Trustee Act 1975

[31 January 1975]

[preamble and words of enactment omitted]

PART I

PRELIMINARY

Interpretation

1 In this Act, unless the context otherwise requires�

"authorised investments" means investments authorised by the instrument, if any, creating the trust for the investment of money subject to the trust, or by any provision of law;

"contingent right" as applied to land includes a contingent or ex ecutory interest, a possibility coupled with an interest, whether the object of the gift or limitation of the interest, or possibility is or is not ascertained, also a right of entry, whether immediate or future, and whether vested or contin gent;

"convey" and "conveyance" as applied to any person include the execution by that person of every necessary or suitable as surance for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of land whereof he is seized or possessed, or wherein he is entitled to a contingent right, either for his whole estate or for any less estate, to gether with the performance of all formalities required by law for the validity of the conveyance;

"court" means the Supreme Court;

"estate representative" means the executor, original or by repre sentation, or administrator for the time being of a deceased person;

"income" includes rents and profits;

"instrument" includes a statutory provision;

"mortgage" and "mortgagee" relate to every estate and interest re garded in equity as merely a security for money, and every person deriving title under the original mortgagee;

"pay" as applied in relation to stocks and securities in connec tion with the expression "into court" includes a deposit or transfer of the same in or into court;

"possession" includes receipt of rents and profits or the right to receive the same, if any; and "possessed" applies to receipt of income of and to any vested estate less than a life estate or interest in possession or in expectancy in any land;

"property" includes real and personal property, and any estate, share and interest in any property, real or personal, and any debt, and any thing in action, and any other right or interest, whether in possession or not;

"rights" include estates and interests;

"sale" includes an exchange;

"securities" include stocks, funds and shares and "securities payable to bearer" include securities transferable by delivery or by delivery and endorsement;

"stock" includes fully paid up shares, and so far as relates to vesting orders made by the court under this Act, includes any fund, annuity, or security transferable in books kept by any company or society, or by instrument of transfer either alone or accompanied by other formalities, and any share or inter est therein;

"transfer" in relation to stock or securities, includes the perfor mance and execution of every deed, power of attorney, act, and thing on the part of the transferor to effect and complete the title in the transferee;

"trust" does not include the duties incident to an estate or inter est conveyed by way of mortgage, but with this exception the expressions "trust" and "trustee" extend to implied and con structive trusts, and to cases where the trustee has a benefi cial interest in the trust property, and to the duties incident to the office of an estate representative, and "trustee" in cludes an estate representative, and "new trustee" includes an additional trustee;

"trust corporation" means�

(a) a corporation either appointed by the court in any par ticular case to be a trustee or entitled under the rules made under the Administration of Estates Act 1974 [title 26 item 12], to act as trustee; and

(b) the person for the time being holding office as public trustee in his capacity as corporation sole under the Public Trustee Act 1906 of the Parliament of the United Kingdom;

"trust for sale" in relation to land means an immediate trust for sale, whether or not exercisable at the request or with the consent of any person, and with or without power at discre tion to postpone the sale;

"trust funds" include any funds in the hands of a trustee, whether at the time in a state of investment or not.

Application of Act

2 (1) This Act, except where otherwise expressly provided, applies to trusts including, so far as this Act applies thereto, executorships and administratorships constituted or created either before, on or after 1 March 1975.

(2) The powers conferred by this Act on trustees are in addition to the powers conferred by the instrument, if any, creating the trust, but those powers, unless otherwise stated, apply if and so far only as a con trary intention is not expressed in the instrument, if any, creating the trust, and have effect subject to the terms of that instrument.

(3) This Act does not affect the legality or validity of anything done before 1 March 1975, except as otherwise herein expressly pro vided.

PART II

GENERAL POWERS OF TRUSTEES AND ESTATE REPRESENTATIVES

General Powers

Power of trustees to sell by auction etc.

3 (1) Where a trust for sale or a power of sale of property is vested in a trustee, he may sell or concur with any other person in sell ing all or any part of the property, either subject to prior charges or not, and either together or in lots, by public auction or by private contract, subject to any such conditions respecting title or evidence of title or other matter as the trustee thinks fit, with power to vary any contract for sale, and to buy in at any auction, or to rescind any contract for sale and to re-sell, without being answerable for any loss.

(2) Where a trust for sale or a power of sale of land held on lease is vested in a trustee, he may make, on such terms and conditions as he may think proper, a sub-lease of the land or any part thereof with a nominal reversion, where such sub-lease amounts in substance to a sale and the trustees have satisfied themselves that it is the most appro priate method of disposing of the land.

(3) Where trustees lease any land pursuant to any power con ferred on them by subsection (2) they may sell any rent reserved on any reversion expectant upon the determination of such lease.

(4) Where any sub-lease purports to have been made in exer cise of a power conferred by this section, that power shall, until the con-
trary is proved, be assumed to have been properly exercised and�

(a) the sub-lessee shall not, either before or on the execu tion of the sub-lease, be concerned to see or enquire whether a case has arisen to authorise the execution of that sub-lease; and

(b) neither the sub-lessee nor any of his successors in title shall be concerned to see to the application of any mon eys paid in consideration of the lease.

(5) A trust or power to sell or dispose of land includes a trust or power to see or dispose of part thereof whether the division is horizontal, vertical, or made in any other way.

(6) (a) A trust or power to sell or dispose of land includes a power, either with or without consideration, to grant by writing an option to purchase or take a lease of the land, or any part thereof, or any easement, right, or privilege over or in relation to the same, at a price or rent fixed at the time of granting the option;

(b) every such option shall be made exercisable within an agreed number of years not exceeding ten.

Power to sell subject to depreciatory conditions

4 (1) No sale made by a trustee shall be impeached by any bene ficiary upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it also appears that the consideration for the sale was thereby rendered inade quate.

(2) No sale made by a trustee shall, after the execution of the conveyance, be impeached as against the purchaser upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it appears that the purchaser was acting in collusion with the trustee at the time when the contract for sale was made.

(3) No purchaser, upon any sale made by a trustee, shall be at liberty to make any objection against the title upon any of the grounds aforesaid.

(4) This section applies to sales and purchases made before, on or after 1 March 1975.

Power of trustee to give receipts

5 The receipt in writing of any trustee for any money, securities, or other personal property or effects payable, transferable, or deliverable to him under any trust or power shall be a sufficient discharge for the same, and shall effectually exonerate the person paying, transferring, or delivering the same from seeing to the application or being answerable for any loss or misapplication thereof.

Power to compound liabilities

6 (1) Any one of several estate representatives, or a sole estate representative, or two or more trustees acting together, or a sole acting trustee where by the instrument, if any, creating the trust, or by any statutory provision, a sole trustee is authorised to execute the trusts and powers reposed in him, may, if and as he or they think fit�

(a) accept any property, real or personal, before the time at which it is made transferable or payable; or

(b) sever and apportion any blended trust funds or property; or

(d) accept any composition or any security, real or personal, for any debt or for any property, real or personal, claimed; or

(e) allow any time for payment of any debt; or

(f) compromise, compound, abandon, submit to arbitration, or otherwise settle any debt, account, claim, or thing whatever relating to the trust,

and for any of those purposes may enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, and other things as to him or them seem expedient, without being responsi ble for any loss occasioned by any act or thing so done by him or them in good faith.

Power to raise money by sale, mortgage, etc.

7 (1) Where trustees are authorised by the instrument, if any, creating the trust or by any provision of law to pay or apply capital money subject to the trust for any purpose or in any manner, they shall have and shall be deemed always to have had power to raise the money
required by sale, conversion, calling in, or mortgage of all or any part of the trust property for the time being in possession.

