PART VIII - Special Provisions
|
|
Determination of proper law of trust |
80. |
(1) |
The proper law of a trust or a particular aspect of a trust is |
| |
|
|
(a) |
the law of the jurisdiction expressly designated by the terms of the trust
as being the law that is to govern the trust or the particular aspect of the
trust, as the case may be; |
| |
|
|
(b) |
if the terms of the trust do not expressly designate the governing law for
the trust or the particular aspect of the trust, then the law of the
jurisdiction that may reasonably be inferred from the terms of the trust as
being the aw that is to govern the trust or the particular aspect of the
trust, as the case may be; or |
| |
|
|
(c) |
if the terms of the trust do not expressly designate the governing law for
the trust or the particular aspect of the trust and no reasonable inference
may be drawn from the terms of the trust as to the governing law, then the
law of the jurisdiction with which the trust at the time it was created had
the closest connection. |
| |
|
(2) |
For the purposes of paragraph (c) of subsection (1) in ascertaining the law
with which a trust is most closely connected at the time it was created
reference shall be made in particular to |
| |
|
|
(a) |
the place of administration of the trust designated by the settlor; |
| |
|
|
(b) |
the situs of the assets of the
trust; |
| |
|
|
(c) |
the place of residence or business of the trustee; and |
| |
|
|
(d) |
the objects of the trust and the places where they are to be fulfilled. |
|
Change of proper law |
81. |
(1) |
If the terms of the instrument creating a trust so provide, the proper law
of the trust may be changed from the law of the Territory to the law of
another jurisdiction, or from the law of another jurisdiction to the law of
the Territory, provided that in the case of a change from the law of the
Territory the new proper law would recognize the validity of the trust and
the respective interests of the beneficiaries. |
| |
|
(2) |
A change in proper law shall not affect the legality or validity of, or
render any person liable for, anything done before the change. |
| |
|
(3) |
Without limiting or affecting subsection (2), the instrument creating a
trust may provide that |
| |
|
|
(a) |
the proper law be changed to that of any other jurisdiction specified in the trust; or |
| |
|
|
(b) |
the trust assets be transferred to a trustee in that other jurisdiction, |
| |
|
|
upon the occurrence of
any event, other than any of the events described in subsection (4), which
is specified in the trust instrument. |
| |
|
(4) |
The events referred to in subsection (3) are |
| |
|
|
(a) |
an order of the Court; |
| |
|
|
(b) |
the institution of criminal proceedings against the settlor, the trustees or
any of the beneficiaries; and |
| |
|
|
(c) |
an investigation in relation to the settlor, the trustees, any of the
beneficiaries of the trust or any part of the trust property by the
Financial Services Commission pursuant to any enactment. |
|
Jurisdiction of court |
82. |
The court has jurisdiction where |
| |
|
(a) |
the proper law of a trust or a particular aspect of a trust is the law of
the Territory; |
| |
|
(b) |
the trustee of any trust is resident in the Territory; |
| |
|
(c) |
in the case of a corporate trustee of any trust, it is incorporated or
registered to do business in the Territory; |
| |
|
(d) |
any trust property is situate in the Territory but only in respect of
property so situate; |
| |
|
(e) |
the administration of any trust is carried on in the Territory; |
| |
|
(f) |
the Court is otherwise the natural forum for the litigation |
| |
|
(g) |
the parties submit to the jurisdiction of the Court; or |
| |
|
(h) |
the trust instrument contains a provision referring disputes to the
jurisdiction of the Court. |
|
Proper law to determine disposition of personal property |
83. |
(1) |
If a person transfers or disposes of personal property to the trustee of a
trust |
| |
|
|
(a) |
he shall be deemed to have had capacity to do so if he is at the time of
such transfer or disposition of full age and of sound mind under the law of
his domicile; and |
| |
|
|
(b) |
no rule relating to inheritance or succession of the law of his domicile
shall affect any such transfer or disposition or otherwise affect the
validity of such trust. |
| |
|
(2) |
For the avoidance of doubt it is declared that the provisions of this
section shall apply notwithstanding any other provisions of this Part and
shall apply only to transfers or dispositions of property made to a trustee
of a trust after the commencement of this Part, but this declaration shall
be without prejudice to the validity or otherwise of transfers or
dispositions made before that time. |
| |
|
(3) |
This section shall only apply to trusts created before the date on which
section 83A comes into force. |
|
Conflict of laws rules for certain trusts and dispositions.
First Schedule |
83A. |
(1) |
In this section and the First Schedule, unless the context otherwise
requires |
| |
|
|
"disposition", in relation to any property, includes every form of
conveyance, transfer, assignment, lease, license, mortgage, charge, pledge,
encumbrance or other transaction of that property or by which any interest
in it is created or extinguished; |
| |
|
|
"foreign law" means the law of any part of the world outside the Territory,
other than a provision in an Act of the Parliament of the United Kingdom, or
any enactment made under such Act, which extends to the Territory as part of
the law of the Territory; |
| |
|
|
"Hague Trusts Convention" means the Convention on the Law Applicable to
Trusts and on their Recognition, as applicable to the Territory by virtue of
the Recognition of Trusts Act 1987 (Overseas Territories) Order 1989; |
| |
|
|
"heirship rights" means any right, claim or interest in, against or to
property of a person arising, accruing or existing in consequence of, or in
anticipation of, that person's death, other than any such right, claim or
interest created by will or other voluntary disposition by such person or
resulting from an express limitation in the disposition of the property to
such person; |
| |
|
|
"judgement" means any judgement or award of arbitration given by a court,
tribunal or arbitrator in any part of the world, whatever the judgement or
aware may be called, including a decree, order, decision or writ of
execution, as well as the determination of costs or expenses by an officer
of the court or by a tribunal or arbitrator; |
| |
|
|
"personal relationship" includes every form of relationship by blood or
marriage, including former marriage, and, in particular, a personal
relationship between two persons exists if |
| |
|
|
(a) |
one is the child of the other, natural or adopted (whether or not the
adoption is recognised by law), legitimate or illegitimate; |
| |
|
|
(b) |
one is married to the other (whether or not the marriage is recognised by
law); |
| |
|
|
(c) |
one cohabits with the other or so conducts himself in relation to the other
as to give rise in any jurisdiction to any rights, obligations or
responsibilities analogous to those of a parent and child or husband and
wife; or |
| |
|
|
(d) |
personal relationship exists between each one of them and a third person; |
| |
|
|
"settlor", in relation to a trust, includes every person who, directly or
indirectly, on behalf of himself or on behalf of any other, as owner or as
holder of a power in that behalf, makes a disposition of property to be held
in that trust or declares or otherwise creates such trust; |
| |
|
|
"terms" includes express and implied terms; |
| |
|
|
"Virgin Islands trust" means a trust the essential validity of which is, for
the time being, governed by the law of the Territory and which is |
| |
|
|
(a) |
