3.59New legislation when enacted applies from the date it comes into force. However, consideration must also be given to how it should apply to things done and arrangements made before that date. The general principle or presumption long recognised by the common law and more recently captured in section 7 of the Interpretation Act 1999 is that legislation does not operate retrospectively. However, the presumption against retrospective effect will be overridden where a statute is clearly intended, because of express or implicit wording, to have some retrospective application.
3.61We have approached the important matter of transition from the starting point that there ought to be one law of trusts in New Zealand, not a pre-Trusts Act law and a post-Trusts Act law. Trustees and beneficiaries should be able to determine easily what obligations they are under, or what obligations they are owed, and that would be made too complex if that law depended for too long on the date of the existing trust deed.
3.62In fact, many of the provisions of the proposed Trusts Act do not change the obligations owed, but as we have explained, merely provide explications of the existing law. We see little reason why those explications should not commence with the statute. At the other end of the scale, the more administrative and mechanical provisions that we recommend are designed to be of use for existing trusts as much as future trusts. There seems to us every reason that, except where there are legal proceedings currently on foot, the new law in such areas should advantage all trusts.
3.63However, there are sets of provisions for which we think a transitional period is desirable. When obligations change there ought to be sufficient opportunity for those involved to be able to adapt to the changed obligations. Examples of these provisions might include the expanded obligation of trustees to provide information, which may require trustees to change their administrative practices, or the inability of trustees to rely on an exemption clause that purports to exclude liability, which may require some trustees to consider their own insurance or even whether they wish to continue to be trustees.
3.64Transitional provisions are also required where we are recommending changes to the default powers of trustees, which will give trustees all of the powers of natural persons. This may require trust deeds to be revised to restrict those, now broad, powers when those broader powers would not be appropriate. In one case, that of the allocation of receipts or expenses either to, or against, the categories of capital or income, we are recommending that while the statutory flexibility (which is subject to the duties of the trustees) ought to override constraints in existing trust deeds, constraints might be imposed in future trust deeds.
3.65Although we have indicated the appropriate transitional arrangements in the text as we considered each recommendation, we have also set out a table of recommendations and the suggested transitions for the sake of convenience at the end of this chapter (see table C).