Methodist Church of New Zealand Trusts Bill

Recommendation

The Finance and Expenditure Committee has examined the Methodist Church of New Zealand Trusts Bill and recommends that it be passed with the amendments shown.

Introduction

The Methodist Church of New Zealand Trusts Bill provides the Methodist Church with an alternative mechanism to that under the Charitable Trusts Act 1957 for varying certain charitable trusts associated with the Church. This mechanism would allow the Church to make changes to its trusts in a much more straightforward and cost-effective way.

The bill also expands the purposes for which trust funds and trust properties relating to Methodist orphanages or Methodist children’s homes can be applied. This change would allow the Church to apply these funds and properties to provide care for children and young persons by means other than orphanages and children’s homes, so as to reflect recent changes in law and current social policy.

Pursuant to Standing Orders we have considered the preamble and consider that the statements in it have been proved to our satisfaction. We acknowledge that the proposals to provide an alternative approach as set out in the bill could not be achieved other than by legislation.

We note that several Private Acts of Parliament, such as the Anglican Trusts Act 1981, the Roman Catholic Bishops Empowering Act 1997, and the Presbyterian Church Property Amendment Act 1996, achieve objects similar to those of this bill for the Churches that promoted them.

Definition of “trust property”

We recommend amending the definition of “trust property” in clause 5 to make it clear that only property held in trust on behalf of the Church or any part of it would be trust property. This amendment would clarify which trusts would be covered by the bill.

Notice to Attorney-General

We recommend amending clause 12(1) to clarify that all schemes prepared under Part 2 of the bill must be sent to the Attorney-General for consideration. Part 2 of the bill applies to all Church trusts, and establishes a mechanism to vary such trusts through a different process from that under the Charitable Trusts Act, with oversight of the variations by the Attorney-General. The bill as introduced specifies in clause 12 that “trusts for charitable purposes” would be referred to the Attorney-General. We consider that such specificity might unintentionally exclude some Church trusts, or might cause unnecessary uncertainty as to which schemes should have oversight by the Attorney-General. Our recommended amendment makes it clear that all schemes prepared under Part 2 (relating to any Church trust) would have such oversight, removing any possible uncertainty.

Orphanages or children’s trusts

We recommend amending clause 18(1) to clarify that the trust funds and properties to which Part 3 of the bill applies (the charitable trust funds and trust properties held for Methodist orphanages or children’s homes in New Zealand, or for the care, welfare, or benefit of the persons cared for in such places) could be used only for charitable purposes. This amendment would remove any doubt as to whether the funds could be held or applied for non-charitable purposes, and accords with the way the funds must be held and applied currently.

Appointment and removal of trustees

We recommend the removal of clause 21 and the insertion of new clause 19A to provide that the trustees can be appointed or removed only after consultation with the trustees. In the bill as introduced, clause 21 confers an unrestrained power to appoint or remove trustees on the Annual Conference of the Methodist Church. We consider that such an unfettered power could have undesirable consequences and set an unwelcome precedent.

We understand that the power in clause 21 as introduced was based on section 20 of the Anglican Church Trusts Act. However, we note that neither the Presbyterian Church Property Amendment Act nor the Roman Catholic Bishops Empowering Act contains an equivalent unlimited power to appoint and remove trustees.

We consider the provisions of the Roman Catholic Bishops Empowering Act to be more in line with general trust principles, and therefore we recommend amendments to follow its provisions more closely.