Hon MARIAN HOBBS (Labour—Wellington Central) Link to this
I move, That the Trustees Executors Limited Amendment Bill be now read a first time. I will, at the appropriate time, move that the bill be referred to the Commerce Committee. This is a private bill, promoted by Trustees Executors Ltd. Trustees Executors Ltd was previously known as TOWER Trust Ltd. The principal purpose of the bill is to substitute the name of Trustees Executors’ parent company in the principal Act from TOWER Ltd to Sheffield Investments Incorporated (NZ) Holdings Ltd in order to enable the company to transact business with its parent. At the same time the bill introduces a mechanism to allow Trustees Executors’ further parent companies to be named by Order in Council and renames the TOWER Trust Limited Act 2002 so that it reflects Trustees Executors’ current name. I am aware that this issue was raised in the last Parliament with a similar piece of private legislation for another trustee company, so this discussion will not be new for the committee.
Trustees Executors Ltd was first incorporated in 1881. It was then known as the Trustees, Executors, and Agency Co. of New Zealand (Ltd). The company now has eight branches. It has customers throughout New Zealand and provides a comprehensive range of specialised services to both personal and corporate clients. As a trustee company, Trustees Executors is governed by the Trustee Companies Act 1967. It is also governed by its own private Act, like the other three statutory trustee companies.
The private Act is the TOWER Trust Limited Act 2002. The 2002 Act authorises the company to transact estate and trust business with its parent company and with its parent company’s subsidiaries. The Act sets out certain safeguards in respect of those transactions. Trustees Executors can do business with its related companies only if Trustees Executors is satisfied on reasonable grounds that doing so is in the best interests of the estate or trust concerned. All payments made to related companies must be clearly identified in the accounts provided to the estate or trust. Similar concessions exist for the other statutory trustee companies.
The TOWER Trust Limited Act 2002 currently defines Trustees Executors’ parent to mean TOWER Ltd. However, TOWER sold Trustees Executors, then known as TOWER Trust Ltd, to Sheffield Investments Incorporated (NZ) Holdings Ltd in July 2003. Shortly after that, Trustees Executors adopted its current name. Accordingly, the objects of the bill are, first, to enable Trustees Executors to transact business with its current parent company, Sheffield, and with Sheffield’s subsidiaries, whether or not they are incorporated in New Zealand, and with future parent companies; second, to amend the title of the TOWER Trust Limited Act 2002 to reflect Trustees Executors’ current name; and, third, to ensure that the TOWER Trust Limited Act 2002 reflects Trustees Executors’ current ownership structure.
Sheffield is not a well-known name in New Zealand. Sheffield is ultimately owned by Sterling Grace Corporation in New York. Sterling Grace is a private investment company that has provided private equity, investment, and asset management services since 1885. It manages investments in various sectors and countries, mainly in Australia, Europe, and the United States. I should make it clear for the House that the bill authorises transactions only with Sheffield, a New Zealand incorporated company, and its subsidiaries. The bill does not authorise transactions with the US parent.
The fact that New Zealand’s four statutory trustee companies need legislation of this type from time to time has been a cause of comment from and frustration for many members of this House. A number of select committees have recommended a review of the regime for naming parent companies in trustee legislation with a view to enacting generic legislation to cover all trustee companies. This was the issue raised—and rejected, I think—by the select committee in 2005. It is still a live issue out there in the community of trustees. In the absence of generic legislation, Trustees Executors has included in this bill a mechanism to allow for its future parent companies to be named by Order in Council. The order can be made only on the recommendation of the Minister of Justice after consultation with the Minister of Commerce.
The mechanism will remove the need for parliamentary approval of a new parent company, as we are providing now, should Trustee Executors be sold, yet still allow appropriate scrutiny of future parent companies before transactions with them are authorised. Trustees Executors tells me that no such sale is currently intended by its parent, but that is not to say it may not happen in the future. Trustee company sales are not the rare occurrence today that they used to be. No doubt the Commerce Committee will consider the Order in Council mechanism more fully.
This bill has been advertised in accordance with the Standing Orders, and all persons who have a direct interest in the bill have been notified of the intention of Trustees Executors to promote it. I commend the bill to the House.
KATE WILKINSON (National) Link to this
I support the Trustees Executors Limited Amendment Bill on behalf of the National Party. I am delighted to be given this wonderfully exciting opportunity to support the bill, which I am sure will be of intense and general interest to everybody. By way of background, there are four trustee companies—not to be confused with trust companies—established by private Act that may undertake the administration of estates and personal trust work. These are the New Zealand Guardian Trust Co., Trustees Executors Ltd—formerly TOWER Trust Ltd—Perpetual Trust Ltd and PGG Trust Ltd trading together, and New Zealand Permanent Trustees Ltd.