created on or after the date on which this section comes into force; or
|
| |
|
|
(b) |
created before the date on which this section comes into force, but the
proper law of which has been changed to the law of the Territory after that
date in accordance with section 81; |
| |
|
(2) |
For the purposes of this section and the First Schedule, no change in
circumstances causes a personal relationship, once established, to
terminate. |
| |
|
(3) |
In the definition of "Virgin Islands trust" in subsection (1), subsections
(9) and (12) and items 2, 3, 4(1A) and 7 of the First Schedule, "law"
excludes choice of law rules, but otherwise in this section and the First
Schedule, where the context so admits, "law" includes choice of law rules. |
| |
|
(4) |
In subsection (11), "internal law" excludes choice of law rules. |
| |
|
(5) |
For the purposes of identifying the law applicable under this section and
the First Schedule, the Territory shall be treated as a State and where a
State comprises more than one territorial unit, each of which has its own
rules of law, each territorial unit shall be treated as a State. |
| |
|
(6) |
Without prejudice to subsections (13) to (18), in ascertaining whether a
trust has been completely constituted, the preliminary issues referred to in
Article 4 of the Hague Trusts Convention shall be determined, to the extent
so provided, in accordance with subsections *7) to (11) and the First
Schedule. |
| |
|
(7) |
The formal and essential validity of a disposition, not being a testamentary
disposition, of immovable property or tangible movable property, and the
capacity to make the disposition, shall be determined according to the law
of the State in which the property is situated at the time of the
disposition. |
| |
|
(8) |
The formal and essential validity of a disposition, not being a testamentary
disposition, of tangible movable property, and the capacity to make the
disposition, shall be determined in accordance with the First Schedule, or,
in the case of intangible movable property not provided for in the First
Schedule, in accordance with the law under which the property came into
existence. |
| |
|
(9) |
The capacity to subject property to a trust, not being a testamentary trust,
as distinct from the capacity to dispose of that property, shall be
determined in accordance with the law governing the essential validity of
the trust. |
| |
|
(10) |
Where a person declares a trust of his own property, there shall be no
requirement for compliance with the rules on formal or essential validity or
capacity applicable to a disposition of that property or of any interest in
it. |
| |
|
(11) |
Where, under subsections (6) to (10) and the First Schedule, an issue falls
to be determined by the law of the Territory, the choice of law rules of the
Territory shall designate the internal law of the Territory to determine the
issue. |
| |
|
(12) |
Subject to subsections (6) to (11) and the First Schedule, all questions
arising in regard to the validity, construction, effect or administration,
whether the administration is conducted in the Territory or elsewhere, of a
trust including |
| |
|
|
(a) |
question relating to any of the following matters, being matters specified
in Article 8 of the Hague Trusts Convention |
| |
|
|
|
(i) |
the appointment, resignation and removal of trustees, the capacity to act as
a trustee, and the devolution of the office of trustee; |
| |
|
|
|
(ii) |
the rights and duties of trustees among themselves; |
| |
|
|
|
(iii) |
the right of trustees to delegate in whole or in part the discharge of their
duties or the exercise of their powers; |
| |
|
|
|
(iv) |
the powers of trustees to administer or to dispose of trust assets, to
create security interests in the trust assets, or to acquire new assets; |
| |
|
|
|
(v) |
the powers of investment of trustees; |
| |
|
|
|
(vi) |
restrictions upon the duration of the trust, and upon the power to
accumulate the income of the trust; |
| |
|
|
|
(vii) |
the relationships between the trustees and the beneficiaries including the
personal liability of the trustees to the beneficiaries; |
| |
|
|
|
(viii) |
the variation or termination of the trust; |
| |
|
|
|
(ix) |
the distribution of trust assets; |
| |
|
|
|
(x) |
the duty of trustees to account for their administration; and |
| |
|
|
(b) |
the the extent that they do not fall under paragraph (a), questions as to |
| |
|
|
|
(i) |
the fiduciary or non-fiduciary powers, obligations or duties of the trustees
or to the liabilities or rights of the trustees; |
| |
|
|
|
(ii) |
the existence and extent of powers conferred or retained, including powers
to vary or revoke the trust and powers of appointment, and questions as to
the validity of any exercise of any such power; |
| |
|
|
are to be determined by the property law of the trust or, where there are
different proper laws for different aspects of the trust, the proper law
applicable to the area in which the question falls. |
| |
|
(13) |
Subject to any express provision to the contrary in the trust or
disposition, no Virgin Islands trust, and no disposition of property to be
held upon the trusts of such a trust, is void, voidable, liable to be set
aside or defective in any fashion, nor is the capacity of any settlor in
relation to the trust or disposition to be questions, nor is the trustee or
any beneficiary or other person to be subjected to any liability or deprived
of any right, by reason that |
| |
|
|
(a) |
the law of any foreign jurisdiction prohibits or does not recognise the
concept of a trust, or |
| |
|
|
(b) |
the Virgin Islands trust or the disposition |
| |
|
|
|
(i) |
avoids or defeats any right, claim or interest conferred by foreign law upon
any person by reason of a personal relationship to the settlor or by way of
heirship rights; or |
| |
|
|
|
(ii) |
contravenes any rule of foreign law or any foreign judicial or
administrative order or arbitration order or action intended to recognise,
protect, enforce or give effect to such a right, claim or interest. |
| |
|
(14) |
Heirship rights conferred by foreign law in relation to the property of a
living person shall be disregarded when determining rights of ownership of
property subject to, or claimed to be subject to, a Virgin Islands trust. |
| |
|
(15) |
Heirship rights conferred on persons by foreign law shall not be taken to
constitute those persons creditors for the purposes of section 81 of the
Conveyancing and Law of Property Ordinance, nor to constitute those persons
"creditors of others" for the purposes of the Act against Fraudulent Deeds,
Gifts, Alienations, etc. to the extent, if any, that that Act has any
application to the Territory. |
| |
|
(16) |
Subject to subsection (17), the law designated as applicable to succession
by virtue of the Territory's choice of law rules shall apply to a Virgin
Islands trust, not being a testamentary trust, only to the extent that it
does not contain rules conferring any right, claim or interest upon any
person by reason of a personal relationship to the settlor or by way of
heirship rights. |
| |
|
(17) |
Subsection (16) shall not apply where the law so designated is that of the
Territory. |
| |
|
(18) |
In the case of a conflict between any of the provisions of subsections (13)
to (17) and any of the provisions of subsections (6) to (11) and the First
Schedule, the provisions of subsections (13) to (17) shall prevail. |
| |
|
(19) |
To the extent that it is inconsistent with subsections (13) to (18), a
foreign judgement shall not be recognised or enforced or give rise to any
estoppel, and both its recognition and its enforcement shall be regarded as
contrary to the public policy of the Territory. |
| |
|
(20) |
Subsections (6) to (12) apply only to trusts created on or after the date on
which this section comes into force.
