PUBLIC TRUST OFFICE.

Press, Volume LX, Issue 18222, 5 November 1924, Page 9

PUBLIC TRUST OFFICE.

.#— , FURTHER CONTRIBUTION BY "JURIST." 11. [The fo'.owinsr is a second article from o ;ir contributor. "Jurist,"' whefe first article appeared in "The Tress" of Friday, October 04th.] Public Trust Office Legislation. In tho session 1921-22 the Public Trust OtJu-o rut through 'The Public Trust Otiue Amendment Art."' The effect of this lins l.een to repeal certain well-defined and well-established principles ot' law in the administration of a deceased estate so far as the Public Trust Office is concerned. Many of the I'h.-.nLrcs are verv far-reaHiing, and many are open ;<•■ £erions criticism. Others, again, may make for improvement, but if this be so, why should not the Legislature make those alterations applicable to Trust law generally? The result is that there is confusion and uncertainty. In a recent case in which the question arose of the conversion into cash of u trust estate administered by the Public Trustee, one eminent {fudge made the remark:— "It is the first time in Christendom that it lias crjno about that a will means one tiling when administered by the i?ui>lic Trustee and an:ther if administered by » private person." In the same case, another Judge (Hon. Mr Justice Adams), dealing with the reneal by "The Public Trust Office Amendment Act, 1922," of the wellknown case of Howe v. Dartmouth <a case of great antiquity dealing with certain rules of administration of trust estates), said:— "It mny wel] be a question for the Legislature to consider whether such legislation is in tho public interest.'' From a perusal of the Act ono may bo permitted to ask whether this farreaching Public Trust Office Amendment Act, 1921-22, received at the hands of the Legislature that consideration which its importance to beneficiaries whose estates happen to be administered by the Public Trustee, merited. Widow as Life Tenant. first the position of a. widow as a life tenant. Section o9 of the above Act reads as follows: "(1) Where any person is legal or equitable tenant for life of any lands comprised in an estate being admin.stored by the Public Trustee, such, person shall acft be entitled to tho use, cccupation, and enjoyment of or to receipt of tho income, rents, issues, and profits of such lands, except with tho consent of ths Public Trustee, and on such terms and conditions as to keepinj tho trust property in repair and punctual payment of rate*?, tax'?, insuranco premiums, assessments, rents, impositions, and other outgoings, or otherwise, as the Public Trustee mav think fit. "(2) Should such person being in occupation of such linn's fail to observe any "f the duties or obligation* attaching to him as such tenant for life, or imposed by tho | Public Trustee, or the Public Trustee for any other reason deem it necessary or expedient to enter into possession of tho said lands, then the Public Trustee may, by notice in writing: personally delivered to such person, or forwarded by registered latter to him at his last known addyew, direct such person to give up possession of *he said property on or before u. d«te to bo named in such notice, not being lees than ono calendar month frim the date thereof." Power of Public Trustee to End Widow's Life Estate. It should be pointed out that a life estate is, next to the estate in feesimple, the very highest estate known to English law. It is a very common thing for a testator to leave his widow a life interest in tho whole or in a portion of his estate, but more especially does he often leave his widow a life estate in his dwelling house, so that the widow may continue on and not have her home broken up, as otherwise might be the case. The above section, however, gives the Public Trustee, if he be the executor of the will, power to over-ride the wishes of the testator and to annex conditions as he mav think fit, and if those conditions are not complied with the Public Trustee, it will be, seen, is empowered to give the widow a months notice determining her occupancy; inother words, he has power to end. and determine her occupancy of the estate left to her hy her husband. Widow as Life Tenant Treated as Trespasser. Strange as this may seem, however, the section. goes further; it states:— "(3) On failure to give up poweesion oil such lands on or before th„ expiry «* w lO date named in such notice, »uca person ahall be deemed to be a trespasser, and the Public Trusteo may take the ncceaaary legal proceedings to have euch parson ejected. It will be seen from the above that if the widow does not comply with the regulations of the Public Trustee, she can be treated as a trespasser on her property, the life estate in which had been devised to her by her j"«8 b fnd. and this notwithstanding the fact that she holds the highest estate m English law save and except tho fee-simple. Life Estate to be No Defence. The section goes on as follows: "(4) It shall bo no defence to any mich proceedings that the person sought to be ejected is a legal or equitable life tenant of the said lands." Here, a man may wish his widow to have all the benefit and advantage that could accrue to her from a life interest in his estate, and yet his wishes can bo completely over-ridden and the widow treated as a trespasser. Whatever protection or rights Bhe may have had under the Settled Land Act (an Act which has been in forco and has stood the test of many years), is rcEealed so far as an estate administered ' y the Public Trustee is concerned. ' The concluding sub-section ot the above astounding piece of legislation is as follows: "(5) la respect of any estate under administration by the Public Trustee, the provisions of the Settled Land Act. 1906, shall have no amplication, and the powers, of leasing and sau thereof ahall only be exercised by tho Public Truat*e, and not by the tenant for life or other person entittsd to exercise such power under that Act." I venture to say that one may search the legislation of everv section of the British Empire and find no parallel to such an over-riding of rights or to the bestowal of such autocratic oowers on a trustee If any such legislation exists, I have not, in my search, come across it. That a widow can be treated as a trespasser upon her late husband's property—property, it should be noticed, left to her by her husbands will, shows to what dangerous «M alarming lengths a Government department is prepared to fiO. WI!C ° j£ obtains legislative sanction to ew» extraordinary procedure, it may said that the ™M C ?™ftLJfi?*£ public officer, will .not «* **gj Ir arbitrarily. That is »ot is his power of doing *o tb*' » jected to. The <****%%**" ', powers is vicious in principle Modifying Contracte of ****7 ftW Another ««*g"g;"JgSVl>» ** brought about by tfthS Public '&^Js l £rho ma.y He estate oT a;*£*K notice that serve upon „. be to jfiLSiT and nakss the cloded in the md*W>

