Since the Trusts Act 2019 came into force on 30 January 2021, Professor Emerita Nicola Peart from Otago University, renowned commentator on the Trusts Act (and so much else relating to Family Law) has been updating the annotated Trusts Act with comprehensive commentary that has evolved as the new Act settles in and the courts settle in with it. She has been a participant in many conferences held since the new legislation was first enacted and everybody has had the chance to discuss and consider ramifications. For the August update, as well as the usual updates of recent cases since update 2, Professor Peart will be covering new commentary on ss 77–80, 87 and 88 of the Trusts Act 2019, which covers:

• Application of insurance money for loss or damage of trust property
• Trustee’s power to adjust interests in trust property of portfolio investment entity
• Trustee’s liability limited where notice given to distribute trust property without regard to unknown claims
• Protection of purchasers and mortgagees dealing with trustees
• Trustee’s lien on insurance money for premiums
• Trustee’s indemnity for rent, covenant, or agreement under lease

She has also written in this update on the very interesting Privy Council judgment recently handed down on the Grand View Private Trust Co Ltd v Wong [2022] UKPC 47 case. It has been described as providing welcome clarification to trustees on their powers in broadly worded documents and the importance of proper purpose. Professor Peart notes that the Privy Council disagreed with the Court of Appeal of Bermuda, concluding that the trustee had exercised the power for an improper purpose:

“While the powers used very broad language, the purpose of the power to add and remove beneficiaries had to be gleaned from the terms of the trust as a whole and the surrounding circumstances at its inception. The trust was set up as a private express trust for the benefit of the children and remoter issue of the brothers. The beneficiaries were individuals, not purposes. The second trust, by contrast, was created on the same day for charitable and non-charitable purposes, not for individuals. The assets held by the family trust were small by comparison with the billions held by the second trust. The family members could not benefit from the second trust. There was no link between the two trusts. There was nothing in the first trust to suggest that the power to add and remove beneficiaries was intended to be used to deprive all of the children and remoter issue of the brothers of any benefit from the trust and to substitute a trustee of a purpose trust and then transfer all the assets to the purpose trust. In the light of the focus of the trust and the surrounding circumstances, the Board concluded that the purpose of the power to add and remove beneficiaries was to further the interests of the beneficiaries or one or more of them.”

This commentary will be available in Family Property at the end of August.