(2) This section applies notwithstanding anything to the con trary contained in the instrument, if any, creating the trust.

Protection to purchasers and mortgages dealing with trustees

8 No purchaser or mortgagee, paying or advancing money on a sale or mortgage purporting to be made under any trust or power vested in the trustees, shall be concerned to see that such money is wanted, or that no more than is wanted is raised, or otherwise as to the application thereof.

Devolution of powers or trusts

9 (1) Where a power or trust is given to or imposed on two or more trustees jointly, the same may be exercised or performed by the survivors or survivor of them for the time being.

(2) Until the appointment of new trustees, the estate represen tatives or representative for the time being of a sole trustee, or, where there were two or more trustees, of the last surviving or continuing trustee, shall be capable of exercising or performing any power or trust, which was given to, or capable of being exercised by, the sole or last sur viving or continuing trustee, or other the trustees or trustee for the time being of the trust.

(3) In this section "estate representative" does not include an executor who has renounced or has not proved.

Power to insure

10 A trustee may insure against loss or damage from any cause any building or other insurable property to any amount, including the amount of any insurance already in force, not exceeding the full value of the building or property, and pay the premiums for such insurance out of the income thereof or out of the income of any other property subject to the same trusts without obtaining the consent of any person who may be entitled wholly or partly to such income.

Application of insurance money where policy kept up under any trust, power or obligation

11 (1) Money receivable by trustees or any beneficiary under a policy of insurance against the loss or damage of any property subject to a trust or settlement, from whatever cause, shall, where the policy has been kept up under any trust in that behalf or under any power statu tory or otherwise, or in performance of any covenant or of any obligation statutory or otherwise, be capital money for the purposes of the trust or settlement, as the case may be.

(2) If any such money is receivable by any person, other than the trustees of the trust or settlement, that person shall use his best en deavours to recover and receive the money, and shall pay the net residue thereof, after discharging any costs of recovering and receiving it, to the trustees of the trust or settlement, or, if there are no trustees capable of giving a discharge therefor, into court.

(3) Any such money�

(a) if it was receivable in respect of property held upon trust for sale, shall be held upon the trusts and subject to the powers and provisions applicable to money arising by a sale under such trust;

(b) in any other case, it shall be held upon trusts corre sponding as nearly as may be with the trusts affecting the property in respect of which it was payable.

(4) Such money, or any part thereof, may also be applied by the trustees, or, if in court, under the direction of the court, in rebuilding, reinstating, replacing, or repairing the property lost or damaged, but any such application by the trustees shall be subject to the consent of any person whose consent is required by the instrument, if any, creating the trust to the investment of money subject to the trust.

(5) Nothing contained in this section prejudices or affects the right of any person to require any such money or any part thereof to be applied in rebuilding, reinstating, or repairing the property lost or dam aged, or the rights of any mortgagee, lessor, or lessee, whether under any statutory provision or otherwise.

(6) This section applies to policies effected either before, on or after 1 March 1975, but only to money received after such date.

Power of trustees of renewable leaseholds to renew and raise money for the purpose

12 (1) Subject to subsection (2), a trustee of any leaseholds for lives or years which are renewable from time to time either under any covenant or contract may, if he thinks fit, use his best endeavours to obtain from time to time a renewed lease of the same hereditaments on reasonable terms, and for that purpose may from time to time make or concur in making a surrender of the lease for the time being subsisting and do all such other acts as are requisite.

(2) Where by the terms of the instrument, if any, creating the trust the person in possession for his life or other limited interest is en titled to enjoy the same without any obligation to renew or to contribute to the expense of renewal, this section shall not apply unless the consent in writing of that person is obtained to the renewal on the part of the trustee.

Deposit of documents for safe custody

13 Trustees may deposit any documents held by them relating to the trust, or to the trust property, with any bank or trust company, and any sum payable in respect of such deposit shall be paid out of the in come of the trust property.

Reversionary interests, valuations, and audit

14 (1) Where trust property includes any share, estate or interest in property not vested in the trustees, or the proceeds of the sale of any such property, or any other thing in action, the trustees on the same falling into possession, or becoming payable or transferable may�

(a) agree or ascertain the amount or value thereof or any part thereof in such manner as they may think fit;

(b) accept in or towards satisfaction thereof, at the market or current value, or upon any valuation or estimate of value which they may think fit, any authorised invest ments;

(d) execute any release in respect of the premises so as ef fectually to discharge all accountable parties from all li ability in respect of any matters coming within the scope of such release,

without being responsible in any such case for any loss occasioned by any act or thing so done by them in good faith.

(2) The trustees shall not be under any obligation and shall not be chargeable with any breach of trust by reason of any omission�

(a) to apply for a writ of distringas or any stop or other like order upon any securities or other property out of or on which such share, estate or interest or other thing in action as aforesaid is derived, payable or charged; or

(b) to take any proceedings on account of any act, default, or neglect on the part of the persons in whom such se curities or other property or any of them or any part thereof are for the time being, or had at any time been, vested;

unless and until required in writing so to do by some person, or the guardian of some person, beneficially interested under the trust, and unless also due provision is made to their satisfaction for payment of the costs of any proceedings required to be taken so, however, that nothing in this subsection shall relieve the trustees of the obligation to get in and obtain payment or transfer of such share, estate or interest or other thing in action on the same falling into possession.

(3) Trustees may, for the purpose of giving effect to the trust, or any of the provisions of the instrument, if any, creating the trust or of any Act, from time to time (by suitably qualified agents) ascertain and fix the value of any trust property in such manner as they think proper, and any valuation so made in good faith shall be binding upon all persons interested under the trust.

(4) Trustees may, in their absolute discretion, from time to time, but not more than once in every three years unless the nature of the trust or any special dealings with the trust property make a more frequent exercise of the right reasonable, cause the accounts of the trust property to be examined or audited by an independent accountant, and shall, for that purpose, produce such vouchers and give such informa tion to him as he may require; and the costs of such examination or au dit, including the fee of the auditor, shall be paid out of the capital or in come of the trust property, or partly in one way and partly in the other, as the trustees, in their absolute discretion, think fit, but, in default of any direction by the trustees to the contrary in any special case, costs attributable to capital shall be borne by capital and those attributable to income by income.

Power to employ agents

15 (1) Subject to subsection (5), trustees or estate representatives may, instead of acting personally, employ and pay an agent, whether a barrister, bank, trust corporation, or other person, to transact any busi ness or do any act required to be transacted or done in the execution of the trust, or the administration of the testator's or intestate's estate, in cluding the receipt and payment of money, and shall be entitled to be allowed and paid all charges and expenses so incurred, and shall not be responsible for the default of any such agent if employed in good faith.

(2) The donor of a power of attorney given under this section shall be liable for the acts or defaults of the donee in the same manner as if they were the acts or defaults of the donor.

(3) The power of attorney shall not come into operation unless and until the donor is out of Bermuda, and shall be revoked by his re turn.

(4) In favour of any person dealing with the donee, any act done or instrument executed by the donee shall, notwithstanding that the power has never come into operation or has been revoked by the act of the donor or by his death or return to Bermuda or otherwise, be as valid and effectual as if the donor were alive and of full capacity, and had himself done such act or executed such instrument, unless such person had actual notice that the power had never come into operation or of the revocation of the power before such act was done or instrument exe cuted.

