Queensland: Trusts Act 1973 (Qld)

Trusts Act 1973 An Act to consolidate and amend the law relating to trusts, trustees, settled land and charities Part 1 Preliminary 1 Short title This Act may be cited as the Trusts Act 1973. 2 [Repealed] 3 [Repealed] 4 Application (1) Except where otherwise provided, this Act applies to every trust, as defined in section 5, whether constituted or created before or after the commencement of this Act. (2) Nothing in this Act shall preclude a settlor from conferring on a trustee or other person exercising the powers of a trustee under this Act any powers additional to or larger than those conferred by this Act. (3) Any additional or larger powers so conferred shall, as far as may be, notwithstanding anything in this Act, and unless a contrary intention is expressed in the instrument (if any) creating the trust, operate and be exercisable in the like manner and with all the like incidents effects and consequences as if conferred by this Act. (4) The powers conferred by or under this Act on a trustee are in addition to the powers given by any other Act and by the instrument (if any) creating the trust; but the powers conferred on the trustee by this Act, unless otherwise provided, 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. (5) Except where otherwise provided by this Act, this Act does not affect the legality or validity of anything done before the commencement of this Act. (6) This Act binds the Crown not only in right of the State but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities. 5 Definitions In this Act— apart from this Act, when used in relation to land of which there is no trustee, does not include the public trustee, or a trustee appointed pursuant to section 12 or 80, or in whom the trust property is vested pursuant to section 16 or 90. approved form see section 118. authorised investments means investments of trust funds that are— (a) authorised by the instrument creating the trust; or (b) made by the trustee exercising a power of investment under part 3 or under an order under section 94; or (c) authorised by another Act or the general law. bankrupt includes insolvent. benefit, in relation to any person, includes insurance on the life of that person. commencement of this Act means the time when this Act (other than sections 94, 95, 98 and 99) came or comes into operation. contingent right, in relation to land, includes a contingent or executory interest and a possibility coupled with an interest, whether the object of the gift or limitation of the interest or possibility is or is not ascertained; and also a right of entry, whether immediate or future, and whether vested or contingent. conveyance, as applied to any person, includes the execution or doing by that person of every necessary or suitable assurance, act, and thing for conveying, transferring, assigning, appointing, surrendering or otherwise disposing of property. court means the Supreme Court or a judge thereof. execute includes the doing of all acts and things necessary for a conveyance, and with reference to an instrument not under seal means sign. instrument creating the trust includes any deed, will, agreement for a settlement, Act of Parliament, or other instrument, or any number of instruments, whether made or passed before or after, or partly before and partly after, the commencement of this Act. land includes— (a) land of any tenure, and any estate or interest, whether vested or contingent, in land; and (b) mines and minerals, whether or not severed from the surface; and (c) buildings or parts of buildings, whether the division is horizontal, vertical or made in any other way; and (d) a unit comprised in a building units plan registered in the manner provided by or under the Building Units and Group Titles Act 1980; and (e) any other corporeal hereditaments; and (f) rent and any incorporeal hereditament; and (g) an easement, right, privilege, share, interest or benefit in, over or derived from land; and, in this definition, mines and minerals includes any strata or seams or minerals or substances in or under any land, and powers of working or getting them and hereditament means real property which under an intestacy might at common law devolve on an heir. lease includes a bailment. mortgagee includes every person having an estate or interest regarded at law or in equity as merely a security for money and every person deriving title to the mortgage under the original mortgagee; and mortgage has a corresponding meaning. payment, in relation to stocks and securities, includes the deposit or transfer of them. person includes a trustee corporation, a corporation sole and a corporation aggregate. personal representative means the executor, original or by representation, or the administrator for the time being of the estate of a deceased person. person not under a disability, and any like expression, means a person of full age and full mental capacity. possession includes receipt of income or the right to receive the income (if any); and possessed applies to receipt of income of and to any vested estate less than a life interest, at law or in equity, in possession or in expectancy in any land. public accountant means— (a) a person registered, or taken to be registered, as an auditor under the Corporations Act; or (b) a member of the Australian Society of Certified Practising Accountants or the Institute of Chartered Accountants in Australia; or (c) a person who holds a public practising certificate issued by the Institute of Public Accountants and has completed a tertiary course of study in accounting with an auditing component from a university or institute prescribed under the Corporations Act, section 1280(2A); or (d) a person approved by the chief executive who has completed a tertiary course of study in accounting with an auditing component from a university or institute prescribed under the Corporations Act, section 1280(2A). public trustee means the public trustee constituted by the Public Trustee Act 1978. registered valuer means a valuer registered under the Valuers Registration Act 1992. registrar means the registrar of titles. rent includes a rent service or a rent charge, or other rent, toll, duty, royalty or annual or periodic payment in money or money's worth reserved or issuing out of or charged upon land, but does not include mortgage interest. repealed Acts means the Acts that pursuant to the Trustees and Executors Acts Amendment Act 1964 might have been cited as the Trustees and Executors Acts 1897 to 1964. sale includes an exchange. securities includes debentures, stock and shares; and securities payable to bearer includes securities transferable by delivery or by delivery and endorsement. statutory trustee means a person— (a) who, in respect of land referred to in section 6 may exercise the powers by this Act conferred or capable of being conferred on a trustee; but (b) who, apart from this Act, is not a trustee of such land. stock includes 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 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 