Trustee Act 1925 (ACT)
Trustee Act 1925
A1925-14
Republication No 22
Effective: 12 December 2023
Republication date: 12 December 2023
Last amendment made by A2023‑57
About this republication
The republished law
This is a republication of the Trustee Act 1925 (including any amendment made under the Legislation Act 2001, part 11.3 (Editorial changes)) as in force on 12 December 2023. It also includes any commencement, amendment, repeal or expiry affecting this republished law to 12 December 2023.
The legislation history and amendment history of the republished law are set out in endnotes 3 and 4.
Kinds of republications
The Parliamentary Counsel’s Office prepares 2 kinds of republications of ACT laws (see the ACT legislation register at type="disc">
authorised republications to which the Legislation Act 2001 applies
unauthorised republications.
The status of this republication appears on the bottom of each page.
Editorial changes
The Legislation Act 2001, part 11.3 authorises the Parliamentary Counsel to make editorial amendments and other changes of a formal nature when preparing a law for republication. Editorial changes do not change the effect of the law, but have effect as if they had been made by an Act commencing on the republication date (see Legislation Act 2001, s 115 and s 117). The changes are made if the Parliamentary Counsel considers they are desirable to bring the law into line, or more closely into line, with current legislative drafting practice.
This republication does not include amendments made under part 11.3 (see endnote 1).
Uncommenced provisions and amendments
If a provision of the republished law has not commenced, the symbol U appears immediately before the provision heading. Any uncommenced amendments that affect this republished law are accessible on the ACT legislation register ( For more information, see the home page for this law on the register.
Modifications
If a provision of the republished law is affected by a current modification, the symbol M appears immediately before the provision heading. The text of the modifying provision appears in the endnotes. For the legal status of modifications, see the Legislation Act 2001, section 95.
Penalties
At the republication date, the value of a penalty unit for an offence against this law is $160 for an individual and $810 for a corporation (see Legislation Act 2001, s 133).
Trustee Act 1925
Contents
Page
Part 1 Preliminary
1 Name of Act 2
2 Dictionary 2
3 Notes 2
4 Meaning of trust 2
5Offences against Act—application of Criminal Code etc 3
5A Treatment of unincorporated entities named in trusts 3
Part 2 Trustees
Division 2.1 Appointment, retirement, disclaimer and ceasing to be executor
6 Appointment of new trustees 4
7 Additional trustee 7
7A Children not to be appointed trustees 8
8 Retirement 8
9 Vesting on appointment and retirement 9
10 Renunciation of probate 10
11 Ceasing to be executor 12
12 Registration 13
13 Protection of purchasers 14
Division 2.2 Powers and duties
Subdivision 2.2.1 Investment
14 Powers of investment 14
14A Duties of trustee in relation to powers of investment 15
14B Law and equity preserved 15
14C Exercise of power of investment 16
14D Powers of trustee in relation to securities 17
14E Power to buy house as residence for beneficiary 19
14F Investment in securities under RITS system 19
17 Accepting a short title 20
18 Ratio of loan to value 20
19 Loss on authorised security 21
20 Release of part of security 21
21 Arrangement with company 22
22 New shares in company 23
23 Calls on shares 24
24 Accrued interest on debentures or stock sold or purchased 24
25 Continued holding 24
Subdivision 2.2.2 Sale and other dealings
26 Powers incidental to sale 25
27 Duration of trust or power to sell 26
27B Postponement of sale 27
27C Purchaser under trust for sale 27
27D Application of rule in Howe v Earl of Dartmouth to leases 27
28 Deferred payment on sale of land 28
30 Depreciatory conditions 30
31 Sale of part of land 31
32 Sale, exchange and partition 31
32A Power to purchase equity of redemption instead of foreclosure 32
33 Sale after right of redemption barred 32
34 Release of equity of redemption in discharge of mortgage debt 33
35 Surrender of onerous lease 33
36 Leasing 34
37 Renewal of renewable leasehold 36
38 Raising money 37
39 Protection of purchasers or mortgagees 37
39A Application of income by trustee as mortgagee in possession 38
Subdivision 2.2.3 Property not in possession
40 Powers 39
Subdivision 2.2.4 Insurance
41 Insurance 40
42 Application of insurance money 41
Subdivision 2.2.5 Maintenance, advancement and protective trusts
43 Maintenance and accumulation 42
44 Advancement 44
45 Protective trusts 45
Subdivision 2.2.6 Appropriation and payment to public trustee and guardian
46 Appropriation 47
47 Payment to public trustee and guardian 51
Subdivision 2.2.7 Receipts and compounding
48 Receipts 53
49 Compounding 53
Subdivision 2.2.8 Safe custody, audit and valuation
50 Deposit for safe custody 54
51 Audit 55
51A Information etc for Minister 55
51B Minister may require inquiry etc 56
52 Valuation 57
Subdivision 2.2.9 Agents, banks and others
53 Employment of agents 57
54 Banks 58
54A Bank may recognise certain signatures and endorsements 59
55 Property outside ACT 59
56 Undivided interests 60
Subdivision 2.2.10 Surviving trustees
57 Two or more trustees 61
Subdivision 2.2.11 Protection of trustees
58 Powers of attorney 61
59 Implied indemnity 62
60 Distribution after notice 62
61 Distribution where estate comprises leaseholds, and in certain other cases 63
61A Personal liability of legal representative or trustee 64
62 Notice affecting a trustee 64
63 Advice 64
Division 2.3 Delegation
64 Execution of trust 66
65 Consent to exercise of trust or power 67
66 Person dealing with delegate 68
67 Power of attorney 68
68 Registration 68
Part 3 Powers of Supreme Court
Division 3.1 New trustees and vesting orders
70 New trustees 69
71 Vesting orders 70
72 Contingent rights of unborn person 72
73 Child beneficiary 73
74 Mortgagee under disability 73
75 Deceased mortgagee 73
76 Sale or mortgage of land 75
77 Specific performance etc 75
78 Effect of vesting order 76
79 Appointment of person to convey 77
80 Trustees of charities 77
Division 3.2 Dealings and improvements
81 Advantageous dealings 78
82 Improvements and repairs 79
83 Improvements and repairs without Supreme Court’s approval 81
