TRUST INVESTMENTS

Taranaki Daily News, 29 April 1931, Page 7

TRUST INVESTMENTS

AMENDMENT of the law, meeting HARDSHIP cases. Wellington. April 27. The sharp fall in land values has so embarrassed trustees holding land as security under their trust that special clauses were inserted in the Finance Bill N°- 2. which was passed by the Legislative Council to-day, to eliminate the pogmty.nty of hardrshlp. , These amendments to the law relating to trust mortgages it secure for a trustee to continue an investment, notwithstanding the fact that the value of the eePF’ty b ad 60 LpA’ fallen as to make it no longer an investment authorised by tile trust instrument or the general Jaw, ,> When the House of reached the clauses the -Hon*- W* Doij’ n;e Stewart (Reform, Dunedin asked the Prime Minister, the Rt. G W. Forbes, what representation had been made for the inclusion of these provisions and what wtm the object of them. It seemed that this clause gave a trustee power, to dispose of the. whole pf an estate —power which lie did not possess hitherto. It also gave a trustee power to mortgage, the uHiole of prospective share and mortgage tfie whole’apset. The Prime Minister explained that the first clause brought the New Zealand law relating to tru-»t mortgages into some measure of conformity with the English law. It had been found that, oWlng to the drop in the price of Innd, many securities lield in trust Jiau fallen below the value of the mortgages, and they then ceased to be authorised investments. s Mr. 11. G- R- Mason (Labour, Auckland ’ Suburbs) suggested a provision such as this should, in fairness to the legal members of the House, be brought down and allowed to be thoroughly anaA- Hamilton (Reform, Wallace) considered the clause to be a useful and necessary one. Large amounts w? 1 ? frequently involved in cases in yßicli the death or a person complicated the position for the tyusfe?. Mr. W. P- Endean (Reform, Parnell) warned the House against. upsetting a fundamental principle of the law ox equity and advised the members to consider the clause very carefullyThe Prime Minister said the Attor-ney-General had recommended the insertion of the provision to meet certam cases of hardship yvhjch .would occur it trustees were forced to realise upon securities whjch had seriously fallen in value. If it should be the general opinion of the House, lie had no senous objection to letting the clause stand over. . Mr. T. W. McDonald (Government, Wairarapa); I have a strong objection. Mr. McDonald said it seemed that before any law was passed by the House it had to be submitted to the Law Society or to some body of legal men. It that was so, there should be a right te submit to them every piece of legislation. brought down. Reform members: Oh, ridiculous!

Mr. McDonald: It is just as necessary in hundreds of other eases as it is in this one. I say, however, that Parliament should be quite above any law society and any body of lawyers. Mr. Stewart said he had received representations upon certain cases where difficulty had arisen involving many thousands of pounds. . An amendment moved by the Prime Minister making the provision apply to prior trustees held under the.same trust was finally carried on the voices. The second part of the provision empowered trustees in certain eases, with the consent of the Court, to borrow moneys and apply them to advancement of persons entitled to capital of trust property, The Prime Minister explained that the clause had been sought by the Canterbury Chamber of Commerce and stock and station agents who desired to carry farmers over the depression and who were prevented from doing so on count of an anomaly , in This clause was also carried on the voices.