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 incidental to an estate conveyed by way of mortgage, but with that exception trust extends to implied, resulting, bare and constructive trusts, and to cases where the trustee has a beneficial interest in the trust property, and to the duties incidental to the office of a personal representative. trustee includes— (a) a trustee corporation; and (b) any other corporation in which property subject to a trust is vested; and (c) any person who immediately before the commencement of this Act was a trustee of the settlement or in any way a trustee under the Settled Land Act 1886 and who, if that Act had not been repealed, would be such a trustee; and (d) a personal representative; and (e) a statutory trustee within the meaning of this Act. trustee corporation means the public trustee or a trustee company under the Trustee Companies Act 1968. trust property includes— (a) property settled on any trust, whether express, implied, resulting, bare, or constructive; and (b) property subject to a trust or direction for sale, however arising; and (c) land which is lawfully vested in any person for an estate for the person's own or any other life, or for a term of years determinable on life not being a mere lease at rent, or for any greater estate not being a fee simple absolute; and (d) land in respect of which any person has, by virtue of any will, a personal licence to reside for the person's own life, or for the life of any other person or persons, or for any lesser period. 5A Meaning of investment etc. on the security of property Any reference to the investment, loan or advance of trust money by a trustee on the security of property shall be construed to include a reference to such investment, loan or advance on the transfer of an existing security as well as on a new security. 6 Exercise of powers (1) Subject to section 31(3), the powers by this Act conferred on a trustee may be exercised by, and the powers by this Act capable of being conferred by the court on a trustee may be conferred upon and, where conferred, may be exercised by, the following persons— (a) in respect of land which immediately before the commencement of this Act was settled land within the meaning of the Settled Land Act 1886 (the repealed Act)—by the person being of full age and not a mentally ill person who was, or, if more than 1 by the persons being of full age and not mentally ill persons— (i) who were, in respect of that land, the tenant for life within the meaning of the repealed Act, or who had the powers of the tenant for life under the repealed Act; and (ii) who if that Act had not been repealed would be the tenant for life or have those powers; whether or not such powers were or any of such powers was exercisable only with the consent, approval or sanction of some other person or persons or of the court; but where, under the repealed Act, a power was exercisable by any person or persons only upon the written request of the tenant for life, then such person or persons shall have, and shall and may exercise, the powers conferred by this section upon the written request of the person who was tenant for life and who if that Act had not been repealed would be the tenant for life, but not otherwise; (b) in respect of any other land which is trust property— (i) if there is, apart from this Act, no trustee of the land—by the person or persons, not under a disability, for the time being beneficially entitled to possession thereof, or to the rents and profits therefrom; or (ii) if there is, apart from this Act, a trustee of the land—by the trustee; but the trustee shall, unless otherwise directed by the court, exercise the power conferred by section 32 to sell the land if so required in writing by the person (if not under a disability) or, if more than 1, all of the persons (if not under a disability) at that time beneficially entitled to an interest in possession in the land or under the trust of the land; (c) in respect of any land or other trust property not hereinbefore provided for—by the trustee (if any) of that land or other trust property; (d) in any case, or where the persons by whom, or at whose direction, the powers conferred by this section are exercisable do not agree—by such person or persons and in such manner as the court may order or direct on application thereto of any person who has, directly or indirectly, an interest, whether vested or contingent, in that property. (2) Where a trustee has, whether before or after the commencement of this Act, done any act which might lawfully have been done with the prior approval of the court or pursuant to a prior order of the court conferring power under this Act to do such act, the court may— (a) on the application of any trustee or person interested; and (b) after notice to such person or persons (if any) as to the court may seem requisite; and (c) on such terms or conditions as to the court may seem appropriate; make an order granting approval or conferring power under this Act to do such act, and may make such order retrospective to any prior date or period as to the court seems fit. (3) An order made pursuant to subsection (2) shall, subject to any term or condition imposed by the court, have the same force and effect as if the approval had been obtained or the power conferred before the doing of the act referred to in the order. 7 Exercise of powers by statutory trustee Subject to any order or direction of the court, in exercising any power under this Act, a statutory trustee— (a) shall have regard to the interests of all parties beneficially interested in the property; (b) shall be in the position of a trustee, and, in relation to the exercise of any power, have— (i) all the duties and liabilities of a trustee for the parties beneficially interested in the property; and (ii) all the rights of a trustee and be entitled to all the indemnities and protection of a trustee; (c) shall, in order to its being invested or otherwise applied in accordance with this Act, pay or procure the payment of any capital money arising on any sale, mortgage, or other dealing with any land— (i) into court; or (ii) to a trustee appointed by the court under section 80; or (iii) otherwise as the court may direct; (d) shall not, in relation to any such exercise of power, be liable to impeachment of waste. 