Western Australia: Trustees Act 1962 (WA)

Western Australia Trustees Act 1962 Western Australia Trustees Act 1962 Contents Part I — Preliminary 1. Short title 2 2. Commencement 2 4. Repeals 2 5. Application 2 6. Terms used 4 Part II — Appointment and discharge of trustees 7. New trustees, appointment of 8 8. New trustee, protection for people dealing with in good faith 11 9. Trustee may retire without replacement in some cases 11 10. Trust property, vesting of in new or continuing trustees 12 11. Corporation may act as trustee in some cases 14 12. Renouncing probate etc., effect of 14 13. Trustee corporation obtaining probate etc., effect of 15 14. Advisory trustees, appointment and functions of 16 15. Custodian trustees, appointment and functions of 17 Part III — Investments 16. Application of Part 20 17. Trust funds, investment of 20 18. Investment power of trustees, exercise of 20 19. Investment power of trustees, rules of law and equity apply 21 20. Investment by trustee, matters to be considered 22 21. Company shares etc. held in trust, trustees' powers as to 23 22. Choses in action under RITS system, presumptions as to 24 23. Calls on shares, trustees' powers as to 25 24. Residence for beneficiary, power to invest in etc. 25 25. Retained authorised investments, no liability for 26 26. Loans secured against property, trustees' liability for 26 26A. Improper loans, trustees' limited liability for 27 26B. Breach of trust as to investments, factors to be considered by Court 27 26C. Breach of trust as to investments, Court may set off losses against gains 28 26D. Housing loans, trustees' liability for 28 26E. Authorised trustee investments, meaning of 31 Part IV — General powers of trustees 27. Property, powers to sell, lease, exchange, etc. 32 28. Trust or power to sell property, duration of 34 28A. Option to purchase land, trustees' liability for grant of 35 29. Rule against perpetuities, application of 35 30. Property, miscellaneous powers as to 36 31. Trust or power to sell, ancillary powers to 41 32. Depreciatory conditions of sale, effect of 42 33. Land may be sold and proceeds secured by mortgage 42 34. Property may be sold on terms of deferred payment 43 35. Onerous leases or property may be surrendered 44 36. Leases may be renewed 45 37. Equity of redemption may be purchased instead of foreclosing 45 38. Property may be sold after right of redemption barred 46 39. Equity of redemption may be released in discharge of mortgage debt 46 40. Trustee as mortgagee in possession, application of income by 47 41. Receipts may be given 49 42. Property, debts, etc., miscellaneous powers as to 49 43. Capital money may be raised by sale, mortgage, etc. of trust property 50 44. Purchasers etc. dealing with trustees, protection for 50 45. Trustees dying, devolution of powers or trusts 50 46. Insuring trust property 51 47. Insurance money, application of 51 48. Trust's documents may be put in safe custody 52 49. Reversionary interests, powers as to 53 50. Valuation of trust property, powers as to 54 51. Trust's accounts, audit of 54 52. Co-owners, power to act in conjunction with 55 53. Agents, attorneys, etc., power to employ 55 54. Delegation of trustees' powers during absence from State or incapacity 57 55. Business, trade, etc. of deceased, power to carry on 59 56. Business, power to convert into, or sell to, a company 61 57. Trustee may sue himself in a different capacity 61 Part V — Maintenance, advancement and protective trusts 58. Infant beneficiary, application of income until 18 62 59. Capital may be applied for maintenance, education, etc. 64 60. Advances for maintenance etc. may be made conditionally 65 61. Protective trusts, rules as to 66 Part VI — Indemnities and protection of trustees, etc. 62. Leases etc., trustees' liability under 68 63. Deceased estate, advertising for claims against, trustees' protection 69 64. Claims etc., procedure for barring 71 65. Deceased estate, claims made after distribution of, tracing, following assets 72 66. Unknown beneficiaries, advertising for, distribution of shares of 76 67. Service of notices etc. under s. 30(1)(k), 64 and 66 79 68. Trustee of more than one trust, protection as to notice 80 69. Powers of attorney, protection for trustees relying on 80 70. Trustees liable for own defaults etc. only 80 71. Trustees' expenses, reimbursement out of trust property 81 72. Chattels, bequest for life etc. or interest in, trustees' protection 81 73. Chattels bequeathed to infant, dealing with 82 74. Shares, trustees' liability for calls on after transfer of 82 75. Breach of trust, Court may relieve trustee from personal liability for 82 76. Breach of trust, Court may order beneficiary to give indemnity for 83 Part VII — Further powers of the Court Division 1 — Appointment of new trustees 77. New trustees, Court may appoint 84 Division 2 — Vesting orders 78. Vesting orders, when Court may make 85 79. Vesting orders, terms of etc. 86 80. Contingent rights of unborn persons, orders as to 87 81. Mortgagee under a disability, orders as to 87 82. Infant's beneficial interest, orders as to 87 83. Order for sale or mortgage of land, effect of etc. 88 84. Orders for conveyance of land etc., consequential declarations and orders as to 88 85. Vesting orders, effect of 89 86. Vested stock etc., directions as to transfer of etc. 90 87. Person may be appointed to convey instead of vesting order 91 88. Charities etc., vesting property in 91 Division 3 — Jurisdiction to make other orders 89. Additional powers, Court may confer on trustee etc. 91 90. Varying or revoking certain trusts, Court's powers as to 92 91. Periodic payments, Court may vary amount of 94 92. Directions, trustee may ask Court for 94 93. Applications to Court, who may make 94 94. Review of trustee's acts by Court etc. 95 95. Trustee acting under Court's direction, protection of 95 96. Absence etc. of parties, Court may