Power Simon: Trustee Amendment Bill — First ReadingText is incorporated into the Bound VolumePower Simon: Trustee Amendment Bill — First Reading[Sitting date: 11 October 2007. Volume:642;Page:12336. Text is incorporated into the Bound Volume.]SIMON POWER (National—Rangitikei): The Associate Minister of Justice the Hon Clayton Cosgrove in his usual delicate and gentle way approached me some months ago about the Trustee Amendment Bill and whether National would be prepared to support it. In this day and age it is becoming an increasing trend for the Government to ask the Opposition about its view on a bill prior to it coming to the House. I have noticed this interesting emergence over the last 1½ to 2 months in particular.In respect of this bill the Hon Nanaia Mahuta has done a good job of outlining the general policy statement and provisions. At first glance of course it is easy for those speaking to legislation such as this to use that commonly coined phrase that the bill is simply a technical one of a mechanical nature and accordingly should pass through the House. Indeed as the Minister said the bill is based on proposals in a 2002 Law Commission report—one of the reports that with recent changes to the commission’s role have taken on a more significant meaning for this House and create an interesting relationship with the Ministry of Justice which used to do this sort of work. I think too it is worth just saying that the purpose of the bill is to make the law clearer in relation to trusts and trustees by amending a number of specific provisions in the Act that have caused difficulty.Essentially the legislation makes four key changes. The first of those is to expand the trustees’ collective power to delegate decision-making powers. Of course it does not permit delegation of certain fundamental powers such as the power to appoint trustees or to decide how capital or income of a trust is to be distributed. Secondly it requires trustees to apply to the court for directions where advice is received from an advisory trustee and that advice conflicts with the terms of the trust which actually makes sense. Thirdly it widens the insurance powers of trustees which also makes sense although it is limited to the trust property. Fourthly it requires trustees to notify any beneficiary of any entitlement. As the Minister said in her opening remarks that is probably a useful change.I was concerned about one matter prior to National agreeing to support this bill at its first reading and that was whether the bill had any consequences or implications for corporate trustees. I phoned Sir Geoffrey Palmer to ask him for some advice on thismatter and he was good enough to provide me with a written opinion. In that opinion he said that the matters dealt with in the bill are not likely to arise in relation to trustee companies in the context of the Securities Act. Trust deeds in this context are contracts between the trustee company and the issuer of debt securities and in this case the trustee company does not usually hold property on trust except in a liquidation situation. In this context the trustee acts as an agent of the security holders to monitor compliance by the issuer with the terms of the trust deed. He concluded by saying that he therefore would not expect the Trustee Amendment Bill to be relevant to trustee companies in their role as monitors of the performance of issuers of securities under the Securities Act. That tidied away the one concern that National had about the bill at the first reading stage.We look forward to hearing submissions on the bill and we will listen to those submissions carefully before forming our final view on it. At this stage National is happy to support the bill going to the select committee after its first reading.