent – appointment of receiver made, with conditions

Re Cameron and Robertson-Brown [2022] NZHC 2495 (Cooke J)

Please note: practitioners working in commercial, equity, private client and trust law may find this decision of interest due to its discussion of the scope of inherent jurisdiction against the statutory provisions of the Trusts Act 2019 and the advice about evidential requirements for these types of applications.

The trustees of a trust were attempting to develop trust-owned land in the Wairarapa region.

However, the vagaries of life, the changing economic climate and related covid-19 impacts all contributed to an assessment by the trustees that the appointment of a receiver to the trust was a responsible course to ensure the land and all affected parties were dealt with correctly and in a way that would maximise the value of the land.

The trustees therefore applied to the High Court pursuant to s 138 of the Trusts Act, leading the judge to observe that s 138 has not been considered in many cases.

Applicable principles – detailed discussion of procedure and jurisdiction – extensive analysis of the differing legal thresholds required through the use of s 138 of the Act, as in this present application, compared to the invocation of the court’s inherent jurisdiction, where s 138 refers to such an appointment being “reasonably necessary”, contrasted with the traditional view that the use of the court’s inherent jurisdiction in these types of situations is traditionally seen as a last resort, where there is “peril” to trust property – judicial advice and observation about the scope and subject of evidence required for these types of applications pursuant to s 138, including evidence of circumstances, financial position, necessity and basis for the proposed appointment, extent of required powers, likely costs of the proposed receiver and duration of the appointment – discussion of how the proposed receiver will most appropriately assess the priority of different claims, including mention of the Companies Act 1993 and the Receiverships Act 1993 – reference to precedent and to the Law Commission commentary.

Held: the trustees’ application for the appointment of a receiver to the trust is granted, with conditions.