proceed in 96 97. Costs of court proceedings, orders as to 97 98. Trustees' remuneration 97 99. Payment into Court by trustees 98 Part VIII — Miscellaneous 100. Indemnity to persons acting under this Act etc. 99 101. Bankers acting on trustees' authority, protection of 99 102. Non‑charitable and invalid purposes, inclusion does not invalidate a trust 100 103. Interest bearing securities, apportionment of interest on sale etc. 101 104. Residuary estate of deceased, application of income from 102 105. Residuary estate of deceased, application of income pending sale etc. 103 106. Annuities etc., to be applied as income in some cases 104 107. Trustees' remuneration deemed testamentary expenses 104 108. Missing beneficiaries etc., costs of inquiries as to 105 109. Life tenant etc. to have powers of a trustee in certain cases 105 110. Regulations 105 First Schedule — Acts repealed Second Schedule — Form of notice by advertisement Notes Compilation table 108 Defined terms Western Australia Trustees Act 1962 An Act to consolidate and amend the law relating to trustees. Part I — Preliminary 1. Short title This Act may be cited as the Trustees Act 1962 1. 2. Commencement This Act shall come into operation on 1 January 1963. [3. Deleted: No. 1 of 1997 s. 4.] 4. Repeals (1) The Acts specified in the First Schedule are hereby repealed to the extent mentioned in that Schedule. (2) Without limiting the provisions of the Interpretation Act 1918 2, the repeal of any enactment by this Act does not affect any document made or any thing whatsoever done under the enactment so repealed or under any corresponding former enactment, and every such document or thing, so far as it is subsisting or in force at the time of the repeal and could have been made or done under this Act, shall continue and have effect as if it had been made or done under the corresponding provision of this Act and as if that provision had been in force when the document was made or the thing was done. 5. Application (1) Except where otherwise expressly provided, this Act applies to every trust, as defined in section 6, whether constituted or created before or after the commencement of this Act. (1a) Except where otherwise expressly provided, this Act as amended by the Trustees Amendment Act 1987 applies to every trust, as defined in section 6, whether constituted or created before or after the commencement of the Trustees Amendment Act 1987 1. (2) The powers conferred by or under this Act on a trustee who is not a corporation 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 stated, apply if and so far only as a contrary intention is not expressed in the instrument (if any) creating the trust, and have effect subject to the terms of that instrument. (3) The powers conferred by or under this Act on a trustee that is a corporation are in addition to the powers given by the instrument (if any) creating the trust and to the powers given by or under the Act or any instrument by or under which the corporation is constituted and any other Act; but the powers conferred on the trustee by this Act, unless otherwise stated — (a) 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; and (b) apply if and so far only as a contrary intention is not expressed in the Act or any instrument by or under which the corporation is constituted or any other Act, and have effect subject to the terms of every such Act and instrument; but nothing in this paragraph affects any Act that applies to every trustee, whether a corporation or not. (4) This Act does not affect the legality or validity of anything done before the commencement of this Act, except as in this Act expressly provided. (5) This Act binds the Crown. [Section 5 amended: No. 84 of 1987 s. 4.] 6. Terms used (1) In this Act, unless the context otherwise requires, — bank means — (a) an ADI (authorised deposit‑taking institution) as defined in section 5 of the Banking Act 1959 of the Commonwealth; or (b) a bank constituted by a law of a State, a Territory or the Commonwealth; bankrupt includes insolvent; benefit, in relation to any person, includes insurance on the life of that person; 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; and to convey has a corresponding meaning; Court means the Supreme Court of Western Australia 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, and derivatives of "execute" have corresponding meanings; income includes rents and profits other than profits that under any rule of law are in the nature of capital; instrument includes an Act of Parliament; land includes — (a) land of any tenure; 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) any other corporeal hereditament; and (e) a rent and other incorporeal hereditaments; and (f) 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 that under an intestacy might at common law have devolved 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; and to pay has a corresponding meaning; person includes a trustee corporation and a corporation sole, and also a body of persons, whether corporate or unincorporate; personal representative means the executor, original or by representation, or an administrator for the time being of the estate of a deceased person; 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; property includes real and personal property and any estate, share, and interest in any property, real or personal, and any debt, and any thing in action, and any other right or interest, whether in possession or not; 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; right includes an estate or interest; sale includes an exchange; and to sell has a corresponding meaning; securities includes stock, funds, shares and promissory notes; and securities payable to bearer includes securities transferable by delivery or by delivery and endorsement; 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 