7A Effect of exercise of powers (1) The exercise by a trustee of any power under this Act shall— (a) to the extent and in the manner to and in which it is expressed or intended to operate and can operate under this Act; and (b) subject to the requirements of any other Act; be effectual to dispose of any property thereby intended to be disposed of and to discharge the property from— (c) any limitations, restrictions, powers and provisions; and (d) any estates, interests or charges; to which the property, by reason of its character as such trust property, is or might otherwise become subject. (2) Nothing in this section affects— (a) any estate, interest or charge to which the property has or may become subject otherwise than by reason of its character as such trust property; (b) any estate, interest, charge, or right in or in respect of the property granted or created— (i) before the date of the disposition referred to in subsection (1); and (ii) by a person referred to in section 6 or by any predecessor in title of such person. (3) The exercise by a trustee of any power under this Act or of any like power conferred by the trust instrument— (a) shall not occasion any forfeiture; (b) shall not, except as provided by this Act, be capable of being restrained, prohibited, prevented or impaired by any provision of or limitation in, any contract, covenant, settlement, will, assurance or other instrument. (4) In this section— dispose of shall include any sale, exchange, partition, lease, mortgage, transfer or charge and the creation or grant of any right in or in respect of property. 8 Application to court to review acts and decisions (1) Any person who has, directly or indirectly, an interest, whether vested or contingent, in any trust property or who has a right of due administration in respect of any trust, and who is aggrieved by any act, omission or decision of a trustee or other person in the exercise of any power conferred by this Act or by law or by the instrument (if any) creating the trust, or who has reasonable grounds to apprehend any such act, omission or decision by which the person will be aggrieved, may apply to the court to review the act, omission or decision, or to give directions in respect of the apprehended act, omission or decision; and the court may require the trustee or other person to appear before it and to substantiate and uphold the grounds of the act, omission or decision which is being reviewed and may make such order in the premises (including such order as to costs) as the circumstances require. (2) An order of the court under subsection (1) shall not— (a) disturb any distribution of the trust property, made without breach of trust, before the trustee became aware of the making of the application to the court; or (b) affect any right acquired by any person in good faith and for valuable consideration. (3) Where any application is made under this section, the court may— (a) if any question of fact is involved—determine that question or give directions as to the manner in which that question shall be determined; and (b) if the court is being asked to make an order which may adversely affect the rights of any person who is not a party to the proceedings—direct that that person shall be made a party to the proceedings. 9 Effect of conversion of property under statutory power Where in consequence of the exercise of any power under this Act realty is converted into personalty or personalty is converted into realty, such personalty or realty shall be held— (a) upon trusts corresponding as nearly as the law and circumstances permit with the trusts (if any) affecting the property prior to conversion; or (b) if there are no trusts—subject to limitations, conditions, powers, or directions corresponding as nearly as the law and circumstances permit with those affecting the property prior to conversion. Part 2 Appointment and discharge of trustees—devolution of trusts 10 Application of part Except where otherwise provided in this part, the provisions of this part shall apply whether or not a contrary intention is expressed in the instrument (if any) creating the trust. 11 Limitation of the number of trustees (1) Where, at the commencement of this Act, there are more than 4 trustees of any property 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 trusts made or coming into operation after the commencement of this Act— (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) Nothing in this section shall apply— (a) to property vested or to be vested in trustees for charitable purposes; or (b) to property vested or to be vested in trustees where the Minister has given a certificate in writing that the Minister approves of the number of trustees in whom the property is or is to be vested. (4) A custodian trustee shall not be counted as a trustee for the purpose of this section. 12 Power of appointing new trustees (1) Where a trustee, whether original or substituted, and whether appointed by the court or otherwise— (a) is dead; or (b) remains out of the State for more than 1 year without having properly delegated the execution of the trust; or (c) seeks to be discharged from all or any of the trusts or powers reposed in or conferred on the trustee; or (d) refuses to act therein; or (e) is unfit to act therein; or (f) is incapable of acting therein; or (g) is an infant; or (h) being a corporation, has ceased to carry on business, is under official management, is in liquidation or has been dissolved; then the person nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust, or if there is no such person or no such person able and willing to act, then the surviving or continuing trustee or trustees for the time being, or the personal representative of the last surviving or continuing trustee, may by writing appoint a person or persons (whether or not being the person or persons exercising the power) to be a trustee or trustees in the place of the trustee first in this subsection mentioned. (2) On the appointment of a trustee or trustees for the whole or any part of the trust property— (a) the number of trustees may, subject to the restriction imposed by this Act on the number of trustees, be increased; and (b) a separate set of trustees may be appointed for any part of the trust property held on trusts distinct from those relating to any other part, and whether or not new trustees are or are to be appointed for any other part of the trust property; and any existing trustee may be appointed or remain 1 of the separate set of trustees; or if only 1 trustee were originally appointed, then 1 separate trustee may be so appointed for the part of the trust first in this paragraph mentioned; and (c) it is not obligatory to fill up the original number of trustees where 2 or more trustees were originally appointed; but (except where only 1 trustee was originally appointed or where the trust instrument otherwise provides) a trustee is not discharged under this section unless— (i) in the case of any trust (including a trust referred to in subparagraph (ii))—there will remain either a trustee corporation or at least 2 individuals to act as trustees of the trust; or (ii) in the case of a trust for any charitable or public purpose or for any purpose of recreation or other leisuretime use or occupation—there will remain a local government to act as trustee of the trust; and (d) any assurance 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. (3) 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 that trustee were dead, or, in the case of a corporation, as if the corporation had been dissolved, and the provisions of this section shall apply accordingly. (4) The power of appointment given by subsection (1), or any similar previous enactment, to the personal representative of the last surviving or continuing trustee is and shall be deemed always to have been exercisable by the