Description
LAWS OF HONG KONG
TRUSTEE ORDINANCE
CHAPTER 29
CHAPTER 29
TRUSTEE ORDINANCE
ARRANGEMENT OF SECTIONS
Section Page
PART 1
PRELIMINARY
1. Short title ................................. ... ... ... ... ... ... ... 5
2. Interpretation............................... ... ... ... ... ... ... ... 5
3. Application ................................. ... ... ... ... ... ... ... 7
PART 11
INVESTMENTS
4. Authorized investments ... ... . ... ... ... ... ... ... ... ... 7
5. Retention of redeemable stocks until redemption ... ... ... ... ... ... ... 8
6. Discretion of trustees ... ... ... ... ... ... ... ... ... ... ... ... ... 8
7. Retention of unauthorized investment ... ... ... ... ... ... ... ... ... 8
8. Investment in bearer securities ... ... ... ... ... ... ... ... ... ... ... 8
9. Loans and investments by trustees not chargeable as breaches of trust ... ... ... 8
10. Liability for loss by reason of improper investment ... ... ... ... ... ... ... 9
11. Powers supplementary to powers of investment ... ... ... ... ... ... ... 9
12. Power to deposit at bank and to pay calls . ... ... ... ... ... ... ... ... 10
PART Ill
GENERAL POWERS OF TRUSTEES AND PERSONAL
REPRESENTATIVES
General Powers
13. Power of trustees for sale to sell by auction. etc. ... ... ... ... ... ... ... 11
14. Power to sell subject to depreciatory conditions ... ... ... ... ... ... ... 11
15. Power of trustees to give receipts . ... ... ... ... ... ... ... ... ... ... 11
16. Power to do other acts ... ... ... ... ... ... ... ... ... ... ... ... ... 12
17. Powers of trustees of renewable leaseholds to renew and raise money for the
purpose ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 12 18. Power to raise money by
sale, mortgage, etc . ... ... ... ... ... ... ... ... 13
19. Protection to purchasers and mortgagees dealing with trustees ... ... ... .. 13
20. Devolution of powers or trusts ... ... ... ... ... ... ... ... ... ... ... 13
21. Power to insure ... ... ... ... ... .. ... ... ... ... ... ... ... ... 14
22. Application of insurance money where policy kept up under any trust, power or
obligation ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 14 23. Deposit of documents for
sale custody ... ... ... ... ... ... ... ... ... is
24. Reversionary interests, valuations. and audit ... ... ... ... ... ... ... ... 15
25. Power to employ agents ... ... ... ... ... ... ... ... ... ... ... ... 16
26. Power to concur with others ... ... ... ... ... ... ... ... ... ... 17
27. Power to delegate trusts ... ... ... ... ... ... ... ... ... ... ... ... 17
Section...................................... Page
Indemnities
28. Protection against liability in respect of rents and covenants ... ... ... ... 18
29. Protection by means of advertisement ...... ... ... ... ... ... ... ... 19
30. Protection in regard to notice ......... ... t . ... ... ... ... ... 20
31. [Repealed] ................................ ... ... ... ... ... ... ... 20
32. Implied indemnity of trustees ............. ... ... ... ... ... ... ... 20
Maintenance, Advancement and Protective Trusts
33. Power to apply income for maintenance and to accumulate surplus income during
a minority ............................... ... ... ... ... ... ... ... 21
34..............Power of advancement .......... ... ... ... ... ... ... ... ... ... ... 22
35............Protective trusts ............... ... ... ... ... ... ... ... ... ... ... 23
PART IV
APPOINTMENT AND DISCHARGE OF TRUSTEES
36.Limitation of the number of trustees ... ... ... ... ... ... ... ... ... 24
37.Power of appointing new or additional trustees ... ... ... ... ... ... 24
38.Supplemental provisions as to appointment of trustees ... ... ... ... ... ... 26
39.Evidence as to a vacancy in a trust ... ... ... ... ... ... ... ... ... 27
40.Retirement of trustee without a new appointment ... ... ... ... ... ... 27
41.Vesting of trust property in new or continuing trustees ... ... ... ... ... ... 27
PART V
POWERS OF THE COURT
Appointment of new Trustees
42.Power of court to appoint new trustees ... . ... ... ... 29
43.Power to authorize remuneration ... ... . ... ... ... ... ... 29
44.Powers of new trustee appointed by court ... ... ... ... ... ... ... ...
29
Vesting Orders
45.Vesting orders of land ..... ... ... ... ... ... ... ... ... ... ... ... 29
46.Orders as to contingent rights of unborn persons ... ... ... ... ... ... 31
47.Vesting order in place of conveyance by infant mortgagee ... ... ... ... 31
48.Vesting order consequential on order for sale or mortgage of land ... ... 31
49.Vesting order consequential on judgment for specific performance. etc. ... ... 31
50. Effect of vesting order 31
51. Power to appoint person to convey ... ... ... ... ... ... ... ... ... ... 32
52. Vesting orders as to stock and thing in action ... ... ... ... ... ... ... ... 32
53. Vesting orders of charity property 33
54.Vesting orders in relation to infant's beneficial interest ... ... ... ... ... ... 34
55.Orders made upon certain allegations to be conclusive evidence 34
Jurisdiction to make other Order
56. Power of court to authorize dealing with trust property ... ... ... ... ... ... 34
57. Persons entitled to apply for orders ... ... ... ... ... ... ... ... ... ... 35
58. Power to give judgment in absence of a trustee ... ... ... ... ... ... ... ... 35
Section...................................... Page
59. Power to charge costs on trust estate ..... ... ... ... ... ... ... ... ... 35
60. Power to relieve trustee from personal liability ... ... ... ... ... ... ... 35
61. Power to make beneficiary indemnify for breach of trust ... ... ... ... ... 36
Payment into Court
62. Payment into court by trustees ......... ... ... ... ... ... ... ... ... 36
PART VI
THE JUDICIAL TRUSTEE
63. Power of court on application to appoint judicial trustee ... ... ... ... 36
64. Rules ..................................... ... ... ... ... ... ... ... 37
65. Definitions ............................ ... ... ... ... ... ... ... ... 38
PART VII
THE OFFICIAL TRUSTEE
66. Appointment of Official Trustee ........ .. 1 ... ... ... ... ... ... 38
67. Payment of trust moneys into bank to credit of Official Trustee ... ... ... ... 38
68. Transfer of trust securities into name of Official Trustee ... ... ... ... ... 39
69. Conveyance of land in trust to Official Trustee ... ... ... ... ... ... ... 39
70. Certificate to be given by Official Trustee ... ... ... ... ... ... ... ... 39
71. Order for payment, etc. by majority of trustees without concurrence of others ... 39
72. Administration of trust estate ......... ... ... ... ... ... ... ... ... 40
73. Charges upon trust estate administered by Official Trustee ... ... ... ... ... 40
74. General rights and powers of Official Trustee ... ... ... ... ... ... ... 40
75. Limitation of liability of Official Trustee ... ... ... ... ... ... ... ... 41
76. Rules for administration of trust funds ... ... ... ... ... ... ... ... 41
PART VIII
TRUST COMPANIES
77. Application by company to be registered as a trust company ... ... ... 41
78. Issue of certificate ...................... ... ... ... ... ... ... ... ... 42
79. Register of trust companies to be kept..... ... ... ... ... ... ... ... ... 43
80. Deposit to be held as security ......... ... ... ... ... ... ... ... ... 43
81. Objects ................................... ... ... ... ... ... ... ... 44
82. Trust company may act as executor ......... ... ... ... ... ... ... ... 46
83. Trust company to apply for probate or administration ... ... ... ... ... ... 46
84. Procedure as to petitions, etc . 47
85. Appointment of a company to be a trustee ... ... ... ... ... ... ... 48
86. Joint tenancy ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 48
87. Trust company may act as agent ... ... ... ... ... ... ... ... ... ... ... 48
88. Security not required ... ... . ... ... ... ... ... ... ... ... ... ... ... 48
89. Trust funds to be kept separate ... ... ... ... ... ... ... ... ... ... ... 48
90. Investment of trust funds ... ... ... ... ... ... ... ... ... ... ... ... 48
91. Investment of trust company's own funds ... ... ... ... ... ... ... ... ... 49
92. Loans to trust company officers. etc. prohibited ... ... ... ... ... ... ... 49
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93. Borrowing .............................. ... ... ... ... ... ... ... 49
94. [Repealed] ................................ ... ... ... ... ... ... ... 50
95. Investigation by inspector ............. ... ... ... ... ... ... ... ... 50
96. Special provision as to winding up a trust company ... ... ... ... ... so
97. Personal liability of officers of a trust company ... ... ... ... ... ... 50
98. Offences ............................... ... ... ... ... ... ... ... ... 51
99. Not to be guardian or committee ........ ... ... ... ... ... ... ... 51
100.Restriction on holding shares in a trust company ... ... ... ... ... ... 51
101.Voluntary winding-up or disposal may be restrained ... ... ... ... ... ... 51
102.Liability and powers of trust company ... ... ... ... ... ... ... ... 52
103.Registration of a trust company as shareholder, etc. not notice of trust ... ... 52
104.Unclaimed money to be paid into court ... ... . ... ... ... ... ... 52
105.Fees payable by trust companies ... ... ... ... ... ... ... ... ... ... 52
106.Registration of certain banking corporations as trust companies ... ... ... ... 52
107.Limitation of powers of inspectors under section 95 ... ... ... ... ... ... 53
108.Striking off trust company registered under section 106 ... ... ... ... ... ... 53
PART IX
GENERAL PROVISIONS
109.Indemnity ......................... ... ... ... ... ... ... ... 53
First Schedule. Fees to be paid by Trust Companies to the Registrar of Companies ... 53
Second Schedule. Part I. Overseas Investments ... ... ... ... ... ... ... 54
Part II Hong Kong Investments ... ... ... ... ... ... ... ... 56
CHAPTER 29
TRUSTEE
To amend the law relating to trustees.
[27 July 1934.]
PART 1
PRELIMINARY
1. This Ordinance may be cited as the Trustee Ordinance.
2. In this Ordinance, unless the context otherwise requires
'authorized investments' means investments authorized by the
instrument, if any, creating the trust for the investment of money
subject to the trust, or by law;
'contingent right' as applied to land includes a contingent or executory
interest, a possibility coupled with an interest, whether the object
of the gift or limitation of the interest of possibility is or is not
ascertained, also a right of entry, whether immediate or future, and
whether vested or contingent;
'convey' and 'conveyance' as applied to any person include the
execution by that person of every necessary or suitable assurance
(including an assent) for conveying, assigning, appointing,
surrendering, or otherwise transferring or disposing of land
whereof he is seised or possessed, or wherein he is entitled to a
contingent right, either for his whole estate or for any less estate,
together with the performance of all formalities required by law for
the validity of the conveyance;
'income' includes rents and profits;
'instrument' includes enactment;
'land' includes land of any tenure, and mines and minerals, whether or
not severed from the surface, buildings or parts of buildings,
whether the division is horizontal, vertical or made in any other
way, and other corporeal hereditaments; also a rent and other
incorporeal hereditaments, and an easement, right, privilege, or
benefit in, over, or derived from land, or an undivided share in land;
and in this definition---minesand minerals' includes any strata or
seam of minerals or substances in or under any land, and powers of
working and getting the same, and an undivided share thereof,
'lunatic' means any person who has been found by due course of law
to be of unsound mind and incapable of managing his affairs;
'mortgage' and 'mortgagee' include and relate to every estate and
interest regarded in equity as merely a security for money, and
every person deriving title under the original mortgagee;
'pay' and 'payment' as applied in relation to stocks and securities and
in connexion with the expression 'into court' include the deposit
or transfer of the same in or into court;
'personal representative' means the executor, original or by
representation, or administrator for the time being of a deceased
person;
'person of unsound mind' means any person, not a minor, who not
having been found to be a lunatic is incapable from infirmity of
mind of managing his own affairs;
'possession' includes receipt of rents and profits or the right to receive
the same, if any; and 'possessed' applies to receipt of income of
and to any vested estate less than a life interest in possession or in
expectancy in any land;
'property' includes movable and immovable property, and any estate,
share and interest in any property, movable or immovable, and any
debt, and any thing in action, and any other right or interest,
whether in possession or not;
'rights' includes estates and interests;
'sale' includes an exchange;
'securities' includes stocks, funds and shares, and so far as relates to
payments into court has the same meaning as in the enactments
relating to funds in court and -securities payable to bearer'
includes securities transferable by delivery or by delivery and
endorsement,
'Stock- includes fully paid up shares, and, so far as relates to vesting
orders made by the court under this Ordinance, includes any fund,
annuity, or security transferable in books kept by any corporation,
company or society, or by instrument or transfer either alone or
accompanied by other formalities, and any share or interest
therein;
'transfer', in relation to stock or securities, includes the performance
and execution of every deed, power of attorney, act, and thing on
the part of the transferor to effect and complete the title in the
transferee;
'trust' does not include the duties incident to an estate conveyed by
way of mortgage, but with this exception the expression 'trust'
and 'trustee' extend to implied and constructive trusts, and to
cases where the trustee has a beneficial interest in the trust
property, and to the duties incident to the office of a personal
representative, and 'trustee' where the context admits includes a
personal representative, and 'new trustee' includes an additional
trustee;
'trust corporation' means the Public Trustee in England or a
corporation appointed by the court in any particular case to be a
trustee (if authorized by its constitution to act as trustee) or any
trust company registered under Part VIII;
'trust for Sale-, in relation to land, means an immediate binding trust for
sale, whether or not exercisable at the request or with the consent
of any person, and with or without power at discretion to postpone
the sale, and 'trustees for sale' means the persons (including a
personal representative) holding land on trust for sale.
3. (1) This Ordinance, except where otherwise expressly provided,
applies to trusts including, so far as this Ordinance applies thereto,
executorships and administratorships constituted or created either
before or after the commencement of this Ordinance.
(2) The powers conferred by this Ordinance on trustees are in
addition to the powers conferred by the instrument, if any, creating the
trust, but those powers, unless otherwise stated, apply if and so far only
as a contrary intention is not expressed in the instrument, if any,
creating the trust, and have effect subject to the terms of that
instrument.
(3) This Ordinance does not affect the legality or validity of
anything done before the commencement of this Ordinance, except as
otherwise expressly provided.
PART 11
INVESTMENTS
4. (1) A trustee may invest any trust funds in his hands, whether at
the time in a state of investment or not
(a)in any investment specified in the Second Schedule;
(b)in any other investment (including deposits in a bank outside
the Colony) which may be authorized by the court on
summary application for that purpose made in chambers.
(2) Any application to the court made under subsection (1)(b) shall
be made by the trustee ex parte and shall be supported by affidavit.
(3) The Governor in Council may from time to time by order
published in the Gazette amend the Second Schedule.
(Replaced, 48 of 1968, s. 2)
5. A trustee may retain until redemption any redeemable stock,
fund, or security which may have been purchased in accordance with
the powers of this Ordinance, or any Ordinance replaced by this
Ordinance.
6. Every power conferred by sections 4 and 5 shall be exercised
according to the discretion of the trustee, but subject to any consent or
direction with respect to the investment of the trust funds, required by
the instrument, if any, creating the trust or by any Ordinance.
7. A trustee shall not be liable for breach of trust by reason only of
his continuing to hold an investment which has ceased to be an
investment authorized by the trust instrument or by the general law.
8. (1) A trustee may, unless expressly prohibited by the instrument
creating the trust, retain or invest in securities payable to bearer which,
if not so payable, would have been authorized investments.
