Last night Parliament passed the Trusts Act 2019.  I was lucky to be one on the Law Commissioners responsible for the 2013 Report on which the Bill remains based.   In the last few years I have also been lucky to have helped the talented and hard-working people at the Ministry of Justice  and PCO as the report became an exposure draft, a bill and now an Act ( or least when its Royal Assent).

 This, in my unbiased opinion, is the most important piece of private law reform in New Zealand since the Companies Act 1993. Like the Companies Act it seeks to strengthen an essential piece of our country’s legal infrastructure.  The Act is not revolutionary, almost all of it will be familiar.  What is world leading ( at least I like to think) is the efforts in part 2 and part 3 to define what an express trust is and what duties trustees owe.  There is much of interest for trusts scholars I think in some of the underlying debate we had on these provisions.  One thing that fell of reform process is purpose trusts.

 What is most important perhaps is the simplification of the “under the hood” mechanics that make trusts work in the every-day world ( oh, and the law of perpetuities is replaced by a simple duration limit of 125 years).     We have also done some controversial things like straightened the information requirements to something like a beneficiary right to require trustees to consider, and we now prohibited indemnification of gross negligence , although the definition took a bit a work and probably looks closer now to a lesser degree of dishonesty.  My favourite provision remains cl 80 which allows a limited right to a creditor for restitution of property given to a trust even if the indemnity is impaired by the lack of good faith in the trustee.

Kind regards

Geoff