administrator for the time being of that trustee or the executor for the time being, whether original or by representation, of that surviving or continuing trustee who has proved the will of his or her testator without the concurrence of any executor who has renounced or has not proved. (5) Where, in the case of any trust, there are not more than 3 trustees (none of them being a trustee corporation or a local government), then— (a) the person or persons nominated for the purpose of appointing new trustees by the instrument (if any) creating the trust; or (b) where there is no person nominated for the purpose of appointing new trustees by the instrument creating the trust, or no such person able and willing to act, then the trustee or trustees for the time being; may, by writing, appoint a person or persons (whether or not being the person or persons exercising the power) 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; but (except where the Minister has given a certificate in writing that the Minister approves the appointment of the additional trustees) on any appointment of additional trustees under this subsection the number of trustees shall not be increased beyond 4. (6) Every new trustee appointed under this section has the same powers, authorities, and discretions and may in every respect act, as if the new trustee had originally been appointed a trustee by the instrument (if any) creating the trust, both before and after all the trust property becomes by law or by assurance or otherwise vested in the trustee. (7) The provisions of this section which are brought into effect by the circumstance that a person nominated trustee (whether sole or otherwise) in a will is dead are brought into effect whether the death of that person occurred before or after the death of the testator; and the provisions relative to a continuing trustee relate also to a refusing or retiring trustee, if willing to act in the execution of the provisions of this section. (8) The provisions of this section relating to a person nominated for the purpose of appointing new trustees apply whether the appointment is 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. (9) In this section— trustee does not include a personal representative as such. (10) In this section— trustee corporation— (a) includes the public trustee of another State, or a person in that State discharging functions similar to the public trustee of this State; (b) includes a trustee corporation authorised by the laws of another State to administer the estate of deceased persons and other trust estates. 13 Evidence as to a vacancy in a trust (1) Where any instrument appointing a new trustee contains a statement as to how a vacancy in the office of trustee occurred, that statement is conclusive evidence, in favour of a subsequent purchaser in good faith, of the circumstances under which the vacancy occurred. (2) Any vesting of trust property consequent upon an appointment of a new trustee containing a statement as to how a vacancy in the office of trustee occurred is valid in favour of any subsequent purchaser in good faith. (3) The protection afforded to a purchaser by this section extends to the registrar or other person registering or certifying title. (4) This section applies to instruments of appointment signed either before or after the commencement of this Act. 14 Retirement of trustee without a new appointment (1) This section applies where a trustee declares by writing that the trustee is desirous of being discharged from all or any or any part of the trusts reposed in the trustee, and after the trustee's discharge there will be a trustee corporation or at least 2 individuals to act as trustees to perform the trust or part of the trust from which that trustee desires to be discharged. (2) In any case to which this section applies, if the co-trustees and such other person (if any) as is empowered to appoint trustees consent by writing 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— (a) shall be deemed to have retired from the trusts from which the trustee has declared the trustee desires to be discharged; and (b) shall, by the writing by which consent is given to the trustee's discharge, be discharged from the trusts under this Act; without any new trustee being appointed in his or her place. 15 Vesting of trust property in new and continuing trustees (1) Where a new trustee is appointed the instrument of appointment vests, subject to the provisions of any other Act, the trust property in the persons who become and are the trustees as joint tenants without any conveyance, transfer or assignment. (2) Where a trustee is discharged in accordance with the provisions of section 14 the instrument of discharge divests the trust property from the discharged trustee and, subject to the provisions of any other Act, vests it in the continuing trustees as joint tenants without any conveyance, transfer or assignment. (3) Where, by reason of the provisions of any other Act or for the protection of any trust property, it is requisite that the vesting in a new trustee or divesting from a discharged trustee should be notified to or registered or recorded by the registrar or other person having the duty or function of registering or recording any discharge or appointment of trustees or divesting or vesting or other dealings under that Act, the trustees shall— (a) execute and produce to the registrar or such other person such instrument or instruments as may be necessary; and (b) do such other act or acts as may properly be required by the registrar or such other person; for the purpose of effecting such notification, registration or recording; and an instrument of appointment or discharge shall be deemed a conveyance from the persons in whom the trust property was previously vested to the persons in whom it vests by virtue of such instrument. (4) Where trust property has vested in the public trustee pursuant to section 16(2) it shall not be necessary to notify, register or record such vesting if the public trustee has not acted in regard to the trusts or if the only action taken by the public trustee has been the appointment of a new trustee. (5) Where the consent of any person is requisite to the conveyance, transfer or assignment of any trust property the vesting of that property in accordance with the provisions of this section is subject to that consent; but the consent may be obtained after the execution of the instrument of appointment or discharge by the persons who are then trustees. (6) An instrument of appointment or discharge shall not operate as a breach of covenant or condition or occasion any forfeiture of any lease, underlease, agreement for lease, or other property. 