(5) For the purpose of executing or exercising the trusts or powers delegated to him, the donee may exercise any of the powers con ferred on the donor as trustee by any Act or by the instrument creating the trust, including power, for the purpose of the transfer of any securi ties, himself to delegate to an attorney power to transfer such securities but not including the power of delegation conferred by this section.

(6) The fact that it appears from any power of attorney given under this section, or from any evidence required for the purposes of any such power of attorney or otherwise, that in dealing with any securities the donee of the power is acting in the execution of a trust shall not be deemed for any purpose to affect any person in whose books the securi ties are registered with any notice of the trust.

Indemnities

Protection against liability in respect of rents and covenants

18 (1) Where an estate representative or trustee liable for�

(a) any rent, covenant, or agreement reserved by or con tained in any lease; or

(b) any rent, covenant or agreement payable under or con tained in any grant made in consideration of a rent charge; or

(c) any indemnity given in respect of any rent, covenant or agreement referred to in either of the foregoing para graphs,

satisfies all liabilities under the lease or grant which may have accrued, and been claimed, up to the date of the conveyance hereinafter men tioned, and, where necessary, sets apart a sufficient fund to answer any future claim that may be made in respect of any fixed and ascertained sum which the lessee or grantee agreed to lay out on the property demised or granted, although the period for laying out the same may not have arrived, then and in any such case the estate representative or trustee may convey the property demised or granted to a purchaser, legatee, devisee, or other person entitled to call for a conveyance thereof and thereafter�

(i) he may distribute the residuary real and per sonal estate of the deceased testator or intestate, or, as the case may be, the trust estate (other than the fund, if any, set apart as aforesaid) to or amongst the persons entitled thereto, without appropriating any part, or any further part, as the case may be, of the estate of the deceased or of the trust estate to, meet any future liability under the said lease or grant;

(ii) notwithstanding such distribution, he shall not be personally liable in respect of any subsequent claim under the said lease or grant.

(2) This section operates without prejudice to the right of the lessor or grantor, or the persons deriving title under the lessor or grantor, to follow the assets of the deceased or the trust property into the hands of the persons amongst whom the same may have been respec tively distributed, and applies notwithstanding anything to the contrary in the will or other instrument, if any, creating the trust.

(3) In this section "lease" includes an underlease and an agreement for a lease or underlease and any instrument giving any such indemnity as aforesaid or varying the liabilities under the lease; "grant" applies to a grant whether the rent is created by limitation, grant, reser vation, or otherwise, and includes an agreement for a grant and any in strument giving any such indemnity as aforesaid or varying the liabilities under the grant; "lessee" and "grantee" include persons respectively de riving title under them.

Protection by means of advertisements

19 (1) With a view to the conveyance to, or distribution among, the persons entitled to any real or personal property, the trustees of a set tlement or of a disposition on trust for sale may give notice by
advertise ment published three times at intervals of not less than one week in a newspaper for the time being approved as the Gazette, of their intention to make such conveyance or distribution as aforesaid, and requiring any person interested to send to the trustees within the time, not being less than one month from the publication of the last of the notices, fixed in the notice, particulars of his claim in respect of the property or any part thereof to which the notice relates.

(2) At the expiration of the time fixed by the notice the trustees may convey or distribute the property or any part thereof to which the notice relates, to or among the persons entitled thereto, having regard only to the claims, whether formal or not, of which the trustees then had notice and shall not, as respects the property so conveyed or distributed, be liable to any person whose claim the trustees have not had notice at the time of conveyance or distribution; but nothing in this section�

(a) prejudices the right of any person to follow the property, or any property representing the same, into the hands of any person, other than a purchaser, who may have re ceived it; or

(b) frees the trustees from any obligation to make inquiries and searches or obtain official certificates of search sim ilar to those which an intending purchaser would be ad vised to make or obtain.

(3) This section applies notwithstanding anything to the con trary in the will or other instrument, if any, creating the trust.

(4) This section does not apply to the protection of estate repre sentatives by means of advertisements under section 53 of the Adminis tration of Estates Act 1974 [title 26 item 12].

Protection in regard to notice

20 A trustee or estate representative acting for the purposes of more than one trust or estate shall not, in the absence of fraud, be affected by notice of any instrument, matter, fact or thing in relation to any particu lar trust or estate if he has obtained notice thereof merely by reason of his acting or having acted for the purposes of another trust or estate.

Power of trustees to pay to attorney appointed by beneficiary

21 A trustee acting or paying money in good faith under or in pur suance of any power of attorney shall not be liable for any such act or payment by reason of the fact that at the time of the act or payment the person who gave the power of attorney was subject to any disability or bankrupt or dead, or had done or suffered some act or thing to avoid the power, if this fact was not known to the trustee at the time of his so act ing or paying so, however, that�

(a) nothing in this section shall affect the right of any per son entitled to the money against the person to whom the payment is made;

(b) the person so entitled shall have the same remedy against the person to whom the payment is made as he would have had against the trustee.

Implied indemnity of trustees

22 (1) A trustee shall be chargeable only for money and securities actually received by him notwithstanding his signing any receipt for the sake of conformity, and shall be answerable and accountable only for his own acts, receipts, neglects, or defaults, and not for those of any other trustee, nor for those of any bank, broker, or other person with whom any trust money or securities may be deposited, nor for the insufficiency or deficiency of any securities, nor for any other loss, unless the same happens through his own wilful default.

(2) A trustee may reimburse himself or pay or discharge out of the trust premises all expenses incurred in or about the execution of the trusts or powers.

Maintenance, Advancement and Protective Trusts

Power to apply income for maintenance and to accumulate surplus income during a minority

23 (1) Where any property is held by trustees in trust for any per son for any estate or interest whatsoever, whether vested or contingent, then, subject to any prior estates or interests or charges affecting that property�

(a) during the infancy of any such person, if his estate or interest so long continues, the trustees may, at their sole discretion, pay to his parent or guardian, if any, or oth erwise apply for or towards his maintenance or educa tion, or otherwise for his benefit, the whole or such part, if any, of the income of that property as may, in all the circumstances, be reasonable, whether or not
there is�

(i) any other fund applicable to the same purpose; or

(ii) any person bound by law to provide for his maintenance or education; and

(b) if such person on attaining the age of twenty-one years has not a vested estate or interest in such income, the trustees shall thenceforth pay the income of that prop erty and of any accretion thereto under subsection (3) to him, until he either attains a vested estate or interest therein or dies, or until failure of his estate or interest.

(2) In deciding whether the whole or any part of the income of the property is during a minority to be paid or applied for the purposes aforesaid, the trustees shall have regard to the age of the infant and his requirements and generally to the circumstances of the case, and in par ticular to what other income, if any, is applicable for the same purposes; and where trustees have notice that the income of more than one fund is applicable for those purposes, then, so far as practicable, unless the en tire income of the funds is paid or applied as aforesaid or the court oth erwise directs, a proportionate part only of the income of each fund shall be so paid or applied.

