New South Wales: Trustee Act 1925 (NSW)

Trustee Act 1925 No 14 An Act to amend and consolidate the law relating to trustees and trust property; to amend in certain respects the law relating to executors and administrators; to amend the Wills, Probate and Administration Act 1898 and certain other Acts; and for purposes connected therewith. Part 1A Preliminary 1 Name of Act and commencement (1) This Act may be cited as the Trustee Act 1925. (2) This Act shall commence and come into operation on the first day of March, one thousand nine hundred and twenty-six. 2 (Repealed) 3 Repeals (1) The Acts mentioned in the Schedule to this Act are to the extent therein expressed hereby repealed. (2) All rules of court made under the authority of any Act hereby repealed and being in force at the commencement of this Act shall so far as applicable be deemed to have been made under the authority of this Act. 4 Notes Notes in the text of this Act do not form part of this Act. Part 1 Interpretation 5 Definitions In the interpretation of this Act, unless the context or subject-matter otherwise indicates or requires— Administrator means administrator within the meaning of the Probate and Administration Act 1898 and includes the NSW Trustee acting as collector of an estate under an order to collect. 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 or possibility is or is not ascertained, also a right of entry, whether immediate or future, and whether vested or contingent. Convey and conveyance, applied to any person, include the execution or doing by that person of every necessary or suitable assurance act and thing for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of property. Court means the Supreme Court. Executor means the executor to whom probate has been granted and includes an executor by right of representation. Government securities include Government stocks, funds, bonds, debentures and Treasury bills. Incapable person means a person not a minor who is incapable through mental infirmity, arising from disease or age, of managing his or her affairs, but who is not an insane person. Insane person means a person who has been found or declared, whether by inquisition or under any Lunacy Act in force at the time, to be insane or of unsound mind and incapable of managing himself or herself or his or her affairs. Instrument includes deed will and Act of Parliament. Joint tenant includes joint owner. Land includes tenements and hereditaments, corporeal and incorporeal, and every estate and interest therein, whether vested or contingent, freehold or leasehold, and whether at law or in equity, in severalty or otherwise. Legal representative means executor or administrator. Minor means a person under the age of eighteen years. Mortgage includes and relates to every estate and interest regarded in equity as merely a security for money. Mortgagee includes any person from time to time deriving title to the mortgage under the original mortgagee. Mortgagor includes any person from time to time deriving title to the equity of redemption under the original mortgagor, or entitled to redeem a mortgage, according to the person's estate interest or right in the mortgaged property. NSW Trustee means the NSW Trustee and Guardian constituted under the NSW Trustee and Guardian Act 2009. Order includes judgment. Pay into court and payment into court in relation to stocks and securities, include the deposit or transfer of the same in or into court. Possessed extends to receipt of income of, and to any vested estate less than a life estate, legal or equitable, in possession or in expectancy, in any property. Property includes real and personal property, and any estate or interest in any property, real or personal, and any debt, and any thing in action, and any claim or demand, and any other right or interest, whether in possession or not. Purchaser includes a lessee or mortgagee, or other person who for valuable consideration takes or deals for any property; and purchase has a meaning corresponding with that of purchaser; but sale means only a sale properly so-called. Regulation means regulation made under this Act. Right includes estate and interest. Security includes stocks, funds, shares. Stock includes paid-up shares; and, so far as relates to vesting orders made by the Court under this Act, includes any fund annuity or security transferable in books kept by any corporation company or society, or by instrument of transfer, either alone or accompanied by other formalities, and any share or interest therein. Transfer in relation to stock 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, includes implied and constructive trusts, and cases where the trustee has a beneficial interest in the trust property, and the duties incident to the office of legal representative of a deceased person. Trustee has a meaning corresponding with that of trust; and includes legal representative and the NSW Trustee and a trustee company. Trustee company means an incorporated company authorised by Act of Parliament of this State to act as trustee in New South Wales. Trustee for sale means a trustee in whom a trust for sale or a power of sale of property is vested. Will includes codicil. Note— The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. Part 2 Trustees Division 1 Appointment, retirement, disclaimer, and ceasing to be executor 6 New trustee (1) A new trustee may by registered deed be appointed in place of a trustee, either original or substituted, and whether appointed by the Court or otherwise. (2) A new trustee may be so appointed in any of the following cases, namely— (a) where a trustee is dead, (b) where a trustee remains out of New South Wales for more than one year without having properly delegated the execution of the trust, (c) where a trustee remains out of New South Wales for more than two years, (d) where a trustee desires to be discharged from all or any of the trusts or powers reposed in or conferred on the trustee, (e) where a trustee refuses or is unfit to act in such trusts or powers, or is incapable of acting therein, or is a minor, (f) where a trustee is removed under a power contained in the instrument creating the trust, (g) where a trustee being a corporation is dissolved. Provided that a new trustee may not be appointed on the sole ground that a trustee remains out of New South Wales for more than two years if such trustee has delegated the execution of the trust pursuant to the Trustee and Wills (Emergency Provisions) Act 1940 and such delegation remains in force. (3) The person to be appointed a trustee may be the person, or one of the persons, by whom or with whose consent the appointment is or may be made. (4) The appointment may be made by the following persons, namely— (a) by 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 by the surviving or continuing trustees or trustee for the time being, or by the legal representative of the last surviving or continuing trustee. (5) The appointment may be made for the whole or any part of the trust property, and on the appointment— (a) two or more trustees may be appointed concurrently, (b) the number of trustees may be increased, but not beyond four, (c) a separate set of trustees may be appointed for any distinct part of the trust property, that is to say, for any part for the time