Trusts Bill

I’ll take a quick call, because it would be improper for a piece of legislation this important and this fundamental to the daily lives of so many New Zealanders to go uncommented on. I possibly made the principal of the most important comments about this part of the bill in response to my question to the honourable member David Parker in relation to the rule against perpetuities. But it is this provision of the bill which starts to get into the meat and bones of trust law. The meaning of “express trust” is defined. The characteristics of an express trust are defined. There’s provisions in relation to sole beneficiaries, and otherwise dealing with provisions on the distribution of trust property. So this is really what defines a trust and what trusts are about, and I think it is very well drafted and very well-laid-out in this bill.

Thank you very much, Mr Chair, and to the committee for the opportunity to speak in this, Part 2 of the consideration at this, the committee stage of the Trusts Bill.

💬 Kieran McAnulty: Filibustering.

We have—I’m encouraged to join the Government side in filibustering. In fact, we are joining the Government side to the extent of voting for this piece of legislation, which is worth supporting. I’ll make my contribution reasonably brief for the benefit of all concerned—in particular, Mr McAnulty. I wish him better luck in the debating chamber than he had on the cricket field recently.

I’ll just note, in relation to the express trusts being created, that it’s helpful to have a codification, essentially, setting out the means by which a trust can be created. It’s helpful to have the clarity for something that is actually technically not a matter of law but a matter of equity. That is a thing that has arisen separately to a strict legal construct. So notwithstanding that we have a piece of legislation that actually goes to the trouble of saying what the law is about, that area outside the law, it is none the less a useful thing for the House to turn its attention to.

The maximum duration of trust, as dealt with in clause 16, is said to be 125 years. That’s a pretty generous period of time. Of course, we see also in that clause that “The terms of a trust may specify or imply a shorter duration.” So there’s a limitation rule against perpetuity, I suppose, in the language, whereby we’re actually getting some clarity, again, around that. So just for the purpose of being very transparent, we see expressly stated that the common law rule known as the rule against perpetuities is abolished, and that’s something that has been the bugbear of many law students throughout the ages. Certainly, this idea that you can have a trust only for a certain period of time takes some getting one’s head around. I think in practice, by which I mean in the practice of law, and also as opposed to the theoretical application, the reality is that in a shorter period of time—for example, 80 years, as is often prevailed—simply, a trust would be, effectively, continued by the creation of a new trust along similar lines. So to lengthen that out seems to us a pretty sensible idea, and we’re happy to support that.

Part 2 agreed to.

Part 3 Trustees’ duties and information obligations