TRUSTS – BOOK REVIEW –
“Equity & Trusts in New Zealand”, 2nd Ed 2009, Thomson Reuters
Book publishers give books to reviewers in the hope that they’ll say “This is an excellent book and you should definitely buy it!” But most reviewers are usually not quite so obliging.
However, I am quite happy to say at the outset of this review that the 2nd Edition of “Equity & Trusts in New Zealand” is a book which all NZ lawyers who have a credible practice in Equity or Trusts should have in their libraries. Dr Andrew Butler and his team of 12 co-authors have produced a book that is practical, easy to read, and sufficiently comprehensive as to serve the interests of students at one end of the spectrum and specialist practitioners at the other.
Texts of this calibre are important for the development of our law. Having lost the right of appeal to the Privy Council, we are on our own as a country and the development of good law is dependent, to a significant extent, on the existence of sound academic study and debate.
There are numerous structural changes in this edition including new chapters on Sham Trusts, Trading Trusts, Equity and Restitution, Maori Trusts and a chapter entitled “Concluding Observations: The State of Equity, Future Developments and Possible Reform”.
A pleasing aspect of the book is the authors’ interest in trying to foster debate about the merits or demerits of the law at present. Several chapters conclude with sections in which suggestions are made for reform.
In the case of sham Trusts, Jessica Palmer’s chapter on this topic contains a comprehensive – and helpful – criticism of the law at present.
Professor Nicola Peart also stands high for her outspoken comments in a chapter on “Equity in Family Law”.
Most “serious” texts on Trusts avoid the way courts treat Trusts in the context of relationship property disputes. I think this arises from a purist sentiment which says that judges in the Family Courts cannot be trusted to apply proper principles to Trusts. This is a big mistake since, in the New Zealand context at least, most Trust disputes arise in the context of relationship property disputes. It is to the authors’ credit that they acknowledge this - and the book confronts these issues head on.
One of the most important topics in Trust law at present is the validity of “trusts” over which a person has “effective control”. In this context Dr Butler says that:
“If persons said to be ‘trustees’ in a purported ‘trust’ instrument were entirely free to act in respect of that property as they wished and without being under any duty to anyone else then they would be absolute owners of the purported ‘trust’ property and cannot be ‘trustees’ ” .
It is hard to dispute the accuracy of this statement. It would, however, be helpful if, in the next edition, there was an attempt to apply it to cases where Judges have held – either implicitly or explicitly – that a Trust is valid notwithstanding the appearance of “effective control” by a person of its assets.
Authors of legal texts these days have a completely new source of information to draw on – transcripts of oral argument in the Supreme Court. I did not detect any use of this material in the text.
The case of Chirnside v Fay [2007] 1 NZLR 433 is a major decision from the Supreme Court on the circumstances in which fiduciary duties will arise in joint-ventures and it features prominently in the book. I was counsel for Aotearoa in the case of Paper Reclaim v Aotearoa [2007] 3 NZLR 169 and relied on some parts of the judgment that Her Honour Elias CJ had delivered six months earlier in Chirnside.
The Butler text prints paragraph 14 of her judgment as recording an important aspect of the law on this topic. I sought to invoke that paragraph in Aotearoa and the transcript records me saying “… maybe I misunderstand the Judgment, if I just take the first sentence of paragraph 14.” To which Elias CJ is recorded as saying:
“Oh, don’t. Move on to the majority reasons if you must.”
This exchange followed a submission in which I said that I also relied upon a general proposition which she had stated in paragraph 1 of her Judgment in Chirnside. When I referred to that paragraph, her response, as recorded in the transcript was:
“Well I’m certainly, repent me of that one, …”
In his recently published book “Judicial Recusal” Hammond J has said that judges are entitled to change their opinions (he quotes the famous line of Baron Bramwell, “The matter does not appear to me now, as it appears to have appeared to me then”). In this context it seems that neither the extract from Her Honour’s Judgment that appears on page 1147 of the Butler text, nor the statement of principle that appears in paragraph 1 of her Judgment, represent her present thinking on this topic today.
In the late 1980s I co-wrote “The Law of Intellectual Property in New Zealand” with Andrew Brown. Despite its success, the book never made it to a second edition. The Attorney-General recently asked me why this was so. There are a number of answers but the main one is that the task was too daunting for two practising lawyers. Dr Butler has found a better formula. With his team of co-authors he has found a way to keep the topics of Equity and Trusts alive in a serious academic format. There must be strong prospects that this book will become an enduring feature in our law on these topics.