THE PERPETUAL TRUSTEES COMPANY

Southland Times, Issue 23840, 10 June 1939, Page 4

THE PERPETUAL TRUSTEES COMPANY

FIFTY-FITH ANNUAL

MEETING

The fifty-fifth annual meeting of the Perpetual Trustees Estate and Agency Company of New Zealand, Ltd., was held in the board room of the company on Wednesday, June 7, 1939. Mr W. E. Reynolds, chairman of directors, presided, and he was supported by the following: Messrs Edgar C. Hazlett, W. Downie Stewart, R. J. Gilmour (Invercargill), E. G. Kerr (Timaru), R. KIreland (Oamaru), A. R. Turnbull (North Canterbury), H. S. Lawrence (Christchurch) and the general manager, Mr A. Ibbotson. Apologies were received from Messrs James Begg, C. Stanley Smith and L. Deans Ritchie, and the meeting was well attended. Moving the adoption of the annual report and balance sheet the chairman said:— CHAIRMAN’S ADDRESS The annual report and balance sheet having been circulated among shareholders, I would ask your permission to take them as read. I believe I am justified in saying that today we are just as much concerned about the world’s financial problems as we were a year ago. Further, one can but express regret that seething unrest and uncertainty still prevail throughout almost every country in the world, and more especially in the countries comprising Europe. Personally, I look for a quietening down of this unrest during the coming year, and if this should prove so, we can, I think, then look for a better balance of interests being arrived at, bringing with it renewed confidence and stability. I am sure this is what people in general the world over desire and earnestly hope for. Our Dominion is far removed from the centre of the conflict, and consequently we may perhaps be forgiven if we are somewhat inclined to concern ourselves more with what are our own immediate prospects. Unfortunately for our farming community, the past season has not been a favourable one. Generally speaking, both yields and prices have been disappointing, consequently our primary producers are passing through a rather difficult time. One can but express the hope that the coming season may be a better one for them, amply repaying them for their labours. In the face of the foregoing, it is not to be expected that our company has come through the past year easily. In reality it has been a strenuous and difficult year for all concerned, calling for exceptional application _ and care throughout the whole of it. May I here be permitted to say how much I appreciate the efficient way in which our officers have responded to the demands made upon them, and which has resulted in the report and balance sheet which your directors have satisfaction in placing before you today. I shall refer to these more fully later on. BRANCHES All shareholders must by this time be aware of the fact that we have branches at Dunedin, Invercargill, Oamaru, Timaru and Christchurch. All of these have come through the year with credit, and have given us proof of a growing and moderately remunerative business at each centre. As our business continues to grow and expand, the general manager and his staff are called upon more frequently for advice and support. _ They have never failed to give readily of their best, and it has resulted in satisfactory adjustments being arrived at wherever practicable. To my co-directors resident in Dunedin I wish to express my sincere appreciation of their interest and cooperation at all times so willingly given, and at the same time I desire to place on record our grateful indebtedness for similar interest and co-operation to our branch directors, Messrs R. J. Gilmour, of Invercargill, R. K. Ireland, of Oamaru, E. G. Kerr, of Timaru, and A. R. Turnbull and H. S. Lawrence, of Christchurch. A word of praise is also due to our branch managers and their respective staffs at the different centres. SERVICE Our institution was established some 55 years ago for the purpose of making adequate provision for the proper handling and safeguarding of deceased persons’ estates and the welfare of their dependents. The scale of charges then decided upon is largely in operation today, despite the fact that all costs and charges incurred in the running of our institution have increased very considerably. Your directors so far have'preferred not to increase the company’s scale of charges, but by means of greater and more improved service to increase the volume of our business and to add to the number of our satisfied and appreciative clients. The ever-growing realization of the advantages of a corporate over a private trustee, together with a recognition of the complications now associated with the administration of deceased estates, is sending more business, into the expert care of trustee companies. While corpus and other commission charges have remained unaltered, the work involved in administration has very greatly increased, and so, of course, have costs. As an illustration of increased. costs, I would point out that, whereas in the year 1915 our expenses amounted to 50.2 per cent, of our gross earnings, today the cost has risen to 80.06 per cent. In other words, in the year 1915, of every £lOO of revenue received £5O went in expenses, whereas today, of every £lOO of revenue received £BO goes out in expenses. LEGISLATION There was no legislation of any great importance passed during the last year dealing with the law which relates to executors and trustees. The Fair Rents Act was extended to September 30, 1939, and the landlord was given a right of access to the leased premises to effect necessary repairs. An interesting piece of legislation was contained in sections 56 to 58 of the Statutes Amendment Act, 1938. If deals with the long-debated question whether apportionment should be made as between capital and income when a trustee has sold or purchased debentures or stock carrying a fixed rate of interest during the continuance of a trust. The old rule was that although the sale or purchase price included a portion of the interest accruing due to the date of sale or purchase, yet the whole amount realized by or paid for the debentures or stock was to be treated as capital and no part was to he treated as income. This frequently caused injustice, especially to a life tenant. It is, therefore, gratifying to trustees, as well as to accountants, to know that legislation has now settled this troublesome problem and allows the apportionment to be made. It might be mentioned that the laws of apportionment are now fairly well developed and it would be of great assistance to those whose business it is to deal with wills and trusts if testators or their advisers would always keep these matters before them, especially the simple one directing the non-apportionment of rents, dividends and other periodical payments for the period current at testator’s decease, so that the widow or life tenant can receive the whole income for the next half-year or other period and not merely the apportioned part thereof. The effects of the Rehabilitation Act,