(3) During the infancy of any such person, if his estate or in terest so long continues, the trustees shall accumulate all the residue of that income in the way of compound interest by investing the same and the resulting income thereof from time to time in authorised investments, and shall hold those accumulations as follows:�

(a) if any such person�

(i) attains the age of twenty-one years, or marries under that age, and his estate or interest in such income during his infancy or until his mar riage is a vested estate or interest; or

(ii) on attaining the age of twenty-one years or on marriage under that age becomes entitled to the property from which such income arose in fee simple, or absolutely, or for an entailed estate or interest,

the trustees shall hold the accumulation in trust for such person absolutely, but without prejudice to any provision with respect thereto contained in any settle ment by him made under any statutory powers during his infancy, and so that the receipt of such person after marriage, and though still an infant, shall be a good dis charge; and

(b) in any other case the trustees shall, notwithstanding that such person had a vested estate or interest in such income, hold the accumulations as an accretion to the capital of the property from which such accumulations arose, and as one fund with such capital for all pur poses, and so that, if such property is settled land, such accumulations shall be held upon the same trusts as if the same were capital money arising therefrom,

but the trustees may, at any time during the infancy of such person if his estate or interest so long continues, apply those accumulations, or any part thereof, as if they were income arising in the then current year.

(4) This section applies in the case of a contingent estate or interest only if the limitation or trust carries the intermediate income of the property, but it applies to a future or contingent legacy by the parent of, or a person standing in loco parentis to, the legatee, if and for such period as, under any provision of law, the legacy carries interest for the maintenance of the legatee, and in any such case at last aforesaid the rate of interest shall (if the income available is sufficient, and subject to any rules of court to the contrary) be five per centum per annum.

(5) This section applies to a vested annuity in like manner as if the annuity were the income of property held by trustees in trust to pay the income thereof to the annuitant for the same period for which the annuity is payable, save that in any case accumulations made during the infancy of the annuitant shall be held in trust for the annuitant or his estate representatives absolutely.

(6) This section does not apply where the instrument, if any, under which the interest arises came into operation before 1 March 1975.

Power of advancement

24 (1) Trustees may at any time or times pay or apply any capital money subject to a trust, for the advancement or benefit, in such man ner as they may, in their absolute discretion, think fit, of any person en titled to the capital of the trust property or of any share thereof, whether absolutely or contingently on his attaining any specified age or on the occurrence of any other event, or subject to a gift over on his death un-
der any specified age or on the occurrence of any other event, and whether in possession or in remainder or reversion, and such payment or application may be made notwithstanding that the estate or interest of such person is liable to be defeated by the exercise of a power of ap pointment or revocation, or to be diminished by the increase of the class to which he belongs so, however, that�

(a) the money so paid or applied for the advancement or benefit of any person shall not exceed altogether the amount of the presumptive or vested share, estate or interest of that person in the trust property; and

(b) if that person is or becomes absolutely and indefeasibly entitled to a share in the trust property the money so paid or applied shall be brought into account as part of such share; and

(c) no such payment or application shall be made so as to prejudice any person entitled to any prior life or other estate or interest, whether vested or contingent, in the money paid or applied unless such person is in exis tence and of full age and consents in writing to such payment or application.

(2) This section applies only where the trust property consists of�

(a) money or securities which are not by any provision of law or in equity considered as land; or

(b) property held upon trust for sale, calling in and conver sion and the proceeds of such sale, calling in and con version are not in equity considered as land.

(3) This section does not apply to trusts constituted or created before 1 March 1975.

Protective trusts

25 (1) Where any income, including an annuity or other periodical income payment, is directed to be held on protective trusts for the benefit of any person (in this section referred to as "the principal beneficiary") for the period of his life or any less period, then, during that period (in this section referred to as "the trust period") the said income shall, without prejudice to any prior estate or interest be held�

(a) upon trust for the principal beneficiary until whichever of the following events shall first occur�

(i) the trust period expires; or

(ii) the principal beneficiary (whether before or after the termination of any prior estate or interests) does or attempts to do or suffers any act or thing, or until any other event (not being an ad vance under any statutory or express power) happens whereby, if during the trust period the said income were payable to the principal bene ficiary absolutely, he would be deprived of the right to receive the same or any part thereof; and

(b) upon trust, where any of the events referred to in sub paragraph (ii) of paragraph (a) happens during the sub sistence of the trust period, to apply the said income (as the trustees in their absolute discretion, without being liable to account for the exercise of their discretion, think fit) for the maintenance or support, or otherwise for the benefit, of all or any one or more exclusively of the other or others of the following persons�

(i) the principal beneficiary and his or her wife or husband, if any, and his or her children or more remote issue, if any; and

(ii) if as often as and while there is no living issue of the principal beneficiary, the principal benefi ciary and his or her wife or husband, if any, and the persons who, if the principal beneficiary were actually dead without having married would for the time being be his next of kin,

so that the trustees in the exercise of their discretion may apply any in come accrued but unapplied in any previous year for the purposes of the trusts implied as aforesaid in any subsequent year.

(2) This section does not apply to trusts coming into operation before 1 March 1968, and has effect subject to any variation of the trusts implied as aforesaid contained in the instrument creating the trust.

(3) Nothing in this section operates to validate any trust which would, if contained in the instrument creating the trust, be liable to be
set aside.

PART III

APPOINTMENT AND DISCHARGE OF TRUSTEES

Power of appointing new or additional trustees

26 (1) Where a trustee, whether original, substituted or additional, and whether appointed by a court or otherwise, is dead, or remains out of Bermuda for more than twelve months, or desires to be discharged from all or any of the trusts or powers reposed in or conferred on him, or refuses or is unfit to act therein, or is incapable of acting therein, then�

(a) the person or persons nominated for the purpose of ap pointing new trustees by the instrument, if any, creating the trust; or

(b) if there is no such person, or no such person able and willing to act, then the surviving or continuing trustees or trustee for the time being, or the estate representa tives of the last surviving or continuing trustee,

may, by writing, appoint one or more other persons (whether or not being the persons exercising the power) to be a trustee or trustees in the place of the trustee so deceased, remaining out of Bermuda, desiring to be dis charged, refusing, or being unfit or being incapable, as aforesaid.

(2) Where a trustee has been removed under a power contained in the instrument creating the trust, a new trustee or new trustees may be appointed in the place of the trustee who is removed, as if he were dead, or, in the case of a corporation, as if the corporation desired to be discharged from the trust, and this section shall apply accordingly.

(3) Where a corporation being a trustee is or has been dis solved, either before, on or after 1 March 1975, then, for the purposes of this section and of any statutory provision replaced thereby, the corpo ration shall be deemed to be and to have been from the date of the dis solution incapable of acting in the trusts or powers reposed in or con ferred on the corporation.

(4) The power of appointment given by subsection (1) or any similar previous statutory provision to the estate representatives of a last surviving or continuing trustee shall be and shall be deemed always to have been exercisable by the executors for the time being (whether origi nal or by representation) of such surviving or continuing trustee who have proved the will of their testator or by the administrators for the time being of such trustee without the concurrence of any executor who has renounced or has not proved.

(5) But a sole or last surviving executor intending to renounce, or all the executors where they all intend to renounce, shall have and shall be deemed always to have had power, at any time before renounc ing probate, to exercise the power of appointment given by this section, or by any similar previous enactment, if willing to act for that purpose and without thereby accepting the office of executor.

(6) Where a sole trustee, other than a trust corporation, is or has been originally appointed to act in a trust, or where, in the case of any trust, there are not more than three trustees (none of them being a trust corporation) whether original, substituted or additional and whether appointed by the court or otherwise, then and in any such case�

(a) the person or persons nominated for the purpose of ap pointing new trustees by the instrument, if any, creating the trust; or

(b) if there is no such person, or no such person able and willing to act, then the trustee or trustees for the time being,

may, by writing, appoint one or more other persons (whether or not being the persons exercising the power) to be an additional trustee or addi tional trustees, but it shall not be obligatory to appoint any additional trustee unless the instrument, if any, creating the trust, or any statutory provision provides to the contrary.