|
|
Purpose trusts |
84. |
(1) |
For the purpose of this section |
| |
|
|
(a) |
"designated person" means |
| |
|
|
|
(i) |
a barrister or solicitor practising in the Territory, |
| |
|
|
|
(ii) |
an accountant practising in the Territory who qualifies as an "auditor" for
purposes of the Banks and Trust Companies Act, 1990, |
| |
|
|
|
(iii) |
a licensee under the Banks and Trust Companies Act, 1990, or |
| |
|
|
|
(iv) |
such other person as the Minister of Finance may by order designate; and |
| |
|
|
(b) |
"trust for any purpose" means a trust other than a trust |
| |
|
|
|
(i) |
that is for the benefit of particular persons whether or not immediately
ascertainable, or |
| |
|
|
|
(ii) |
that is for the benefit of some aggregate of persons ascertained by
reference to some personal relationship. |
| |
|
(2) |
A person may create a valid trust for any purpose, whether charitable or
not, if |
| |
|
|
(a) |
the purpose is specific, reasonable and possible; |
| |
|
|
(b) |
the purpose is not immoral, contrary to public policy or unlawful; |
| |
|
|
(c) |
at least one trustee of the trust is a designated person; |
| |
|
|
(d) |
the trust instrument appoints a person, who may be a protector, to enforce
the trust and provides for the appointment of a successor to such person; |
| |
|
|
(e) |
the person appointed to enforce the trust is a party to the trust instrument
or consents in writing, addressed to the trustee who is a designated person,
to enforce the trust; and |
| |
|
|
(f) |
the trust instrument specifies the event upon the happening of which the
trust terminates and provides for the disposition of surplus assets of the
trust upon its termination. |
| |
|
(3) |
The rule against perpetuities and remoteness of vesting shall not apply to a
trust to which subsection (2) applies and, for the avoidance of any doubt,
the rule against perpetuities and remoteness of vesting includes the rule
against inalienability, the rule against perpetual trusts, any rule
prohibiting a trust under which trust property would, apart from that rule,
be inalienable beyond a permissible period, and any rule prohibiting a trust
or power under which trust property would, apart from that rule, be capable
of application for a purpose beyond a permissible period. |
| |
|
(4) |
Nothing in this section shall affect the existing law with respect to trusts
established for charitable purposes. |
| |
|
(5) |
Where a trustee who is a designated person has reason to believe that a
person who is appointed to enforce the trust is dead, is unwilling, refuses
or is unfit to act or is incapable of acting, then that trustee shall as
soon as practicable inform the Attorney General in writing of the fact and
send him a copy of the instrument creating the trust. |
| |
|
(6) |
The Attorney General on being informed under subsection (5) shall within90
days apply for the appointment of a person to enforce the trust and the
court may, unless it feels that the person is not fit, by order declare that
person to be the person to enforce the trust. |
| |
|
(7) |
The order of the court under subsection (6) is conclusive evidence of the
appointment of the person to enforce the trust and the appointment takes
effect as from the date of the order. |
| |
|
(8) |
Where any costs are incurred by the Attorney General in connection with any
application under subsection (6), the court may make such order as it
considers just as to the payment of those costs out of the assets of the
trust. |
| |
|
(9) |
Where a designated person fails to comply with subsection (5), then, subject
to subsection (10), the designated person is guilty of an offence and is
liable on summary conviction to a fine of not more than $5,000. |
| |
|
(10) |
It shall be a defence to a charge of committing an offence under subsection
(9) to prove that the designated person took all reasonable steps and
exercised all due diligence to avoid committing the offence. |
| |
|
(11) |
The person appointed pursuant to paragraph (d) of subsection (1) shall be
entitled, in addition to any documents, information or other rights
specifically provided for in the trust instrument, to |
| |
|
|
(a) |
annual accounts of the trust; |
| |
|
|
(b) |
copies of the trust instrument and deeds and other written instruments
executed pursuant to the trust instrument; |
| |
|
|
(c) |
and counsels’ opinions and legal advice received by the
trustees. |
| |
|
(12) |
Where any of the persons specified in subsection (13) has reason to believe
that no trustee of a trust to which subsection (2) applies is a designated
person or that no designated person is likely in the immediate future to be
appointed as a trustee pursuant to the terms of the trust instrument, that
person shall use all reasonable endeavours to secure the appointment of a
designated person as a trustee of the trust and if such endeavours fail to
result in such an appointment he shall make an application to the Court for
the appointment of a designated person pursuant to the provisions of
subsection (14). |
| |
|
(13) |
The persons referred to in subsection (12) are |
| |
|
|
(a) |
any trustee of a trust who is not a designated person; and |
| |
|
|
(b) |
any person who has been appointed to enforce the trust. |
| |
|
(14) |
If, at any time following its creation, a trust to which subsection (2)
applies does not have at least one trustee who is a designated person, on
the application in relation to the trust by |
| |
|
|
(a) |
any existing trustee of the trust, |
| |
|
|
(b) |
a person who has been appointed to enforce the trust, or |
| |
|
|
(c) |
the Attorney General, |
| |
|
|
the Court shall make an order appointing a designated person as a trustee of
the trust. |
| |
|
(15) |
On an application in relation to a purpose trust by |
| |
|
|
(a) |
a trustee of the trust; or |
| |
|
|
(b) |
a person who has been appointed to enforce the trust, |
| |
|
|
the Court may in such manner as it thinks fit vary any of the purposes of
the trust, or enlarge or otherwise vary any of the powers of the trustees or
other provisions of the trust. |
| |
|
(16) |
In exercising the powers conferred upon it by subsection (15), the Court
shall have regard to such factors as the Court thinks material, which may
include |
| |
|
|
(a) |
such changes in circumstances since the trust was created as are in the
opinion of the Court relevant; and |
| |
|
|
(b) |
such factors and proposals as are set out in the application. |
| |
|
(17) |
The changes in circumstances referred to in subsection (16)(a) may include
the fact that the execution of the trust in accordance with its terms has
become in whole or in part |
| |
|
|
(a) |
impossible or impracticable; |
| |
|
|
(b) |
unlawful or contrary to public policy; or |
| |
|
|
(c) |
obsolete in that, by reason of changed circumstances, it fails to achieve
the intention of the settlor and the spirit of the gift. |
| |
|
(18) |
Where any costs are incurred in connection with an application under
subsection (15), the Court may make such order as it considers just as to
the payment of those costs, including payment out of the property of the
trust. |
| |
|
(19) |
Where any costs are incurred by the person who has been appointed to enforce
the trust in connection with enforcement, the Court may make such order as
it considers just as to the payment of those costs, including payment out of
the property of the trust. |
| |
|
(20) |
For the purposes of section 203 of the Criminal Code, 1997 property held
upon the trusts of a trust to which subsection (2) applies shall be
regarded, as against the trustee and as against the person who has been
appointed to enforce the trust, as belonging to others, and an intention on
the part of any such person to defeat the trust shall be regarded as an
intention to deprive others of their property. |
| |
|
(21) |
The trustee of a trust to which subsection (2) applies who is a designated
person shall keep in the Territory a documentary record of |
| |
|
|
(a) |
the terms of the trust; |
| |
|
|
(b) |
the identity of any other trustees and the person who has been appointed to
enforce the trust; |
| |
|
|
(c) |
all settlements of the property upon the trust and the identity of settlors; |
| |
|
|
(d) |
the accounts of the trust; and |
| |
|
|
(e) |
all distributions or applications of the trust property. |
| |
|
(22) |
This section shall only apply to trusts created before the date on which
section 84A comes into force. |
|
Purpose trusts created on or after the commencement of this
section |
84A. |
(1) |
For the purposes of this section,
"charitable trust" means a trust
for exclusively charitable purposes;
"designated person" means |
| |
|
|
(a) |
a barrister or solicitor practising in the Territory; |
| |
|
|
(b) |
an accountant practising in the Territory who qualifies as an "auditor" for
the purposes of the Banks and Trust Companies Act, 1990; |
| |
|
|
(c) |
a licensee under the Banks and Trust Companies Act, 1990; or |
| |
|
|
(d) |
such other person as the Minister of Finance may, by Order, designate; and |
| |
|
|
"rule against trusts or powers of excessive duration" includes, but without
limitation, |
| |
|
|
(a) |
the rule known as the rule against inalienability, sometimes referred to as