(2) Securities payable to bearer retained or taken as an investment
by a trustee (not being a trust corporation) shall, until sold, be
deposited by him for safe custody and collection of income with a
banker or banking company.
(3) A direction that investments shall be retained or made in the
name of a trustee shall not, for the purposes of this section, be deemed
to be such an express prohibition as aforesaid.
(4) A trustee shall not be responsible for any loss incurred by
reason of such deposit, and any sum payable in respect of such deposit
and collection shall be paid out of the income of the trust property.
9. (1) A trustee lending money on the security of any property on
which he can properly lend shall not be chargeable with breach of trust
by reason only of the proportion borne by the amount of the loan to the
value of the property at the time when the loan was made, if it appears
to the court
(a)that immediately prior to the making of the loan the trustee
obtained a report as to the value of the property made by a
person whom he reasonably believed to be an able practical
surveyor or valuer instructed and employed independently of
any owner of the property. whether such surveyor or valuer
carried on business in the locality where the property is situate
or elsewhere; and (Amended, 48 of 1968,s.3)
(b)that the amount of the loan does not exceed one half of
the value of the property as stated in the report; and
(Amended, 48 of 1968, s. 3)
(c)that the loan was made under the advice of the surveyor or
valuer expressed in the report.
(2) A trustee lending money on the security of any leasehold
property shall not be chargeable with breach of trust only upon the
ground that in making such loan he dispensed either wholly or
partly with the production or investigation of the lessor's title.
(3) A trustee shall not be chargeable with breach of trust only
upon the ground that in effecting the purchase, or in lending money
upon the security, of any property he has accepted a shorter title
than the title which a purchaser is, in the absence of a special
contract, entitled to require, if in the opinion of the court the title
accepted be such as a person acting with prudence and caution
would have accepted.
(4) This section applies to transfers of existing securities as
well as to new securities and to investments made before as well as
after the commencement of this Ordinance.
10. (1) Where a trustee improperly advances trust money on
a mortgage security which would at the time of the investment be a
proper investment in all respects for a smaller sum than is actually
advanced thereon, the security shall be deemed an authorized
investment for the smaller sum, and the trustee shall only be liable to
make good the sum advanced in excess thereof with interest.
(2) This section applies to investments made before as well as
after the commencement of this Ordinance.
11. (1) Trustees lending money on the security of any pro-
perty on which they can lawfully lend may contract that such money
shall not be called in during any period not exceeding 7 years from
the time when the loan was made, provided interest be paid within a
specified time not exceeding 30 days after every half-yearly or other
day on which it becomes due, and provided there be no breach of
any covenant by the mortgagor contained in the instrument of
mortgage or charge for the maintenance and protection of the
property.
(2) On a sale by trustees of land for a term having at least 60
years to run, the trustees may, where the proceeds are liable to be
invested, contract that the payment of any part, not exceeding
two-thirds, of the purchase money shall be secured by mortgage of
the land sold, with or without the security of any other property, but
such mortgage, if any buildings are comprised therein, shall contain
a covenant by the mortgagor to keep such buildings insured against
loss or damage by fire to the full value thereof.
(3) The trustees shall not be bound to obtain any report as to
the value of the land or other property to be comprised in such
mortgage, or any advice as to the making of the loan, and shall not
be liable for any loss which may be incurred by reason only of the
security being insufficient at the date of the mortgage.
(4) Where any securities of a company are subject to a trust,
the trustees may concur in any scheme or arrangement-
(a)for the reconstruction of the company;
(b)for the sate of all or any part of the property and under-
taking of the company to another company;
(e)for the amalgamation of the company with another
company;
(d)for the release, modification, or variation of any rights,
privileges or liabilities attached to the securities or any of
them,
in like manner as if they were entitled to such securities beneficially,
with power to accept any securities of any denomination or descrip-
tion of the reconstructed or purchasing or new company in lieu of or
in exchange for all or any of the first-mentioned securities; and the
trustees shall not be responsible for any loss occasioned by any act
or thing so done in good faith, and may retain any securities so
accepted as aforesaid for any period for which they could have
properly retained the original securities.
(5) If any conditional or preferential right to subscribe for any
securities in any company is offered to trustees in respect of any
holding in such company, they may as to all or any of such
securities, either exercise such right and apply capital money subject
to the trust in payment of the consideration, or renounce such right,
or assign for the best consideration that can be reasonably obtained
the benefit of such right or the title thereto to any person, including
any beneficiary under the trust, without being responsible for any
loss occasioned by any act or thing so done by them in good faith:
Provided that the consideration for any such assignment shall
be held as capital money of the trust.
(6) The powers conferred by this section shall be exercisable
subject to the consent of any person whose consent to a change of
investment is required by law or by the instrument, if any, creating
the trust.
(7) Where the loan referred to in subsection (1), or the sale
referred to in subsection (2), is made under the order of the court,
the powers conferred by those subsections respectively shall apply
only if and as far as the court may by order direct.
12. (1) Trustees may, pending the negotiation and prepara-
tion of any mortgage or charge, or during any other time while an
investment is being sought for, pay any trust money into a bank to a
deposit or other account, and all interest, if any, payable in respect
thereof shall be applied as income.
(2) Trustees may apply capital money subject to a trust in payment
of the calls on any shares subject to the same trust.
PART III
GENERAL POWERS OF TRUSTEES AND PERSONAL REPRESENTATIVES
General Powers
13. (1) Where a trust for sale or a power of sale of property is
vested in a trustee, he may sell or concur with any other person in
selling all or any part of the property, either subject to prior charges or
not, and either together or in lots, by public auction or by private
contract, subject to any such conditions respecting title or evidence of
title or other matter as the trustee thinks fit, with power to vary any
contract for sale, and to buy in at any auction, or to rescind any contract
for sale and to resell without being answerable for any loss.
(2) A trust or power to sell or dispose of land includes a trust or
power to sell or dispose of part thereof, whether the division is
horizontal, vertical, or made in any other way.
14. (1) No sale made by a trustee shall be impeached by any
beneficiary upon the ground that any of the conditions subject to
which the sale was made may have been unnecessarily depreciatory,
unless it also appears that the consideration for the sale was thereby
rendered inadequate.
(2) No sale made by a trustee shall, after the execution of the
conveyance, be impeached as against the purchaser upon the ground
that any of the conditions subject to which the sate was made may have
been unnecessarily depreciatory, unless it appears that the purchaser
was acting in collusion with the trustee at the time when the contract for
sale was made.
(3) No purchaser, upon any sate made by a trustee, shall be at
liberty to make any objection against the title upon any of the grounds
aforesaid.
(4) This section applies to sales made before or after the
commencement of this Ordinance.
15. (1) The receipt in writing of >a trustee for any money,
securities, or other personal property or effects payable, transferable, or
deliverable to him under any trust or power shall be a sufficient
discharge to the person paying, transferring, or delivering the same and
shall effectually exonerate him from seeing to the application or being
answerable for any loss or misapplication thereof.
(2) A receipt in writing for the proceeds of sale or other capital
money arising under a trust for sale of land shall be a sufficient
discharge if it is signed by the person or persons lawfully executing
the conveyance in pursuance of that sale and the person making
payment shall not be liable for any loss or misapplication of those
proceeds or that money. (Replaced, 62 of 1984, s. 63)
(3) This section applies notwithstanding anything to the contrary
in the instrument, if any, creating the trust.
16. A personal representative, or 2 or more trustees acting together,
or, subject to the restrictions imposed in regard to receipts by a sole
trustee not being a trust corporation, a sole acting trustee where by the
instrument, if any, creating the trust, or by statute, a sole trustee is
authorized to execute the trusts and powers reposed in him, may, if and
as he or they think fit
(a)accept any property, before the time at which it is made
transferable or payable; or
(b)sever and apportion any blended trust funds or property; or
(c)pay or allow any debt or claim on any evidence that he or they
think sufficient; or
(d)accept any composition or any security, for any debt, or for
any property, claimed; or
(e)allow any time for payment of any debt; or
(f)compromise, compound, abandon, submit to arbitration, or
otherwise settle any debt, account, claim, or thing whatever
relating to the testator's or intestate's estate or to the trust,
and for any of those purposes may enter into, give, execute and do such
agreements, instruments or composition or arrangement, releases, and
other things as to him or them seem expedient, without being
responsible for any loss occasioned by any act or thing so done by him
or them in good faith.
17. (1) A trustee of any leaseholds for lives or years which are
renewable from time to time either under any covenant or contract, or by
custom or usual practice, may, if he thinks fit, and shall, if thereto
required by any person having any beneficial interest, present or future,
or contingent, in the leaseholds, use his best endeavours to obtain from
time to time a renewed lease of the same hereditaments on the
accustomed and reasonable terms, and for that purpose may from time to
time make or concur in making a surrender of the lease for the time being
subsisting, and do all such other acts as are requisite:
Provided that, where by the terms of the settlement or will the
person in possession for his life or other limited interest is entitled to
enjoy the same without any obligation to renew or to contribute to the
expense of renewal, this section shall not apply unless the consent in
writing of that person is obtained to the renewal on the part of the
trustee.
(2) If money is required to pay for the renewal, the trustee effecting
the renewal may pay the same out of any money then in his hands in
trust for the persons beneficially interested in the lands to be comprised
in the renewal lease, and if he has not in his hands sufficient money for
the purpose he may raise the money required by mortgage of the
hereditaments to be comprised in the renewed lease, or of any other
hereditaments for the time being subject to the uses or trusts to which
those hereditaments are subject, and no person advancing money upon
a mortgage purporting to be under this power shall be bound to see that
the money is wanted, or that no more is raised than is wanted for the
purpose. or otherwise as to the application thereof.
(3) This section applies to trusts created either before or after the
commencement of this Ordinance, but nothing in this section shall
authorize any trustee to do anything which he is in express terms
forbidden to do, or to omit to do anything which he is in express terms
directed to do, by the instrument creating the trust.
18. (1) Where trustees are authorized by the instrument, if any,
creating the trust or by law to. pay or apply capital money subject to the
trust for any purpose or in any manner, they shall have and shall be
deemed always to have had power to raise the money required by sale,
conversion, calling in, or mortgage of all or any part of the trust property
for the time being in possession.
(2) This section applies notwithstanding anything to the contrary
contained in the instrument, if any, creating the trust, but does not apply
to trustees of property held for charitable purposes.
19. No purchaser or mortgagee, paying or advancing money on a
sale or mortgage purporting to be made under any trust or power vested
in trustees, shall be concerned to see that such money is wanted, or that
no more than is wanted is raised, or otherwise as to the application
thereof.
20. (1) Where a power or trust is given to or imposed on 2 or more
trustees jointly, the same may be exercised or performed by the
servivors or survivor of them for the time being.
(2) Until the appointment of new trustees, the personal
representatives or representative for the time being of a sole trustee, or,
where there were 2 or more trustees of the last surviving or continuing
trustee, shall be capable of exercising or performing any power or trust
which was given to, or capable of being exercised by, the sole or last
surviving or continuing trustee, or other the trustees or trustee for the
time being of the trust.
(3) This section takes effect subject to the restrictions imposed in
regard to receipts by a sole trustee, not being a trust corporation.
(4) In this section 'personal representative' does not include an
executor who has renounced or has not proved.
21. (1) A trustee may insure against loss or damage by fire and
typhoon any building or other insurable property to any amount,
including the amount of any insurance already on foot, up to the full
value of the building or property, and pay the premiums for such
insurance out of the income thereof or out of the income of any other
property subject to the same trusts without obtaining the consent of
any person who may be entitled wholly or partly to such income.
(2) This section does not apply to any building or property which a
trustee is bound forthwith to convey absolutely to any beneficiary
upon being requested to do so.
22. (1) Money receivable by trustees or any beneficiary under a
policy of insurance against the loss or damage of any property subject
to a trust, whether by fire or otherwise, shall, where the policy has been
kept up under any trust in that behalf or under any power statutory or
otherwise, or in performance of any covenant or of any obligation
statutory or otherwise, or by a tenant for life impeachable for waste, be
capital money for the purpose of the trust as the case may be.
(2) If any such money is receivable by any person, other than the
trustees of the trust, that person shall use his best endeavours to
recover and receive the money, and shall pay the net residue thereof
after discharging any costs of recovering and receiving it, to the
trustees of the trust, or, if there are no trustees capable of giving a
discharge therefor, into court.
(3) Any such money-
(a)if it was receivable in respect of property held upon trust for
sale, shall be held upon the trusts and subject to the powers
and provisions applicable to money arising by a sale under
such trust;
(h)in any other case, shall be held upon trusts corresponding as
nearly as may be with the trusts affecting the property in
respect of which it was payable.
(4) Such money, or any part thereof, may also be applied by the
trustees, or, if in court, under the direction of the court, in rebuilding,
reinstating, replacing. or repairing the property lost or damaged, but any
such application by the trustees shall be subject to the consent of any
person whose consent is required by the instrument, if any, creating the
trust to the investment of money subject to the trust.
(5) Nothing contained in this section shall prejudice or affect the
right of any person to require any such money or any part thereof to be
applied in rebuilding, reinstating, or repairing the property lost or
damaged, or the right of any mortgagee, lessor. or lessee, whether under
any statute or otherwise.
(6) This section applies to policies effected either before or
after the commencement of this Ordinance, but only to money
received after such commencement.
23. Trustees may deposit any documents held by them relating
to the trust, or to the trust property, with any banker or banking
company or any other company whose business includes the under-
taking of the safe custody of documents, and any sum payable in
respect of such deposit shall be paid out of the income of the trust
property.
24. (1) Where trust property includes any share or interest in
property not vested in the trustees, or the proceeds of sate of any
such property, or any other thing in action, the trustees on the same
falling into possession, or becoming payable or transferable may-
(a)agree or ascertain the amount or value thereof or any part
thereof in such manner as they may think fit;
(b)accept in or towards satisfaction thereof, at the market or
current value, or upon any valuation or estimate of value
which they may think fit, any authorized investments;
(c)allow any deductions for duties, costs, charges and expenses
which they may think proper or reasonable;
(d)execute any release in respect of the premises so as effec-
tually to discharge all accountable parties from all liability
in respect of any matters coming within the scope of such
release,
without being responsible in any such case for any loss occasioned
by any act or thing so done by them in good faith.
(2) The trustees shall not be under any obligation and shall
not be chargeable with any breach of trust by reason of any
omission-
(a)to apply for any stop or other like order upon any
securities or other property out of or on which such share
or interest or other thing in action as aforesaid is derived,
payable or charged; or
(b)to take any proceedings on account of any act, default, or
neglect on the part of the persons in whom such securities
or other property or any of them or any part thereof are
for the time being, or had at any time been, vested,
unless and until required in writing so to do by some person, or the
guardian of some person, beneficially interested under the trust, and
unless also due provision is made to their satisfaction for payment of
the costs of any proceedings required to be taken:
Provided that nothing in this subsection shall relieve the
trustees of the obligation to get in and obtain payment or transfer of
such share or interest or other thing in action on the same falling
into possession.
(3) Trustees may, for the purpose of giving effect to the trust, or
any of the provisions of the instrument, if any, creating the trust or of
any statute, from time to time (by duly qualified agents) ascertain and fix
the value of any trust property in such manner as they think proper, and
any valuation so made in good faith shall be binding upon all persons
interested under the trust.
