Partial condification of trustees' fiduciary duties against the backdrop of corporate law

Abstract

This dissertation examines whether the lack of ready access by trustees to a codified set of their fiduciary duties is contributing to poor governance of trusts and whether setting out these duties in the Trust Property Control Act would promote good governance. Chapter 1 considers whether corporate law reform is an appropriate basis for comparison when considering the codification of trustees’ fiduciary duties. It suggests that corporate law is a useful comparator because it has well-developed law in relation to fiduciary duties, which has also shaped trust law. Twenty plus years after the Trust Property Control Act was enacted, South Africa’s socio-economic environment has changed dramatically and trusts are today used extensively and for many purposes. Trust law needs to keep pace with this change, as well as current thinking on good governance. It also needs to better serve today’s vast number of trustees of varying skill and experience. The dissertation asks what lessons can be learned from considering the partial codification of directors’ fiduciary duties in the Companies Act 2008 and whether the proposed codification will advance governance of trusts and benefit beneficiaries in fundamental ways. It uses primary and secondary sources and comparative research in considering the approach to codification of fiduciary duties in New Zealand, Australia and England. The newly enacted New Zealand Trusts Act 38 of 2019 is particularly relevant and timely. Chapter 2 examines the theory of and rationale for codification, and the arguments of its opponents, generally, as well as specifically in relation to the Companies Act 2008. It also considers the influence of King IV. Chapter 3 examines fiduciary duties identified in trust cases with a view to formulating a body of core duties incorporated into the partial codification proposed in the subsequent chapter. These amendments are suggested as part of a multi-pronged approach to improved governance in trust law. The final chapter concludes that although the partial codification of directors’ fiduciary duties in the Companies Act offers, in principal, useful guidance, it cannot serve as a template for amendments to the Trust Property Control Act. By contrast, the legislative action proposed in chapter 4 is consistent with international trends in governance and should advance the cause of good governance in trust law.