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; and trustee has a corresponding meaning and includes a trustee corporation and every other corporation in which property subject to a trust is vested and every 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 of 1892 3 and, where the context admits, includes a personal representative; and new trustee includes an additional trustee; trustee corporation means the Public Trustee in and for Western Australia or any trustee company under the Trustee Companies Act 1987; trust for sale, in relation to land, means an immediate binding trust for sale, whether or not exercisable at the request or with the consent of any person, and with or without power at discretion to postpone the sale; and trustee for sale means the person (including a personal representative) holding land on trust for sale. (2) 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. (3) For the purposes of this Act, a person shall be deemed to be under a disability while he is not of full age or of full mental capacity. [Section 6 amended: No. 84 of 1987 s. 5; No. 1 of 1997 s. 5; No. 26 of 1999 s. 108; No. 39 of 2011 s. 18.] Part II — Appointment and discharge of trustees 7. New trustees, appointment of (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 one 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 him; 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 in liquidation or is 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 representatives 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) where the number of trustees originally appointed was less than 4, 2 or more trustees may be appointed in place of a trustee being replaced under this section, but so that after any appointment the number of trustees shall not exceed 4; 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 one of the separate set of trustees; or if only one trustee were originally appointed, then one separate trustee may be so appointed for the part of the trust first in this paragraph mentioned; and (c) 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 2 trustees were originally appointed; but, except where only one trustee was originally appointed, a trustee shall not be discharged under this section unless there will remain either a trustee corporation or at least 2 individuals to act as trustees to perform the trust; and (d) any assurance or thing requisite for vesting the trust property, or any part thereof, 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 he 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 executor for the time being, whether original or by representation, of that surviving or continuing trustee who has proved the will of his testator or by the administrator for the time being of that trustee without the concurrence of any executor who has renounced or has not proved; but a sole or last surviving executor intending to renounce has, or all the executors where they all intend to renounce have, and shall be deemed always to have had power, at any time before renouncing probate, to exercise the power of appointment given by this section or by any similar previous enactment if willing to act for that purpose and without thereby accepting the office of executor. (5) Where, in the case of any trust, there are not more than 3 trustees (none of them being a trustee corporation), 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 on any appointment of additional trustees under this subsection the number of trustees shall not be increased beyond 4, where 4 or fewer trustees were originally appointed, or beyond the original number of trustees, where more than 4 were originally appointed. (6) Every new trustee appointed under this section has the same powers, authorities, and discretions and may in every respect act, as if he 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 him. (7) The provisions of this section that 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, the term trustee does not include a personal representative as such. 8. New trustee, protection for people dealing with in good faith (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, or the circumstances under which the vacancy occurred. (2) Any appointment of a new trustee depending on such a statement as is mentioned in subsection (1) and any vesting declaration, express or implied, consequent on that appointment, in favour of any subsequent purchaser in good faith, is valid. (3) The protection afforded to a purchaser by this section extends to the Commissioner of Titles, Registrar of Titles 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. 9. Trustee may retire without replacement in some cases (1) This section applies where a trustee declares by writing that he is desirous of being discharged from all or any of the trusts reposed in him, and after his discharge there will be a trustee corporation or at least 2 individuals to act as trustees to perform 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 he has declared he desires to be discharged; and (b) subject to subsection (3), shall, by the writing by which consent is given to his discharge, be discharged from the trusts under this Act, without any new trustee being appointed in his place. (3) Any conveyance requisite for vesting in the continuing trustees alone the property subject to the trusts from which the retiring trustee is to be discharged shall be executed or done; and in respect of any part of the trust property for the vesting of which in the continuing trustees a conveyance is necessary, the retiring trustee shall not be discharged until that part is duly conveyed. (4) 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 provisions of that instrument. 