the rule against perpetual trusts; and |
| |
|
|
(b) |
so far as not embraced within paragraph (a), |
| |
|
|
|
(i) |
any rule prohibiting a trust under which trust property would, apart from
the rule, be inalienable beyond a permissible period, and |
| |
|
|
|
(ii) |
any rule prohibiting a trust or power under which trust property would,
apart from the rule, be capable of application for a purpose beyond a
permissible period. |
| |
|
(2) |
A person may create a valid trust for any purpose or purposes if the
conditions set out in subsection (3) are satisfied. |
| |
|
(3) |
The conditions referred to in subsection (2) are |
| |
|
|
(a) |
the purpose or purposes are specific, reasonable and possible; |
| |
|
|
(b) |
the purpose or purposes are not immoral, contrary to public policy or
unlawful; |
| |
|
|
(c) |
at least one trustee of the trust is a designated person; |
| |
|
|
(d) |
the trust instrument appoints a person as enforcer of the trust, and
provides for the appointment of another enforcer on any occasion on which
there is no enforcer, or no enforcer able and willing to act; |
| |
|
|
(e) |
the enforcer appointed by the trust instrument is a party to the trust
instrument or gives his consent in writing, addressed to the trustee who is
a designated person, to act as enforcer of the trust. |
| |
|
(4) |
In this section a trust for a purpose or purposes that satisfies the
conditions in subsection (3), not being a charitable trust, is referred to
as a "purpose trust". |
| |
|
(5) |
No rule against trusts or powers of excessive duration shall apply to a
purpose trust. |
| |
|
(6) |
Nothing in this section shall operate to invalidate a trust which, apart
from this section, would be a valid trust. |
| |
|
(7) |
Nothing in this section affects the law with respect to charitable trusts
and, in particular, nothing in this section shall affect the ability of the
Attorney General to enforce a charitable trust. |
| |
|
(8) |
Without prejudice to subsections (6) and (7), any purported appointment of
an enforcer of a charitable trust shall be of no effect. |
| |
|
(9) |
The Court may, whenever it is expedient to appoint an enforcer of a purpose
trust and it is found inexpedient so to do without the assistance of the
Court, make an order appointing an enforcer either to fill a vacancy or in
substitution for the existing enforcer. |
| |
|
(10) |
Where a trustee of a purpose trust who is a designated person has reason to
believe that there is no enforcer of the trust, or no enforcer able and
willing to act, and that no enforcer is likely in the immediate future to be
appointed, that trustee shall as soon as practicable inform the Attorney
General in writing of the fact and send him a copy of the instrument
creating the trust. |
| |
|
(11) |
On being informed under subsection (10), the Attorney General shall, with
all reasonable speed but in any event within ninety days, apply to the Court
for the appointment of an enforcer under subsection (19) |
| |
|
(12) |
Where any costs are incurred by the Attorney General in connection with any
application under subsection (11), the Court may make such order as it
considers just as to the payment of those costs out of the assets of the
trust. |
| |
|
(13) |
Where a designated person fails to comply with subsection (1)), then,
subject to subsection (14), the designated person commits an offence and is
liable on summary conviction to a fine not exceeding five thousand dollars. |
| |
|
(14) |
It shall be a defense to a charge of committing an office under subsection
(13) to prove that the designated person took all reasonable steps and
exercised due diligence to avoid committing the offence. |
| |
|
(15) |
A trustee of a purpose trust shall provide the enforcer of the trust with |
| |
|
|
(a) |
the accounts of the trust; |
| |
|
|
(b) |
copies of the trust instrument and of deeds and other written instruments
executed pursuant to the trust instrument; |
| |
|
|
(c) |
legal and other professional advice received by the trustees; and |
| |
|
|
(d) |
such, if any, other documents and information as the trust instrument
requires to be provided. |
| |
|
(16) |
The instrument declaring or evidencing a purpose trust may, but need not, do
any of the following: |
| |
|
|
(a) |
specify an event or date upon the happening or occurrence of which the trust
ceases to be a purpose trust; |
| |
|
|
(b) |
provide for the disposition of assets of the trust when the trust ceases to
be a purpose trust; or |
| |
|
|
(c) |
provide that, for so long as the trust is a purpose trust, the trustees owe
no duty |
| |
|
|
|
(i) |
to any persons entitled to such assets when the trust ceases to be a purpose
trust; or |
| |
|
|
|
(ii) |
in relation to any purposes for which such assets are then to be applied. |
| |
|
(17) |
An enforcer of a trust appointed in accordance with the provisions of this
section shall have both the power and duty of enforcing it. |
| |
|
(18) |
A person may not be or become a trustee of a purpose trust while he is the
enforcer of that trust. |
| |
|
(19) |
Where any of the persons specified in subsection (20) has reason to believe
that no trustee of a purpose trust is a designated person or that no
designated person is likely in the immediate future to be appointed as a
trustee pursuant to the terms of the trust instrument, that person shall use
all reasonable endeavours to secure the appointment of a designated person
as a trustee of the trust and if such endeavours fail to result in such an
appointment he shall make an application to the Court for the appointment of
a designated person pursuant to the provisions of subsection (21). |
| |
|
(20) |
The persons referred to in subsection (1() are |
| |
|
|
(a) |
any trustee of the trust who is not a designated person; |
| |
|
|
(b) |
the enforcer of the trust. |
| |
|
(21) |
If, at any time following its creation, a purpose trust does not have at
least one trustee who is a designated person, on the application in relation
to the trust by any of the following persons: |
| |
|
|
(a) |
the settlor, unless the trust instrument provides otherwise; |
| |
|
|
(b) |
any existing trustee of the trust; |
| |
|
|
(c) |
the enforcer of the trust; or |
| |
|
|
(d) |
the Attorney General, |
| |
|
|
the Court shall make an order appointing a designated person as a trustee of
the trust. |
| |
|
(22) |
On an application in relation to a purpose trust by |
| |
|
|
(a) |
any person appointed by the instrument declaring or evidencing the trust for
the purposes of this subsection, |
| |
|
|
(b) |
the settlor, unless the trust instrument provides otherwise, |
| |
|
|
(c) |
a trustee of the trust, or |
| |
|
|
(d) |
the enforcer of the trust, |
| |
|
|
the Court may in such manner as it thinks fit vary any of the purposes of
the trust, or enlarge or otherwise vary any of the powers of the trustees or
other provisions of the trust. |
| |
|
(23) |
In exercising the powers conferred upon it by subsection (22), the Court
shall have regard to such factors as the Court thinks material which may
include |
| |
|
|
(a) |
such changes in circumstances since the trust was created as are in the
opinion of the Court relevant; and |
| |
|
|
(b) |
such factors and proposals as are set out in the application. |
| |
|
(24) |
The changes in circumstances referred to in subsection (23)(a) may include
the fact that the execution of the trust in accordance with its terms has
become in whole or in part |
| |
|
|
(a) |
impossible or impracticable; |
| |
|
|
(b) |
unlawful or contrary to public policy; or |
| |
|
|
(c) |
obsolete in that, by reason of changed circumstances, it fails to achieve
the intention of the settlor and the spirit of the gift. |
| |
|
(25) |
Where any costs are incurred in connection with an application under
subsection (22), the Court may make such order as it considers just as to
payment of those costs, including payment out of the property of the trust. |
| |
|
(26) |
Where any costs are incurred by the enforcer of a trust in connection with
enforcement, the Court may make such order as it considers just as to
payment of those costs, including payment out of the property of the trust. |
| |
|
(27) |
For the purposes of section 203 of the Criminal Code, 1997 property held
upon the trusts of a trust to which subsection (2) applies shall be
regarded, as against the trustee and as against the person who has been
appointed to enforce the trust, as belonging to others, and an intention on
the part of any such person to defeat the trust shall be regarded as an
intention to deprive others of their property. |
| |
|
(28) |
The trustee of a purpose trust who is a designated person shall keep in the
Territory a documentary record of |
| |
|
|
(a) |
the terms of the trust; |
| |
|
|
(b) |
the identity of any other trustees and the enforcer of the trust; |
| |
|
|
(c) |
all settlements of the property upon the trust and the identity of the
settlors; |
| |
|
|
(d) |
the accounts of the trust; and |
| |
|
|
(e) |
all distributions or applications of the trust property. |
| |
|
(29) |
This section shall only apply to trusts created on or after the date on
which this section comes into force.