being held on trusts distinct from those relating to any other part or parts, notwithstanding that no new trustees or trustee are or is to be appointed for other parts, provided that the number of trustees in any separate set shall not exceed four, (d) any existing trustee may be appointed or remain one of the separate set of trustees, (e) if only one trustee was originally appointed, then one separate trustee may be appointed for the distinct part, (f) it shall not be obligatory 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 two trustees were originally appointed. (6) By the appointment a trustee in place of whom the new trustee is appointed shall be discharged from the trust, provided that, except where only one trustee was originally appointed, a trustee shall not be so discharged unless there will be left after the discharge at least two trustees, or the NSW Trustee, or a trustee company, to perform the trust. (7) Any conveyance or thing requisite for vesting the trust property, or any part thereof, jointly in the persons who are the trustees, shall be executed or done. (8) Every new trustee appointed under this section, as well before as after all the trust property becomes by law or by conveyance or otherwise vested in the new trustee, shall have the same powers authorities and discretions, and may in all respects act as if the new trustee had been originally appointed a trustee by the instrument, if any, creating the trust. (9) The provisions of this section relative to a trustee who is dead include the case of a person nominated trustee in a will but dying before the testator. (10) The provisions of this section relative to a person nominated for the purpose of appointing new trustees apply, whether the appointment is to be made in a case specified in this section or in a case specified in the instrument, if any, creating the trust, but where a new trustee is appointed under this section in a case specified in that instrument, the appointment shall be subject to the terms applicable to an appointment in that case under the provisions of that instrument. (11) The provisions of this section relative to a continuing trustee include a refusing or retiring trustee, if willing to act in the execution of the provisions of this section, provided that— (a) where there is in fact a continuing trustee, nothing in this section shall authorise a refusing or retiring trustee to act apart from the continuing trustee, (b) if a refusing or retiring trustee does not act in the execution of the provisions of this section, the fact that the refusing or retiring trustee was willing to act shall not affect the validity of an appointment made by any other person. (12) Nothing in this section shall give power to appoint any person as an executor or administrator. (13) Except as otherwise provided in subsection (12), this section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (14) This section applies to trusts created either before or after the commencement of this Act, and extends to the appointment of a new trustee where the case for the appointment arose before the commencement of this Act. (15) An appointment of a new trustee made before the commencement of this Act, under a power conferred by statute or by the instrument, if any, creating the trust, shall not be deemed to be invalid for the reason only that on the appointment the number of the trustees was increased or decreased, unless the increase or decrease was expressly forbidden by statute or by that instrument, but nothing in this subsection shall be deemed to invalidate any appointment of a new trustee made before the commencement of this Act. 7 Additional trustee (1) A new trustee may by registered deed be appointed in addition to any existing trustee or trustees. (2) A new trustee may be so appointed in any of the following cases, namely— (a) where a sole trustee other than the NSW Trustee or a trustee company is or has been originally appointed to act in a trust, or (b) where, in the case of any trust, there are not more than three trustees, either original or substituted, and whether appointed by the Court or otherwise, and none of the trustees is the NSW Trustee or a trustee company. (3) The person to be appointed a trustee may be the person, or one of the persons, by whom or with whose consent the appointment is or may be made. (4) The appointment may be made by the following persons, namely— (a) by 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 by the trustee or trustees for the time being. (5) The appointment may be made for the whole or any part of the trust property, and on the appointment— (a) two or more trustees may be appointed concurrently, (b) the number of trustees shall not be increased beyond four. (6) Except as provided by the instrument, if any, creating the trust, or by any statutory enactment to the contrary, it shall not be obligatory to appoint any additional trustee. (7) Subsections (7), (8), (10), (12), (13), and (14) of section 6 shall apply to the appointment of an additional trustee. 8 Retirement (1) A trustee may by registered deed retire from the trust without any new trustee being appointed in the trustee's place. (2) A trustee may not so retire, unless the trustee's co-trustees and such other person, if any, as is empowered to appoint trustees, consent by the same or other registered deed to the retirement, and there will be left after the retirement at least two continuing trustees, or the NSW Trustee, or a trustee company, to perform the trust. (3) Two or more trustees may retire concurrently. (4) By the retirement the trustee shall be discharged from the trust, provided that, if in order to vest any part of the trust property in the continuing trustees alone, it is necessary that it should be duly transferred, the retiring trustee shall not be discharged in respect of that part until it is duly transferred. (5) At any time after the registration of the deed or deeds of consent and retirement the continuing trustees shall have the same powers authorities and discretions, and may in all respects act as if the retiring trustee were wholly discharged from the trust. (6) Any conveyance or thing required for vesting the trust property in the continuing trustees alone shall be executed or done. (7) Nothing in this section shall authorise any retirement from the office of an executor or administrator. (8) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (9) This section applies to trusts created either before or after the commencement of this Act. 9 Vesting (1) Where a new trustee is appointed, the execution and registration of the deed of appointment shall without any conveyance, except as otherwise provided in this section, vest in the persons who become and are the trustees for performing the trust, as joint tenants and for the purposes of the trust, the trust property for which the new trustee is appointed. (2) Where a trustee retires, the execution and registration of the deed or deeds of consent and retirement shall without any conveyance, except as otherwise provided in this section, vest in the continuing trustees alone as joint tenants and for the purposes of the trust, all the trust property which is jointly vested in the continuing trustees and the retiring trustee. (3) In the case of land subject to the provisions