10. Trust property, vesting of in new or continuing trustees (1) Where a new trustee is appointed, the execution of the instrument of appointment vests, subject to the provisions of this section, the trust property for which the new trustee is appointed in the persons who become and are the trustees, as joint tenants for the purposes of the trust, without any conveyance. (2) In any case to which section 9 applies, the execution of the instrument of discharge vests, subject to the provisions of this section, all the property subject to the trusts from which the retiring trustee has declared that he is desirous of being discharged in the continuing trustees alone, as joint tenants for the purposes of the trust, without any conveyance. (3) Subsections (1) and (2) do not apply — (a) to land conveyed by way of mortgage for securing money subject to the trust, except land conveyed on trust for securing debentures or debenture stock; or (b) to any property, including property subject to the operation of the Transfer of Land Act 1893, which is transferable only in books kept by a company or other body or in manner directed by or under an Act of Parliament. (4) In the case of any property referred to in subsection (3), the execution of the instrument of appointment of a new trustee or of the instrument of discharge, as the case may be, for the purposes of the trust vests in the persons who become and are the trustees or in the continuing trustee, as the case may be, the right to call for a conveyance of the property and to sue for and recover the property. (5) For purposes of registration — (a) in the case of an instrument of appointment of a new trustee, the appointor shall be deemed the conveying party and the conveyance shall be deemed to be made by him under a power conferred by this Act; and (b) in the case of an instrument of discharge, the retiring trustee and any person consenting in such instrument to his discharge shall be deemed the conveying parties and the conveyance shall be deemed to be made by them under a power conferred by this Act. (6) In this section — continuing trustees and retiring trustees have the same meaning as in section 9(3); and instrument of discharge means an instrument containing the consent or consents referred to in section 9(2) and executed in a case to which section 9 applies. (7) For the purposes of a covenant against assignments, or against assignment without licence or consent, contained in any lease, underlease or agreement for a lease or underlease, a vesting under this section shall be deemed not to be an assignment. 11. Corporation may act as trustee in some cases (1) Any trustee corporation may be appointed and may lawfully act as the sole trustee in respect of any trust, notwithstanding that the instrument creating the trust may provide for or direct the appointment of 2 or more trustees; and nothing in this subsection prevents any other corporation from acting as a trustee in accordance with any authority vested in it in that behalf, whether by its memorandum of association or otherwise, but a corporation shall not administer the estate of any deceased person unless expressly authorised to do so by any Act. (2) This section does not permit the appointment of a corporation as trustee if the instrument creating the trust forbids the appointment of the corporation. (3) This section extends to any trust or instrument and to any appointment of trustees, whether created or made before or after the commencement of this Act. 12. Renouncing probate etc., effect of (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 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 him, 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. 13. Trustee corporation obtaining probate etc., effect of (1) Where a trustee corporation has, pursuant to the provisions of any Act, obtained a grant of probate of a will or letters of administration with the will annexed, upon the authority of any person or the majority of persons appointed by the will of any deceased person to be both executor and trustee thereof, then, by virtue of the grant and without further appointment, the trustee corporation shall be deemed to be appointed trustee of the will in the place of the person or persons by whose authority the trustee corporation applied for the grant. (2) Where the Court appoints a trustee corporation administrator in the place of a person who, by the will, was appointed both executor and trustee thereof, or in the place of a person who has obtained letters of administration with the will annexed and who is both administrator and trustee of that will, then the trustee corporation shall, by virtue of such appointment and without further appointment, be deemed to be appointed trustee of the will in the place of that executor or administrator. (3) Where, pursuant to section 12(4) of the Public Trustee Act 1941, the Court, upon the application of any executor or administrator being also trustee of the will of the person whose estate he is administering, by order transfers to the Public Trustee the estate of the deceased person for administration, then the Public Trustee shall, by virtue of that order and without further appointment, be deemed to be appointed trustee of the will in the place of that executor or administrator. 