84 Sale of child’s property 81
Division 3.3 Relief and indemnity
85 Excusable breaches of trust 82
86 Indemnity for breach of trust 82
Division 3.4 Miscellaneous powers
87 Division of chattels 83
88 Order in absence of trustee 83
89 Supreme Court considerations in action for breach of trust 83
89A Power of Supreme Court to set off investment gains and losses 84
90 Postponement of order 84
Division 3.5 Applications and orders
91 Orders in other proceedings 84
92 People entitled to apply 85
Division 3.6 Charitable trusts
94A Applications to Supreme Court 85
94B Orders of Supreme Court 86
94C Notice to Minister 86
94E Action under Supreme Court order lawful 86
Part 4 Payment into court
94F Definitions for pt 4 87
95 Trustees 87
96 Person liable to person with legal disability 88
98 Money or securities 88
Part 5 Miscellaneous
102 Compulsion to account 89
103 Indemnity for anything done under Act etc 89
104 Preamble to Charitable Uses Act 1601 90
105 Illusory etc share valid in law and equity 90
106 Consideration of advice etc by certain trustees 90
Schedule 1 Preamble to Charitable Uses Act 1601 92
Dictionary93
Endnotes
1 About the endnotes 97
2 Abbreviation key 97
3 Legislation history 98
4 Amendment history 105
5 Earlier republications 119
Trustee Act 1925
An Act relating to trustees and trust property, and for related purposes
Part 1Preliminary
Name of Act
This Act is the Trustee Act 1925.
Dictionary
The dictionary at the end of this Act is part of this Act.
Note 1The dictionary at the end of this Act defines certain words and expressions used in this Act, and includes references (signpost definitions) to other words and expressions defined elsewhere in this Act or in other legislation.
For example, the signpost definition ‘trust—see section 4 (Meaning of trust).’ means that the expression ‘trust’ is defined in that section.
Note 2A definition in the dictionary (including a signpost definition) applies to the entire Act unless the definition, or another provision of the Act, provides otherwise or the contrary intention otherwise appears (see Legislation Act 2001, s 155 and s 156 (1)).
Notes
A note included in this Act is explanatory and is not part of this Act.
NoteSee Legislation Act 2001, s 127 (1), (4) and (5) for the legal status of notes.
Meaning of trust
(1)In this Act, trust includes—
(a)an implied or constructive trust (including a trust where the trustee has a beneficial interest in the trust property); and
(b)the duties of a legal representative of a dead person.
(2)However, trust does not include the duties incidental to an estate conveyed by way of mortgage.
Offences against Act—application of Criminal Code etc
Other legislation applies in relation to offences against this Act.
Note 1Criminal Code
The Criminal Code, ch 2 applies to all offences against this Act (see Code, pt 2.1).
The chapter sets out the general principles of criminal responsibility (including burdens of proof and general defences), and defines terms used for offences to which the Code applies (eg conduct, intention, recklessness and strict liability).
Note 2Penalty units
The Legislation Act, s 133 deals with the meaning of offence penalties that are expressed in penalty units.
5ATreatment of unincorporated entities named in trusts
(1)This section applies if an unincorporated entity is named in an instrument establishing a trust.
(2)For this Act, the people who make up the entity from time to time are taken to have been individually named in the instrument.
(3)To remove any doubt, this section does not apply to the interpretation of the instrument establishing the trust.
Part 2Trustees
Division 2.1 Appointment, retirement, disclaimer and ceasing to be executor
Appointment of new trustees
(1)A new trustee may by registered deed be appointed in place of a trustee, either original or substituted, and whether appointed by the Supreme Court or otherwise.
(2)A new trustee may be appointed in the following cases:
(a)if a trustee is dead;
(b)if a trustee remains out of the ACT for more than 1 year without having properly delegated the execution of the trust;
(c)if a trustee remains out of the ACT for more than 2 years;
(d)if a trustee desires to be discharged from all or any of the trusts or powers reposed in or conferred on him or her;
(e)if a trustee refuses to act, is unfit to act, or cannot act, as trustee;
(f)if a trustee is a child;
(g)if a trustee is removed under the trust instrument;
(h)if a trustee that is a corporation is dissolved.
(3)The person to be appointed a trustee shall not be the person, or 1 of the persons, by whom or with whose consent the appointment is or may be made, unless the appointment is made with the consent of the Supreme Court or of a majority of the beneficiaries.
(4)The appointment may be made by—
(a)the person (the nominated person) nominated by the trust instrument to appoint new trustees; or
(b)if there is no nominated person, or the nominated person cannot or is unwilling to act—the surviving or continuing trustee for the time being; or
(c)if there is no surviving or continuing trustee—by the legal representative of the last surviving or continuing trustee.
(5)The appointment may be made for all or any part of the trust property.
(6)The following provisions apply to appointments under subsection (1):
(a)2 or more trustees may be appointed concurrently;
(b)the number of trustees may be increased up to 4;
(c)a separate set of up to 4 trustees may be appointed for any part of the trust property held on trusts that are distinct from those relating to any other part of the trust property even if a new trustee is not to be appointed for the other part;
(d)any existing trustee may be appointed or remain a trustee of the separate set of trustees;
(e)if only 1 trustee was originally appointed—a separate trustee may be appointed for the distinct part;
(f)it is not necessary to appoint more than 1 new trustee if only 1 trustee was originally appointed or to fill up the original number of trustees if more than 2 trustees were originally appointed.
(7)By the appointment a trustee in place of whom the new trustee is appointed shall be discharged from the trust, provided that, except where only 1 trustee was originally appointed, a trustee shall not be so discharged unless there will be left after the discharge at least 2 trustees, the public trustee and guardian, or a trustee company, to perform the trust.