16 Devolution of trust assets and trust powers upon death (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 survivors or survivor of them for the time being. (2) Upon the death of a sole trustee or, where there were 2 or more trustees, of the last surviving or continuing trustee, the trust property shall devolve to and vest in the public trustee and shall remain vested in the public trustee until— (a) an appointment of a new trustee is made and (unless the appointment is made by the public trustee) notice in writing of the appointment is given to the public trustee, whereupon the trust property shall devolve to and vest in the person so appointed subject to and in accordance with the provisions of section 15; or (b) if no such appointment is made—a grant of probate or letters of administration of the estate of the deceased trustee is made and notice in writing of such grant and of his or her intention to assume the trust of the trust property is given to the public trustee by the person to whom the grant was made, whereupon the trust property shall devolve to and vest in such person who shall be deemed to be the person appointed by the person nominated for the purpose of appointing new trustees. (3) Trust property vested by virtue of this section in the public trustee shall vest in the public trustee, notwithstanding the fact that no instrument has been executed appointing the public trustee as trustee, in the like manner and subject to the same provisions as trust property which vests in a new trustee by virtue of section 15. (4) Trust property vested by virtue of this section in a person to whom a grant of probate or letters of administration of the estate of a deceased trustee has been made shall vest in the person in like manner and subject to the same provisions as trust property which vests in a new trustee by virtue of section 15. (5) While the trust property is vested in the public trustee under this section the public trustee shall have the same powers, authorities and discretions, and may in every respect act, as if the public trustee had originally been appointed a trustee by the instrument (if any) creating the trust; but unless the court, in special circumstances, otherwise directs it shall not be obligatory for the public trustee to exercise any of such powers, authorities or discretions. (6) Where the trust property vests by virtue of this section in the person to whom a grant of probate or letters of administration of the estate of the deceased trustee is made that person shall have all the powers, authorities and discretions and in every respect act as if the person had originally been appointed a trustee by the instrument (if any) creating the trust. (7) Where by virtue of this section trust property is divested from the public trustee in consequence of an appointment of a new trustee or a grant of probate or letters of administration of the estate of the deceased trustee all liability on the part of the public trustee (other than liability for which the public trustee is not entitled to be indemnified out of the trust property) in respect of any action taken by the public trustee with regard to the trust property shall cease; but any person who, but for this provision, would have had a remedy against the public trustee shall have the like remedy against the person in whom the trust property has vested pursuant to such appointment of new trustee or grant of probate or letters of administration. (8) Nothing in this section shall deprive the public trustee of any power which the public trustee has or may exercise under the Public Trustee Act 1978, section 62. (9) In this section— trustee does not include a personal representative as such. trust property includes any property vested in the trustee as mortgagee. 17 Devolution of mortgage estates on death (1) An estate or interest in property vested solely in any person (not being a trustee) by way of mortgage shall upon the person's death devolve to and vest in the public trustee until a grant of probate or letters of administration to the estate of the deceased mortgagee is made when the mortgaged property shall devolve to and vest in the person to whom the grant is made. (2) While the property is vested in the public trustee under this section the public trustee shall have the same powers, authorities and discretions and may in every respect act, as if the public trustee were originally the mortgagee of the property. (3) Nothing in this section shall deprive the public trustee of any power which the public trustee has or may exercise under the Public Trustee Act 1978, section 61. 18 Disclaimer of trusts on renunciation of probate (1) Where a person appointed by will both executor and trustee thereof renounces probate, or after being duly cited or summoned 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 any person appointed by will both executor and trustee thereof— (a) renounces probate; or (b) after being duly cited or summoned fails to apply for probate; or (c) dies before probate is granted to the person; and letters of administration with the will annexed are granted to any other person, the person who obtains the grant shall, by virtue of the grant and without further appointment, be deemed to be appointed trustee of the will in the place of the person who was appointed by the will. 19 Custodian trustees (1) Subject to the provisions of this section and to the instrument (if any) creating the trust, any corporation may be appointed to be custodian trustee of any trust in any case where, and in the same manner as, it could be appointed to be trustee. (2) Subject to the provisions of the instrument (if any) creating the trust, where a custodian trustee is appointed of any trust— (a) the trust property shall be vested in the custodian trustee as if the custodian trustee were the sole trustee, and for that purpose vesting orders may, where necessary, be made under this Act; and (b) the management of the trust property and the exercise of all powers and discretions exercisable by the trustee under the trust shall be and remain vested in managing trustees other than the custodian trustee (the managing trustees) as fully and effectually as if there were no custodian trustee; and (c) the sole function of the custodian trustee shall be to get in and hold the trust property and invest its funds and dispose of the assets as the managing trustees in writing direct, for which purpose the custodian trustee shall execute all such documents and perform all such acts as the managing trustees in writing direct; and (d) for the purposes of paragraph (c), a direction given by the majority of the managing trustees, where there are more than 1, shall be deemed to be given by all the managing trustees; and (e) the custodian trustee shall not be liable for acting on any direction to which paragraph (c) refers; but if the custodian trustee is of opinion that any such direction conflicts with the trusts or the law, or exposes the custodian trustee to any liability, or is otherwise objectionable, the custodian trustee may apply to the court for directions in the matter; and any order giving directions shall bind both the custodian trustee and the managing trustees; and the court may make such order as to costs as it thinks proper; and (f) the custodian trustee shall not be liable for any act or default on the part of any of the managing trustees; and (g) all actions and proceedings touching or concerning the trust property shall be