(4) Trustees may, in their absolute discretion, from time to time, but
not more than once in every year unless the nature of the trust or any
special dealings with the trust property make a more frequent exercise of
the right reasonable, cause the accounts of the trust property to be
examined or audited by an independent accountant, and shall, for that
purpose, produce such vouchers and give such information to him as he
may require; and the costs of such examination or audit, including the
fee of the auditor, shall be paid out of the capital or income of the trust
property, or partly in one way and partly in the other as the trustees, in
their absolute discretion, think fit, but, in default of any direction by the
trustees to the contrary in any special case, costs attributable to capital
shall be borne by capital and those attributable to income by income.
25. (1) Trustees or personal representatives may, instead of acting
personally, employ and pay an agent, whether a solicitor, banker,
stockbroker, or other person, to transact any business or do any act
required to be transacted or done in the execution of the trust, or the
administration of the testator's or intestate's estate, including the receipt
and payment of money, and shall be entitled to be allowed and paid all
charges and expenses so incurred, and shall not be responsible for the
default of any such agent if employed in good faith.
(2) Trustees or personal representatives may appoint any person to
act as their agent or attorney for the purpose of selling, converting,
collecting, getting in, and executing and perfecting insurances of, or
managing or cultivating, or otherwise administering any property,
movable or immovable, subject to the trust or forming part of the
testator's or intestate's estate, in any place outside the Colony, or
executing or exercising any discretion or trust or power vested in them
in relation to any such property, with such ancillary powers, and with
and subject to such provisions and restrictions as they may think fit,
including a power to appoint substitutes, and shall not, by reason only
of their having made Such appointment, be responsible for any loss
arising thereby.
(3) Without prejudice to such general power of appointing agents
as aforesaid
(a)a trustee may appoint a solicitor to be his agent to receive and
give a discharge for any money or valuable consideration or
property receivable by the trustee under the trust, by
permitting the solicitor to have the custody of, and to
produce, a deed having in the body thereof or endorsed
thereon a receipt for such money or valuable consideration
or property. the deed being executed, or the endorsed receipt
being signed, by the person entitled to give a receipt for that
consideration;
(b)a trustee shall not be chargeable with breach of trust by
reason only of his having made or concurred in making any
such appointment; and the production of any such deed by
the solicitor shall have the same statutory validity and effect
as if the person appointing the solicitor had not been a
trustee;
(c)a trustee may appoint a banker or solicitor to be his agent to
receive and give a discharge for any money payable to the
trustee under or by virtue of a policy of insurance, by
permitting the banker or solicitor to have the custody of and
to produce the policy of insurance with a receipt signed by the
trustee, and a trustee shall not be chargeable with a breach of
trust by reason only of his having made or concurred in
making any such appointment:
Provided that nothing in this subsection shall exempt a trustee
from any liability which he would have incurred if this Ordinance and
any enactment replaced by this Ordinance had not been passed, in case
he permits any such money, valuable consideration, or property to
remain in the hands or under the control of the banker or solicitor for a
period longer than is reasonably necessary to enable the banker or
solicitor, as the case may be, to pay or transfer the same to the trustee.
This subsection applies whether the money or valuable consideration or
property was or is received before or after the commencement of this
Ordinance.
26. Where an undivided share in the proceeds of sale of land
directed to be sold, or in any other property, is subject to a trust, or
forms part of the estate of a testator or intestate, the trustees or personal
respresentatives may (without prejudice to the trust for sale affecting
the entirety of the land and the powers of the trustees for sale in
reference thereto) execute or exercise any trust or power vested in them
in relation to such share in conjunction with the persons entitled to or
having power in that half over the other share or shares, and
notwithstanding that any one or more of the trustees or personal
representatives may be entitled to or interested in any such other share,
either in his or their own right or in a fiduciary capacity.
27. (1) Not with standing any rule of law or equity to the contrary, a
trustee may, by power of attorney, delegate for a period not exceeding
12 months the execution or exercise of all or any of the trusts, powers
and discretions vested in him as trustee either alone or jointly with any
other person or persons.
(2) The persons who may be donees of a power of attorney under
this section include a trust corporation but not (unless a trust
corporation) the only other co-trustee of the donor of the power.
(3) An instrument creating a power of attorney under this section
shall be attested by at least one witness.
(4) Before or within 7 days after giving a power of attorney under
this section the donor shall give written notice thereof (specifying the
date on which the power comes into operation and its duration, the
donee of the power, the reason why the power is given and, where some
only are delegated, the trusts, powers and discretions delegated) to
(a)each person (other than himself) if any, who under any
instrument creating the trust has power (whether alone or
jointly) to appoint a new trustee; and
(b)each of the other trustees, if any;
but failure to comply with this subsection shall not, in favour of a
person dealing with the donee of the power, invalidate any act done or
instrument executed by the donee.
(5) The donor of a power of attorney given under this section shall
be liable for acts or defaults of the donee in the same manner as if they
were the acts or defaults of the doner.
(6) For the purpose of executing or exercising the trusts or powers
delegated to him, the donee may exercise any of the powers conferred
on the donor as trustee by statute or by the instrument creating the
trust, including power, for the purpose of the transfer of any inscribed
stock, himself to delegate to an attorney power to transfer but not
including the power of delegation conferred by this section.
(7) The fact that it appears from any power of attorney given under
this section, or from any evidence required for the purposes of any such
power of attorney or otherwise, that in dealing with any stock the donee
of the power is acting in the execution of a trust shall not be deemed for
any purpose to affect any person in whose books the stock is inscribed
or registered with any notice of the trust.
(8)This section applies-
(a)to a personal representative as it applies to a trustee except
that subsection (4) shall apply as if it required notice there
mentioned to be given to each of the other personal
representatives, if any, except any executor who has
renounced probate;
(b)whenever the trusts, powers or discretions in question arose.
(Replaced, 51 of'1972, s. 8)
Indemnities
28. (1) Where a personal representative or trustee liable as such for
(a)any rent, covenant, or agreement reserved by or contained in
any lease; or
(b)any rent, covenant or agreement payable under or contained
in any grant made in consideration of a rentcharge; or
(c)any indemnity given in respect of any rent, covenant or
agreement referred to in either of the foregoing paragraphs,
satisfies all liabilities under the lease or grant which may have accrued,
and been claimed, up to the date of the conveyance hereinafter
mentioned, and, where necessary, sets apart a sufficient fund to answer
any future claim that may be made in respect of any fixed and
ascertained sum which the lessee or grantee agreed to lay out on the
property demised or granted, although the period for laying out the
same may not have arrived, then and in any such case the personal
representative or trustee may convey the property demised or granted
to a purchaser, legatee, devisee or other person entitled to call for a
conveyance thereof and thereafter
(i)he may distribute the residuary estate of the deceased testator
or intestate, or, as the case may be, the trust estate (other than
the fund, if any, set apart as aforesaid) to or amongst the
persons entitled thereto, without appropriating any part, or
any further part, as the case may be, of the estate of the
deceased or of the trust estate to meet any future liability
under the said lease or grant;
(ii) notwithstanding such distribution, he shall not be personally
liable in respect of any subsequent claim under the said lease
or grant.
(2) This section operates without prejudice to the right of the lessor
or grantor, or the persons deriving title under the lessor or grantor, to
follow the assets of the deceased or the trust property into the hands of
the persons amongst whom the same may have been respectively
distributed, and applies notwithstanding anything to the contrary in the
will or other instrument, if any, creating the trust.
(3) In this section 'lease' includes an underlease and an agreement
for a lease or underlease and any instrument giving any such indemnity
as aforesaid or varying the liabilities under the lease; 'grant' applies to
a grant whether the rent is created by limitation, grant, reservation, or
otherwise, and includes an agreement for a grant and any instrument
giving any such indemnity as aforesaid or varying the liabilities under
the grant, lessee and 'grantee', include persons respectively deriving
title under them.
29. (1) With a view to the conveyance to or distribution among the
persons entitled to any movable or immovable property, trustees or
personal representatives may give notice by advertisement in the
Gazette, and such other like notices, including notices elsewhere than in
the Colony, as would, in any special case, have been directed by a court
of competent jurisdiction in an action for
administration, of their intention to make such conveyance or
distribution as aforesaid, and requiring any person interested to
send to the trustees or personal representatives within the time, not
being less than 2 months, fixed in the notice or, where more than one
notice is given, in the last of the notices, particulars of his claim in
respect of the property or any part thereof to which the notice
relates.
(2) At the expiration of the time fixed by the notice the trustees
or personal representatives may convey or distribute the property or
any part thereof to which the notice relates, to or among the persons
entitled thereto, having regard only to the claims, whether formal or
not, of which the trustees or personal representatives then had notice
and shall not, as respects the property so conveyed or distributed,
be liable to any person of whose claim the trustees or personal
representatives have not had notice at the time of conveyance or
distribution; but nothing in this section shall-
(a) prejudice the right of any person to follow the property, or
any property representing the same, into the hands of any
person, other than a purchaser, who may have received it;
or
(b) free the trustees or personal representatives from any
obligation to make searches similar to those which an
intending purchaser would be advised to make or obtain.
(3) This section applies notwithstanding anything to the con-
trary in the will or other instrument, if any, creating the trust.
30. A trustee or personal representative acting for the pur-
ace. poses of more than one trust or estate shall not, in the absence of
fraud, by affected by notice of any instrument, matter, fact or thing
in relation to any particular trust or estate if he has obtained notice
thereof merely by reason of his acting or having acted for the
purposes of another trust or estate.
31. [Repealed, 51 of 1972, s. 81
32. (1) A trustee shall be chargeable only for money and
securities actually received by him notwithstanding his signing any
receipt for the sake of conformity, and shall be answerable and
accountable only for his own acts, receipts, neglects, or defaults,
and not for those of any other trustee, or of any banker, broker,
or other person with whom any trust money or securities may be
deposited, nor for the insufficiency or deficiency of any securities,
nor for any other loss, unless the same happens through his own
wilful default.
(2) A trustee may reimburse himself or pay or discharge out of
the trust premises all expenses incurred in or about the execution of
the trusts or powers.
Maintenance, Advancement and Protective Trusts
33. (1) Where any property is held by trustees in trust for any
person for any interest whatsoever, whether vested or contingent, then,
subject to any prior interests or charges affecting that property
(a)during the infancy of any such person, if his interest so long
continues, the trustees may, at their sole discretion, pay to his
parent or guardian, if any, or otherwise apply for or towards
his maintenance, education or benefit, the whole or such part,
if any, of the income of that property as may, in all the
circumstances, be reasonable, whether or not there is
(i) any other fund applicable to the same purpose; or
(ii) any person bound by law to provide for his
maintenance or education; and
(b)if such person on attaining. years has not a
vested interest in such income, the trustees shall thence-
forth pay the income of that property and of any accretion
thereto under subsection (2) to him, until he either attains a
vested interest therein or dies, or until failure of his
interest:
Provided that, in deciding whether the whole or any part of the
income of the property is during a minority to be paid or applied for the
purposes aforesaid, the trustees shall have regard to the age of the
infant and his requirements and generally to the circumstances of the
case, and in particular to what other income, if any, is applicable for the
same purposes; and where trustees have notice that the income of more
than one fund is applicable for those purposes, then, so far as
practicable, unless the entire income of the funds is paid or applied as
aforesaid or the court otherwise directs, a proportionate part only of the
income of each fund shall be so paid or applied.
(2) During the infancy of any such person, if his interest so long
continues, the trustees shall accumulate all the residue of that income in
the way of compound interest by investing the same and the resulting
income thereof from time to time in authorized investments, and shall
hold those accumulations as follows
(a) if any such person-
(i) attains the age @P 21 years or- maries under that
age; and his interest in such income during his infancy or
until his marriage is a vested interest; or
(ii) on attaining, years or on marriage
under that age becomes entitled to the property from
which such income arose absolutely;
the trustees shall hold the accumulations in trust for such
person absolutely, and so that the receipt of such person
after marriage, and though still an infant, shall be a good
discharge; and
(b)in any other case the trustees shall, notwithstanding that such
person had a vested interest in such income, hold the
accumulations as an accretion to the capital of the property
from which such accumulations arose, and as one fund with
such capital for all purposes;
but the trustees may, at any time during the infancy of such person if
his interest so long Continues, apply those accumulations, or any part
thereof, as if they were income arising in the then current year.
(3) This section applies in the case of a contingent interest only if
the limitation or trust carries the intermediate income of the property,
but it applies to a future or contingent legacy by the parent of, or a
person standing in loco parentis to, the legatee, if and for such period
as, under the general law, the legacy carries interest for the maintenance
of the legatee, and in any such case as last aforesaid the rate of interest
shall (if the income available is sufficient, and subject to any rules of
court to the contrary) be $5 per cent per annum.
(4) This section applies to a vested annuity in like manner as if the
annuity were the income of property held by trustees in trust to pay the
income thereof to the annuitant for the same period for which the
annuity is payable, save that in any case accumulations made during the
infancy of the annuitant shall be held in trust for the annuitant or his
personal representatives absolutely.
(5) This section does not apply where the instrument, if any, under
which the interest arises came into operation before the commencement
of this Ordinance.
34. (1) Trustees may at any time or times pay or apply any capital
money subject to a trust, for the advancement or benefit in such manner
as they may, in their absolute discretion, think fit, of any person entitled
to the capital of the trust property or of any share thereof, whether
absolutely or contingently on his attaining any specified age or on the
occurrence of any other event, or subject to a gift over on his death
under any specified age or on the occurrence of any other event, and
whether in possession or in remainder or reversion, and such payment
or application may be made notwithstanding that the interest of such
person is liable to be defeated by the exercise of a power of appointment
or revocation, or to be diminished by the increase of the class to which
he belongs:
Provided that
(a)the money so paid or applied for the advancement or benefit
of any person shall not exceed altogether in amount one-half
of the presumptive or vested share or interest of that person
in the trust property, and
(b)if that person is or becomes absolutely and indefeasibly
entitled to a share in the trust property the money so paid or
applied shall be brought into account as part of such share;
and
(e)no such payment or application shall be made so as to
prejudice any person entitled to any prior life or other
interest, whether vested or contingent, in the money paid
or applied unless such person is in existence and of full age
and consents in writing to such payment or application.
(2) This section applies only where the trust property consists of
money or securities or of property held upon trust for sale calling in and
conversion, and such money or securities, or the proceeds of such sale
calling in and conversion are not by statute or in equity considered as
land.
(3) This section does not apply to trusts constituted or created
before the commencement of this Ordinance.
35. (1) Where any income, including an annuity or other periodical
income payment, is directed to be held on protective trusts for the
benefit of any person (in this section called the principal beneficiary) for
the period of his life or for any less period, then, during the period (in
this section called the trust period) the said income shall, without
prejudice to any prior interest, be held on the following trusts, namely
(a)upon trust for the principal beneficiary during the trust period
or until he, whether before or after the termination of any prior
interest, does or attempts to do or suffers any act or thing, or
until any event happens, other than an advance under any
statutory or express power, whereby, if the said income were
payable during the trust period to the principal beneficiary
absolutely during that period, he would be deprived of the
right to receive the same or any part thereof, in any of which
cases, as well as on the termination of the trust period,
whichever first happens, this trust of the said income shall fail
or determine;
(b)if the trust aforesaid fails or determines during the subsistence
of the trust period, then, during the residue of that period, the
said income shall be held upon trust for the application
thereof for the maintenance or support, or otherwise for the
benefit, of all or any one or more exclusively of the other or
others of the following persons (that is to say)- (Amended,
L.N. 7179)
(i) the principal beneficiary and his or her wife or husband,
if any, and his or her children or more remote issue, if any; or
(ii) if there is no wife or husband or issue of the principal
beneficiary in existence, the principal beneficiary and the
persons who would, if he were actually dead, be entitled to the
trust property or the income thereof or to the annuity fund, if
any, or arrears of the annuity, as the case may be;
as the trustees in their absolute discretion, without being
liable to account for the exercise of such discretion, think fit.