(7) Every new trustee appointed under this section as well be fore as after all the trust property becomes by law, or by assurance, or otherwise, vested in him shall have the same powers, authorities, and discretions, and may in all respects act as if he had been originally ap pointed a trustee by the instrument, if any, creating the trust.

(8) The provisions of this section relating to a trustee who is dead include the case of a person nominated trustee in a will but dying before the testator, and those relative to a continuing trustee include a refusing or retiring trustee, if willing to act in the execution of the provi sions of this section.

(9) Where a trustee is incapable, by reason of mental disorder within the meaning of the Mental Health Act 1968 [title 11 item 36], of exercising his functions as trustee and is also entitled in possession to
some beneficial interest in the trust property, no appointment of a new trustee in his place shall be made by virtue of subsection (1)(b) unless leave to make the appointment has been given by the judicial authority appointed to act for the purposes of Part IV of the Mental Health Act 1968.

Supplemental provisions as to appointment of trustees

27 On the appointment of a trustee for the whole or any part of trust property�

(a) the number of trustees may be increased; and

(b) a separate set of trustees may be appointed for any part of the trust property held on trusts distinct from those relating to any other part or parts of the trust property, notwithstanding that no new trustees or trustee are or is to be appointed for other parts of the trust property, and any existing trustee may be appointed or remain one of such separate set of trustees, or, if only one trustee was originally appointed, then, save as hereinafter provided, one separate trustee may be so appointed; and

(c) it shall not be obligatory, save as hereinafter provided, to appoint more than one new trustee where only one trustee was originally appointed, or to fill up the original number of trustees where more than two trustees were originally appointed but, except where only one trustee was originally appointed, a trustee shall not be dis charged from his trust unless there will be either a trust corporation or at least two individuals to act as trustees to perform the trust; and

(d) any assurance or thing requisite for vesting the trust property, or any part thereof, in a sole trustee, or jointly in the persons who are the trustees, shall be executed or done.

Evidence as to a vacancy in a trust

28 (1) A statement, contained in any instrument coming into op eration after 1 March 1975 by which a new trustee is appointed for any purpose connected with land, to the effect that a trustee has remained out of Bermuda for more than twelve months or refuses or is unfit to act, or is incapable of acting, or that he is not entitled to a beneficial interest in the trust property in possession, shall, in favour of a bona fide pur chaser, be conclusive evidence of the matter stated.

(2) In favour of such purchaser any appointment of a new trustee depending on that statement, and any vesting declaration, ex press or implied, consequent on the appointment, shall be valid.

Retirement of trustee without a new appointment

29 (1) Where a trustee is desirous of being discharged from the trust or a severable part of the trust, and after his discharge there will be either a trust corporation or at least two individuals to act as trustees to perform the trust, then, if such trustee as aforesaid by deed declares that he is desirous of being discharged from the trust or the severable part thereof, and if his co-trustees and such other person, if any, as is em powered to appoint trustees, by deed consent to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property, the trustee desirous of being discharged shall be deemed to have retired from the trust or a severable part thereof, and shall, by the deed, be dis charged therefrom under this Act, without any new trustee being ap pointed in his place.

(2) Any assurance or thing requisite for vesting the trust prop erty in the continuing trustees alone shall be executed or done.

Vesting of trust property in new or continuing trustees

30 (1) Where by a deed a new trustee is appointed to perform any trust, then�

(a) if the deed contains a declaration by the appointor to the effect that any estate or interest in any land subject to the trust, or in any chattel so subject, or the right to re cover or receive any debt or other thing in action so subject, shall vest in the persons who by virtue of the deed become or are the trustees for performing the trust, the deed shall operate, without any conveyance or as signment, to vest in those persons as joint tenants and for the purposes of the trust the estate, interest or right to which the declaration relates; and

(b) if the deed is made after 1 March 1975 and does not contain such a declaration, the deed shall, subject to any express provision to the contrary therein contained, operate as if it had contained such a declaration by the appointor extending to all the estates, interests and
rights with respect to which a declaration could have been made.

(2) Where by a deed a retiring trustee is discharged under the statutory power without a new trustee being appointed, then�

(a) if the deed contains such a declaration as aforesaid by the retiring and continuing trustees, and by the other person, if any, empowered to appoint trustees, the deed shall, without any conveyance or assignment, operate to vest in the continuing trustees alone, as joint tenants, and for the purposes of the trust, the estate, interest, or right to which the declaration relates; and

(b) if the deed is made after 1 March 1975 and does not contain such a declaration, the deed shall, subject to any express provision to the contrary therein contained, operate as if it had contained such a declaration by such persons as aforesaid extending to all the estates, inter ests and rights with respect to which a declaration could have been made.

(3) An express vesting declaration, whether made before, on or after 1 March 1975, shall, notwithstanding that the estate, interest or right to be vested is not expressly referred to, and provided that the other statutory requirements were or are complied with, operate and be deemed always to have operated (but without prejudice to any express provision to the contrary contained in the deed of appointment or dis charge) to vest in the persons respectively referred to in subsections (1) and (2), as the case may require, such estates, interests and rights as are capable of being and ought to be vested in those persons.

(4) This section does not extend�

(a) to land conveyed by way of mortgage for securing money subject to the trust, except land conveyed on trust for securing debentures or debenture stock;

(b) to land held under a lease which contains any covenant, condition or agreement against assignment or disposing of the land without licence or consent, unless, prior to the execution of the deed containing expressly or im pliedly the vesting declaration, the requisite licence or consent has been obtained, or unless, by virtue of any rule of law, the vesting declaration, express or implied, would not operate as a breach of covenant or give rise to a forfeiture;

(c) to any share, stock, annuity or property which is only transferable in books kept by a company or other body, or in manner directed by or under any statutory provi sion.

In this subsection "lease" includes an underlease and an agreement for a lease or underlease.

PART IV

POWERS OF THE COURT

Appointment of New Trustees

Power of court to appoint new trustees

31 (1) The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult or impracti cable so to do without the assistance of the court, make an order ap pointing a new trustee or new trustees either in substitution for or in ad dition to any existing trustee or trustees, or although there is no existing trustee.

(2) In particular and without prejudice to the generality of sub section (1), the court may make an order appointing a new trustee in substitution for a trustee who is incapable, by reason of mental disorder within the meaning of the Mental Health Act 1968 [title 11 item 36], of exercising his functions as trustee, or is a bankrupt, or is a corporation which is in liquidation or has been dissolved, or who for any other reason whatsoever appears to the court to be undesirable as a trustee.

(3) An order under this section, and any consequential vesting order or conveyance, shall not operate further or otherwise as a dis charge to any former or continuing trustee than an appointment of new trustees under any power for that purpose contained in any instrument would have operated.

(4) Nothing in this section gives power to appoint an executor or administrator.

Power of court to authorise remuneration

32 The court may, in any case in which the circumstances appear to it so to justify, authorise any person to charge such remuneration for his services as trustee as the court may think fit.

Powers of new trustee appointed by the court

33 Every trustee appointed by a court of competent jurisdiction shall, as well before as after the trust property becomes by law, or by as surance, or otherwise, vested in him, have the same powers, authorities, and discretions, and may in all respects act as if he had been originally appointed a trustee by the instrument, if any, creating the trust.

