Collins Judith: Trustee (Public Trust) Amendment Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeCollins Judith: Trustee (Public Trust) Amendment Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 08 May 2013. Volume:689;Page:9821. Text is incorporated into the Bound Volume.]Hon JUDITH COLLINS (Minister of Justice): I moveThat the Trustee (Public Trust) Amendment Bill be now read a second time. Since the House is in urgency I do not wish to take too much time but there have been some issues raised by members opposite and I think that they deserve to be answered. For a start I do not know why Ms Curran asked whether or not I was rushing the Trustee (Public Trust) Amendment Bill through for some reason. Well yes the reason is very much is that I want to save the Public Trust actually. I am not going to stand by and I do not think Parliament wants us to stand by and let it be basically the taxpayer having to pay absolutely millions of dollars out to fund the Public Trust to take on public responsibilities around trusteeships when this was never ever intended.The question was asked tonight why this was not done before. Well actually in the 114 years that the provision has been in the law for the Public Trust to be a trustee of last resort—in 114 years—nobody has ever before sought to make the Public Trust the trustee of last resort for a corporate trustee failure. That is why. It has never been done before. Nobody ever thought this could be done and certainly in Parliament no Minister of Justice thought that—in fact that is why. As for the situation of why now it is actually because the advice is we cannot risk it. We cannot risk it.The case that has brought this to a head is the Capital + Merchant Finance case which is actually due to be heard in the High Court on 6 June. Of course this bill does not purport to apply to that case. I think that would be unfair. It has been in the court for some time. But the advice that I have been given is that we cannot risk it. Of course what has really happened in this case as well which may not have been disclosed by me yet in the first reading is that the receivers of Capital + Merchant Finance have sought to bring in and to hold to account the corporate trustees. That has therefore allowed the corporate trustees to say that actually strictly according to law and rightly they have a conflict of interest and therefore cannot retain the trusteeship of Capital + Merchant Finance. So the action from the receivers—and I am not criticising them for it they are entitled to do that under the law—is something we have never seen before actually in 114 years—so even longer Mr Assistant Speaker than you have been at this place.Chris Hipkins: Only just.Hon JUDITH COLLINS: Only just says Mr Hipkins. In addition there have been some questions raised about—and I would say too that the Perpetual Trust which is clearly not that perpetual after this behaviour has 22 other failed finance companies that it is currently corporate trustee for. We are looking in that case at 22 companies and there are actually 60 failed finance companies that this could well apply to across the board including those 22. So this is not a risk that I as the Minister of Justice believe is one that we can take to sit back and wait to see whether this test case that is before the court is successful. It might be; it might not be. I cannot risk it and I do not think the Public Trust can risk it.An issue has been raised I think particularly by the Green member who spoke as to whether or not this matter could be dealt with in some other way whether or not we could have a select committee process. Because of the nature of what we are talking about proceedings could be filed pretty quickly particularly by a company or lawyers who are currently before the court right now on a similar matter. So I am not really prepared to allow this to go on.We could possibly as Mr Mallard suggested take some moves saying it could go to a select committee and then come back and then have the effect of it backdated. I think whatever we do in this matter we would be subject to criticism be it either of a retrospective nature or the fact that we are moving to have this through in urgency.Whatever we do we are going to be criticised but I am not prepared to stand back and let this happen and do nothing about it and then say “Woe is me!”.But in addition to that we also have—and this is I think the saver for those who are so worried about process—the Financial Markets Conduct Bill which is currently before Parliament. That bill is expected to be enacted in a few months’ time but it does not come into force until 1 April 2014. The Supplementary Order Paper to the Financial Markets Conduct Bill will provide a longer-term solution by permitting the Financial Markets Authority or the FMA to appoint a replacement trustee from amongst all available licensed trustees so that the Public Trust is treated equitably and to require an indemnity from the resigning trustee as a precondition of the appointment. This provides the longer-term solution.I make no bones about it: this is a stop-gap measure but it is one that we need to have in force. When the Financial Markets Conduct Bill comes through and takes effect from April next year should it be passed by this Parliament then that will in fact supersede what we are doing this evening.I would also like to take the opportunity just briefly to thank all parties for their support for this bill. I understand it is a very difficult situation but I am sure everyone here understands this is something that needs to happen. It is not the ideal situation but frankly we have not been served up an ideal set of facts so thank you everybody. I know everyone has some concerns about some aspects in terms of process but I hope that you understand and respect the fact that there is the Financial Markets Conduct Bill and that will in fact take over from this provision. I commend this bill to the House.