(2) This section does not apply to trusts coming into operation
before the commencement of this Ordinance, and has effect subject to
any variation of the implied trusts aforesaid contained in the instrument
creating the trust.
(3) Nothing in this section operates to validate any trust which
would, if contained in the instrument creating the trust, be liable to be
set aside.
PART IV
APPOINTMENT AND DISCHARGE OF
TRUSTEES
36. (1) Where, at the corn commcenment of this Ordinance there are
more than 4 trustees of a settlement of land or more than 4 trustees
holding land on trust for sale, no new trustees shall (except where as a
result of the appointment the number is reduced to 4 or less) be capable
of being appointed until the number is reduced to less than 4, and
thereafter the number shall not be increased beyond 4.
(2) In the case of settlements and dispositions on trust for sale of
land made or coming into operation after the commencement of this
Ordinance
(a)the number of trustees thereof shall not in any case exceed 4,
and where more than 4 persons are named as such trustees,
the 4 first named (who are able and willing to act) shall alone
be the trustees, and the other persons named shall not be
trustees unless appointed on the occurrence of a vacancy;
(b)the number of the trustees shall not be increased beyond 4.
(3)The restrictions hereby imposed on the number of trustees
do not apply in the case of land vested in trustees for charitable,
ecclesiastical, or public purposes or where the net proceeds of the
sale of the property are held for like purposes.
37. (1) Where a trustee, either original or substituted, and whether
appointed by a court or otherwise, is dead, or remains out of the Colony
for more than 12 months, or desires to be discharged from all or any of
the trusts or powers reposed in or conferred on him, or refuses or is
unfit to act therein, or is incapable of acting therein, or is an infant, then,
subject to the restrictions imposed by this Ordinance on the number of
trustees
(a)the person or persons nominated for the purpose of
appointing new trustees by the instrument, if any, creating the
trust; or
(b)if there is no such person, or no such person able and willing
to act, then the surviving or continuing trustees or trustee for
the time being, or the personal representatives of the last
surviving or continuing trustee,
may, by writing, appoint one or more other persons (whether or not
being the persons exercising the power) to be a trustee or trustees in the
place of the trustee so deceased, remaining out of the Colony, desiring
to be discharged, refusing, or being unfit or being incapable, or being an
infant as aforesaid.
(2) Where a trustee has been removed under a power contained in
the instrument creating the trust, a new trustee or new trustees may be
appointed in the place of the trustee who is removed, as if he were dead,
or, in the case of a corporation, as if the corporation desired to be
discharged from the trust, and the provisions of this section shall apply
accordingly, but subject to the restrictions imposed by this Ordinance
on the number of trustees.
(3) Where a corporation being a trustee is or has been dissolved,
either before or after the commencement of this Ordinance. then, for the
purposes of this section and of any enactment replaced thereby, the
corporation shall be deemed to be and to have been from the date of the
dissolution incapable of acting in the trusts or powers reposed in or
conferred on the corporation.
(4) The power of appointment given by subsection (1) or any
similar previous enactment to the personal representatives of a last
surviving or continuing trustee shall be and shall be deemed always to
have been exercisable by the executors for the time being (whether
original or by representation) of such surviving or continuing trustee
who have proved the will of their testator or by the administrators for
the time being of such trustee without the concurrence of any executor
who has renounced or has not proved.
(5) But a sole or last surviving executor intending to renounce, or
all the executors where they all intend to renounce, shall have and shall
be deemed always to have had power, at any time before renouncing
probate, to exercise the power of appointment given by this section, or
by any similar previous enactment, if willing to act for that purpose and
without thereby accepting the office of executor.
(6) Where a sole trustee, other than a trust corporation, is or has
been originally appointed to act in a trust, or where, in the case of any
trust, there are not more than 3 trustees (none of them being a trust
corporation) either original or substituted and whether appointed by the
court or otherwise, then and in any such case
(a)the person or persons nominated for the purpose of
appointing new trustees by the instrument, if any, creating
the trust; or
(b)if there is no such person, or no such person able and willing
to act, then the trustee or trustees for the time being,
may, by writing, appoint another person or other persons to be an
additional trustee or additional trustees, but it shall not be obligatory to
appoint any additional trustee, unless the instrument, if any, creating
the trust, or any statutory enactment provides to the contrary, nor shall
the number of trustees be increased beyond 4 by virtue of any such
appointment.
(7) Every new trustee appointed under this section, as well before
as after all the trust property becomes by law, or by assurance, or
otherwise, vested in him, shall have the same powers, authorities, and
discretions, and may in all respects act as if he had been originally
appointed a trustee by the instrument, if any, creating the trust.
(8) The provisions of this section relating to a trustee who is dead
include the case of a person nominated trustee in a will but dying before
the testator, and those relative to a continuing trustee include a refusing
or retiring trustee, if willing to act in the execution of the provisions of
this section.
(9) Where a lunatic or person of unsound mind, being a trustee, is
also entitled in possession to some beneficial interest in the trust
property, no appointment of a new trustee in his place shall be made by
the continuing trustees or trustee, under this section, unless leave has
been given by the court to make the appointment.
38. (1) On the appointment of a trustee for the whole or any part of
trust property
(a)the number of trustees may, subject to the restrictions
imposed by this Ordinance on the number of trustees, be
increased; and
(b)a separate set of trustees, not exceeding 4 may be appointed
for any part of the trust property held on trusts distinct from
those relating to any other part or parts of the trust property,
notwithstanding that no new trustees or trustee are or is to be
appointed for other parts of the trust property, and any
existing trustee may be appointed or remain one of such
separate set of trustees, or, if only one trustee was originally
appointed, then, save as hereinafter provided, one separate
trustee may be appointed; and
(c)it shall not be obligatory, save as hereinafter provided, to
appoint more than one new trustee where only one trustee
was originally appointed, or to fill up the original number of
trustees where more than 2 trustees were originally appointed,
but, except where only one trustee was originally appointed,
and a sole trustee when appointed will be able to give valid
receipts for all capital money, a trustee shall not be discharged
from his trust unless there will be either a trust corporation or
at least 2 individuals to act as trustees to perform the trust;
and
(d)any assurance or thing requisite for vesting the trust
property, or any part thereof, in a sole trustee, ro jointly in the
persons who are the trustees, shall be executed or done.
(2) Nothing in this Ordinance shall authorize the appointment of a
sole trustee, not being a trust corporation, where the trustee, when
appointed would not be able to give valid receipts for all capital money
arising under the trust.
39. (1) A statement, contained in any instrument coming into
operation after the commencement of this Ordinance by which a new
trustee is appointed for any purpose connected with land, to the effect
that a trustee has remained out of the Colony for more than 12 months
or refuses or is unfit to act, or is incapable of acting, or that he is not
entitled to a beneficial interest in the trust property in possession, shall,
in favour of a purchaser of a legal estate, be conclusive evidence of the
matter stated.
(2) In favour of such purchaser any appointment of a new trustee
depending on that statement, and any vesting declaration, express or
implied, consequent on the appointment, shall be valid.
40. (1) Where a trustee is desirous 5 of being discharged from the
trust, and after his discharge there will be either a trust corporation or at
least 2 individuals to act as trustees to perform the trust, then, if such
trustee as aforesaid by deed declares that he is desirous of being
discharged from the trust, and if his cotrustees and such other person, if
any, as is empowered to appoint trustees, by deed consent to the
discharge of the trustee, and to the vesting in the co-trustees alone of
the trust property, the trustee desirous of being discharged shall be
deemed to have retired from the trust, and shall, by the deed, be
discharged therefrorn under this Ordinance, without any new trustee
being appointed in his place.
(2) Any assurance or thing requisite for vesting the trust property
in the continuing trustees along shall be executed or done.
41. (1) Where by a deed anew trustee is appointed to perform any
trust, then
(a)if the deed contains a declaration by the appointor to the
effect that any estate or interest in any land subject to the
trust, or in any chattel so subject, or the right to recover or
receive any debt or other thing in action so subject, shall vest
in the persons who by virtue of the deed become or are the
trustees for performing the trust, the deed shall operate,
without any conveyance or assignment, to vest in those
persons as joint tenants and for the purposes of the trust the
estate, interest or right to which the declaration relates; and
(b)if the deed is made after the commencement of this Ordinance
and does not contain such a declaration, the deed shall,
subject to any express provision to the contrary therein
contained, operate as if it had contained such a declaration by
the appointor extending to all the estates, interests and rights
with respect to which a declaration could have been made.
(2) Where by a deed a retiring trustee is discharged under the
statutory power without a new trustee being appointed, then
(a)if the deed contains such a declaration as aforesaid by the
retiring and continuing trustees, and by the other person, if
any, empowered to appoint trustees, the deed shall, without
any conveyance or assignment, operate to vest in the
continuing trustees alone, as joint tenants, and for the
purposes of the trust, the estate, interest or right to which the
declaration relates; and
(b)if the deed is made after the commencement of this Ordinance
and does not contain such a declaration, the deed shall,
subject to any express provision to the contrary therein
contained, operate as if it had contained such a declaration by
such person as aforesaid extending to all the estates, interests
and rights with respect to which a declaration could have been
made.
(3) An express vesting declaration, whether made before or after
the commencement of this Ordinance, shall, notwithstanding that the
estate, interest or right to be vested is not expressly referred to, and
provided that the other statutory requirements were or are complied
with, operate and be deemed always to have operated (but without
prejudice to any express provision to the contrary contained in the deed
of appointment or discharge) to vest in the persons respectively referred
to in subsections (1) and (2), as the case may require, such estates,
interests and rights as are capable of being and ought to be vested in
those persons.
(4) This section does not extend-
(a)to land conveyed by way of mortgage for securing money
subject to the trust, except land conveyed on trust for
securing debentures or debenture stock;
(b)to land held under a lease which contains any convenant,
condition or agreement against assignment or disposing of the
land without licence or consent, unless, prior to the execution
of the deed containing expressly or impliedly the vesting
declaration, the requisite licence or consent has been
obtained. or unless, by virtue of any statute or rule of law, the
vesting declaration, express or implied, would not operate as a
breach of convenant or give rise to a forfeiture;
(e)to any share, stock, annuity or property which is only
transferable in books kept by'a company or other body, or in
manner directed by or under any enactment.
In this subsection 'lease' includes an underlease and an
agreement for a lease or underlease.
(5) For purposes of registration of the deed, the person or persons
making the declaration, expressly or impliedly, shall be deemed the
conveying party or parties, and the conveyance shall be deemed to be
made by him or them under a power conferred by this Ordinance.
(6) This section applies to deeds of appointment or discharge
executed on or after 1 July 190 1.
PART V
POWERS OF THE COURT
Appointment of new Trustees
42. (1) The court may, whenever it is expedient to appoint a new
trustee or new trustees, and it is found inexpedient, difficult or
impracticable so to do without the assistance of the court, make an order
appointing a new trustee or new trustees either in substitution for or in
addition to any existing trustee or trustees, or although there is no
existing trustee. In particular and without prejudice to the generality of
the foregoing provision, the court may make an order appointing a new
trustee in substitution for a trustee who is sentenced to a term of
imprisonment or is a lunatic or a person of unsound mind or is a
bankrupt or is a corporation which is in liquidation or has been
dissolved.
(2) An order under this section, and any consequential vesting
order or conveyance, shall not operate further or otherwise as a
discharge to any former or continuing trustee than an appointment of
new trustees under any power for that purpose contained in any
instrument would have operated.
(3) Nothing in this section gives power to appoint an executor or
administrator.
43. Where the court appoints a corporation, other than the Public
Trustee in England, to be a trustee either solely or jointly with another
person, the court may authorize the corporation to charge such
remuneration for its services as trustee as the court may think fit.
44. Every trustee appointed by a court of competent jurisdiction
shall, as well before as after the trust property becomes by law, or by
assurance, or otherwise, vested in him, have the same powers,
authorities, and discretions, and may in all respects act as if he had been
originally appointed a trustee by the instrument, if any, creating the
trust.
Vesting Orders
45. In any of the following cases, namely-
(a)where the court appoints or has appointed a trustee, or where
a trustee has been appointed out of court under any statutory
or express power;
(b)where a trustee entitled to or possessed of any land or
interest therein, whether by way of mortgage or otherwise,
or entitled to a contingent right therein, either solely or
jointly with any other person-
(i) is under disability; or
(ii) is out of the jurisdiction of the court; or
(iii) cannot be found, or, being a corporation, has been
dissolved;
(c)where it is uncertain who was the survivor of 2 or more
trustees jointly entitled to or possessed of any interest in
land;
(d)where it is uncertain whether the last trustee known to have
been entitled to or possessed of any interest in land is living
or dead;
(e)where there is no personal representative of a deceased
trustee who was entitled to or possessed of any interest in
land, or where it is uncertain who is the personal represent-
ative of a deceased trustee who was entitled to or possessed
of any interest in land;
(f)where a trustee jointly or solely entitled to or possessed of
any interest in land, or entitled to a contingent right
therein, has been required, by or on behalf of a person
entitled to require a conveyance of the land or interest or a
release of the right, to convey the land or interest or to
release the right, and has wilfully refused or neglected to
convey the land or interest or release the right for 28 days
after the date of the requirement;
(g)where land or any interest therein is vested in a trustee
whether by way of mortgage or otherwise, and it appears
to the court to be expedient,
the court may make an order (in this Ordinance called a vesting
order) vesting the land or interest therein in any such person in any
such manner and for any such estate or interest as the court may
direct, or releasing or disposing of the contingent right to such
person as the court may direct:
Provided that-
(i) where the order is consequential on the appointment of a
trustee the land or interest therein shall be vested for such
estate as the court may direct in the persons who on the
appointment are the trustees; and
(ii)where the order relates to a trustee entitled or formerly
entitled jointly with another person, and such trustee is
under disability or out of the jurisdiction of the court
or cannot be found, or being a corporation has been
dissolved, the land, interest or right shall be vested in such
other person who remains entitled, either alone or with any
other person the court may appoint.
46. Where any interest in land is subject to a contingent right in an
unborn person or class of unborn persons who, on coming into
existence would, in respect thereof, become entitled to or possessed of
that interest on any trust, the court may make an order releasing the land
or interest therein from the contingent right, or may make an order
vesting in any person the estate or interest to or of which the unborn
person or class of unborn persons would, on coming into existence, be
entitled or possessed in the land.
47. Where any person entitled to or possessed of any interest in
land, or entitled to a contingent right in land, by way of security for
money, is an infant, the court may make an order vesting or releasing or
disposing of the interest in the land or the right in like manner as in the
case of a trustee under disability.
48. Where any court gives a judgment or makes an order directing
the sale or mortgage of any land, every person who is entitled to or
possessed of any interest in the land, or entitled to a contingent right
therein, and is a party to the action or proceeding in which the judgment
or order is given or made or is otherwise bound by the judgment or
order, shall be deemed to be so entitled or possessed, as the case may
be, as a trustee for the purposes of this Ordinance, and the court may, if
it thinks expedient, make an order vesting the land or any part thereof for
such estate or interest as the court thinks fit in the purchaser or
mortgagee or in any other person.