|
|
Trustees to act by majority |
85. |
(1) |
Subject to any provision contained in the instrument creating the trust, |
| |
|
|
(a) |
every decision made, resolution passed or power or discretion exercised by
trustees is valid if made, passed or exercised by a majority of the trustees
if there are more than 2 of them; and |
| |
|
|
(b) |
any deed or other instrument executed pursuant to such a decision,
resolution or exercise of power or discretion is likewise valid as if it had
been executed by all the trustees. |
| |
|
(2) |
This section shall not apply to trusts in existence at the time the section
comes into effect. |
|
Protector of trusts |
86. |
(1) |
An instrument creating a trust may contain provisions by virtue of which the
exercise by the trustees of any of their powers and discretions shall be
subject to the previous consent of the settlor or some other person, whether named as protector, nominator, committee
or any other name; and if so provided in the instrument creating the trust the
trustees shall not be liable for any loss caused by their actions if the
previous consent was given. |
| |
|
(2) |
There may be conferred on the settlor or some
other person, whether named as protector, nominator, committee or by any other
name, by the instrument creating the trust, any powers, and without limitation
to the foregoing power may be conferred on that person to do any one or more of
the following: |
| |
|
|
(a) |
determine the law of which jurisdiction shall be the proper law of the
trust; |
| |
|
|
(b) |
change the forum of administration of the trust; |
| |
|
|
(c) |
remove trustees; |
| |
|
|
(d) |
appoint new or additional trustees; |
| |
|
|
(e) |
exclude any beneficiary as a beneficiary of the trust; |
| |
|
|
(f) |
include any person as a beneficiary of the trust in substitution for or in
addition to any existing beneficiary of the trust; and |
| |
|
|
(g) |
withhold consent from specified actions of the trustees either conditionally
or unconditionally. |
| |
|
(3) |
A person exercising any of the powers set forth in paragraphs (a) to (d) and
(g) of subsection (2) shall not by virtue only of the exercise of the power
be deemed to be a trustee; and unless otherwise provided in the instrument
creating the trust, is not liable to the beneficiaries for the bona fide
exercise of the power. |
|
Managing Trustee |
87. |
A trust instrument may contain provisions by virtue of which the exercise of
any of the trustee's powers may be reserved to a managing trustee, and no
other trustee is liable for any of the decisions, acts or transactions of
the managing trustee in so far as they amount to exercise of powers reserved
by the trust instrument to the managing trustee. |
|
Successor Trustee |
88. |
In the absence of any contrary provisions in the trust instrument, a
successor trustee may exercise all powers and discretions granted to the
original trustee including, without limitation, any power to select from a
class of beneficiaries those persons entitled to income or principal of the
trust fund. |
|
Construction of power to amend trust |
89. |
(1) |
In the absence of any contrary provisions in the trust instrument, an
express power to amend in a trust instrument shall be construed as a power
to vary all or any of its terms, including terms implied by law. |
| |
|
(2) |
In this section, |
| |
|
|
"vary" includes enlarge, add to, replace, remove, and restrict; |
| |
|
|
"terms" means terms of any description whatsoever, and in particular, but
without limitation, terms declaring trusts and terms conferring powers
whether dispositive or administrative; and |
| |
|
|
"power to amend" includes any express provision, howsoever worded, contained
in the trust instrument indicating that the trust or the trust instrument
may be varied, amended or modified by the trustees or any other person. |
| |
|
(3) |
This section applies to any trust, whether created before, on or after the
date on which this section comes into force. |
|
Exemption from income tax, etc. |
90. |
(1) |
Notwithstanding any provisions of the Income Tax Act, the income of any
trust in the hands of a trustee is exempt from income tax and the
beneficiaries of any trust who are not persons resident in the Territory
shall likewise be exempt from payment of income tax in respect of any moneys
received by them from the trustee of any trust. |
| |
|
(2) |
No estate tax, inheritance tax, succession tax, gift tax, rate, duty, levy
or other charge is payable by beneficiaries who are not resident in the
Territory in respect of any distribution to them by the trustee of any
trust. |
| |
|
(3) |
Notwithstanding any provision of the Stamp Act, any trust that does not have
as beneficiaries persons resident in the Territory shall be exempt from the
payment of stamp duty with respect to |
| |
|
|
(a) |
the deed or other written instrument creating the trust; |
| |
|
|
(b) |
all deeds and other written instruments of appointment made pursuant to the
trust; |
| |
|
|
(c) |
all deeds and other instruments by which assets are transferred to or from
the trustee of a trust; and |
| |
|
|
(d) |
all instruments relating to the transfer of beneficial interests in a trust. |
| |
|
(4) |
The exemptions in this section do not apply to any trust which |
| |
|
|
(a) |
has as an underlying asset land in the Territory; or |
| |
|
|
(b) |
carries on a business or trade in the Territory. |
| |
|
(5) |
The provisions of this section apply to all trusts in existence at the time
of the coming into operation of this Act. |
|
Exemption from registration |
91. |
(1) |
Notwithstanding any provisions of the Registration and Records Act, |
| |
|
|
(a) |
any deed creating a trust; |
| |
|
|
(b) |
all deeds of appointment made pursuant to the terms of a trust; and |
| |
|
|
(c) |
all other deeds executed by the trustees, settlors, beneficiaries or
protectors of a trust pursuant to the powers and discretions specified in
the instrument creating the trust, |
| |
|
|
are
exempt from registration under the provisions of the Registration and Records
Act. |
| |
|
(2) |
The exemption granted by subsection (1) applies to all deeds referred to
therein executed prior to the time when this provision becomes effective. |
|
Trust duty |
92. |
(1) |
In this section, |
| |
|
|
"authorised person", for the purposes of a trust to which a chargeable
instrument relates, means |
| |
|
|
(a) |
the settlor of the trust; |
| |
|
|
(b) |
a trustee of the trust; |
| |
|
|
(c) |
any person who has executed the chargeable instrument on behalf of a
corporate trustee of the trust; |
| |
|
|
(d) |
any person duly authorised to execute documents on behalf of a corporate
trustee of the trust; |
| |
|
|
(e) |
any beneficiary or person capable of benefiting from the trust; |
| |
|
|
(f) |
any person authorised or appointed by any of the persons described in
paragraphs (a) to (e) to cancel the revenue or postage stamp referred to in
subsection (3)(a); |
| |
|
|
(g) |
a barrister, solicitor, attorney, advocate or lawyers acting for any of the
persons described in paragraphs (a) to (f) who is admitted to practice in
any jurisdiction other than the Territory; or |
| |
|
|
(h) |
a barrister or solicitor who is admitted to practice in the Territory; |
| |
|
|
"chargeable instrument" means an instrument in writing executed on or after
the date on which this section comes into force, which is either |
| |
|
|
(a) |
an instrument declaring or evidencing a trust of which the proper law is,
immediately following the creation of the trust, the law of the Territory,
or |
| |
|
|
(b) |
an instrument changing the proper law of a trust to the law of the
Territory, |
| |
|
|
but which is not |
| |
|
|
|
(i) |
a will or codicil; |
| |
|
|
|
(ii) |
an instrument creating or recording a bare trust; |
| |
|
|
|
(iii) |
an instrument creating or recording a trust which is exclusively for
charitable purposes; |
| |
|
|
|
(iv) |
an instrument executed in exercise of a power vested in a trustee or any
other person conferred or reserved by the terms of a trust; or |
| |
|
|
|
(v) |
an instrument directing or declaring that further property is to be held
upon the trusts of an existing trust; |
| |
|
|
"trust duty" means the duty referred to in subsection (2). |
| |
|
(2) |
Every chargeable instrument shall be liable to trust duty in the sum of one
hundred dollars. |
| |
|
(3) |
Subject to subsection (4), trust duty shall be deemed to have been duly paid
on a chargeable instrument only when within three months of the date of the
instrument |
| |
|
|
(a) |
a revenue or postage stamp of the Territory for one hundred dollars is