(8)Any conveyance or thing requisite for vesting the trust property, or any part of the trust property, jointly in the persons who are the trustees, shall be executed or done.
(9)Every new trustee appointed under this section, as well before as after all the trust property becomes by law or by conveyance or otherwise vested in him or her, shall have the same powers and discretions, and may in all respects act as if he or she had been originally appointed a trustee by the trust instrument.
(10)The provisions of this section about a trustee who is dead include the case of a person nominated trustee in a will but dying before the testator.
(11)The provisions of this section about a person nominated for the purpose of appointing new trustees apply, whether the appointment is to be made in a case specified in this section or in a case specified in the trust instrument, 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.
(12)The provisions of this section about a continuing trustee apply to a refusing or retiring trustee if the trustee is willing to act in the execution of this section.
(13)However—
(a)if there is a continuing trustee—this section does not authorise a refusing or retiring trustee to act separately from the continuing trustee; or
(b)if a refusing or retiring trustee does not act in the execution of this section—the fact that the trustee was willing to act does not affect the validity of an appointment made by anyone else.
(14)Nothing in this section shall give power to appoint any person as an executor or administrator.
(15)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Additional trustee
(1)A new trustee may by registered deed be appointed in addition to any existing trustee or trustees.
(2)A new trustee may be appointed in the following cases:
(a)where a sole trustee other than the public trustee and guardian or a trustee company is or has been originally appointed to act in a trust;
(b)where, in the case of any trust, there are not more than 3 trustees, either original or substituted, and whether appointed by the Supreme Court or otherwise, and none of the trustees is the public trustee and guardian or a trustee company.
(3)The person to be appointed a trustee shall not be the person, or 1 of the persons, by whom the appointment is or may be made, unless the appointment is made with the consent of the Supreme Court or of a majority of the beneficiaries.
(4)The appointment may be made by—
(a)the person (the nominated person) nominated by the trust instrument to appoint new trustees; or
(b)if there is no nominated person, or the nominated person cannot or is unwilling to act—the trustee for the time being.
(5)The appointment may be made for all or any part of the trust property.
(6)The following provisions apply to appointments under subsection (1):
(a)2 or more trustees may be appointed concurrently;
(b)the number of trustees may be increased up to 4.
(7)Except as provided by the trust instrument or another Territory law, it is not necessary to appoint any additional trustee.
(8)Section 6 (8), (9), (11) and (14) apply to the appointment of an additional trustee.
7AChildren not to be appointed trustees
(1)The appointment of a child as trustee is void.
(2)This section does not affect the power to appoint a new trustee to fill the vacancy.
Retirement
(1)A trustee may by registered deed retire from the trust without any new trustee being appointed in his or her place.
(2)A trustee may not so retire, unless his or her co-trustees and such other person (if any) as is empowered to appoint trustees, consent by the same or other registered deed to the retirement, and there will be left after the retirement at least 2 continuing trustees, or the public trustee and guardian, or a trustee company, to perform the trust.
(3)Trustees may retire concurrently.
(4)By the retirement the trustee shall be discharged from the trust, provided that, if in order to vest any part of the trust property in the continuing trustees alone, it is necessary that it should be duly transferred, the retiring trustee shall not be discharged in respect of that part until it is duly transferred.
(5)At any time after the registration of the deed or deeds of consent and retirement the continuing trustees shall have the same powers and discretions, and may in all respects act as if the retiring trustee were wholly discharged from the trust.
(6)Any conveyance or thing required for vesting the trust property in the continuing trustees alone shall be executed or done.
(7)Nothing in this section shall authorise any retirement from the office of an executor or administrator.
(8)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Vesting on appointment and retirement
(1)Where a new trustee is appointed, the execution and registration of the deed of appointment shall without any conveyance, except as otherwise provided in this section, vest in the persons who become and are the trustees for performing the trust, as joint tenants and for the purposes of the trust, the trust property for which the new trustee is appointed.
(2)Where a trustee retires, the execution and registration of the deed or deeds of consent and retirement shall without any conveyance, except as otherwise provided in this section, vest in the continuing trustees alone as joint tenants and for the purposes of the trust, all the trust property which is jointly vested in the continuing trustees and the retiring trustee.
(3)Land under the Land Titles Act 1925 does not vest until—
(a)the appropriate transfer is registered; or
(b)an entry of the vesting is made in the register kept under that Act.
(4)For subsection (3), an entry of the vesting of land has the same effect as the registration of a transfer of the land.
(5)The following property does not vest until the appropriate transfer is registered:
(a)a mortgage for securing money subject to the trust (other than land under the Land Titles Act 1925 or land conveyed on trust for securing debentures or debenture stock);
(b)other property for which a conveyance is required to be registered under the law of the place where the property is located.
(6)Property that is only transferable—
(a)in books kept by a corporation, company or other body; or
(b)in the manner directed by or under a law in force in the place where the property is located;
does not, under this section, vest until it is duly transferred.
(7)In the case of land held under a lease which contains any covenant condition or agreement against assignment or disposing of the land without license or consent, the land shall not vest until it is duly transferred, unless—
(a)before the execution of the deed of appointment, or the deed or deeds of consent and retirement, as the case may be, the requisite license or consent to the assignment or disposition has been obtained; or
(b)by virtue of any statute or rule of law the vesting would not operate as a breach of covenant or give rise to a forfeiture.
(8)In subsection (7):
lease includes an underlease and an agreement for a lease or underlease.
(9)If any property does not vest under this section until transfer or registration, the execution and registration of the deed of appointment, or of the deed or deeds of consent and retirement, as the case may be, shall nevertheless vest the right to call for a transfer of the property, and to sue for or recover the property.
(10)This section extends to an appointment by deed, or a retirement by deed, under the provisions of the trust instrument.
(11)In this section:
joint tenant includes joint owner.