the restoration of graduated land tax, the lower prices offering for sheep farmers’ produce and increased costs all round have all contributed towards a downward tendency in land values. At tlie moment the market for farm properties is a very weak one and so far as one can foresee, farm land values will not show any improvement until the margin between revenue and expenditure becomes greater thereby making farming a worth-while business proposition. WILLS A testator who leaves the making of his will to the last period of his existence, when the mind may be enfeebled *imd the powers of appreciation and discrimination are on the wane, takes the chance of its being said after his death that he did not know what he was doing when he executed the document. There is also the possibility that he may be too ill to make a will at all. Members of the . family of a deceased testator frequently make unsatisfactory executors or trustees inasmuch as, having relations only to deal with, they fail to recognize their obligations and the necessity of conforming to the rules laid down by law and generally neglect to keep proper accounts, while they often resent being asked for information by those entitled thereto. . Friends generally begin with tne best intentions but seldom maintain the same interest in their work when they find they are obliged to give much more time and attention to tnew trust work than they can afford and that the worries and anxieties of administration are unceasing. The temptations of a private executor and trustee are great, especially if he happens to become financially embarrassed. How many executors and trustees have yielded to these temptations and misappropriated the estates of their friends? If, on the other hand, an executor or trustee is a wealthy man, he may not care for the trouble entailed in the management of an estate, and may depute his duties to others, who may do grievous injury to the estate. Our company does not object to the appointment of a member of a testator’s family or a personal friend of the testator as an advisory trustee if and when the testator for some special reason thinks such an appointment desirable and in the interests of his estate. I should perhaps point out here the very general rule that marriage cancels a will that has been made previous thereto. _ , The Perpetual Trustee Estate and Agency Company (established in 1884) claims that the constitution of its directorate, the training of its officials, the organization of its staff, its great experience, and its ample capital and reserves make it exceptionally well qualified to act as exbcutor and trustee. REVISION OF WILLS A year ago I referred _ to the important matter of the revision of existing wills, and I would again say in connection with the making of wills how very important it is that these should be carefully revised from time to time. All trustee companies know by experience the baneful effects that arise from old or hastily-made wills, and how unfortunate and inequitable they frequently are as a result of the altered circumstances of beneficiaries, of imperfect instructions given to the lawyer employed to draw up the will, of the greater or lesser magnitude of the estate that is dealt with, or from other causes that have arisen during the testator’s life time, and that no doubt would have been provided for had a periodical revision of his will been made by the testator in consultation with his lawyer. . This has been especially evident during the last few years, because of altered conditions generally. It is the clear duty of every person who makes a will to study carefully its contents every few years and to see that either by codicil or the redrawing of the will any anomalies or inequitable treatment of beneficiaries are rectified. The effectiveness of one’s will and the value of one’s estate depend very largely upon the life, wisdom and integrity of the executor and trustee appointed. Our institution offers all the requirements necessary in an ideal executor and trustee. It is never ill or absent from duty. It has a wealth of varied knowledge and experience. It is vigilant and impartial, and its charges are fixed and published and are moderate. The fidelity and integrity of our company and its directors and officers have been proved over a period of 55 years. May I say in concluding my remarks under this heading that it is wise to put your trust in those who know their business and that by having your will properly drawn to meet your present circumstances, you will at least have done your duty to your family. The chairman then commented upon various aspects of the annual accounts and the upward trend in the volume of the company’s business as indicated by the figures, and concluded by moving

the adoption of the annual report and balance-sheet. “A GREAT RECORD” Mr Peter Barr, seconding the adoption of the report and balance-sheet, said the chairman had very fully and clearly explained the position disclosed by the accounts and it was not necessary for him to say very much in that connection. He recommended to those present, and to those who read the report, the chairman’s remarks with reference to legislation and especially that portion of the address which referred to the necessity for the frequent revision of wills I by testators. The chairman might quite well have spoken at greater length about the advantages of dealing with the company, but he had done so last year and these remarks should be considered carefully by shareholders and by all who have to do with the company. The company has a great record—a very great record, indeed, and when he looked at the balance-sheet he could not help noting in connection with the board that the names of Reynolds, Hazlett, Begg and Stewart were all honoured names in Dunedin when most of those Dunedin men present were boys and that being so it was a pleasure to see Mr Reynolds in the chair and to see such a number of well-known business men leading the affairs of the company. Now that the board of the company has been strengthened by the addition of members from Canterbury and other districts he was sure they would all feel quite confident that the affairs of the company are in excellent hands. The report and balance-sheet were adopted. DIRECTORS AND AUDITORS On the motion of Mr F. G. Duncan, seconded by Mr D. J. Calder, the retiring directors —Messrs W. ,E. Reynolds, James Begg and E. G. Kerr—were reappointed and the appointment during the year of Mr H. S. Lawrence was confirmed. Mr T. Sommerville proposed and Mr T. C. Coull seconded the reappointment of lhe auditors, and this was agreed to. VOTE OF THANKS A vote of thanks to the directors and staff, proposed by Mr C. J. Payne and replied to by the chairman (Mr W. E. Reynolds) and the general manager (Mr A. Ibbotson), was carried.