14. Advisory trustees, appointment and functions of (1) In the administration of any trust property any trustee may act, to the extent in this section provided, with an advisory trustee or advisory trustees. (2) An advisory trustee or advisory trustees may be appointed in respect of all or any part of the trust property — (a) by the testator, settlor or other creator of the trust, in the instrument creating the trust; or (b) by order of the Court made on the application of any beneficiary or trustee or of any person on whose application the Court would have power to appoint a new trustee; or (c) by any person having power to appoint a new trustee. (3) Where a trustee acts with an advisory trustee or advisory trustees, the trust property shall be vested in the firstmentioned trustee (in this section referred to as the responsible trustee), who shall have the sole management and administration of the estate and its trusts as fully and effectually as if he were the sole trustee, and in any such case — (a) the responsible trustee may consult the advisory trustees on any matter relating to the trusts or the estate; and (b) the advisory trustees may advise the responsible trustee on any matter relating to the trusts or the estate, but shall not be trustees in respect of the trust; and (c) where any advice or direction is tendered or given by the advisory trustees, the responsible trustee may follow and act on that advice or direction without being liable for anything done or omitted by him by reason of his following that advice or direction; and (d) where the responsible trustee is of opinion that any advice or direction of an advisory trustee conflicts with the trusts or any rule of law, or exposes him to any liability, or is otherwise objectionable, he may apply to the Court for directions in the matter, and any decision and order therein shall be final and shall bind the responsible trustee and the advisory trustee, and the Court may make such order as to costs as appears proper; but nothing in this section makes it necessary for the responsible trustee to apply to the Court for any such directions; and (e) where advisory trustees are not unanimous, and tender to the responsible trustee conflicting advice or directions, the responsible trustee may apply to the Court for directions in like manner and with like effect as provided by paragraph (d). (4) A person dealing with the responsible trustee in relation to any trust property shall not be concerned to inquire as to the concurrence or otherwise of the advisory trustees or be affected by notice of the fact that the advisory trustees have not concurred. (5) Subject to the provisions of the instrument (if any) creating the trust and to any order made by the Court, where remuneration is payable to the trustee of any trust property, remuneration or commission may be paid to both the responsible trustee and the advisory trustees, and subject as aforesaid the amount thereof shall be — (a) as regards the responsible trustee, where the responsible trustee is the Public Trustee, as prescribed under the Public Trustee Act 1941; and (b) in any other case, as may be determined by the responsible trustee if he is entitled to fix his own remuneration or by the Court. 15. Custodian trustees, appointment and functions of (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 (in this Act called 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 one, 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 the 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. (4) Subject to the provisions of the instrument (if any) creating the trust and to any order made by the Court, where remuneration or commission is payable to the trustee of any trust property, remuneration may be paid to both the custodian trustee and the managing trustees, and subject as aforesaid the amount thereof shall be — (a) as regards the custodian trustee, where the custodian trustee is the Public Trustee, as prescribed under the Public Trustee Act 1941; and (b) in any other case, as may be determined by the managing trustees if they are entitled to fix their own remuneration, or by the Court. Part III — Investments [Heading inserted: No. 1 of 1997 s. 6.] [15A. Deleted: No. 1 of 1997 s. 6.] 16. Application of Part This Part applies to trusts created before or after the coming into operation of the Trustees Amendment Act 1997 1. [Section 16 inserted: No. 1 of 1997 s. 6.] [16A-16D. Deleted: No. 1 of 1997 s. 6.] 17. Trust funds, investment of A trustee may, unless expressly prohibited by the instrument creating the trust — (a) invest trust funds in any form of investment; and (b) at any time, vary an investment or realize an investment of trust funds and reinvest money resulting from the realization in any form of investment. [Section 17 inserted: No. 1 of 1997 s. 6.] 18. Investment power of trustees, exercise of (1) Subject to the instrument creating the trust, a trustee shall, 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. (2) A trustee shall exercise a power of investment in accordance with any provision of the instrument creating the trust that is binding on the trustee and requires the obtaining of any consent or approval or compliance with any direction with respect to trust investments. (3) Subject to the instrument creating the trust, a trustee must, at least once in each year, review the performance (individually and as a whole) of trust investments. [Section 18 inserted: No. 1 of 1997 s. 6.] 19. Investment power of trustees, rules of law and equity apply (1) Any rules and principles of law or equity that impose a duty on a trustee exercising a power of investment including, without limiting the generality of those duties, rules and principles that impose — (a) a duty to exercise the power of a trust in the best interests of all present and future beneficiaries of the trust; or (b) a duty to invest trust funds in investments that are not speculative or hazardous; or (c) a duty to act impartially towards beneficiaries and between different classes of beneficiaries; or (d) a duty to take advice, continue to apply except to the extent that they are inconsistent with this or any other Act or the instrument creating the trust. (2) 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. (3) If a trustee is under a duty to take advice, the reasonable costs of obtaining the advice are payable out of trust funds. [Section 19 inserted: No. 1 of 1997 s. 6.] 