49. Where a judgment is given for the specific performance of a
contract concerning any interest in land, or for sate or exchange of any
interest in land, or generally where any judgment is given for the
conveyance of any interest in land either in cases arising out of the
doctrine of election or otherwise, the court may declare
(a)that any of the parties to the action are trustees of any interest
in the land or any part thereof within the meaning of this
Ordinance; or
(b)that the interests of unborn persons who might claim under
any party to the action, or under the will or voluntary
settlement of any deceased person who was during his
lifetime a party to the contract or transaction concerning
which the judgment is given, are the interests of persons who,
on coming into existence, would be trustees within the
meaning of this Ordinance,
and thereupon the court may make a vesting order relating to the rights
of those persons, born and unborn, as if they had been trustees.
50. A vesting order under any of the foregoing provisions shall in
the case of a vesting order consequential on the appointment of a
trustee, have the same effect
(a)as if the persons who before the appointment were the
trustees, if any, had duly executed all proper conveyances
of the land for such estate or interest as the court directs;
or
(b)if there is no such person, or no such person of full
capacity, as if such person had existed and been of full
capacity and had duly executed all proper conveyances of
the land for such estate or interest as the court directs,
and shall in every other case have the same effect as if the trustee, or
other person or description or class of persons to whose rights or
supposed rights the said provisions respectively relate had been an
ascertained and existing person of full capacity, and had executed a
conveyance or release to the effect intended by the order.
51. In all cases where a vesting order can be made under any of
the foregoing provisions, the court may, if it is more convenient,
appoint a person to convey the land or any interest therein or release
the contingent right, and a conveyance or release by that person in
conformity with the order shall have the same effect as an order
under the appropriate provision.
52.(1) In any of the following cases, namely-
(a)where the court appoints or has appointed a trustee, or
where a trustee has been appointed out of court under any
statutory or express power;
(b)where a trustee entitled, whether by way of mortgage or
otherwise, alone or jointly with another person to stock or
to a thing in action-
(i) is under disability; or
(ii) is out of the jurisdiction of the court; or
(iii) cannot be found, or, being a corporation, has been
dissolved; or
(iv) neglects or refuses to transfer stock or receive the
dividends or income thereof, or to sue for or recover a
thing in action, according to the direction of the person
absolutely entitled thereto for 28 days next after a request
in writing has been made to him by the person so entitled;
or
(v) neglects or refuses to transfer stock or receive the
dividends or income thereof, or to sue for or recover a
thing in action for 28 days next after an order of the court
for that purpose has been served on him;
(c)where it is uncertain whether a trustee entitled alone or
jointly with another person to stock or to a thing in action
is alive or dead;
(d)where stock is standing in the name of a deceased person
whose personal representative is under disability;
(e)where stock or a thing in action is vested in a trustee whether
by way of mortgage or otherwise and it appears to the court to
be expedient,
the court may make an order vesting the right to transfer or call for a
transfer of stock, or to receive the dividends or income thereof, or to sue
for or recover the thing in action, in any such person as the court may
appoint:
Provided that
(i)where the order is consequential on the appointment of a
trustee, the right shall be vested in the persons who, on the
appointment, are the trustees; and
(ii) where the person whose right is dealt with by the order was
entitled jointly with another person, the right shall be vested
in that last-mentioned person either alone or jointly with any
other person whom the court may appoint.
(2) In all cases where a vesting order can be made under this
section, the court may, if it is more convenient, appoint some proper
person to make or join in making the transfer:
Provided that the person appointed to make or join in making a
transfer of stock shall be some proper officer of the bank, or the
company or society whose stock is to be transferred.
(3) The person in whom the right to transfer or call for the transfer
of any stock. is vested by an order of the court under this Ordinance
may transfer the stock to himself or any other person, according to the
order, and all companies, banks and societies shall obey every order
under this section according to its tenor.
(4) After notice in writing of an order under this section it shall not
be lawful for any company, bank or society to transfer any stock to
which the order relates or to pay any dividends thereon except in
accordance with the order.
(5) The court may make declarations and give directions
concerning the manner in which the right to transfer any stock or thing
in action vested under the provisions of this Ordinance is to be
exercised.
(6) The provisions of this Ordinance as to vesting orders shall
apply to shares in ships registered under the enactments relating to
merchant shipping as if they were stock.
53. The powers conferred by this Ordinance as to vesting orders
may be exercised for vesting any interest in land, stock or thing in action
in any trustee of a charity or society over which the court would have
jurisdiction upon action duly instituted, whether the appointment of the
trustee was made by instrument under a power or by the court under its
general or statutory jurisdiction.
54. Where an infant is beneficially entitled to any property, the
court may, with a view to the application of the capital or income thereof
for the maintenance, education or benefit of the infant, make an order
(a)appointing a person to convey such property; or
(b)in the case of stock, or a thing in action, vesting in any person
the right to transfer or call for a transfer of such stock, or to
receive the dividends or income thereof, or to sue for and
recover such thing in action, upon such terms as the court
may think fit.
55. Where a vesting order is made as to any land under this
Ordinance founded on an allegation of any of the following matters
namely
(a)the personal incapacity of a trustee or mortgagee; or
(b)that a trustee or mortgagee or the personal representative of
or other person deriving title under a trustee or mortgagee is
out of the jurisdiction of the court or cannot be found, or
being a corporation has been dissolved; or
(c)that it is uncertain which of 2 or more trustees, or which of 2
or more persons interested in a mortgage, was the survivor; or
(d)that it is uncertain whether the last trustee or the personal
representative of or other person deriving title under a trustee
or mortgagee, or the last surviving person interested in a
mortgage is living or dead, or
(e)that any trustee or mortgagee has died intestate without
leaving a person beneficially interested under the intestacy or
has died and it is not known who is his personal
representative or the person interested,
the fact that the order has been so made shall be conclusive evidence of
the matter so alleged in any court upon any question as to the validity
of the order, but this section does not prevent the court from directing a
reconveyance or surrender or the payment of costs occasioned by any
such order if improperly obtained.
Jurisdiction to make other Order
56. (1) Where in the management or administration of any properly
vested in trustees. any sale, lease, mortgage, surrender, release, or other
disposition, or any purchase, investment, acquisition, expenditure, or
other transaction, is in the opinion of the court expedient, but the same
cannot be effected by reason of the absence of any power for that
purpose vested in the trustees by the trust instrument, if any, or by law,
the court may by order confer upon the trustees, either generally or in
any particular instance, the necessary power for the purpose, on such
terms, and subject to such provisions
and conditions, if any, as the court may think fit and may direct in
what manner any money authorized to be expended. and the costs of
any transaction. are to be paid or borne as between capital and
income.
(2) The court may, from time to time, rescind or vary any
order under this section, or may make any new or further order.
(3) An application to the court under this section maybe made
by the trustees, or by any of them. or by any person beneficially
interested under the trust.
57. (1) An order under this Ordinance for the appointment of
a new trustee or concerning any interest in land, stock. or thing in
action subject to a trust. may be made on the application of any,
person beneficially interested in the land. stock, or thing in action,
whether under disability or not, or on the application of any person
duly appointed trustee thereof.
(2) An order under this Ordinance concerning any interest in
land, stock, or thing in action subject to a mortgage may be made on
the application of any person beneficially interested in the equity of
redemption, whether under disability or not, or of any person
interested in the money secured by the mortgage.
58. Where in any action the court is satisfied that diligent
search has been made for any person who. in the character of
trustee, is made a defendant in any action, to serve him with a
process of the court, and that he cannot be found. the court may
hear and determine the action and give judgment therein against
that person in his character of a trustee as if he had been duly served,
or had entered an appearance in the action, and had also appeared
by his solicitor at the hearing, but without prejudice to any interest
he may have in the matters in question in the action in any other
character.
59. The court may order the costs and expenses of and incident
to any application for an order appointing a new trustee, or for a
vesting order, or of and incident to any such order, or any convey-
ance or transfer in pursuance thereof, to be raised and paid out of
the property in respect whereof the same is made, or out of the
income thereof, or to be borne and paid in such manner and by such
persons as to the court may seem just.
60. If it appears to the court that a trustee, whether appointed
by the court or otherwise, is or may be personally liable for any
breach of trust, whether the transaction alleged to be a breach of
trust occurred before or after the commencement of this Ordinance,
but has acted honestly and reasonably. and ought fairly to be
excused for the breach of trust and for omitting to obtain the
directions of the court in the matter in which he committed such
breach, then the court may relieve him either wholly or partly from
personal liability for the same.
61. (1) Where a trustee commits a breach of trust at the instigation
or request or with the consent in writing of a beneficiary, the court may,
if it thinks fit. make such order as to the court seems just, for
impounding all or any part of the interest of the beneficiary in the trust
estate by way of indemnity to the trustee or persons claiming through
him. (Amended, 27 of 1971, s. 15)
(2) This section applies to breaches of trust committed as well
before as after the commencement of this Ordinance.
Payment into Court
62. (1) Trustees, or the majority of trustees, having in their hands
or under their control money or securities belonging to a trust, may pay
the same into court. and the same shall, subject to the rules of court, be
dealt with according to the orders of the court.
(2) The receipt or certificate of the proper officer shall be a
sufficient discharge to trustees for the money or securities so paid into
court.
(3) Where money or securities is or are vested in any persons as
trustees, and the majority are desirous of paying the same into court,
but the concurrence of the other or others cannot be obtained, the court
may order the payment into court to be made by the majority without
the concurrence of the other or others.
(4) Where any such money or securities is or are deposited with
any banker, broker, or other depositary, the court may order payment or
delivery of the money or securities to the majority of the trustees for the
purpose of payment into court.
(5) Every transfer, payment and delivery made in pursuance of any
such order shall be valid and take effect as if the same had been made
on the authority or by the act of all the persons entitled to the money
and securities so transferred. paid or delivered.
PART VI
THE JUDICIAL
TRUSTEE
63. (1) Where application is made to the court by or on behalf of the
person creating or intending to create a trust, or by or on behalf of a
trustee or beneficiary, the court may, in its discretion, appoint a person
(in this Part called a judicial trustee) to be a trustee of that trust, either
jointly with any other person or as sole trustee, and, if sufficient cause
is shown, in place of all or any existing trustees.
(2) The administration of the property of a deceased person,
whether a testator or intestate, shall be a trust, and the executor or
administrator a trustee. within the meaning of this Part.
(3) Any fit and proper person nominated for the purpose in the
application may be appointed a judicial trustee, and, in the absence of
such nomination, or if the court is not satisfied of the fitness of a person
so nominated, an official of the court may be appointed, and in any case
a judicial trustee shall be subject to the control and supervision of the
court as an officer thereof.
(4) The court may. either on request or without request, give to a
judicial trustee any general or special directions in regard to the trust or
the administration thereof.
(5) There may be paid to the judicial trustee out of the trust
property such remuneration, not exceeding any prescribed limits, as the
court may assign in each case. subject to any rules under this Part
respecting the application of such remuneration where the judicial
trustee is an official of the court, and the remuneration so assigned to
any judicial trustee shall, save as the court may for special reasons
otherwise order, cover all his work and personal outlay.
(6) Once in every year the accounts of every trust of which a
judicial trustee has been appointed shall be audited, and a report
thereon made to the court by such persons as may be prescribed, and, in
any case where the court shall so direct, an inquiry into the
administration by a judicial trustee of any trust, or into any dealing or
transaction of a judicial trustee, shall be made in such manner as may be
prescribed.
64. The Chief Justice may with the approval of the Legislative
Council make rules for carrying into effect this Part of this Ordinance
and especially to prescribe or provide for
(a)requiring judicial trustees, who are not officials of the court, to
give security for the due application of any trust property
under their control;
(b)the safety of the trust property, and the custody thereof,
(c)the remuneration of judicial trustees and the fees to be taken
under this Part so as to cover the expenses of the
administration of this Part, and the payment of such
remuneration and fees out of the trust property, and, where
the judicial trustee is an official of the court, the application of
the remuneration and fees payable to him;
(d)dispensing with formal proof of facts in proper cases;
(e)facilitating the discharge by the court of administrative duties
under this Part without judicial proceedings and otherwise
regulating procedure under this Part and making it simple and
inexpensive;
(f) the suspension or removal of any judicial trustee, and the
succession of another person to the office of any judicial
trustee who may cease to hold office, and the vesting in such
person of any trust property,
(g)the classes of trusts in which officials of the court are not to
be judicial trustees, or are to be so temporarily or
conditionally;
(h)the procedure to be followed where the judicial trustee is
executor or administrator;
(i)preventing the employment by judicial trustees of other
persons at the expense of the trust, except in cases of strict
necessity;
(j)filing and auditing of the accounts of any trust of which a
judicial trustee has been appointed.
65. In this Part-
,,official of the court- means the holder of such paid office in or
connected with the court as may be prescribed;
'prescribed' means prescribed by rules made under this Part.
PART VII
THE OFFICIAL TRUSTEE
66. (1) For the purpose of carrying into effect the provisions of this
Part, it shall be lawful for the Governor to appoint a fit and proper
person to be Official Trustee:
Provided that, until such appointment is made, the Registrar
General shall ex officio exercise all the powers, privileges and
discretions, and discharge the duties required to be performed by the
Official Trustee under this Ordinance.
(2) The said office shall have perpetual succession, and all lands or
any interest therein. and all moneys. stocks, and securities and land
which may be vested in the Official Trustee under this Part shall be
deemed to be vested in the Official Trustee for the time being. without
any further transfer or conveyance.
67. (1) Trustees, or the majority of trustees, having in their hands or
under their control any moneys belonging to any trust, shall be at
liberty, on filing in the Registry of the court an affidavit shortly
describing the instrument creating the trust. according to the best of
their knowledge and belief, to pay the same, with the consent of the
Official Trustee and in accordance with such directions as they may
receive for the purpose from him. into the court. and the said trust
moneys shall be paid through the Treasury into a bank authorized by
the Governor on deposit bearing interest, or otherwise, to the account of
the Official Trustee (by his official designation) in the matter of the
particular trust (describing the same by the names of the parties. as
accurately as may be. for the purpose of distinguishing it). in trust to
attend the orders of the court.
(2) Any trust moneys paid into a bank pursuant to subsection (1)
which
(a)remain unclaimed for a period of 5 years from the last making
of any order of the Court in relation thereto,. or
(b)if no such order shall have been made. remain unclaimed for a
period of 5 years from the date of payment into the bank,
shall be transferred by the Official Trustee to the general revenue of the
Colony. (Added, 71 of 1971, s. 3)
68. Trustees, or the majority of trustees. having any securities
standing in their names in the books of any public company or
corporation established in the Colony, or in the names of any deceased
persons of whom they are personal representatives, upon any trust,
shall be at liberty, on filing such affidavit as aforesaid, to transfer such
securities, with such consent and in accordance with such directions as
aforesaid, into the name of the Official Trustee (by his official
designation) or to deposit the same in his name in such bank as
aforesaid in the matter of the particular trust (describing the same as
aforesaid), in trust to attend the orders of the court.
69. Trustees, or the majority of trustees, in whom any land within
the Colony is or becomes vested upon any trust, shall be at liberty, on
filing such affidavit as aforesaid, to convey such land, with such
consent and in accordance with such directions as aforesaid, to the
Official Trustee, in trust to attend the orders of the court.
70. In every such case as aforesaid, the certificate of the Official
Trustee for the moneys so paid. or of the transfer or deposit of such
securities, or of the conveyance of such land shall be a sufficient
discharge to such trustees for the moneys so paid. or the stocks or
securities so transferred or deposited. or the land so conveyed as
aforesaid.