of the Real Property Act 1900, the property shall not vest until either— (a) the appropriate transfer is executed and registered, so that the property is duly transferred, or (b) an entry of the vesting is made by the Registrar-General. Any such entry shall have the same effect as if the property were duly transferred. (3A) In the case of any property subject to the provisions of the Closer Settlement Acts, the Crown Land Management Act 2016, the Mining Act 1992 or the Offshore Minerals Act 1999, or any other Act relating to Crown lands, the property shall not vest until either— (a) the appropriate transfer is executed and registered so that the property is duly transferred, or (b) an entry of the vesting is made in the appropriate register kept under the provisions of the Act to which such property is subject. Any such entry shall have the same effect as if the property were duly transferred. (4) In the following cases the property shall not vest until the appropriate transfer is executed and registered so that the property is duly transferred, that is to say, in the case of— (a) any property comprised in a mortgage for securing money subject to the trust, where the property is not either land subject to the provisions of the Real Property Act 1900 or land conveyed on trust for securing debentures or debenture stock, (b) (Repealed) (c) any property a conveyance of which is required to be registered by or under any Act, whether of this State or otherwise, other than the Acts mentioned in subsections (3) and (3A). (5) In the case of any property that is only transferable in books kept by a corporation company or other body, or in manner directed by or under any Act, whether of this State or otherwise, the property shall not vest until it is duly transferred. (6) In the case of land held under a lease which contains any covenant condition or agreement against assignment or disposing of the land without licence or consent, the land shall not vest until it is duly transferred, unless— (a) before the execution of the deed of appointment, or the deed or deeds of consent and retirement, as the case may be, the requisite licence or consent to the assignment or disposition has been obtained, or (b) by virtue of any statute or rule of law the vesting would not operate as a breach of covenant or give rise to a forfeiture. In this subsection lease includes an underlease and an agreement for a lease or underlease. (7) If any property does not vest under this section until transfer or registration, the execution and registration of the deed of appointment, or of the deed or deeds of consent and retirement, as the case may be, shall nevertheless vest the right to call for a transfer of the property, and to sue for or recover the property. (8) This section extends to an appointment by deed, or a retirement by deed, under the provisions of the instrument, if any, creating the trust. (9) This section applies to trusts created either before or after the commencement of this Act. 10 Renunciation of probate (1) If a person who is appointed by will both executor and trustee thereof renounces probate, or after being duly cited fails to apply for probate, the renunciation or failure shall be deemed to be a disclaimer of the trust contained in the will. (2) Where a person is, by a will, appointed both executor and trustee thereof but probate of the will or administration with the will annexed is, by or under this or any other Act, granted or transferred to the NSW Trustee or a trustee company in the place of that person or in addition to that person, then the NSW Trustee or trustee company shall, without further appointment, be deemed to be appointed trustee or one of the trustees of the will, as the case may require. (2A), (2B) (Repealed) (3) This section applies only to a renunciation failure grant or transfer after the commencement of this Act. 11 Ceasing to be executor (1) If any property is vested in any person as executor of a will under which the person is the trustee of the property or is beneficially entitled thereto, such person may, at any time after all the executorial duties with respect to the property have been duly performed, declare by registered instrument in writing that he or she has ceased to hold the property as executor and that he or she holds the same as trustee or as beneficiary, as the case may be. (2) Where a declaration is so made, the property shall, except as otherwise provided in this section, be deemed to be held in accordance with the declaration. (3) In the case of land subject to the provisions of the Real Property Act 1900— (a) where a declaration is so made that the executor holds as trustee, the property shall not be deemed to be so held until the Registrar-General enters a caveat forbidding the registration of any instrument not in accordance with the trusts and provisions declared and contained in the will so far as concerns the land affected by the declaration, (b) where a declaration is so made that the executor holds as beneficiary, the property shall not be deemed to be so held until the Registrar-General withdraws any inconsistent caveat. (4) This section applies to wills made either before or after the commencement of this Act, and whether the executorial duties have been performed before or after the commencement of this Act. 12 Registration (1) Any instrument by which a new trustee is appointed, or by which a trustee retires or disclaims, or by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, may be registered in the office of the Registrar-General in the manner and on payment of the fees prescribed by regulation under the Conveyancing Act 1919. (2) This section extends to an appointment or retirement, whether under this Part or under the provisions of the instrument creating the trust or otherwise, and to a consent to an appointment or retirement. (3) This section applies whether the trust does or does not relate to land subject to the provisions of the Real Property Act 1900. (4) In the case of land subject to the provisions of the Real Property Act 1900, where an appointment or retirement or an instrument by which an executor declares that the executor holds as trustee or as beneficiary, as the case may be, is registered, the Registrar-General is hereby authorised and directed to make an entry of the vesting of the trust property or to enter vary and withdraw caveats as may be proper in the circumstances— Provided that the Registrar-General shall not be bound so to do until a written request is made to the Registrar-General by the persons in whom the property is to be vested, such evidence is given as the Registrar-General may reasonably require, and such notice, if any, is given to any other person as the Registrar-General may direct. (5) Nothing in this section shall prevent an appointment retirement disclaimer or other instrument from being registered under any law now in force. (6) This section applies to instruments executed either before or after the commencement of this Act. 13 Protection of purchasers (1) A statement contained in any registered deed by which a new trustee is appointed, to the effect that a trustee has remained out of New South Wales for more than one year without having properly delegated the execution of the trust, or has remained out of New South Wales for more