Pecuniary interest 2

Written By: - Date published: 8:37 am, October 2nd, 2009 - 11 comments
Categories: bill english - Tags:

Bill English keeps claiming that he has “no pecuniary interest” in his family trust. What does that mean? A while back John A did a post on pecuniary interest. Time for Part 2 in the series.

As John A noted, the main case which seems to be cited in defining pecuniary interest (at least in Australia and in NZ by the Auditor General) is Downward v Babington, where such an interest is defined as a situation that will “give rise to an expectation which is not too remote of a gain or loss of money”. Brief extracts from a few other definitions I’ve encountered are here: “A direct interest related to money in an action or case” Black’s Law Dictionary 1131 (6th ed.1990), here: outcomes of which will or may affect their personal financial interests or those of their close associates, and here:
the opportunity, directly or indirectly, to profit or share in any profit…held by members of a person’s immediate family sharing the same household (the latter are more fully quoted in this comment).

So, clearly “pecuniary interest” is typically taken to include direct, indirect or shared profit, to the individual or to immediate family sharing the same household. In what possible world does Bill English not have a pecuniary interest in his own family trust? How can he get away with claiming this? It’s because he is using the term to mean “doesn’t have to be listed in the MP’s Register of Pecuniary Interests”. The criteria for listing a trust depends on a term with a much narrower definition. A trust only needs to be listed if the member has a “beneficial interest”: “an enforceable, proprietary interest in the trust property. Examples of a proprietary interest include ownership and a right to possession or occupation”. That turns out to be a definition so narrow that you can drive a truck round it, which is what Bill is doing.

In short, as normally defined Bill certainly has a pecuniary interest in his family trust, but in terms of our Parliament’s rules he probably does not. It actually gets more complicated than this, with different kinds of beneficial interest – if you want all the gory details there is an excellent summary by Vernon Small here. I’m in complete agreement with Vernon that this whole episode highlights a gaping hole in the rules:

No-one is expecting MPs to undergo the Spanish Inquisition. But if the intent of the register is to keep politicians honest and maintain the public’s faith in our democratic institutions and their reputations, then this hole in the disclosure regime – including matters of control of a trust – should be closed.

11 comments on “Pecuniary interest 2 ”

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  1. burt 1
    2 October 2009 at 9:05 am

    So overspending on election advertising and winning the election would be counted as gaining a pecuniary advantage because of the direct benefit of the PM salary VS leader of opposition salary ?

    • ghostwhowalksnz 1.1
      2 October 2009 at 9:27 am

      So its OK when you steal the money instead of paying the GST ( still unpaid) and lose the election.
      The Auditor General only found ONE party didnt use these funds for electioneering and that was JAP.

    • burt 1.2
      2 October 2009 at 9:35 am

      ghostwhowalksnz

      No it’s not alright.

      National should have been prosecuted over that but sadly some other parties self servingly validated themselves and in the process also gave National (and ACT) a free pass.

    • burt 1.3
      2 October 2009 at 9:54 am

      ghostwhowalksnz

      I think you need to look at my position on the Labour-led govt again, look carefully at what has motivated my dissent. It is a lack of integrity, a lack of accountability and prevalence of self serving use of power for their own agenda of advancing the interests of ‘the party’ ahead of the people who they serve.

      Watch carefully as the National-led govt start to head that way because over time they will and you will find that all my previous comments with Labour crossed out and National written in with crayon will be applicable.

      Please if you ever perceive that I’m applying a different standard to National than I would have applied to Labour call me on it. Because you know that I’ll be doing that to others who have justified all sorts of things by Labour that they think are unacceptable from National.

      I’m not a National supporter more than one of my politically aware friends have called me an anarchist over the years because I refuse to align myself with a flag based only on it’s colour. That’s not to say I don’t have an ideology, but accountability and transparency in govt are more important than the ideology of the govt de-jour.

  2. ak 2
    2 October 2009 at 10:45 am

    burt: …accountability and transparency in govt are more important than the ideology of the govt de-jour.

    By George burt, admirable, what, and couldn’t agree more old chap: proper accounting and transparency is all. If only the Reich had had a stout fellow like yourself keeping proper count, there wouldn’t be these niggling doubts still beggaring us all to this very day (I’ll swear those damned Aushwich totals are still out by at least seventeen).

    • burt 2.1
      2 October 2009 at 11:06 am

      ak

      You prove my point very well. Do you think the people who voted in the National Socialist govt you refer to would have accepted that behaviour from the ‘opposition’ parties? Cheers for reminding us just how poor peoples judgement can be when they put ideology ahead of accountability and transparency.

  3. ak 3
    2 October 2009 at 5:27 pm

    (….observes with numb fascination the opaque sentence-like structures limping across the screen in a cruel parody of logical discourse…..)

  4. SPC 4
    2 October 2009 at 8:04 pm

    If the housing allowance claimed is the rent charged by the Trust to house Bill and his family (and others of this same family are the beneficiares of the Trust) is a larger amount than the interest payments on the ownership of the property this provides a reason for the Trust arrangement rather than declaring ownership outright and only be able to claim the lesser interest payments as housing cost.

    Another reason for the Wellington house being held by Trust ownership is that if Bill does not actually own a house in Dipton (a wider English Family Trust?), it would be harder to claim he was primarily based in Dipton if he and his immediate family only owned a property in Wellington.

    • Ianmac 4.1
      2 October 2009 at 8:20 pm

      SPC: Interesting thought. has anyone asked Bill to PROVE that he himself OWNs the house at Dipton? If it is OK to say that he doesn’t own the Wellington house because a Trust does, then does the same apply to the Dipton house? Maybe the English Trust does, so that he cannot claim it as his Primary Residence? Huh? 😯

  5. SPC 5
    2 October 2009 at 10:52 pm

    The only evidence I know of so far, is that he alone pays for the phone at the Dipton residence but his wife AND he share the phone at their Karori house (possibly as she works in Wellington she does not get to the house at Dipton much). Thus indicates he only really lives with his family at the Karori residence and his place at Dipton is not one they use much.

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