71. (1) Where any moneys or securities, or any land, are or is vested
in any persons as trustees, and the majority of them are desirous of
paying, transferring, depositing, or conveying the same as aforesaid, but
the concurrence of the other or others cannot be obtained, the court
may order the payment. transfer. deposit, or conveyance to be made by
the majority without the concurrence of the other or others; and where
any such moneys or securities are deposited with any banker, broker, or
other depositary, the court may order payment or delivery of the moneys
or securities to the majority of the trustees for the purpose of payment
into court.
(2) Every payment, transfer, deposit, delivery, and conveyance
made in pursuance of any such order shall be valid and take effect as if
the same had been made on the authority or by the act of all the persons
entitled to the moneys, securities, or land so paid, transferred,
deposited, delivered, or conveyed.
72. (1) Such orders as may seem fit shall be made by the court in
respect of the trust estate and for the investment and payment of any
such moneys or of any dividends or interest on any such securities, and
for the transfer and delivery out of any such securities, and for the
administration of any such trust generally, upon a petition to be
presented in a summary way to the court by such party or parties as to
the court may appear to be competent and necessary in that behalf, and
service of such petition shall be made on such person or persons as the
court may see fit and direct.
(2) Every order made upon any such petition shall have the same
authority and effect, and shall be enforced in the same manner, as if the
same had been made in an action regularly instituted in the court.
(3) If in any case it appears that the trust estate cannot be safely
administered without the institution of one or more action or actions, the
court may direct any such action or actions to be instituted.
73. (1) There shall be imposed and levied, for the use of the Crown,
upon every trust estate administered under this Part a charge equivalent
to the following percentage of the net value of the trust estate 10 per
cent where the value of the trust estate does not exceed $100,000, or,
where the value exceeds $100,000, 10 per cent on the first 5 100,000 and
5 per cent on the excess.
(2) The said charge shall constitute a primary lien upon the trust
estate, and shall be levied, in the case of trust moneys deposited in a
bank, by an order of the court, authorizing the payment thereof to the
Official Trustee for the use of the Crown, and in the case of securities or
land, by sale, mortgage, or otherwise as the court may direct, and in case
of any such sale. or mortgage, the court may, by the same or any further
order, empower the Official Trustee to execute all instruments necessary
for carrying out this provision, and instruments so executed shall be as
valid and effectual to all intents and purposes as if the same had been
executed by all persons who, but for this provision, would have been
necessary parties thereto.
(3) There shall also be imposed and levied, for the use of the
Crown, upon every such estate a charge equivalent to 5 per cent of the
annual revenue of the trust estate. The Official Trustee shall deduct
such charge in making up the annual accounts of the estate.
(Amended, 27 of 1985, s. 2)
74. (1) In the administration of any trust estate, the Official Trustee
shall have and may exercise all the rights and powers conferred upon
trustees by this Ordinance, so far as they are applicable to such trust
estate.
(2) The Official Trustee may, subject to any rules that may be made
under section 76, employ for the purposes of any trust such solicitors,
bankers, accountants, brokers or other persons, as he may consider
necessary. and, in determining the persons to be employed
in relation to any trust, he shall have regard to the interests of the trust,
but subject to this he shall, whenever practicable, take into
consideration the wishes of the creator of the trust and of the other
trustees (if any) and of the beneficiaries, either expressed or implied by
the practice of the creator of the trust, or in the previous management of
the trust.
75. The Official Trustee shall incur no personal liability by reason
of any securities being transferred into his name as aforesaid, or by
reason of any land being conveyed to him as aforesaid, or by reason of
any loss accruing to any trust estate in his hands, otherwise than by his
own wilful neglect or default:
Provided that nothing in this Part shall be deemed to affect any
rights or remedies against the trust estate or any cestui que trust or any
person other than the Official Trustee and the trustees so discharged as
aforesaid.
76. The Governor in Council may make rules providing for the
administration of trust funds.
(Replaced, 9 of 1950, Schedule)
PART VIII
TRUST COMPANIES
77. (1) Any company incorporated in Hong Kong (not being a
private company within the meaning of section 29 of the Companies
Ordinance) may apply in writing to the Registrar of Companies to be
registered as a trust company under this Part.
(2) A company which makes an application under subsection (1)
shall be eligible to be registered under this Part if, but only if
(a)the objects of the company as set out in its memorandum and
articles of association are restricted to some or all of the
objects set out in section 8 1,
(b)the issued share capital of the company is not less than
$1,000,000;
(c)in the case of a company having an issued share capital of
$1,000,000 that capital is bona fide fully paid up for a cash
consideration and, in the case of a company having an issued
share capital exceeding $1,000,000 at least $1,000,000 of that
capital is bona fide paid up for a cash consideration;
(d)the board of directors has been duly appointed in accordance
with the articles of association of the company;
(e) the company has either-
(i) deposited with the Director of Accounting Services
investments specified in the Second Schedule (other than
those specified in paragraphs 7, 14, 15, 17 and 19) to the value
of not less than $500,000; or
(ii) deposited in the name of the Director of Accounting
Services with a finance company that is a subsidiary of a bank
licensed under section of the Banking Ordinance a sum not
less than 5500,000 and lodged a receipt issued by the finance
company for that amount with the Director of Accounting
Services; and
the company is able to meet its obligations. apart from its
liability to its shareholders, without taking into account the
investments or sum deposited under paragraph (e).
(Amended, L.N. 16177)
(3)For the purposes of subsection (2)-
(a)'finance company' means a company whose principal
business involves the receiving on deposit of money, whether
repayable to depositors with or without interest or other
consideration, and the lending of that money, or a substantial
part of that money, to borrowers on terms that the money is
repayable to the company or its nominee with interest or at a
premium or with consideration in money or money's worth, but
does not include a bank licensed under the Banking Ordinance;
(b)section 2(4), (5) and (6) of the Companies Ordinance shall apply
as if each reference in those subsections to 'a company- or
'first-mentioned company' were read as a reference to a
finance company and as if each reference in those subsections
to 'another company- or 'other company' were read as a
reference to a bank licensed under Section of the Banking
Ordinance.
(4) A trust company registered under this Ordinance before the
date of commencement* of the Trustee (Amendment) Ordinance 1975
which has not previously complied with the requirements as to eligibility
for registration as a trust company as set out in subsection (2) of this
section shall. within 9 months after that date. comply with those
requirements to the satisfaction of the Registrar of Companies.
(Amended, 90 of'1975, s. 2)
(5) Notwithstanding section 7 of the Companies Ordinance, a trust
company to which subsection (4) applies may, within the period of 9
months referred to in that subsection, alter any condition contained in
its memorandum of association to such extent as may be required to
enable it to comply with the requirements of subsection (2). (Added, 90
of 1975 s. 2)
(Replaced, 23 of 1975, s. 2)
78. (1) On the receipt of an application under section 77, the
Registrar of Companies shall make such inquiry as he deems necessary,
and, if satisfied that all the requirements of section 77 have been
complied with, shall register the company applying for registration as a
trust company in the register prescribed by section 79 and shall issue to
it a certificate that the company is registered as a
trust company, and thereupon the company shall be invested with all
the powers, privileges and immunities and shall be subject to all the
liabilities imposed by this Part.
(2) Notice of the issue of such certificate shall be published by the
Registrar of Companies in the Gazette for 4 consecutive weeks next
following the issue.
(3) If the Registrar of Companies is not satisfied that all the
requirements of section 77 have been complied with. he shall refuse to
register the company as a trust company:
Provided that the company may appeal from such refusal to the
Governor in Council, whose decision shall be final.
79. There shall be kept in the office of the Registrar of Companies a
register, to be called the -Register of Trust Companies', in which shall
be entered the names of all trust companies registered under this
Ordinance, together with such other particulars as the Registrar of
Companies may think necessary.
80. (1) From the time of the issue to any company of a certificate
under section 78 the investments or the sum of money deposited under
section 77 shall be held as security for the depositors and creditors of
the company and for the faithful execution of all trusts which may be
accepted by or imposed upon the company and for its obligations
generally. (Amended, 23 of 1975, s. 3)
(2) If at any time, by reason of the decline in value of any
investments so held by the Director of Accounting Services or of
increase of the gross liabilities of any trust company. the Registrar of
Companies is of opinion that additional security ought to be furnished
by the trust company. he may order the company to make, within a
period to be stated in the order, a further deposit of investments (being
investments contemplated by section 77(2)(e)) of a specified value with
the Director of Accounting Services: (Amended, 23 of 1975, s. 3)
Provided that the company may appeal from such order to the
Governor in Council, whose decision shall be final.
(3) A trust company may, with the approval of the Director of
Accounting Services and subject to such terms as he may specify
(a) substitute-
(i) other investments contemplated by sub-paragraph (i) of
paragraph (e) of section 77(2) for all or any of the investments
deposited with the Director of Accounting Services under
that sub-paragraph; or
(ii) a sum of money, as contemplated by sub-paragraph (ii)
of that paragraph, for the investments so deposited; or
(b)if the company has deposited a sum of money under sub-
paragraph (ii) of paragraph (e) of section 77(2), withdraw the
sum and either
(i) deposit it with another finance company; or
(ii) substitute for the sum of money so withdrawn
investments contemplated by sub-paragraph (i) of that
paragraph. (Replaced, 23 of 1975, s. 3)
(4) All money accruing by way of dividends or interest in respect
of investments deposited with the Director of Accounting Services or in
respect of sums deposited with a finance company under this Part shall
be paid to the trust company which made the deposit. (Replaced, 23 of
1975, s. 3)
(Amended, L.N. 16177)
81. (1) The objects of a trust company may be some or all of, but
shall not exceed the following
(a)to accept and execute the offices of executor, administrator,
trustee, receiver, receiver and manager, assignee, liquidator,
guardian of the property of infants, committee of the estates of
lunatics, or other like office of a fiduciary nature;
(b)to act as attorney or agent for the collection, receipt and
payment of money and for winding up estates and for the sale
or purchase of any movable or immovable property;
(e)to act as agent for the management and control of movable and
immovable property for and on behalf of the owners thereof or
for or on behalf of executors, administrators or trustees;
(d)to act as investing and financial agent for and on behalf of
executors, administrators, and trustees or any other persons
whatsoever and to receive money in trust for investment and
to allow interest thereon until invested; and to undertake for
and on behalf of executors, administrators and trustees or any
other persons whatsoever the negotiation of loans of all
descriptions and the procuring and lending of money on the
security of any description of property immovable or movable
or without taking any security on such terms as may be
arranged, and to advance and lend moneys to protect any
estate, trust or property entrusted to the company as aforesaid
and to charge interest upon any such advances:
Provided that nothing herein contained shall be held
either to restrict or extend the powers of the company as
trustee or agent under the terms of any trust or agency that
may be conferred upon it;
(e)to take securities of such nature as are deemed expedient for
any moneys owing to the company,
(f)to be the custodian on such terms as are agreed upon of any
moneys, securities. jewellery, plate or other valuable property
and of papers, documents, deeds, wills, debentures and other
evidence of title or indebtedness;
(g)to receive and manage any sinking, redemption. guarantee
or any other special fund or deposit and to act as agent for
countersigning, registering or otherwise ascertaining and
certifying to the genuineness of any issue of shares, stocks,
bonds, debentures or other securities for money of any
government, municipal or other corporate body or of any
association, whether incorporated or not, duly authorized
to issue and make such issue and to hold any such
securities as agent or trustee and to act generally as agent
for any such government, municipal or corporate body or
association;
(h)to acquire and hold immovable property for the actual use
and occupation of the company or any of its officers and
servants and to erect, construct. enlarge, alter and main-
tain any buildings necessary or convenient for the said
purposes and to sell or otherwise dispose of any such
immovable property if not required for the said purposes;
(i)to hold land which having been mortgaged to the company
is acquired by it for the protection of its investments; and
from time to time sell, mortgage, lease or otherwise dispose
thereof,
(j)to deposit the moneys of the company not immediately
required with any bank or banks at interest until such
moneys can be more permanently invested and to invest
the moneys of the company in accordance with the provi-
sions of section 91;
(k)to borrow moneys and secure the repayment thereof with
interest in accordance with the provisions of section 93;
(I)to receive and collect such remuneration for its services as
is agreed upon or as fixed or allowed from time to time
by law and all usual and customary charges. costs and
expenses;
(m)to support and subscribe to any charitable or public object
and any institution, society or club which may be for the
benefit of the company or its employees or may be con-
nected with any town or place where the company carries
on business; to give pensions, gratuities or charitable aid to
any person or persons who may serve or have served the
company or to the wives, children or other relatives of such
persons; to make payments towards insurance and to form
and contribute to provident and benefit funds for the
benefit of any persons employed by the company:
Provided that no such subscription, gift, payment or
contribution shall be given or made, except out of profits
of the company available for distribution as dividend;
(n)to acquire and undertake the whole or any part of the
business of any person or company of a like nature to any
business which a trust company is authorized to carry on and
in consideration for such acquisition to undertake all or any of
the liabilities of such person or company and to issue shares
to such person or company;
(o)to do all such other things as are incidental or conductive to
the attainment of the beforementioned objects or any of them;
(p)to carry out all or any of the objects aforesaid either within or
outside the Colony and by or through trustees, agents or
otherwise and either alone or in conjunction with others.
(Added, 48 of 1968, s. 4)
(Amended, 24 of 1950,
Schedule)
(2) Nothing in this section shall be construed to authorize any trust
company to engage in the business of banking or of insurance or the
business of a deposit, provident or benefit society.
(3) No trust company shall carry on any business or execute any
office other than the businesses or offices included in the objects set
out in subsection (1).
(4) For the avoidance of doubt it is hereby declared that nothing in
subsection (1) shall be construed so as to restrict. or at any time to have
restricted, a trust company to carrying out its objects within the Colony
only. (Added, 48 of 1968, s. 4)
82. If at any time a trust company shall be appointed executor of the
will of any testator, it shall be lawful for the company to apply to the
court for probate of the will and if probate be granted, to exercise and
discharge all the powers and duties of an executor.
83. (1) If and whenever any person shall be entitled to apply for
probate of the will of any testator without leave being reserved to any
other person to apply for probate. it shall be lawful for such person,
whether absent from the Colony or not, and notwithstanding the
provisions of any other enactment, instead of himself applying for such
probate, to authorize a trust company to apply to the court for a grant of
administration with the will annexed of the estate of such testator, and
such grant may be made to the trust company upon its own application,
when so authorized, but the provisions of this section shall not apply to
any case in which a will provides that a company shall not act as
executor or in the trusts thereof.
(2) If and whenever any person shall be entitled to apply for letters
of administration with the will of any testator annexed of the estate of
such testator, it shall be lawful for such person, whether absent from the
Colony or not. and notwithstanding the provisions of any other
enactment, to authorize a trust company, either alone, or jointly with any
other person, to apply to the court for a grant of letters of administration
with the will annexed of the estate of such testator, and such grant may
be made to the company upon its own
application when so authorized. but the provisions of this section shall
not apply to a case in which a will provides that a company shall not act
as executor, or in the trusts thereof.
(3) It shall be lawful for any person or persons entitled to apply for
administration of the estate of any intestate. whether such person or
persons be absent from the colony or not. and notwithstanding the
provisions of any other enactment. to authorize a trust company to
apply to the court for such letters of administration. either alone or
jointly with any other person. and administration of the estate of any
such intestate may be granted to the company either alone or jointly as
aforesaid, upon its own application. when so authorized.
