The Law Commission’s proposals for greater “Trust-busting” powers in the PRA

My last article (LawNews Issue 43, 30 November 2018), concerned the Law Commission’s proposals to give the Courts greater powers to break into trusts in relationship property disputes. I concluded it with some speculation as to whether or not the Commission’s proposals would be enacted.

The President of the Commission, Sir Douglas White, has since written to me with details of the Commission’s track record of success in getting Parliament to implement its proposals for reform. It’s a subject that should interest lawyers.

A previous President of the Commission, Sir Grant Hammond, wrote an article on this subject for the Waikato Law Review in 2016. He said that, since the Commission’s inception in 1985, the Commission has produced 139 reports and that “most, have been adopted wholly or in part …”. In the period since 2004, he said there has been a 79% adoption rate by Parliament of the 29 measures that the Commission had recommended between 2004 and the date of his article.

The figures that he gave are not quite as good as that. For example, one of the proposals had only been “partially accepted”, one was “awaiting a legislative vehicle”, while nine of the others had been “substantially” but not fully accepted. Even so, the success rate is impressive. Sir Grant said that an adoption rate of 79% is the highest adoption rate of 12 similar Commissions in the Commonwealth.

What does this mean for the greater powers to break into trusts that the Commission says should be included in the PRA? If, in the period 2005 to 2016, almost 80% of the Commission’s recommendations have been broadly accepted by Parliament, there must be a reasonable likelihood that the Commission’s proposals for the changes to the PRA will be adopted.

As I said in my last article, the intrusion by Parliament into the property interests of spouses and co-habitees is becoming so significant that people who wish to adopt other forms of property division and ownership should contract out of the PRA and record their preferred arrangements in agreements that comply with the contracting-out requirements of the Act. And people who don’t want the courts to invade their trusts should be creative in devising mechanisms to protect them from judicial attacks.

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