Modifying «--£EVs J Another sweeping»HgJ«^* thai brought aboot bf l *»»»» 18 , Public may h the estate * •"S2R»«*» *** ? 6 erre upon the "gSfifpropertv in- ~ be w*^. to jflLJS: and nnkss the 11

mortice within one month applies to the Supremo Court as piw ideii bv the sevtion I nin referring to. the Public Trustee may sell the mortgaged property subject to the mortsa.ee, nnd distribute ti>'> pi\>.<vrl.x, and conml.'telv put an end to the persona! covenant in the mortgage so far as the mortgagee is concerned, and "neither the I'mlie Trustee i.or the as.-ets «>f the- estate shall be liable under or in respect of any covenant, agreement, or stipulation, express or implied, in tho said mortgage, either directly or by wav of indemnity or ether vise howsoever.'' So seriously is this infringement of mortgagee's rights regarded, that all well-drawn mortgacres now contain a ■ proviso that should the estate be administered by the Public Trust Office, the money shall immediately at the option of tho mortgagee become duo and payable. Recently Mr Atnioro, M.P. for Nelson, asked the Premier in the House whether this practice had not arisen, and would the Government take steps to make such a practice illegal ? It is a pity that that gentleman did not make himself a little moro familiar with the section before. . by innuendo, condemning the practice which lias grown up. The Public Trustee is to have the rtcrht to modify a I mortgagee's contract, and vet. if the mortgagee inserts a clause to protect himself by reason of the Public Trustee's interference with the right of contract, the mortgagee is to be precluded from protecting himself. 1 In this connexion, a Canterbury mortgagee recently received notice of intention to sell from the Public Trustee The inortcnTee in this case, instead of ignoring the notice. cot his solicitor to act. The result vas that when the case came his Honour Mr Justice \dnnis. bis Honour declined t-> allc-w tlv> Public Trustee to sell, and ordered him to pay the costs of the proceeding's. In doing «o. bi«s Honour evnress<v7 himself very ■forciblv as in Mich legislation altering the rights of contract. Other Modifications of the Lav. Here are a few of the far-reaching alterations in the law of administering estates made in "The Public Trust Office Amendment Act, IU2I-22" : Over-riding rights of a Company as tc Its Share Register. (a) The Public Trustee can, on occasions, over-ride the rights of a company as to its share register. A company's rights over its share register—what it . shall register and what it shall not—are determined by its Articles, by the Companies Acts, and by the Courts, but hero we have certain sections- placing the Public Trusteo above such trifling things as Companies' Articles of Association, tho Companies Acts, or Courts. Modifying tie Bankruptcy Act. • (b) If an estate administered by the Public Trustee is insolvent, it is not to bo administered according to the general rules of tho bankruptcy law, but the following priorities apply-: (1) costs of administration, (2) funeral expenses, proportioned as the Publio Trustee thinks proper, (3) medical expenses incurred for a period not exceeding three months, and after that according to the principles set out in the Bankruptcy Act. Here, again, in the case of an estate administered by a private trustee, certain priorities obtain, but in tho case of an estate administered by the Public Trustee, other priorities obtain. Deciding Questions of Domicile. (c) The Public Trusteo, in administering an estate under £IOOO of any ! person, mav determine the domicile of that person on such evidence as lie thinks fit. Here, ho usurps tho functions of the Supreme Court, and in eo 1 doing may even alter the destination of the fund. If he makes an error in deciding as to a testator's domicile (often a most intricate and difficult matter), the section goes on to say "he shall not be liable to any cestui que trust, beneficiary, next of kin, creditor, or other person in respect of any error in such determination.'