(4) For the purposes of any application to the court for letters of
administration to the estate of any deceased person. the court shall
consider a trust company, when authorized as aforesaid. to be in law
entitled, equally with any other person or class of persons to apply for
and obtain a grant. but a trust company, being so entitled, shall not on
that account alone, be preferred to the widower, widow, or next-of-kin of
any intestate.
(5) No grant of probate or of letters of administration shall be
granted to a syndic or nominee on behalf of a trust company.
(6) where any person entitled to apply for probate or letters of
administration has authorized a trust company to apply for a grant in
favour of the company under subsection (1) or (2) and the court has
subsequently made such a grant, all property, functions, powers,
authorities, discretions and rights vested in or conferred on that person
by the will or by law shall, on the making of the grant and without
conveyance or assignment or the execution of any other instrument,
become vested in and exercisable by the company as fully and
effectually as if it had been named as executor under the will. (Added, 23
of 1975, s. 4)
84. (1) In all cases in which a trust company is empowered under
this Part to apply for probate or letters of administration, and petition,
declaration, account or affidavit or other necessary document may be
made or sworn by any officer of the company duly authorized by the
company in that behalf.
(2) Any officer of the company appointed by a trust company for
that purpose may, on behalf of the company, sign any petition, account
or statement, take any oath, swear any affidavit. make any declaration,
verify any act, give personal attendance at any court or place, and do
any act or thing whatsoever. which may require to be signed, taken,
sworn, made, verified, given, or done on behalf of the company:
Provided that nothing in this Part contained shall confer upon any
person, not otherwise entitled thereto, any right to appear or be beard
before or in any court on behalf of the company or to do any act
whatsoever on behalf of the company which could otherwise be
lawfully done only by a barrister or by a solicitor.
85. In all cases in which the court or any person or persons
has or have power to appoint a trustee, whether as an original or
new or additional trustee, to perform any legal trust or duty a trust
company may be appointed in the same manner as if the company
were a private individual:
Provided that-
(a)no trust company shall be appointed in any case in which
the instrument creating the trust, or the power authorizing
the appointment, forbids the appointment of a company;
(b)nothing in this section shall be deemed to derogate from
the provisions of sections 38 and 40. (Added, 24 of 1950,
Schedule)
86. A trust company, acting in a fiduciary capacity, shall be
capable of acquiring and holding any property in joint tenancy in
the same manner as if it were a private individual.
87. It shall be lawful fora trust company to act under any deed
or instrument by which the company is appointed agent or attorney
for any person, and all the powers conferred upon the company by
any such deed or instrument may be exercised by such officer of the
company as the company may appoint for that purpose:
Provided that nothing in this section shall be deemed to
authorize any person to confer upon a trust company any power
which may not lawfully be delegated by him.
88. (1) Notwithstanding the provisions of any other enact-
ment, no trust company to which a grant of letters of administration
has been made shall be required to furnish security for the due
administration of the estate.
(2) Notwithstanding the provisions of any other enactment,
no trust company appointed by the court to perform the duties of
receiver, guardian, committee or any other office or trust shall be
required to furnish security for the due performance of such duties.
89. All moneys, property and securities received or held by any
trust company in a fiduciary capacity shall always be kept distinct
from those of the company and in separate accounts, and so marked
in the books of the company for each particular trust as always to
be distinguished from any other in the registers and other books of
account to be kept by the company, so that at no time shall trust
moneys form part of or be mixed with the general assets of the
company; and all investments made by the company as trustee shall
be so designated that the trusts to which such investments belong
can be readily identified at any time.
90. (1) A trust company may invest trust moneys in its hands
in or upon any securities in which private trustees may by law invest
trust moneys and may from time to time vary any such investment
for others of the same nature:
Provided that the company shall not in any case invest the moneys
of any trust in or upon securities prohibited by the instrument creating
the trust. and whenever any special directions are given in any order,
judgment, decree or will or in any other instrument creating the trustee
to the particular class or kind of securities or property in or upon which
any investment shall be made, the company shall follow such directions.
The company may also, in its discretion, retain and continue any
investment and securities coming into its possession in any fiduciary
capacity.
(2) No trust company shall directly or indirectly invest any trust
moneys otherwise than in accordance with the provisions of subsection
(1).
91. (1) A trust company may invest moneys forming part of its own
capital or reserve or accumulated profits--
(a)in or upon any securities in or upon which private trustees
may by law invest trust moneys; and
(b)in or upon such other securities as the Governor in Council
may from time to time approve.
(2) A trust company may acquire and hold immovable property for
the actual use and occupation of itself or of any of its officers or
servants and may sell and dispose of the same.
(3) A trust company may, for the protection of its investments,
acquire land which has been mortgaged to it, but shall sell any land so
acquired within 3 years after the acquisition thereof, unless such time is
extended by the Governor in Council.
(4) No trust company shall directly or indirectly invest any of its
moneys otherwise than in accordance with subsections (1), (2) and (3):
Provided that nothing in this section shall be deemed to prevent
the acceptance by a trust company of any securities whatsoever to
secure the payment of a debt previously contracted in good faith; but
any security so acquired by the company which it would otherwise be
prohibited from taking or holding shall, within 2 years from the time of
its acquisition, or within such further time as may be allowed by the
Registrar of Companies, be sold or disposed of.
92. No loan shall be made by any trust company to any director or
other officer or servant thereof or to any company or firm in the
management of which any such director or other officer or servant is
actively engaged. If any loan is made in contravention of this section, all
directors and officers of the company who made the loan or assented
thereto shall be jointly and severally liable to the company for the
amount thereof with interest.
93. (1) For the purpose of attaining the objects of the company as
set out in section 81 (or such of them as the company may have
adopted), and for no other purpose, a trust company may from
time to time borrow money provided that the aggregate of the sums of
money borrowed shall at no time exceed the amount of the company's
capital for the time being paid up.
(2) Moneys borrowed by a trust company shall not be secured, by
debenture or otherwise, on its capital or general undertaking, but may be
secured on any of the company's property (not being property held by it
on any trust), other than the securities deposited by it with the Director
of Accounting Services under the provisions of this Part. (Amended, 9
of 1950, Schedule and L.N. 161177)
94. [Repealed, 84 of 1970, s. 2]
95. (1) The Governor in Council may at any time appoint an
inspector to investigate the affairs and management of any trust
company and may prescribe the manner in, and the extent to, which the
investigation shall be conducted.
(2) It shall be the duty of all officers and servants of the company to
produce for examination by the inspector all books, accounts. vouchers
and other documents in their custody or control in relation to matters
under investigation, and to answer truly all inquiries addressed to them
by the inspector respecting any matter affecting the affairs of the
company.
(3) The inspector shall make a report of his investigation to the
Chief Secretary.
(4) All expenses of and incidental to any such investigation shall
be paid by the company, if the Governor in Council so directs.
96. (1) The court may order the winding up of a trust company in
accordance with the Companies Ordinance, and the provisions of that
Ordinance shall apply accordingly subject however to the modification
that the company may also be ordered to be wound up on application
made by the Attorney General if
(a)the company has made default in complying with a
requirement of this Part and such default has continued for a
period of 2 months after notice of default has been served
upon the company, or
(h)from the consideration of the report of an inspector appointed
under secion 95 it appears that the company has committed a
breach of trust.
(2) Upon the winding up of a trust company every person who has
been a director of the company at any time within the period of 2 years
immediately preceding the commencement of the winding up shall be
liable for the balance unpaid on every share which he may have
transferred during such 2 years.
97. Where a trust company holds the office of executor.
administrator or trustee, every person employed by the company to
discharge any of the duties of such office shall. in respect of the
duties entrusted to him, be personally responsible to the court and be
subject to the process of the court, as though he had been personally
appointed to such office.
98. (1) Any director. officer or servant of a trust company who
wilfully and with intent to defraud neglects to make any entry in the
books of the company which it is his duty to make shall be guilty of a
misdemeanor.
(2) Any director, officer or servant of a trust company, who wilfully
and with intent to defraud makes or abets the making of any false entry
in the books of the company. or subscribes or exhibits any false
document with intent to deceive any person appointed under this Part
to investigate the affairs and management of the company shall he
guilty of a misdemeanor.
(3) Any director, officer or servant of a trust company who refuses
to produce for examination to any person appointed under this Part to
investigate the affairs and management of the company all books and
documents relevant to such investigation which are in his custody or
control shall be guilty of a misdemeanor.
(Amended, 23 of1975, s. 5)
99. No trust company shall be appointed to be guardian of the
person of an infant or committee of the person of a lunatic.
100. (1) No member of a trust company shall at any time hold shares
in the capital of the company to an amount exceeding onefifth of the
issued capital of the company for the time being.
(2) Subsection (1) does not apply, to a trust company that [s the
subsidiary of a bank licensed under section of the Banking Ordinance.
(Added, 23 of'1975, s. 6)
(3) For the purposes of subsection (2) of this section. section 2(4),
(5) and (6) qf the Companies Ordinance shall apply as if each reference
in those subsections to 'a company- or---thefirstmentioned company'
were read as a reference to a trust company and as if each reference in
those subsections to -another company' or 'other company' were read
as a reference to a bank licensed under section X of the Banking
Ordinance. (Added, 23 of 1975 s. 6)
101. So long as any estate in respect of which a trust company is
trustee shall remain in whole or in part unadministered, it shall not be
lawful to proceed to wind up the company voluntarily, unless with the
sanction of the court, and it shall be lawful for any person interested in
such estate, or who may have any claim in respect thereof, to apply to
the court in a summary way by motion to restrain any director or any
shareholder from disposing of any shares which such director or
shareholder may hold in the company or to restrain the winding up
voluntarily of the company; and the court shall have power to make
such order as it deems Just.
102. Subject to the provisions of this Part, the liability of every trust
company to the person or persons interested in any estate held by the
company as executor, administrator, trustee, receiver, liquidator,
assignee, guardian or committee or in any other official or business
capacity shall be the same as if the estate had been held by a private
person in the like capacity; and the powers of the company shall be the
same as those of a private person in the like capacity.
103. Neither the application by a trust company for registration as a
member or shareholder in the books of any company or corporation nor
the entry of the name of a trust company in the books of any company
or corporation shall constitute notice of trust, and no company or
corporation shall be entitled to object to enter the name of a trust
company on its books by reason only that the company may be or is a
trustee, and, in dealings with property, the fact that the person or one of
the persons dealt with is a trust company shall not of itself constitute
notice of a trust.
104. All money and securities which shall remain in the hands of a
trust company, as trustee, unclaimed by the person entitled to the same
for a period of 6 years after the time when the same shall have become
payable to such person (except where payment has been restrained by
order of a court of competent jurisdiction), together with such interest. if
any, as shall have been received by the company in respect thereof, less
any commission or other charges properly chargeable by the company,
shall be paid by the company into court under and in accordance with
section 62:
Provided that it shall not be necessary for the company to comply
with the provisions of this section more often than once in any year nor
shall it be necessary for the company to obtain the concurrence or
consent of any person to such payment into court.
105. (1) There shall be paid by every trust company to the Registrar
of Companies, in respect of the matters mentioned in the First Schedule,
the several fees specified therein. (Amended, 48 qf 1968,s.5)
(2) All such fees shall be paid by the Registrar of Companies into
the Treasury.
(3) It shall be lawful for the Governor from time to time, by
notification in the gazette to add to or alter the First Schedule.
(Amended, 48 of 1968, s. 5, and 72 of 1973, s. 2)
106. (1) Notwithstanding the foregoing. any company lawfully
carrying on banking business in the Colony and having a capital (in
stock or shares) for the time being issued of not less than 54,000,000 (of
which not less than 51,600.000 shall have been paid up in cash) may
with the consent of the Governor be registered as a trust company:
Provided that the Governor shall not give such consent unless he
is satisfied that the extent and nature of the company's business in the
Colony is sufficient to justify such special registration.
(2) Consent of the Governor under subsection (1) shall be notified
to the Registrar of Companies who shall register the company in the
register prescribed by section 79, issue to it a certificate that the
company is registered as a trust company, and publish notice thereof in
the Gazette for 4 consecutive weeks next following such issue.
(3) The provisions of sections 77, 78, 80, 81, 91, 92, 93, 96 and 100
shall not apply to such company or to such registration, but subject to
such exceptions and to the provisions of the succeeding section the
said company shall be invested with all the powers, privileges and
immunities and shall be subject to all the liabilities imposed by this Part.
(Replaced, 24 of 1950 Schedule. Amended, 72 of 1973 s. 2)
107. The powers of investigation conferred upon inspectors under
section 95 shall in the case of a corporation registered as a trust
company under section 106 be limited to the trust business of the
corporation.
(Added, 17 of 1939 s. 2)
108. On application made by the Attorney General the court may
order that any corporation registered under the provisions of section 106
as a trust company shall be struck off the register of trust companies if it
ceases to be qualified for registration under that section or if from the
consideration of the report of an inspector appointed under section 95 it
appears that the corporation has committed a breach of trust, and the
court may appoint a new trustee, or new trustees, for any trust property
held by the corporation.
(Added, 17 qf 1939, s. 2)
PART IX
GENERAL PROVISIONS
109. This Ordinance, and every order purporting to be made under
this Ordinance, shall be a complete indemnity to any bank and to all
persons for any acts done pursuant thereto, and it shall not be
necessary for any bank or person to inquire concerning the propriety of
the order, or whether the court by which the order was made had
jurisdiction to make it.
FIRST SCHEDULE [s. 105.1
FEES TO BE PAID BY TRUST COMPANIES TO THE
REGISTRAR OF COMPANIES
1.On application for registration under section 77 520.00
2.For certificate of registration under section 78-
(a).where the authorized capital does not exceed $500,000 $100.00
(b).where the authorized capital exceeds 5500.000 but does not
exceed 51,000,000 ..............5300.00
(c).where the authorized capital exceeds $1,000,000 5600.00
Amended 48 of 1968, s. 6: L.N. 195170 and 27 of 1985. s. 3)
SECOND SCHEDULE (s.
4.1
PART I
OVERSEAS INVESTMENTS
(a) (i) Defence Bonds,
(ii) National Savings Certificates,
(iii) deposits in the Post Office Savings Bank,
(iv) ordinary deposits in a trustee savings bank.
of the United Kingdom,
(b)Ulster Savings Certificates.
(c)deposits in a bank or a department thereof certified under section 9(3) of
the Finance Act 1956.
2. Securities issued by Her Majesty's Government in the United Kingdom. the
Government of Northern Ireland or the Government of the Isle of Man. not being
securities falling within paragraph 1 of this Schedule and being fixed-interest
securities registered in the United Kingdom or the Isle of Man, Treasury Bills, Tax
Reserve Certificates or any variable-interest securities issued by Her Majesty's
Government in the United Kingdom and registered in the United Kingdom.
(Amended, L.N.
28/84)
3. Any securities the payment of interest on which is guaranteed by Her
Majesty's Government in the United Kingdom or the Government of Northern
Ireland.
4. Fixed-interest securities issued in the United Kingdom by any public
authority or nationalized industry or undertaking in the United Kingdom.
5. Securities issued in the United Kingdom by the government of a territory
within the Commonwealth outside the United Kingdom or by any public or local
authority within such a territory. being securities registered in the United Kingdom
and in respect of which the rate of interest is fixed or is variable by reference to
one or more of the following
(a)the Bank of England's former minimum lending rate:
(b)the average rate of discount on allotment on 9 1 -day Treasury bills;
(c)a yield on 9 ]-day Treasury bills:
(d)a London sterling inter-bank offered rate:
(e)a London sterling certificate of deposit rate.
the base rate of one or more of the London clearing banks.
(Replaced, L.N.
