Trusts Notes

29 Pages • Complete Study Notes • Year: Pre-2021 • Previously uploaded under: LLB270 - Property and Trusts B

Rights, Powers, and Duties of Trustees and Beneficiaries Sources of the rights, powers and duties of a trustee/beneficiary • First look to the trust instrument as it will contain the express terms of the trust→ because the creator of the trust is, subject to any legislative restrictions, free to alter or modify provisions of the general law or legislation, as well as to determine the consequences of any breach of duty (Bowering v Knox) • Next look to the Trustee Act 1925 (NSW) o s 6 provides for power of appointment where the trust does not contain an express power of appointment • If there is still gaps, look to the common law as the courts have inherent jurisdiction on the basis that equity will not allow a trust to fail Appointment of trustees • Generally a trust instrument will appoint a trustee, and most will have an express power to appoint a new trustee (can be exercised by thirs party or ‘appointer) o Trustee must be a legal person (either an individual or a corporation) with the capacity to hold and deal with property o Trustee must not be a minor • In NSW the appointment of a minor as trustee will be void, whereas in some places they hold the position for the minor until they reach majority o You cannot be forced to be a trustee • If the instrument doesn’t contain express power of appointment (Statutory power) o Based on principle hat equity will not allow a trust to fail for want of trustee o However wont use this inherent power where it is possible to appoint new trustee using instrument or trust Act Re Gibbons’ Trust (1882) o s 6(4) TA confers a statutory power of appointment which includes the power to appoint any person named in the trust instrument, or any/the last surviving or continuing trustees or on the legal representative (ie executor of a will) of the last. • This power can be exercised where: (a) trustee dies (Church of England Property Trust v Rossi) (b) trustee out of New South Wales for more than one year without having properly delegated the execution of the trust (Re Geelong Waterworks & Sewerage Trust) (c) trustee remains out of New South Wales for more than two years (even if property delegated) (d) trustee desires to be discharged (Re Pearse) (e) trustee refuses to act (Re Birchall; Birchall v Ashton) (f) or is unfit to act (Re Turner) (g) or is incapable of acting (Re East) (h) trustee is removed (i) corporate trustee is dissolved

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