Finlayson ChristopherHon CHRISTOPHER FINLAYSON (National): It goes without saying that the National Party will support this excellent reform of Amy Adams. This is as the Minister of Justice has said an extremely important piece of legislation. Indeed the current trusts legislation is over 60 years old and as the Minister said there are so many trusts in this country it's of critical importance that the law on the subject is clear. In his final comments the Minister made a very interesting point and one I wholeheartedly endorse and that is the importance of ensuring that the committee—the Justice Committee to which this bill will be referred—will have enough time carefully and thoroughly to analyse the law because this is literally a once-in-a-lifetime opportunity and it will be extremely important that there be a broad range of submissions on the bill. This is the chance to get our trusts law into a good state.If I can just remind the House that some years ago I was on the Justice and Electoral Committee and we had to consider the Evidence Bill and because of its importance a subcommittee of the Justice and Electoral Committee was formed. It was chaired by Russell Fairbrother the former MP for Napier and I thought he did an excellent job chairing this small committee. We appointed a special adviser in Robert Fisher a former High Court judge and that subcommittee met on separate occasions really to drill down into the detail of the Evidence Bill. The resulting legislation which is subject to a five-yearly review from the Law Commission is so good that it hasn't required all that many changes over the last decade. I really commend to the Justice Committee that kind of approach for this legislation because as the Minister said one of the key purposes of the reform of Amy Adams is to make the law of trusts more accessible. Simplicity of language is a very fine ideal but we need to make sure that things are expressed very carefully.If I can just refer to a couple of points the first point relates to the definition of court" in clause 9. The committee will need to consider whether it should be other than the High Court. For example there are other courts of competent jurisdiction like the Family Court or the Māori Land Court that could well be considered as appropriate fora to determine issues relating to trusts within their jurisdiction. We ought to look very very closely at Part 3 of the legislation and I refer honourable members to the mandatory duties that are set out. The mandatory duties in clauses 22 to 26 look like statements of the obvious but could well end up being a poisoned chalice for trustees.Take for example clause 22 which says "A trustee must know the terms of the trust." How many trustees I'd ask Willow-Jean Prime of settlement trusts know their terms? At most the obligation should be perhaps to be familiar with the relevant terms. Then there is the interrelationship between clause 22 and clause 23 which provides that "A trustee must act in accordance with the terms of the trust." So they'll need to look very carefully at those terms and they'll need also to consider very carefully the default duties because they are very baldly stated and they'll need to test those statements up against some practical real-life situations. For example the duty to invest prudently which is set out in clause 28 sounds obvious but prudence could imply diversity but do we want to see family trusts whose sole asset is a house or farm considering selling up just to achieve prudent investment in sectors other than real estate?Then and I'm sure the MP for Christchurch Central may be able to help us on this I'm very interested in the term set out in clauses 37 and 38 of "gross negligence". In fact I do regard it as a somewhat troubling provision. What's the difference between negligence and gross negligence? It's a new term and new terms as that member knows bring with them at least the potential for litigation. Clause 37 says the trust terms must not limit or exclude liability of trustees for gross negligence and clause 38 as I said also includes it. So it's worth considering the concept of gross negligence in the context of the elements of negligence that I'm sure the MP for Christchurch Central taught very carefully when he was at Canterbury University. Is negligence gross because of the high fiduciary duties owned by trustees to beneficiaries? If so then all negligence is going to be gross. Is negligence gross because of the nature of the breach? Is negligence gross because of the extent of the damage or loss? These are all issues that the committee is going to have to consider very carefully.So within this legislation there are some very very serious issues that need carefully to be considered and the Justice Committee is going to need to apply itself to these issues listen very carefully to submissions and not adopt a once-over-lightly type of approach because as I say when you've got terms like "gross negligence" if it's not carefully thought through it could give rise to a lot of litigation which would be great for lawyers but not so great for trustees and trusts. I'm very happy that we've reached this stage of the reform. It is one where the real work is going to have to be done in the select committee and I strongly suggest to the select committee that it would be wise to appoint a subcommittee like we did with the Evidence Bill so that some of the matters I've raised—and there are many many other issues that will need to be looked at—can be considered very thoroughly and carefully. With those very few comments on Amy Adams' bill I commend the bill to the House."