* In one breath the Public "Trustee usurps the judicial functions of the Supreme Court, and from his decision there is no appeal; and 1 in the next lie takes to himself complete immunity in respect of his determination. Here, again. I venture to assert such an assumption of judicial powers, is without parallel in any other legislation in the British Empire. Modifying Bights of Lessors. (d) The Public Trustee has, in administering the estate of a lessee, power in certain instances to modify the contract of lease and over-ride the rights of the lessor. Orer-tidiag of Public Eevennes Art. Not only dots the Publio Trustee seek the right to set aside, contract, nnd to usurp the functions of the. Courts, but by Section 31 of the above Act, the Minister of Finance it given the following powers, via.—-he may, "notwithstanding anything to the con-< trary in Section 54 of Uie Public Hevenues Act, 1910, where he considers such a course necessary for the service of the Public Trust Office expend any sum or sums out of the Public Trusteed accounts in excess of or without the appropriation of Parliament, the total amount in any one* year not to exceed £60,000. , One may well ask, where are these powers leading? and: is no limit to he placed upon this bureaucratic Department? An eminent English Judge recently sajd:—i "Bolsheviks and Bureaucrats have on* attribute in common—tb*y have bo us? J or Parliament or Law Courts, and seek to dispose of them and commandeer th«ii powers. It would seem that the Public Trust* Office, by usurping judicial functions and over-riding the common law and Acts of Parliament, is certainly tending to become a bureaucracy with most far-reaching powers. Th* Common Fund and Widow As Tenant for Life. The following concrete instance as to the depletion of a widow's income by 26 per cent., may be of interest to your readers. It arose in the case of the Public Trusteo v. Sawtell. and Ore (1920, G.L.R. p 237). The case dealt with the question of the conversion or a trust estate in respect of which the widow had a life interest. The following is an extract from the judgmentof his Honour the Chief Justice off*, Bobert Stout:— M& "The Public Trustee i« the will and by the Public goon ae property » coavott no direction in the Will ment the Public Trustee if in what is called the Common XESsaEEB&m 32, Pubuc Truet Officemeans that only * property had. bee B 1 '■ ■the Court might **?*?£ re Hartigaa <W nded for the f»'£*&S&^*^"£ i £ the .ife ten***- J&W^&J&P&JZ *£ &*3 Sritoeethea *• Srteni pS«at. aßould ££ to W« v. Dartmouth Srfei eaee. the ie»ult would wee t*Wl%&uZ£m*tA the widow »ou d be H *Hj2*te?t»C<w»*' 1 ' «0O per annum, inveetmeuta now curbe *l2<X> a year. No *?*&*£* PuMio Trnat Office givee a guar-. ls»4 thY «*tate will suffer no low i£«LfcTißveetoent if the money i» invested WIT Common Fund, but this is a very wry insurance premium to pay «o far as >s life tenant is ooncerned if there x» to , • difference in her income oi no less tb»n tOO per year." I think your readers will agree with' is Honour the Chief Justice t&afe ££QO? * vear income of a widow out' of fttt-t. icome of £I2OO is a fairly TarjEe>Bo|»* 5 a pay for the State guarantee. " . ' \.*\