than two years, or refuses or is unfit to act, or is incapable of acting, shall, in favour of a subsequent purchaser in good faith, be conclusive evidence of the matter so stated upon any question as to the validity of the appointment and of any vesting consequent thereon. (2) A statement contained in any registered instrument by which an executor declares that the executor holds any property as trustee or as beneficiary, as the case may be, to the effect that all executorial duties with respect to the property have been duly performed, shall in favour of a subsequent purchaser in good faith be conclusive evidence of the matter so stated upon any question as to the capacity in which the property was held. (3) The protection afforded by this section shall extend to the Registrar-General Crown Solicitor or other person registering or certifying title. (4) This section applies to deeds executed either before or after the commencement of this Act. Division 2 Powers and duties 14 Powers of investment A trustee may, unless expressly forbidden by the instrument (if any) creating the trust— (a) invest trust funds in any form of investment, and (b) at any time vary any investment. 14A Duties of trustee in respect of power of investment (1) This section has effect subject to the instrument (if any) creating the trust. (2) A trustee must, in exercising a power of investment— (a) if the trustee's profession, business or employment is or includes acting as a trustee or investing money on behalf of other persons, exercise the care, diligence and skill that a prudent person engaged in that profession, business or employment would exercise in managing the affairs of other persons, or (b) if the trustee is not engaged in such a profession, business or employment, exercise the care, diligence and skill that a prudent person would exercise in managing the affairs of other persons. Note— Some Acts deem investments under the Acts to be investments that satisfy the prudent person test. See, for example, section 6.3 of the Government Sector Finance Act 2018. (3) A trustee must exercise a power of investment in accordance with any provision of the instrument (if any) creating the trust that is binding on the trustee and requires the obtaining of any consent or approval with respect to trust investments. (4) A trustee must, at least once in each year, review the performance (individually and as a whole) of trust investments. 14B Law and equity preserved (1) Any rules and principles of law or equity that impose a duty on a trustee exercising a power of investment continue to apply except to the extent that they are inconsistent with this or any other Act or the instrument (if any) creating the trust. (2) Without limiting the generality of subsection (1), a duty imposed by any rules and principles of law or equity includes the following— (a) a duty to exercise the powers of a trustee in the best interests of all present and future beneficiaries of the trust, (b) a duty to invest trust funds in investments that are not speculative or hazardous, (c) a duty to act impartially towards beneficiaries and between different classes of beneficiaries, (d) a duty to take advice. (3) Any rules and principles of law or equity that relate to a provision in an instrument creating a trust that purports to exempt, limit the liability of, or indemnify a trustee in respect of a breach of trust, continue to apply. (4) If a trustee is under a duty to take advice, the reasonable costs of obtaining the advice are payable out of trust funds. 14C Matters to which trustee is to have regard when exercising power of investment (1) Without limiting the matters that a trustee may take into account when exercising a power of investment, a trustee must, so far as they are appropriate to the circumstances of the trust, if any, have regard to the following matters— (a) the purposes of the trust and the needs and circumstances of the beneficiaries, (b) the desirability of diversifying trust investments, (c) the nature of, and the risk associated with, existing trust investments and other trust property, (d) the need to maintain the real value of the capital or income of the trust, (e) the risk of capital or income loss or depreciation, (f) the potential for capital appreciation, (g) the likely income return and the timing of income return, (h) the length of the term of the proposed investment, (i) the probable duration of the trust, (j) the liquidity and marketability of the proposed investment during, and on the determination of, the term of the proposed investment, (k) the aggregate value of the trust estate, (l) the effect of the proposed investment in relation to the tax liability of the trust, (m) the likelihood of inflation affecting the value of the proposed investment or other trust property, (n) the costs (including commissions, fees, charges and duties payable) of making the proposed investment, (o) the results of a review of existing trust investments in accordance with section 14A (4). (2) A trustee may, having regard to the size and nature of the trust, do either or both of the following— (a) obtain and consider independent and impartial advice reasonably required for the investment of trust funds or the management of the investment from a person whom the trustee reasonably believes to be competent to give the advice, (b) pay out of trust funds the reasonable costs of obtaining the advice. (3) A trustee is to comply with this section unless expressly forbidden by the instrument (if any) creating the trust. 14D Powers of trustee in relation to securities (1) If securities of a body corporate are subject to a trust, the trustee may concur in any scheme or arrangement— (a) for or arising out of the reconstruction, reduction of capital or liquidation of, or the issue of shares by, the body corporate, or (b) for the sale of all or any part of the property and undertaking of the body corporate to another body corporate, or (c) for the acquisition of securities of the body corporate, or of control of the body corporate, by another body corporate, or (d) for the amalgamation of the body corporate with another body corporate, or (e) for the release, modification or variation of rights, privileges or liabilities attached to the securities, or any of them, in the same manner as if the trustee were beneficially entitled to the securities. (2) The trustee may accept instead of, or in exchange for, the securities subject to the trust securities of any denomination or description of another body corporate party to the scheme or arrangement. (3) If a conditional or preferential right to subscribe for securities in a body corporate is offered to a trustee in respect of a holding in that body corporate or another body corporate, the trustee may, as to all or any of the securities— (a) exercise the right and apply capital money subject to the trust in payment of the consideration, or (b) assign to any person, including a beneficiary under the trust, the benefit of the right, or the title to the right, for the best consideration that can be reasonably obtained, or (c) renounce the right. (4) A trustee accepting or subscribing for securities under this section is, for the purposes of any provision of this Division, exercising a power of investment. (5) A trustee may retain securities accepted or subscribed for under this section for any period for which the trustee could properly have retained the original securities. (6) The consideration for an assignment made under subsection (3) (b) is to be held as capital of the trust. (7) This section applies in relation to securities acquired before or after the commencement of the Trustee Amendment (Discretionary Investments) Act 1997, subject to the instrument (if any) creating the trust. 