affixed to the chargeable instrument; and |
| |
|
|
(b) |
an authorised person has cancelled the revenue or postage stamp referred to
in paragraph (a) by writing on it or across it his name and the date on
which his name has been so written on or across it. |
| |
|
(4) |
Where, in relation to a trust, two or more instruments are chargeable
instruments, trust duty shall be deemed to have been paid on each of those
instruments if it is deemed to have been duly paid, by virtue of a stamp
affixed and cancelled in accordance with subsection (3), on any one of them. |
| |
|
(5) |
Where trust duty is not deemed to have been duly paid on a chargeable
instrument in accordance with the provisions of this section, that
instrument (and, in the case of a chargeable instrument changing the proper
law of a trust to the law of the Territory, any instrument declaring or
evidencing the trust to which such chargeable instrument relates) may not be
pleaded or given in evidence or admitted to be good, useful or available in
law or equity in civil proceedings unless, following the payment in the
manner described in subsection (7), of |
| |
|
|
(a) |
a penalty in the sum of two hundred dollars for each calendar year or part
thereof that shall have elapsed from the creation of the trust to which the
instrument relates or the date upon which its proper law becomes the law of
the Territory, as the case may be, and |
| |
|
|
(b) |
the sum of one hundred dollars (hereinafter in this section called "late
duty"), |
| |
|
|
the Court by order at its discretion so directs. |
| |
|
(6) |
The provisions of subsection (5) shall not affect rights to plead or give in
evidence or admit to be good, useful or available in criminal proceedings
any chargeable instrument or other document. |
| |
|
(7) |
The penalty referred to in subsection (5)(a) and the late duty shall be paid
by affixing to the chargeable instrument a revenue or postage stamp of the
Territory for the amount of the penalty and the late duty on or across which
shall be written by any person, the date upon which the stamp is affixed to
the instrument. |
| |
|
(8) |
No chargeable instrument or other document which is liable to trust duty,
the penalty referred to in subsection (5)(a) or the late duty shall be
produced to the Treasury, Post Office or other public body for the purposes
of payment of such trust duty, penalty or late duty. |
|
|
|
|
|
TOP |
|
PART IX - Incorporation of Administrative Powers by
Reference
|
|
Incorporation by reference |
93. |
(1) |
Any instrument
creating any trust may incorporate by reference any of the provisions set
out in the Second Schedule, in which case the following expressions appearing in
the provisions have, unless a contrary intention appears, the meanings
respectively assigned to them:
"the Trustees"
means the trustees for the time being of the trust;
"the Trust Fund"
means -
|
| |
|
|
(a) |
the property in respect of which trusts are declared; |
| |
|
|
(b) |
all property paid or transferred to or otherwise vested in and accepted by
the Trustees; |
| |
|
|
(c) |
all income which, in accordance with the provisions of the trust, is
accumulated by the Trustees and added to the capital thereof; and |
| |
|
|
(d) |
all money, investments and other property from time to time representing all
property and income mentioned in paragraphs (a), (b) and (c) and any part of
the said property or income. |
| |
|
(2) |
A memorandum signed by the Trustees as to property paid or transferred to or
otherwise vested in or accepted by the Trustees is conclusive evidence of
the payment, transfer or other vesting. |
|
|
|
|
|
TOP |
|
Part X -
Trustees and Dealings with Third Parties
|
|
Definitions |
94. |
(1) |
In this Part |
|
|
|
"contract" includes a warranty, undertaking, covenant and any other legal
commitment; |
|
|
|
"transaction" includes a contract; |
|
|
|
"trust fund", in relation to a trust, means the property for the time being
subject to the trust. |
|
|
(2) |
In this Part, references, in relation to a power, to requirements for its
exercise are references solely to requirements for the exercise of the
power, including, in particular, requirements for consent, expressly laid
down by the terms of the power. |
|
Transactions deemed to be property entered into with trustees |
95. |
(1) |
For the purposes of this Part, where a person ("the third party") enters
into a transaction with a trustee, the transaction shall be deemed to be
properly entered into by the trustee if the condition stated in subsection
(2) is satisfied. |
|
|
(2) |
The condition referred to in subsection (1) is that when entering into the
transaction it appears to the third party after reasonable enquiry that |
|
|
|
(a) |
the trustee has power, conferred by the terms of the trust or by law, to
enter into a transaction of the kind in question; and |
|
|
|
(b) |
if there is any requirements for exercise of that power, the trustee has
complied with them. |
|
|
(3) |
Satisfaction of the condition in subsection (2) shall not require the third
party to make enquiry as to whether, in the particular case, the exercise of
the power referred to in subsection (2)(a) would be in breach of any duty of
the trustee, apart from any duty to comply with any requirements for its
exercise. |
|
|
(4) |
Subsection (1) shall not apply in construing the provisions of subsections
97(3) and (4) and 98(2). |
|
|
(5) |
Subsection (1) shall not apply otherwise than for the purposes of this Part,
and in particular shall not affect a trustee's obligation to make
restitution or pay compensation if he has acted improperly. |
|
Protection of persons dealing with trustees |
96. |
(1) |
Where a person ("the third party") enters into a transaction with a trustee
of a trust and that transaction has been properly entered into by the
trustee, the provisions of subsections (2) and (3) shall apply, except to
the extent that the transaction otherwise provides. |
|
|
(2) |
Property acquired by the third party in or by virtue of the transaction
shall be take free and discharged from the trust. |
|
|
(3) |
The third party shall not be concerned to see that property acquired by the
trustee from the third party in or by virtue of the transaction is properly
applied. |
|
|
(4) |
Subsections (1) to (3) shall not prejudice any other right or claim of the
third party in relation to the transaction. |
|
Optional provision concerning liability of trustees |
97. |
(1) |
This section applies to a trust where the terms of the trust expressly so
provide. |
|
|
(2) |
Where this section applies to a trust, the provisions of subsections (3) and
(4) shall have effect. |
|
|
(3) |
Except as otherwise provided in the contract, a trustee of the trust shall
not be personally liable under or by virtue of a contact with any party
properly entered into by the trustee in the trustee's fiduciary capacity in
the course of administering the trust if the trustee disclosed in the
contract the fiduciary capacity, or if the party was otherwise aware of that
capacity. |
|
|
(4) |
A claim based on |
|
|
|
(a) |
a contract entered into by a trustee of the trust, |
|
|
|
(b) |
an obligation arising from ownership or control of trust property, or |
|
|
|
(c) |
a tort committed in the course of administering the trust, |
|
|
|
may be asserted by a party in a judicial proceeding against the trustee in
the trustee's fiduciary capacity, whether or not the trustee is personally
liable for the claim, and so that the claimant shall be entitled to
satisfaction out of the trust fund directly rather than by way of
subrogation to any right of indemnity of the trustee. |
|
Limitation of trustee's personal contractual liability |
98. |
(1) |
Where section 97 does not apply to a trust, this section shall apply to it. |
|
|
(2) |
Subject to subsection (3), where, in a contract properly entered into by a
trustee, the trustee discloses his fiduciary capacity, or the other party is
otherwise aware of that capacity, the trustee is personally liable for any
sum payable under the contract only to the extent of the value of the trust
fund when the payment falls due. |
|
|
(3) |
When computing the value of the trust fund for the purposes of subsection
(2), the fund shall be treated as still including any property which, since
the contract was entered into, has been distributed. |
|
|
(4) |
Subsections (2) and (3) shall have effect subject to any contrary provision
in the contract. |
|
|
(5) |
For the purposes of subsection (3), property shall be taken to have been
distributed if it has ceased to be subject to the trust otherwise than on a
disposal in good faith for valuable consideration in the management or
