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Down And Out In New Zealand: Opening The Discretionary Trust For A Bankrupt’s Creditors

dc.contributor.authorStevens, Nicholas
dc.date.accessioned2023-05-17T03:27:42Z
dc.date.available2023-05-17T03:27:42Z
dc.date.copyright2022
dc.date.issued2022
dc.description.abstractThe discretionary trust in New Zealand is a prolific and effective shield against the effects of personal bankruptcy. This paper discusses the interaction between New Zealand discretionary trusts and insolvency law. It analyses the obvious policy problem, that trusts allow settlors to avoid the statutory bankruptcy scheme at will. Fundamentally, the paper seeks to better protect creditors by bringing trust powers into the insolvency property pool. It begins by addressing the illusory trust debate in the literature, concluding that the illusory trust doctrine is relevant, but distinct. The paper then presents a form-over-substance, or functional, approach to identifying trust powers by looking through otherwise opaque drafting practices. To determine which powers are “property”, the paper looks to what bundle of a settlor’s rights would best vindicate the social and statutory purposes of insolvency law. Ultimately, it argues that Bennett and Barkley’s unlimited self-benefit criteria would best support these purposes. The paper’s analysis uses a property law framework to formalise the reasoning in the “trust busting” cases of Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Co (Cayman) Ltd [2011] UKPC 17, [2011] 4 All ER 704 and Clayton v Clayton [2016] NZSC 29, [2016] 1 NZLR 551. The paper recognises there are trade-offs due to New Zealand’s weak sham regime. However, it concludes the new pathway is a promising model to open discretionary trusts for creditors, to advance Parliament’s intention, and to support a principled approach to trust law.en_NZ
dc.formatpdfen_NZ
dc.identifier.urihttps://ir.wgtn.ac.nz/handle/123456789/30732
dc.languageen_NZ
dc.language.isoen_NZ
dc.publisherTe Herenga Waka—Victoria University of Wellingtonen_NZ
dc.subjectTrustsen_NZ
dc.subjectInsolvencyen_NZ
dc.subjectIllusory trustsen_NZ
dc.subjectSettlor controlen_NZ
dc.subjectBundle of rightsen_NZ
dc.subject.courseLAWS489en_NZ
dc.titleDown And Out In New Zealand: Opening The Discretionary Trust For A Bankrupt’s Creditorsen_NZ
dc.typeTexten_NZ
thesis.degree.disciplineLawen_NZ
thesis.degree.grantorTe Herenga Waka—Victoria University of Wellingtonen_NZ
thesis.degree.nameBachelor of Lawsen_NZ
vuwschema.contributor.schoolSchool of Lawen_NZ
vuwschema.contributor.unitVictoria Law Schoolen_NZ
vuwschema.contributor.unitFaculty of Law / Te Kauhanganui Tātai Tureen_NZ
vuwschema.subject.anzsrcforV2489999 Other law and legal studies not elsewhere classifieden_NZ
vuwschema.type.vuwBachelors Research Paper or Projecten_NZ

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