Little Andrew; Dyson RuthTRUSTS BILLThird ReadingHon ANDREW LITTLE (Minister of Justice): I move That the Trusts Bill be now read a third time. It is the role of Ministers of Justice in most administrations to look after what might be described as the political or administrative bricks and mortar of laws and lawmaking. So we deal with frameworks we deal with rights—whether human rights or the rights of business—and what have you. This piece of legislation the Trusts Bill is no different in that regard. But I stand here today with a real sense of pride and I might add pleasure because of this piece of legislation. Now as Minister of Justice I deal with a lot of laws and draft laws and a lot of these issues and I have to say that in dealing with this law which let's face it straddles two administrations—it started life as a bill in the dying months or month in fact of the previous administration and has worked its way through the House since. But it is—and I don't say this of a lot of pieces of legislation—I think a brilliant piece of legislation in an area of law that has been confusing it has been unclear about which lawyers have complained through the generations. This is a law I think that will give clarity and good guidance to generations of lawyers of settlors of trustees and of beneficiaries to come. So I am very proud to present for its third reading this Trusts Bill. Trusts are an important part of New Zealand society. They are commonly used legal structures for families and businesses. Would you believe there is around one trust for every 12 people in New Zealand? I think we can guess the concentration of those trusts across communities in New Zealand but I say no more than that. Many Kiwis have their family home managed by a trust and as it turns out many farmers have their farms in trusts—unusual I know. Some trusts have charitable objects large and small and they typically use a trust to manage their assets as do some of those operating in the commercial and financial sectors. Trusts law appears to many—apart from people like Andrew Bayly and probably Tim Macindoe—to be a very dry boring area of law. But actually for many lawyers it is probably one of the most exciting rewarding and fulfilling areas of law because it allows lawyers to spell out in very clear detail the nature of relationships objectives to which trust property might be put and to see the great beneficence that this whole framework of law can create. So there are many lawyers for whom trust law literally warms the heart. I know—hard to believe isn't it? But it's true. So this law I think is going to give those lawyers and those legal practices a lot to chew on and a lot to do. Given the very important and far-reaching role that trust law plays it's imperative that the law is fit for purpose. This bill provides a great opportunity to advance our trust law. If it does one thing—only one thing—what this law will do is make it more accessible and allow for the wide range of functions that trusts serve in New Zealand in order for people to confidently manage their affairs. While trusts are widely used in New Zealand there is equally widespread misunderstanding about what a trust is and about the accompanying rules. The current Trustee Act 1956 is outdated and the rights and obligations of trust users are difficult to understand. Compare that to this bill where everything is very clearly laid out. There is only one area that I think is slightly more complicated than it needs to be and that is the involvement of Schedule 2 of the bill. But when you look at it and stand back and say well it is probably the best way to provide for those things that are mandatory duties for trusts and trustees and those things about which a trust deed might provide some variation or some difference for—but providing for that it wasn't possible to put that in a single section; it had to be done over several sections and a Schedule that refers back to a definition section. But I say no more than that. I am still confident that the way this Act is set out the way it spells out trustee's duties and responsibilities and obligations—particularly to beneficiaries—I think would be of great assistance to many many New Zealanders. Much of existing trust law is spread through our common law and that makes finding it and understanding it a complex task. This bill offers a solution to these problems by providing a modern and accessible Act. There will be many legal practitioners who will be relieved to see the end of the antiquated Trustee Act. They would be pleased to see that this is a law that kind of does two things: it doesn't codify the common law but equally it says that unless it strictly abolishes some common law provisions—and it does at least one common law principle: the rule against perpetuities—the common law will continue to prevail unless of course explicit provisions in the bill cut across that. So if you can understand that then you will understand that there will be no complexity at all in it. At this point I think I want to acknowledge actually the road that this law has taken. It started as a piece of work by the Law Commission in 2009. The Law Commission in its usual way did extensive consultation engaged with the profession engaged with trustees and engaged with many others. It produced a set of recommendations in 2013. In 2016 the Ministry of Justice produced an exposure draft that was the subject of more consultation and then in August 2017 the bill was introduced. What a pity it was at the end of that Parliament that it couldn't have been a little earlier. But now here it is—two years on. Slightly less than two years on we are here seeing this bill into its third reading and about to pass into law. There is no question that the gestation of this bill has been lengthy. It will be well cooked. It will be tender. It will be falling off the bone. It will be a lovely piece of law for lawyers to get their teeth into. You can smell it from here—you can smell the pleasure from here and it's going to go very well.I want to thank all those who have been involved in putting the law together including members of this House—not just the select committee but actually members of this Parliament who had an extensive debate at the committee stage last night which I think has produced a very high-quality law of which every member of this House can be duly proud. It is satisfying to get to this final stage to see the product of all the work that everybody has striven to put into it.Part of the reason for requiring such a dedicated effort and extensive consultation is because of one key underpinning objective of the bill and that is to provide a statute that goes further than merely providing administrative provisions for trusts. This bill takes a far more ambitious approach towards our trust law jurisprudence. It is ambitious because it sets out the core guiding principles of the law relating to trusts without codifying the common law. It aims to strike that very fine balance between prescriptiveness and flexibility and in so doing the bill will allow the courts to continue to develop the common law as they have done for centuries but locating it in a very New Zealand set of solutions around the problems that typically arise.The bill completely replaces and overhauls—or I suspect overhauls and replaces—the Trustee Act. It takes the most fundamental principles from the common law and brings them into an accessible whole in this bill. The provisions will be a core set of principles where those involved in a trust can easily get access to it and clearly understand the nature of the arrangement they are involved in and the obligations that they have. The bill sets out core mandatory trustee duties with practical and fixable trustee powers that allow trustees to manage and invest trust property in the most appropriate way. There are also clear rules about when trustees are required to provide information to beneficiaries so that beneficiaries can enforce their rights in relation to a trust. One of the most common complaints is beneficiaries who say they don't know what's going on. They don't have the information—what is the financial performance of the assets of the trust and what rights do they have whether for a distribution or for an input into what the trustees are doing?Some standards that were previously uncertain have been legislated for—for example under the bill it won't be possible for a trustee to be indemnified for dishonesty wilful misconduct or gross negligence that is intentionally in breach of the terms of a trust. The non-exhaustive list of what a court must consider when a trustee has been grossly negligent will provide greater certainty for trustees and still allow flexibility for the courts to assess the circumstances of each case. We're debating today a bill that refreshes and modernises the law relating to trusts while maintaining its core aspects that have been developed by the courts over centuries. I am very proud of this bill. On behalf of the Government and this Parliament I commend the bill to the House.ASSISTANT SPEAKER (Hon Ruth Dyson): Can I just apologise to the Minister. I omitted to give the two-minute warning bell; I was probably so engrossed in the Trusts Bill.