20. Investment by trustee, matters to be considered (1) Without limiting the matters that a trustee may take into account when exercising a power of investment, a trustee shall, so far as they are appropriate to the circumstances of the trust, have regard to — (a) the purposes of the trust and the needs and circumstances of the beneficiaries; and (b) the desirability of diversifying trust investments; and (c) the nature of and risk associated with existing trust investments and other trust property; and (d) the need to maintain the real value of the capital or income of the trust; and (e) the risk of capital or income loss or depreciation; and (f) the potential for capital appreciation; and (g) the likely income return and the timing of income return; and (h) the length of the term of the proposed investment; and (i) the probable duration of the trust; and (j) the liquidity and marketability of the proposed investment during, and on the determination of, the term of the proposed investment; and (k) the aggregate value of the trust estate; and (l) the effect of the proposed investment in relation to the tax liability of the trust; and (m) the likelihood of inflation affecting the value of the proposed investment or other trust property; and (n) the costs (including commissions, fees, charges and duties payable) of making the proposed investment; and (o) the results of a review of existing trust investments. (2) A trustee may — (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; and (b) pay out of trust funds the reasonable costs of obtaining the advice. [Section 20 inserted: No. 1 of 1997 s. 6.] 21. Company shares etc. held in trust, trustees' powers as to (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, or in addition to, the securities subject to the trust any 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 the benefit of the right, or the title to the right, to a person, including a beneficiary under the trust, 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 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) shall be held as capital of the trust. (7) This section applies in relation to securities acquired before or after the coming into operation of the Trustees Amendment Act 1997 1 but subject to the instrument creating the trust. [Section 21 inserted: No. 1 of 1997 s. 6.] 22. Choses in action under RITS system, presumptions as to (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 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 referred to in subsection (1) shall 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 referred to in subsection (1) 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 coming into operation of the Trustees Amendment Act 1997 1 but applies only to the extent that the trust instrument creating the trust does not expressly prohibit its application. (5) In this section — RITS system means the Reserve Bank Information and Transfer System operated by the Reserve Bank of Australia, as operating from time to time. [Section 22 inserted: No. 1 of 1997 s. 6.] 23. Calls on shares, trustees' powers as to Subject to the instrument creating the trust — (a) a trustee may 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, it may exercise the powers conferred by this section despite the shares on which the calls are made being shares in the trustee corporation. [Section 23 inserted: No. 1 of 1997 s. 6.] 24. Residence for beneficiary, power to invest in etc. (1) Subject to the instrument creating the trust, a trustee may — (a) invest any trust funds in the purchase of 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 creating the trust, a trustee may, if to do so would not unfairly prejudice the interests of the 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 interest of the beneficiary 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 connection with the use of a dwelling‑house. [Section 24 inserted: No. 1 of 1997 s. 6.] 25. Retained authorised investments, no liability for A trustee is not liable for breach of trust by reason only of retaining an investment that has ceased to be — (a) an investment authorised by the instrument creating the trust; or (b) an investment properly made by the trustee exercising a power of investment; or (c) an investment made under this Act or a corresponding previous enactment; or (d) an investment authorised by any other Act or the general law. [Section 25 inserted: No. 1 of 1997 s. 6.] 26. Loans secured against property, trustees' liability for (1) If a trustee lends money on the security of a property, the trustee is not liable for breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made if it appears to the Court — (a) that, in making the loan, the trustee was acting on a report as to the value of the property made by a person whom the trustee reasonably believed to be competent to give such a report and whom the trustee instructed and employed independently of any owner of the property; and (b) that the amount of the loan did not exceed two‑thirds of the value of the property as stated in the report; and (c) that the loan was made in reliance on the report. (2) This section applies to transfers of existing securities as well as to new securities and to investments made before or after the coming into operation of the Trustees Amendment Act 1997 1. [Section 26 inserted: No. 1 of 1997 s. 6.] 26A. Improper loans, trustees' limited liability for (1) If a trustee improperly advances trust money on a security that would at the time of the investment have been a proper investment if the sum advanced had been smaller than the actual sum advanced, the security shall be taken to be a proper investment in respect of the smaller sum, and the trustee is only liable to make good the difference between the sum advanced and the smaller sum, with interest. (2) This section applies to investments made before or after the coming into operation of the Trustees Amendment Act 1997 1. [Section 26A inserted: No. 1 of 1997 s. 6.] 