administration of trust property. |
|
Protection from tortious liability |
99. |
A trustee is personally liable for torts committed in the course of
administering a trust, or for obligations arising from ownership or control
of trust property, including liability for violation of any law relating to
protection of the environment, only if the trustee is personally at fault. |
|
Provisions relating to the right of subrogation |
100. |
(1) |
Subject to the terms of the trust and without prejudice to section 97 where
applicable, |
|
|
|
(a) |
where a trustee of a trust has incurred a liability in favour of another
party ("the third party") under or by virtue of a contract properly entered
into by the trustee, the trustee shall have a right of indemnity against the
trust fund and against distributed property or its traceable product, to
which right the third party shall be subrogated; and |
|
|
|
(b) |
in computing the amount of the indemnity any indebtedness of the trustee
shall be disregarded. |
|
|
(2) |
If the contract is deemed, by virtue of section 95, to be properly entered
into when in fact it was entered into without requisite power or without
compliance with any requirements for its exercise or otherwise in breach of
duty, the trustee shall be liable to compensate the trust fund for any
amount to which the right of subrogation applies by virtue of subsection
(1). |
|
|
(3) |
The disregarding of any indebtedness of the trustee under subsection (1)(b)
shall be solely for the purpose of establishing the extent of the third
party's right of subrogation, and shall not eliminate or otherwise affect
that indebtedness. |
|
|
(4) |
For the purposes of this section, indebtedness of a trustee includes all
liability, quantified or not, of the trustee to make restitution or pay
compensation to the trust fund, including the liability specified in
subsection 92). |
|
|
(5) |
Rights of indemnity conferred by this section, |
|
|
|
(a) |
shall not prejudice any rights of indemnity or reimbursement to which, apart
from this section, a trustee would be entitled, |
|
|
|
(b) |
shall subsist notwithstanding any purported waiver or exclusion, in whole or
in part, by the trustee. |
|
|
(6) |
For the purposes of subsection (1), property shall be taken to have been
distributed if, since the contract was entered into, it has ceased to be
subject to the trust otherwise than on a disposal in good faith for valuable
consideration in the management or administration of trust property. |
|
Optional power to vary trust for protection of creditors |
101. |
(1) |
This section applies to a trust where the terms of the trust expressly so
provide. |
|
|
(2) |
Where this section applies to a trust, subsections (3) to (6) shall have
effect. |
|
|
(3) |
Where a person ("the lender") has lent money to a trustee of the trust,
whether on security or not, that trustee or any trustee for the time being
in office may, where so requested by the lender for the lender's protection,
by declaration in writing, to such extent and in such manner as the trustee
thinks fit, restrict, or impose conditions on the exercise of, any of the
following: |
|
|
|
(a) |
powers of investment and other powers in the management and administration
of trust property; |
|
|
|
(b) |
rights of beneficiaries, including objects of powers, to actual receipt of
trust property to which they have or may become entitled; |
|
|
|
(c) |
powers relating to the appointment, retirement or removal of trustees. |
|
|
(4) |
A declaration pursuant to subsection (3) |
|
|
|
(a) |
shall not be made by a trustee unless he considers it to be compatible with
his equitable duties under the trust in relation to its beneficiaries; |
|
|
|
(b) |
shall not affect any power of the Court. |
|
|
(5) |
A restriction or condition made or imposed under a declaration pursuant to
subsection (3) may subsist only during such time or times as there is a
liability of money lent under or by virtue of a contract properly entered
into by a trustee of the trust. |
|
|
(6) |
If, and to the extent that, a trust is for purposes, the reference in
subsection (4)(a) to a trust's beneficiaries shall be taken to include a
reference to those purposes. |
|
Optional power to create charges |
102. |
(1) |
This section applies to a trust where the terms of the trust expressly so
provide. |
|
|
(2) |
Where this section applies to a trust, subsections (3) to (12) shall have
effect. |
|
|
(3) |
A trustee of the trust may grant security in accordance with this section in
favour of a person (referred to in this section as a "third party") acting
in good faith and for value in relation to liabilities to that third party
incurred by the trustee under or by virtue of a contract properly entered
into by the trustee. |
|
|
(4) |
The grant of security may take the form of a fixed legal or equitable
mortgage or charge over all or any of the property subject to the trust, or
of a right in equity in accordance with subsection (5). |
|
|
(5) |
A trustee may by writing grant a third party the right in equity, which
shall be enforceable as such, to require the trustee to discharge
liabilities to that third party out of the trust fund, or some part of it,
and a right so granted is referred to in this section as a "trustee
statutory charge". |
|
|
(6) |
A trustee statutory charge shall, except to the extent otherwise agreed by
the parties concerned, have priority over |
|
|
|
(a) |
rights of persons under the terms of the trust, |
|
|
|
(b) |
obligations under the trust to apply property for any purpose, |
|
|
|
(c) |
trustees' rights of indemnity against the trust fund, |
|
|
|
(d) |
creditors' claims against the trust fund not secured by any fixed charge or
right in the nature of a fixed security over any trust property, and |
|
|
|
(e) |
any trustee statutory charge entered into at a later time, |
|
|
|
but shall be subject to any fixed charge or right in the nature of a fixed
security over any trust property, and subject to any trustee statutory
charge entered into at an earlier time. |
|
|
(7) |
Nothing in subsection (6) shall affect the rights of a person claiming under
a floating security created over property subject to a trust prior to its
becoming so subject. |
|
|
(8) |
A person receiving any trust property, otherwise than on a disposal by a
trustee for value in course of management or administration of the trust
fund, shall take it subject to any subsisting trustee statutory charge, but
without prejudice to any claim of a third party against a trustee for
distributing property before the charge has been satisfied. |
|
|
(9) |
A security granted pursuant to subsection (3) may be on such terms and
conditions as the trustee thinks fit. |
|
|
(10) |
Subject to the terms of the charge, the trustee for the time being of a
trust shall pay due regard, in the execution, management and administration
of the trust, to the interest of any person entitled to the benefit of a
trustee statutory charge. |
|
|
(11) |
The Bills of Sale Act shall have no application to a trustee statutory
charge. |
|
|
(12) |
The powers conferred by this section shall be in addition to any powers to
grant security conferred by the trust instrument or by any other provision
of law. |
|
Prohibition of amendment of applied sections |
103. |
This Part does not permit the application of section 97, 101 or 102 to a
trust other than in the terms of the relevant section. |
|
Application of Part |
104. |
This Part shall apply to trusts created on or after the date on which this
Part comes into force. |
|
|
|
Definitions |
105. |
(1) |
In this Part,
"charitable company" means a
charity which is a company or other body corporate;
"charity trustees" means the
persons having the general control and management of the administration of
charity;
"gross income", in relation to a
charity, means it gross recorded income from all sources including property
which is held and administered by or on behalf of a charity for any special
purposes of the charity, and is so held and administered on separate trusts
relating only to that property; and
"trusts", in relation to a
charity, means the provisions establishing it as a charity and regulating
its purposes and administration, whether those provisions take effect by way
of a trust or not. |
|
|
(2) |
In this Part, the expression "charity" does not include any ecclesiastical
corporation or any trust of property for purposes for which the property has
been consecrated. |
|
Occasions for applying property cy-pres |
106. |
(1) |
Subject to subsection (2), the circumstances in which the original purposes