28,84)
6. Fixed-interest securities issued in the United Kingdom by the International
Bank for Reconstruction and Development. being securities registered in the
United Kingdom.
7.[Deleted L.N. 28,841
8.Stock of the Bank of Ireland.
9. Debentures issued by the Agricultural Mortgage Corporation Limited or the
Scottish Agricultural Securities Corporation Limited being companies registered in
the United Kingdom.
10. Loans to any authority to which this paragraph applies charged on all or
any of the revenues of the authority or on a fund into which all or any of those
revenues are payable, any fixed-interest securities issued in the United Kingdom by
any such authority for the purpose of borrowing money so charged. and deposits
with
any such authority by way of temporary loan made on the giving of a receipt for
the loan by the treasurer or other similar officer of the authority and on the giving
of an undertaking by the authority that, if requested to charge the loan as aforesaid.
it will either comply with the request or repay the loan.
This paragraph applies to the following authorities--
(a)any local authority in the United Kingdom;
(b)any authority all the members of which are appointed or elected by one
or more local authorities in the United Kingdom;
(c)any authority the majority of the members of which are appointed or
elected by one or more local authorities in the United Kingdom. being an
authority which by virtue of any enactment has power to issue a precept
to a local authority in England and Wales. or a requisition to a local
authority in Scotland, or to the expenses of which, by virtue of any
enactment. a local authority in the United Kingdom is or can be required
to contribute:
(d)the Receiver for the Metropolitan Police District or a combined police
authority (within the meaning of the Police Act 1946);
(e)the Belfast City and District Water Commissioner.
11. Debentures or the guaranteed or preference stock of any incorporated
company, being statutory water undertakers within the meaning of the Water Act
1945, or any corresponding enactment in force in Northern Ireland. and having
during each of the 10 years immediately preceding the calendar year in which the
investment was made paid a dividend of not less than 5per cent on its ordinary
shares.
12. Deposits by way of special investment in a trustee savings bank or in a
department (not being a department certified under section 9(3) of the Finance
Act 1956) of a bank any other department of which is so certified.
13. Deposits in a building society designated under section 1 of the House
Purchase and Housing Act 1959.
14. First legal mortgages of freehold property in England and Wales or
Northern Ireland and of leasehold property in those countries of which the
unexpired term at the time of investment is not less than 60 years, and loans on
heritable security in Scotland.
Amended L.N. 176/70)
15. Perpetual rent-charges charged on land in England and Wales or Northern
Ireland and fee-farm rents (not being rent-charges) issuing out of such land. and
feuduties or ground annuals in Scotland.
Amended L.N, 176/70)
15A. Securities issued in the United Kingdom by
(a)the International Bank for Reconstruction and Development or by the
European Investment Bank or by the European Coal and Steel
Community, being securities registered in the United Kingdom: or
(b) the Inter-American Development Bank. being securities in respect of
which the rate of interest is variable by reference to one or more of the following
(i) the Bank of England's former minimum lending rate;
(ii) the average rate of discount on allotment on 9 1 -day Treasury bills:
(iii)a yield on 91-day Treasury bills.,
(iv)a London sterling inter-bank offered rate;
(v)a London sterling certificate of deposit rate:
(vi)the base rate of one or more of the London clearing banks.
(Added, L.N. 28,84) 15B.
Securities issued in the United Kingdom by any authority to which paragraph 10
applies for the purpose of borrowing money charged on all or any of the revenues
of the authority or on a fund into which all or any of those revenues are payable
and being securities in respect of which the rate of interest is variable by reference
to one or more of the following
(a)the Bank of England's former minimum lending rate;
(b)the average rate of discount on allotment on 91-day Treasury, bills:
(c)a yield on 9 1 -day Treasury bills;
(d)a London sterling inter-bank offered rate;
(e)a London sterling certificate of deposit rate;
the base rate of one or more of the London clearing banks.
(Added, L.N. 28184)
15C. Securities issued in the United Kingdom by a company incorporated in
the United Kingdom, being securities registered in the United Kingdom and not
being securities Falling within any other paragraph of this Part; but the securities
mentioned in this paragraph do not include
(a)securities the price of which is not quoted on a recognized stock exchange
within the meaning of the Prevention of Fraud (Investments) Act 1958,
or the Belfast Stock Exchange;
(h)shares or debenture stock not fully paid up (except shares or debenture
stock which by the terms of issue are required to be fully paid up within 9
months of the date of issue);
(e)shares or debentures of an incorporated company of which the total issued
and paid up share capital is less than $ 10,000,000-,
(d)shares or debentures of an incorporated company which has not in each of
the 5 years immediately preceding the calendar year in which the
investment is made paid a dividend wholly in cash (except to the extent
that the shareholders have opted to accept it other than wholly in cash)
on all the shares issued by the company. excluding any shares issued after
the dividend was declared and any shares which by their terms of issue did
not rank for the dividend for that year:
Provided that a company Formed-
(i) to take over the business of another company or other companies;
or
(ii) to acquire the securities of. or control of. another company or
other companies,
or for either of those purposes and for other purposes shall be deemed to
have paid a dividend in any year in which such a dividend has been paid by
the other company or all the other companies, as the case may be.
(Added, L.N. 28184)
1 15D Bills, notes and bonds issued by the Government of the United States of
America.
(Added, L.N. 28184)
15E. (1) Units. securities or other rights and interests issued
(a)under a unit trust situated; or
(b) by a mutual fund corporation incorporated,
in a country outside Hong Kong and authorized by the Securities Commission in
Hong Kong.
(2) -Securities-, -unit trust- and 'mutual fund corporation- have the same
meanings as in the Securities Ordinance.
(Added, L.N. 28/84)
PART II
HONG KONG INVESTMENTS
16. Any Government securities of the Colony.
17. First legal mortgages of property. including an undivided share in property,
in the Colony held under Crown lease of which the unexpired term at the time of
investment is not less than 50 years, excluding any, term for which the Crown
lease can be renewed.
18. Deposits held in Hong Kong or in any other place by a bank. other than
an unincorporated bank. licensed under the Banking Ordinance.
(Replaced, L.N. M 76)
19. Any securities issued by companies incorporated in Hong Kong which the
following conditions
(a)the issued and paid up share capital of the company is not less than
HK$100,000,000 or its equivalent at the date the investment is made;
Amended L.N. 28/84)
(h)the securities. in the case of shares or debenture stock. in which a trustee
seeks to invest are fully paid up
(c)at the date the investment is made the securities are listed on a stock
exchange approved or deemed to have been approved under the Securities
Ordinance; and ( Replaced, 23 of 19 75. s. 7 1
(d)the company has in each of the 5 Years immediately preceding the
calendar year in which the investment is made paid a dividend wholly in
cash (except to the extent that the shareholders have opted to accept it
other than wholly in cash) on all the shares issued by the company,
excluding any shares issued after the dividend was declared and any shares
which by their terms of issue did not rank for the dividend for that year.
Amended L.N. 28 84)
For the purposes of sub-paragraph (cl) a company formed
(i)to take over the business of another company or other companies: or
(ii) to acquire the securities of. or control of. another company or other
companies.
or for either of those purposes and for other purposes shall be deemed to have paid
a dividend as mentioned in that sub-paragraph in any year in which such a dividend
has been paid by the other company or all the other companies, as the case may
be.
20. Any securities issued by the Hong Kong Building and Loan Agency
Limited, the payment of which is guaranteed by the Government.
21. Any securities issued by the Mass Transit Railway Corporation which are
either charged on the property undertaking and revenue of the Corporation. or any
part thereof. or guaranteed by, the Government. Added 36 of 1975, s- 31)
22.(1) Any deposit with a licensed deposit-taking company in Hong Kong.
(2) ---Deposit-and---licenseddeposit-taking company--- have the same
meanings
as in the Deposit Ordinanee
L.N. 28/84 23. (
1) Any certificate of deposit issued by a licensed bank or licensed deposittaking
company in Hong Kong.
(2) -Certificate of deposit ---licensedbank--- and ---licenseddeposit-taking
company--- have the same meanings as in the P~. -'s A 'II taking Companies
Ordinance
Added L.N. 28 84)
24. ( 1) Any units or other rights and interests issued under a unit trust
situated in Hong Kong and authorized by the Securities Commission on..
(2)---Unittrust--- has the same meaning as in the Securities Ordinance.
(Added L.N. 28 84)
(Second Schedule added 48 of 1968. s. 7)
Originally 18 of 1934. (Cap. 29, 1950.) 17 of 1939. 9 of 1950. 22 of 1950. 24 of 1950. 31 of 1965. 48 of 1968. 84 of 1970. L.N. 176/70. L.N. 195/70. 27 of 1971. 71 of 1971. 51 of 1972. 72 of 1973. 23 of 1975. 36 of 1975. 90 of 1975. L.N. 313/76. L.N. 16/77. L.N. 7/79. 2 of 1983. L.N. 28/84. 62 of 1984. 27 of 1985. Short title. Interpretation. [cf.1925 c. 19, s. 68.] Application. 1925 c. 19, s. 69. Authorized investments. Second Schedule. Retention of redeemable stocks until redemption. [cf.1925 c. 19, s. 2.] Discretion of trustees. 1925 c. 19, s. 3. Retention of unauthorized investment. 1925 c. 19, s. 4. Investment in bearer securities. 1925 c. 19, s. 7. Loans and investments by trustees not chargeable as breaches of trust. 1925 c. 19, s. 8. Liability for loss by reason of improper investment. 1925 c. 19, s. 9. Powers supplementary to powers of investment. 1925 c. 19, s. 10. Power to deposit at bank and to pay calls. 1925 c. 19, s. 11. Power of trustees for sale to sell by auction, etc. 1925 c. 19, s. 12. Power to sell subject to depreciatory conditions. 1925 c. 19, s. 13. Power of trustees to give receipts. 1925 c. 19, s. 14. Power to do other acts. 1925 c. 19, s. 15. Powers of trustees of renewable leaseholds to renew and raise money for the purpose. 1893 c. 53, s. 19. Power to raise money by sale, mortgage, etc. 1925 c. 19, s. 16. Protection to purchasers and mortgagees dealing with trustees. 1925 c. 19, s. 17. Devolution of powers or trusts. 1925 c. 19, s. 18. Power to insure. 1925 c. 19, s. 19. Application of insurance money where policy kept up under any trust, power or obligation. 1925 c. 19, s. 20. Deposit of documents for safe custody. 1925 c. 19, s. 21. Reversionary interests, valuations, and audit. 1925 c. 19, s. 22. Power to employ agents. 1925 c. 19, s. 23. Power to concur with others. 1925 c. 19, s. 24. Power to delegate trusts. [cf. 1971 c. 27, s. 9. & cf. 1925 c. 19, s. 25.] Protection against liability in respect of rents and covenants. 1925 c. 19, s. 26. Protection by means of advertisement. 1925 c. 19, s. 27. Protection in regard to notice. 1925 c. 19, s. 28. Implied indemnity of trustees. 1925 c. 19, s. 30. Power to apply income for maintenance and to accumulate surplus income during a minority. 1925 c. 19, s. 31. Power of advancement. 1925 c. 19, s. 32. Protective trusts. 1925 c. 19, s. 33. Limitation of the number of trustees. 1925 c. 19, s. 34. Power of appointing new or additional trustees. 1925 c. 19, s. 36. Supplemental provisions as to appointment of trustees. 1925 c. 19, s. 37. Evidence as to a vacancy in a trust. 1925 c. 19, s. 38. Retirement of trustee without a new appointment. 1925 c. 19, s. 39. Vesting of trust property in new or continuing trustees. 1925 c. 19, s. 40. Power of court to appoint new trustees. 1925 c. 19, s. 41. Power to authorize remuneration. 1925 c. 19, s. 42. Powers of new trustee appointed by court. 1925 c. 19, s. 43. Vesting orders of land. 1925 c. 19, s. 44. Orders as to contingent rights of unborn persons. 1925 c. 19, s. 45. Vesting order in place of conveyance by infant mortgagee. 1925 c. 19, s. 46. Vesting order consequential on order for sale or mortgage of land. 1925 c. 19, s. 47. Vesting order consequential on judgment for specific performance, etc. 1925 c. 19, s. 48. Effect of vesting order. 1925 c. 19, s. 49. Power to appoint person to convey. 1925 c. 19, s. 50. Vesting orders as to stock and thing in action. 1925 c. 19, s. 51. Vesting orders of charity property. 1925 c. 19, s. 52. Vesting orders in relation to infant's beneficial interest. 1925 c. 19, s. 53. Orders made upon certain allegations to be conclusive evidence. 1925 c. 19, s. 55. Power of court to authorize dealing with trust property. 1925 c. 19, s. 57. Persons entitled to apply for orders. 1925 c. 19, s. 58. Power to give judgment in absence of a trustee. 1925 c. 19, s. 59. Power to charge costs on trust estate. 1925 c. 19, s. 60. Power to relieve trustee from personal liability. 1925 c. 19, s. 61. Power to make beneficiary indemnify for breach of trust. 1925 c. 19, s. 62. Payment into court by trustees. 1925 c. 19, s. 63. Power of court on application to appoint judicial trustee. 1896 c. 35, s. 1. Rules. 1896 c. 35, s. 4. Definitions. 1896 c. 35, s. 5. Appointment of Official Trustee. Payment of trust moneys into bank to credit of Official Trustee. 1847 c. 96, s. 1; 1893 c. 53, c. 42. Transfer of trust securities into name of Official Trustee. 1847 c. 96, s. 1. Conveyance of land in trust to Official Trustee. 1847 c. 96, s. 1. Certificate to be given by Official Trustee. 1847 c. 96, s. 1. Order for payment, etc. by majority of trustees without concurrence of others. 1893 c. 53, s. 42. Administration of trust estate. 1847 c. 96, s. 2. Charges upon trust estate administered by Official Trustee. General rights and powers of Official Trustee. 1906 c. 55, s. 11(2). Limitation of liability of Official Trustee. Rules for administration of trust funds. Application by company to be registered as a trust company. (Cap. 32.) Second Schedule. (Cap. 155.) (Cap.155.)(Cap.32.)(Cap.155.)(23of 1975.)[*1.7.75] (Cap.32.) Issue of certificate. Register of trust companies to be kept. Deposit to be held as security. Objects. Trust company may act as executor. Trust company to apply for probate or administration. Procedure as to petitions, etc. Appointment of a company to be a trustee. Joint tenancy. Trust company may act as agent. Security not required. Trust funds to be kept separate. Investment of trust funds. Investment of trust company's own funds. Loans to trust company officers,etc.prohibited. Borrowing. Investigation by inspector. Special provision as to winding up a trust company,(Cap.32.) Personal liability of officers of a company. Offences. Not to be guardian or committee. Restriction on holding shares in a trust company. (Cap. 155.) (Cap.32.) (Cap.155.) Voluntary winding-up or disposal may be restrained. Liability and powers of trust company. Registration of a trust company as shareholder, etc. not notice of trust. Unclaimed money to be paid into court. Fees payable by trust companies. First Schedule. Registration of certain banking corporation as trust companies. Limitation of powers of inspectors under section 95. Striking off trust company registered under section 106. Indemnity.1925 c.19.s.66. Trustee Investments Act 1961.First Schedule, Parts I & II. (1956 c. 54.) (1946 c. 46.)(1945 c. 42.)(1956 c. 54.)(1959 c. 33.) (1958 c. 45.) (Cap. 333.) (Cap. 155.) (Cap. 333.) (Cap. 328.) (Cap. 328.) (Cap. 333.)