14DA Power to purchase dwelling-house as residence for beneficiary (1) Without limiting section 14C and subject to the instrument (if any) creating the trust, a trustee may— (a) purchase a dwelling-house for a beneficiary to use as a residence, or (b) enter into any other agreement or arrangement to secure for a beneficiary a right to use a dwelling-house as a residence. (2) Despite the terms of the instrument (if any) creating the trust, a trustee may, if to do so would not unfairly prejudice the interests of other beneficiaries, retain as part of the trust property a dwelling-house for a beneficiary to use as a residence. (3) A dwelling-house purchased, retained or otherwise secured for use by the beneficiary as a residence may be made available to the beneficiary for that purpose on such terms and conditions consistent with the trust and the extent of the beneficiary's interest as the trustee thinks fit. (4) The trustee may retain a dwelling-house or any interest or rights in respect of a dwelling-house acquired under this section after the use of the dwelling-house by the beneficiary has ceased. (5) In this section, dwelling-house includes— (a) any building or part of a building designed, or converted or capable of being converted, for use as a residence, and (b) any amenities or facilities for use in association with the use of a dwelling-house. 14DB Guidelines for trustees (1) The regulations may make provision for or with respect to guidelines for the investment by trustees of trust funds. (2) A trustee does not comply with section 14A merely by complying with any regulations made for the purposes of this section. 14E Advisory committee (1) In this section, Committee means the committee constituted by subsection (2). (2) There is constituted by this subsection a committee consisting of— (a) the NSW Trustee, and (b) a master of the Court nominated by the Chief Justice of the Court and appointed by the Attorney General, and (c) an officer of the Treasury nominated by the Secretary of the Treasury and appointed by the Attorney General, and (d) 2 persons appointed by the Attorney General who, in the opinion of the Attorney General, have experience relevant to the function of the Committee. (3) The function of the Committee is to advise the Attorney General on matters relating to the investment of trust funds. (4) The Attorney General shall not be bound by the advice of the Committee. (5) The Committee may regulate its own procedure. (6) The Committee may seek the advice of such persons as it sees fit on matters related to the function of the Committee. 14F Investment in securities under Reserve Bank RITS system (1) A chose in action arising under the RITS system and which entitles its holder to a security of a particular description (the underlying security) is, for the purposes of this Act and the trust instrument creating a trust, taken to be the same in all respects as the underlying security. (2) Accordingly, the holding or acquisition by a trustee of such a chose in action is to be regarded as an investment by the trustee in the underlying security. (3) It does not matter that the right conferred by the chose in action is a right in respect of securities of a particular description and not in respect of particular securities. (4) This section applies to a trust created before or after the commencement of this section but applies only to the extent that the trust instrument creating the trust does not expressly forbid its application. (5) In this section— the RITS system means the Reserve Bank Information and Transfer System operated by the Reserve Bank of Australia, as operating from time to time. 15, 16 (Repealed) 17 Accepting a short title (1) A trustee shall not be chargeable with breach of trust upon the ground only that in effecting the purchase of or in lending money upon the security of any property the trustee has accepted a shorter title than the title which a purchaser is, in the absence of a special condition, 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. (2) This section extends to transfers of existing securities as well as to new securities. (3) This section applies to investments made either before or after the commencement of this Act. 18 Ratio of loan to value (1) A trustee lending money on the security of any property on which the trustee can lawfully 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, provided that the loan was made in accordance with this section. (2) In making the loan the trustee must have acted upon a report as to the value of the property made by a qualified valuer, instructed and employed by the trustee independently of any owner of the property. (3) The amount of the loan must not exceed— (a) two-thirds of the value of the property as stated in the report, or (b) 95 per cent of the value of the property as stated in the report if— (i) the repayment of the loan is insured under a contract of insurance issued by a prescribed insurer, and (ii) the mortgagee is the assignee of the benefit of that contract of insurance. (4) The loan must have been made under the advice of the valuer expressed in the report. (5) This section extends to transfers of existing securities as well as to new securities. (6) This section applies to investments made either before or after the commencement of this Act. (7) In this section— prescribed insurer means an insurer or an insurer of a class prescribed by the regulations. qualified valuer means (subject to the regulations) a person who— (a) has membership of the Australian Valuers Institute (other than associate or student membership), or (b) has membership of the Australian Property Institute (other than student or provisional membership), acquired in connection with his or her occupation as a valuer, or (c) has membership of the Royal Institution of Chartered Surveyors as a chartered valuer, or (d) is of a class prescribed by the regulations. 