It may be useful to backtrack in history somewhat and relate the reasons for the existence of these trustee companies. I will quote from the original Trustees, Executors and Agency Company Act of 1882. Apart from being a history lesson, this illustrates some of the changes in drafting styles, bearing in mind that the Act was passed by this Parliament. It states: “Whereas from the uncertainty of human life, and from other causes, great difficulty often arises in securing the services of suitable persons for the office of trustee, executor, liquidator, guardian, and other similar offices: And whereas”—[Interruption] I know!—“in order to secure the more certain discharge of the duties of such offices a company has been formed … with the object, among other purposes, of affording persons the opportunity of obtaining the services of a permanent corporation for the performance of the duties of such offices, and thus to remove much of the uncertainty and insecurity which attends the appointment of private individuals:”—
Hon Maurice WilliamsonI knew that my colleague Mr Williamson knew that. It continues with a further “whereas”: “And whereas it is expedient”—[ Interruption]; there are plenty of “whereases”—“to enable the said incorporated company … to act as liquidator, executor … and to perform and discharge all the duties of such offices and to receive remuneration for such duties, and also to act as receiver and committee of the estate under any law now in force or hereafter … in the colony”—no less—“relating to lunatics”—I kid members not; this law of 1882 relates to lunatics—“… and to perform and discharge … such duties, and to confer upon the said company the powers and privileges hereinafter set forth, in order to enable the said company more effectually and usefully to carry out the objects sought in its incorporation.” That is the 1882 drafting style of the original Trustees, Executors and Agency Company Act. These days we would just say in simple terms that this Act enables a trustee company to be paid.
Under general trust law a trustee cannot charge for work done as a trustee unless this is specifically authorised in either the trust document or the will creating the trust. In legal circles this is known as the charging clause. In effect, the trustee company Acts creating these trustee companies are similar to that charging clause, merely enabling trustee companies to charge for the work that they do. Each time there is a change of the parent company, a trustee company must secure changes to its private Act to authorise it to transact business with its new parent company.
This is, surprisingly enough, a very sensible bill. It is a technical bill. It is not new law. It has happened before, and no doubt it will happen again. What I find surprising about this bill, though, is that when a similar situation was presented in 2004 in a very sensible bill, the New Zealand Guardian Trust Company Amendment Bill—and at that stage it merely wanted to enable the Guardian Trust to transact with its parent company, Promina Group Ltd—the Labour Government representatives decided by majority that they were not willing to support the proposal. In 2004 the proposal was not supported; in 2006 it is suddenly a wonderful idea.
I am pleased to say that in 2004 National at least displayed common sense, some business acumen, and the nous to take the minority view supporting the proposal to approve that new parent company. How times have changed! Now we have the same situation, albeit with a different trustee company, being supported and proposed by a member on the opposite side of the House. I am pleasantly surprised at this sudden, but no doubt momentary and fleeting, discovery of common sense by the Labour Government. But where was that common sense when it was decided that our farm dogs, our working dogs, should be microchipped? Where is the common sense in that? I have yet to find anyone who can explain to me how microchipping farm dogs will stop urban dogs biting and attacking people.
Bob ClarksonThey may well be Labour dogs. All this does is add an extra nonsensical compliance cost to our farmers, with no hope whatsoever of addressing the mischief. Is the problem in relation to microchipping aggressive dogs in the country? No. Is the problem rural farm dogs? No. Is the problem with the farmers? No. This microchipping will not address the problem whatsoever.
The ASSISTANT SPEAKEROK, I will come back to common sense. This is a surprising turn-round where common sense has suddenly eluded the Labour Government. The microchipping bill is ludicrous, dumb, and lacks common sense. I would like to see this fleeting example of common sense displayed by the Labour Government remain with us for a wee bit longer. Returning to common sense, I say that National supports this bill. All the bill does, as Marian Hobbs has said, is to rename the Act from “TOWER Trust Ltd” to “Trustees Executors Ltd”, and it enables that trustee executor to transact with its parent company, Sheffield Investments Incorporated (NZ) Holdings Ltd. The bill is only technical in nature. It is commercial reality. It is wonderful common sense. Therefore, National supports this bill.
STEVE CHADWICK (Labour—Rotorua) Link to this
I rise to take a very short call on the Trustees Executors Limited Amendment Bill, but one could be forgiven for being slightly confused about the microchipping of dogs. The introduction of the bill was very profoundly put by its introducing sponsor, Marian Hobbs, and it really had nothing to do with dogs. This is simply a bill that came from the Trustees Executors themselves, and it is sensible. It is a private bill, and any Government of the day always supports a private bill when it comes to the House. That is democracy. So we are delighted to support this bill today.
There is a very interesting bit in the bill about future-proofing, with an Order in Council mechanism so that we will not have to relitigate it in the House. That is common sense. It is the sort of legislation that this Government is pleased to stand by, support, and promote.