1.3We intend that this Report record our recommendations and also that it provide an important resource for those involved in interpreting the new Trusts Act as to how the reforms relate to the general law of trusts.
1.4This Report is set out in five parts. Part 1 sets out our general approach and the principles that have guided our reform. We seek here to explain not only the justification for the recommendations set out in the second part, but also to set out the relationship that we see between our reforms and the law of trusts as it currently stands and indeed the general law.
1.5We also seek to explain how our proposals ought to be considered as a package and interpreted as such when implemented. As we explain in Part 1, the proposed new Trusts Act will interact with the current law in different ways. First, some of the provisions in the new Act reflect what is generally understood as the current law. The intention of recommending the statutory recognition of the duties of trustees, for example, is to clarify rather than reform the current law. It would be appropriate to interpret these provisions as reflecting their equitable principles and understandings. Second, at times we recommend what might be considered modifications, or tailoring, of current law, and it would be appropriate to interpret those modifications or alterations in light of case law, but also in light of the intentions behind our recommendation for modification. Third, we sometimes recommend the considerable alteration, or even reversal, of the current equitable principles or case law.
1.6Parts 2 to 5 of this Report contain our particular recommendations. The division into parts broadly replicates the divisions used in the Preferred Approach Paper. We have included a narrative description of recommendations and their justifications, and at times also indicate why we have chosen a particular form of recommendation.
1.7One of the persistent concerns in submissions and at consultation meetings was exactly how recommendations setting out the characteristics of trusts, articulating duties of trustees, or restricting exemption clauses might look in the proposed Trusts Act. With the assistance of the Parliamentary Counsel Office, we are able to include indicative drafting of these provisions as well as those giving effect to our recommendations on the review of trustee decisions, the setting out of trustee indemnities and the variation and revocation of trusts. Where appropriate, we have annotated these provisions with comments explaining why we have reached particular drafting outcomes.
1.8Chapters deal with particular topics. Rather than repeating the material that we have previously discussed in issues papers or the Preferred Approach Paper, we have sought in the individual chapters to build on that analysis. At some points, it may be necessary for those who seek particular detail to refer back to the relevant issues paper or the Preferred Approach Paper. We have included description and analysis of the submissions we have received on our Preferred Approach Paper, and have indicated where we have altered our position as a result of those submissions or further analysis. Where, as is sometimes the case, we have continued with the original proposal despite submissions to the contrary, we have stated why we have reached that conclusion.