Renunciation of probate
(1)If a person who is appointed by will both executor and trustee of the will renounces probate, or after being duly cited fails to apply for probate, the renunciation or failure shall be deemed to be a disclaimer of the trust contained in the will.
(2)Where—
(a)such a person renounces probate or fails, after being duly cited, to apply for probate; or
(b)such a person dies before probate is granted to him or her; or
(c)such a person, instead of applying for probate—
(i)requests the public trustee and guardian in writing to apply for an order under the Administration and Probate Act 1929, section 88; or
(ii)authorises a trustee company to apply for administration with the will annexed;
and where the Supreme Court grants to the public trustee and guardian an order under that section to collect and administer the estate of the person or administration with the will of the person annexed is granted to a trustee company, the public trustee and guardian or the trustee company, as the case may be, shall, by virtue of the order or grant and without further appointment be deemed to be appointed trustee of the will in the place of the person appointed trustee by the will.
(3)Where—
(a)under the Trustee Companies Act 1947, section 7, a trustee company is authorised to apply for probate of a will in place of a person who was, by the will, appointed both executor and trustee of the will; and
(b)probate of that will is granted to the trustee company;
the trustee company shall, by virtue of the grant and without further appointment, be deemed to be appointed trustee of the will in place of that person.
(4)Where—
(a)the Supreme Court grants administration with the will annexed to a trustee company instead of granting probate of the will to a person who was, by the will, appointed both executor and trustee of the will; or
(b)under the Trustee Companies Act 1947, section 14, an executor who was, by a will, appointed both executor and trustee of the will, with the consent of the Supreme Court, appoints a trustee company to perform and discharge the acts and duties of that executor;
the trustee company shall, by virtue of the appointment, be deemed to be appointed trustee or 1 of the trustees, as the case may be, of the will.
Ceasing to be executor
(1)If any property is vested in any person as executor of a will under which he or she is the trustee of the property or is beneficially entitled to it, the person may, at any time after all the executorial duties with respect to the property have been duly performed, declare by registered instrument in writing that he or she has ceased to hold the property as executor and that he or she holds the same as trustee or as beneficiary, as the case may be.
(2)Where a declaration is so made, the property shall, except as otherwise provided in this section, be deemed to be held in accordance with the declaration.
(3)For land under the Land Titles Act 1925—
(a)if the declaration is that the executor holds the land as trustee—the land is not taken to be so held until the registrar-general enters for the land a caveat forbidding the registration of any instrument not in accordance with the trusts and provisions of the will; or
(b)if the declaration is that the executor holds the land as beneficiary—the land is not taken to be so held until the registrar-general withdraws any inconsistent caveat.
Registration
(1)Any instrument by which a new trustee is appointed, or by which a trustee retires or disclaims, or by which the executor declares that he or she holds as trustee or as beneficiary, as the case may be, shall be deemed not to be registered for this Act unless it has been registered under the Registration of Deeds Act 1957.
(2)This section extends to an appointment or retirement, whether under this part or under the provisions of the trust instrument or otherwise, and to a consent to an appointment or retirement.
(3)This section applies whether or not the land is under the Land Titles Act 1925.
(4)For land under the Land Titles Act 1925, if an appointment or retirement or an instrument by which an executor declares that the executor holds as trustee or as beneficiary is registered, the registrar-general must make an entry of the vesting of the trust property or enter, vary or withdraw caveats, as the case requires.
(5)However, the registrar-general shall not be bound so to do until a written request is made to him or her by the persons in whom the property is to be vested, such evidence is given as he or she may reasonably require, and such notice (if any) is given to any other person as he or she may direct.
Protection of purchasers
(1)A statement in a registered deed by which a new trustee is appointed to the effect of any of the following matters, is, in favour of a subsequent honest purchaser, conclusive evidence of the appointment and any vesting resulting from the appointment:
(a)that a trustee has remained outside the ACT for longer than 1 year without having properly delegated the execution of the trust;
(b)that a trustee has remained outside the ACT for longer than 2 years;
(c)that a trustee refuses to act, is unfit to act, or cannot act, as trustee.
(2)A statement contained in any registered instrument by which an executor declares that he or she holds any property as trustee or as beneficiary, as the case may be, to the effect that all the executorial duties with respect to the property have been duly performed, shall in favour of a subsequent honest purchaser be conclusive evidence of the matter so stated upon any question as to the capacity in which the property was held.
(3)The protection afforded by this section to an honest purchaser extends to the registrar-general when registering or certifying title.
Division 2.2 Powers and duties
Subdivision 2.2.1 Investment
Powers of investment
A trustee may, unless expressly forbidden by the trust instrument—
(a)invest trust funds in any form of investment; and
(b)vary an investment at any time.
14ADuties of trustee in relation to powers of investment
(1)This section has effect subject to the trust instrument.
(2)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.
(3)A trustee shall exercise a power of investment in accordance with any provision of the trust instrument that is binding on the trustee and requires the trustee to obtain a consent or approval in relation to trust investments.
(4)A trustee shall, at least once a year, review the performance (individually and as a whole) of trust investments.
14BLaw and equity preserved
(1)Any rule or principle of law or equity that imposes a duty on a trustee exercising a power of investment continues to apply except to the extent that it is inconsistent with this or any other Act or with the trust instrument.
(2)A duty mentioned in subsection (1) includes the following:
(a)a duty to exercise the powers of a trustee in the best interests of all present and future beneficiaries of the trust;
(b)a duty to invest trust funds in investments that are not speculative or hazardous;
(c)a duty to act impartially towards beneficiaries and different classes of beneficiaries;
(d)a duty to take advice.
(3)If a provision in a trust instrument purports to exempt, indemnify or limit the liability of a trustee in relation to a breach of trust, any rule or principle of law or equity that relates to the provision continues to apply.
(4)If a trustee is under a duty to take advice, the reasonable costs of obtaining the advice are payable out of trust funds.
