¶ 501
Overview
Scope of the chapter. The International Trusts Act 1984 is the statute under which every Cook Islands international trust is formed, registered and protected. Part II of this book examines the international trust in detail: its creation (see infra ch. 6), its trustees (see infra ch. 7), its beneficiaries (see infra ch. 8), its protectors and reserved powers (see infra ch. 9), purpose and charitable trusts (see infra ch. 10) and its variation, migration and termination (see infra ch. 11). The creditor-protection provisions are examined in Part V (see infra chs. 21–25). This chapter provides the foundation for all of them. It describes how the Act came to be enacted, what it contained in 1984, how each of its amending Acts changed it, which trusts fall within it, and the rules by which a trust is registered, renewed and deregistered. A planner who reads a later chapter's treatment of a section should be able to return to this chapter to see when that section was enacted, what it replaced and which trusts it governs.
Why the history matters. The Act has been amended eight times by Acts that are read together with it and deemed part of it, and no official consolidation of the amended text is published. The amendments did more than add provisions. Several repealed and replaced earlier sections, renumbered provisions by moving them between Parts, and applied new rules to trusts registered before the amendment. Some provisions apply only to trusts settled on or after 8 September 1989. Others were deemed to have been in force from 1984. A decision of the High Court or the Court of Appeal can be understood only against the version of the Act in force when it was given, and the leading decision, the Orange Grove litigation of 1995, was followed within a year by an amending Act directed at its holdings (see infra ¶ 540). A planner who works from a secondary summary of the current law, without knowing where each rule came from, will misread the cases and may misjudge which rule governs an older trust.
Sources. This chapter is based on the text of the International Trusts Act 1984 (No. 14) as enacted and the text of each amending Act as published by the Financial Supervisory Commission: the International Trusts Amendment Acts of 1985 (No. 7), 1989 (No. 23), 1989 (No. 2) (No. 31), 1991 (No. 32), 1995–96 (No. 25), 1999 (No. 3), 2004 (No. 7) and 2013 (No. 15), with the International Trusts (Forms and Fees) Regulations 1985 and the International Trusts (Prescribed Fees) (Amendment) Regulations 2014. Where this chapter states the effect of a section as amended, it identifies the amending Act. The Commission's legislation page lists no amending Act after 2013. The Schedule to the Act, which lists the other enactments that apply to international trusts, has also been extended by amendments made in other statutes (see infra ¶ 560.07).
Plan of the chapter. The chapter proceeds as follows. The origins of the 1984 Act and the policy behind it (see infra ¶ 510). The Act as enacted, Part by Part (see infra ¶ 520). The 1989 amendments that created the protective provisions for which the Act is known (see infra ¶ 530). The 1991 amendment and the Orange Grove litigation that tested it (see infra ¶ 540). The comprehensive amendments of 1995–96 (see infra ¶ 550). The amendments of 1999, 2004 and 2013 and changes made through other statutes (see infra ¶ 560). The scope of the Act: which trusts are international trusts, and what the definition requires (see infra ¶ 570). Registration, renewal, deregistration and the registry's practice (see infra ¶ 580). The chapter closes with guidance on reading the Act and a planning checklist (see infra ¶ 590).