Trustee’s indemnity, corporate trustees and insolvency
16.1 This chapter addresses various issues relating to corporate trustees, creditors, trustees’ indemnity, and insolvency, which were previously discussed in the Fifth Issues Paper and the Preferred Approach Paper. It includes discussion of previous proposals on:
- liability of directors of corporate trustees to creditors and beneficiaries;
- disclosure of trustee status of companies acting as trustees and interaction with other registers; and
- areas where trust law interacts with insolvency law.
16.2This chapter also discusses recommendations in the following areas:
- the standing of the Official Assignee to challenge the validity of a trust;
- the ability of the High Court to appoint a receiver for trusts;
- principles regarding trustees’ liability and indemnity; and
- creditors dealing with trustees.
16.3In some of these areas there have been changes from what was proposed in the Preferred Approach Paper. We have decided that some of those proposals are more appropriately dealt with later in the Law Commission’s corporate trustee review. This chapter discusses submitters’ comments and reasons for changes in position from the Preferred Approach Paper.