26B. Breach of trust as to investments, factors to be considered by Court In proceedings against a trustee for breach of trust in respect of 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 — (a) the nature and purpose of the trust; and (b) whether the trustee had regard to the matters set out in section 20 so far as is appropriate to the circumstances of the trust; and (c) whether the trust investments have been made pursuant to an investment strategy formulated in accordance with the duty of a trustee under this Part; and (d) the extent the trustee acted on the independent and impartial advice of a person competent (or apparently competent) to give the advice. [Section 26B inserted: No. 1 of 1997 s. 6.] 26C. Breach of trust as to investments, Court may set off losses against gains (1) The Court may, when considering an action for breach of trust arising out of or in respect of 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 that 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. [Section 26C inserted: No. 1 of 1997 s. 6.] 26D. Housing loans, trustees' liability for (1) If a trustee lends money on a real security in accordance with the provisions of this Act, or had made such a loan in accordance with the provisions of this Act as in force immediately before the coming into operation of the Trustees Amendment Act 1997 1, the trustee is not chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property on which the loan is secured if — (a) the trustee was not expressly forbidden by the instrument (if any) creating the trust to lend money on a real security; and (b) the loan was a housing loan; and (c) the loan is secured by a contract of insurance in the prescribed form entered into with an authorised insurer. (2) The Minister may by notice published in the Gazette — (a) declare a corporation that is lawfully carrying on the business of insuring mortgages in Western Australia to be an authorised insurer for the purposes of this section; and (b) revoke a declaration made under paragraph (a). (3) The Minister may by notice published in the Gazette — (a) specify terms and conditions subject to which an authorised insurer is authorised to enter into contracts of insurance for the purpose of this section; and (b) vary or revoke any such terms and conditions. (4) An authorised insurer who fails to comply with any terms or conditions subject to which it is authorised to enter into contracts of insurance for the purpose of this section shall be guilty of an offence. Penalty: $5 000. (5) In this section — authorised insurer means a corporation that has been declared to be an authorised insurer under subsection (2); dwelling‑house includes — (a) any building that consists, or any buildings that consist, in whole or in substantial part, of residential accommodation, whether constituting a single unit of accommodation or 2 or more such units; and (b) any residential accommodation of a kind commonly known as a flat or home unit; and (c) appurtenances, outbuildings, fences and permanent provision for lighting, water supply, drainage and sewerage provided in connection with the dwelling‑house; housing loan means a loan — (a) made for any one or more of the following purposes, that is to say, of enabling the borrower — (i) to acquire a prescribed interest in land and construct, or complete the construction of, a dwelling‑house on the land; or (ii) to construct a dwelling‑house, or complete the construction of a dwelling‑house, on land in which the borrower has a prescribed interest; or (iii) to acquire a prescribed interest in land on which there is a dwelling­‑house; or (iv) to alter, improve or extend a dwelling‑house constructed on land in which the borrower has a prescribed interest; or (v) to meet expenses in respect of the provision of improvement of roads, kerbing, guttering or footpaths in connection with land in which the borrower has a prescribed interest; or (vi) to discharge a mortgage, charge or other encumbrance over land in which the borrower has a prescribed interest, being land on which a dwelling‑house is being constructed; and (b) the repayment of which is secured by a security over the interest of the borrower in the land, and, where the lender requires the borrower to meet the cost of the premium in respect of a contract of insurance entered into in respect of the loan, includes moneys advanced by the lender to enable the borrower to meet that cost, being moneys the repayment of which is secured by a security over the interest of the borrower in the land; prescribed interest in land means — (a) an estate in fee simple; or (b) an interest as lessee under a lease in perpetuity from the Crown in right of the Commonwealth or the State of Western Australia; or (c) an interest as lessee under a lease for a term of years from the Crown in right of the Commonwealth or the State of Western Australia or from the owner of an estate in fee simple if the authorised insurer is satisfied that the term, covenants and conditions of the lease give reasonable security of tenure to the lessee for a substantial period. [Section 26D inserted: No. 1 of 1997 s. 6.] 26E. Authorised trustee investments, meaning of Any provision in an instrument (whether or not creating a trust) that empowers or requires a person to invest money in investments authorised for the investment of trust funds or moneys is to be read as if it empowered or required that person to invest that money according to the provisions of this Part relating to the investment of trust funds. [Section 26E inserted: No. 1 of 1997 s. 6.] Part IV — General powers of trustees 27. Property, powers to sell, lease, exchange, etc. (1) Subject to the provisions of this section, every trustee, in respect of any property for the time being vested in him, may — (a) sell the property; or (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 vested in him 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; or (c) postpone the sale, calling in, and conversion of any property that he has a duty