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.