18 August 2021 | IMPORTANT NOTICE

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In line with Ministry of Health guidance, our staff are currently working remotely. They remain available to assist and it is business as usual. However, we ask that wherever possible you contact us online or by email to registrar@nzdrc.co.nz.

If you need to courier documents, please contact our Registry staff in the first instance to confirm the appropriate delivery details.

He waka eke noa.

Trust Disputes

ARBITRATION AND MEDIATION PROVIDE AN EFFICIENT, EFFECTIVE, AND PRIVATE WAY TO RESOLVE TRUST DISPUTES
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The arbitration or mediation of trust disputes can help parties to avoid publicly litigating their dispute in the courts. Litigation is not only an expensive option for disputing parties but is likely to allow the disclosure of matters which are inherently personal to the parties. This can include personal information as well as financial and other commercial matters which would otherwise remain confidential.

The NZDRC has developed a specialist private dispute resolution service for parties to disputes concerning trusts that is robust and certain, yet innovative in its commonsense approach to resolving these challenging types of disputes promptly and privately.

The three options available are Arbitration, Mediation, and a hybrid process – Arb-Med.

What’s New?

The new Trusts Act 2019 (Act) came into force on 30 January 2021. It brings a number of significant changes to trust law and is the first major reform in 70 years. The Act applies to existing and future family trusts, trading trusts and trusts created under wills.

One of the most significant developments in the Act is the express provision for ADR processes to resolve both internal (between trustees and/or beneficiaries) and external trust disputes involving a trustee and one or more third parties. An ADR process is defined in the Act as an alternative dispute resolution process (for example, mediation or arbitration) designed to facilitate the resolution of a matter. Prior to the Act, it was generally considered that disputes relating to trusts were not capable of resolution through mediation or arbitration because many beneficiaries of trusts were discretionary, unascertained, or lacking capacity and therefore their interests could not be safeguarded or considered. In sum, the move to expressly provide for and promote the use of ADR in the Act has been a watershed moment by global standards.

Model Clause

NZDRC recommends parties to contracts include model arbitration and mediation clauses to ensure they can access these processes as a dispute resolution option of choice without delay should a dispute arise between them.

Model Clause for Arbitration under the NZDRC Arbitration Rules

The following arbitration clause should be included in contracts where the parties wish to have any future disputes resolved by arbitration under the New Zealand Dispute Resolution Centre’s Arbitration Rules:

“Any dispute or difference arising in relation to the trust between a trustee and one or more beneficiaries, or a trustee and one or more other trustees, but excluding any dispute about the validity of all or part of the trust, shall be referred to and finally resolved by arbitration in accordance with the Arbitration Rules of the New Zealand Dispute Resolution Centre.”

Model Clause for Mediation under the NZDRC Mediation Rules

The following mediation clause should be included in contracts where the parties wish to have any future disputes resolved by mediation under the New Zealand Dispute Resolution Centre’s Mediation Rules:

“Any dispute or difference arising in relation to the trust between a trustee and one or more beneficiaries, or a trustee and one or more other trustees, but excluding any dispute about the validity of all or part of the trust, shall be referred to and finally resolved by mediation in accordance with the Mediation Rules of the New Zealand Dispute Resolution Centre.”

estimated number of trusts in New Zealand

The Trusts Act 2019: keeping it in the family

By Maria Cole* No-one likes to have their dirty laundry aired in public. Sadly, it has been all too common for parties in family trust and estate disputes, to find their private family affairs made public and become the topic of law journal articles and gossip at...

Alternative Dispute Resolution under the Trusts Act 2019 – missing in action?

By John Green   The new Trusts Act 2019 (Act) came into force on 30 January 2021. It brings a number of significant changes to trust law and is the first major reform in 70 years. The Act applies to existing and future family trusts, trading trusts and trusts...

The Trusts Act 2019: What you need to know

By Melissa Perkin and Melt Strydom Introduction Although exact numbers are unknown, it is estimated there are hundreds of thousands of trusts in New Zealand. The new Trusts Act 2019 came into force on 30 January 2021. It brings a number of significant changes to trust...