Curran ClareHon CLARE CURRAN (Labour—Dunedin South): Thanks Madam Assistant Speaker. Interesting little contribution just before. Not having studied law the arcane sort of things that make law students happy is some interesting to hear about. Why we've got this bill is a lack of public understanding about trusts what they are how they work the implications of transferring property to them and the rights and obligations of everyone involved. The Trustee Act is outdated. I think we've well traversed that—1956. It doesn't reflect how trusts are working in practise. It's narrow in scope. It makes it difficult to draft trust deeds and trust administration is overly complicated. Making changes to trusts or managing unforeseen circumstances is difficult and often expensive and dealing with simple administrative matters can often require an application to the courts.It's interesting this because a number of people have mentioned the sheer number of trusts in New Zealand: somewhere between 300000 and 500000. If you look at them most trusts have a minimum of two trustees and some more than that. So we're likely to have around a million people in New Zealand who are trustees which is quite a lot of people and yet we've got such outdated legislation so kudos to the Hon Amy Adams for kicking off this piece of work and for the Law Commission for doing it. It's also interesting—I had a bit of a look at some of the earlier Law Commission reports on this where they said that trusts are interestingly very popular in New Zealand. In fact there's almost like a trust movement and it's called the trust industry which advocates for trusts. Because they're so easy to set up—Hon Phil Twyford: Is it a trust itself?Hon CLARE CURRAN: It could be a trust itself. They're easy to set up and the system in which they operate—you know there is a favourable tax environment for them. Interestingly another comment that was made was that it's a bit of a status thing to be a trustee apparently. Who knew? The fact is that all those reasons that I read out at the beginning as to what the problem with trust law is means that it's certainly overdue for an overhaul. In the time I've got left I just want to mention one thing that I've been reading about and obviously if I speak in the committee stage I'd like to speak more about it and it goes to the liability issues for trustees. The big debate that went on—as I understand and I wasn't in the select committee—was around the measure of gross negligence and the views on whether or not that should be considered how it should be defined and who should be liable and under what circumstances. The Law Commission had recommended including gross negligence in the restriction on an exemption in indemnity clauses. They took it out then they put it back in again but there were a lot of submissions on this as I understand it. Federated Farmers and Rural Women New Zealand submitted that the trustees of a trust often bring very different skill sets and experience to their trustee roles. They could be both professional and lay trustees. They're concerned about trustees being held to a standard of behaviour beyond the relevant individual skill set under the exemption and indemnity clauses and were concerned that uncertainty about the meaning of gross negligence" would make it hard for trustees to get insurance for such liability. How the select committee dealt with that was to—the term "gross negligence" isn't defined in the bill. It's not a commonly used legal phrase. So to clarify the intent of the bill they recommended inserting a clause 40A to provide guidance on how the court is to consider gross negligence. It sounded as if this was one of the main issues—I'm not sure—from those who were on the select committee and that it was a good issue which looks as if it's had a good outcome. I hope we'll hear more about that in the committee of the whole House stage. This is an overdue piece of law reform and I commend it to the House."