Vesting Orders

Vesting orders of land

34 (1) Subject to subsection (2), where�

(a) the court appoints or has appointed a trustee, or where a trustee has been appointed out of court under any statutory or express power; or

(b) a trustee entitled to or possessed of any land or estate or interest therein, whether by way of mortgage or other wise, or entitled to a contingent right therein, either solely or jointly with any other person�

(i) is an infant; or

(ii) is out of the jurisdiction of the court; or

(iii) cannot be found, or, being a corporation, has been dissolved; or

(c) it is uncertain who was the survivor of two or more trustees jointly entitled to or possessed of any estate or interest in land; or

(d) it is uncertain whether the last trustee known to have been entitled to or possessed of any estate or interest in land is living or dead; or

(e) there is no estate representative of a deceased trustee who was entitled to or possessed of any estate or interest in land, or where it is uncertain who is the estate repre sentative of a deceased trustee who was entitled to or possessed of any estate or interest in land; or

(f) a trustee jointly or solely entitled to or possessed of any estate or interest in land, or entitled to a contingent right therein, has been required, by or on behalf of a person entitled to require a conveyance of the land or estate or interest or a release of the right, to convey the land or estate or interest or to release the right, and has wilfully refused or neglected to convey the land or estate or in terest or release the right for twenty-eight days after the date of the requirement; or

(g) land or any estate or interest therein is vested in a trustee whether by way of mortgage or otherwise, and it appears to the court to be expedient;

the court may make an order (in this Act referred to as a "vesting order") vesting the land or estate or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.

(2) Where an order made under subsection (1)�

(a) is consequential on the appointment of a trustee the land or estate or interest therein shall be vested for such estate or interest as the court may direct in the persons who on the appointment are the trustees; and

(b) relates to a trustee entitled or formerly entitled jointly with another person, and such trustee is an infant or out of the jurisdiction of the court or cannot be found, or being a corporation has been dissolved, the land estate interest or right shall be vested in such other person who remains entitled, either alone or with any other per son the court may appoint.

Orders as to contingent rights of unborn persons

35 Where any estate or interest in land is subject to a contingent right in an unborn person or class of unborn persons who, on coming into existence would, in respect thereof, become entitled to or possessed of that estate or interest on any trust, the court may make an order�

(a) releasing the land or estate or interest therein from the contingent right; or

(b) vesting in any person the estate or interest to or of which the unborn person or class of unborn persons would, on coming into existence, be entitled or
possessed in the land.

Vesting order in place of conveyance by infant mortgagee

36 Where any person entitled to or possessed of any estate or inter est in land, or entitled to a contingent right in land, by way of security for money, is an infant, the court may make an order vesting or releasing or disposing of the estate or interest in the land or the right in like man ner as in the case of an infant trustee.

Vesting order in place of conveyance by estate representative of mortgagee

37 Where�

(a) a mortgagee of land has died without having entered into possession or into the receipt of the rents and profits thereof; and

(b) the money due in respect of the mortgage has been paid to a person entitled to receive the same, or that person consents to an order for the reconveyance of the land,

the court may make an order vesting the land in such person in such manner and for such estate or interest as the court may direct, where�

(i) an estate representative or devisee of the mort gagee is out of the jurisdiction of the court or cannot be found, or, being a corporation, has been dissolved; or

(ii) an estate representative or devisee of the mort gagee on demand made by or on behalf of a per son entitled to require a conveyance of the land has stated in writing that he will not convey the same or does not convey the same for the space of twenty-eight days after a proper instrument for conveying the land has been tendered to him by or on behalf of the person so entitled; or

(iii) it is uncertain which of several devisees of the mortgagee was the survivor; or

(iv) it is uncertain whether the estate representative of the mortgagee or the survivor of several de visees of the mortgagee is living or dead; or

(v) there is no estate representative to a mortgagee who has died intestate as to the land, or where the mortgagee has died, and it is uncertain who is his estate representative or devisee.

Vesting order consequential on order for sale or mortgage of land

38 Where the court gives a judgment or makes an order directing the sale or mortgage of any land, every person who is entitled to or pos sessed of any estate or interest in the land, or entitled to a contingent right therein, and is a party to the action or proceeding in which the judgment or order is given or made or is otherwise bound by the judg ment or order, shall be deemed to be so entitled or possessed, as the case may be, as a trustee for the purposes of this Act, and the court may, if it thinks expedient, make an order vesting the land or any part thereof for such estate or interest as the court thinks fit in the purchaser or mortgagee or in any other person.

Vesting order consequential on judgment for specific performance, etc.

39 Where a judgment is given for the specific performance of a con tract concerning any estate or interest in land, or for the partition, or for sale or exchange of any estate or interest in land, or generally where any judgment is given for the conveyance of any estate or interest in land ei ther in cases arising out of the doctrine of election or otherwise, the court may declare�

(a) that any of the parties to the action are trustees of any estate or interest in the land or any part thereof within the meaning of this Act; or

(b) that the estates or interests of unborn persons who might claim under any party to the action, or under the will or voluntary settlement of any deceased person who was during his lifetime a party to the contract or trans action concerning which the judgment is given, are the estates or interests of persons who, on coming into ex istence, would be trustees within the meaning of this Act;

and thereupon the court may make a vesting order relating to the rights of those persons, born and unborn, as if they had been trustees.

Effect of vesting order

40 A vesting order under any of the foregoing provisions shall in
the case of a vesting order consequential on the appointment of a trustee, have the same effect�

(a) as if the persons who before the appointment were the trustees, if any, had duly executed all proper con veyances of the land for such estate or interest as the court directs; or

(b) if there is no such person, or no such person of full ca pacity, as if such person had existed and been of full ca pacity and had duly executed all proper conveyances of the land for such estate or interest as the court directs,

and shall in every other case have the same effect as if the trustee or other person or description or class of persons to whose rights or sup posed rights the said provisions respectively relate had been an ascer tained and existing person of full capacity, and had executed a con veyance or release to the effect intended by the order.

Power to appoint person to convey

41 Where a vesting order can be made under any of the foregoing provisions, the court may, if it is more convenient, appoint a person to convey the land or any interest therein or release the contingent right, and a conveyance or release by that person in conformity with the order shall have the same effect as an order under the appropriate provision.

Vesting orders as to stock and things in action

42 (1) Subject to subsection (2), where�

(a) the court appoints or has appointed a trustee, or where a trustee has been appointed out of court under any statutory or express power; or

(b) a trustee entitled, whether by way of mortgage or other wise, alone or jointly with another person to stock or to a thing in action�

(i) is an infant; or

(ii) is out of the jurisdiction of the court; or

(iii) cannot be found, or, being a corporation, has been dissolved; or

(iv) neglects or refuses to transfer stock or receive the dividends or income thereof, or to sue for or recover a thing in action, according to the direc tion of the person absolutely entitled thereto for twenty-eight days next after a request in writing has been made to him by the person so entitled; or

(v) neglects or refuses to transfer stock or receive the dividends or income thereof, or to sue for or recover a thing in action for twenty-eight days next after an order of the court for that purpose has been served on him; or

(c) it is uncertain whether a trustee entitled alone or jointly with another person to stock or to a thing in action is alive or dead; or

(d) stock is standing in the name of a deceased person whose estate representative is under disability; or

(e) stock or a thing in action is vested in a trustee whether by way of mortgage or otherwise and it appears to the court to be expedient,

the court may make an order vesting the right to transfer or call for a transfer of stock, or to receive the dividends or income thereof, or to sue for or recover the thing in action, in any such person as the court may appoint.

(2) Where�

(a) an order made under subsection (1) is consequential on the appointment of a trustee, the right shall be vested in the persons who, on the appointment, are the trustees; and

(b) the person whose right is dealt with by an order made under subsection (1) was entitled jointly with another person, the right shall be vested in that last-mentioned person either alone or jointly with any other person whom the court may appoint.

