4.29Section 29 of the Trustee Act authorises trustees to employ agents to transact trust business or do anything required in executing the trust or administering trust property. It permits delegation of administrative or ministerial functions, but does not enable a trustee to delegate the trustee’s fundamental decision-making powers. A trustee is not liable for the acts of the agent if the agent was employed in good faith. The section also permits a trustee to appoint an agent to carry out the trust outside of New Zealand including exercising any discretion, trust, or power vested in the trustee.
4.31The Select Committee that considered the Bill recommended making it clearer that in reviewing the agency and the agent’s actions the trustee must consider whether a trustee exercising reasonable care would intervene and intervene if such a trustee would consider it necessary to do so.
4.32The current section 29 is not sufficiently clear in how it describes which of a trustee’s functions an agent can be employed to carry out. The list of examples of professionals who may be employed as an agent in section 29(1) is also often interpreted as meaning only professionals can be appointed, despite the phrase “or other person”.
4.33We consider that it is sensible to make clear the types of functions that can be given to an agent. Nearly all submitters agreed that new legislation should contain the same types of agency provisions as were included in the Select Committee version of the Trustee Amendment Bill 2007. Several, including Chapman Tripp, Greg Kelly Law, Cone Marshall and the Trustee Corporations Association, thought that differentiating between trustee functions and administrative functions was useful and meant that trustees would be required to carry out certain important tasks themselves.
4.34The NZLS raised the concern that the provisions on the payment of fees and charges were too prescriptive. This is a valid concern, but it can be addressed through revised drafting.
4.35The only significant alteration from the Bill’s approach that we propose is to include a non-exhaustive list of factors for a trustee to take into account in appointing an agent. We consider that this will help trustees to appoint appropriate agents and to better meet their duties under the Act. It will provide greater guidance to trustees than the law does currently.