of a charitable gift can be altered to allow the property given or part of
it to be applied cy-pres shall be as follows: |
|
|
|
(a) |
where the original purposes, in whole or in part, |
|
|
|
|
(i) |
have been as far as may be fulfilled; or |
|
|
|
|
(ii) |
cannot be carried out generally or according to the directions given and to
the spirit of the gift; or |
|
|
|
(b) |
where the original purposes provide a use for part only of the property
available by virtue of the gift; or |
|
|
|
(c) |
where the property available by virtue of the gift and other property
applicable for similar purposes can be more effectively used in conjunction,
and to that end can suitably, regarding being had to the spirit of the gift,
be made applicable to common purposes; or |
|
|
|
(d) |
where the original purposes were laid down by reference to an area which
then was but has since ceased to be a unit for some other purpose, or by
reference to a class of persons or to an area which has for any reason since
ceased to be suitable, regarding being had to the spirit of the gift, or to
be practical in administering the gift; or |
|
|
|
(e) |
where the original purposes, in whole or in part, have, since they were laid
down, |
|
|
|
|
(i) |
been adequately provided for by other means; or |
|
|
|
|
(ii) |
ceased, in law, to be charitable on the grounds that they have become
useless or harmful to the community or for other reasons; or |
|
|
|
|
(iii) |
ceased in any other way to provide a suitable and effective method of using
the property available by virtue of the gift, regard being had to the spirit
of the gift. |
|
|
(2) |
Subsection (1) shall not affect the conditions which must be satisfied in
order that property given for charitable purposes may be applied cy-pres
except insofar as those conditions required a failure of the original
purposes. |
|
|
(3) |
References in subsections (1) and (2) to the original purposes of a gift
shall be construed, where the application of the property given has been
altered or regulated by a scheme or otherwise, as referring to the purposes
for which the property is for the time being applicable. |
|
|
(4) |
It is hereby declared that a trust for charitable purposes places a trustee
under a duty, where the case permits and requires the property or some part
of it to be applied cy-pres, to secure its effective use for charity by
taking steps to enable it to be so applied. |
|
Power for the Court to authorised dealings with charity
property, etc. |
107. |
(1) |
Subject to the provisions of this section, where it appears to the Court
that any action proposed or contemplated in the administration of a charity
is expedient in the interests of the charity, it may be order authorise that
action, whether or not it would otherwise be within the powers exercisable
by the charity trustees in the administration of the charity to do so, and
anything done under the authority of such an order shall be deemed to be
properly done in the exercise of those powers. |
|
|
(2) |
An order under this section may be made so as to authorise a particular
transaction, compromise or the like, or a particular application of
property, or so as to give more general authority, and without prejudice to
the generality of subsection (1), may authorise a charity to use common
premises, or employ a common staff, or otherwise combine for any purpose of
administration, with any other charity. |
|
|
(3) |
An order under this section may give directions as to the manner in which
any expenditure is to be borne and as to other matters connected with or
arising out of the action thereby authorised, and where anything is done in
pursuance of an authority given by any such order, any directions given in
connection therewith shall be binding on the charity trustees for the time
being as if contained in the trusts of charity, but any such directions may
on the application of the charity be modified or superseded by a further
order. |
|
|
(4) |
Without prejudice to the generality of subsection (3), the directions which
may be given by an order under this section may in particular include
directions for |
|
|
|
(a) |
meeting any expenditure out of a specified fund; |
|
|
|
(b) |
charging any expenditure to capital or to income; |
|
|
|
(c) |
requiring expenditure charged to capital to be recouped out of income within
a specified period; |
|
|
|
(d) |
restricting the costs to be incurred at the expense of the charity; or |
|
|
|
(e) |
the investment of moneys arising from any transaction. |
|
|
(5) |
No order under this section shall authorise the doing of any act expressly
prohibited by any enactment or by the trusts of the charity, nor shall it
extend or alter the purposes of the charity. |
|
Power to spend capital |
108. |
(1) |
This section applies to a charity if |
|
|
|
(a) |
it has a permanent endowment which does not consist of, or comprise, any
land; |
|
|
|
(b) |
its gross income in the twelve months period ending on the date on which the
resolution referred to in subsection (2) is passed did not exceed two
thousand, five hundred dollars or such greater sum as the Governor in
Council may, by Order, specify; |
|
|
|
(c) |
there is no express provision in the trust instrument to the effect that
this section does not apply to the charity; and |
|
|
|
(d) |
it is not a charitable company. |
|
|
(2) |
Where the charity trustees of a charity to which this section applies are of
the opinion that the property of the charity is too small, in relation to
its purposes, for any useful purpose to be achieved by the expenditure of
income alone or that its purposes can be more effectively served by the
expenditure of all or any part of its capital, they may resolve for the
purposes of this section that the charity ought to be freed from the
restrictions with respect to expenditure of capital to which its permanent
endowment is subject. |
|
|
(3) |
Any resolution passed under subsection (2) shall be passed by a majority of
not less than two-thirds of such charity trustees as vote on the resolution. |
|
|
(4) |
Where charity trustees pass a resolution under subsection (2), they shall |
|
|
|
(a) |
give public notice of the resolution in such manner as they think reasonable
in the circumstances; and |
|
|
|
(b) |
send a copy of the resolution to the Attorney General, together with a
statement of their reasons for passing it. |
|
|
(5) |
The Attorney General may, when considering the resolution, require the
charity trustees to provide additional information or explanation |
|
|
|
(a) |
as to the circumstances in and by reference to which they have determined to
act under this section, or |
|
|
|
(b) |
relating to their compliance with this section in connection with the
resolution, |
|
|
|
and the Attorney General shall take into account any representations made to
him by persons appearing to him to be interested in the charity where those
representations are made within the period of six weeks beginning with the
date when the Attorney General receives a copy of the resolution by virtue
of subsection (4)(b) |
|
|
(6) |
Where the Attorney General has so received a copy of a resolution from any
charity trustees and it appears to him that the trustees have complied with
this section in connection with the resolution, the Attorney General shall,
within the period of three months beginning with the date when he received
the copy of the resolution, notify the trustees, in writing, that he either |
|
|
|
(a) |
concurs with the resolution; or |
|
|
|
(b) |
does not concur with the resolution. |
|
|
(7) |
Where the Attorney General notifies the trustees of his concurrence with the
resolution under subsection (6)(a), the charity trustees shall have, as from
the date as may be specified in the notification, power by virtue of this
section to expend any property of the charity without regard to any such
restrictions as are mentioned in subsection (2). |
|
|
(8) |
An Order under subsection (1)(b) may apply either generally in relation to
all charities or in relation to charities specified in the Order. |
|
|
(9) |
A charity shall be deemed for the purposes of this section to have a
permanent endowment unless all property held for the purposes of the charity
may be expended for those purposes without distinction between capital and
income, and in this section "permanent endowment" means, in relation to any
charity, property held subject to a restriction on its being expended for
the purposes of the charity. |
|
Application of Part |
109. |
This Part applies in relation to trusts whether created before, on or after
the date on which this Part comes into force. |
First Schedule
|
Second Schedule
|