14CExercise of power of investment
(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 (if any), have regard to the following matters:
(a)the purposes of the trust and the needs and circumstances of the beneficiaries;
(b)the desirability of diversifying trust investments;
(c)the nature of, and the risk associated with, existing trust investments and other trust property;
(d)the need to maintain the real value of the capital or income of the trust;
(e)the risk of capital or income loss or depreciation;
(f)the potential for capital appreciation;
(g)the likely income return and the timing of income return;
(h)the length of the term of the proposed investment;
(i)the probable duration of the trust;
(j)the liquidity and marketability of the proposed investment during, and at the end of, the term of the proposed investment;
(k)the aggregate value of the trust estate;
(l)the effect of the proposed investment in relation to the tax liability of the trust;
(m)the likelihood of inflation affecting the value of the proposed investment or other trust property;
(n)the costs (including commissions, fees, charges and duties payable) of making the proposed investment;
(o)the results of a review of existing trust investments.
(2)A trustee may, having regard to the size and nature of the trust—
(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.
(3)A trustee shall comply with this section unless expressly forbidden by the trust instrument.
14DPowers of trustee in relation to securities
(1)If securities of a body corporate are subject to a trust, the trustee may concur, in the same way as if the trustee were beneficially entitled to the securities, 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 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 all or any of the securities.
(2)The trustee may accept instead of, or in exchange for, the securities subject to the trust securities of any denomination or description of another body corporate party to the scheme or arrangement.
(3)If a conditional or preferential right to subscribe for securities in a body corporate is offered to a trustee in relation to a holding in the body corporate or another body corporate, the trustee may, for all or any of the securities—
(a)exercise the right and apply capital money subject to the trust in payment of the consideration; or
(b)assign to any person, including a beneficiary under the trust, the benefit of the right, or the title to the right, for the best consideration that can be reasonably obtained; or
(c)renounce the right.
(4)A trustee accepting or subscribing for securities under this section is, for any provision of this division, exercising a power of investment.
(5)A trustee may keep securities accepted or subscribed for under this section for any period for which the trustee could properly have kept the original securities.
(6)The consideration for an assignment made under subsection (3) (b) is to be held as capital of the trust.
(7)This section applies in relation to securities subject to the trust instrument.
14EPower to buy house as residence for beneficiary
(1)Without limiting section 14C and subject to the trust instrument, a trustee may—
(a)buy a 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 house as a residence.
(2)Despite the terms of the trust instrument, a trustee may keep, as part of the trust property, a house for a beneficiary to use as a residence if to do so would not unfairly prejudice the interests of other beneficiaries.
(3)If a house is bought, kept or otherwise secured for use by a beneficiary as a residence, the house may be made available to the beneficiary on the terms, consistent with the trust and the beneficiary’s interest in the trust, that the trustee considers appropriate.
(4)The trustee may keep a house, or any interest or rights in relation to a house, secured for use by a beneficiary under this section after the beneficiary’s use of the house as a residence has finished.
(5)In this section:
house includes—
(a)any building or part of a building designed, or converted or capable of being converted, for use as a residence; and
(b)any amenities or facilities for use in association with the use of a house.
14FInvestment in securities under RITS system
(1)A thing in action arising under the RITS system that entitles its holder to a security of a particular description (the underlying security) is, for this Act and the trust instrument, taken to be the same in all respects as the underlying security.
NoteA thing in action (also called a chose in action) is an intangible personal property right recognised and protected by the law. Examples include debts, money held at a bank, shares, rights under a trust, copyright, and the right to sue for breach of contract.
(2)Accordingly, the holding or acquisition by a trustee of such a thing in action is to be regarded as an investment by the trustee in the underlying security.
(3)It does not matter that the right conferred by the thing in action is a right in relation to securities of a particular description and not in relation to particular securities.
(4)This section applies only to the extent that the trust instrument does not expressly forbid 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.
Accepting a short title
A trustee shall not be chargeable with breach of trust upon the ground only that in effecting the purchase of or in lending money upon the security of any property he or she has accepted a shorter title than the title which a purchaser is, in the absence of a special condition, entitled to require, if in the opinion of the Supreme Court the title accepted be such as a person acting with prudence and caution would have accepted.
Ratio of loan to value
(1)A trustee lending money on the security of any property on which he or she can lawfully lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, provided that the loan was made in accordance with this section.
(2)A loan shall be deemed not to have been made by a trustee in accordance with this section—
(a)unless the trustee acts upon a report of the value of the property made by a person reasonably believed by the trustee to be a competent valuer and instructed and employed by the trustee independently of any owner of the property, whether the valuer carries on business in the locality where the property is situated or elsewhere; and
(b)unless the loan is made upon the advice, expressed in the report, of the valuer; and
(c)unless the amount of the loan is not more than 2/3 of the value of the property as stated in the report.
Loss on authorised security
If a trustee improperly advances an amount of trust money on a mortgage security that would, at the time of investment, be a proper investment for a smaller amount, the trustee is liable to make good only the difference between the amounts with interest.
Release of part of security
(1)Where any property is held by a trustee by way of security and the trustee has power under this Act or otherwise to invest on mortgage and to vary investments, the trustee—
(a)may release part of the property from the mortgage, whether any part of the mortgage debt is repaid or not, provided that the unreleased part of the property would, at the time, be a proper investment in all respects for the amount remaining unpaid; and
(b)may, on a sale by the mortgagor of part of the mortgaged property and on the receipt by the trustee of the whole of the purchase money for the part after deduction of the expenses of the sale, release such part from the mortgage.
(2)A subsequent purchaser of the released part of the property, or the registrar-general, shall not be concerned to inquire whether the release was authorised by this section.
Arrangement with company
(1)Where any security of a company is held by a trustee, and the trustee can lawfully hold or retain the same, the trustee may, in like manner as if he or she were beneficially entitled to the security, concur in any scheme or arrangement—
(a)for the reconstruction of the company; or
(b)for the amalgamation of the company with any other company; or
(c)for the sale of all or any part of the property and undertaking of the company to any other company; or
(d)for the release, modification or variation of any rights, privileges or liabilities attached to the security.
