3.16A more complex question that has been addressed in our issues papers, and also in submissions and discussion with our reference group, is the appropriate relationship between the new Trusts Act and the case law on which it is unquestionably based. While a true code might be said to be “exclusive” in the sense that there is no need to go behind the words that the drafter has used in articulating a code, the reality is that this is not our intention in relation to the Trusts Act.
Nothing in this Act prevents a court, in interpreting the provisions of this Act, from having recourse to the general law of trusts and equity where that law is consistent with this Act.
3.18There is no one relationship between the pre-existing law, or equitable principles that might govern the administration of trusts, and our recommendations.
3.19In some instances, the principal examples being the characteristics of express trusts and the articulation of mandatory and default duties, we have endeavoured to essentially incorporate traditional notions of what case law currently requires. The current case law and related commentary will continue to be of primary importance. During consultation, one of the recurring criticisms of our proposal to set out the definition or the duties in statutory language, was that this will somehow fix those duties and meanings, prevent development and focus attention on the words used rather than the principles they represent. This is not our intention and it misperceives the process that courts, lawyers and other readers will take when interpreting the legislation. The proper approach will be to read the words of the statute in light of the understanding of the equitable principles that gave rise to them. We have chosen the wording with care and that wording has been road tested through our consultation, but the focus should not be on interpreting them in isolation, abstracted from their context.
3.21In a third type of provision, we have referred to existing case law but have suggested that it ought to be replaced. In relation to these provisions, the primary focus ought to be the statute, rather than pre-existing case law or statutory provisions. In this category we might put provisions such as the abolition of the law against perpetuities or the abolition of the current rules relating to the categorisation of particular receipts or expenses as capital or income. In the case of these provisions, the old law would remain of historic interest or a way of understanding the mischief which the new provisions are intended to deal with.
3.22In order to aid those who might seek to interpret provisions in the new statute, we have included a consolidated chart of those provisions that fall into each of these three categories at the end of this chapter (see table A). Another table sets out the way in which our other recommendations that currently have a statutory rather than case law character interact with existing statute law (see table B).