19 Loss on mortgages (1) Where a trustee improperly advances trust money on a mortgage security which would at the time of investment be a proper investment in all respects for a smaller sum than is actually advanced, then the trustee is only liable to make good the sum advanced in excess of the smaller sum with interest. (2) This section extends to transfers of existing mortgages as well as to new mortgages. (3) This section applies to investments made either before or after the commencement of this Act. 20 Release of part of the security (1) Where any property is held by a trustee by way of security and the trustee has power under this Act or otherwise to invest on mortgage and to vary investments, the trustee— (a) may release part of the property from the mortgage, whether any part of the mortgage debt is repaid or not, provided that the unreleased part of the property would, at the time, be a proper investment in all respects for the amount remaining unpaid, (b) may, on a sale by the mortgagor or part of the mortgaged property and on the receipt by the trustee of the whole of the purchase money thereof after deduction of the expenses of the sale, release such part from the mortgage. (2) A subsequent purchaser of the released part of the property, or the Registrar-General Crown Solicitor or other person registering or certifying title, shall not be concerned to inquire whether the release was authorised by this section. (3) This section applies to securities created either before or after the commencement of this Act. 21 Arrangement with company (1) Where any security of a company is held by a trustee, and the trustee can lawfully hold or retain the same, the trustee may, in like manner as if the trustee were beneficially entitled to the security, concur in any scheme or arrangement— (a) for the reconstruction of the company, or (b) for the amalgamation of the company with any other company, or (c) for the sale of all or any part of the property and undertaking of the company to any other company, or (d) for the release modification or variation of any rights privileges or liabilities attached to the security. (1A) Where any security of a company is held by a trustee, and the trustee can lawfully hold or retain the security, the trustee may, in like manner as if the trustee were beneficially entitled to the security, accept and carry out any proposal made in writing by or on behalf of another company for the purchase by that other company of any securities in the first-mentioned company in consideration of the allotment of securities in that other company whether with or without any other consideration in any case where— (a) the proposal is conditional upon the holders of a proportion (not being less than 75 per cent) in value of such of the securities in the first-mentioned company as have not already been acquired by that other company agreeing to deal with those securities in accordance with the proposal, and (b) a sufficient number of the holders of the securities in question (including the trustees) agree in writing to deal with the shares in accordance with the proposal. (2) In lieu of or exchange for the security the trustee may accept any security of any denomination or description of— (a) in the case of a scheme or arrangement referred to in subsection (1)—the reconstructed, new or purchasing company, or (b) in the case of a proposal referred to in subsection (1A)—the company that purchased the security. (3) The trustee shall not be responsible for any loss occasioned by any act or thing so done in good faith, and may hold and retain any security so accepted in like manner as the trustee could have done if the same had been an investment authorised by the instrument, if any, creating the trust or by law. (4) 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 the instrument, if any, creating the trust or by law. (5) Anything done by a trustee before the commencement of this Act which would have been authorised by this section (subsection (1A) excepted) if then in force shall be deemed to have been and is hereby authorised by this Act. (6) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (7) This section applies to trusts created either before or after the commencement of this Act. 21A Building societies and credit unions—transfers of engagements and amalgamations (1) Where a trustee has invested trust funds in a building society or credit union and may lawfully retain the investment, the trustee may, as if the trustee were beneficially entitled to the investment, concur in— (a) a transfer of engagements of the building society or credit union to another building society or credit union, or (b) a merger of the building society or credit union under the Financial Institutions (New South Wales) Code. (2) Where the instrument creating a trust requires the consent of any person before an investment of the trust funds may be changed, the powers conferred by subsection (1) may not be exercised without the consent of that person. (3) This section applies only if, and as far as, a contrary intention is not expressed in the instrument, if any, creating the trust, and has effect subject to the terms of that instrument and to the provisions therein contained. (4) This section applies to trusts created before or after the commencement of Schedule 1 to the Trustee (Investment Powers) Amendment Act 1982. 22 New shares in a company (1) Where a preferential right to subscribe for a security in a company is offered to a trustee in respect of any holding in the company, the trustee may— (a) exercise the right and apply capital money subject to the trust in payment of the consideration, or (b) renounce the right, or (c) assign the benefit of the right for the best consideration that can reasonably be obtained to any person, including a beneficiary under the trust. (2) Where a trustee assigns the benefit of the right the consideration received by the trustee for the assignment shall be held as capital money of the trust. (2A) In any case in which the preferential right in subsection (1) referred to is offered to the trustee, the trustee may in any case in which the shares the subject-matter of the right are subject to a special or reserve liability, whether under the provisions of section 254N of the Corporations Act 2001 of the Commonwealth or otherwise, in the event of the winding-up of the company exercise the right and hold the said shares as if they were part of the trustee's original holding in the company. (3) The trustee shall not be responsible for any loss occasioned by any act or thing so done in good faith. (4) 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. (5) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (6) This section applies to trusts created either before or after the commencement of this Act. 23 Calls on shares (1) A trustee may apply capital money subject to a trust in payment of the calls on any shares subject to the trust. (2) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (3) This section applies to trusts created either before or after the commencement of this Act. 24 Accrued interest on debentures or stock sold or purchased (1) Where any payment received by a trustee in respect of a sale of debentures or inscribed stock bearing interest at a fixed rate shall be or include payment for the right to receive any interest accrued from the debentures or stock at the time of the sale, though the interest may not then be due, the amount of the accrued interest shall for the purposes of the trust be deemed to have been received as interest in respect of the period during which the interest so accrued. (2) Where any payment made by a trustee in respect of a purchase of any debentures or inscribed stock bearing interest at a fixed rate shall be or include payment for the right to receive any interest accrued from the debentures or stock at the time of the purchase, though the interest may not then be due, the amount of the accrued interest when received shall for the purposes of the trust be deemed to have been received as purchase money repaid. (3) (Repealed) (4) Anything done by a trustee before the commencement of this Act which would have been authorised by this section if then in force shall be deemed to have been and is hereby