(2)Instead of or exchange for the security the trustee may accept any security of any denomination or description of the reconstructed or new or purchasing company.
(3)The trustee shall not be responsible for any loss occasioned by anything done honestly, and may hold and retain any security so accepted in like manner as he or she could have done if the same had been an investment authorised by the trust instrument or by law.
(4)The powers conferred by this section shall be exercisable subject to the consent of any person whose consent to a change of investment is required by the trust instrument or by law.
(5)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
New shares in company
(1)Where a preferential right to subscribe for a security in a company is offered to a trustee in respect of any holding in the company, he or she may—
(a)exercise the right and apply capital money subject to the trust in payment of the consideration; or
(b)renounce the right; or
(c)assign the benefit of the right for the best consideration that can reasonably be obtained to any person, including a beneficiary under the trust.
(2)Where a trustee assigns the benefit of the right, the consideration received by him or her for the assignment shall be held as capital money of the trust.
(3)If—
(a)a preferential right to subscribe for shares in a company is offered to the trustee; and
(b)the shares are subject to a special or reserve liability; and
(c)the company is wound up;
the trustee may exercise the right and hold the shares as if they were part of the trustee’s original holding in the company.
(4)The trustee shall not be responsible for any loss occasioned by anything done honestly.
(5)The powers conferred by this section shall be exercisable subject to the consent of any person whose consent to a change of investment is required by law or by the trust instrument.
(6)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Calls on shares
(1)A trustee may apply capital money subject to a trust in payment of the calls on any shares subject to the trust.
(2)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Accrued interest on debentures or stock sold or purchased
(1)Where any payment received by a trustee in respect of a sale of debentures or inscribed stock bearing interest at a fixed rate shall be or include payment for the right to receive any interest accrued from the debentures or stock at the time of the sale, though the interest may not then be due, the amount of the accrued interest shall for the purposes of the trust be deemed to have been received as interest in respect of the period during which the interest so accrued.
(2)Where any payment made by a trustee in respect of a purchase of any debentures or inscribed stock bearing interest at a fixed rate shall be or include payment for the right to receive any interest accrued from the debentures or stock at the time of the purchase, though the interest may not then be due, the amount of the accrued interest when received shall for the purposes of the trust be deemed to have been received as purchase money repaid.
(3)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Continued holding
A trustee is not liable for breach of trust only because the trustee continues to hold an investment after the investment is no longer authorised by the trust instrument or by law.
Subdivision 2.2.2 Sale and other dealings
Powers incidental to sale
(1)A trustee for sale may—
(a)sell all or any part of the trust property; or
(b)sever and sell fixtures apart from the balance of the property; or
(c)grant and sell any easement right or privilege of any kind over or in relation to the property; or
(d)impose, reserve or make binding, as far as the law permits, by covenant, condition or other means, on the whole or any part of the trust property that remains unsold, or on any property sold and on the purchaser of that property, a restriction or reservation in relation to building on, or other use of, land; or
(e)sell the whole or part of the trust property, either with or without—
(i)a grant or reservation of rights of way, rights of water, easements, rights, and privileges for or connected with building or other purposes in relation to the whole or any part of the trust property that remains unsold or to any property sold; and
(ii)a covenant by the purchaser of land to expend money on the land; or
(f)lay out and make such roads, streets and ways, to be dedicated to the public or not, and grant such easements, rights of way or rights of drainage over those roads, streets and ways, as the circumstances of the case require and the trustee thinks fit; or
(g)join with any other person in doing anything under paragraphs (a) to (f); or
(h)pay or apply capital money subject to the trust for any of the purposes mentioned in this subsection.
(2)The sale may be subject to any such conditions respecting title or evidence of title or other matter as the trustee thinks fit, and may be—
(a)either subject to prior charges or not; or
(b)either together or in lots, in subdivision or otherwise; or
(c)by public auction or by private contract.
(3)The trustee may vary any contract for sale, buy in at any auction, rescind any contract for sale and resell, without being answerable for any loss.
(4)If the trustee joins with any other person in selling, the purchase money shall be apportioned in or before the contract of sale, and a separate receipt shall be given by the trustee for the apportioned share.
(5)A contravention of subsection (4) shall not invalidate or be deemed to have invalidated any instrument intended to affect or evidence the title to any land.
(6)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Duration of trust or power to sell
(1)Where the instrument creating a trust or power to sell property does not expressly limit the duration of the trust or power, the trustee may, if so requested in writing by any beneficiary, sell the property under the authority conferred by this section and shall be deemed to be a trustee for sale accordingly, notwithstanding any lapse of time or that all the beneficiaries are absolutely entitled to the property or full ownership in possession and are free of any incapacity, but in all other respects the authority conferred by this section shall be subject to any restrictions to which the power or trust created by the instrument is subject.
(2)Nothing in this section shall affect any trust or power to sell which is for the time being in existence under the instrument creating the trust or power.
(3)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
27BPostponement of sale
(1)A power to postpone sale is implied in every trust for sale, unless the contrary intention appears in the trust instrument.
(2)Subject to any express direction to the contrary in the trust instrument, if there is power to postpone sale—
(a)the trustee for sale is not liable for postponing the sale, in the exercise of his or her discretion, for any indefinite period; and
(b)a buyer need not investigate any directions about the postponement of sale.
(3)Where a disposition or settlement coming into operation after 1 December 1957 contains a trust either to retain or sell any property, the disposition or settlement is taken to be a trust to sell the property with power to postpone the sale.
27CPurchaser under trust for sale
(1)A trust for sale shall, so far as regards the safety and protection of any purchaser, be deemed to subsist notwithstanding any lapse of time until the property is conveyed to or under the direction of the persons interested in the proceeds of sale, and in the case of land until the conveyance is duly registered.
