Collins Judith: Trustee (Public Trust) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeCollins Judith: Trustee (Public Trust) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 08 May 2013. Volume:689;Page:9827. Text is incorporated into the Bound Volume.]Hon JUDITH COLLINS (Minister of Justice): I moveThat the Trustee (Public Trust) Amendment Bill be now read a third time. This bill has gone through the House under urgency and it is urgent. This bill provides a quick interim solution to a potential floodgate of expenses for the Public Trust and to the public purse if securities trustees walk away from their responsibilities.Without this amendment the Public Trust faces a potentially significant financial burden. Capital + Merchant Finance is unlikely to be able to pay Public Trust fees and expenses so the Public Trust is likely to have to meet the cost itself. However there are currently 60 finance companies in liquidation receivership or moratorium and if even a fraction of the trustees of those companies attempt to hand their roles to the Public Trust the cost could be enormous—and of course that is not only the case should they be successful; even litigation has its expense and the Public Trust is not able to continue to fund this.It is not only the financial burden. The Public Trust faces damages to its reputation and its brand. It would be responsible for communicating with thousands of dissatisfied investors. They may not appreciate the distinction between a retiring trustee and the Public Trust as replacement trustee. By law we require the Public Trust to be a competitive business and yet our current law without amendment is putting the Public Trust at an unfair disadvantage.This is all because of one small rule—the trustee of last resort rule. Section 46 of the Trustee Act allows the High Court to appoint the Public Trust as replacement trustee for any trustee who wishes to retire or resign. The Public Trust has a statutory duty to accept the appointment. The rule does not require the retiring trustee to find other replacement trustees first by indemnifying their fees and expenses that the trust or the company being supervised cannot pay. This bill will rectify this. It will require a retiring trustee to make efforts to find another replacement trustee and to pay the replacement trustee’s reasonable fees and expenses.The Public Trust can still be appointed as a last resort trustee. I think that is a very important point. If this happens the resigning trustee will meet Public Trust’s reasonable fees and expenses as the trustee for the trust in question if the trust or the company being supervised cannot cover them. The bill will only apply to licensed trustee appointments for products regulated by the Securities Act. It will not apply to family trusts. This is only a short-term solution but it will fix the problem right now. The Financial Markets Conduct Bill will provide a longer-term solution. This bill applies prospectively. It does not affect the Capital + Merchant Finance case; Public Trust will bear this burden.The Government does not want to undermine business confidence in the law by changing the rules midstream and without notice. Instead the bill will change the rules into the future. It will stop the risk of significant burden being imposed on the Public Trust and it will be doing so in the nick of time and for that I very much thank this House. I commend this bill to the House.