authorised by this Act. (5) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (6) This section applies to trusts created either before or after the commencement of this Act. 25 Continued holding (1) A trustee shall not be liable for breach of trust by reason only of the trustee's continuing to hold an investment which has ceased to be an investment authorised by the instrument, if any, creating the trust or by law. (2) This section applies to investments made either before or after the commencement of this Act. 26 Powers incident to sale (1) A trustee for sale may— (a) sell all or any part of the trust property, (b) sever and sell fixtures apart from the balance of the property, (c) grant and sell any easement right or privilege of any kind over or in relation to the property, (d) do anything that a mortgagee may do under subsection (1) of section 110 of the Conveyancing Act 1919 to the like extent as if the powers conferred by that subsection on a mortgagee in relation to the mortgaged property or any part thereof were in terms conferred by this subsection on the trustee in relation to the trust property or any part thereof, (e) join with any other person in doing anything under any of the preceding paragraphs of this subsection, (f) pay or apply capital money subject to the trust for any of the purposes mentioned in this subsection. (2) The sale may be subject to any such conditions respecting title or evidence of title or other matter as the trustee thinks fit, and may be— (a) either subject to prior charges or not, (b) either together or in lots, in subdivision or otherwise, (c) by public auction or by private contract. (3) The trustee may vary any contract for sale, buy in at any auction, rescind any contract for sale and re-sell, without being answerable for any loss. (4) If the trustee joins with any other person in selling, the purchase money shall be apportioned in or before the contract of sale, and a separate receipt shall be given by the trustee for the apportioned share. (4A) A contravention of subsection (4) shall not invalidate or be deemed to have invalidated any instrument intended to affect or evidence the title to any land. (5) This section applies only if and as far as a contrary intention is not expressed in the instrument creating the trust or power, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (6) This section applies to trusts or powers created either before or after the commencement of this Act. 27 Duration of trust or power to sell (1) Where the instrument creating a trust or power to sell property does not expressly limit the duration of the trust or power, the trustee may, if so requested in writing by any beneficiary, sell the property under the authority conferred by this section and shall be deemed to be a trustee for sale accordingly, notwithstanding any lapse of time or that all the beneficiaries are absolutely entitled to the property in fee simple or full ownership in possession and are free of any incapacity, but in all other respects the authority conferred by this section shall be subject to any restrictions to which the power or trust created by the instrument is subject. (2) Nothing in this section shall affect any trust or power to sell which is for the time being in existence under the instrument creating the trust or power. (3) This section applies only if and as far as a contrary intention is not expressed in the instrument creating the trust or power and shall have effect subject to the terms of that instrument and to the provisions therein contained. (4) This section applies to trusts or powers created either before or after the commencement of this Act. 27A (Repealed) 27B Postponement of sale (1) A power to postpone sale shall be implied in every trust for sale, unless a contrary intention appears. (2) Where there is a power to postpone sale, then (subject to any express direction to the contrary in the instrument, if any, creating the trust for sale) the trustee for sale shall not be liable in any way for postponing the sale, in the exercise of the trustee's discretion, for any indefinite period; nor shall a purchaser be concerned in any case with any directions respecting the postponement of sale. (3) The provisions of subsections (1) and (2) apply to trusts created either before or after the commencement of this Act. (4) Where a disposition or settlement coming into operation after the commencement of the Trustee (Amendment) Act 1929 contains a trust either to retain or sell any property, the same shall be construed as a trust to sell the property with power to postpone the sale. 27C Purchaser under a trust for sale (1) A trust for sale shall, so far as regards the safety and protection of any purchaser, be deemed to subsist notwithstanding any lapse of time until the property is conveyed to or under the direction of the persons interested in the proceeds of sale, and in the case of land until the conveyance is duly registered. (2) Nothing in this section shall prevent any court from making an order restraining a sale. (3) This section applies to trusts created and to the execution thereof either before or after the commencement of this Act. 28 Deferred payment on sale of land (1) A trustee for sale may sell land on terms of deferred payment or otherwise. (2) The terms of deferred payment may provide either for the purchase money being paid by instalments, or for the unpaid purchase money being secured by mortgage. (3) If the purchase money is to be paid by instalments, the terms upon which the land is sold shall, in addition to such other provisions as the trustee may deem proper, include provisions for giving effect to the following— (a) that part of the purchase money shall be paid on the execution of the contract of sale, (b) that the balance of the purchase money shall be payable in instalments, the first not later than three years from the date of the contract of sale and the others at intervals of not more than a year beginning from the date on which the first instalment is payable, and shall bear interest payable half-yearly or oftener on the amount from time to time unpaid. No instalment which is made payable during the first three years from the date of the contract of sale shall be of an amount less than five per centum of the purchase money, and all instalments which are made payable after the third year from the date of the contract of sale shall be equal in amount, (c) that the whole of the purchase money and interest shall be payable within a period not exceeding ten years from the date of the contract of sale, (d) that if any instalment or interest or part thereof is in arrear and unpaid for six months or for such less period as may be specified, the whole of the purchase money shall become due and payable. (4) If the unpaid purchase money is to be secured by mortgage, the terms upon which the land is sold shall, in addition to such other provisions as the trustee may deem proper, include provisions for giving effect to the following— (a) that part of the purchase money shall be paid on the execution of the contract of sale, (b) that the unpaid purchase money shall be secured by a registered mortgage of the land sold, with or without the security of any other property, and shall bear interest payable half-yearly or oftener on the amount from time to