brought or defended in the name of the custodian trustee at the written direction of the managing trustees, and the custodian trustee shall not be liable for the costs thereof apart from any payable out of the trust property; and (h) a person dealing with the custodian trustee shall not be concerned to inquire as to any direction, concurrence or otherwise of the managing trustees or be affected by notice of the fact that the managing trustees have not concurred; and (i) the power of appointing new trustees, when exercisable by the trustee, shall be exercisable by the managing trustees alone, but the custodian trustee shall have the same power as any other trustee of applying to the court for the appointment of a new trustee. (3) On the application of the custodian trustee or of any of the managing trustees or of any beneficiary and on satisfactory proof that it is the general wish of the beneficiaries or that on other grounds it is expedient to terminate the custodian trusteeship, the court may make an order for that purpose and may also make such vesting orders and give such directions as in the circumstances seem to the court to be necessary or expedient. Part 3 Investments 20 Application of particular provisions Sections 29 to 30C apply despite anything contained in the instrument creating the trust. 21 Power of trustee to invest A trustee may, unless expressly forbidden by the instrument creating the trust— (a) invest trust funds in any form of investment; and (b) at any time, vary an investment or realise an investment of trust funds and reinvest an amount resulting from the realisation in any form of investment. 22 Duties of trustee in relation to power of investment (1) 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 for other persons—exercise the care, diligence and skill a prudent person engaged in that profession, business or employment would exercise in managing the affairs of other persons; or (b) if the trustee's profession, business or employment is not, or does not include, acting as a trustee or investing money for other persons—exercise the care, diligence and skill a prudent person of business would exercise in managing the affairs of other persons. (2) A trustee must, in exercising a power of investment, comply with a provision of the instrument creating the trust that is binding on the trustee and requires the obtaining of a consent or approval or compliance with a direction for trust investments. (3) A trustee must, at least once in each year, review the performance, individually and as a whole, of trust investments. 23 Law and equity preserved (1) A rule or principle of law or equity imposing a duty on a trustee exercising a power of investment continues to apply except so far as it is inconsistent with this or another Act or the instrument creating the trust. (2) Without limiting the rules or principles mentioned in subsection (1), they include a rule or principle imposing— (a) a duty to exercise the powers of a trustee in the best interests of all present and future beneficiaries of the trust; and (b) a duty to invest trust funds in investments that are not speculative or hazardous; and (c) a duty to act impartially towards beneficiaries and between different classes of beneficiaries; and (d) a duty to obtain advice. (3) A rule or principle of law or equity relating to a provision in an instrument creating a trust that purports to exempt, limit the liability of, or indemnify a trustee in relation to a breach of trust, continues to apply. (4) If a trustee is under a duty to obtain advice, the reasonable cost of obtaining the advice is payable out of trust funds. 24 Matters to which trustee must have regard in exercising power of investment (1) Without limiting the matters 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, 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 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 at the end of, the term of the proposed investment; (k) the total value of the trust estate; (l) the effect of the proposed investment for the tax liability of the trust; (m) the likelihood of inflation affecting the value of the proposed investment or other trust property; (n) the cost (including commissions, fees, charges and duties payable) of making the proposed investment; (o) the results of a review of existing trust investments. (2) A trustee— (a) may obtain, and if obtained must 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; and (b) may pay out of trust funds the reasonable costs of obtaining the advice. 25 Powers of trustee in relation to securities (1) If securities of a corporation are subject to a trust, the trustee may agree to a scheme or arrangement— (a) for or arising out of the reconstruction, reduction of capital or liquidation of, or the issue of shares by, the corporation; or (b) for the sale of all or part of the property and undertaking of the corporation to another corporation; or (c) for the acquisition of securities of the corporation, or of control of the corporation, by another corporation; or (d) for the amalgamation of the corporation with another corporation; or (e) for the release, modification or variation of rights, privileges or liabilities attached to the securities, or any of them; in the same way 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 corporation that is party to the scheme or arrangement. (3) If a conditional or preferential right to subscribe for securities in a corporation is offered to a trustee for a holding in that corporation or another corporation, the trustee may, for 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 any provision of this part, 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) must be held as capital of the trust. (7) This section applies to securities whether acquired before or after the commencement of this section. 26 Investment in securities under RITS (1) A chose in action arising under RITS that entitles its holder to a security of a particular description (the underlying security) is, for this Act and the instrument creating a trust, taken to be the same in all respects as the underlying security. (2) The holding or acquisition by a trustee of a chose in action mentioned in subsection (1) is taken to be 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 relation to securities of a particular description and not in relation to particular securities. (4) In this section— RITS means the Reserve Bank of Australia's Information and Transfer System, as operating from time to time. 27 Power of trustee as to calls on shares A trustee may— (a) apply capital money subject to a trust in payment of calls on shares subject to the same trust; and (b) if the trustee is a trustee corporation, exercise the power conferred by paragraph (a) despite the shares on which the calls are made being shares in the trustee corporation. 