to sell, whether or not it is of a wasting, speculative or reversionary nature; but, in the case of property of a wasting or speculative nature, for no longer than is reasonably necessary to permit its prudent realisation; or (d) let or sublet the property at a reasonable rent for any term not exceeding one year, or from year to year, or for a weekly, monthly or other like tenancy or at will; or (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), 10 years; to take effect in possession within one 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; or (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 he 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 him 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 one 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 him in, upon or about the property which is leased or subleased. (4) Where the property subject to a trust includes land, the trustee shall exercise the power conferred by this section to sell the land, if so required in writing by the person or all the persons at that time beneficially entitled to an interest in possession under the trust of the land. (5) Where there is a power (statutory or otherwise) to postpone the sale of any land or 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 liable in any way merely for postponing the sale in the exercise of his 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 investment be concerned in any case with any directions respecting the postponement of a sale; but nothing in this subsection applies to any property of a wasting or speculative nature. [Section 27 amended: No. 1 of 1997 s. 7.] 28. Trust or power to sell property, duration of (1) Where the instrument creating a trust to sell property or a power to sell property does not expressly limit the duration of the trust or power, then, 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 not under any disability the trustee may sell the property; but in all other respects the authority conferred by this section is subject to any restrictions to which the trust or power created by the instrument is subject. (2) A purchaser of any property sold under a trust for sale or a power to sell, or the Registrar of Titles or other person registering or certifying title, shall not be concerned to enquire whether the property was sold under the authority conferred by this section. (3) Nothing in this section affects a trust for sale or a power to sell that is for the time being in existence under the instrument creating the trust or power. 28A. Option to purchase land, trustees' liability for grant of (1) Where there is statutory or other power to sell land that is subject to a trust, a trustee who grants to a person an option to purchase that land within a period not exceeding 6 months for a price fixed at the time the option is granted shall not be chargeable with breach of trust by reason only that the trustee granted that option if before so doing the trustee received advice from an independent valuer to the effect that — (a) the purchase price fixed for the land is reasonable; and (b) the fee payable for the option is reasonable. (2) In subsection (1), independent valuer means — (a) a person who is instructed and employed independently of the person to whom the option is granted; and (b) in the case of land in the State, a person who is licensed under the Land Valuers Licensing Act 1978; or (c) in the case of land in another State or a Territory, a person who is licensed as a valuer under the law of that State or Territory or, if there is no such law, a person who is a Fellow or Associate of the Australian Property Institute (Inc.). [Section 28A inserted: No. 84 of 1987 s. 13; amended: No. 74 of 2003 s. 122.] 29. Rule against perpetuities, application of (1) The rule of law known as the rule against perpetuities does not apply and shall be deemed never to have applied so as to render void — (a) a trust or power to sell property, where a trust of the proceeds of sale is valid; or (b) a trust or power to lease or exchange property, where the lease or exchange directed or authorised by the trust or power is ancillary to the carrying out of a valid trust; or (c) any other power that is ancillary to the carrying out of a valid trust or the giving effect to a valid disposition of property; or (d) any provision for the remuneration of trustees. (2) This section does not — (a) render any trustee liable for any acts done prior to the commencement of this Act for which that trustee would not have been liable had this section not been enacted; or (b) enable any person to recover any money distributed or paid under any trust, if he could not have recovered that money had this section not been enacted. 30. Property, miscellaneous powers as to (1) Every trustee, in respect of any property for the time being vested in him, may — (a) expend 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 the salvage of the property; or (b) subject to the rules of law applicable in such cases and to any direction of the Court to the contrary, apportion the cost of the work mentioned in paragraph (a) between capital and income or otherwise among the persons entitled thereto in such manner as he considers equitable, with power, where the whole or part of the cost of the work is charged to capital, to recoup capital from subsequent income, if that course would be equitable having regard to all the circumstances of the case; or (c) expend money, subject to the same trusts, in the improvement or development of the property, but not, without the consent of the Court, in excess of — (i) $20 000, or such other amount as the Governor may by regulation provide, for any one purpose; or (ii) $50 000, or such other amount as the Governor may by regulation provide, for any one purpose if the expenditure is made upon the advice of a person whom the trustee reasonably believes to be