(2)Nothing in this section shall prevent any court from making an order restraining a sale.
27DApplication of rule in Howe v Earl of Dartmouth to leases
(1)The rule in Howe v Earl of Dartmouth (1802) (7 Ves 137) does not apply in relation to property consisting of a territory lease.
(2)This section applies to a trust unless the contrary intention appears in the trust instrument.
Deferred payment on sale of land
(1)A trustee for sale may sell land on terms of deferred payment or otherwise.
(2)The terms of deferred payment may provide either for the purchase money being paid by instalments, or for the unpaid purchase money being secured by mortgage.
(3)If the purchase money is to be paid by instalments, the terms upon which the land is sold shall, in addition to such other provisions as the trustee may deem proper, include provisions for giving effect to the following:
(a)that part of the purchase money shall be paid on the execution of the contract of sale;
(b)that the balance of the purchase money is payable in instalments, the first not later than 3 years after the date of the contract of sale and the others at intervals of not longer than 1 year beginning on the day the first instalment is payable, and interest is payable, at least every 6 months, on any unpaid amount;
(c)that the whole of the purchase money and interest shall be payable within a period not exceeding 10 years from the date of the contract of sale;
(d)that, if an instalment (or a part of an instalment) or interest is in arrears for 6 months (or any shorter period provided in the contract), all of the purchase money is payable immediately.
(4)For subsection (3) (b), an instalment must not be payable during the first 3 years from the date of the contract of sale that is less than 5% of the purchase money, and all instalments payable after then must be equal in amount.
(5)If the unpaid purchase money is to be secured by mortgage, the terms upon which the land is sold shall, in addition to such other provisions as the trustee may deem proper, include provisions for giving effect to the following:
(a)that part of the purchase money shall be paid on the execution of the contract of sale;
(b)that the unpaid purchase money shall be secured by a registered mortgage of the land sold, with or without the security of any other property, and shall bear interest payable half-yearly or oftener on the amount from time to time unpaid;
(c)that the mortgage must contain covenants by the mortgagor to pay the principal and interest, to maintain and protect the property, and insure all buildings (if any) on the land against loss or damage by fire to their full insurable value;
(d)that the mortgagor shall not have power to make any lease of the property, unless the trustee consents in writing.
(6)Whether the purchase money is to be paid by instalments or the unpaid purchase money is to be secured by mortgage, the trustee shall not be deemed to be lending money within the meaning of section 18 so as to be bound to act in accordance with that section, and shall not be liable for any loss which may be incurred by reason only of the security being insufficient at the date of the mortgage.
(7)The part of the purchase money to be paid on the execution of the contract of sale shall not be less than the sum which a person acting with prudence would, if the land were his or her own, have accepted in the circumstances in order to sell the land to the best advantage.
(8)The trustee shall not be bound to require payment of any greater part of the purchase money before letting the purchaser into possession, or before conveying the land and taking a mortgage back, than a person acting with prudence would, if the land were his or her own, have considered as sufficient, provided that the trustee shall not convey the land and take a mortgage back until at least 1/10 of the purchase money has been paid.
(9)Notwithstanding that the purchase money is to be paid by instalments, the trustee may at any time after 1/10 of the purchase money has been paid convey the land and take a mortgage back in any case where a person acting with prudence would, if the land were his or her own, have been willing in the circumstances so to do, and in any such case the mortgage shall be in accordance with subsection (5) (b), (c) and (d), and subsection (6) applies.
(10)Any mortgage under this section may be for any period not exceeding 10 years from the date of the contract of sale.
(11)The trustee may, on such terms (if any) as he or she deems proper, by writing waive or vary any right arising from failure to comply with any term of the contract of sale or of any mortgage under this section within the proper time.
(12)Where the sale is made under the order of the Supreme Court, the provisions of this section shall apply, unless the court shall otherwise direct.
(13)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Depreciatory conditions
(1)The sale of land by a trustee subject to a condition that may have been unnecessarily depreciatory is not a ground for—
(a)the buyer objecting to the title to the land; or
(b)a beneficiary challenging the sale; or
(c)if the land has been conveyed to the buyer—the buyer’s title to the land being challenged.
(2)However—
(a)a beneficiary may challenge the sale of the land on the ground that a condition may have been unnecessarily depreciatory if the consideration for the sale was made inadequate because of the condition; and
(b)a buyer’s title may be challenged on the ground that a condition may have been unnecessarily depreciatory if the buyer was acting in collusion with the trustee when the contract for the sale was made.
Sale of part of land
(1)A trust or power to sell or dispose of land includes a trust or power to sell or dispose of part of the land, whether the division is horizontal, vertical, or otherwise.
(2)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Sale, exchange and partition
(1)If a trustee is authorised by the trust instrument or by law to dispose of land by sale, exchange or partition, the trustee may dispose of all or any part of the land in that way.
(2)The exchange or partition may be made upon terms of giving or receiving any money for equality of exchange or partition.
(3)For the purpose of completing the disposition, the trustee may convey or otherwise dispose of the land either by way of revocation and appointment of the use or otherwise as may be necessary.
(4)This section extends to any other person authorised to dispose of land by way of sale, exchange or partition.
32APower to purchase equity of redemption instead of foreclosure
(1)This section applies if default is made in a mortgage held by a trustee over land in Australia.
(2)Unless expressly prevented by the trust instrument, the trustee may, instead of foreclosing, buy the equity of redemption if the amount spent on the purchase—
(a)is subject to the same trusts as the mortgage debt; and
(b)is not more than 5% of the amount owing under the mortgage.
Sale after right of redemption barred
(1)Where any property is vested in a trustee by way of security, and the property becomes discharged from the right of redemption, the trustee shall hold the property on trust for sale, with power to postpone the sale for such a period as he or she may think proper.