28 Power to purchase dwelling house as residence for beneficiary (1) A trustee may— (a) purchase a dwelling house for a beneficiary to use as a residence; or (b) enter into an 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 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 the conditions consistent with the trust and the extent of the beneficiary's interest that the trustee considers appropriate. (4) The trustee may retain a dwelling house or an interest or rights in a dwelling house acquired under this section after the use of the dwelling house by the beneficiary has ended. (5) In this section— dwelling house includes— (a) a building or part of a building designed, or converted or capable of being converted, for use as a residence; and (b) amenities or facilities for use in association with the use of a dwelling house. 29 Power of trustee to retain investments A trustee is not liable for breach of trust only because the trustee continues to hold an investment that has stopped being an investment— (a) authorised by the instrument creating the trust; or (b) properly made by the trustee exercising a power of investment; or (c) made under this part as previously in force from time to time; or (d) authorised by another Act or the general law. 30 Loans and investments by trustees not breaches of trust in particular circumstances (1) If a trustee lends an amount on the security of property, the trustee is not in breach of trust only on the ground of the comparison of the amount of the loan with the value of the property at the time when the loan was made— (a) if it appears to the court that— (i) in making the loan, the trustee was acting on a report about the value of the property made by a person whom the trustee reasonably believed to be competent to give the report and whom the trustee instructed and employed independently of any owner of the property; and (ii) the amount of the loan was not more than two-thirds of the value of the property as stated in the report; and (iii) the loan was made in reliance on the report; or (b) if the trustee is insured by an entity prescribed under a regulation carrying on the business of insurance against all loss that may arise because of the default of the borrower. (2) If a trustee lends an amount on the security of leasehold property, the trustee is not in breach of trust only because the trustee dispensed, either completely or in part, with the production or investigation of the lessee's title when making the loan. (3) This section applies to transfers of existing securities as well as to new securities and to investments whether made before or after the commencement of this section. 30A Limitation of liability of trustee for loss on improper investments (1) If a trustee improperly lends trust money on a security that would have been a proper investment if the amount lent had been less than the actual amount lent— (a) the security is to be taken to be a proper investment in relation to the lesser amount; and (b) the trustee is only liable to make good the difference between the amount advanced and the smaller amount, with interest. (2) This section applies to investments whether made before or after the commencement of this section. 30B Court may take into account investment strategy etc. in action for breach of trust In a proceeding against a trustee for a breach of trust in relation to a duty under this part relating to the trustee's power of investment, the court may, when considering the question of the trustee's liability, take into account the following matters— (a) the nature and purpose of the trust; (b) whether the trustee had regard to the matters set out in section 24 so far as they are appropriate to the circumstances of the trust; (c) whether the trust investments have been made under an investment strategy formulated in accordance with the duty of a trustee under this part; (d) the extent the trustee acted on the independent and impartial advice of a person competent, or apparently competent, to give the advice. 30C Power of court to set off gains and losses arising from investment (1) The court may, when considering an action for breach of trust arising out of or in relation to an investment by a trustee where a loss has been or is expected to be sustained by the trust, set off all or part of the loss resulting from the investment against all or part of the gain resulting from any other investment whether in breach of trust or not. (2) The power of set off conferred by subsection (1) is in addition to any other power or entitlement to set off all or part of any loss against any property. Part 4 General powers of trustees 31 Application of part (1) Except where otherwise provided in this part, the provisions of this part shall apply whether or not a contrary intention is expressed in the instrument (if any) creating the trust. (2) The powers conferred on a trustee by this part are exercisable by the trustee notwithstanding any lapse of time, or that all the beneficiaries are absolutely entitled to the trust property and are not under a disability, except so far as such powers are expressly revoked by all such beneficiaries by notice in writing to the trustee. (3) A statutory trustee shall not, except with the sanction of the court, exercise any of the powers conferred by section 32(1), other than the power conferred by section 32(1)(d), or by section 45. 32 Powers to sell, exchange, partition, postpone, lease etc. (1) Subject to the provisions of this section, every trustee, in respect of any trust property, may— (a) sell the property or any part of the property; (b) dispose of the property by way of exchange for other property in the State of a like nature and a like or better tenure, or, where the property consists of an undivided share, concur in the partition of the property in which the share is held, and give or take any property by way of equality of exchange or partition; (c) postpone the sale, calling in, and conversion of any property that the trustee has a duty to sell, other than property that is of a wasting, speculative or reversionary nature; (d) let or sublet the property at a reasonable rent for any term not exceeding 1 year, or from year to year, or for a weekly, monthly, or other like tenancy or at will; or enter into any sharefarming agreement with respect to the property on reasonable terms for any period not exceeding 1 year; and renew any such lease or tenancy or sharefarming agreement; (e) grant a lease or sublease of the property for any term not exceeding— (i) in the case of a building lease—30 years; or (ii) in the case of any other lease (including a mining lease)—21 years; to take effect in possession within 1 year next after the date of the grant of the lease or sublease at a reasonable rent, with or without a fine, premium or foregift, any of which if taken shall be deemed to be part of and an accretion to the rental, and shall, as between the persons beneficially entitled to the rental, be considered as accruing from day to day and be apportioned over the term of the lease or sublease; (f) at any time during the currency of a lease of the property, reduce the rent or otherwise vary or modify the terms thereof, or accept, or concur or join with any other person in accepting, the surrender of any lease. (2) Any trustee may, on such conditions as the trustee