time unpaid, (c) that the mortgage shall contain covenants by the mortgagor to pay the principal money secured and the interest thereon, to maintain and protect the property, and to keep all buildings, if any, thereon insured against loss or damage by fire to the full insurable value thereof, (d) that notwithstanding section 106 of the Conveyancing Act 1919 the mortgagor shall not have power to make any lease of the property, unless the trustee consents in writing. (5) Whether the purchase money is to be paid by instalments or the unpaid purchase money is to be secured by mortgage, the trustee shall not be deemed to be lending money within the meaning of section 18 so as to be bound to act in accordance with the provisions of that section, 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. (6) The part of the purchase money to be paid on the execution of the contract of sale shall not be less than the sum which a person acting with prudence would, if the land were the person's own, have accepted in the circumstances in order to sell the land to the best advantage. (7) The trustee shall not be bound to require payment of any greater part of the purchase money before letting the purchaser into possession, or before conveying the land and taking a mortgage back, than a person acting with prudence would, if the land were the person's own, have considered as sufficient, provided that the trustee shall not convey the land and take a mortgage back until at least one-tenth part of the purchase money has been paid. (8) Notwithstanding that the purchase money is to be paid by instalments, the trustee may at any time after one-tenth of the purchase money has been paid convey the land and take a mortgage back in any case where a person acting with prudence would, if the land were the person's own, have been willing in the circumstances so to do, and in any such case the mortgage shall be in accordance with paragraphs (b) (c) and (d) of subsection (4), and the provisions of subsection (5) shall apply. (9) Any mortgage under this section may be for any period not exceeding ten years from the date of the contract of sale. (10) The trustee may, on such terms, if any, as the trustee deems proper, by writing waive or vary any right arising from failure to comply with any term of the contract of sale or of any mortgage under this section within the proper time. (11) Where the sale is made under the order of the Court, the provisions of this section shall apply, unless the Court shall otherwise direct. (12) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (13) This section applies to trusts created either before or after the commencement of this Act. 29 Sale or purchase under Conveyancing Act 1919 (1) A trustee who is either a vendor or a purchaser may sell or buy without excluding the application of subsection (2) of section 53 of the Conveyancing Act 1919. (2) This section shall be deemed to have applied as from the commencement of that Act. 30 Depreciatory conditions (1) Where a trustee sells subject to any condition which may have been unnecessarily depreciatory— (a) the purchaser shall not be at liberty to make any objection to the title on that ground, (b) the sale shall not be impeached by any beneficiary upon that ground, unless it also appears that the consideration for the sale was thereby rendered inadequate, (c) the sale shall not, after the execution of the conveyance, be impeached as against the purchaser upon that ground, unless it appears that the purchaser was acting in collusion with the trustee at the time when the contract for sale was made. (2) This section applies to sales made either before or after the commencement of this Act. 31 Sale of part of land (1) 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 otherwise. (2) This section applies only if and as far as a contrary intention is not expressed in the instrument, if any, creating the trust or power, and shall have effect subject to the terms of that instrument and to the provisions therein contained. (3) This section applies to trusts or powers created either before or after the commencement of this Act. 32 Sale exchange and partition (1) Where a trustee is authorised by the instrument, if any, creating the trust or by law to dispose of land by way of sale exchange or partition, the trustee may so dispose— (a) of the land with or without an exception or reservation of all or any of the mines and minerals therein, or (b) of any mines and minerals. (2) The disposition may be with or without a grant or reservation of powers of working, wayleaves, or rights of way, rights of water and drainage, and other powers, easements, rights, and privileges for or incident to or connected with mining purposes, in relation to the land or any part thereof, or any other land. (3) The exchange or partition may be made subject to and in consideration of the reservation of an undivided share in mines or minerals. (4) The exchange or partition may be made upon terms of giving or receiving any money for equality of exchange or partition. (5) For the purpose of completing the disposition the trustee may convey or otherwise dispose of the land either by way of revocation and appointment of the use or otherwise as may be necessary. (6) This section extends to any other person authorised to dispose of land by way of sale exchange or partition. (7) This section applies to trusts or powers created either before or after the commencement of this Act. 32A Power to purchase equity of redemption in lieu of foreclosure A trustee unless expressly forbidden by the instrument, if any, creating the trust, may, in lieu of proceeding to foreclosure, purchase the equity of redemption of land in New South Wales the subject of a mortgage held by the trustee under which default has been made where the moneys expended in such purchase are subject to the same trusts as the mortgage debt: Provided that in no case shall the moneys paid by way of consideration for such purchase exceed five per cent of the amount due under the mortgage. 33 Sale after right of redemption barred (1) Where any property is vested in a trustee by way of security, and the property becomes discharged from the right of redemption, the trustee shall hold the property on trust for sale, with power to postpone the sale for such a period as the trustee may think proper. (2) The net proceeds of sale, after payment of costs and expenses, shall be applied in like manner as the mortgage debt, if received, would have been applicable, and the income of the property until sale shall be applied in like manner as the interest, if received, would have been applicable. (3) This section shall not affect any rule of law relating to the apportionment of capital and income between tenant for life and remainderman. (4) This section shall not affect the right of any person to require that, instead of a sale, the property shall be conveyed to the person or in accordance with the person's directions. (5) This section applies whether the property is discharged from the right of redemption by virtue of the statutes of limitation or of an order for foreclosure or purchase of the equity of redemption or otherwise. (6) This section extends to securities by way of mortgage of land under the Real Property Act 1900 and in relation thereto an order for foreclos