s 1Short title and commencement

This Act may be cited as The Trustee Act 1893 and shall come into operation on a day to be fixed by the Governor, by

Proclamation in the Government Gazette.

s 2Division

This Act is divided into parts, as follows:

Part I – Investments

Part II – Various powers and duties of trustees

Part III – Powers of the Court

Part IV – Special provisions as to appointment of new trustees

Part V – Miscellaneous and supplemental.

s 3Repeal

The Acts mentioned in the First Schedule hereto are repealed to the extent in such schedule mentioned. Such repeal shall not affect:

I Anything done under any enactment hereby repealed;

II Any right or privilege acquired, or liability incurred, under any enactment hereby repealed.

Any proceedings begun under the repealed enactments, or any of them, may be continued and concluded as though this Act had not been passed.

Part I Investments

s 4Application of Part

This Part applies to trusts created before or after the commencement of the Trustee Amendment Act (No. 2) 1995.

s 5Power of trustee to invest

A trustee may, unless expressly forbidden by the instrument creating the trust:

(a)

invest trust funds in any form of investment; and

(b) at any time, vary an investment or realise an investment of trust funds and reinvest money resulting from the realisation in any form of investment.

s 6Duties of trustee in respect of power of investment

(1)

Subject to the instrument creating the trust, a trustee shall, in exercising a power of investment:

(a)

if the trustee's profession, business or employment is or includes acting as a trustee or investing money on behalf of other persons, exercise the care, diligence and skill that a prudent person engaged in that profession, business or employment would exercise in managing the affairs of other persons; or

(b)

if the trustee is not engaged in such a profession, business or employment, exercise the care, diligence and skill that a prudent person of business would exercise in managing the affairs of other persons.

(2)

A trustee shall, in exercising a power of investment, comply with any provision of the instrument creating the trust that is binding on the trustee and requires the obtaining of a consent or approval or compliance with any direction with respect to trust investments.

(3)

Subject to the instrument creating the trust, a trustee shall, not less than once in each year, review the performance (individually and as a whole) of trust investments.

s 7Law and equity preserved

(1) Any rules and principles of law or equity that impose a duty on a trustee exercising a power of investment including, without limiting the generality of those duties, rules and principles that impose:

(a) a duty to exercise the 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;

(d)

a duty to take advice,

continue to apply except so far as they are inconsistent with this or any other Act or the instrument creating the trust.

(2) Any rules and principles of law or equity that relate to a provision in an instrument creating a trust that purports to exempt, limit the liability of, or indemnify a trustee in respect of a breach of trust, continue to apply.

(3) If a trustee is under a duty to take advice, the reasonable costs of obtaining the advice are payable out of trust funds.

s 8Matters to which trustee shall have regard in exercising 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, have regard to:

(a) the purposes of the trust and the needs and circumstances of the beneficiaries;

(b)

the desirability of diversifying trust investments;

(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;

(j)

the probable duration of the trust;

(k) the liquidity and marketability of the proposed investment during, and on the determination of, the term of the proposed investment;

(m)

the aggregate value of the trust estate;

(n) the effect of the proposed investment in relation to the tax liability of the trust;

(p) the likelihood of inflation affecting the value of the proposed investment or other trust property;

(q) the cost (including commissions, fees, charges and duties payable) of making the proposed investment; and

(r)

the results of a review of existing trust investments.

(2)

A trustee may:

(a) obtain and consider independent and impartial advice reasonably required for the investment of trust funds or the management of the investment from a person whom the trustee reasonably believes to be competent to give the advice; and

(b) pay out of trust funds the reasonable costs of obtaining the advice.

s 9Powers of trustee in relation to securities

(1) If securities of a body corporate are subject to a trust, the trustee may concur in any scheme or arrangement:

(a) for or arising out of the reconstruction, reduction of capital or liquidation of, or the issue of shares by, the body corporate;

(b) for the sale of all or any part of the property and undertaking of the body corporate to another body corporate;

(c) for the acquisition of securities of the body corporate, or of control of the body corporate, by another body corporate;

(d) for the amalgamation of the body corporate with another body corporate; or

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

in the same manner as if the trustee were beneficially entitled to the securities.

(2) The trustee may accept instead of, or in exchange for, 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 respect of a holding in that body corporate or another body corporate, the trustee may, as to all or any of the securities:

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

(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 the purposes of this Part, exercising a power of investment.

(5) A trustee may retain securities accepted or subscribed for under this section for any period for which the trustee could properly have retained the original securities.

(6) The consideration for an assignment made under subsection (3)(b) shall be held as capital of the trust.

(7) This section applies in relation to securities acquired before or after the commencement of the Trustee Amendment Act (No. 2) 1995 but subject to the instrument creating the trust.

s 10Power of trustee as to calls on shares

Subject to the instrument creating the trust:

(a)

a trustee may apply capital money subject to a trust in payment of calls on shares subject to the same trust; and

(b)

if the trustee is a trustee company, it may exercise the powers conferred by this section notwithstanding the shares on which the calls are made being shares in the trustee company.

s 10APower to purchase dwelling house as residence for beneficiary

(1)

Subject to the instrument creating the trust, a trustee may:

(a) purchase a dwelling house for a beneficiary to use as a residence; or

(b) enter into any other agreement or arrangement to secure for a beneficiary a right to use a dwelling house as a residence.

(2) Notwithstanding the terms of the instrument creating the trust, a trustee may, if to do so would not unfairly prejudice the interests of other beneficiaries, retain as part of the trust property a dwelling house for a beneficiary to use as a residence.

(3) A dwelling house purchased, retained or otherwise secured for use by the beneficiary as a residence may be made available to the beneficiary for that purpose on such terms and conditions consistent with the trust and the extent of the beneficiary's interest as the trustee thinks fit.

(4) The trustee may retain a dwelling house or any interest or rights in respect of a dwelling house acquired under this section after the use of the dwelling house by the beneficiary has ceased.

(5)

In this section, dwelling house includes:

(a) any building or part of a building designed, or converted or capable of being converted, for use as a residence; and

(b) any amenities or facilities for use in association with the use of a dwelling house.

s 10BPower of trustee to retain investments

A trustee is not liable for breach of trust by reason only of continuing to hold an investment that has ceased to be:

(a)

an investment authorised by the instrument creating the trust;

(b) an investment properly made by the trustee exercising a power of investment;

(d)

an investment authorised by any other Act or the general law.

Trustee Act 1893

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