thinks proper, rescind, cancel, modify or vary any contract or agreement for the sale and purchase of any land, or agree to do so, or compromise with or make allowances to any person with whom such a contract or agreement has been made, or who is the assignee thereof in respect of any unpaid purchase money secured on mortgage or otherwise; and without prejudice to the generality of this subsection, a trustee may, by writing, waive or vary any right exercisable by the trustee that arises from a failure to comply at or within the proper time with any term of any agreement for sale, mortgage, lease, or other contract. (3) In exercising any power of leasing or subleasing conferred by this section or by the instrument (if any) creating the trust, a trustee may— (a) grant to the lessee or sublessee a right of renewal for 1 or more terms, at a rent to be fixed or made ascertainable in a manner specified in the original lease or the original sublease, but so that the aggregate duration of the original and of the renewal terms shall not exceed the maximum single term that could be granted in the exercise of the power; or (b) grant a lease with an optional or compulsory purchasing clause; or (c) grant to the lessee or sublessee a right to claim compensation for improvements made or to be made by the lessee or sublessee in, upon or about the property which is leased or subleased. (4) Where there is a power (whether statutory or otherwise) to postpone the sale of any land or authorised investment that a trustee has a duty to sell by reason only of a trust or direction for sale, then, subject to any express direction to the contrary in the instrument (if any) creating the trust, the trustee shall not be in any way liable merely for postponing the sale in the exercise of the trustee's discretion for an indefinite and unlimited period, whether or not that period exceeds the period during which the trust or direction for sale remains valid; nor shall a purchaser of the land or authorised investment be in any case concerned with any directions respecting a sale; but nothing in this subsection applies to any property of a wasting or speculative nature. 33 Miscellaneous powers in respect of property (1) Every trustee, in respect of any trust property, may— (a) expend money (including capital money) subject to the same trusts for the repair, maintenance, upkeep or renovation of the property, whether or not the work is necessary for the purpose of salvage of the property; and (b) expend money (including capital money) subject to the same trusts, but not, except with the sanction of the court, exceeding $10,000 in the improvement or development of the property; and (c) expend money (including capital money) subject to the same trusts, in payment of calls on shares subject to those trusts; and (d) pay out of money (including capital money) subject to the same trusts any rates, premiums, taxes, assessments, insurance premiums and other outgoings in respect of the property; and (e) where the property is land—subdivide or apply for approval to subdivide the land into blocks and for that purpose construct and dedicate all such roads, streets, access ways, service lanes and footpaths and make all such reserves, and do all such other things and pay all such money (including capital money), as the trustee thinks necessary or as are required by, or under, any Act or local law relating to subdivisions; and (f) pay out of money (including capital money) subject to the same trusts such sum as the trustee thinks reasonable by way of expenditure upon or contribution toward the construction and maintenance of such roads, streets, access ways, service lanes, and footpaths, and such sewerage, water, electricity, drainage and other works as are in the opinion of the trustee likely to be beneficial to the property, notwithstanding that they are intended to be constructed wholly or partly on land not subject to the same trusts and dedicate land subject to the same trusts as roads, streets, accessways, service lanes and footpaths where in the trustee's opinion it is likely to be beneficial to the property; and (g) subject to this Act and to any direction of the court, apportion any payment or expenditure made in pursuance of paragraphs (a) to (f) between capital and income or otherwise among the persons entitled thereto in such manner as the trustee considers equitable, with power, where the whole or part of the payment or expenditure is made out of capital moneys, to recoup capital from subsequent income, if that course would be equitable in all the circumstances; and (h) grant easements and profits a prendre and enter into party wall agreements and agreements that relate to fencing, and execute all necessary documents to give effect thereto; and (i) as mortgagor or mortgagee, agree to the renewal, extension or variation of the mortgage for such period and on such terms and conditions as the trustee thinks fit; but— (i) the powers conferred by this paragraph may be exercised by a trustee as mortgagor for the purpose of raising additional money on the security of a mortgage of any property, where the trustee would have power under section 45 to raise money by a mortgage of the property, and not otherwise; and (ii) nothing in this paragraph authorises any trustee to advance money on the security of any mortgage that would not be an authorised investment in respect of the amount advanced; and (j) make such inquiries, by way of advertisement or otherwise, as the trustee thinks necessary for the purpose of ascertaining the next of kin or beneficiaries; and (k) where the property includes a life policy and there is no money or insufficient money available for the payment of premiums on the policy, surrender the policy for money or accept instead of the policy a fully paid-up policy or vary the terms of the policy in such manner as the trustee thinks fit; and (l) appropriate any part of the property in or towards satisfaction of any legacy payable thereout or in or towards satisfaction of any share of the trust property (whether settled, contingent or absolute) to which any person is entitled, and for that purpose value the whole or any part of the property in accordance with section 51; but— (i) the appropriation shall not be made so as to affect adversely any specific gift; and (ii) before any such appropriation is effectual, notice thereof shall be given to all persons not under a disability who are interested in the appropriation, and to the parent or guardian of any infant who is interested in the appropriation, and to the person having the care and management of the estate of any person who is not of full mental capacity, and any such person may within 1 month after receipt of the notice or, upon the person's application to the court within that month, within such extended period as the court may allow, apply to the court to vary the appropriation, and the appropriation shall be conclusive save as varied by the court; and (m) where provision is made in any instrument creating a trust for payment of an annuity or other periodic payment, and notwithst