Tizard Judith: New Zealand Guardian Trust Company Amendment Bill — First Reading 
Tizard Judith: New Zealand Guardian Trust Company Amendment Bill — First Reading 
[Volume:642;Page:12464] 
Hon JUDITH TIZARD (Labour—Auckland Central) 
: 
 I move  
That the New Zealand Guardian Trust Company Amendment Bill be now read a first time. 
 This is a private bill promoted by the New Zealand Guardian Trust Co. Ltd for Parliament’s consideration. The bill substitutes the name of the Guardian Trust’s parent company Promina Group Ltd with Suncorp-Metway Ltd in order to enable the company to transact business with its parent company. At the appropriate time I intend to move that the bill be considered by the Finance and Expenditure Committee. 
As honourable members will recall—those who have served more than a term in this House—this is not the first time that this company has needed private legislation. Nor indeed is it the first time that the other three companies that provide trustee services have come to this House for private legislation enabling them to have the privilege to transact business with their parent company. I will briefly outline the history of the New Zealand Guardian Trust Co. Ltd and members who want more detail can go back to the 2004 bill which has a great deal more history involved. 
The Guardian Trust has been operating as a trustee in New Zealand since 1883 when the Guardian Trust and Executors Company Act was passed. Indeed the trust was part of the old New Zealand Insurance Co. Ltd which was established in Auckland in 1852 so the history of this company goes back almost as long as the history of New Zealand as a country. In 1982 the Guardian Trust merged with the trust department of the New Zealand Insurance Co. necessitating the passing of a New Zealand Guardian Trust Company Act in that year. The trust has 14 branches throughout New Zealand at present and acts on trusts and estates for many thousands of New Zealanders. The Guardian Trust is a trustee company authorised under the New Zealand Guardian Trust Company Act 1982 to carry on business as an executor a trustee and a trustee company and in other fiduciary capacities. 
This Act currently allows the trust the privilege of transacting business with its parent company which is named in any subsidiary or company associated with its parent company. It also allows it to attain the financial benefit from such transactions which would otherwise be precluded under trust law. The ability to transact business in these circumstances is necessary given the size of the corporate group in which the Guardian Trust is associated and the opportunities that may be lost if the ability to transact business with such companies is not available. Similar concessions exist for all other trustee companies. However it has been pointed out in this House that this concession is a privilege. 
I think that the House needs to consider seriously how Acts of this sort—and this Act in particular—are dealt with. The Act currently defines the parent company to mean Promina Group Ltd. In March this year the businesses of Promina Group Ltd and Suncorp-Metway were merged by way of a scheme of arrangement. Under this scheme Suncorp-Metway acquired all shares in Promina Group Ltd and accordingly Suncorp-Metway is not the ultimate parent company of the New Zealand Guardian Trust. This now renders the name of the parent in the Act inaccurate. 
As I mentioned earlier a number of select committees and indeed Parliament have dealt—wrestled one would say—with this issue of whether generic legislation would better protect people who have dealings with this trustee company and other trustees. I am asking the select committee to recognise that most select committees have recommended that generic legislation be introduced to deal with the need for various trust companies to bring legislation of this sort before the House. Although I hope that the select committee will be able to deal with this particular issue in relation to the New Zealand Guardian Trust Co. in this bill I also hope that we will get to an understanding of how to deal with these issues in future for the New Zealand Guardian Trust Co. and for other trustee companies. 
I am concerned—and the matter has been raised in this House in 2004 and 2005—that the committees have tended to see this issue as a frequent irritation and perhaps even a time-waster for select committees and for the House. I thank Stephen Franks the former ACT MP who made a very spirited opposition to this legislation passing when it came before the House last. He made the point that the Reserve Bank had grappled with this area and indeed the Governor of the Reserve Bank had made a number of speeches around the fact that the Australian banking law means that Australians have an Australian preference. Now as members will understand both Promina Group Ltd and Suncorp-Metway are primarily Australian banks. I quote Stephen Franks where he said: “Quite nakedly Australian banking law states that if there is a banking collapse Aussies will come first—the Kiwis come second.” He said: “That I fear is what will happen to people dealing with trustee companies if the trust assets are allowed to be deployed through a head office treasury or through an accounting system that is in Australia—suddenly the shutters will go up.” 
I ask the select committee to take those words—and indeed the words of Alan Bollard the Governor of the Reserve Bank—very seriously and discuss the matter of whether it is a useful exercise that the owners of and subsequent owners of trustee companies are required to reflect on their duties as trustees to those New Zealand beneficiaries. I have made the point in previous private bills that have come before the House for this organisation that it tends to be people who are very vulnerable in some cases who use trustee companies and they are not necessarily people who are able to make the most informed decisions about the structures of the companies they choose to deal with. 
 So I would ask the select committee to look very seriously at this matter and to look at this bill. Obviously we need this private legislation. I am happy that the petition of the New Zealand Guardian Trust Company Amendment Bill is required otherwise I as MP for Auckland Central would not have agreed to bring this bill to the House. But in accordance with the Standing Orders the notice of my intention to promote this bill has been distributed to those persons who have a direct interest in the subject matter of the bill and it has been publicly advertised. I commend the bill to the House and to the select committee.