(3) Where a vesting order can be made under this section, the court may, if it is more convenient, appoint some proper person to make or join in making the transfer so, however, that the person appointed to make or join in making a transfer of stock shall be some proper officer of the bank, or the company or society whose stock is to be transferred.

(4) The person in whom the right to transfer or call for the transfer of any stock is vested by an order of the court under this Act, may transfer the stock to himself or any other person, according to the order, and the bank and all other companies shall obey every order un der this section according to its tenor.

(5) After notice in writing of an order under this section it shall not be lawful for the bank or any other company to transfer any stock to which the order relates or to pay any dividends thereon except in accor dance with the order.

(6) The court may make declarations and give directions con cerning the manner in which the right to transfer any stock or thing in action vested under this Act is to be exercised.

(7) The provisions of this Act as to vesting orders shall apply to shares in British ships registered in Bermuda as if they were stock.

Vesting orders of charity property

43 The powers conferred by this Act as to vesting orders may be ex ercised for vesting any estate or interest in land, stock, or thing in action in any trustee of a charity or society over which the court would have ju risdiction upon action duly instituted, whether the appointment of the trustee was made by instrument under a power or by the court under its general or statutory jurisdiction.

Vesting orders in relation to infant's beneficial interests

44 Where an infant is beneficially entitled to any property the court may, with a view to the application of the capital or income thereof for the maintenance, or education, or otherwise for the benefit of the infant, make an order�

(a) appointing a person to convey such property; or

(b) in the case of stock, or a thing in action, vesting in any person the right to transfer or call for a transfer of such stock, or to receive the dividends or income thereof, or to sue for and recover such thing in action, upon such terms as the court may think fit.

Orders made upon certain allegations to be conclusive evidence

45 Where a vesting order is made as to any land under this Act or under any Act relating to persons of unsound mind founded on an alle gation�

(a) of the personal incapacity of a trustee or mortgagee; or

(b) that a trustee or mortgagee or the estate representative of or other person deriving title under a trustee or mort gagee is out of the jurisdiction of the court or cannot be found, or being a corporation has been dissolved; or

(c) that it is uncertain which of two or more trustees, or which of two or more persons interested in a mortgage, was the survivor; or

(d) that it is uncertain whether the last trustee or the estate representative of or other person deriving title under a trustee or mortgagee, or the last surviving person inter ested in a mortgage is living or dead; or

(e) that any trustee or mortgagee has died intestate without leaving a person beneficially interested under the intes tacy or has died and it is not known who is his estate representative or the person interested,

the fact that the order has been so made shall be conclusive evidence of the matter so alleged in any court upon any question as to the validity of the order; but this section does not prevent the court from directing a re conveyance or surrender or the payment of costs occasioned by any such order if improperly obtained.

Application of vesting order to property out of Bermuda

46 The powers of the court to make vesting orders under this Act shall extend to all property wherever situated.

Jurisdiction to make other Orders

Power of court to authorise transactions relating to trust property

47 (1) Where any transaction affecting or concerning any property vested in trustees, is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that pur pose vested in the trustees by the instrument, if any, creating the trust, or by any provision of law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms and subject to such provisions and conditions, if any, as the court may think fit and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.

(2) The court may, from time to time, rescind or vary any order

thereof, or to be borne and paid in such manner and by such persons as to the court may seem just.

Power to relieve trustee from personal liability

52 (1) If it appears to the court that a trustee, whether appointed by the court or otherwise, is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before, on or after 1 March 1975, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter in which he committed such breach, then the court may relieve him either wholly or partly from personal liability for the same.

(2) In this section "trustee" includes a person who has ceased to be a trustee and the estate representative of a deceased trustee.

Power to make beneficiary indemnify for breach of trust

53 (1) Where a trustee commits a breach of trust at the instigation or request or with the consent in writing of a beneficiary, the court may, if it thinks fit, make such order as to the court seems just, for impound ing all or any part of the estate or interest of the beneficiary in the trust estate by way of indemnity to the trustee or persons claiming through him.

(2) This section applies to breaches of trust committed as well before as on or after 1 March 1975.

Payment into court

Payment into court by trustees

54 (1) Trustees, or the majority of trustees, having in their hands or under their control money or securities belonging to a trust, may pay the same into court; and the same shall, subject to rules of court, be dealt with according to the orders of the court.

(2) The receipt or certificate of the proper officer shall be a suf ficient discharge to trustees for the money or securities so paid into court.

(3) Where money or securities are vested in any persons as trustees, and the majority are desirous of paying the same into court, but the concurrence of the other or others cannot be obtained, the court may order the payment into court to be made by the majority without the concurrence of the other or others.

(4) Where any such money or securities are deposited with any bank, broker, or other depositary, the court may order payment or deliv ery of the money or securities to the majority of the trustees for the pur pose of payment into court.

(5) Every transfer payment and delivery made in pursuance of any such order shall be valid and take effect as if the same had been made on the authority or by the act of all the persons entitled to the money and securities so transferred, paid, or delivered.

PART V

INVESTMENTS

Authorised investments

55 (1) A trustee may invest any property in his hands, whether at the time in a state of investment or not, in any manner permitted by the First Schedule, but only if the investment is in other respects reasonable and proper.

(2) A trustee's power of investment under subsection (1) shall be subject to any enlargement or restriction of his powers of investment set out in the instrument creating the trust.

(3) Nothing in this section shall restrict the powers of the court under section 47.

(4) Subject to subsection (5), nothing in the First Schedule shall authorise the making of an investment in shares of a corporation or in bonds, debentures or other evidences of indebtedness of a corporation which would cause the aggregate market value of all such investments to exceed one half of the market value at that time of the whole trust estate.

(5) Subsection (4) shall not apply to bonds, debentures or other evidences of indebtedness of or guaranteed by a government mentioned or referred to in paragraph 1 of the First Schedule.

(6) In determining market values for the purposes of subsec tion (4) a trustee may rely on published market quotations as to those investments for which such quotations are available, and upon such val uations of other investments as in his judgment seem fair and reason able according to available information.

(7) A trustee may from time to time vary or transpose any secu rities in which money in his hands is invested, whether under the au thority of this Act or otherwise, into or for any other securities of any nature authorised by this Act.

Discretion of trustees

56 Every power conferred by section 55 shall be exercised according to the discretion of the trustee, but subject to any consent or direction required by the instrument, if any, creating the trust or by any statutory provision with respect to the investment of the trust funds.

Power to retain investment which has ceased to be authorised

57 A trustee shall not be liable for breach of trust by reason only of his continuing to hold an investment which has ceased to be an invest ment authorised by the trust instrument or by any provision of law.

Investment in bearer securities

58 (1) Nothing in this Act shall authorise a trustee to invest in se curities payable to bearer unless those securities are purchased through a bank and until sold retained at all times by the bank for safe custody and collection of income.

(2) A trustee shall not be responsible for any loss incurred by reason of such retention and any sum payable in respect of the retention and the collection of income shall be paid out of the income of the trust property.

(3) The purchase through or retention by a bank of bearer se curities in compliance with subsection (1) shall not operate as a contra vention of any direction in the instrument creating the trust to the effect that investment shall be retained or made in the name of the trustee.