(2)The net proceeds of sale, after payment of costs and expenses, shall be applied in like manner as the mortgage debt, if received, would have been applicable, and the income of the property until sale shall be applied in like manner as the interest, if received, would have been applicable.
(3)This section does not affect any rule of law relating to the apportionment of capital and income between a life tenant of land and a person entitled to the remainder of the interest in the land.
(4)This section shall not affect the right of any person to require that, instead of a sale, the property shall be conveyed to him or her or in accordance with his or her directions.
(5)This section applies whether the property is discharged from the right of redemption by virtue of the statutes of limitation or of an order for foreclosure or purchase of the equity of redemption or otherwise.
(6)This section extends to land secured by a mortgage under the Land Titles Act 1925 and, in relation to such security, an order for foreclosure includes an order for foreclosure under that Act.
Release of equity of redemption in discharge of mortgage debt
(1)Where an equity of a redemption is vested in a trustee and the mortgaged property is not of greater value than the amount of the mortgage debt, the trustee may release the equity of redemption to the mortgagee in discharge of the mortgage debt or part of it.
(2)The trustee shall not be chargeable with breach of trust nor shall the release be impeached by any beneficiary upon the ground only that the mortgaged property was of greater value than the amount of the mortgage debt or of the part of it discharged if the trustee acted honestly and on the advice of a person whom he or she reasonably believed to be a competent valuer instructed and employed independently of the mortgagee, whether the valuer carried on business in the locality where the property is situated or elsewhere.
(3)A subsequent purchaser or the registrar-general shall not be concerned to inquire whether the release was authorised by this section.
Surrender of onerous lease
(1)Where a leasehold is vested in a trustee and the property is subject to onerous covenants of such a nature that it would not be in the interests of the beneficiaries to retain the property, the trustee may surrender or concur in surrendering the lease.
(2)The trustee shall not be chargeable with breach of trust nor shall the surrender be impeached by any beneficiary upon the ground only that the covenants were not of such a nature if the trustee acted honestly and on the advice of a person whom he or she reasonably believed to be a competent valuer instructed and employed independently of the lessor, whether the valuer carried on business in the locality where the property is situated or elsewhere.
(3)A subsequent purchaser or the registrar-general shall not be concerned to inquire whether the surrender was authorised by this section.
Leasing
(1)A trustee may give a lease of land in possession for a term of not longer than—
(a)if the trustee has power to manage the land, or holds the land on trust for sale with an express power to postpone the sale—5 years; or
(b)in any other case—3 years.
(2)A trustee shall not be deemed to hold land with power to manage the land within the meaning of this section by reason only of the fact that it is proper to postpone sale in order to sell to the best advantage and in the meantime to manage the land.
(3)Any lease that a trustee is authorised to make under this section, or under the trust instrument or other instrument giving the authorisation, may—
(a)provide for rent increases at times stated in the lease; or
(b)give an option for renewal that does not extend the lease beyond the term for which the trustee is authorised to make the lease.
(4)A trustee making a lease under this section may execute such assurances and do such things as are necessary or proper to make the lease.
(5)A lease shall be deemed not to have been made under this section unless—
(a)it is made to take effect in possession not later than 3 months after its date; and
(b)it reserves the best rent that can reasonably be obtained, regard being had to the circumstances of the case, but, subject to subsection (6), without a fine being taken or the rent being made payable in advance except that the last payment of rent may be made payable on a day not more than 1 month before the expiration of the term of the lease; and
(c)it contains a condition of re-entry if the rent is not paid within a period (not longer than 30 days) provided in the lease; and
(d)in the case of a lease of land subject to the provisions of the Land Titles Act 1925 that would not, unless registered under that Act, be valid as against a person claiming an interest in the land by virtue of a dealing registered subsequent to the execution of the lease—it is registered under that Act; and
(e)in the case of a lease other than a lease referred to in paragraph (d)—it is registered under the Registration of Deeds Act 1957; and
(f)the lease is executed by the lessee.
(6)Where a trustee makes a lease of land on which are erected premises that are licensed under the Liquor Act 2010—
(a)a bonus or fine may be taken in respect of the lease; and
(b)if a bonus or fine is taken—the bonus or fine shall be dealt with by the trustee as though an amount ascertained by dividing the amount of the bonus or fine by the number of days contained in the term of the lease were rent received by the trustee under the lease in respect of each day of the term of the lease.
(7)The execution of a lease by the lessor is evidence, for the lessee and anyone deriving title from the lessee, of the execution of the lease by the lessee.
(8)A contract to make or accept a lease under this section may, if registered, be enforced by or against every person on whom the lease, if granted, would be binding.
(9)This section shall not apply to a bare trustee for persons all of whom are entitled in possession and are free of any incapacity.
(10)This section applies to a trust except so far as the contrary intention appears in the trust instrument.
Earlier republications
Some earlier republications were not numbered. The number in column 1 refers to the publication order.
Since 12 September 2001 every authorised republication has been published in electronic pdf format on the ACT legislation register. A selection of authorised republications have also been published in printed format. These republications are marked with an asterisk (*) in column 1. Electronic and printed versions of an authorised republication are identical.
Republication No Amendments to Republication date 1 A1992‑50 1 September 1992 2 A1997‑96 1 June 1998 3 A1999‑28 31 July 1999 4 A2001‑56 23 November 2001 5 A2003‑2 31 March 2003 6 A2004‑2 22 March 2004 7 A2005‑20 2 June 2005 8 A2005‑43 1 October 2005 9 A2005‑43 23 March 2006 10 A2007‑3 28 March 2007 11 A2007‑3 12 April 2007 12 A2007‑3 30 May 2007 13 A2007‑25 31 March 2008 14* A2008‑7 7 May 2008 15 A2010‑43 1 December 2010 16 A2011-22 1 July 2011 17 A2015‑33 14 October 2015 18 A2016-13 1 April 2016 19 A2016‑18 27 April 2016 20 A2017‑4 9 March 2017 21 A2021‑33 17 December 2021
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