Contents

Chapter 1
Introduction

Conduct of this review

1.15The Law Commission began work on this reference in March 2009. Being conscious that the law of trusts was a potentially vast subject, the Commission sought at an early juncture to divide the project into three stages. This Report represents the culmination of the Commission’s first project on trust law: looking at the Trustee Act 1956, which had been the focus of the Select Committee, and trust law generally. There are two further reviews of areas of trust law to complete our full suite of work on the law of trusts. One of these, intended to deal with the charitable trusts and the Charitable Trusts Act 1957, has now been expanded to include consideration of purpose trusts (the charitable and purpose trusts review). The other was initially intended to deal with the trustee companies’ legislation. However, the Commission has come to view this review as being more appropriately focused not just on the statutory trustee companies but on companies and other body corporates that act as trustees, an important subset of which are the statutory trustee companies (the corporate trustee review).13

1.16As part of its work programme the Commission has issued five issues papers:

1.17In total we received 98 submissions on these five issues papers. Having reviewed these submissions, the Commission formulated what it termed its “preferred approach” and released the Review of the Law of Trusts: Preferred Approach in October 2012.19 Our motivation for circulating the Preferred Approach Paper, before going on to issue a final Report, was to ensure our recommendations were in line with actual practice in New Zealand, as well as with the theory of trusts.

1.18After the Preferred Approach Paper was published, the Commission undertook an extensive programme of consultation with trust practitioners around New Zealand to “road test” the proposals. We were fortunate to be assisted in this by the New Zealand Law Society, which organised meetings with their members in various centres around New Zealand. The Auckland District Law Society also arranged two meetings with its members in Auckland for us. We had meetings with special interest groups of the New Zealand Institute of Chartered Accountants in Wellington and Auckland. The Institute also organised a general consultation meeting with its members. We met also with lawyers who provide advice in relation to the trusts that have been set up as part of the Treaty settlement process with the Government. In addition to consultation with the private sector, we also consulted with various government agencies with an interest in trust law.

1.19We have received 73 submissions on the Preferred Approach Paper. We have been fortunate in these submissions and the submissions we have received on the original issues papers, and have given them careful consideration. In part, the strength of the submissions on the Preferred Approach Paper has led us to defer final recommendations on some proposals until we can fully consider the matters raised. For example, the submissions relating to companies acting as trustees have meant we have deferred final recommendations until our planned corporate trustee review.

1.20In countless areas of detail, we have taken account of comments in consultation meetings and formal submissions. This Report and our recommendations are considerably improved as a result. Inevitably, we received submissions that we have not agreed with, and we have not adopted some suggestions made. Criticism of the proposals that we made in the issues papers or the Preferred Approach Paper has often deepened our understanding of the issues involved. Urgings to go further than we had proposed in particular areas were an invaluable check on the limits to reform that we had perceived, even if we did not ultimately agree that particular reforms were appropriate, or appropriately pursued within the scope of this Report or the proposed Trusts Act.

13See Trustee Companies Act 1967, Trustee Companies Management Act 1975, and the Trustee Companies Management Amendment Act 1978 for the statutory arrangements applying to statutory trustee companies.
14Law Commission Review of Trust Law in New Zealand: Introductory Issues Paper (NZLC IP19, 2010) [Introductory Issues Paper]. All Issues Papers in the review of the law of trusts are available at <www.lawcom.govt.nz/trusts>.
15Law Commission Some Issues with the Law of Trusts: Review of the Law of Trusts − Second Issues Paper (NZLC IP20, 2010) [Second Issues Paper].
16Law Commission Perpetuities and the Revocation and Variation of Trusts: Review of the Law of Trusts − Third Issues Paper (NZLC IP22, 2011) [Third Issues Paper].
17Law Commission The Duties, Office and Powers of a Trustee: Review of the Law of Trusts − Fourth Issues Paper (NZLC IP26, 2011) [Fourth Issues Paper].
18Law Commission Court Jurisdiction, Trading Trusts and Other Issues: Review of the Law of Trusts – Fifth Issues Paper (NZLC IP28, 2011) [Fifth Issues Paper].
19Preferred Approach Paper, above n 8.