Hobbs Marian: Trustees Executors Limited Amendment Bill — First Reading 
Hobbs Marian: Trustees Executors Limited Amendment Bill — First Reading 
[Volume:629;Page:1403] 
Hon MARIAN HOBBS (Labour—Wellington Central) 
: 
 I move  
That the Trustees Executors Limited Amendment Bill be now read a first time. 
 I will at the appropriate time move that the bill be referred to the Commerce Committee. This is a private bill promoted by Trustees Executors Ltd. Trustees Executors Ltd was previously known as TOWER Trust Ltd. The principal purpose of the bill is to substitute the name of Trustees Executors’ parent company in the principal Act from TOWER Ltd to Sheffield Investments Incorporated (NZ) Holdings Ltd in order to enable the company to transact business with its parent. At the same time the bill introduces a mechanism to allow Trustees Executors’ further parent companies to be named by Order in Council and renames the TOWER Trust Limited Act 2002 so that it reflects Trustees Executors’ current name. I am aware that this issue was raised in the last Parliament with a similar piece of private legislation for another trustee company so this discussion will not be new for the committee. 
Trustees Executors Ltd was first incorporated in 1881. It was then known as the Trustees Executors and Agency Co. of New Zealand (Ltd). The company now has eight branches. It has customers throughout New Zealand and provides a comprehensive range of specialised services to both personal and corporate clients. As a trustee company Trustees Executors is governed by the Trustee Companies Act 1967. It is also governed by its own private Act like the other three statutory trustee companies. 
The private Act is the TOWER Trust Limited Act 2002. The 2002 Act authorises the company to transact estate and trust business with its parent company and with its parent company’s subsidiaries. The Act sets out certain safeguards in respect of those transactions. Trustees Executors can do business with its related companies only if Trustees Executors is satisfied on reasonable grounds that doing so is in the best interests of the estate or trust concerned. All payments made to related companies must be clearly identified in the accounts provided to the estate or trust. Similar concessions exist for the other statutory trustee companies. 
The TOWER Trust Limited Act 2002 currently defines Trustees Executors’ parent to mean TOWER Ltd. However TOWER sold Trustees Executors then known as TOWER Trust Ltd to Sheffield Investments Incorporated (NZ) Holdings Ltd in July 2003. Shortly after that Trustees Executors adopted its current name. Accordingly the objects of the bill are first to enable Trustees Executors to transact business with its current parent company Sheffield and with Sheffield’s subsidiaries whether or not they are incorporated in New Zealand and with future parent companies; second to amend the title of the TOWER Trust Limited Act 2002 to reflect Trustees Executors’ current name; and third to ensure that the TOWER Trust Limited Act 2002 reflects Trustees Executors’ current ownership structure. 
Sheffield is not a well-known name in New Zealand. Sheffield is ultimately owned by Sterling Grace Corporation in New York. Sterling Grace is a private investment company that has provided private equity investment and asset management services since 1885. It manages investments in various sectors and countries mainly in Australia Europe and the United States. I should make it clear for the House that the bill authorises transactions only with Sheffield a New Zealand incorporated company and its subsidiaries. The bill does not authorise transactions with the US parent. 
The fact that New Zealand’s four statutory trustee companies need legislation of this type from time to time has been a cause of comment from and frustration for many members of this House. A number of select committees have recommended a review of the regime for naming parent companies in trustee legislation with a view to enacting generic legislation to cover all trustee companies. This was the issue raised—and rejected I think—by the select committee in 2005. It is still a live issue out there in the community of trustees. In the absence of generic legislation Trustees Executors has included in this bill a mechanism to allow for its future parent companies to be named by Order in Council. The order can be made only on the recommendation of the Minister of Justice after consultation with the Minister of Commerce. 
The mechanism will remove the need for parliamentary approval of a new parent company as we are providing now should Trustee Executors be sold yet still allow appropriate scrutiny of future parent companies before transactions with them are authorised. Trustees Executors tells me that no such sale is currently intended by its parent but that is not to say it may not happen in the future. Trustee company sales are not the rare occurrence today that they used to be. No doubt the Commerce Committee will consider the Order in Council mechanism more fully. 
This bill has been advertised in accordance with the Standing Orders and all persons who have a direct interest in the bill have been notified of the intention of Trustees Executors to promote it. I commend the bill to the House. 
Sitting suspended from 6 p.m. to 7.30 p.m.