Chapter 1

The origins of the reference

1.9This Report, and all of the work on which it is based, has its origins in an earlier Law Commission Report, Some Problems in the Law of Trusts, issued in April 2002.9  As the title indicates, rather than the comprehensive review of the law of trusts that we have undertaken, the Law Commission was then concerned with a limited number of problems relating to the law of trusts:

1.10The Trustee Amendment Bill 2007 would have given substance to many of the particular recommendations made by the Law Commission in Some Problems in the Law of Trusts. While the Bill was considered and reported back by the Justice and Electoral Committee, it was never given a second reading. The Bill was discharged in March 2012, because of this project. The report of the Select Committee had, however, been a critical impulse for the beginning of this review within the Law Commission.

1.11While the majority of the committee was prepared to recommend the Bill for a second reading, the Select Committee recorded:10

Although we agree in principle with this amendment bill we do not think it reforms the law relating to trusts extensively enough. During the course of our examination of this bill many related issues that were outside the scope of this bill were brought to our attention, … We urge the Government to conduct a comprehensive review of the law relating to trusts as soon as practicable.

1.12The Select Committee report included a list of other topics that it thought would be a desirable part of such a review:11
1.13The National Party members of the Select Committee, then in opposition, provided a comment that expressed the need for a more comprehensive review of the Trustee Act and was stronger in its criticism of the limited scope of the Bill:12

[T]his is very poor legislation which results from an ancient Law Commission report. It misses some big issues while concentrating on a series of minor ones. The real need is to repeal the out-of-date Trustee Act 1956 and replace it with legislation which is relevant and up to date.

1.14This reference was, in essence, the Government’s response to the recommendation by the Select Committee that there be a wider inquiry into the law of trusts than the Commission’s 2002 Report. The proposals in this Report cover the additional topics identified by the Select Committee with the exception of accession to the Hague Convention (which must wait until the charitable and purpose trusts review) and trading trusts (which will be considered further when we look at companies acting as trustees). The principal recommendation of this Report is that there be a new Trusts Act.

9Law Commission Some Problems in the Law of Trusts (NZLC R79, 2002).
10Trustee Amendment Bill 2007 (144-2) (select committee report) at 3–4.
11At 3–4.
12 At 4.