Loans and investments by trustees not chargeable as breaches of trust

59 (1) A trustee lending money on the security of any property on which he can properly 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, if it appears to the court�

(a) except where the loan is a loan insured under the Housing Loan Insurance Act 1984 [title 29 item 5] which complies with the requirements of that Act and of any regulations under that Act, that in making the loan the trustee was acting upon a report as to the value of the property made by a person whom he reasonably believed to be an able practical surveyor or valuer instructed and employed independently of any owner of the property; and

(b) that the amount of the loan does not exceed two third parts of the value of the property as stated in the report; and

(2) A trustee lending money on the security of any leasehold property shall not be chargeable with breach of trust only upon the ground that in making such loan he dispensed either wholly or partly with the production or investigation of the lessor's title.

(3) A trustee shall not be chargeable with breach of trust only upon the ground that in effecting the purchase, or in lending money upon the security, of any property he has accepted a shorter title than the title which a purchaser is, in the absence of a special contract, enti tled to require, if in the opinion of the court the title accepted be such as a person acting with prudence and caution would have accepted.

(4) This section applies to transfers of existing securities as well as to new securities and to investments made before as well as on or after the 1st March, 1975.

Liability for loss by reason of improper investment

60 (1) Where a trustee improperly advances trust money on a mortgage security which would at the time of the investment be a proper investment in all respects for a smaller sum than is actually advanced thereon, the security shall be deemed an authorised investment for the smaller sum, and the trustee shall only be liable to make good the sum advanced in excess thereof with interest.

(2) This section applies to investments made before as well as on or after 1 March 1975.

Powers supplementary to powers of investment

61 (1) Trustees lending money on the security of any property on which they can lawfully lend may contract that the money shall not be called in during any period not exceeding seven years from the time when the loan was made, provided interest be paid within a specified time not exceeding thirty days after every half-yearly or other day on which it becomes due, and provided there be no breach of any covenant by the mortgagor contained in the instrument or mortgage for the main tenance and protection of the property.

(2) On a sale of land for an estate in fee simple the trustees may, where the proceeds are liable to be invested, contract that the pay-
ment of any part, not exceeding two-thirds, of the purchase money shall be secured by a mortgage of the land sold with or without the security of any other property, such mortgage, if any buildings are comprised in the mortgage, to contain a covenant by the mortgagor to keep them insured against loss or damage by fire to the full value thereof.

(3) The trustees shall not be bound to obtain any report as to the value of the land or other property to be comprised in such mortgage, or any advice as to the making of the loan, and shall not be liable for any loss which may be incurred by reason only of the security being insuffi cient at the date of the mortgage.

(4) Where any securities of a company are subject to a trust, the trustees may concur in any scheme or arrangement�

(a) for the reconstruction of the company;

(b) for the sale of all or any part of the property and under taking of the company to another company;

(d) for the amalgamation of the company with another com pany;

(e) for the release, modification, or variation of any rights, privileges or liabilities attached to the securities or any of them,

in like manner as if they were entitled to such securities beneficially, with power to accept any securities of any denomination or description of the reconstructed or purchasing or new company in lieu of or in ex change for all or any of the first-mentioned securities; and the trustees shall not be responsible for any loss occasioned by any act or thing so done in good faith, and may retain any securities so accepted as afore said for any period for which they could have properly retained the origi nal securities.

(5) If any conditional or preferential right to subscribe for any securities in any company is offered to any trustees in respect of any holding in the company, they may as to all or any of the securities�

(a) exercise the right and apply capital money subject to the trust in payment of the consideration; or

(b) renounce the right; or

(c) assign for the best consideration that can be reasonably obtained the benefit of the right or the title thereto to any person, including any beneficiary under the trust,

without being responsible for any loss occasioned by any act or thing so done by them in good faith so, however, that the consideration for any assignment in pursuance of paragraph (c) shall be held as capital money of the trust.

(6) The powers conferred by this section shall be exercisable subject to the consent of any person whose consent to a change of in vestment is required by any provision of law or by the instrument, if any, creating the trust.

(7) Where the loan referred to in subsection (1), or the sale re ferred to in subsection (2), is made under the order of the court, the powers conferred by those subsections respectively shall apply only if and as far as the court may by order direct.

Power to deposit money at bank and to pay calls

62 (1) Trustees may, pending the negotiation and preparation of any mortgage, or during any other time while an investment is being sought for, pay any trust money into a bank to a deposit or other ac count, and all interest, if any, payable in respect thereof shall be applied as income.

(2) Trustees may apply capital money subject to a trust in payment of the calls on any shares subject to the same trust.

Powers of the Minister of Finance

63 (1) The Minister of Finance may by regulation extend the pow ers of investment conferred by section 55 by adding to the First Schedule any manner of investment specified in the regulation.

(1A) The negative resolution procedure shall apply to regulations made under subsection (1).

(2) The Minister of Finance may from time to time, by notice published in the Gazette, declare any stock exchange to be a recognised stock exchange for the purposes of this Act.

PART VI

GENERAL PROVISIONS

Indemnify to banks and others

64 This Act, and every order purporting to be made under this Act,
shall be a complete indemnity to banks and to all persons for any acts done pursuant thereto, and it shall not be necessary for a bank or for any person to inquire concerning the propriety of the order, or whether the court by which the order was made had jurisdiction to make it.

Enactments repealed

65 [omitted]

Commencement

66 [omitted]

[this Act was brought into operation on 1 March 1975]

FIRST SCHEDULE

AUTHORISED INVESTMENTS

1 Bonds, debentures, or other evidences of indebtedness�

(a) of or guaranteed by the Government of Bermuda;

(b) of or guaranteed by the government of an independent member country of the Commonwealth;

(d) of or guaranteed by the government of the United States of America;

(e) of or guaranteed by the government of any province or state of any of the countries mentioned or referred to in (b), (c) or (d) above.

2 The bonds, debentures or other securities issued or guaranteed by the International Bank for Reconstruction and Development estab lished by the Bank Agreement referred to in the Bretton Woods Agree ments Act 1945, of the Parliament of the United Kingdom.

3 Deposit receipts, deposit notes, certificates of deposits, accep tances and other similar instruments issued or endorsed by any licensed bank to which the Banks Act 1969 [title 17 item 20] applies.

3A Deposit receipts, deposit notes, certificates of deposit and other similar instruments �

(a) issued or endorsed by a deposit company licensed under the Deposit Companies Act 1974 [title 17 item 19]; and

(b) for discharging the obligations represented by which ei ther �

(i) first mortgages on real property not exceeding 66 2/3% of the value of the property; or

(ii) other assets of a kind approved in writing by the Bermuda Monetary Authority,

have been earmarked and set aside in such manner as that Authority either generally or in relation to any particular deposit company or transaction have in writing approved.

4 Bonds, debentures or fully paid shares of a corporation whose issued and fully paid share capital is at least $3,000,000 or its equiva lent in foreign currency at the time of investment if the price of such bonds, debentures or fully paid shares is quoted on a recognized stock exchange.

5 First mortgages of land in Bermuda conveyed to the trustee in fee simple subject to any proviso for redemption contained in the con veyance by way of mortgage.

6 First mortgages of land in Bermuda held for a term of years whereof the residue unexpired at the date of investment is at least sixty years.

7 Debentures issued under the authority of section 2 of the Hamilton Corporation Act 1910 and section 37 of the Municipalities Act 1923 [title 4 item 1].

8 Bonds, debentures or other evidences of indebtedness of Bermuda Electric Light Company Limited or Bermuda Telephone Com pany Limited.

SECOND SCHEDULE

ENACTMENTS REPEALED

[omitted]

[Amended by
1977 : 35
BR 34/1978
1984 : 10]

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Bermuda Consolidated Legislation

Trustee Act 1975